News / Relief for foreign vessels as Bangladesh suspends cabotage rules

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The High Court of Bangladesh has “suspended” for six months the cabotage rules which require every foreign vessel to obtain a waiver certificate from the country’s shipping regulator before loading any cargo destined for or leaving Bangladesh.

The court issued the order on Tuesday after a Bangladesh Container Shipping Association (BCSA) petition claimed the waiver requirement hindered the business interests of foreign ships.

The High Court asked the regulator why the mandatory certificate requirement, under the Bangladesh Flag Vessel (protection of interest) Act 2019, should not be declared unlawful.

Section 3 (1) of the act says at least 50% of sea-borne cargo relating to Bangladesh’s foreign trade must be carried by Bangladesh flag vessels.

However, the act adds that this provision shall not be applied in the case of “any cargo, subject to the no-objection from the prescribed authority, which is required to be carried by any other vessel in accordance with any reciprocal arrangement made between the two trading partners”.

In addition, any cargo in respect of which a general waiver is announced by the prescribed authority, and the carriage of cargo to such places where no Bangladesh-flagged vessel is operated for transporting cargo directly between Bangladesh and its trading partners.

Sheikh Habibur Rahman, BCSA secretary, said some sections of the act had been “misinterpreted”, and thus its application had been hindering foreign ships’ business in Bangladesh.

“We are fed up with the issue. Our business is seriously hampered,” added Syed Mohammad Arif, chairman of the Bangladesh Shipping Agents Association.

He told The Loadstar: “I had meetings with the director general of shipping several times on the waiver certificate issue, but to no avail.”

Mr Arif said complications created by the “unlawful” application of the cabotage act meant many foreign ships had stopped sailing towards Bangladeshi ports, and added: “Many will also leave unless the issue is resolved amicably.”

He described the high court ruling as “a very practical decision, considering the hassles faced by foreign shipping in Bangladesh”.

In recent months, the shipping regulator has fined a number of vessels that loaded cargo without obtaining the waiver certificate, and kept them ‘arrested’ until the fine was paid.

There are only eight Bangladesh-flag containerships, while over 90 foreign vessels regularly service Bangladesh ports to carry its seaborne trade.