More than two dozen Bangladeshi apparel exporters are still grappling with a deepening payment crisis, due to over $7 million in overdue payments from the Russian buyer, Concept Group LLC.
The payment delays were largely the result of international banking restrictions imposed on Russia following Western sanctions.
According to the Bangladesh Knitwear Manufacturers and Exporters Association, Russian buyers imported apparel items from more than two dozen Bangladeshi apparel manufacturers through eight buying houses.
However, the Russian buyers couldn鈥檛 make the payment against the imports due to international sanctions.
To break the payment deadlock, an industry leader under BKMEA proposed using Bangladesh鈥檚 pending payments for the Rooppur Nuclear Power Plant as a reciprocal mechanism to recover the stalled export earnings.
In this regard, they also discussed the matter with the Economic Relations Division of the finance ministry.
BKMEA also said that several buying agents, including Adroit Sourcing, Mother Corporation, P2ZS Apparels Ltd and Zara Fashion, still await payment for garment shipments under a master contract with Concept Group.
Mohammad Hatem, president of the BKMEA, told 抖阴精品 that several buying agents have complained about overdue payments under a $70.2 million master contract. Some payments were delayed by over 120 days and, in some cases, more than a year, despite timely shipments by Bangladeshi exporters.
The international sanctions on Russia have disconnected Russian banks from the SWIFT payment network, making it almost impossible for Russian buyers to transfer payments in US dollars.
As a result, Bangladeshi exporters, particularly those supplying under a master contract with Concept Group, cannot recover their export earnings from the Russian buyers.
On the other hand, the Bangladesh government also cannot transfer its payments to Russia for the Rooppur Nuclear Power Plant 鈥� the country鈥檚 largest ongoing infrastructure project.
Recognising this overlap, BKMEA has put forward a proposal to link the two payment streams.
Mohammad Hatem said the government could transfer the funds allocated for the Rooppur project into an account controlled by BKMEA or another designated national mechanism.
Russian buyers, including Concept Group, would then be instructed to pay the equivalent RMG export dues directly to the Russian government.
He said this approach would, in effect, allow Bangladesh to offset its blocked project payments by recovering its frozen export earnings.
鈥榃e have already raised the matter with the Bangladesh Bank governor and the secretary of the Economic Relations Division,鈥� Hatem said.
The ERD took the matter into cognizance, he added.
He explained that the mechanism would serve two purposes, including allowing them to recover the $7 million owed to the exporters, which is critical for their survival.
Secondly, it would help the government release its stalled project payments, avoiding further delays to the Rooppur project.
Hatem said that if the mechanism is successful, it could establish a 鈥榖arter system鈥� channel that could serve the long-term bilateral trade between Bangladesh and Russia.
Hatem also said that Russian buyers could deposit payments in rubles, yuan, or other alternative currencies under the proposed arrangement. At the same time, Bangladesh would clear its sovereign obligations without violating international sanctions.
On April 30, the BKMEA president formally wrote to the Russian buyer, Concept Group Brand Director Evgeniya, seeking urgent action to resolve outstanding payments.
The association urged the buyer to explore alternative payment methods, including using rubles or yuan, third-country banks or a barter system, which could be the most practical mechanism under current sanctions.
Meanwhile, after sending the letters, Hatem said a payment of $12,000 he received as arrears for one of his companies.
Himalay Sourcing Ltd managing director Morshed Bakul said that that his banks are increasing their pressure for payment as he failed to recover about $342 thousand from the Russian buyer.
鈥業f the barter system works, we will welcome it as we need the payment by anyhow, otherwise we will fall under serious cash shortfall,鈥� he added.
