Weekly News Clippings (February 27, 2014)

NBR to tackle tax evasion by multinationals (The Daily Star, February 27, 2014)
The National Board of Revenue has moved to curb tax evasion by scrutinising the transactions of multinational companies with their associated enterprises overseas. The tax administration issued an order last week to form a unit to audit transactions of companies that abuse a mechanism, known as transfer pricing or TP, to manipulate prices of imports from their associated enterprises abroad. Sometimes, related entities of a multinational company show artificially high prices for an imported product or service in an attempt to deflate profits and evade taxes. The practice is known as transfer mispricing, a way of price manipulation or fraudulence. The nation lost $1.4 billion a year between 2001 and 2010 due to illicit capital flight, according to a Washington-based Global Financial Integrity.

Bangladesh not ready for nuke plant (The Daily Star, February 26, 2014)
German Ambassador to Bangladesh Albrecht Conze has expressed his reservations on setting up nuclear power plants in Bangladesh. In his opinion, the country is too populated and runs risks of earthquakes that may lead to a nuclear disaster. Bangladesh is building a 2,000 megawatt nuclear plant in Pabna with Russian assistance. The German diplomat was also critical of coal-fired power stations which emit huge amounts of carbon. He blamed weak regulations for the excess amounts of carbon traditional brick kilns emit and for the pollution of rivers with industrial waste. Nearly 25 percent of Germany's electricity production comes from renewable energy.

Tofail: Duty free access to Chile from 2015 (Dhaka Tribune, February 26, 2014)
Bangladesh would get duty free market access to Chile from the beginning of 2015, according to a statement made by the Commerce Minister Tofail Ahmed. After his meeting with the Chilean Ambassador Christian Barros on Wednesday morning, the minister told journalists that a “Preferential Trade Agreement” will be signed between the two countries this year.

 Banking groups can invest 50pc of capital (The Financial Express, February 26, 2014)
The central bank has asked the commercial banks to limit their total investment in the capital market to minimise investment risk. Under the new provision, the market value of total investment of a banking group in the capital market on consolidated basis will not exceed 50 per cent of its consolidated paid up capital, balance in share premium account, statutory reserve and retained earnings, as stated in the latest audited financial statements. The banks have been also asked for taking necessary measures to gradually bring down their excess investment in the capital market by July 21, 2016 on both solo and consolidated basis.

Fresh gas tariff hike on cards (The Financial Express, February 26, 2014)
The government has moved for a fresh hike in gas tariff for all consumers and all state-owned gas marketing companies are now preparing to submit tariff hike proposals to the energy regulator separately. According to a top government official, the gas marketing companies, which are the subsidiaries of state-owned Petrobangla, have been asked to submit tariff hike proposals separately to the BERC.

Tanners pledge to start relocation by March (The Daily Star, February 25, 2014)
Tanners have decided to start relocating on the pressure to address environmental issues with a hope to boost exports. At least 25 companies will be the first to begin constructing factories in Savar Industries from March. Minister Amir Hossain Amu directed the Chinese joint venture company—JLEPCL-DCL—to resume construction of the central effluent treatment plant in a week, as CETP is a key element for tannery relocation. As per the contract, JLEPCL-DCL was scheduled to install the plant within 15 months at a cost of Tk 477.46 crore at Savar Leather Industrial Park, but the company missed the deadline.

Reopen shrimp market, Dhaka urges Moscow (Dhaka Tribune, February 25, 2014)

Bangladesh has requested the Russian Federation to reopen its shrimp market in the federal countries, which halted Bangladeshi shrimp imports last year over quality issues. Bangladesh exported a total of 7,651MT shrimps to the Russian Federation from 2010-14 after Moscow signed a deed with Dhaka in December, 2009. However, Moscow stopped the import in October last year after a mismatch of bacterial standard between the two countries raised health concerns.

BANGLADESH: Workers see safety offsetting output (just-style, February 24, 2014)

Garment workers in Bangladesh not only lack basic knowledge on fire and building safety but also feel that the fire drills and safety training take too much of their time and increase pressure on them to reach production targets. According to a survey conducted by the Alliance for Bangladesh Worker Safety as part of ongoing efforts to measure workers' knowledge and awareness of health and safety issues, existing training activities have had limited impact, with content not adapted to account for workers' low literacy levels, particularly among female workers. A combination of questions and interviews with more than 3,200 workers in 28 factories producing for Alliance member companies also found that workers feel a limited sense of responsibility to prevent fires.

Billion-dollar project for 3 economic zones (The Daily Star, February 24, 2014)

A new study has identified Sherpur in Moulvibazar and Mirsarai and Anwara in Chittagong as potential locations for economic zones to be built at an estimated cost of $1.17 billion by investors. The study, commissioned by Bangladesh Economic Zones Authority, advised the government to roll out the Sherpur Economic Zone first as required infrastructure—power, water and gas—is in place. The government approved the Economic Zones Act in 2010 to attract both foreign and domestic investors to create 10 million jobs by 2030 and spur economic development. The three zones have been selected as pilot projects.

Plastic fair ends with hope to raise export (Dhaka Tribune, February 24, 2014)

A four-day fair of plastic goods and machinery ended in Dhaka yesterday with local manufacturers receiving around Tk 20 crore in export orders, down from about Tk 25 crore last year. According to fair organizers, the decline in the spot orders was due to comparatively lower participation of foreign buyers and local manufacturers discouraged by the political turmoil in the past few months. There were some 350 stalls in the annual event, where participants from 15 countries including China, India, Taiwan, Korea and Malaysia, showcased their wares.

European brands to hire 25 local engineers (The Daily Star, February 23, 2014)

European retailers will hire 25 Bangladeshi engineers along with international inspectors for evaluating garment factories for structural soundness and fire safety, said the general secretary of the IndustriALL Global Union, which was instrumental in drafting in the Accord on Fire and Building Safety in Bangladesh. His comments come as the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) expressed its strong reservations about the inspection standards of the Accord, particularly about the hiring of foreign inspectors. The Accord, which has been signed by 150 brands, would inspect 1,500 factories by September this year. 

Bangladesh High Commissioner attacked in Nairobi (Capital News, February 23, 2014)

Bangladesh’s High Commissioner to Kenya Wahidur Rahman was attacked by thugs at his Nairobi’s Karen home on Saturday night. The criminals have reportedly stolen cash, a television set and other items from the High Commissioner’s residence, according to police. Rahman was also slightly injured during the incident that occurred at about 10 pm. 

Sonali Bank loses millions to hackers (The Financial Express, February 22, 2014)

The Sonali Bank has incurred a loss of Tk 20 million last year after hackers breached its vulnerable security system. "The bank lost $250,000 due to the hacking of one of its accounts' password last year," said M Aslam Alam, Secretary of the Bank and Financial Institutions Division, "which means that there are huge flaws in the management of passwords of the bank’s accounts. Finance Minister MA Muhith, too expressed dissatisfaction over the bank’s security system.To protect the bank from any such future risk, he suggested overhauling of the bank’s security, including its online security system.

Bangladesh Petroleum seeks tax waivers for oil product imports (Platts, February 21, 2014)

State-owned Bangladesh Petroleum Corp has submitted a formal request to the National Board of Revenue seeking a waiver on local taxes, value added taxes and other duties imposed on refined oil product imports, so as to borrow less from its main financier, International Islamic Trade Finance Corp. According to the BPC Chairman Eunusur Rahman, the Energy and Mineral Resources Division under the Ministry of Power, Energy and Mineral Resources will also submit a similar letter soon to the NBR for the tax waivers for BPC. BPC paid around Taka 50.22 billion ($644 million) in local taxes, VAT and other duties to NBR in fiscal 2012-2013 (July-June)in spite of incurring a loss of around Taka 53.84 billion in the same fiscal year for importing oil products.

Weekly News Clippings (February 20, 2014)

Forex reserves surge past $19b (The Daily Star, February 20, 2014)
Foreign currency reserves continued its unprecedented growth to reach $19.04 billion yesterday on the back of a rise in remittances and exports and a fall in imports. This was the first time in the history that the reserves have surged past the $19 billion mark, which placed Bangladesh second only to India in the subcontinent. Bangladesh Bank Governor Atiur Rahman attributed the strong reserves to a stable exchange rate.


RMG manufacturers eye big spot orders from US expo (Financial Express, February 19, 2014)
Bangladeshi manufacturers of readymade garments (RMG) are participating in a three-day apparel expo in the US resort city of Las Vegas in Nevada, showcasing their latest garment products to get an extra edge in North American market. The Men's Apparel Guild in California, known as MAGIC International, a leading event manager for apparels industry, is organizing the three-day expo that began on Tuesday.  A major objective of the Bangladeshi participants is to get spot orders from the US buyers.

Foreign funding for NGOs remains robust (Dhaka Tribune, February 19, 2014)
Foreign funding for non-governmental organisations has remained unchanged despite concerns from donors and development partners alike over the political turmoil centering January 5 national elections. Funding through the NGO Affairs Bureau retained its growth of 4.83% in the first half of the current fiscal compared to 12 months of last fiscal year. In the previous year, the NGOs could attract pledges of $639.83m against 1,084 approved projects. Most of this amount was released in the current fiscal which is 31.89% less than the previous fiscal.

Retailers launch Bangladesh factory inspection (Channel News Asia, February 18, 2014)
Safety experts hired by Western retailers such as H&M and Benetton will begin a mass inspection Wednesday of clothing factories in Bangladesh, nearly a year after 1,135 garment workers died in a building collapse. Dozens of fire officers and structural engineers will begin inspecting more than 1,500 plants and then recommend safety improvements in an exercise that is expected to last until September. Bangladesh is the world's second biggest clothing manufacturer and the sector is the mainstay of the impoverished South Asian nation's economy.

Bangladesh out of FATF grey list (The Daily Star, February 17, 2014)
Bangladesh has come out of the Financial Action Task Force's (FATF) grey list, meaning there would be a great reduction in the cost and time of financial transactions with the rest of the world which would benefit businessmen in the country.  The FATF plenary meeting held in French capital Paris on February 13 gave unanimous recognition to Bangladesh’s Action for preventing Money Laundering and Terror Financing as reaching international standards. In 2008, FATF made first mutual evaluation of Bangladesh and in the rating Bangladesh’s position was in negative category. In October 2010, the FATF gave Bangladesh time-bound 28 action items needed to bring its anti-money laundering and counter-terrorist financing measures to international standards.

Software, IT vendors aim for $1b exports(The Daily Star, February 17, 2014)
Software and IT service providers have made an ambitious plan to earn $1 billion from exports—10 times higher than the current level—and create 1 million professionals in five years. In addition, Bangladesh Association of Software and Information Services (BASIS) aims to make the internet available to one crore new users a year and to contribute 1 percent to gross domestic product from the software and IT sector by 2018 under the One Bangladesh campaign.

Bangladesh awards wheat tender to Glencore at $303/T (Reuters, February 17, 2014)
Trading firm Glencore has won a tender to supply 50,000 tonnes of wheat to Bangladesh after submitting the lowest offer at $303 a tonne. This was the lowest price it has paid in tenders for wheat in the current financial year that began in July 2013. The imports are part of a plan by the Directorate General of Food, the state grains buyer, to ship in 850,000 tonnes of wheat in the year to June 2014.

7 kids die in Jessore bus plunge (The Daily Star, February 15, 2014)
A bus carrying 75 schoolchildren on a study trip skidded off a road and into a canal in southwestern Bangladesh on Saturday, killing at least seven children and injuring dozens more, a police chief said.
The seven children were between the ages of 6 and 12, and they were declared dead on the scene.

Bangladesh trade deficit shrinks (Business Standard, February, 16, 2014)
Trade deficit during the first six months of the 2013-2014 fiscal contracted by 58.29 percent to about $1.53 billion year-on-year. According to the central bank data, the country's import payment was $16.044 billion, down 0.11 percent, during the July-December period of the current fiscal (July 2013-June 2014) while earnings from exports stood at $14.511 billion, up 17.15 percent, during the same period.

Bangladesh Jan exports rise 7.8 pct on garment sales(Reuters, February 16, 2014)
Bangladesh's exports rose 7.8 percent in January from a year earlier to $2.75 billion, boosted by clothing sales, the Export Promotion Bureau said. Bangladesh's $22 billion garment industry had seen orders cut nearly in half in the three months to December as political unrest in the months leading up to a Jan. 5 election hit the country.