Chapter XII

CHAPTER XII

EXPORTS

1. General.

The Government of Pakistan have by their Notification Nos.I(6)-ECS/48 and I(7)ECS/48 both dated the 1st July, 1948 issued in pursuance of Section 12 of the Act prohibited the export by post and otherwise than by post, of any goods either directly or indirectly to any place outside Pakistan, unless a declaration is furnished by the exporter to the Collector of Customs or to such other person as the State Bank may specify in this behalf that foreign exchange representing the full export value of the goods has been or will be disposed of in a manner and within a period specified by the State Bank. This chapter deals with the regulations governing exports from Pakistan.

2. Exports exempted from Exchange Control Procedure.

The prohibition mentioned above does not apply to exports to Afghanistan, exports to Iran by land route under special arrangement and to the export of:

(i.) Bonafide trade samples of articles exported as such by an exporter registered under the Registration (Importers and Exporters) registered under the Registration (Importers and Exporters) Order 1993 or has been exempted from registration thereunder, provided FOB value of samples supplied free of charge does not exceed US $ 2,000/- or equivalent per firm per annum. Leather garments manufacturers are entitled to export 50 (fifty) samples in a calendar year irrespective of monetary ceiling,

Above Paragraph is Updated via F.E. Circular 73 dated 7th November 1994.

Above Paragraph is Updated via F.E. Circular 67, dated 2nd October 1994.

(ii) personal effects whether accompanied or unaccompanied of travellers,

(iii) ship stores and transshipment cargo,

(iv) goods shipped under the orders of the Government of Pakistan or of such officers as may be appointed by the Government of Pakistan in this behalf or of the Military, Naval or Air Force authorities in Pakistan for Military, Naval or Air Force requirements. In the case of export by post, a certificate signed by a Gazetted Officer or by any person entitled to use service postage stamps should be pasted on the outer cover of the parcel to the above effect,

(v) gift packets where they are accompanied by a declaration by the sender that the contents of the packet are less than Rs.500/ in value and that the dispatch of the packet does not involve any transaction in foreign exchange, and

(vi) where the packet is covered by a certificate issued by the State Bank to the effect that the export of the parcel does not involve any transaction in foreign exchange.

Customs authorities will not allow exports without declaration on the export forms except in the cases listed above.

3. Export Control Regulations.

Exchange Control regulations regarding exports cover all goods exported from Pakistan irrespective of whether they are subject to licence under the Export Trade Control Regulations or not. Similarly, nothing in the Exchange Control Regulations relieves the exporters from the necessity of complying with the Export Trade Control Regulations as laid down by Government from time to time, including the necessity of obtaining an export licence wherever necessary. The Government of Pakistan has under the Export Trade Control Regulations banned exports to South Africa and Israel.

4. Registration of Exporters.

Under the Registration (Importers and Exporters) Order, 1952, no person can export any goods from Pakistan unless he is duly registered as an exporter with the Chief Controller of Imports and Exports. Authorised Dealers should, therefore, ensure before certifying any export form 'E' as required in para 7 below that the person is so registered. The registration number should be quoted on the relative export forms.

5. Forms Prescribed for declaring Exports.

As required under the Federal Government Notification Nos.I(6)-ECS/48 and I(7)ECS/48 both dated the 1st July, 1948 the exporters are required to declare their exports to the Customs/Postal authorities in form 'E' (Appendix V-13)

6. Method and Period of Payment.

(a) Full export value of goods exported from Pakistan and declared to the Custom authorities should be received in an approved manner as embodied in State Bank's Notifications No. F.E. 1/98-SB dated the 8^th June, 1998 on the due date for payment or within four months from the date of shipment / dispatch whichever is earlier or within such period as may be prescribed by the State Bank through special or general permission, through an Authorised Dealer either in convertible foreign currency in which the Authorised Dealer maintains accounts or in U.S.D. Dollar or in Pakistan rupee from a non-resident bank account. However, where the terms of sale / irrevocable letter of credit provide for payment on 120 days usance / 180 days' usance in case of Hand Knotted Carpets from the date of shipment / posting, it shall be permissible for the exporter to repatriate the export proceeds within 135 / 195 days from the date of shipment / posting. Prior approval of the State Bank should be obtained before arranging for payment in any manner other than that indicated above.

Above Paragraph Updated via F.E. Circular 49 dated 29th October, 1998.

Above Paragraph Updated via F.E. Circular 20 dated 9th June, 1998.

(b) As an exception to the above, payment for goods exported to countries other than those with which Pakistan has special Payment Arrangements e.g. Asian Clearing Union member countries etc., may also be accepted from any foreign currency accounts maintained with banks in Pakistan including an account maintained by the exporter himself. The transaction shall be reported first on Schedule E-4 under Code No. 1718 as payment to the account holder and simultaneously on Schedule A-1/A-2 on account of export proceeds.

Above Paragraph Added via the Reprint as published by State Bank of Pakistan dated 30-June-1993.

7. Certification of Export Forms by Authorised Dealers.

(a) Before the export forms are lodged by the exporters with the Customs/Postal authorities all the copies thereof are required to be certified as under by the Authorised Dealers.

(i) Certified that the above exporter(s) is / are known to us, that he / they is / are bonafide businessman / businessmen in Pakistan and that he / they has / have made arrangements with us for the realisation of the export proceeds of the goods declared on this form within the time limit stipulated in State Bank's Notification No. F.E. 1/98 dated the 8^th June, 1998 and that we are satisfied with the said arrangements. We have also satisfied ourselves about the bonafides of the importers / consignees abroad and their credentials etc.

(ii) We undertake to ensure that export proceeds against shipment on firm contract shall be received by us within the period prescribed by the State Bank. In the event of non-compliance due to reasons beyond our control we shall furnish to the State Bank of Pakistan a full explanation as to the reasons and circumstances resulting in our inability to comply.

(iii) We undertake that in the event of non-realisation of export proceeds against shipment on consignment sale within the stipulated period, we shall obtain from the exporter(s) and furnish to the State Bank of Pakistan a full explanation as to the circumstances resulting in non-realisation. We further undertake that in the event of short realisation, we shall obtain from the exporter(s) and furnish to the State Bank of Pakistan a fully documented account sale certified by the consignees/Chamber of Commerce of the country of import. In the case of short realization in respect of consignment sales Authorised Dealers shall also obtain from the exporter(s) a full explanation for the shortfall and furnish it to the State Bank alongwith such other documents as may be called for by it.

(b) Authorised Dealers shall not certify any export form unless they have satisfied themselves with regard to the following:

(i) Arrangements have been made for realization of export proceeds of the goods covered by the relative export forms.

(ii) Bonafides of the importers / consignees abroad and their credentials have been verified. Where necessary they should make discreet enquiries through their foreign correspondents. In case of shipments against T.R. (Trust Receipts) or D.A. (Documents against Acceptance) greater care should be exercised by the Authorised Dealers in certifying the relative export forms. Where Authorised Dealers doubt the bonafides or standing of the importers/consignees or where they suspect collusion with the intent to evade or delay repatriation of full export proceeds, they should report such cases promptly to the State Bank.

Above Paragraph Updated via the Reprint as published by State Bank of Pakistan dated 30-June-1993.

(iii) Arrangements have been made for receipt of documents of title to goods like Railway Receipt, Bill of Lading, Airway Bill and Truck Receipt.

(iv) Genuineness of the charter party where shipment is to be made against a charter party Bill of Lading has been verified. Discreet enquiries should be made about the carrier and the importers as indicated in sub-paragraph (ii) above to safeguard against any loss of cargo or foreign exchange in such cases.

(v) The export form has been signed by the exporter or his authorised agent. The signatory should disclose his status / capacity in the concerned firm / company etc., i.e. Director / Partner / Proprietor / Manager etc. In case the form is signed by the agent of the exporter, it should be ensured by the Authorised Dealers that he holds a valid legal power of attorney from the exporter & the terms of the power of attorney are such that the exporter as well as the attorney can be held responsible severally and jointly for the repatriation of the export proceeds to Pakistan.

(vi) Letter of credit for export to Asian Clearing Union member country has been received under the ACU Arrangement, unless the export is covered by a loan / credit extended to the importing country by International Agencies like IBRD / Asian Development Bank etc., in which case letters of credit will be established envisaging payment in convertible currencies outside the Asian Clearing Union Arrangement.

(vii) In the case of re-export of imported goods, export licence issued by the Office of the Chief Controller of Imports & Exports in terms of pare 3 of their Public Notice No.3(87) Exp.1 dated the 4th August, 1987 is produced to the Authorised Dealer.

8. Export by Country Craft, Motor Launch or Truck.

Authorised Dealers can also advise letters of credit or confirm arrangements and certify export forms for exports by means of country-craft or motor-launch or truck subject to normal procedure followed in case of exports.

9 (a). Printing and Distribution of Export Forms.

(a) Head / Principal Offices of Authorised Dealers are required to maintain a complete record of all export forms printed by them and of their distribution to their branches and customers. For this purpose, they should maintain a Stock Register which should show branch-wise distribution of the export forms. It is the responsibility of the Head / Principal Offices to keep their branches adequately stocked with the export forms.

9 (b). Maintenance of Patry-Wise Record of Certified Export Forms.

(b) Authorised Dealers should maintain another register for recording therein the particulars of export forms issued and certified by them in respect of each exporter. In this register they should record against each form the date of submission of the export documents in cases where shipments have been made, or of the surrender of complete set of export forms in cases where goods have not at all been entered for shipment or complete shut-out notice in cases where the goods have been entered for shipment but have been shut-out. Against each export form, the Authorised Dealers should also indicate the date of realization of the export proceeds wherever the documents are negotiated or collected through them. In cases where none of the above documents are received by them within the period of 21 days from the date of certification on the relative export forms the Authorised Dealers should immediately get in touch with the exporter concerned to ascertain whether or not the shipment has been effected. If the Authorised Dealer is satisfied that the exporter has not yet been able to ship the goods against the certified export form, it should make a suitable notation against the entry in the register of the relevant certified export form and follow it up till the documents referred to above are submitted to it. All other cases where the exporters do not respond to the notices of the Authorised Dealers, should be reported to the State Bank with full particulars on priority basis. The advices should invariably bear a running serial number.

10. Making out and Delivery of Shipping Documents.

In exercise of the powers vested in it under Section 20(3) of the Act, all carriers whether common or private (railway, steamship, motor trucking or airline companies) and their agents have been directed by the State Bank as under:

(i) In respect of export of goods from Pakistan to foreign countries by land route or by sea, the Railway Receipts, Bills of Lading, Truck Receipts or any other documents of title to Cargo should be drawn only to the order of an Authorised Dealer designated for the purpose by the exporter. This restriction will not apply if the exporter produces a certificate to the carriers from the Authorised Dealer concerned in the prescribed form (Appendix V-14). The certificate will be issued by the Authorised Dealers only if the shipment is being made against an advance payment or against an irrevocable Letter of Credit which calls for drawing of documents of title to cargo to the order of the opening bank, or the importer, or the exporter or to order and blank endorsed. In all cases the railway receipt, bill of lading and other documents of title to cargo should be delivered by the carriers to the authorised representative of the Authorised Dealer concerned holding authority letter for collecting these documents.

(ii) In respect of export of goods to foreign countries by air, the airway bills and any other documents of title to cargo should be drawn to the order of a bank in the country of import nominated by the Authorised Dealer designated for this purpose by the exporter. However, in the case of export of goods against advance payment or against irrevocable letter of credit which contains a condition that the airway bill and other documents should be drawn to the order of the importer abroad the airway bill and other documents of title to cargo may be drawn to the order of the importer abroad, provided the exporter produces to the carriers a certificate to this effect from the Authorised Dealer concerned in the prescribed form (Appendix V-14). In all cases the airway bill and other documents of title to cargo will be delivered by the carriers to the authorised representative of the Authorised Dealer concerned holding authority letter for collecting these documents.

The above directions do not apply to the following cases:

(a) Bonafide trade samples provided the F.O.B. value of each consignment supplied free of charge does not exceed U.S.$1000/-.

(b) Personal effects, whether accompanied or unaccompanied, of travellers.

(c) Ship stores and transshipment cargo.

(d) Goods shipped under the orders of Federal Government or of such officers as may be appointed by the Federal Government in this behalf or by Military, Naval or Air Force authorities in Pakistan for Military, Naval or Air Force requirements.

(e) Exports covered by exemption certificates issued by the State Bank.

(f) Exports of fresh fish, vegetables, fruits, poultry and other goods of perishable nature.

(iii) In case where irrevocable Letter of Credit contains a condition that documents shall accompany a certificate from the beneficiary stating that one original (1/3rd or 2/3rd) Bill of Lading or Airway bill has been dispatched to the buyer / consignee, Authorised Dealers may allow dispatch of original 1/3rd or 2/3rd Bill of Lading or Airway Bill to the party named in the letter of credit only after the documents have been presented for negotiation under the letter of credit.

11. Endorsement of Shipping Documents by Authorised Dealers.

The Authorised Dealers to whose order the relative railway receipts, bills of lading etc., are drawn shall endorse the same to the order of their foreign correspondent but in no case shall they make any blank endorsement thereon or endorse them to the order of the consignor unless they have obtained specific or general approval of the State Bank. However, in the case of exports through third country intermediary i.e. under merchanting arrangements, it will be in order for Authorised Dealers to make blank endorsement where advance payment has been received or where documents are negotiated under letters of credit which call for such blank endorsement.

12. Functional Utility of the Copies of Form 'E'.

All exports from Pakistan which are subject to Exchange Control Regulations are required to be declared on form 'E' which is in sets of four copies each. The exporter should submit the full set of Form 'E' to the Authorised Dealer for certification as described in para 7(a) above only after it has been completed and signed by the exporter himself or his authorised agent. While certifying Form 'E', Authorised Dealers should ensure that exporters give only one address in Form 'E'. After the form is certified by the Authorised Dealer, it should be submitted to the Customs / Postal authorities at the time of shipment alongwith the shipping bill. The Customs authorities will detach the original copy and after filling in the portion relating to them and affixing their seal and signature thereon forward it to the State Bank. The Customs authorities will return the duplicate, triplicate and quadruplicate copies to the exporter or his authorised agent who will retain the quadruplicate for his own record and submit the duplicate and triplicate copies to the Authorised Dealer alongwith the shipping documents within 14 days from the date of shipment. The Authorised Dealer will forward the triplicate copies of the export forms to the State Bank alongwith the monthly return in which realization of export proceeds is reported, retaining the duplicate for his record. In cases where receipts of export proceeds are reported by an Authorised Dealer in respect of exporters residing in the jurisdiction of an area office of Exchange Control other than that to which the returns are being submitted, separate area-wise schedules A-1/A-2 with one additional copy will be prepared and submitted to the Exchange Control. The name of the area office of Exchange Control to which the schedules pertain will be prominently indicated on top thereof.

13. Submission of Export Documents to Authorised Dealers.

All shipping documents covering goods exported from Pakistan and declared on Form 'E' must be passed through the medium of an Authorised Dealer within 14 days from the date of shipment. The exporter must submit the duplicate (bearing Customs seal and signature of Customs Officials with Code number) and triplicate copies of Form 'E' alongwith the shipping documents, invoices etc., to the Authorised Dealer who had certified the Form 'E'. An extra copy of the shipper's invoice must be attached to the triplicate copy of the Form 'E'. In the event of payment being received through an Authorised Dealer other than the one who had certified the export form, the Authorised Dealer negotiating or collecting the export documents should convey the particular of the export form to the bank who had originally certified the export form to enable the latter to make a suitable note in the relative register.

14. Scrutiny of Documents.

On receipt of the bill of lading / airway bill / railway receipt etc., alongwith the Form 'E' and the export documents, the Authorised Dealers should compare the bills and/or documents with the relative export form and satisfy themselves that they conform in all respects to the declarations made on the relative export forms and the amount of the bills and invoices is not less than the value declared on them. All such cases where the Authorised Dealers consider that the value declared to the Customs and accepted by them does not represent the true value of the goods, should be promptly reported to the State Bank. The Authorised Dealers may, however, accept bills / documents for negotiation/collection if the difference between the value stated on the relative export form and the amount of the bill / invoice represents legitimate adjustments on account of short weight or actual freight and other items of similar nature. Details of such adjustments must be given on the relative export forms and must be authenticated by the Authorised Dealers under their stamp and signature.

15. Exports subject to receipt of Advance Payments or Irrevocable Letters of Credit.

In the case of commodities export of which is subject to receipt of advance payment or irrevocable letter of credit shipments will be allowed by the Customs only on the basis of the certificate of the Authorised Dealer on the export forms to the effect that either advance payment or irrevocable letter of credit has been received covering export of the goods mentioned on the export form.

16. E.P.C. Procedure.

(i) Exporters of commodities which may be subjected to Export Price Check procedure from time to time are required to file with the State Bank particulars of contracts made by them with foreign buyers on prescribed form within the prescribed period together with the certified copies of original offers and acceptances or any other evidence in support of the contract. In cases where the State Bank is satisfied about the rate at which sales have been contracted and that exporters have fulfilled other prescribed requirements, it will approve the E.P.C. form and return the original to the exporter.

(ii) Exporters are required to produce the approved copy of the E.P.C. form to the Customs for inspection alongwith the relative export forms at the time of shipment and again to the Authorised Dealers at the time of negotiation / collection of documents covering the relative shipment. Authorised Dealers at the time of negotiation / collection of documents covering export of such commodities will compare the invoices with the original copy of the E.P.C. form bearing the approval of the State Bank. Documents must not be accepted for negotiation / collection unless the Authorised Dealers are satisfied that the particulars of the invoices agree in all respects with the particulars declared on the E.P.C. form. When negotiating / collecting the documents, the quantity and the value for which the documents are negotiated / sent for collection should be endorsed on the reverse of the E.P.C. forms under the stamp and signature of the Authorised Dealer. Where the E.P.C. form has not been fully utilised but is still valid, it may, after necessary endorsement, be returned to the exporter. E.P.C. forms which have been fully utilised, should be forwarded by the Authorised Dealers to the State Bank alongwith the triplicate copies of the relative export forms. Expired E.P.C. forms should be forwarded by the Authorised Dealers to the State Bank alongwith the explanation of the exporters as to why the E.P.C. approval has not been utilised.

17. Special Requirements for Export of Wool and other Commodities subject to Grading Scheme.

Under the Wool Grading Scheme of the Government of Pakistan every exporter of wool is required to obtain a test report from the Government Test House for all shipments of wool intended for export whether on firm contract or on account basis. In all such cases the exporter of wool is required to forward to the State Bank through an Authorised Dealer a copy of the test report of the Wool Test House duly initialed by the Customs alongwith the invoice and triplicate copy of the relative export form. In the case of firm sales, the exporters should also mention in the invoice:

(i) the quality of wool,

(ii) the rate per pound and

(iii) yield basis on which the sale has been made.

Sale of wool on consignment basis is required to be made only by public auction through recognised Auction Houses abroad. Account Sale from these recognised Auction Houses should be forwarded to the State Bank alongwith the relative triplicate copy of the export form.

The procedure governing other commodities which may, in future be subjected to Grading Scheme will be notified to Authorised Dealers separately.

18. Reporting of Overdue Cases.

(a) The State Bank has by a notification in the official Gazette, has prescribed the period within which full foreign exchange value of the exports must be realised. Non-realisation or delay in realization of the export proceeds without the prior permission of the State Bank constitutes an offence and renders the exporters liable to action under the Act.

Above Paragraph 18 (a) is Updated via F.E. Circular 20, dated 9th June, 1998.

(b) To enable the State Bank to review the position of all outstanding export bills, the Controlling/Head Offices of Authorised Dealers will furnish to the State Bank every month the following statements.

(i) Statement showing the total figures of all export bills including partly unrealised relating to all their branches outstanding at the end of each month in the prescribed form (Appendix V-15).

(ii) Statement in the prescribed form (Appendix V-16) containing particulars of those export bills which have become overdue during the month under report. This statement will be prepared in respect of Authorised Dealer's branches according to the Exchange Control areas given in para 4 of Chapter 1 and will be submitted in duplicate for each area separately. The outstanding export bills pertaining to each exporter should be listed in a sequence with exporter-wise totals and the grand total given at the end. However, the statement for the month of June each year should show particulars of all overdue export bills as on 30th June.

(iii) Statement in Appendix V-17 showing particulars of those cases which were reported by Authorised Dealers as overdue in the previous statements but the items are deleted from their books during the month under report either due to realisation of the proceeds or under instructions from the State Bank.

The above statements in Appendices V-15, V-16 and V-17 should reach the Exchange Control Department (Statistics Section) State Bank of Pakistan, Central Directorate, Karachi by the 15th of the month following that to which they relate. It will be the responsibility of the Authorised Dealers to see that the above statements are submitted to the State Bank on due date and that all cases of exports which become overdue are invariably incorporated in these statements and that there is no omission in this regard.

Also see FE Circular No. 48 dated 22nd October, 1998.

19. Part Drawings and Advance Remittances.

(i) If it is customary in any particular trade for exporters to draw bills for only a percentage of the invoice value and to receive the balance after arrival of the goods at destination, Authorised Dealers may negotiate / collect bills in the part amount provided they obtain an undertaking from the exporters that they will realise the balance within the prescribed period. Authorised Dealers should report such part receipts on Form 'E' not attached Voucher" on schedule 'A-2'. It is the responsibility of the Authorised Dealers to follow up each such case and to ensure that the balance amount is also realised within the prescribed period. This exemption will not, however, apply in the case of shipments of those goods which are subject to either 100% advance remittance or to the opening of irrevocable letter of credit for the full amount of the export.

(ii) When a part of the invoice value has been received in advance by the shippers, the Authorised Dealers when negotiating / collecting documents for the balance should certify on the triplicate copy of the export form that part of the amount had been received by them in advance quoting reference to the return in which the receipt was reported on an "Advance Payment Voucher" (Chapter XXII).

(iii) In both the above cases the triplicate copy of the export form should be kept outstanding by the Authorised Dealer and submitted to the State Bank only after the full value of the export has been received.

20. Short Shipment.

Where a portion of a consignment is short shipped and the exporter consequently draws a bill or prepares an invoice for a quantity less than that declared on the relative export form, he should give a notice of short shipment on the prescribed form in duplicate to the Customs. It will be the responsibility of the exporters concerned to produce to the Authorised Dealer a copy of the short shipment notice duly certified by the Customs alongwith the shipping documents. In such cases, Authorised Dealers should negotiate / collect the shipping documents on the basis of short shipment notice. The Authorised Dealer will forward the short shipment notice duly signed by the Customs to the State Bank of Pakistan alongwith triplicate copy of 'E' form while reporting the realization of full value of the goods shipped. If the exporter fails to produce the short shipment notice alongwith the export documents, the Authorised Dealer may negotiate / collect the documents but report full particulars of the case to the State Bank. The Authorised Dealer should, however, continue to follow up the case with the exporter for submission of short shipment notice.

21. Shipments Shut-out Entirely.

(i) Where a shipment to be made by a particular vessel is entirely shut out and reshipped by another vessel, the exporter should apply on the prescribed form in duplicate to the Customs for permission to alter the name of the vessel on the relative export form and the shipping bill.

(ii) Where a shipment is entirely shut out and is not being reshipped immediately by another vessel, the exporter should give a notice to the Customs in the prescribed form in duplicate. It will be the responsibility of the exporter concerned to produce to the Authorised Dealer who had certified the export form, a copy of the shut-out notice duly certified by the Customs within 21 days from the date of certification of the export form. On receipt of the shut-out notice, the Authorised Dealers should treat the relative export forms as cancelled and forward the shut-out notice to the State Bank.

22. Shipment lost or damaged in Transit.

(i) If shipments from Pakistan are lost in transit for which payment has not already been received, the Authorised Dealers must see that an insurance claim is made immediately the loss is known. The triplicate copy of the relative export form should be endorsed with the narration "Shipment Lost" under the stamp and signature of the Authorised Dealer and sent to the State Bank under a separate covering letter giving the following particulars and bearing running serial number:

(a) Name of the insurance company with which goods were insured.

(b) Amount of insurance and its currency.

(c) Place where claim is payable.

(ii) The Authorised Dealer who had certified the export form should pursue the matter with the shipper and ensure that in each case the exporter has received the insurance claim and produces encashment certificate, in cases where claims are paid in foreign currencies and Rupee payment certificate where settlements are made in Rupees. These certificates should be forwarded by the Authorised Dealer to the State Bank giving reference of relative export forms.

23. Advance Remittances against Exports.

In case of remittance received in advance for goods to be exported from Pakistan, Authorized Dealers should obtain a certificate in duplicate from the beneficiary on the Advance Payment Voucher (Appendix V-18) declaring the particulars of the intended export, before disbursing the amount to him. Both copies of the Advance Payment Voucher shall be authenticated by the Authorized Dealer. The original shall be surrendered to State Bank with the relative Schedule A-2, while the duplicate shall be returned to the exporter for production at the time of certification of Form 'E'. The Authorized Dealer which has disbursed the amount, shall ensure that Form 'E' is certified for export in accordance with the declaration made on the Advance Payment Voucher within a period of one year of receipt of advance payment and particulars of form(s) 'E' viz. Dated of certification, value for which 'E' Forms certified and progressive un-utilized balance (where more than one forms 'E' are certified) shall be endorsed on the duplicate copy of the Advance Payment Voucher. The triplicate copy of the 'E' Form will be surrendered to the State Bank under a covering letter alongwith a photo copy of the Advance Payment Voucher and the invoice.
In the case of payments received for export of fresh fruits / vegetables, it would be in order for the Authorized Dealers to certify 'E' Forms against Advance Payment received, even if the detailed particulars of the 'Goods', their 'Quality' and 'Invoice Value' have not been filled in, provided the Vegetables' is declared in the relevant column. While certifying the 'E' Form, the following remarks would be added by the Authorized Dealers:-

'This form has been certified against the outstanding balance of __________ (Amount) out of the advance payment of __________ (Amount) received on __________ (Date).

At the time of shipment, the exporter will fill in the required particulars in all copies of the 'E' Form and submit the duplicate and triplicate copier to the Authorized Dealer alongwith the shipping documents and an invoice. The Authorized Dealer will compare the details of the 'Goods', 'Quantity' and 'Invoice Value' and process the case as indicated in sub-para (i).

Above Paragraph Updated via F.E. Circular 33 dated 17th December, 1997.

Above Paragraph Updated via F.E. Circular 37, dated 12th April, 1994.

24. Export on D.A. / T.R. Basis - Non-payment by Foreign Buyers.

In case of exports on firm contract on D.A. or T.R. basis, Authorised Dealers, before certifying the export form, should ensure that the foreign buyer is of sound financial standing and enjoys good repute. Doubtful cases should be referred to the State Bank for instructions. Despite aforesaid precaution, if a foreign buyer refuses to accept the goods, the exporter should either make immediate arrangements for shipping the goods back to Pakistan or alternate buyer found with the approval of the State Bank. However, prior approval of the State Bank will not be necessary in cases where the consignment initially refused is taken up finally by the original consignee or an alternate buyer found provided that payment for the consignment is not less than its full value minus actual demurrage charges, if any. In those cases where the foreign buyers default in making payment after taking delivery of the goods against their acceptance of the bill or T.R. Authorised Dealers shall consider the possibility of launching legal action against the foreign buyers for recovery of export proceeds in consultation with the State Bank. To this end, Authorised Dealers should make arrangements for obtaining a suitable undertaking from the exporters at the time of certification of the Form 'E' for firm sales on D.A. or T.R. basis so that there is no hitch in initiating legal action in those cases where the foreign buyers have defaulted.

25. Verification of Export Proceeds Realisation Certificate.

Sometimes exporters are required to produce to the Government Departments evidence of exports and the realisation of their proceeds. In such cases Proceeds Realisation Certificates may be issued by the Authorised Dealers in the prescribed form (Appendix V-21) after getting them authenticated by the State Bank. The State Bank will authenticate such certificates on the strength of certification made by the Authorised Dealers. The transaction would be post-facto verified by the State Bank with reference to the relative schedule/statement received from the concerned Authorised Dealer. To facilitate checking and verification of these transactions Authorised Dealers should quote the correct reference and the period of their schedule/statement in column 10 of the proforma at Appendix V-21.

26. Issue of Duplicate Export Proceeds Realisation Certificate.

In case of loss of original export realisation certificate the State Bank on application would issue duplicate thereof on the basis of undertaking given by the Authorised Dealer in the prescribed form (Appendix V-22). The word "Duplicate" will be prominently marked in indelible ink at the top of such certificates.

27. Payment of Freight in Rupees.

(i) Carrier companies will not accept payment of freight in Rupees on cargo shipped on C&F or CIF basis unless the exporter produces to them a certificate from an Authorised Dealer in the form given below:

"CERTIFIED that 'E' form No …………………………in respect of shipment to be made by Messrs (Name of Exporter) ………………………… has been stamped to the effect that the documents in respect of the shipment under this 'E' form shall be negotiated / accepted only if these are drawn on C&F or CIF and not on FOB basis".

(ii) Before issuing the above certificate, Authorised Dealer will invariably endorse the relative 'E' form in the following manner:

"Certified that documents in respect of the shipment under this form shall be negotiated / accepted only when these are drawn on C&F or CIF and not on FOB basis."

The carrier companies will invariably submit to the State Bank with the freight manifests the aforesaid bank's certificates alongwith the relative bills of lading which should be arranged according to the entries appearing in the freight manifest.

28. Export of Jewelery, Precious or Semi-precious Stones.

Export of gold jewelry / precious and semi-precious stones will be allowed in accordance with the procedure notified by the Export Promotion Bureau and the instructions issued by the State Bank from time to time.

29. Remittance of Export Commission and Brokerage.

(i) Authorised Dealers are permitted to allow payment of commission / brokerage due to foreign importers / or agents by exporters in Pakistan at the following:

		Maximum rate of commission etc.
(a)	Books, journals and magazines.	Upto 33 1/3 %
(b)	Engineering goods (Electrical and Non-electrical).	Upto 10 %
(c)	Sports goods, surgical instruments, cutlery, leather goods, ready-made garments and other textile made-ups, carpets and plastic manufacturers.	Upto 7 %
(d)	Cotton.	Upto 1 %
(e)	All other goods except cement.	Upto 5 %

Cases not covered by the above instructions should be referred to State Bank with full facts and documentary evidence necessitating the payment of commission at a higher rate.

(ii) Authorised Dealers can allow payment of commission etc., upto the above extent without the prior approval of the State Bank as under after satisfying themselves that the payment is in conformity with the relative agreement between the exporter and the buyer / agent abroad:

(a) By deduction from the invoices where payment is to be made to the foreign buyers themselves. In such cases the net amount realised will only be reported as "Purchase".

(b) By instructing the negotiating bank abroad that the amount of commission etc., may be paid by them to the agents direct out of the proceeds of the bill. Here the Authorised Dealers should report the full export proceeds of the bill as "Purchase" and the amount of commission should be reported as "Sale".

(c) By remittances from Pakistan when the full export proceeds are received within seven days of the receipt of export proceeds. The Authorised Dealers should report the full export proceeds of the bill as "Purchase" and the amount of commission remitted should be reported as "Sale". Where remittance is not made as provided herein, approval of the State Bank in accordance with the provisions of para 6 of Chapter XIV shall be obtained.

Paragraph 29 (ii)(c) is Updated via F.E. Circular 72, dated 3rd November, 1993.

It should , however, be noted that in the case of exports under special trading agreements, commission is payable only through the special accounts opened for settlement of related transactions.

(iii) In cases where the exporter is not required to pay commission or where he is required to pay to the foreign agent an amount less than the maximum 5% FOB value of goods realised can be retained in foreign currency account with Authorised Dealers in Pakistan. The funds held in such foreign currency accounts can be used by the exporters for promotional publicity, collection of commercial intelligence, purchase of designs/patterns, market studies, bonafied export claims and short fall in realization of export proceeds without any approval from the State Bank. The foreign currency accounts so opened will be fed exclusively with the amount of commission on exports and no other deposits whatsoever the nature, will be accepted for credit to such foreign currency accounts.

The facility given to exporters vide sub-paragraph (iii) of paragraph 29, Chapter XII to retain amounts in foreign currency accounts for the purpose mentioned their in, is withdrawn vide F.E Circular 38, dated 21st July, 1998.

Above Paragraph 29 (iii) is Updated via F.E. Circular 20, dated 22nd February, 1994.