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BGMEA says it doesn’t support clause only applicable to Bangladesh in LC from buyers

by tbhad

UNB, Dhaka

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has said it does not support inclusion of any clause in commercial instruments if it applies only to trade with Bangladesh and creates confusion.

“We have seen similar instances in the past, of quoting an LC clause from a buyer to generalize it as a sanction on Bangladesh, and made our position clear against such misrepresentation of fact,” said the apex body of the apparel exporters in a clarification.

A copy of a letter of credit (LC) from a foreign buyer to one of the BGMEA members has come to the association’s attention.

The LC contains the text: “We will not process transactions involving any country, region or party sanctioned by the UN, US, EU, UK. We are not liable for any delay, non-performance or/disclosure of information for Sanctions Reasons.”

There is a concern and confusion caused by the interpretation of this clause that a sanction might have been imposed against Bangladesh, which is not correct, BGMEA said.

BGMEA urged its members, receiving LCs with such clause as mentioned above, to communicate with the respective brand(s) and solicit a clarification.

“If the clause appears only in the LCs issued in favor of Bangladeshi suppliers, then this violates ethics. In such a scenario, we would urge our member factories to take the matter with utmost importance, and, if necessary, to review/reconsider continuing business with such buyer(s),” it said.

BGMEA said the global trade landscape is changing fast; human rights and environmental issues are getting increased priorities, while geopolitical issues are also influencing trade.

“Since Bangladesh’s economy and its growth are heavily reliant on trade, any development around trade policy concerns us,” it mentioned.

This is to be noted that the LC came from a particular buyer, and this is not a statutory order or notice by any country. So, this should not be misinterpreted as a measure of trade enforcement or economic sanction on Bangladesh, BGMEA said.

“We understand that human rights and environmental due diligence is of increased importance for many of our export markets. The Government of Bangladesh is engaged with our trade partners,” it said.

The US Presidential Memorandum signed on November 16, 2023 to “advance worker empowerment, rights, and high labor standards globally” adds significant weight to the ongoing global labor campaign, as it appears to be quite unique in terms of engagement and enforcement.

“We respect the spirit of it and find an alignment with its core principles. Though the Memorandum stipulates a number of measures including ‘deploying the full range of diplomatic and assistance tools and, as appropriate, financial sanctions, trade penalties, visa restrictions, and other actions,’ however, this is not adopted for Bangladesh, rather it is a unilateral stance of the United States of America on workers’ rights issue,” BGMEA observed.

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