ILLEGAL ‘TRANS-SHIPMENT’ OF GARMENTS BY FOREIGN TRADER

A Belgian national, Mr. Luc Vossen, owner of a company called Mal¾ Fashions is under investigation by the Garment Association of Nepal and The Commission for the Investigation of Abuse of Authority for conducting business in Nepal against the rules and regulations of Nepal.

Mal¾ Fashions was established in March 1999 as a garment industry and given a licence by the Department of Industry with the understanding that it would set up a garment industry in Tikathali village, Lalitpur with an investment of Rs. Twenty (20) million. However, after one year of regularly exporting

garments in its name, it has come to light that this company has not invested in any garment industry. It has a trading office in Sinchahiti, Lalitpur from where illegal activities are conducted with the help of three Vietnamese women (Ms. Anh, Ms. Bich, and Ms. Dung) and a Bangladeshi national (Mr. Farukh). All these activities are co-ordinated by Mr. Luc Vossen himself, who has been recommended a one year business visa by the Department of Industries and operates from the Radisson hotel where he spends over Rs. six(6) thousand a night.

The CIAA has asked the Department of Industries to clarify why they still continue to give a licence to Mal¾ Fashions to operate an industry in Nepal when after one year of exporting garments from Nepal it still does not have a factory, whereas the laws clearly stipulate that a garment factory must have a minimum of fifty (50) machines. Furthermore, they have also questioned what motivated them to recommend visas for the three Vietnamese girls when no factory exists.

Since the European Union is aware that unscrupulous businessmen take advantage of the numerous benefits that it has bestowed upon Nepal because of its ‘least developed nation status’, the EU has made it mandatory that the Garment Association of Nepal, the Local Chamber of Commerce and the Department of Commerce of HMG certify all garment exports to the EU are actually made in Nepal by monitoring the factories. After receiving numerous complaints that Mal¾ Fashions was responsible for illegal ‘trans-shipment’ of garments during the month of May 2000, GAN went for a surprise inspection of Mal¾ Fashions on June 03, 2000. Armed with incriminating papers from Singapore and various documents signed by the Lalitpur Chamber of Commerce and Department of Commerce saying that Mal¾ Fashions had ‘exported’ certain consignments from Nepal, Mal¾ Fashions was asked to prove that the consignment was indeed made in Nepal and exported legally. Upon investigation, it was found that Mal¾ Fashions did not even have a factory in Nepal. When staff of Mal¾ Fashions were further questioned as to where future consignments for which Mal¾ Fashions had asked permission for export were being fabricated, they were unable to provide satisfactory answers.

Luc Vossen is favourably placed to take advantage of the benefits of ‘trans-shipment’. His main company called SEDI S.A., incorporated in Geneva has offices in Belgium, Nepal, Bangladesh, Singapore and Vietnam. Since there are strict controls, quotas for exports from Bangladesh and Vietnam to EU, garments are first fabricated in Vietnam/Bangladesh and sent to Singapore. Documents for these garments made in Vietnam are made in Nepal stating that these garments are made in Nepal. Because of lax monitoring and substantial rewards, the papers are signed by the concerned authorities without physically checking that the goods are actually made in Nepal. These ‘authentic documents’ are couriered to Belgium. No garments actually leave Nepal as none were made in the first place! The consignment from Vietnam has the shipping marks changed in the warehouse in Singapore and are then shipped to the EU – as if the goods were exported from Nepal to the EU via Singapore!

The Garment Association of Nepal is especially keen to pursue this matter as the EU has been very generous in allowing genuine Nepalese garment exporters to take advantage of GSP (Generalised System of Preference) and quota-free exports. The EU had already taken HMG to task last year and had made it mandatory for the Department of Industries to also monitor and ensure that   the goods are indeed fabricated in Nepal. GAN is desirous to punish the guilty so that the genuine exporters can enjoy these privileges given only to the poorest of countries like Nepal, Cambodia and Laos. Although GAN is pursuing this case relentlessly, they are shocked by the lethargy and stonewalling being done by the Department of Industries – ample proof that certain officers of the Department of Industries are in the payroll of the foreigner. If the Department of Industries does not punish the guilty, GAN intends to send all the available documents to the concerned departments in the EU. It has also started corresponding via email with the

authorities of the EU.
Mal¾ Fashions: 543317,530518
Mr. D.L. Shrestha : Section Officer, Department of Industries – suspected of
being consultant to Luc Vossen -
Note: dear Editor,

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Anonymous

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