|
|||
FE
Manual 2002
|
| CHAPTER XIII IMPORTS
This
chapter sets out the regulations relating to sale of foreign exchange
by the Authorised Dealers against import of goods into Pakistan
from any country. Import
of goods into Pakistan is regulated by the Ministry of Commerce,
Government of Pakistan, under the Imports and Exports (Control)
Act, 1950 and the notifications issued thereunder. No import is
permissible from Israel or from any other country, which
may be notified by the Ministry of Commerce. Import of goods originating
from any of these countries/ sources is also prohibited. Imports
from India are regulated as notified by the Ministry of Commerce,
Government of Pakistan from time to time.
No person can import goods into Pakistan unless he is registered
with the Export Promotion Bureau, under the Registration (Importers
and Exporters) Order, 1993 or exempted from the provisions of
the said Order. Authorised Dealers should, therefore, verify that
the importer is registered or otherwise exempted before any letter
of credit is opened/contract registered or remittance made on
his behalf for imports into Pakistan. Authorised Dealers should
ensure that the registration number of the importer is invariably
furnished on Form 'I'. Where the importer
has been granted an exemption, a suitable mention of this fact
should be made on Form
'I'. Before
establishing any letter of credit/registering contracts, Authorised
Dealers should take all precautions to ensure that the goods to
be imported under it are clearly classifiable under the Import
Trade Control Schedules. In all cases of doubt, reference should
be made either by the Authorised Dealer or the importer direct
to the Export Promotion Bureau. Failure to do so may result in
confiscation of goods or imposition of penalty for violating the
provisions of the I.T.C. regulations. In all such cases establishment
of letter of credit/registration of contract and/or making of
remittance will also constitute infringement of the Foreign Exchange
regulations. Subject to the provisions of this Chapter, imports can be made on FOB basis, CFR liner terms basis or CFR free out basis. However, prior permission of the State Bank shall be obtained for import of sugar and food grains (cereals) on CFR free out basis. 6.
Modes of payments for imports.
Payment for imports may be made either through letters
of credit, without letters of credit against documents received
for collection on the basis of registration of contracts, or as
clean remittance without opening of letter of credit and without
registration of contract, as described in detail in the subsequent
paragraphs. 7.
Letters of Credit to be opened only against Firm Contracts. Authorised
Dealers should ensure before opening a letter of credit that in
each case a firm commitment exists. For this purpose, they should
ensure that an invoice, order or indent has been issued by an
indentor duly registered as importer under Registration (Importers
and Exporters) Order, 1993 and it bears registration number of
the indentor concerned. It is also permissible to open a letter
of credit on the basis of proforma invoice/order issued/accepted
by the foreign supplier.
Authorised Dealers should also ensure that while opening
letters of credit, full description of the goods to be imported
is given in each credit alongwith their prices. In all cases where
the amount of the letter of credit is Rs.1,500,000/- or over,
Authorised Dealers should obtain a confidential report on the
exporter from their branches or correspondents abroad or in their
discretion satisfy themselves as to the standing of the shipper
by consulting standard books of reference issued by international
credit agencies such as Seyds, Dunn and Bradstreet. Such reports
should be obtained by the Authorised Dealers themselves and the
reports if submitted by the importers should not be accepted.
Even in the case of imports of the value of less than Rs.1,500,000/-,
it is important that the Authorised Dealers satisfy themselves
about the bonafides of the transactions before opening letters
of credit. 8.
Methods of Payment under Letters of Credit. (i)
Letters of credit may be established providing for payment
to beneficiary either in the country of origin of goods or in
the country of shipment of goods. (ii)
Authorised Dealers may also establish letters of credit
providing for payment to the beneficiary in a third country, not
being the country of origin of goods or the country of shipment
provided they are satisfied that the payment to the beneficiary
in a third country does not involve extra expenditure. This facility
is, however, not admissible for the import of goods which are
directly shipped from the ACU member countries. (iii)
Authorised Dealers may also establish letters of credit
providing for shipment of goods of the origin of more than one
country provided the beneficiary remains the same and the shipment
does not involve extra expenditure. (iv)
Letters
of credit established as per (i), (ii) and (iii) above should
provide for payment in any of the following manners: (a)
in any
foreign currency. (b)
in Rupees for credit to the non-resident bank account of
the country of the beneficiary or of the country of origin/shipment
of goods. (c)
Through ACU
Clearing Arrangement where letters of credit envisage shipment
directly from ACU member countries. (v)
Opening of letters of credit providing for payment in any
other manner requires prior approval of the State Bank. Such requests
giving full facts of the case alongwith their recommendations
should be forwarded by the Authorised Dealers to the State Bank. (vi)
It
is not permissible to establish letters of credit providing for
alternate countries of origin of goods unless prior approval of
the State Bank is obtained. Letters of credit providing for goods
of ‘European Union’ origin may, however, be opened. 9.
Opening of/extension in letters of credit—time frame/change
of beneficiary and commodity/other amendments. (i)
Authorised Dealers can open letters of credit and extend
their validity for a period allowed by the import policy announced
by the Ministry of Commerce subject to compliance with all the
conditions laid down therein. (ii)
If the import policy does not lay down any instruction
in this regard, they may open letters of credit for a period upto
12 months. However, in respect of machinery and mill-work which
are required to be specifically manufactured and the period of
manufacture is more than 12 months, the letter of credit may be
opened for a period upto 24 months. The validity of a letter of
credit may be extended by the Authorised Dealers for further periods
not exceeding 12 months at a time on payment of fee, if so prescribed
in the import policy, provided there has been no change in the
Import Policy/exchange regulations in relation to the importability
of the goods, the country of origin/shipment, and the method of
payment/and if approached within its validity. An expired letter
of credit may also be similarly revalidated subject to the same
conditions. (iii)
Authorised Dealers are also allowed to amend the letters
of credit envisaging change of the beneficiary/goods at the request
of the importers provided the importers approach the Authorised
Dealers for the change within the validity of the letter of credit
and import of the goods covered by the letters of credit are still
permissible.
(iv) Authorised Dealers should also ensure to make endorsement
of L/C opened for items (other than freely importable items) whose
import is subject to certain conditions, in the original Category
Pass Book. In
case an importer opens letters of credit with more than one bank,
the Authorised Dealer holding the original category Pass Book
will make out photostat copies thereof, authenticate the same
and furnish other concerned Authorised Dealers with it and will
keep record thereof. (v)
Authorised Dealers may also make other amendments in the
letters of credit without reference to the State Bank provided
the amendments are not in conflict with the provisions of this
Manual or the Import Trade Control Regulations. (vi)
Letters
of credit may provide for negotiation of documents within a period
not exceeding 30 days from the date of shipment. 10.
Terms on which Letters of Credits may be opened. All
letters of credit and similar undertakings covering imports must
provide for payment to be made against full set of clean on board
(shipped) bills of lading, air consignment notes, railway receipts,
post parcel receipts (or in the case of bulk import of books from
U.K. against "Statement of Dispatches" in lieu of post
parcel receipts) showing dispatch of goods to a place in Pakistan.
Sea-way bills should not be accepted. All letters of credit must
specify submission of invoices certifying the country of origin
in addition to any other certificate prescribed in the import
policy. 11.
Import of Old Ships for Scrapping. Letters
of credit for import of old ships for scrapping may be opened
by the Authorised Dealers in accordance with the normal procedure
after scrutiny of the following documents: (i)
Memorandum of agreement or contract of sale; and (ii)
Confidential reports on buyers and sellers. Authorised
Dealers will satisfy themselves that the ship is free from all
encumbrances and that the seller has a legal title to the ship. 12.
Letters of Credit for Shipment by Country Craft, Motor
Launch or Truck. Ordinarily
it is not permissible to open letters of credit providing for
shipment by means of country craft, motor launch or truck except
by public sector agencies or by well established and reputable
firms in the private sector, provided in the latter case the Authorised
Dealers are satisfied about their financial and business integrity
and they have no doubt that the goods covered by such letters
of credit will be received in Pakistan. In
the case of other importers in the private sector, letters of
credit for import of goods by means of country craft, motor launch
or truck may be opened by the Authorised Dealers subject to the
following condition: (i)
The supplier abroad furnishes guarantee of a bank in the
country of export for an equivalent amount to the effect that
should the goods be lost or damaged or pilfered in transit, the
above guarantee can be invoked and the amount remitted against
the letters of credit recovered. (ii)
Alternatively, the letter of credit provides that payment
will be made to the foreign suppliers after the goods have been
received and cleared by the Customs in Pakistan. In
respect of importers in the private sector who are unable to fulfill
the conditions at (i) and (ii) above, the Authorised Dealers should
refer their cases to the State Bank with full particulars. 13.
Remittances in Excess of the Amount of Letter of Credit. In
cases where the value of documents exceeds the amount of the letter
of credit and the foreign correspondent negotiates the documents
because of the excess amount being small or sends them on collection
basis, Authorised Dealers may allow remittance of the excess amount
subject to the condition that the amount does not exceed 5 percent
of the amount of credit subject to a maximum of US $500/-. The
bill of entry/certified invoice in respect of the consignment
will be required to cover the increased amount. 14.
Types of Letters of Credit not permitted. It
is not permissible to open clean, revolving, transferable or packing
credits. Applications for opening such letters of credit should
be referred to the State Bank with full particulars. 15.
Prohibition to open Letters of Credit for Import from Certain
Countries. It
is not permissible to open letters of credit for imports into
Pakistan in favour of beneficiaries in Israel or of goods originating
from that country. 16.
Imports on the basis of registration of contracts. The
undernoted procedure will be adopted for making imports of goods
not subject to authorisation from the Export Promotion Bureau/Ministry
of Commerce as also not subject to minimum margin restrictions,
if the importer wants to make the import on the basis of registration
of contract without opening letter of credit: - (i)
The importer will
submit a copy of the contract/purchase order/proforma invoice/indent
etc. to the Authorised Dealer for registration.
(ii)
The Authorised Dealer
registering the contract etc. will issue to the importer, a registration
certificate in the format appearing at Appendix V-25. (iii)
In case the documents covering imports are received by
the branch of the Authorised Dealer which had registered the contract/purchase
order/indent/proforma invoice, directly from the bankers of the
suppliers abroad, the remittance may be effected in terms of the
instructions laid down in paragraph 23 (i) of this chapter provided
the documents conform to the terms of the relative contract/purchase
order/indent or proforma invoice. (iv)
In case the shipping documents are received by the importers directly,
or by the Authorised Dealer from the overseas supplier instead
of the bankers of the suppliers, remittance should be made in
accordance with the instructions contained in para 23 (ii) of
this chapter. (v)
In case of imports from ACU member countries, remittances
will be effected through ACU Clearing Arrangements. (vi)
Forward cover will be available to the importers in accordance
with the terms and conditions laid down in Chapter IV of this Manual. (vii)
Authorised Dealers will incorporate the figures of the contracts
registered by them/ remittances made thereagainst in the statements
as per appendices V-131, V-132 V-133 and V-134 (para 15-Chapter XXII). 17.
Imports without letter of credit/registration of the indent/proforma
invoice/order. (i)
In terms of the import policy, registered importers are
permitted to make imports upto
specified value ( US$ 5,000/- as per Import Trade and Procedure
Order 2000) without opening of letters of credit or registering
the indents/proforma invoices or orders with the Authorised Dealers,
and make remittances thereagainst. The registered importers are
free to make remittances in respect of such imports either in
advance or after receipt of the goods in Pakistan. The remittances
can be made through demand draft/telegraphic transfer/mail transfer.
In such cases where the registered importers make advance payments
for such imports, they will be required to furnish to the Authorised
Dealer at the time of making a request for remittance, an undertaking
to produce invoices and bills of lading/airway bill within a period
of four months from the date of advance payment. The Authorised
Dealers will pursue the matter with the importers and report those
cases to the area office of the Exchange Policy Department where
the requisite documents are not produced within the prescribed
time limit. In cases where remittances are made after receipt
of goods in Pakistan, the registered importers can approach the
Authorised Dealers for remittance on the basis of invoices and
original bills of lading or airway bill. The Authorised Dealers
have general permission to make advance payments or arrange remittances
against the prescribed documents on receipt of goods in Pakistan. (ii) At the request of industrial
establishments registered as importers, Authorised Dealers may
issue foreign currency demand draft upto the value prescribed
in the Import Policy (currently US$ 15,000 per fiscal year for
2000-2001) for import of spare parts/machinery, without opening
of letter of credit, provided such import is made by air or by
courier. Authorised Dealers will maintain a record of all such
drafts issued by them. They will obtain from the applicant a declaration
showing the amount already remitted by him during the current
fiscal year and issue demand draft only upto the extent of the
balance entitlement. They will also obtain Exchange Control copy
of Bill of Entry and evidence to the effect that the import was
made by air/courier. These records will be retained till the next
inspection of the concerned bank branch by the State Bank’s Inspectors.
Authorised Dealers may open letters of credit or register
contracts for imports into Pakistan providing for payment on usance
basis subject to the condition that such letters of credit/contracts
do not stipulate payment of any amount by way of interest separately.
The usance should commence from the date of issue of Bill of Lading/Air
Way Bill etc. or the acceptance of Bill of Exchange by the drawees
as the case may be. The letters of credit opened on usance
basis cannot subsequently be converted on sight basis. Similarly
the terms of the contracts covering payments on usance basis registered
by the Authorised Dealers cannot subsequently be changed to sight
basis. It is not permissible to effect payments of usance bills
prematurely. 19.
Imports by public sector agencies to which special allocation
is made by the Government. Public
Sector agencies like WAPDA, Karachi Electric Supply Corporation
Limited, Pakistan State Oil Co. Ltd., OGDC, etc. which are allocated
foreign exchange for their import requirement or the private parties
who are allowed to import on Defence/Railway's account shall make
applications to the area Exchange Policy offices of State Bank
of Pakistan for permission to get the contracts registered with
the Authorised Dealer/open letters of credit, on Appendix
V- 26. Authorised Dealers will register contract/open
letter of credit in these cases on the basis of clearance issued
by State Bank on Appendix V- 26. 20.
Remittance of bank charges in respect of imports. Authorised
Dealers can make remittance of the following bank charges on account
of imports. The particulars of the charges should be specifically
mentioned on the relevant forms. (i)
L.C. Advising Commission. (ii)
L.C. Amendment Commission. (iii)
L.C. Confirmation Commission. (iv)
Negotiation Commission. (v)
Un-utilized letter of credit Commission. (vi)
Payment Commission. (vii)
Reimbursement Commission. (viii)
Collection Commission. (ix)
Acceptance Commission (Usance Drafts). (x)
Postage and Cable Charges. Remittances
of bank charges other than the items mentioned above in respect
of imports will be subject to the prior approval of the State
Bank. 21.
Remittance of Proceeds of Dishonored Bills. In
those cases where the original drawee dishonors the bill and the
foreign shipper or his local agent finds another buyer, the Authorised
Dealers may make remittance not exceeding the value of such bills
without the prior permission of the State Bank if there are no
restrictions in the import policy issued by Ministry of Commerce. 22.
Remittance involving Violation of I.T.C. Regulations. Authorised
Dealers may allow remittance of the value of imports made in contravention
of the import policy if the Federal Government has condoned the
contravention and the Customs have released the goods. Such remittance
may be allowed on submission of the invoice, bill of lading and
Exchange Control copy of Customs Bill of Entry. 23.
General Authority for Remittances against Imports. (i)
Authorised
Dealers may approve, on behalf of the State Bank, applications
for remittance against imports into Pakistan provided the documents
covering imports, whether under letters of credit or otherwise,
are received through them and the conditions set out in this chapter
are complied with. The relative Form
'I' should be certified accordingly when reporting
the sale to the State Bank. In the case of imports by post, Authorised
Dealers may make remittances without the prior approval of the
State Bank, only if the post parcels are addressed directly to
them. In cases, where the parcels are addressed direct to the
individuals or care of the Authorised Dealers, applications should
be forwarded to the State Bank for prior approval. Authorised
Dealers should invariably attach a copy of the relative invoice
with the original or quadruplicate 'I'
Form, as the case may be, submitted by them to the
State Bank with their monthly return of sale in terms of para
33 of this chapter. (ii)
Where the shipping documents are received by the importers
directly, or by the Authorised Dealer from the overseas supplier
instead of the bankers of the suppliers, remittance should be
approved only after the goods have been cleared from the Customs
and the Exchange Control copy of Bill of Entry or Customs certified
invoices in the case of imports by post, relative invoices, Non-negotiable
copies of the Bill of Lading/Airway Bill/Railway Receipt/Truck
Receipt etc. and 'I'
Form duly completed and signed have been submitted. 24.
Collection of Freight on Imports on F.O.B. basis in the
Private Sector. The
following procedure will be followed for imports on FOB basis
in the private sector: (i)
The importers desiring to make imports on FOB basis will
get the letters of credit opened/contracts for imports on consignment
basis registered through/with their bankers provided the importers
fulfill other instructions issued by the Government of Pakistan/State
Bank of Pakistan with respect to imports. (ii)
The shipping lines/airlines will
obviously issue Bills of Lading/Airways Bills in connection with
FOB imports on "Freight to Collect" basis. As and when
freight is required to be paid in Pakistan rupees, the importers
will approach the Authorised Dealers who had opened letter of
credit/registered the contract for import on consignment basis
alongwith a copy of Bill of Lading/Airway Bill indicating the
amount of freight payable together with the freight invoice issued
by the carrier, where available, for issuance of a certificate
in the format appearing at Appendix V-27 which will bear the name/address
of the issuing Authorised Dealer and a running serial number. (iii)
The importers will then pay the freight amount to the carriers
in Pakistan rupees and will also surrender the "certificate"
referred to in the preceding sub-para to the concerned carrier. (iv)
Airlines/shipping companies and their agents will not accept
freight on FOB imports without Authorised Dealers' certificate
mentioned in sub-para (ii) above. The airlines/shipping companies
will invariably attach the said "certificate" (Appendix
V-27) in original alongwith the applications to be made for allowing
remittance of surplus freight collections. 25.
Collection of Freight on F.O.B. Imports by the Public Sector. In
the case of imports by the public sector on FOB basis the carriers
should not accept freight in Rupees without the approval of the
State Bank. Approval will be given by the State Bank after charging
the full amount of the freight to the foreign exchange allocation
of the respective Government/Semi-Government agency. While applying
for approval, the carrier company will produce with the application
a letter in the prescribed form (Appendix V-28) from the concerned
Department/Agency authorising the State Bank to debit its foreign
exchange allocation with the freight amount. As an exception,
it will be in order for the carriers to accept freight in Rupees
on account of F.O.B. imports by the Ministry of Defence only subject
to post-facto approval. Application for permission to pay freight
in Rupees in respect of imports by the Ministry of Defence will
be made by the Controller of Military/Naval/Air Force Accounts
in triplicate in the above proforma. Approval will be accorded
by the State Bank on the original copy of the application with
the following narration. "Payment
of freight in Rupees as indicated above allowed". While
the triplicate copy of the application will be retained by the
State Bank, the original and duplicate will be returned to the
Controller of Military/Naval/Air Force Accounts. The latter will
furnish the original copy to the carrier concerned. 26.
Shipment of Public Sector cargo through PNSC vessels/PIA. As
an exception to the provision of paragraph 25 ibid it will be
in order for the PNSC and PIA to accept freight in Pak Rupees
on FOB imports by the Public Sector agencies (Ministries/Departments,
autonomous and semi-autonomous public sector organizations) provided
the goods are carried by them on freight to pay basis. PIA will,
however, accept cargo only for the sectors covered by it. Authorised
Dealer's Certificate mentioned in Para 24 (ii) will not be required
to be produced to PNSC/PIA by the importing agencies. 27.
Payment of Freight on Import of Trade Samples. Airlines/shipping
companies can accept freight in Rupees upto Rs. 2,000/- per year
per registered importer for import of bonafide trade samples.
While accepting freight the airlines/shipping companies should
obtain a certificate from the registered importer to the effect
that the total amount of freight already paid including the amount
to be paid during the calendar year on account of trade samples
received by him, does not exceed the limit of Rs. 2,000/- The
certificate should be submitted by the airlines/shipping companies
alongwith their application for remittance in which the collection
of such freight is included. 28.
Imports on Private Account. Certain categories of imports are exempted from the Import Trade Control Regulations. For example, in transit imports, imports by diplomatic officials in Pakistan, imports in bond, imports of gift parcels upto the exempted limit and imports by private |