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02 March 2024

Further clarification on an additional LC clause and confusion about economic sanction

Messenger Online

Published: 14:14, 8 December 2023

Further clarification on an additional LC clause and confusion about economic sanction

Photo : Collected

In that past two days an additional LC clause regarding sanction has caught significant media attention. BGMEA investigated the matter and issued clarification statements. We still notice that the issue is being discussed and given attention in the media causing confusion and panic. We received official comments from the original buyer and their agent in Bangladesh. This statement aims to further clear this issue and we hope the unnecessary attention, confusion and panic be avoided. 

As mentioned in our earlier clarifications, this is to be noted that, firstly - the original buyer, which is a French entity, did not insert this additional clause in its master LC to the Bangladesh agent. Secondly - the agent transferred its LC to a Bangladeshi garment factory, which was issued by the Standard Chartered Bank Dubai, and the Standard Chartered Bank inserted this additional clause in the LC on their own. So NO BUYER inserted the LC, a private commercial bank did it without being directed by its client. Thirdly - the agent confirmed that the SCB Dubai has already removed the alleged clause from the LC and transferred to the Bangladeshi factory. So the additional clause doesn’t exist anymore. The agent also assured us that they will make sure not to insert such clause in any LC transferred to Bangladeshi suppliers. This should end the debate and discussion on the misinterpretation of this additional LC clause. 

I appreciate the concerned buyer and the agent for taking prompt action to revise the LC in less than 24 hours. 

As far as garment manufacturing is concerned, Bangladesh has made its position to be a responsible manufacturing hub ensuring workplace safety, workers wellbeing, and championing green industrialisation. We don’t believe there is any legitimate ground that warrants an economic sanction against Bangladesh. 

We want to make it clear to all the global buyers not to insert such clause in their LC, and also to advise their banks not to make such unacceptable insertions. 

We continue to urge the Bangladeshi factories to communicate with their buyers so that such additional clause is not repeated in any LC. We also request our member factories not to accept LCs with such clause. 

I would urge all print, electronic and online media to kindly highlight this clarification through their platforms in the interest of our industry and economy. 

Messenger/Sajib

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