The Head/ Principal Offices of all
Authorized Dealers in Foreign Exchange

Dear Sirs/Madam

Advance Payments Against Imports

Attention of Authorized Dealers is invited to the provisions of FE Circular No. 16 dated November 1, 2004 as subsequently amended vide EPD Circular Letter No.13/Policy-2004 dated November 10, 2004. In order to address the genuine needs of the manufacturing/industrial sector, it has been decided to allow advance payment upto the amount of US$ 10,000/- or equivalent thereof in other currencies per invoice, against intended imports of spare parts/consumables by manufacturing and industrial users for their own use without the requirement of a Letter of Credit or bank guarantee from the supplier. Authorized Dealers may, therefore, process such requests at their end while ensuring the bona-fides of the underlying import transactions and ensuring that related shipping documents are submitted to them by the importers within four months of the advance payments.

The Authorized Dealers will pursue the matter with the importers and report those cases to the area offices of Foreign Exchange Operations Department, SBP-Banking Services Corporation, where the requisite documents are not produced within the prescribed time limit.

Please bring the above to the notice of your constituents.