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The German customs administration is persuading Bangladesh to allow inspections of Bangladeshi bicycle factories in a bid to eliminate any doubts regarding the country of origin, according to sources familiar with the matter.
The administration has proposed a visit to the facilities of Bangladeshi producers in order to expedite future import processes for bicycles and e-bicycles from Bangladesh.
The visit recommendation comes in response to a request made by the Bangladeshi mission in Germany concerning the issue of duties. The Bangladesh embassy in Berlin has urged the Ministry of Commerce to take action on this proposal.
Currently, the export of bicycles manufactured in Bangladesh to its largest market, Germany, is suffering due to the imposition of anti-dumping duties and other tariffs, with suspicions regarding their country of origin, said sources.
German customs authorities said that "imports from Bangladesh are not treated differently from those coming from other countries".
It has generally been established that bicycles and e-bicycles imported into the European Union (EU) are often falsely declared with a different origin in order to evade anti-dumping duties on bicycles originating from China. Consequently, such imports are subjected to more rigorous and risk-based inspections.
The administration is hopeful that a visit will specifically address any doubts regarding Bangladeshi exporters, thereby facilitating future imports into the EU.
Currently, Germany alone accounts for bringing in 25 per cent of bicycles exported by Bangladesh to the EU bloc.
Meanwhile, domestic bicycle manufacturers and exporters have requested the Ministry of Commerce to collaborate closely with the German embassy in Dhaka and the Bangladesh embassy in Berlin for the greater benefit of Bangladesh.
The president of the Bangladesh Bicycle and Parts Manufacturers and Exporters Association (BBPMEA) has already written a letter to the ministry urging action.
"Germany is considered the largest buyer/importer of our bicycles for a long time. But in recent times, our importers in Germany are facing a serious trouble with German customs, particularly at Hamburg port, as they doubt the origin of Bangladeshi bicycles and consider them to be of Chinese origin."
"On the basis of their reasonable doubt as to the authenticity of the bicycles exported by Bangladesh, German customs are charging full tariff with anti-dumping duty on importers," he added.
The association argued that such an approach goes against the principles of the Generalized System of Preferences (GSP) verification policy and the EU rules of origin administrative cooperation.
"German customs are needlessly challenging the Bangladeshi origin of bicycles, which could have disastrous consequences for our products in the German market," he added.
As a result, German bicycle importers are feeling nervous, worried, anxious, disappointed and to some extent, frightened about this issue. If this situation persists, the association fears that Bangladeshi bicycle exports to Germany may come to a complete halt in the near future, leading to an annual loss of US$ 30-40 million.
In this regard, according to the verification policy, if any deviation or violation regarding origin raises doubts among the customs authorities of the EU, they are obligated to notify the local authority or the Export Promotion Bureau (EPB) of Bangladesh to verify the authenticity of the country of export declaration.
Industry insiders said that there have been no deviations from the rules of origin and noted that they are prepared to cooperate with investigations from any end.
Bicycle exporters are registered with the EU's Registered Exporter System (REX) and have consistently received export trophies over the past two decades, building a strong reputation.
The European Anti-Fraud Office (OLAF) team has conducted multiple visits to bicycle factories in Bangladesh and expressed utmost satisfaction with these visits, as mentioned by the insiders. Besides, officials from the EU delegation in Dhaka have recently visited the factories as well.
Bangladesh has been exporting bicycles to EU countries with zero tariffs under the Everything But Arms (EBA) initiative since 2001 and the REX system since 2019.
As a result, bicycle exports to EU countries have significantly increased, reaching US$ 167.5 million in fiscal year (FY) 2021-22. In FY 2020-21, a total of 1.0 million bicycles were exported globally.
Currently, local bicycle exporters benefit from a 4.0 per cent export subsidy, according to the Bangladesh Bank.
According to the European Commission, the REX is a certification system that allows economic operators to self-declare the origin of goods through statements of origin.