Frequently Asked Questions (FAQs) Question and Answer
Q. How long does an LCAF remain valid?
Letter of Credit Authorization Form (LCAF) has three types of validity:
i) Validity for opening LC- within 180 days of issuance (Para 8(8) of Import Policy Order, 2015-18).
ii) Validity for shipment- 17 months for capital machinery and 9 months for other items from the date of issuance (Para 8(9) of Import Policy Order, 2015-18).
iii) Validity for payment- 18 months subsequent to the month of issuance for capital machinery and 12 months for other items (Para 3(c), Chapter 7, Guidelines for Foreign Exchange Transactions Vol-1). However, there are the following relaxations:
a) if capital machinery is imported on phase-wise payments basis as part of the total import value, besides usual/quarterly payment, and LCAF expires before settlement of such remainder payments, ADs may effect such remittances within 30 months of LCAF issuance without obtaining its revalidation (FE Circular 7, 2017).
b) Remittance may be sent even after the prescribed validity of LCAF without its revalidation, if the import payment is made out of fund held in foreign currency accounts of importers maintained under general or special authorization from Bangladesh Bank (FE Circular 7, 2017).
c) In case of import of capital machinery on suppliers' credit basis against approval of Bangladesh Investment Authority (BIDA) for usance period of more than 360 days, remittance can be made after usual validity period prescribed by BB (18 months) without obtaining revalidation (FE Circular Letter 30, 2016).
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