This refers to SMFED Circular Letter No.6 dated February 24, 2011 on the captioned subject.
2. In order to streamline the procedure for availing finance under EFS by exporters who have overdue export proceeds, the following instructions will come into effect from October 01, 2011:
a) An exporter shall be eligible to avail financing under EFS Part-I and/or Part-II, if the total amount of overdue export bills at the time of availing the facility is not more than 5% of the previous year’s export performance shown in EE-1 statements, duly verified/finalized by concerned SBP BSC office(s). Henceforth, exporters availing only the EFS Part-I facility are also required to submit the prescribed EE-1 statements.
b) In case the overdue export position of an exporter is greater than 5% of the previous year’s exports, the exporter will not be entitled to avail the EFS facility till such time that the overdue position is reduced to the 5% benchmark level.
3. To meet the above criteria of financing under EFS, the following guidelines are to be followed:
i) Each exporter will be required to give a Certificate on a prescribed Form (enclosed herewith) showing consolidated position of overdue export bills outstanding against all bank(s) {as per the record of Foreign Exchange Operations Department (FEOD)}, as a percentage of the total exports of the preceding year finalized in EE-1 statements. The Certificate will be submitted through the bank to the concerned SBP BSC office on a six monthly basis by 31st March & September 30, each year. The certificate will remain valid up to the next six months. Process of submission of the certificate would commence from September 2011.
ii) In case of verification of the EE-1 statements from more than one office, a copy of Entitlement of Refinance Limit Certificate(s) (ERLCs) to be obtained from the concerned SBP BSC Office(s) and the consolidated overdue export bills certificate as required at (i) above, should be submitted at the SBP BSC office from where refinance is to be obtained. ERLC will be issued by respective SBP BSC Office(s) based on the EE-1 statements finalized by them, as per the specimen attached herewith.
iii) In case the EFS facility is availed from more than one office, the consolidated overdue export bills certificate along with ERLC(s) should be submitted to the SBP BSC office where the exporter opts to get confirmation of the export overdue benchmark. The office which finalizes the 5% benchmark on a consolidated basis will communicate it to the concerned exporter/bank as well as the SBP BSC office(s) where the exporter intends to avail the EFS facility. The concerned SBP BSC office shall also seek confirmation from the ERLC issuing office(s) for this purpose, if required.
iv) If an exporter is eligible for EFS as mentioned at 2(a) above, by repatriating the proceeds to the level of the benchmark in the intervening period prescribed for submission of certificate, he would be allowed to submit a request along with a new certificate for availing the EFS facility.
v) The total amount of overdue export proceeds will be reported in PKR by applying the annual average exchange rate of the year (simple average of monthly average exchange rate published by SBP), on which the export performance would be based for calculating the 5% benchmark of overdue export bills.
vi) Any misreporting/misstatement shall attract imposition of fine on bank/exporter at the rate prescribed under the Scheme.
4. The concerned SBP BSC office(s) shall verify the export overdue position of the exporter from relevant data and check the benchmark as mentioned at 2(a) above. In normal cases this practice shall be adopted twice a year before granting refinance.
5. The existing waiver in the period for exporters with overdue export bills is being extended up to September 30, 2011 to cover the period until the certificate is submitted by the exporters for the first time.
6. Other instructions on the subject shall remain unchanged. Banks are advised to promptly circulate these instructions to their branches and constituents for meticulous compliance.
Please acknowledge receipt.
Encl: As above.