Service Import Under LC

[Mehdi]

Hi there

Services can be transacted through LC. In case of service import, there does not require B/E which may lead to face regulatory incompliance. In such a situation, what is the practice in importing service you are all following? Can you please explain?

Regards...........Mehdi

[nhduc]

Dear Mehdi,

That Bill of Exchange (B/E) is required under L/C does not depend on goods, services or performances but depends on the type of L/C to be issued.

L/C available by negotiation or L/C available by acceptance would require a sight B/E or a time B/E respectively, whereas L/C available by sight payment or L/C available by deferred payment would require no B/E.

Best regards,
Nguyen Huu Duc

[Mehdi]

Dear Nguyen Huu Duc,

Thanks for addressing the issue.

Please treat B/E as "Bill of Entry" (Customs Pass or whatever meaning is applied.)

Look to have a nice explanation in this regard.

Thanks again....Mehdi

[nhduc]

Dear Mehdi,

Sorry for misunderstanding your query.

Best regards,
Nguyen Huu Duc

[Mehdi]

Dear All,

To this case I have further discussed with differnt people and come to know that there requires specific authorization from the competent authority as per GFET to make service payment under LC or contract. As such, ADs will have to see whether the customer has specific authorization before issuing LC.

In case of such payment under contract having specific permission, there is no problem as the payment will be settled through TM form. Still I am not well aware how the payment under LC arrangement is settled through IMP Form. The problem lies here due to non existence of bill of entry. In absence of it, the IMP will remain unmatched.

I would appreciate if any one can elaborate the settlement issue under service LC.

Regards..........Mehdi

[shislam]

After talking with several authorities, it has been indentified that DC opening bank needs to have prior permission of Bangladesh Bank to import service through DC. As there will be no bill of entry involved, the reporting will be done with IMP form and invoice using reporting purpose code 2710 along with BB approval copy. My questions are what are the documents we should ask for in the DC to import service and should I ask for insurance cover note for the DC? What should be the Incoterm if there are no insurance involved?

[callzr]

After talking with several authorities, it has been indentified that DC opening bank needs to have prior permission of Bangladesh Bank to import service through DC. As there will be no bill of entry involved, the reporting will be done with IMP form and invoice using reporting purpose code 2710 along with BB approval copy. My questions are what are the documents we should ask for in the DC to import service and should I ask for insurance cover note for the DC? What should be the Incoterm if there are no insurance involved?

Really eager to know whether this sort of LC transaction had actually happened in Bangladesh or not.