ZXY International has decided to remove the clause in the letter of credit (LC) that says that it will not accept garments from Bangladesh if the country faces any sanctions.

The vendor also said it will issue a fresh LC by dropping the clause, if required, according to a statement of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

In a recent LC document, it said the LC will not be processed if the garment is sourced from a country that faced sanction from the UN, the US, the EU and the UK.

The trade body of apparel exporters said the much-talked LC was transferred by ZXY International against a master LC issued by a French buyer named KARIBAN.

It was initially reported that a US retailer was the buyer that inserted the clause, which has raised concerns among garment suppliers in Bangladesh.

ZXY transferred the LC in favour of Knit Concern, a member of the BGMEA. The BGMEA collected the copy of the LC, which was issued by Standard Chartered Bank Dubai.

After the sanction clause hit headlines in Bangladesh, the BGMEA sought clarification from ZXY.

The association received a formal clarification from ZXY and a clarification statement from KARIBAN.

KARIBAN did not include the clause in its master LC in favour of ZXY International, the BGMEA said in the statement.

The clause was inserted by Standard Chartered Bank Dubai and the bank has been doing the same in every LC since November 30, 2022, the BGMEA said, adding that the clause does not state that there is any sanction against Bangladesh.