TRW & Co · Customs, VAT & Tax
Bonded Warehouse Licence Lawyer in Chittagong (Chattogram): Licensing, Audits and Appeals
A bonded warehouse licence lawyer in Chittagong helps export factories obtain, keep and defend the customs bond that lets them import inputs duty-free. Under the Customs Act 2023, unaccounted materials can trigger full duty demands, detention of plant and a suspended BIN. With online bond management now mandatory, records matter more than ever.
Key pointSince 1 January 2026 utilisation permissions run through the NBR's Customs Bond Management System, which checks bond data against Bangladesh Bank records, so reconciliation gaps that once went unnoticed are now visible before an auditor arrives.
At a glance
Licence under section 12
The Commissioner of Customs (Bond) licenses private warehouses, including for manufacturing from duty-free imports, and can suspend or cancel for breaches or in the public interest.
BIN can be suspended
Where a bond licence is suspended on public interest grounds, the Customs Act 2023 also suspends the licensee's Business Identification Number.
CBMS now mandatory
The NBR's online Customs Bond Management System launched in January 2025 and became mandatory from 1 January 2026 for bond permissions.
Demands and detention
Unaccounted or improperly removed goods attract full duty, penalties and interest, with power to detain and later sell goods and machinery.
Ninety-day appeal window
Adjudication orders of the Commissioner of Customs (Bond) go to the Appellate Tribunal within 90 days, then to the High Court Division within 90 days.
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What bonded warehouse licensing covers in Chattogram
A bonded warehouse licence lawyer in Chittagong advises export-oriented manufacturers, accessories makers and other licensees on the customs bond: the licence that lets a factory import fabric, yarn, chemicals, packaging and other inputs without paying duty, provided the finished goods are exported. For Chattogram's garment, textile, footwear and accessories factories, the bond is often worth more than any other permit they hold.
The bond is also a standing liability. Every kilogram of duty-free input must be accounted for through production, export, approved transfer or payment of duty. When the records do not reconcile, or when customs suspects misuse, the licensee faces duty demands, penalties, a suspended Business Identification Number and, in serious cases, prosecution. Legal questions arise at four points: obtaining the licence, keeping it renewed and compliant, defending audits and allegations, and dealing with suspension or cancellation.
This page explains the framework under the Customs Act 2023 and how it works in practice for factories in and around Chattogram. For wider Custom House issues, see our customs disputes and import and export pages.
The legal framework: Customs Act 2023 and the bond rules
The Customs Act 2023 replaced the Customs Act 1969 and now governs warehousing. The NBR has published an authentic English text that reflects later Finance Ordinance amendments. The key provisions for bonded factories are these.
Licensing, suspension and cancellation
Section 12 allows the Commissioner of Customs (Bond), or another Commissioner authorised by the NBR, to license a building or enclosure at a warehousing station as a private warehouse. One of the listed purposes is processing or manufacturing goods wholly or partly from dutiable imported goods, which is the basis of the manufacturing bond. Rules may govern the grant of licences, their conditions and the import entitlement of each warehouse, and the Commissioner may require a guarantee for the duties on stored goods.
The same section allows the Commissioner to suspend or cancel a licence if the licensee breaches the Act, the rules or a licence condition, or where it is considered fit in the public interest. Where a licence is suspended on public interest grounds, the licensee's BIN is suspended too. Suspension or cancellation does not stop recovery of government dues.
The warehousing chapter
Chapter XVI (sections 108 to 134) sets the operating rules. Importers placing goods under warehousing must give a general bond, and the NBR or an authorised Commissioner may also require a bank guarantee up to the duty on the goods. Warehoused goods may leave only for home consumption, export or removal to another warehouse, or as the Act otherwise allows.
The NBR sets the permitted warehousing period by rules, and it can differ by type of warehouse. If a licence is cancelled, goods must be moved or cleared within ten days of notice unless the officer extends that period.
Where goods are removed improperly, kept beyond the allowed time or not accounted for, section 126 lets the officer demand the full duty with rent, penalties and interest. If that is not paid, section 127 allows detention of goods, plant, machinery and other property, and their sale if the demand is not met within fifteen days of the detention notice.
The Act's penalty schedule adds a further layer. Carrying on warehouse activities in breach of the Act or without permission, failing to store goods properly, misusing warehouse facilities to evade duty and removing goods without paying duty all attract penalties, several of them calculated by reference to the duty involved, and the most serious can lead to prosecution and imprisonment on conviction. Goods involved are liable to confiscation.
Officers may also audit records under section 99, and many valuation and demand disputes can be referred to alternative dispute resolution under sections 216 to 219.
A bond licence is a promise to account for every duty-free input. The licence is only as safe as the records behind it.
Rules, entitlement and permissions
Bangladesh Customs' bonded warehouse guidance lists the Bonded Warehouse Licensing Rules 2008 among the governing instruments, alongside NBR orders. It describes special bonded warehouses for 100% export-oriented garment factories and general bonded warehouses for other export industries, accessories suppliers, shipbuilders, diplomatic and duty-free outlets and EPZ and economic zone units. Annual entitlement is based on production capacity and past performance, measured against input-output coefficients. Garment exporters import against Utilisation Declarations issued through their trade association, while other industries use Utilisation Permissions issued by the Customs Bond Commissionerates.
| Category | Typical licensee | Import authorisation | Key legal risk |
|---|---|---|---|
| Special bonded warehouse | 100% export-oriented woven, knit and sweater factories | Utilisation Declaration against export orders and master LCs | Reconciliation of fabric and trims with exports |
| General bonded warehouse (deemed exporter) | Accessories and packaging suppliers to exporters | Utilisation Permission within annual entitlement | Proof that supplies went to bonded exporters |
| General bonded warehouse (other exporters) | Non-garment export industries, such as footwear or leather | Utilisation Permission within entitlement | Coefficient disputes and wastage claims |
| Shipbuilding bond | Shipyards building for export | Permissions tied to the build contract | Long bonding periods and project delays |
| EPZ or economic zone unit | Units inside CEPZ, KEPZ or other zones | Zone-specific customs procedures | Sales into the domestic market |
How it works in Chattogram
Bonded factories in the Chattogram region deal with the Customs Bond Commissionerate in Chattogram for licensing, entitlement, permissions, audit and enforcement, and with the Chattogram Custom House when their consignments arrive at the port. Factories inside the Chattogram EPZ and other zones also deal with BEPZA under the zone regime.
Since January 2025, the NBR's Customs Bond Management System (CBMS) has moved bond services online, and it became mandatory from 1 January 2026, according to an NBR press release reported in March 2026. Utilisation permissions are now issued online by the Customs Bond Commissionerates, and the system checks import and export documents against Bangladesh Bank's records. That makes inconsistencies between bank, customs and bond records much easier for officers to detect.
Enforcement in Chattogram has also tightened. In July 2026 The Daily Star reported that the Chattogram Customs Bond Commissionerate was preparing to cancel a licence and pursue legal action over allegedly forged documents used to import duty-free materials, and had imposed compliance conditions such as stock verification and supervised fabric cutting. A bonded warehouse licence lawyer in Chittagong now spends as much time on compliance reviews as on licence applications.
Most bond problems in Chattogram surface at one of three moments. The first is at the port, when a consignment of inputs arrives and the Custom House or the bond office questions the permission, the entitlement or the declared description, and the goods sit accruing port charges while the issue is resolved; our customs clearance team handles that interface.
The second is at audit or renewal, when officers compare imports, production and exports and find a gap. The third is after a tip-off or intelligence report, when an inspection team arrives unannounced and counts stock against the registers. Each moment calls for a different response, and a bonded warehouse licence lawyer in Chittagong who knows how the local Commissionerate and Custom House operate can help a factory prepare for all three.
Seized or detained inputs raise their own issues of release, fines in lieu of confiscation and adjudication, which our goods seizure page explains in more detail.
Key decisions for licensees
Which licence category
A factory that exports directly, supplies other exporters or does both faces different bond types, security levels and permissions. Choosing the wrong structure creates reconciliation problems later.
Coefficients and entitlement
Input-output coefficients drive how much can be imported duty-free. Coefficients that do not reflect real wastage or product mix lead to shortfalls that look like leakage at audit.
Subcontracting and transfers
Moving bonded inputs to a subcontractor or another warehouse needs permission. Informal transfers between group factories are one of the most common grounds for demands.
Responding to a notice
When a show cause notice or audit objection arrives, the choice between a written reply, ADR, a hearing strategy or a writ challenge should be made early, with the full reconciliation in hand.
A bonded warehouse licence lawyer in Chittagong can help weigh these decisions with your commercial team, your customs agent and your auditors, so that legal positions match the numbers.
Obtaining, renewing and amending a bond licence
- Confirm eligibility and category. Check that the business is export-oriented in the way the rules require, and decide whether it is a direct exporter, deemed exporter or both.
- Prepare the premises. The warehouse must be a defined building or enclosure capable of secure storage and inspection, with records kept as the NBR requires.
- Assemble corporate and regulatory papers. Trade licence, TIN and BIN, company documents, factory and environmental permits, membership certificates and machinery details are typically needed.
- Apply and provide security. File the application with the Customs Bond Commissionerate, execute the general bond and provide any guarantee the Commissioner requires.
- Fix entitlement and coefficients. Obtain approved input-output coefficients and annual entitlement that reflect real production.
- Operate through CBMS. Apply for utilisation permissions online, keep bond registers current and reconcile imports with exports continuously.
- Renew on time. Renewal depends on audit of how earlier inputs were used, so start the audit and document collection well before expiry.
- Record changes. Changes of ownership, premises, directors or capacity usually need approval or notification before they take effect.
A lapsed licence can strand inputs at the port just as an export order is due. Diarise expiry dates, start the renewal audit early, and if renewal is delayed for reasons outside your control, raise it in writing with the Commissionerate before the licence lapses rather than after cargo arrives.
Documents and records to keep
Most bond disputes are won or lost on records. A bonded warehouse licence lawyer in Chittagong will ask for:
- the licence, renewals, conditions and any correspondence on entitlement;
- approved input-output coefficients and the evidence used to set them;
- Utilisation Declarations or Permissions, with the related LCs, sales contracts and bills of entry;
- bond registers, stock ledgers, production and wastage records;
- export documents: bills of export, shipping bills, bills of lading and bank realisation evidence;
- permissions for subcontracting, inter-bond transfers and disposal of waste or rejects;
- audit reports, show cause notices and replies.
If you are unsure whether your records would survive an audit, ask a bonded warehouse licence lawyer in Chittagong to test a sample period before the officers do. Because CBMS links bond data with Bangladesh Bank, gaps between bank records and bond records are now visible to officers. Reconciling them internally before an audit is far easier than explaining them in reply to a notice.
Risks and common mistakes
Treating the coefficient as a formality
Input-output coefficients determine how much duty-free input each unit of export can justify. If the coefficient understates real wastage, a factory that has done nothing wrong will still show a shortfall at audit, and the shortfall will be treated as goods not accounted for. Under section 126 of the Customs Act 2023 that can lead to a demand for the full duty with penalties and interest. Review coefficients whenever product mix, fabric types or processes change, and keep the technical evidence that supports them, so that a later demand can be answered with data rather than explanations.
Moving goods between factories informally
Group companies often move fabric, trims or chemicals between units to meet deadlines. Without the required permission, that movement can be treated as removal of warehoused goods in breach of section 118, which permits removal only for home consumption, export, transfer to another warehouse or as the Act allows. The consequences include duty demands and penalties under the Act's penalty schedule. Put inter-unit and subcontracting arrangements on a formal footing, obtain permissions in advance and keep delivery and return records.
Ignoring a suspended BIN
Where a licence is suspended on public interest grounds, section 12(5) provides that the BIN is suspended too. That affects VAT compliance, imports, exports and banking, not just the bond. Licensees sometimes discover the suspension only when a consignment or payment is blocked. If you receive notice of suspension, or suspect it, take advice immediately on the grounds stated, the records needed to answer them, and whether an urgent hearing, appeal or writ application is appropriate. Our VAT team can deal with the BIN consequences in parallel.
Missing appeal deadlines and deposits
Orders passed by the Commissioner of Customs (Bond) as an adjudicating authority can be appealed to the Appellate Tribunal within 90 days under section 226, and appeals from the Tribunal go to the High Court Division within 90 days under section 229. Appeals against duty demands or penalties usually require a deposit of 10 per cent of the duty or fine under section 223, although the appellate authority can dispense with it for undue hardship. Orders fixing warehousing periods under section 119 are excluded from these appeal routes. Plan the deposit and the grounds well before the deadline.
Signing statements during an inspection
During a surprise inspection or stock count, staff may be asked to sign statements or stock sheets on the spot. Those documents are later used as admissions. Factory managers should be briefed to cooperate fully, but to record objections where figures are disputed, to ask for copies, and to contact management and counsel before making any statement about intent or responsibility. Where criminal allegations such as forged documents are involved, the stakes are higher still and our criminal defence team should be involved early.
Foreign buyers, investors and group structures
Bond compliance is increasingly a question for foreign buyers and investors as well as factory owners. Buyers want assurance that duty-free inputs are not leaking into the domestic market, investors acquiring a factory inherit its bond history, and lenders financing back-to-back LCs depend on the licence remaining valid.
- Acquisitions: Bond audits, open demands and coefficient disputes should be part of due diligence, because liabilities stay with the licensee after a share sale.
- EPZ versus bond: A foreign investor choosing between a zone unit and a bonded factory outside the zones faces different customs and labour regimes; our BEPZA practice compares them.
- Trade finance: Banks issuing back-to-back LCs rely on utilisation permissions and valid licences; see our trade finance page.
- Group coordination: TRW & Co's offices in Dhaka, Singapore, Dubai and London can coordinate with foreign parents and buyers on compliance reporting and remediation.
How a bonded warehouse licence lawyer in Chittagong at TRW & Co helps
TRW & Co's Chattogram office at Room 4022, Annex 2, District and Sessions Judge Court Building, Court Hill (Porir Pahar), Kotwali, Chattogram 4000 works with export manufacturers across the region. Our advocates appear before customs authorities, the Appellate Tribunal and the High Court Division. We provide:
Licensing and renewals
We structure applications, review premises and documentation, and manage renewals, amendments and changes of ownership with the Customs Bond Commissionerate.
Compliance health checks
We review coefficients, registers, subcontracting and transfer practices against the Customs Act 2023 and NBR orders, and help fix gaps before an audit finds them.
Audit and notice defence
We prepare replies to audit objections and show cause notices, represent licensees at hearings, and use ADR where it fits the dispute.
Appeals and writs
We take appeals to the Appellate Tribunal and the High Court Division and, where action is taken without jurisdiction or a fair hearing, bring writ petitions.
We do not promise outcomes, and we tell clients plainly when a demand is well founded and settlement is the better course. Related reading: our guide to bonded warehouse rules and to customs appeals.
Checklist for decision-makers
- Is the licence category right for how the factory actually exports and supplies?
- When does the licence expire, and has the renewal audit started?
- Do approved coefficients reflect current products, materials and wastage?
- Are all subcontracting and inter-unit transfers covered by permissions?
- Do bond registers reconcile with bank, customs and export records in CBMS?
- Is there an open audit objection, demand or show cause notice, and what is the deadline?
- Has the BIN or any bank facility been affected by a suspension?
- For buyers and investors: has the bond history been reviewed before signing?
If you need a bonded warehouse licence lawyer in Chittagong, contact our Chattogram office at info@trw.co or +880 1779 127165. You can also read about the TRW & Co Chattogram office or see all our practices.
Frequently asked questions
01Who issues bond licences for factories in Chattogram?
Under section 12 of the Customs Act 2023, private warehouse licences are granted by the Commissioner of Customs (Bond) or another Commissioner authorised by the NBR. Factories in the Chattogram region deal with the Customs Bond Commissionerate in Chattogram for licensing, entitlement, permissions and audit. Units inside export processing zones also work within BEPZA's zone procedures. Applications, permissions and many other services now run through the NBR's online Customs Bond Management System.
02What is the difference between a UD and a UP?
Both authorise duty-free import of inputs against export production. According to Bangladesh Customs' bonded warehouse guidance, garment exporters import against Utilisation Declarations issued through their trade association, while other industries use Utilisation Permissions issued by the Customs Bond Commissionerates. Since January 2026, utilisation permissions are processed online through CBMS. In both cases, the imports must later be reconciled with exports using approved input-output coefficients.
03Can customs suspend my bond licence without a hearing?
Section 12 of the Customs Act 2023 allows suspension or cancellation for breach of the Act, rules or licence conditions, or in the public interest, and a public interest suspension also suspends the BIN. Basic fairness generally requires that the licensee be told the grounds and given a chance to respond, especially before cancellation. Where action is taken without jurisdiction or without a fair hearing, a writ petition in the High Court Division may be available. The right response depends on the order's wording and timing.
04What happens to my goods if the licence is cancelled?
Under section 120 of the Customs Act 2023, the owner of warehoused goods must move them to another warehouse or clear them for home consumption or export within ten days of the cancellation notice, unless the officer extends the period. Goods not removed in time can attract a demand for full duty, rent, penalties and interest under section 126. Plan for this immediately on receiving any cancellation notice.
05How do I challenge a bond audit demand?
Start with a full reconciliation of imports, production, wastage and exports, then reply to the audit objection or show cause notice with supporting evidence. If an adjudication order is passed by the Commissioner of Customs (Bond), it can be appealed to the Appellate Tribunal within 90 days under section 226. A deposit of 10 per cent of the duty or fine is usually required under section 223, though it can be waived for undue hardship. ADR is available for suitable disputes.
06Does a bond licence transfer when a factory is sold?
In a share sale, the company remains the licensee, so its bond history, open audits and liabilities stay with it. In an asset sale, the buyer usually needs its own licence, and changes in ownership or premises generally require approval from the Commissionerate. Either way, buyers should review bond compliance as part of due diligence, and transaction documents should allocate responsibility for pre-completion bond liabilities.
07Can bonded inputs be sent to a subcontractor?
Only with the necessary permission. Section 118 of the Customs Act 2023 allows warehoused goods to leave the warehouse only for home consumption, export, removal to another warehouse or as the Act otherwise provides. Subcontracting without permission can be treated as unlawful removal, leading to duty demands and penalties. Obtain permission in advance and keep delivery, processing and return records for each movement.
Sources and official materials
- Customs Act, 2023 (authentic English text, NBR) — Sections 12, 108 to 134, 220 to 229
- Bangladesh Customs: Bonded Warehouse — Bond types, rules, entitlement, UD and UP
- National Board of Revenue — Customs rules, SROs and orders
- The Business Standard: NBR issues 25,000 online bond permissions (March 2026) — CBMS launch and mandatory use from January 2026
- The Daily Star: Two Ctg exporters face legal action (July 2026) — Chattogram Customs Bond Commissionerate enforcement
- Supreme Court of Bangladesh — Customs appeals and writs in the High Court Division
- Bangladesh Export Processing Zones Authority — Customs procedures for EPZ units
General information only, current as at 2 November 2026. It is not legal advice and does not create an advocate–client relationship. It reflects the law of Bangladesh unless stated otherwise, and the law, court practice and official fees change frequently. Check current official sources and take advice on the facts of your matter.
