Bangladesh Country Profile

Customs Administration

Business Corruption

Many companies consider the customs to be among the most corrupt institutions in the country. Customs procedures in the ports of Chittagong and Chalana, as well as in the airports, are complicated, slow and bureaucratic. According to Global Integrity 2008, customs and excise laws are not always enforced uniformly or without discrimination. Public officials have considerable discretionary power in estimating the value of goods and are able to delay clearance procedures, which leaves room for corruption. The US Department of State 2007 reports that businesspeople often complain of petty corruption, such as the need to make unofficial payments to obtain customs clearance services.

Chittagong Port is known as a corruption-prone and risky port, according to Transparency International Bangladesh Problems and Potentials of Chittagong Port 2007. The Chittagong Port, which handles 85% of the country's total imports and exports, is considered to be one of the most inefficient and corrupt ports in Asia. According to the report, corruption has become institutionalised in the offices of the port where bribes or facilitation payments are expected if a task or procedure needs to be completed. In order to submit or amend a mandatory Import General Manifesto (IGM) or Export General Manifesto (EGM), bribes are paid in virtually all transactions. It was observed in March 2007 that paying bribes at numerous locations in order to anchor a ship in the port was not unusual. The report states that bribery takes place outside the port by reaching an understanding through agents. The pilots of the port take BDT 10,000 as tips for anchoring a ship and then for taking it to outer anchorage. In case of overdrafting of ships, the rate can rise to more than BDT 100,000.

According to Transparency International Bangladesh 2005, the import and export process, including clearance, loading, unloading and release of goods is extremely bureaucratic, and bribes are solicited at several administrative points. On average, more than half the costs incurred to release containers at Bangladeshi ports are bribes. The most costly type of imported goods in terms of bribes is electronic equipment (BDT 3,000 per ton on average), while among export items, the most costly items are vegetables (BDT 1,700 per ton).

Political Corruption

According to the US Department of State 2007, businesspeople consider customs to be a very corrupt institution in which officials routinely exert their power to influence the tariff value of imports and to expedite or delay import and export processing at the ports. To help reduce the discretionary power of customs officials and lower costs and improve efficiency at Bangladesh's trade entry points, a pre-shipment inspection system of import valuation was introduced in 2001. However, the system has not proved efficient.

The Chittagong Port administration and customs officials took an estimated total of BDT 8 billion in bribes in 2004, according to Transparency International Bangladesh 2005. More recently, in May 2008, nine employees of the customs department were detained on charges of irregularities and corruption.

Frequency

The World Bank & IFC: Doing Business 2010:
- A standard export shipment of goods requires 6 documents and takes an average of 25 days at a cost of USD 970 per container.

- A standard import shipment of goods requires 8 documents and takes an average of 29 days at a cost of USD 1,375 per container.

World Economic Forum: The Global Competitiveness Report 2009-2010:
- Business executives give the efficiency of customs procedures (formalities regulating the entry and exit of merchandise) in Bangladesh a score of 2.8 on a 7-point scale (1 being 'extremely inefficient' and 7 'extremely efficient').

The World Bank & IFC: Enterprise Surveys 2007:
- A little more than 51% of companies report that they expect to give gifts to obtain an import licence.

- The average time to clear direct exports through customs is 8 days.

- The average time to claim imports from customs is 10 days.

- Slightly more than 11% of companies surveyed identify customs and trade regulations as a major constraint to doing business.