Attention of Authorised Dealers is invited to para 46(b) (Re-print circulated vide our Circular letter No.CIR.49 / FEP.Reg.(12)-97 dated the 18^th November, 1997). Chapter XIII of the Foreign Exchange Manual (7^th Edition - 1992), as amended from time to time, regarding merchanting trade, in terms of which Authorised Dealers / exporters were permitted to conduct merchanting trade in eight commodities mentioned therein.

2. It has now been decide to permit merchanting trade in commodities (other than the eight commodities mentioned in para 46(b) subject to the same terms and conditions as laid down in the said para of the Foreign Exchange Manual except that the margin to be retained by the Pakistani intermediary which includes his commission and expenses is not less than (a) 10% if the sale price is to be recovered from the foreign buyer before remittances of the purchase price is made to the overseas supplier of the goods, and (b) 15% if the back-to-back letter of credit provides for payment to be made to the overseas supplier of the goods before receipt of remittance from the overseas buyer. Other terms and conditions laid down in said para of the Manual will remain an changed for the transactions covered by this para.