Bangladesh Bank has relaxed foreign exchange rules for intercompany import and export transactions, allowing local companies to trade more easily with their foreign parent companies, subsidiaries and branch offices under a revised declaration framework.
The central bank issued a circular on Tuesday, saying the move aims to rationalise existing import declaration requirements for legitimate related-party transactions.
Previously, importers were required to declare that they had no direct or indirect relationship or financial interest with the foreign exporter. Under the new rules, that declaration will no longer be required for intercompany transactions.
Instead, importers must declare that the transaction has been conducted on an arm’s length basis reflecting competitive market prices and that all applicable transfer pricing, anti-money laundering (AML) and counter-terrorist financing (CFT) regulations have been complied with.
Bangladesh Bank has also extended the same treatment to export transactions involving related parties.
The circular requires authorised dealer (AD) banks to obtain the revised declaration before processing such transactions and verify, through appropriate documentary evidence, the legitimacy of the relationship between the local company and its foreign parent, subsidiary or branch.
The new instructions take effect immediately, while all other foreign exchange regulations remain unchanged.
