Bangladesh Bank (BB) has rationalised declaration requirements on import and export transactions between connected entities to facilitate legitimate trade while ensuring regulatory compliance.

According to a circular issued on Tuesday by the Foreign Exchange Policy Department (FEPD-1) of the central bank, businesses involved in intercompany transactions will no longer be required to submit the general declaration stating they have no direct or indirect connection or financial interest with foreign exporters.

Instead, for trade involving parent companies, approved foreign subsidiaries, or legitimate branch offices abroad, importers must now declare that the transaction is conducted on an arm’s length basis reflecting a competitive market price.

All applicable transfer pricing regulations and relevant laws, including Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) standards, are duly complied with.

The central bank noted that in practice, import transactions are often conducted with parent companies, approved foreign subsidiaries, or legitimate branch offices abroad. The updated rules aim to rationalise the declaration process on the prescribed IMP Form to accommodate these legitimate corporate structures.

The directive also instructs Authorised Dealers (ADs) – licensed foreign exchange banks – to obtain the new declaration from importers before initiating transactions.

Banks must also verify and satisfy themselves, using appropriate documentary evidence, regarding the legitimacy of the relationship between the Bangladeshi importer and the foreign exporter.

Furthermore, Bangladesh Bank specified that these updated instructions for intercompany dealings will apply mutatis mutandis to export transactions as well, modifying relevant prior regulations.

The circular has been sent to all Authorised Dealers in foreign exchange across Bangladesh for immediate compliance.