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CHAPTER
XIV
COMMERCIAL
REMITTANCES (OTHER THAN FOR IMPORTS)
-
Freight and Passage
Collections.
-
Reporting
of Passage and Freight Earnings.
-
Remittance
of Surplus Passage and Freight Collections.
-
General
Average Payments.
-
Operating
Expenses of Pakistani Shipping Companies/Airlines.
-
Charter
of Foreign Ships and Aircrafts.
-
Export
Claims.
-
Guarantees
for Payment of Claims.
-
Employment
of Overseas Agents etc.
-
Remittance
of Royalty/Franchise and Technical Fees.
-
Technical
Services and Consultancy Agreements and Engagement of Foreign
Technicians.
-
Remittances
by Information Technology Sector.
-
Remittance
of Profits by Foreign Banks/Companies.
-
Payment
of Dividend to Non-Resident Shareholders.
-
Export
of Dividend Warrants.
-
-
Advertisements
in Newspapers and Magazines abroad.
-
Bank
Charges and Sundries.
-
Purchase
of Tender Forms from abroad.
-
-
Reporting
of Remittances.
1. Freight and Passage Collections.
i)
Shipping companies/airlines may accept freight and passage
money in Rupees only in the under-noted cases without the prior
approval of the State Bank:
a)
Exports from Pakistan made on C&F/CIF basis against Form
‘E’ duly certified by Authorised Dealers on their letterheads in
terms of para 29 of Chapter XII of the Manual.
b)
Imports into Pakistan on FOB basis:
aa)
Against Authorised Dealer’s certificate on form prescribed at Appendix
V–27 in terms of para 24 of Chapter XIII of the Manual.
bb)
Against SBP’s approval for import on FOB basis in public
sector in terms of para 25 of Chapter XIII of the Manual.
cc)
Against certificate of registered importers for freight on
Import of Trade Sample not exceeding Rs. 2000/- per year in terms
of para 27 of Chapter XIII of the Manual.
c)
Freight on personal effects/excess baggage in accordance
with the provisions laid down in paras 40(i) & 40(iii) of Chapter
XVII of the Manual.
d)
Freight on Export of Trade Sample and gift parcels in accordance
with the procedure laid down in para 40 (ii) of Chapter XVII of
the Manual.
e)
Passage money in accordance with the instructions laid down
in Chapter XVII.
In
all other cases prior approval of State Bank should be obtained
before collecting freight in Rupees. For this purpose, applications
should be made to the State Bank giving the nature of the transactions
and the reasons why freight cannot be paid in foreign currency.
ii)
Foreign shipping companies and airlines, whether having an
office in Pakistan, or not, are not allowed to open PLS accounts.
They can open current accounts for keeping funds received from abroad
and the amounts of freight and passage collections, pending remittance
to their head offices. Agents of foreign shipping companies and
airlines may, however, retain freight/passage collections in PLS
accounts held in their own names provided the profits earned in
these accounts are not passed on in any manner to their principals.
iii)
Cargo Consolidators/Forwarders who are approved members of
FIATA and registered with the Board of Investment, Government of
Pakistan as such, may accept freight in rupees without the prior
approval of the State Bank only in respect of Pakistani exports
cargo on C&F/CIF basis as per procedure prescribed in paragraph
29 of Chapter XII of the Manual provided the consignment is being
dispatched against Advance Payment or an irrevocable letter of credit
which contains a provision for issuance of document of title under
Cargo Consolidation System and a certificate to this effect issued
by the Authorised Dealer on Appendix V-13 is produced.
2. Reporting of
Passage and Freight Earnings.
Foreign
airlines/General Sales Agents/Shipping companies/Shipping Agents
are required to report each month to the State Bank full particulars
of the passages and freight booked by them in Pakistan on form ‘F.P.
Airline’/‘F.P. Shipping’ in duplicate as per specimen appearing
at Appendices V-34 and V-35. The statements should be sent to the
State Bank by the end of the month following that to which they
pertain. While the Airlines should submit only one form ‘F.P. Airline’
in respect of bookings made by them and their agents, the Shipping
Agents should submit separate statement (form F.P. Shipping) for
each of their principals whose ships are handled by them during
a month. The forms F.P. should be supported by bank encashment certificate
in support of Inward remittances received.
3.
Remittance of Surplus Passage and Freight Collections.
i)
Authorised Dealers may allow remittance of surplus passage
and freight collections of those foreign airlines, General Sales
Agents, and shipping companies/agents which are keeping their collections
with them, on submission of application alongwith the following
documents: -
a)
A copy of F.P. Statement (Appendix V-34 for airlines and
V-36 for shipping companies).
b)
Import/Export freight manifests.
c)
A copy of each
bill of lading/airway bill issued in respect of export on freight
pre-paid basis, alongwith Authorised Dealers certificates as stated
in paragraph 1.
d)
Passage statement (Appendix V-37) alongwith photocopies of
ticket coupons and other documents prescribed in Chapter XVII.
e)
Statement of passage/freight bookings earlier made on credit
now realised (Appendices V-38 for airlines and V-39 for shipping).
f)
Disbursement Statements (Appendices V-40/V-41).
g)
Cancellation/refund
statement (Appendix V-42).
h)
Statement of outstanding passage/freight bookings on credit
(Appendices V-43/ V-44).
i)
Authenticated copy of the charter party if the vessel calling
at the ports in Pakistan has been chartered by the principals of
the shipping agents in Pakistan.
j)
A copy of manifest of Cargo Consolidators together with relative
non-negotiable copies of House Bill of Lading or/House Airway Bill
(quoting reference of original Master Bill of Lading or Master Airway
Bill issued by them with names of each shippers), “E” form certificates
prescribed vide para 29 of Chapter XII of the Manual, encashment
certificate where freight is paid in foreign exchange separately
and a copy of valid permission letter given by the Board of Investment.
k)
A copy of encashment certificate in respect of inward remittance.
l)
Auditors’ certificate showing payment of income tax, or exemption
certificate given by the Revenue authorities.
m)
In the case of agents, a copy of the valid permission letter
given by the Board of Investment for acting on behalf of the foreign
principal.
n)
An undertaking to repatriate back to Pakistan, the amount
found by the State Bank, on post-facto checking, to have been remitted
in excess of the entitlement.
ii)
Authorised Dealers will allow remittance of surplus passage
and freight collections plus inward remittance, to the extent of
amounts of passage and freight actually realised less disbursements,
refunds, and income tax paid/payable. No remittance is to be allowed
in excess of the balance available in the account, as it is not
permissible to make remittances out of borrowed funds.
iii)
Authorised Dealers will retain all the documents mentioned
in sub paragraph (i) alongwith a photocopy of Form ‘M’ submitted
by shipping companies/shipping agents for on sight inspection by
the Banking Inspection Department. In the case of airlines or their
G.S.As, the documents will be submitted to the Joint Director, Operations
Division, Exchange Policy Department, SBP, Karachi within three
working days from the date of remittance. The original Form ‘M’
shall be submitted as usual through schedule E-4 while reporting
the transaction in the monthly Foreign Exchange Returns.
iv)
Any irregularity detected and advised by the State Bank shall
be rectified by the concerned airline/GSA/shipping company/agent
within ninety days or the amount under objection will be repatriated
or adjusted from subsequent remittance, as applicable.
4. General Average Payments.
i)
Applications for remittance of general average collected
from consignees in Pakistan shall be made by the shipping companies/shipping
agents on Form ‘M’ accompanied by the following information/documents:-
a)
Circular of Insurance Association regarding general average.
b)
N.O.C. from the Insurance Association and National Insurance
Company Limited about the remittance of the amount of the general
average.
c)
The amounts collected from each individual consignee.
d)
List of cargo subject to general average.
e)
The general average bonds covering the collections.
f)
General Average Award.
Authorised
Dealers may allow remittances on the basis of these documents and
attach the same with the ‘M’ form, while reporting the transactions
in their monthly Foreign Exchange Returns.
ii)
Pending General Average Award, the Authorised Dealers may
also issue bank guarantees in favour of the General Average Adjusters
on submission of the information documents referred to from (a)
to (e) above. Remittances under the guarantees will, however, be
allowed by them on production of General Average Award.
iii)
In the case of exports from Pakistan, if general average
is declared and if the general average claim is paid by the overseas
importer, the insurance company in Pakistan, with whom the goods
were insured prior to shipment from Pakistan may be allowed to reimburse
the amount to the overseas importer on production of the following
documents, which should be submitted to the State Bank as mentioned
in sub-para (i):
a)
Export Realisation
Certificate.
b)
All shipping documents viz. a copy of the bill of lading,
invoice, insurance policy etc.
c)
Average deposit receipt duly endorsed by the overseas importer
in favour of the insurance company in Pakistan.
d)
Letter of subrogation.
e)
An undertaking to render the account on finalization of the
award.
5. Operating Expenses
of Pakistani Shipping Companies/Airlines.
Pakistani
shipping companies and airlines are required to submit to the State
Bank a monthly statement of their earnings and expenditure at foreign
ports in the prescribed forms (Appendices V-45 and V-46) supported
by passage/freight manifest for receipts and by vouchers in respect
of payments. They can make disbursements in respect of approved
transactions only out of their receipts at foreign ports and they
are under obligation to regularly repatriate the excess collections,
if any, to Pakistan and attach the bank encashment certificates
with the statement. In case the collections fall short of the disbursements,
the shipping companies/airlines should make an application to the
State Bank for remittance of the deficit or for meeting bonafide
individual items of disbursements like crew wages, bunkering charges,
port dues, food charges etc. Applications for repair of ships/aircrafts
and purchase of durable stores other than food provisions should,
however, be routed through the Ministry of Communications in the
case of shipping companies and the Ministry of Defence in the case
of airlines.
6. Charter of Foreign Ships and Aircrafts.
Persons
or firms intending to hire on charter non-resident owned ships or
aircrafts should apply in the first instance to the Ministry of
Communications for the charter of ships and the Ministry of Defence
for the charter of aircrafts. Applications for remittance of charter
hire should be made to the State Bank on Form 'M' supported by the
Government sanction and a copy of the Charter Party Agreement and
an undertaking that detailed account of all disbursements made for
the account of the owners will be submitted to the State Bank within
15 days of the expiry of the agreement. If the application is approved,
a permit will be issued to cover any advance payments required under
the terms of the charter but the remittance of the total amount
agreed upon will not normally be sanctioned until the final account
of disbursements is made available to the State Bank. The charterers
should seek from the owners’ periodical reimbursement of the disbursements
made on their behalf or have them adjusted from their remittances
of charter hire.
7. Export Claims.
Applications
from exporters for remittance of various types of claims on exports
should be made on Form 'M' accompanied by a declaration in the prescribed
form (Appendix V-47) duly supported by the following documents:
-
(i)
QUALITY CLAIMS.
a)
Proceeds Realisation Certificate.
b)
Debit Note from the buyer.
c)
Test Report from a recognized Test House or an Arbitration
Certificate from an approved body of arbitrators.
(ii)
AMICABLE SETTLEMENT.
(a)
Proceeds Realisation Certificate.
(b)
Debit Note from the buyer.
(c)
Certificate from the Chamber of Commerce in the country of
import.
(d)
Correspondence in original exchanged between the shippers
and the buyers. Original cables should be produced if cable charges
are included in the Debit Note.
(iii)
COMMISSION (If not paid in terms of the authority delegated vide
Chapter XII).
(a)
Proceeds Realisation Certificate.
(b)
Debit Note.
(c)
Agreement regarding payment of Commission. Shippers should
furnish a copy of the Export Price Check (EPC) form registered with
the relevant authority, if the goods are subject to “Export Price
Check” procedure. The form should show the rate of commission.
(iv)
NON-FULFILMENT OF EXPORT CONTRACT EITHER IN FULL OR IN PART.
a)
Debit Note from the buyer.
b)
Contract in original.
c)
Arbitration award from a recognized arbitrator.
d)
Correspondence in original exchanged between the buyer and
the shipper.
e)
In case of claim for partial non-shipment, Proceeds Realisation
Certificate for the quantity shipped.
(v)
INSPECTION FEE, ARBITRATION FEE, SURVEY AND ANALYSIS FEE, CONTROLLING
FEE, WEIGHING CHARGES ETC.
(a)
Proceeds Realisation Certificate.
(b)
Debit Note from the institution claiming fees.
(c)
Report from the above institution in support of the claim.
(vi)
MISCELLANEOUS CLAIMS LIKE REFUND OF EXPORT DUTY ETC.
a)
Proceeds Realisation Certificate.
b)
Debit Note.
c)
Contract.
d)
Correspondence.
(vii)
LOSS IN WEIGHT.
a)
Proceeds Realisation Certificate and Export Invoice.
b)
Debit Note from the buyers.
c)
Weighment Certificate/Note from a recognized weighing body
and Controller’s Report.
Applications
in respect of items (v), (vi) and (vii) may be approved by the Authorised
Dealers and the prescribed documents surrendered to the State Bank
alongwith the monthly Foreign Exchange Returns. Applications in
respect of items (i), (ii), (iii) and (iv) will, however, require
approval from the State Bank.
8. Guarantees for
Payment of Claims.
i)
In case of export of cotton only, Authorised Dealers may
extend guarantees in favour of overseas importers for payment of
claim, provided the following conditions are fulfilled:
a)
Advance payment or confirmed and irrevocable letter of credit
for hundred percent value has been received in favour of the exporter.
b)
The amount of the guarantee does not exceed 5% of the total
invoice value covered by the advance payment or confirmed and irrevocable
letter of credit.
c)
The guarantee covers shipment of cotton only.
d)
The guarantee is valid for a maximum period of 30 days after
the last date of discharge of cotton in the country of import.
e)
The guarantee provides for payment of claims on submission
of Liverpool Cotton Association Arbitration Award in case of exports
to U.K. and of internationally known associations whose names are
approved by the State Bank in the case of export to other countries.
ii)
Authorised Dealers may also allow remittance of claims falling
within the terms of these guarantees provided the amount is fully
covered by the Arbitration Award of the respective association.
While reporting these remittances to the State Bank, the Authorised
Dealers should enclose with the form 'M': -
a) Relative Arbitration Award,
b) Proceeds Realisation Certificate, and
c) Certificate confirming the date of discharge of cotton
in the country of import.
9. Employment of
Overseas Agents etc.
Prior
permission of the State Bank is required by persons or firms in
Pakistan who wish to acquire the services of agents abroad for any
purpose other than export of goods from Pakistan, whether on regular
basis or otherwise. Applications for this purpose should be made
by letter giving full details of the nature and value of business
transacted in the past by the applicant, the existing arrangements
and the nature of the arrangements proposed to be made with the
overseas agents.
10. Remittance of
Royalty/Franchise and Technical Fees.
(i) Royalty and Technical Fee
in the Manufacturing Sector has been defined as under:-
a)
Definition of Royalty: Royalty is a fee paid by a local firm to
the foreign collaborator in consideration of “Licence to use the
foreign manufacturers’ patent/brand name for marketing the product(s).”
b)
Definition of Technical Fee: It
is a fee paid by the local firm to the foreign collaborator in consideration
of:-
aa)
Engineering and Technical Services including assistance on
manufacturing process, testing and quality control, assistance by
way of making available patented process and/or secret know-how
and right to avail of the technical/confidential information resulting
from continuous technical research and development etc; and
bb)
Technical training of local personnel.
NOTE:
No
technical fee shall be allowed for simple conventional process goods
which are being produced in the country without foreign technical
collaboration.
ii) The remittance
of Royalty/Franchise and Technical Fee or Service Charges in Agriculture,
Social, Infrastructure and Service Sector projects including international
food chains may be allowed according to the following guidelines:-
(a)
The initial lump sum fee payable to the foreign investor/the
party providing technical expertise and/or allowing use of their
brand name, should not exceed US$ 100,000/- irrespective of the
number of outlets under one franchise.
(b)
A maximum of 5% remittance of net sales (excluding sales
tax) in the food sector may be allowed as Franchise Fee only for
those items, which are core items of the franchise and are the specialties
of the trade name. The payment of such fees will be allowed on monthly
basis. No item will be eligible for twice payment of Royalty/Franchise
Fee. In other words, the payment of Royalty/Franchise Fee shall
not be admissible for those items whose franchise is not held by
the food chains and/or which are sold under some other brand name
e.g. soft drinks etc.
(c)
Percentage/amount of fees etc., for other non-manufacturing
projects may also be upto the maximum of 5% of net sales (excluding
sales tax).
(d)
Initial period for which fees is to be allowed to projects
in non-manufacturing sectors, including international food chains,
should not exceed 5 years. Subsequent extension in time period will
be considered and allowed by the Government/State Bank of Pakistan,
provided these projects also make investment in allied upstream
projects.
iii) Upon execution of an agreement
for transfer of technology with foreign collaborator, the local
firm engaged in manufacturing as stated in sub-para (i) or operating
in the non-manufacturing sectors as stated in sub-para (ii) will
designate any of the Authorised Dealers in foreign exchange in Pakistan
through whom payments under the agreement will be made and send
an authenticated copy of the agreement to the State Bank of Pakistan,
Exchange Policy Department (Investment Division), Central Directorate,
Karachi through the designated bank within 30 days from the date
of its execution. Application for acknowledgement will be made on
the prescribed form (Appendix V-48). The State Bank will record
the agreement if it conforms to the foregoing definitions of Royalty/Franchise
and Technical Fees and send an acknowledgement or return it if the
same is not in accord therewith.
iv)
Remittance of Royalty/Franchise and Technical Fees may be
allowed by the Authorised Dealer designated for the purpose, without
the prior approval of the State Bank subject to the following:-
a)
Application for remittance of Royalty/Franchise and Technical
Fees is submitted by the firm concerned in the prescribed form (Appendix
V-49) in triplicate alongwith a copy of the acknowledgement letter
issued by the State Bank.
b)
The correctness of the information furnished in the application(Appendix
V-49) must be certified by the auditors of the firm in the space
provided for the purpose. An additional statement showing calculation
of Royalty/Franchise and Technical Fees duly certified by the auditors
should also be enclosed with the application.
c)
Payment of income tax supported by a certificate from the
auditors of the paying firm. In case it is claimed that the amount
of Royalty/Franchise and Technical Fees is exempt from levy of Pakistan
taxes, the applicant should invariably produce a certificate to
this effect from the competent tax authority and attested copy of
the said certificate should be enclosed with the prescribed application
to be sent alongwith other relevant documents while reporting the
transaction to the Exchange Policy Department.
(v) Authorised
Dealers will maintain company-wise record of remittances allowed
by them on the above account so as to facilitate inspection by the
State Bank’s Inspection Teams.
11.
Technical Services and Consultancy Agreements and Engagement
of Foreign Technicians.
(i) Foreign experts/technicians
may be employed by the local firms in private sector without requiring
approval by any Government agency for rendering such technical services
as supervision of installation, commissioning of plant and training
of personnel.
(ii) Authorised
Dealers may accordingly allow remittances for engagement of foreign
experts/technicians to foreign firms or establish letters of credit
available for payment of such charges on production of beneficiary’s
service invoices/bills duly certified by the employers in Pakistan.
While reporting to the State Bank the remittances effected under
this facility in the monthly foreign exchange returns, the Authorised
Dealers will attach the following documents with relative Form ‘M’:-
(a)
Copy of the service agreement entered into with the foreign
firms.
(b)
Beneficiary’s service invoices/bills duly certified by the
employers in Pakistan.
(iii) It will be the exclusive responsibility
of the Authorised Dealers to ensure that income tax has been correctly
deducted from the amount payable to the foreign beneficiaries and
paid to the income tax authorities or exemption certificate from
the income tax authorities is called and recorded with the Authorised
Dealers.
12. Remittances by
Information Technology Sector.
(i)
Remittances on account of items of the following nature may
be allowed by the State Bank:
(a)
Satellite Transponder Charges.
(b)
International Bandwidth Charges.
(c)
International Internet Service Charges.
(d)
International Private Line Charges.
(e)
Software Licence/Maintenance/Support Fee against specific
“Software Licence Agreement” executed with the licensor on the basis
of NOC issued by Pakistan Software Export Board.
(ii)
Application on Form ‘M’ for such remittances should be submitted
to the Joint Director (Investment Division) through an Authorised
Dealer alongwith the following:
(a)
Agreement, if any.
(b)
Original invoice/demand note.
(c)
NOC from the concerned authority (viz PTA/Pakistan Software
Export Board).
(d)
Evidence of payment of income tax or exemption certificate
from CBR.
13. Remittance of
Profits by Foreign Banks/Companies.
(i) Applications
from branches of foreign banks operating in Pakistan for remittance
of profits to their Head Office abroad should be made to the State
Bank on Form ‘M’ duly supported by the following information/documents:
-
a)
Audited Balance Sheet and Profit & Loss Account of the
branch(es) in Pakistan.
b)
Tax provision made during the year for (a) the current year
and (b) for the prior years alongwith its computation.
c)
A certificate from the auditors in Pakistan that tax provision
made in the accounts is sufficient to meet all tax liabilities in
Pakistan, or copies of final assessment orders and forms duly certified
by the Income Tax Department.
d)
Assessment orders for the previous years, if not submitted
earlier to the State Bank.
e)
Certificate from the auditors showing the liability for staff
gratuity as at the close of accounts and provision made there-against.
If no provision has been made, reasons thereof.
f)
Details of other/miscellaneous income.
g)
Amount charged/claimed on account of Head Office expenses
for the current year (if not separately shown in the accounts) and
the basis of its calculation alongwith Head Office expenses claimed/allowed
by the Income Tax Authorities for the preceding 3 years.
h)
Provision made in the current year for classified assets.
i)
Confirmation to the effect that the amount provided for classified
assets is not less than the amount required to be provided on the
basis of the Prudential Regulations of the State Bank.
j)
Item-wise details of un-realised/accrued income credited
to Profit & Loss Account for the year and in the previous year.
k)
Item-wise details of un-realised/accrued income of the previous
years realised in the current year.
(ii)
Applications for remittance of net remittable profits by
the branches of foreign companies other than banks, operating in
Pakistan to their Head Offices abroad should be submitted on Form
‘M’ supported by the following information/documents: -
a)
Audited Balance Sheet and Profit & Loss Account of the
branch(es) in Pakistan.
b)
Audited Consolidated Balance Sheet and Profit & Loss
Account of the Head Office. If they are not available at the time
of making the applications, they should be submitted subsequently.
c)
Reconciliation of the Head Office Accounts.
d)
Tax provision made during the year for (i) the current year
and (ii) prior years alongwith its computation.
e)
A certificate from the auditors in Pakistan that tax provision
in the accounts is sufficient to meet all tax liabilities in Pakistan
or copies of final assessment orders and forms duly certified by
the Income Tax Department.
f)
Assessment orders for the previous years, if not submitted
earlier.
g)
Certificate from the auditors showing the liability for staff
gratuity as at the close of accounts and provision thereagainst.
If no provision has been made, reasons thereof.
h)
Details of other/miscellaneous income.
i)
Amount charged/claimed on account of Head Office expenses
for the current year (if not separately shown in the accounts) and
the basis of its calculation alongwith Head Office expenses claimed/allowed
by the Income Tax Authorities for the preceding 3 years.
j)
Full particulars of additions, if any, made to fixed assets
in Pakistan, during the period and the source of funds utilized
for financing such additions.
k)
The extent to which the proposed remittance will require
bank finance.
l)
In case the applicant is applying for the first time, documentary
evidence to the satisfaction of the State Bank that the applicant
firm was in existence and conducting business operations in Pakistan
prior to 3rd October, 1963. In respect of those branches
of foreign firms and companies which were established in Pakistan
on or after 3rd October, 1963, original or photocopy
of the letter of the Investment Promotion Bureau/Board of Investment,
Government of Pakistan, granting them permission to conduct business
operations in Pakistan, should be submitted with the application
alongwith other documents.
(iii) A company other than a bank, insurance
company, airline and shipping company desiring to avail of the facility
of making remittance of profit without prior approval of the State
Bank, may approach the Joint Director (Investment Division), Exchange
Policy Department, State Bank of Pakistan, Central Directorate,
Karachi disclosing the name of its banker through whom it would
like to make remittance. The State Bank will authorise the bank
concerned to effect remittance of profit to the Head Office abroad
of the company subject to verification of the remittable amount
in the manner to be prescribed by it. While reporting such remittances,
the designated Authorised Dealers will enclose all the relevant
documents with the relative Form ‘M’.
14. Payment of Dividend to Non-Resident Shareholders.
(i)
Authorised Dealers may allow remittance of dividends to non-resident
shareholders without the prior approval of the State Bank. For this
purpose, each company will designate an Authorised Dealer through
whom it proposes to remit dividends to its non-resident shareholders.
No Authorised Dealer will effect remittance of dividends under this
authority unless it has been authorised by the State Bank to do
so in respect of a particular company.
(ii)
Each company which wants to avail of the facility of making
remittance of dividends without the prior approval of the State
Bank, should advise the Joint Director (Investment Division), Exchange
Policy Department, State Bank of Pakistan, Karachi the name of its
bankers through whom it would like to make remittance. On receipt
of nomination of a bank from the company, the State Bank will authorise
the bank concerned to effect remittance of dividends, whether interim
or final, to the non-resident shareholders of the company without
its prior approval.
(iii) Before allowing remittance of dividends,
Authorised Dealer must ensure:
a)
that the shares are held by the non-residents (other than
Indian nationals) under the specific and/or general permission of
the State Bank and are registered at their foreign addresses,
b)
that the shares in question were not acquired by the non-residents
on the basis of their undertaking that they will not claim remittance
of dividend and,
c)
that the application for remittance of dividend is net of
Pakistan tax liability. Authorised Dealers must also ensure that
the auditor’s certificate to this effect on the application is from
a well-known firm of auditors.
(iv)
The following documents must be seen by the designated Authorised
Dealer before allowing the remittance of dividends: -
a)
Application in triplicate in the prescribed form (Appendix
V-50) duly certified by the company’s auditors. There will be one
consolidated application in respect of dividends due to all the
non-resident shareholders. Where the company’s auditors have not
accepted the entitlement in respect of some shareholders, the application
may be certified with their reservation and entitlement of others
released pending reconciliation. Entitlement in respect of un-resolved
cases may be released through a supplementary consolidated application
after the matter is finalized.
b)
Two certified copies of the audited Annual Profit & Loss
Account and Balance Sheet of the company concerned for the year
to which the dividend application pertains or two copies of interim
Profit & Loss Account for the period to which interim dividend
relates.
c)
Certified true copy of the Shareholders’/Directors’ resolution
declaring the dividend.
d)
In case tax exemption is claimed by them/any of the shareholders,
a certificate to this effect is invariably produced from the competent
tax authorities.
(v)
While reporting remittances allowed by them under the above
authority in their monthly Exchange Returns, the Authorised Dealers
will enclose with the relative Form ‘M’ a copy of the supporting
application (Appendix V-50) together with one copy of audited Annual/Interim
Profit and Loss Account and Balance Sheet and certified true copy
of the Directors’/ Shareholders’ resolution. In cases where shareholders
are resident of different countries and remittances are made in
different currencies, the remittances will be reported on different
‘M’ forms under the relative currency statements. Reference to the
relative monthly currency statements should be made in column 10
of the application (Appendix V-50) against remittances made in different
currencies and the application alongwith its supporting documents
should be attached to any of the ‘M’ forms. Duplicate copy of the
application form will be retained by the Authorised Dealer concerned
for its record.
(vi)
Authorised Dealers also have general permission to allow
payment of dividends due to non-residents (other than Indian) holding
shares of companies incorporated in Pakistan on non-repatriation
basis, by credit to their private non-resident Rupee accounts maintained
with them or with other Authorised Dealers. To this end, Authorised
Dealers making payment of dividends to non-resident shareholders
for credit to their non-resident accounts shall complete the prescribed
Form A-7 and forward the same alongwith the payment instruments
to the Authorised Dealer which maintains the non-resident Rupee
account for credit to the account of the shareholders. The receiving
Authorised Dealer will report the transaction in its monthly Exchange
Return.
(vii) Authorised
Dealers should maintain separate company-wise record of payment
of dividends made to their non-resident shareholders either by remittance
or for credit to their non-resident accounts, as the case may be,
under the above general permission so as to facilitate their inspection
by the State Bank’s Inspection Teams.
(viii)
Authorised Dealers should note that it is one of the conditions
prescribed in the Investment Policy that foreign investor may temporarily
hold 100% shares in the specified newly opened sectors for foreign
investment, pending disinvestments of the prescribed percent of
investment to residents, subject to the condition that remittance
of dividend would be restricted to their investment upto 60% only.
They should ensure compliance with this restriction.
15. Export of Dividend Warrants.
Dividend
warrants of companies incorporated in Pakistan can be freely exported
to the non-resident shareholders, provided the shares have been
issued with the approval of the State Bank and a statement of such
non-resident shareholders has been filed with it.
16.(i)
Foreign Articles in Pakistani Newspapers and Magazines.
Authorised Dealers may allow remittances at actuals, without
prior approval of the State Bank, in respect of articles contributed
by non-resident foreigners for publication in Pakistani Newspapers
or Magazines, provided a demand note from the non-resident contributors
is produced by the publishers of the article to the Authorised Dealers
while applying for remittance. Advance remittance may also be allowed
subject to the applicant’s undertaking to submit the requisite documents
in due course.
(ii) Remittances on account of News Feature, News Picture, Syndication
Services, Gambles, Comics, Puzzles, Book Reviews etc.
Authorised
Dealers may effect remittances, without prior approval of the State
Bank, at the request of the publishers of Newspapers and Magazines
of repute having large circulation or by local agents of the foreign
beneficiaries in Pakistan on account of News Feature Services, News
Picture Services, Syndication Services, Gambles, Comics, Puzzles,
Book Reviews etc. published in Pakistan Newspapers and Magazines.
While effecting remittances, Authorised Dealers shall ensure the
following:-
a) Form ‘M’ has been duly signed by the applicant.
b) A formal letter of request for remittance has been
received from the remitting agency in Pakistan.
c)
The invoices/demand notes etc. of the foreign beneficiaries
are produced in original.
(iii) Remittances of salary/remuneration as well
as Telex/Telefax/Telegram/Telephone Charges to the Overseas Correspondents
of Pakistani Newspapers.
Authorised
Dealers may allow remittances without prior approval of the State
Bank, on account of salary/remuneration as well as Telex/Telegram/Telefax/Telephone
charges in favour of correspondents of Pakistani newspapers posted
abroad on production of original demand notes/bills/vouchers.
17. Advertisements
in Newspapers and Magazines abroad.
Exchange
facility is available to exporters for publishing advertisements
in foreign newspapers and magazines without any upper ceiling. Authorised
Dealers may allow remittances as indicated above for advertisement
charges payable by exporters to newspapers, magazines, etc., abroad
without the prior approval of the State Bank on production and examination
of the following documents:-
(i)
Form ‘M’ signed by the applicant.
(ii)
Invoice/Bill etc., of the beneficiary in original.
(iii)
Undertaking from the applicant concerned that he will produce
relevant clippings from the newspaper/magazine to them within a
period not exceeding three months. These clippings will be retained
by the Authorised Dealers for inspection by State Bank’s Inspectors.
While
effecting the above remittances, Authorised Dealers will ensure
that the newspaper/magazine in which the advertisement is proposed
to be inserted is of good standing and repute and remittance is
made only in the name of the concerned newspaper/magazine. In cases
of doubt, reference should be made to the State Bank before effecting
the remittance.
18. Bank Charges and Sundries.
Authorised
Dealers may, without prior approval of the State Bank, effect remittances
to their foreign correspondents etc., to cover payments due to them
on account of bank charges, cost of cables and other incidental
charges arising in the normal course of authorised business other
than imports. All such remittances should be reported to the State
Bank on Form ‘M’. In cases where bank charges relating to exports
are paid by the Authorised Dealers to their foreign correspondents
by deduction from the amount of the export bills, they should report
the full amount of the export bill as “Purchase” and simultaneously
report the deduction as “Sale”.
Authorised
Dealers may allow remittances on account of fees for tender forms
payable to Government/Semi-Government agencies or a private company
or a firm abroad without the prior approval of the State Bank on
receipt and examination of the following documents:
i)
Form ‘M’ duly filled in and signed by the applicant.
ii)
Newspaper clipping/Pakistan/Foreign Embassy’s letter or other
supporting documents evidencing floatation of tenders and the cost
of tender documents.
Authorised
Dealers may allow remittances covering fees etc., for registration
of patents and trademarks in foreign countries by firms/companies
etc., in Pakistan without prior approval of the State Bank on receipt
and examination of the following documents:
a)
Form ‘M’ duly signed by the applicant.
b)
Debit Notes of the patent attorney/solicitors etc., for the
fees for registration of patent/trade mark.
c) Undertaking from the remitter to produce within
one month from the date of remittance evidence to the effect that
the patent/trade mark has been registered abroad.
It
will be the responsibility of Authorised Dealers to ensure that
the requisite evidence for registration of patent/trade mark is
produced to them within the stipulated period.
(ii)
Registration of Exporters of Pharmaceutical products in Foreign
Countries.
Authorised
Dealers may allow remittances of registration fees by exporters
of pharmaceutical products in Pakistan for their registration with
the Ministry of Health of a foreign country, without the prior approval
of the State Bank, on production of the following documents:
a)
Form ‘M’ duly signed by the applicant.
b) Evidence from the Ministry of Health of the foreign country concerned
demanding payment of registration fee.
c) Undertaking from the remitter to produce within 1½ month from
the date of remittance, evidence to the effect that the applicant
has been registered with the Ministry of Health of the foreign country
concerned.
21. Reporting
of Remittances.
While
reporting remittances to the State Bank allowed by them under paras
10, 16, 17, 18, 19 and 20 in their monthly Exchange Returns, Authorised
Dealers will bunch the ‘M’ forms under each category separately
alongwith the supporting documents on the basis of which remittances
have been effected by them. The bunch of Forms ‘M’ with the relative
documents must have a covering statement in duplicate as per proforma
given below:-
“Covering
statement in respect of remittances
allowed
during the month of ……………….
on
account of ……………………………….
(State
purpose)
All
documents on the basis of which exchange facility is allowed by
Authorised Dealers must invariably be stamped to indicate that the
remittance has been allowed against them. |