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Commission to scrap a new licence rule which makes it mandatory for
foreign shipping lines to have local partners with 51 per cent stakes
for continuing their operation in the country. In a latter to the
finance minister, AMA Muhith last week, the EC director general
(trade), David O'Sullivan, urged him to allow operation of the fully
foreign-owned companies under the previous rule, said the National
Board of Revenue officials. Before introduction of the new rule on
June 11, 2009, by the NBR, foreign shipping operators could operate
in the country with 100 per cent stakes. Referring to a meeting
between the EU ministerial troika and prime minister Sheikh Hasina
on June 9, the EC director general said assurances were given that
the fully foreign- owned companies already operating in the country
would not come under the purview of the new rule. The intense
lobbying by the EC has, caused resentment among local shipping agents
who termed the pressure 'unlawful' and contrary to ' level playing
field' in the country's growing export and import business. They
said the NBR had introduced the new rule as per the Customs Agents
Licencing Rules 2009 mainly to stop capital flight from the country.
They pointed out that the capital generated by the local shipping
companies had no such chances. At present, three fully
foreign-owned companies control more than 50 per cent of the
country's export and import trades worth more than $30 billion. The
companies are – Danish giant Maersk Line, APL, a subsidiary of the
Singapore-based Neptune Orient Lines and the Japan-based Nippon Yusen
Kaisha. There are seven other foreign-owned shipping companies,
including PIL and Sea Consortium, which are operating in the country
under joint venture. Lobbying by the foreign shipping operators
under the banner of the EC has intensified to have the new rule
lifted. They will have to abide by the new directive before seeking
renewal of their licences. 'The intense lobbying means the foreign
shippers want to control the country's growing shipping trade,' said
Ahsanul Huq Chowdhury, chairman of the Bangladesh Shipping Agents
Association. He told New Age that local shipping agents were
really concerned over the move by the foreign shipping companies to
control our shipping trade. He observed that the foreign diplomats
concerned had violated diplomatic norms by trying to interfere in the
matter. He said they were surprised by the move of the foreign
diplomats. He warned that they might go to court to protect the local
shipping business if foreign companies were allowed to operate with
100 per cent ownership. According to the EC director general, the
new rule would create a number of problems for foreign shipping
lines and could force them to sell major portion of a company's
stakes to their local partners. The new rule also stipulates that a
foreign shipping company operating in the country will have to
appoint a local managing director or a chief executive officer.
Besides, the number of foreign employees in such companies will not
exceed two. The new rule also said the foreign shipping lines would
have to reinvest at least 25 per cent of their net profit each year
and the paid-up capital in joint venture will not be less than $1
million. However, the licence validity period has been extended to
four years instead of the existing two years. Chittagong Customs
House (import) commissioner, Syed Golam Kibria said they would act
as per new rule and revise the criteria while issuing licences to
foreign shippers.
