Reporting the Profit from substituted Documents

cparial · Post by **cparial** » Sat Mar 07, 2009 8:29 am

I have a confusion regarding reporting of Profit from SUBSTITUTED DOCUMENTS TO Bangladesh Bank

We have received some Import Documents from a bank A( Who issued EXP in favour of their client- X Ltd) drawn on the Customer(Y Ltd) of my bank B against contract.

Now, X Ltd substituted the B/E and Invoice and instructed us to send to the Bank C of final buyer( Z Ltd) in USA. And we (B) received the proceeds from Bank C and released the payment to Bank A ( their invoice value) in due course.

Now, we have the difference/profit in the account of Y Ltd.

Would you please suggest how this profit will be reported to Bangladesh Bank ?

If this account is in Offshore Banking, will there be any different decision?

Thanks

picant · Post by **picant** » Sat Mar 07, 2009 1:48 pm

Hi Pals,

I understand that you have a certain amount bigger than an Export authorization, so you have difficulty to report it to a bank in Bangladesh. It is a local problem, but in my country, Italy, we have the same, so in this case we report the proceeds of the authorized goods as Export and the difference as Brokerage or Agent commissions. We assume that the goods have been sold after the export customs clearance and the commissions considered got abroad, excluded by Value Added Taxation.
However it is difficult to compare other Countries Laws, but every Nation has to report to the Government, via Banks or directly, import or export of currency and the grounds of such transaction. If the beneficiary has an off shore bank's account, this off shore Country is in a White or in a Black List? Check the FATF website to see the lists!

Other comments appreciated!

Ciao

cparial · Post by **cparial** » Sat Mar 07, 2009 9:33 pm

Dear Picant,

Thank you for the reply.

Certainly export will be reported by Bank A.

Bank B will report only the Difference as Agency commission.

Is it the meaning of your explanation?

Thanks

picant · Post by **picant** » Sat Mar 07, 2009 10:42 pm

Hi Pal,

Real Value of exported goods will be paid to second beneficiary, the differencefrom commercial and real value, being brokerage or agency commission will be paid to first beneficiary. All is legal and permitted in my Country, in other Nations forbidden or limited to Governamental Agency.

Other comments appreciated

Ciao