Open Trade Bangladesh
Home / Export room / Part A
Lesson 6 of 9

Commission, charges and Incoterms

What may be cut from the export value, which Incoterms Bangladesh allows, and the FOB freight puzzle.

Selling abroad has costs: an agent wants commission, banks charge fees, and someone pays the ship. The rules don't ban these costs. They just make sure the costs are real, reasonable and visible, so they can't be used to leave money abroad.

This lesson covers the "cuts" that are allowed and the trade terms that decide who pays what.

Para A-20

Deductible charges

In plain words

Agent's commission: commission for a particular shipment may be deducted from the bill, or paid from Bangladesh after the full money arrives, up to 5% of the value of the goods. More than 5%? Possible only where it is customary in that trade or in exceptional cases, and only with a standing permission from Bangladesh Bank, applied for through the bank (with the Appendix-5 format). Keep the supporting papers for inspection.

Bank and trade charges: allowed as the LC/contract says. Charges the LC doesn't mention may be settled under UCP and other ICC rules.

Books, journals and magazines published in Bangladesh: up to 33.5% discount on the invoice without prior approval.

At the desk

Invoice USD 100,000, agent's commission USD 4,000 (4%). Fine. If the agent wants USD 7,000 (7%), the exporter needs Bangladesh Bank's standing permission first. A Dhaka publisher selling books to a London distributor can give a 30% discount on its own.

Key words
Commission
Fee paid to an agent or the buyer's representative for arranging a sale.
Standing authority
A permission from Bangladesh Bank that covers repeated cases, not just one.
Read the rule as written (Para A-20)

(1) Commission or brokerage due to be paid to foreign importers or to agents by exporters in Bangladesh relating to the particular shipment may be deducted from the relative bill amount or the amount of the sale proceeds or remitted from Bangladesh after the full proceeds have been realized only upto a maximum of 5 (Five) percent of the value of the goods. In exceptional cases or where it is customary in any particular trade to pay commission in excess of 5 (Five) percent by deduction from the invoice value of exports, Bangladesh Bank may consider applications by exporters through their ADs and may grant a standing authority to permit payment of commission in excess of 5 (Five) percent of the invoice value. While applying to Bangladesh Bank for such permission, ADs shall attach application of exporter along with prescribed format (as per Appendix-5). The supporting documents have to be preserved by ADs upto prescribed period for presentation to Bangladesh Bank/inspection team as and when required.

(2) ADs may allow bank charges/trade charges as per stipulation of concerned export LCs/contracts. Bank charges/trade charges, not specifically stipulated in export LCs/contracts, may also be settled in accordance with the instructions of UCP and other applicable international trade rules.

(3) In the case of export of books, journals, and magazines published in Bangladesh, exporters can allow upto 33.5% discount of the invoice value without prior approval of Bangladesh Bank.

Source: Bangladesh Bank, FEPD-1 Circular No. 26, 30 July 2026, Part A, paragraph 20 (page 14). The original circular is the authority.

Para A-21

Use of appropriate incoterms

In plain words

Bangladesh allows these eight Incoterms for exports, if the LC/contract states them: EXW, FCA, FOB, FAS, CFR, CIF, CPT and CIP.

If an LC shows an Incoterm that doesn't fit, the bank tells the LC-issuing bank at once so it can be amended, and informs the exporter. Banks should also teach their exporters which terms fit, so exporters can ask buyers for the right LC from the start.

At the desk

A buyer sends an LC on DDP terms, meaning the exporter must deliver to the buyer's door with import duty paid. DDP is not on Bangladesh's list. The bank asks the issuing bank to amend the term and tells the exporter why.

Key words
FOB
Free On Board: the seller loads the goods on the ship; the buyer pays the sea freight.
CIF
Cost, Insurance and Freight: the seller pays freight and insurance to the destination port.
EXW
Ex Works: the buyer collects from the seller's premises.
Read the rule as written (Para A-21)

EXW, FCA, FOB, FAS, CFR, CIF, CPT and CIP incoterms issued by the International Chamber of Commerce are allowed to use in export from Bangladesh provided those are stipulated in the relevant LC/contract. Inconsistency, if any, in respect of use of incoterms, should be informed immediately to the LC issuing bank for necessary amendment with intimation to the beneficiary. ADs shall also keep their exporter customers informed of the appropriate terms and conditions against applicable incoterms for export so that they can insist foreign buyers to get LC/contract issued accordingly.

Source: Bangladesh Bank, FEPD-1 Circular No. 26, 30 July 2026, Part A, paragraph 21 (page 15). The original circular is the authority.

Para A-25

Shipments on FOB basis

In plain words

If freight was paid in Bangladesh but the export documents say FOB, report it to Bangladesh Bank.

Why? Under FOB, the buyer pays the sea freight. If the freight was paid here, the paperwork and the money tell two different stories, and Bangladesh Bank wants to know.

At the desk

It's like a restaurant bill that says "drinks included" while the customer has also paid for drinks at the counter. Someone needs to explain the difference.

Key words
Freight
The charge for carrying goods by ship, air or road.
Read the rule as written (Para A-25)

In cases where freight has been paid in Bangladesh but export documents are on FOB basis should be reported to Bangladesh Bank.

Source: Bangladesh Bank, FEPD-1 Circular No. 26, 30 July 2026, Part A, paragraph 25 (page 16). The original circular is the authority.

Putting it together

Commission is capped at 5% (unless Bangladesh Bank allows more), charges follow the LC or ICC rules, and only eight Incoterms are allowed. Next: what happens when an export doesn't go to plan.

Check yourself

Four quick questions. Nobody sees your answers but you.

1. The highest agent commission allowed without special permission is...
2. Which Incoterm is NOT in Bangladesh's export list?
3. Books published in Bangladesh may be exported with a discount of up to...
4. Freight was paid in Bangladesh, but documents are on FOB basis. What should the bank do?
Found this useful? Pass it on.

Brain feeling full? Take a tea break.