SBP Export/Import Regulations: Unit 2

1. 1
Committed to you
Welcome to
SBP Regulations On Imports

2. 2
Committed to you
• Import of goods into Pakistan is regulated by Ministry
of Commerce.
• Import from Israel or from any other country notified
by Ministry of Commerce is prohibited.
• Import from India is regulated by Ministry of
Commerce from time to time.
• No person / company / firm is allowed to import unless
he possesses NTN and CNIC No.
• Letter of Credit for import can be opened for a period
upto 12 months, however for machinery and mill work
this period may extend upto 24 months.
SBP Regulations On Imports

3. 3
Committed to you
• Validity of LC may be extended within initial period of 12/24 months,
and may extend beyond 12/24 months, for a further period of 24 /
36 months.
• LC can be amended to change beneficiary within validity of LC.
• Before opening LC the AD should ensure that the item is classified as
importable under the import trade control schedule.
• Before delivering the documents to importer, AD should endorse the
amount of Foreign Exchange, to be remitted, on the invoice.
• Before establishing any letter of credit/registering contracts,
Authorized Dealers should take all precautions to ensure that the
goods to be imported under it are clearly classifiable under the
Import Trade Control Schedules.
SBP Regulations On Imports

4. 4
Committed to you
In addition to invoice value foreign bank’s charges on following
account may also be remitted,
i. LC advising charges
ii.LC amendment charges
iii.LC confirmation charges
iv.Negotiation commission
v.Unutilised LC commission
vi.Payment commission
vii.Reimbursement commission
viii.Collection commission
ix.Acceptance commission (Usance draft)
x.Postages / cable charges etc.
SBP Regulations On Imports

5. 5
Committed to you
• If value of documents exceeds LC amount and negotiating bank negotiates
considering amount being small, AD may effect remittance of excess amount
provided,
i. Such amount is within 5 % of amount of LC and maximum upto US$
500 or equivalent.
ii. Bill of entry covers the excess amount.
• Import on FOB basis is allowed in private sector subject to,
i. LC is opened on FOB basis.
ii. AD will issue a certificate on prescribed format for shipping company /
air line for collection of freight in Pak Rs.
• Payment of import may be made either through letter of credit or without
letter of credit against documents received for collection on the basis of
registration of contract.
• AD may register with them contract submitted by importer, and issue
registration certificate to importer.
SBP Regulations On Imports

6. 6
Committed to you
• AD who had registered the contract may effect remittance
against documents received from bankers of suppliers
abroad, if the documents are in conformity to the registered
contract.
• In case documents are received either by the importer or the
AD directly from overseas supplier, instead of bankers of
supplier, AD will make the remittance after goods have been
cleared from customs.
• Importer shall not use for any other purpose the foreign
exchange acquired for the purpose of imports.
SBP Regulations On Imports

7. 7
Committed to you
• All letters of credit should be documentary Letters of Credit
and should provide for payment against full set of clean on
board bill of lading, airway bill, railway receipt, post parcel,
(in case of bulk import of books from UK, statement of
dispatch).
• All LCs must call for invoices certifying country of origin of
goods in addition to any other certificate prescribed in
import policy.
SBP Regulations On Imports

8. 8
Committed to you
• LC may provide for payment to beneficiary either in the
country of origin of the goods, or in the country of shipment
of the goods.Payment may also be provided in a third
country provided it does not involve any extra payment. This
facility is, however not available for import of goods shipped
from ACU member countries.
• LC can not be opened which provides alternate country of
origin, however LC can be opened providing for goods of
“European Union” origin.
SBP Regulations On Imports

9. 9
Committed to you
• LC may provide for payment in any of the following manners,
i.In any foreign currency.
ii.In Pak Rupees for credit to non resident account of the
country of beneficiary or of the country of origin / shipment
of goods.
iii.Through ACU clearing arrangements where LC calls for
shipment directly from ACU member country.
• Beneficiary / goods can be changed before shipment at the
request of importer, provided new item is importable and
application for change of item is submitted to AD within
validity of the LC.
SBP Regulations On Imports

10. 10
Committed to you
• LC may provide negotiation within a period not exceeding 30 days from
date of shipment.
• AD should endorse opening of LC, for items other than freely
importable, into original category pass book.
• Before opening LC AD should obtain Form – I duly signed from the
importer.
• Form – I should be signed by the importer or his authorised agent, and
such person should disclose his status which is to be verified by AD.
• In case importers do not retire the documents and AD fails to get the I
form singed by them, AD should themselves sign it, and all such cases
should be reported to SBP.
SBP Regulations On Imports

11. 11
Committed to you
• In case of total or partial loss of goods during transit it will be
responsibility of the importer to obtain claim from the concerned
insurance company.
• For handling import under Aid / Loans / Barter agreements, SBP shall
designate ADs for opening of LCs.SBP shall also designate banks in
country of Loan / Aid giving agencies for the purpose of settlement.
• Various Aid / Loans have their own settlement procedure which
should be followed by the AD handling imports under such Aid /
Loans.
• Transactions under ACU member countries must be settled under
ACU mechanism.
SBP Regulations On Imports

12. 12
Committed to you
• Exporter must possess NTN and NIC No.
• Export from Pakistan is subject to a declaration by the exporter that
foreign exchange representing the full value of goods exported has
been or will be repatriated in manner and within a period specified
by SBP.
• The above restrictions do not apply to export to Afghanistan, export
to Iran by land route under special arrangements and to the export
of following,
i.Bonafide trade samples upto value of US$ 2000 per consignment,
supplied free of charge.
SBP Regulations On Exports

13. 13
Committed to you
ii.Leather garments manufacturers are allowed to export 50
samples in a calendar year irrespective of amount.
iii.Personal effects whether accompanied or unaccompanied.
iv.Ship stores and transhipment cargo.
v.Goods supplied by Government of Pakistan.
vi.Gift packets if declared by sender that value of contents is
upto value specified by Ministry of Commerce and no foreign
exchange is involved.
vii.Post parcel certified by SBP that no foreign exchange is
involved in transaction.
SBP Regulations On Exports

14. 14
Committed to you
• Exporter is required to declare details of export on – EFE to
customs / postal authorities.
• Export to certain countries as notified from time to time is
banned.
• Full value of goods exported must be realised on the due date of
related export bill or within 6 months from shipment which ever
is earlier. However in case of LC on 180 days usance such period
shall extend up to 195 days. In case of export of carpets or
exports to South America where usance may be up to 270 days
period for realisation shall extend up to 285 days.
SBP Regulations On Exports

15. 15
Committed to you
• Payment for goods exported to countries other than those with
which Pakistan has special payment arrangements like ACU
member countries etc. can also be accepted from FC accounts
maintained in Pakistan including account maintained by exporter
himself.
• Where terms of sales provide for payment earlier than 6 months,
extension may be allowed upto total period of 6 months from
shipment, if AD is satisfied with exporter’s explanation for delay.
• Exporter is allowed to retain foreign currency with AD for a period
of 3 working days thereafter to sell it to any AD.
SBP Regulations On Exports

16. 16
Committed to you
• Electronic linkage of Custom’s Computerized System (WeBOC)
with the commercial banks for the submission and verification of
Form ‘E” is an important initiative of the Pakistan Customs and
State Bank of Pakistan
• Export by country craft, motor launch or truck is allowed under
normal export procedure.
• Approve / Rejection Form-E request This feature enables the Bank
user to approve / reject the Form-E request which generates by
the exporter
• ADs shall not certify EFE – form unless they have satisfied
themselves with regard to following,
i.Arrangements for realisation of export proceeds have been
made.
SBP Regulations On Exports

17. 17
Committed to you
ii.Bonafide of importer abroad have been verified, particularly in
case of export on DA basis other than on LC.
iii.Arrangements have been made for receipt of documents of
title to goods direct from transport agency
iv.Genuineness of charter party has been verified where
required.
v.Export form has been signed by exporter or his authorised
agent disclosing his status in the concerned company.
vi.LC for export to ACU member country has been received
under ACU arrangements unless the export is under Aid / Loan
program
SBP Regulations On Exports

18. 18
Committed to you
• Certain commodities may, from time to time, be subject to export price
check, and in that case the authorised dealer will have to see the EPC
form along with the documents submitted by the exporter for
negotiation / collection as the case may be.
• Export of wool is under grading scheme and the exporter is required to
obtain a test report from government test house for all shipments of
wool, and such a report should be obtained by the AD along with the
documents for onward submission to SBP.
• Export of wool on consignment basis is only allowed to public sector.
SBP Regulations On Exports

19. 19
Committed to you
• Exports to Afghanistan are not required to be declared on EFE – form,
however exporter is required to repatriate proceeds within specified
period.
• All overdue export bills must be reported to SBP on periodical basis as
defined by SBP.
• If consignment is either lost or damaged in transit, the AD should
immediately lodge claim with insurance company and report the
transaction to SBP on triplicate copy of relative E – form marking
“shipment Lost”.
• In case advance payment has been received for the value of goods to be
shipped, the exporter must submit a certificate on “Advance Payment
Voucher” declaring details of the intended shipment.
SBP Regulations On Exports

20. 20
Committed to you
Exports to Afghanistan.
In respect of export to Afghanistan, the SRO 805(1)/2015 dated the 17th
August, 2015 issued by Ministry of Commerce stipulates that subject to
provisions of sub-paragraph (1) of paragraph-4 of the Export Policy Order,
2013, export of the following perishable goods shall only be allowed
against Pak currency on filing of regular shipping bills without the
requirement of “E-Form”, namely:-
(a) fruits;
(b) vegetables;
(c) dairy products; and
(d) meat.
Export of the above items shall not be entitled to:-
a) Zero rating of sales tax;
b) Rebate of Central excise duty; and
c) Payment of drawback of customs duty.
SBP Regulations On Exports

21. 21
Committed to you
Remittance of agency commission may be allowed by;
i.Deduction from the invoice.
ii.By instructing opening bank abroad to deduct such amount
from the proceeds to be realised and net amount may be
accepted as full realisation.
iii.By remittance from Pakistan on full realisation of the export
proceeds, within a period of 90 days after receipt of export
proceeds.
SBP Regulations On Exports

22. 22
Committed to you
1. Interpretation.
2. Authorised Dealers in Foreign Exchange
2A -Authorized money changers in foreign exchange
2AA. Exchange Companies
2B Cancellation of authorization
3. Restrictions on dealing in Foreign Exchange
4. Restrictions on payments.
5. Blocked accounts
6. Special accounts.
7. Restrictions on import and export of certain currency and
bullion
8. Acquisition by Federal Government of foreign exchange.
9. Duty of persons entitled to receive foreign exchange, etc.
10. Power to regulate the uses, etc., of imported gold and silver.
Foreign Exchange Regulation Act, 1947 (VII of 1947)
(Key Points)

23. 23
Committed to you
11. Payment for exported goods
12. Regulation of export and transfer of securities
13. Custody of securities.
14. Restrictions on issue of bearer securities
15. Acquisition by Federal Government of foreign securities
16. Restriction on settlement
17. Certain provisions as to companies
18. Power to call for information
19. 19 A Power to enter and inspect
20. Supplemental provision
21. Contracts in evasion of this Ac
22. False statements.
23. Penalty and procedure
24. Burden of proof in Certain Cases.
25. Power to Federal Government to give directions
26. Bar of legal proceedings.
27. Power to make rules.
Foreign Exchange Regulation Act, 1947 (VII of 1947)
(Key Points)