BGMEA opposes providing REX facility to BGBA

The country's apparel makers have urged the government not to provide the existing Registered Exporter (REX) facility to Bangladesh Garment Buying House Association (BGBA) as such buying houses are not directly involved in production and exporting activities, sources said.

According to them, if the REX facility is given to the BGBA, it would not only create a conflict of interest, but also cause an unnecessary threat to the country's export sector.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) made the appeal recently in a letter to the Ministry of Commerce (MoC), said an official source.

In the letter, the BGMEA, apex trade body of the country's apparel sector, also raised some arguments against providing such REX facility to the apparel buying houses.

The BGMEA wrote to the MoC after the BGBA made an appeal to the MOC for obtaining such a REX facility like the BGMEA and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

REX refers to a European Union (EU) system that allows registered economic operators to self-certify the origin of their goods by making a "statement on origin", which is applicable to EU GSP beneficiary countries.

The BGMEA and BKMEA are now enjoying The REX facility, which is fully managed under the Export promotion Bureau (EPB) and the MoC, according to the letter.

"Since the BGBA is an apex body of buying houses and agents who are not involved in the production or export of goods directly. So, giving them the same privileges like BGMEA or BKMEA would be unrealistic, which might create a conflict of interest," the BGMEA president Mahmud Hasan Khan said in the letter.

It further said members of BGMEA and BKMEA have set up thousands of factories across the country, with huge infrastructure, machinery, technology and financial investment.

On the other hand, members of BGBA do not have any kind of production infrastructures or financial investment for the same, it said, adding that they only act as intermediaries or agents.

Bangladesh would complete its LDC graduation in 2026, the BGMEA leader said, adding that as a result, the existing GSP benefits will be cancelled and GSP+ benefits will have to be adopted to maintain market access to the EU.

"To get such GSP+ we will have to strictly comply with Intellectual Property Rights (IPR), Labor & Environmental Standards, and EU Due Diligence Directive," he said.

The European Commission has already announced the launch of Product Traceability and the Digital Product Passport (DPP).

Since the BGBA members do not own any factories, they would have the opportunity to set the price of the products as they wish, which might greatly increase the risk of money laundering and illicit money transfers through false trade-invoice mismatches, it said.

This will erode the trust of international buyers and may put Bangladesh at risk of being monitored by the Financial Action Task Force (FATF), according to the BGMEA letter.

When contacted, the BGBA Vice President A.K.M Saifur Rahman said the REX should be able to submit at any time, at the request of the competent authorities, all appropriate documents proving the originating status of the products concerned.

He further said as the GSP beneficiary countries any exporter, manufacturer, or trader of originating goods, established in the territory of a GSP beneficiary country, is entitled to apply to the competent authorities for becoming a registered exporter.

The aspirant exporters should be established, functional manufacturers and traders or re-consignors, he added.

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