Cross-Border Transactions: A 2025 Playbook for Businesses (and Banks) — by Tahmidur Remura Wahid (TRW)

Cross-border deals are where ambition meets complexity. Whether you’re shipping goods, licensing IP, onboarding an overseas distributor, financing imports via trade instruments, or acquiring a foreign target, success hinges on getting law, tax, FX, logistics, and compliance to sing from the same sheet.

This long-form guide distills how to structure and execute cross-border transactions in (and with) Bangladesh and beyond—written in the same practical, clause-ready style you’ve seen in our other TRW guides. Use it as a checklist when you negotiate term sheets, draft contracts, and coordinate banks, brokers, and customs stakeholders.

TRW is a global law firm with deep Bangladesh roots and international capability. We act for exporters and importers, lenders and borrowers, sponsors and funds, as well as tech and industrial groups. This guide is educational; for advice on your facts, speak with TRW.

1) Deal Mapping: What “Cross-Border” Actually Covers

Typical transaction families

• Sale of goods (manufacturer ↔ distributor/buyer), governed by a chosen national law, sometimes by the CISG if applicable (see §2).
• Services (consulting, IT, BPO, maintenance), where taxation (withholding, PE risk) and data/export controls loom large.
• Technology & IP (software licensing, SaaS, OEM, trademark co-branding), where export controls, data residency, and IP enforcement matter.
• Trade finance (LCs, SBLCs, collections, guarantees; §4–§5), where ICC rules and Incoterms define risk and the bank plays referee.
• Investment/M\&A (equity, asset purchases, JVs), requiring FDI approvals, FX clearance, repatriation planning, competition, and sanctions diligence.
• Project & structured finance (ECA-backed, escrowed receivables, forfaiting), blending payment waterfalls, local security, and FX hedging.

Your first 10 questions (every time)

1. What are we selling/buying? Is any part export-controlled, sanctioned, dual-use, or hazardous?
2. Who are the counterparties and beneficial owners? Any sanctions/PEP/AML red flags? (See §8.)
3. Which law governs and where are disputes resolved (court vs. arbitration)? (See §3.)
4. Is the CISG in or out? (See §2.)
5. What is the price currency, and how do we hedge FX? (See §6.)
6. What payment instrument (LC, SBLC, open account with credit insurance, documentary collection)? What ICC rules apply? (See §4–§5.)
7. What Incoterm® 2020 fits the logistics and risk transfer? (See §5.)
8. Any withholding tax, VAT/customs, or DTT relief? (See §7.)
9. What regulatory filings/approvals are needed (central bank FX, customs codes, import permits, sector regulators)?
10. What does “good title passes when…” actually mean in this contract? Match title, risk, documentary control, and payment triggers.

2) The CISG (Vienna Sales Convention): Will It Apply to You?

The United Nations Convention on Contracts for the International Sale of Goods (CISG) harmonizes sale-of-goods rules between Contracting States. If both parties are in CISG states (or conflict rules point to a CISG state’s law), the CISG can apply by default unless excluded in the contract. Many countries use it as the baseline; parties can opt out with a sentence (“The CISG shall not apply”). (uncitral.un.org, Wikipedia)

Bangladesh note. As of August 28, 2025, Bangladesh is not listed among CISG Contracting States; Bangladeshi businesses often transact under chosen national laws (English, Singapore, New York, etc.), with CISG opted out or in by agreement when counterparties prefer it. Recent commentary in Bangladesh has urged considering CISG accession for trade facilitation. (uncitral.un.org, The Daily Star)

Practical clause
“Governing Law. This Agreement is governed by the laws of [England]. The United Nations Convention on Contracts for the International Sale of Goods is excluded.”

3) Dispute Resolution Architecture: Court or Arbitration?

Arbitration is the default for many cross-border deals because awards are enforceable globally under the New York Convention. Bangladesh acceded in 1992, and its Arbitration Act 2001 implements the regime, enabling recognition and enforcement of foreign awards (subject to limited defenses). Choose a neutral seat (e.g., Singapore, London) and a well-run institution (SIAC, ICC, LCIA). (New York Convention)

Checklist—arbitration clause essentials

• Seat of arbitration (not just venue).
• Rules (e.g., ICC/SIAC).
• Number of arbitrators (1 for speed/cost; 3 for high-value).
• Language.
• Interim relief and emergency arbitrator access.
• Confidentiality (if not implied).
• Consolidation/multi-contract mechanics in complex supply chains.

When courts make sense: urgent in-country injunctive relief, or where you need public precedent or local security enforcement first.

4) Payment Mechanics: LCs, Collections, Open Account & Guarantees

Letters of Credit (LCs). For large or new counterparties, documentary credits shift counterparty risk to the issuing/confirming bank and are governed by UCP 600; digital presentations are governed by eUCP 2.0/2.1. In practice, banks “deal in documents, not goods,” so your shipping and certificate language must match the LC exactly. (ICC Knowledge, ICC – International Chamber of Commerce)

Documentary collections (D/P, D/A). Lower bank fees than LCs; governed by URC 522 (and eURC for electronic presentation). Risk sits more on the seller (documents released against payment or acceptance). (ICC Knowledge, ICC – International Chamber of Commerce)

Open account & credit insurance. Common with established buyers; mitigation via trade credit insurance, standby LC/guarantee, escrow, or milestone/bucket payments. Bangladesh has also seen regulatory facilitation of non-LC trade in specific contexts (e.g., open-account exports in earlier central bank guidance), but importers/exporters must check the current central bank circulars and their bank’s policy before contracting. (daily-sun)

Standby LCs & demand guarantees. Performance and payment guarantees often reference URDG 758 (or ISP98 for standbys). Use clean, documentary conditions; avoid factual disputes. (Cipcic-Bragadin Mesic & Associates)

5) Logistics, Title & Risk: Incoterms® 2020 + Insurance

Pick the right Incoterm® 2020. FOB/CIF (sea); FCA/CIP/DAP/DDP for multimodal/door-delivery. Title transfer is not dictated by Incoterms; your contract should say when title passes (e.g., on bank acceptance, on payment, on loading). Incoterms allocate cost/risk and documentary responsibilities; always name place/port (e.g., “CIP Frankfurt Incoterms® 2020”). (ICC – International Chamber of Commerce, Trade.gov)

Cargo insurance. For seller-insured terms (CIF/CIP), specify Institute Cargo Clauses version (A/B/C), insured value (e.g., CIP requires higher insurance—commonly Clause A), and beneficiary. Clause A is the broadest “all risks” form (subject to exclusions). (If Insurance)

Document discipline. Align invoice, packing list, transport document (B/L, AWB, CMR), certificate of origin, inspection/quality certificates, and insurance policy/certificate with the LC wording and ISBP practices to avoid discrepancies. (ISBP 745/821 guides how banks examine documents under UCP 600.) (ICC Academy)

6) FX, Pricing & Hedging

Price currency. Quote (and budget) in a hard currency where possible. Where you price in BDT or a mix, build a hedge policy into the contract (mandatory forwards; rate caps/floors; pass-through clauses).

Bangladesh FX framework (practical).

• Bangladesh Bank’s Guidelines for Foreign Exchange Transactions (GFET) set the backbone for AD banks: forward dealings are addressed, and ADs may quote ready/forward rates to clients; export FX procedures, import LCs/collections, and remittance reporting are standardized. (BB)
• Forward/derivative hedging: banks can book FX forwards (with underlying) and—under evolving guidance—offer limited options subject to approval/controls; banks must keep robust records and comply with FX risk manuals. (Always check the latest FEPD circulars and your bank’s product approval.) (BB)

Commercial tension to resolve in contract

• Who bears FX volatility beyond an agreed band?
• Hedging trigger (e.g., on PO or LC issuance) and proof.
• Early termination costs allocation if shipment slips.

7) Tax, Customs & DTTs (Double Tax Treaties)

Withholding tax (WHT). Cross-border services, royalties, and IP fees typically face WHT in Bangladesh (rate depends on the Income Tax Act 2023 and SROs). Many DTTs can reduce WHT; relief needs treaty eligibility, residence certificates, and procedural compliance with NBR. (National Board of Revenue, Tax Summaries)

Customs/VAT. Tariff classification drives duty; ensure HS codes, valuation, and origin are right. For exports and certain zero-rated supplies, match VAT documentation to reclaim/zero-rate formalities. Sectoral incentives and Export Policy 2024–27 measures continue to evolve (e.g., a push toward WTO-compliant support mechanisms); verify your product’s treatment and any registration prerequisites on Customs/NBR portals. (hub.bangladeshcustoms.gov.bd, ICMAB)

Don’t fixate on a single “treaty count.” Public sources list 30+ Bangladesh DTTs (the precise count depends on what you include and update cycle). What matters for your deal is your counterparty’s jurisdiction and the procedures to obtain relief. (boi.gov.bd, Tax Summaries)

8) Compliance Guardrails: AML/CFT, TBML & Sanctions

Know-Your-Counterparty. Screen the company and the beneficial owners; verify compliance history, watchlists, and adverse media.

Bangladesh framework. The Money Laundering Prevention Act 2012 (as amended) and BFIU guidance require robust KYC, monitoring, and reporting by banks and reporting organizations; trade-based money laundering (TBML) guidelines set out red flags (misinvoicing, circular shipments, unusual routes). Banks will ask for your trade profile and invoices/contracts that make economic sense. (bfiu.org.bd, BB)

Sanctions implementation. Bangladesh implements UN Security Council sanctions through relevant directions; BFIU has issued guidance on targeted financial sanctions and related controls. If you export via third countries, build contractual representations/warranties and an “automatic termination for sanctions breach” clause. (bfiu.org.bd)

Practical tips

• Keep a document trail: contracts, POs, invoices, transport docs, inspection certificates.
• Watch for red flags: inconsistent quantities/quality vs. price; round-tripping; changes in consignee/port without cause.
• Adopt a counterparty on-boarding questionnaire that banks/resellers can reuse.

9) Regulatory Touchpoints in Bangladesh (imports/exports/FDI)

Foreign exchange & trade

• Exports: Newer consolidated FE circulars set rules on EXP forms, repatriation, and ERQ retention; read them alongside the GFET volumes. (BB, Bangladesh Trade Portal)
• Imports: Import LCs/collections, IMP forms, and reporting to the BB online system (OIMS) follow detailed instructions; recent circulars reiterate reporting and record-keeping standards. (BB)
• Forward FX and risk management: AD banks must meet documentation/risk controls when offering forwards/options tied to bona fide trade. (BB)

Investment & repatriation

• FDI & equity transfers: repatriation of sale proceeds by non-resident investors and other capital account moves are addressed in the FX guidelines; coordinate banker + counsel early to avoid friction at exit. (BB)

Policy compass

• The Export Policy 2024–27 signals a post-LDC-graduation shift toward WTO-compatible incentives and diversification; treat it as directional policy for your sector planning. (ICMAB)

10) Sector Snapshots

Manufacturing & RMG/Light Engineering

• Use CIF/CIP if you control insurance and want buyer-friendly pricing; use FOB/FCA if the buyer manages freight.
• LC documents: pay attention to packing declaration and origin requirements; get a pre-check against UCP 600 / ISBP to reduce discrepancies. (ICC Knowledge)

ICT/Software & Business Services

• Contracts hinge on IP ownership, data security, sub-processor approvals, and service credits for downtime.
• Tax: expect WHT on technical services/royalties unless a DTT reduces it; consider PE risk if staff travel/second. (Tax Summaries)

Capital Goods & Infrastructure

• Stage payments + SBLC/URDG 758 performance guarantees, parent guarantees, and milestone documentary checks.
• Consider political risk and convertibility insurance for long-tenor receivables. (Cipcic-Bragadin Mesic & Associates)

11) Negotiation Blueprint: 20 Clauses That Do the Heavy Lifting

1. Governing law & CISG (in/out).
2. Forum (arbitration seat/rules; New York Convention enforcement plan). (New York Convention)
3. Price & currency (FX band, hedging trigger, adjustment).
4. Payment method (LC under UCP 600; collections under URC 522; e-presentation under eUCP/eURC). (ICC Knowledge, ICC – International Chamber of Commerce)
5. Incoterms® 2020 (named place/port; export/import clearances). (ICC – International Chamber of Commerce)
6. Title & risk (don’t rely on Incoterms to transfer title).
7. Inspection & acceptance (pre-shipment vs. destination; who pays; consequence of failure).
8. Compliance & sanctions (representations, ongoing covenant, termination). (bfiu.org.bd)
9. AML/KYC cooperation (provide ultimate beneficial owner (UBO) info; TBML safeguards). (BB)
10. Export controls (catch-all warranty; notify if controlled/dual-use).
11. Tax gross-up & WHT (treaty relief process; tax receipts). (National Board of Revenue)
12. Force majeure (ports closure, sanctions shocks, epidemics).
13. Change-in-law (tariffs, quotas, FX rules—who bears).
14. Liquidated damages (delay; quality shortfall).
15. IP & confidentiality (license scope; escrow for source code if applicable).
16. Assignment & factoring (consent for receivables financing).
17. Insurance (Institute Cargo Clauses; beneficiary, limits, claims support). (If Insurance)
18. Set-off & netting (coordinate with LC/collections to avoid conflict).
19. Notice & language (translation hierarchy).
20. Entire agreement & amendments (no “side emails”).

12) Bank Workstreams: How to Keep Your LC and Docs Clean

• Draft the LC application to mirror your real logistics: earliest/latest shipment, partials, trans-shipments, period for presentation, “to order” or straight B/L.
• Use ISBP-aligned document templates (invoice wording; packing list fields; weight/measure consistency; “clean on board” statements).
• For e-presentation, confirm file formats, authentication/signatures, and eUCP references with the issuing/confirming bank before issuance. (ICC – International Chamber of Commerce)
• For collections, ensure the collection instruction tracks URC 522 requirements (who can release docs; D/P vs. D/A; protest instructions). (ICC Knowledge)
• For guarantees/SBLCs, keep demands documentary and conditions objective; prefer URDG 758 wording for demand guarantees. (Cipcic-Bragadin Mesic & Associates)

13) Execution Risks & How to Cure Them

1) Discrepant documents under LC

• Cure: pre-check against UCP 600/ISBP; appoint an independent document checker; narrow “other documents as may be required” clauses. (ICC Knowledge)

2) FX moves blow your margin

• Cure: mandatory forwards on PO/LC date; collar pricing; add a FX re-opener if shipment delays beyond X days (cost split). (Bangladesh banks can offer forwards with proper documentation under GFET/FX risk guidelines.) (BB)

3) Buyer defaults on open account

• Cure: reserve the right to switch to SBLC or credit insurance after rating downgrade; use retention of title where enforceable.

4) Sanctions change mid-voyage

• Cure: sanctions clause with automatic suspension and unwind; oblige parties to re-route lawfully or terminate without fault. (bfiu.org.bd)

5) TBML / compliance hold at bank

• Cure: maintain a trade profile package (corporate tree, UBO, product/HS code notes, pricing rationale, freight/insurance logic), matching invoices to shipping evidence; use standard red-flag checklists. (BB)

6) Tax leakage

• Cure: pre-clear DTT residency evidence and procedures; build gross-up mechanics; consider restructuring to a treaty-favored hub, mindful of substance rules. (National Board of Revenue)

14) TRW Service Modules (How We Usually Help)

• Structuring & term sheets. We map law–tax–FX–logistics early, draft the governing law/arbitration and Incoterms+title+risk matrix, and set the payment instrument stack (LC/SBLC/collection + e-rules).
• Trade finance & bank engagement. We write LC/guarantee text, align with UCP 600 / URC 522 / URDG 758 / eUCP, and rehearse documents with your forwarder. (ICC Knowledge, Cipcic-Bragadin Mesic & Associates)
• Regulatory. We steer Bangladesh Bank FX procedures, import/export policy fit, and reporting hygiene with AD banks. (BB)
• Tax & treaties. We model WHT/DTT relief, VAT/customs impacts, and profit repatriation paths. (Tax Summaries)
• Compliance. We build sanctions/AML/TBML protocols that banks recognize and clear faster. (BB)
• Disputes. We craft neutral-seat arbitration clauses and run enforcement strategy under the New York Convention. (New York Convention)

15) Quick-Reference Tables

A. Instrument Selection

B. Logistics & Risk

C. FX & Pricing

D. Compliance

E. Bangladesh FX & Trade Touchpoints

16) Sample Clause Pack (Editable Starting Points)

a) Payment (LC under UCP 600 + eUCP)
“Buyer shall cause its bank to issue an irrevocable documentary credit subject to UCP 600 and eUCP v2.1 in favor of Seller, available by sight payment against presentation of the documents set out in Annex [•]. The LC shall permit [electronic presentation/file formats]. Any amendment requires Seller’s prior written consent.” (ICC Knowledge, ICC – International Chamber of Commerce)

b) Collections (URC 522)
“Where documentary collection applies, presentation and handling shall be subject to URC 522 (and eURC where electronic presentation is agreed).” (ICC Knowledge)

c) Incoterms® 2020
“Delivery: CIP Frankfurt Incoterms® 2020. Title passes on receipt by Seller of LC payment; risk passes per CIP on delivery to the named place. Seller shall procure Institute Cargo Clauses (A) insurance in the Buyer’s favor up to [110%] of the invoice value.” (ICC – International Chamber of Commerce, If Insurance)

d) FX and Hedging
“Contract price is in USD. Buyer shall enter into an FX forward for the full amount within 2 Business Days of LC issuance and provide hedge evidence; if shipment is delayed beyond [X] days, the Parties shall cooperate on re-hedging; incremental costs shall be shared [•].” (Within the contours of BB guidelines for trade-related hedging.) (BB)

e) Compliance & Sanctions
“Each Party represents it is not a sanctioned person/controlled entity and will comply with applicable UN sanctions. If any Party becomes sanctioned or performance would breach sanctions, the non-affected Party may suspend or terminate immediately.” (bfiu.org.bd)

f) Disputes (Arbitration & NYC)
“Disputes shall be finally resolved by arbitration under the ICC Rules by [1/3] arbitrator(s). Seat: Singapore. Language: English. Judgment on the award may be entered in any court having jurisdiction.” (Enforceable via the New York Convention.) (New York Convention)

17) A Cross-Border “Day-Zero” Checklist (Use Before You Sign)

• Counterparty KYC/UBO verified; sanctions hits cleared. (bfiu.org.bd)
• Governing law + CISG stance documented. (uncitral.un.org)
• Disputes: arbitration seat settled; interim relief strategy prepared. (New York Convention)
• Pricing currency & FX hedge plan in the contract. (BB)
• Payment instrument chosen and ICC rule set cited (UCP 600/eUCP, URC 522/eURC, URDG 758). (ICC Knowledge, Cipcic-Bragadin Mesic & Associates)
• Incoterms® 2020 named place; title/risk aligned with payment triggers. (ICC – International Chamber of Commerce)
• Tax & DTT relief workflow (certificates, forms, timelines). (Tax Summaries)
• Bangladesh FX/regulatory steps mapped (EXP/IMP forms, OIMS reporting, FEPD circular checks). (BB)
• Insurance program (Cargo Clauses, beneficiary, claims support). (If Insurance)
• TBML/AML documentation pack ready (pricing logic, logistics route evidence). (BB)

Final Word

Cross-border transactions succeed when contracts, bank rules, and regulatory mechanics are aligned before anyone ships or pays. The fastest way to lower risk (and bank friction) is to decide early on governing law/arbitration, documentary rules (UCP/URC/URDG/eUCP), and Incoterms, while building a compliance pack your bank—and your buyer’s bank—can trust on first sight.

If you’d like model clause packs, LC/guarantee text, or a deal-specific playbook (law–tax–FX–logistics–compliance) for your next transaction, we’re here to help at Tahmidur Remura Wahid (TRW) — contact us here.

Sources (key load-bearing references)

• New York Convention status & Bangladesh accession (1992). (New York Convention)
• UCP 600 (ICC); eUCP 2.1 for electronic presentation. (ICC Knowledge, ICC – International Chamber of Commerce)
• URC 522 (collections) & eURC supplement. (ICC Knowledge)
• Incoterms® 2020 (ICC). (ICC – International Chamber of Commerce)
• Institute Cargo Clauses (A) (2009). (If Insurance)
• URDG 758 (demand guarantees). (Cipcic-Bragadin Mesic & Associates)
• CISG (UN/UNCITRAL status; Bangladesh not listed among Contracting States as of Aug 2025; local commentary urging adoption). (uncitral.un.org, The Daily Star)
• Bangladesh Bank GFET & FEPD circulars (exports/imports, reporting, forwards). (BB)
• BFIU AML/CFT & TBML guidance. (BB)
• Income Tax Act 2023 & WHT context; NBR framework; DTT resources. (National Board of Revenue, Tax Summaries)

About TRW
Tahmidur Remura Wahid is a full-service global law firm anchored in Bangladesh with cross-border reach. We combine transactional, regulatory, and disputes expertise with on-the-ground bank and customs fluency—so your contracts clear in the boardroom and at the border.