The Head/Principal Offices of all

Authorized Dealers in Foreign Exchange

Dear Sir/Madam,

6% RESEARCH AND DEVELOPMENT SUPPORT TO THE GARMENTS INDUSTRY

Attention of Authorized Dealers is invited to FE Circular No. 06 dated June 18, 2005 on the subject in terms of which 6% R&D Support was allowed to the garment industry. Subsequently, in accordance with MoC’s decision in terms of FE Circular No. 04 dated April 14, 2006 R&D Support was also allowed on export of readymade textile garments from EPZ Units on the production of bank certificate certifying that the export proceeds of R&D Support claims have been received in Foreign Currency.

In this regard, Authorized Dealers are advised that they may credit PKR denominated R&D Support payments from SBP in the relevant Non-Resident PKR Accounts of EPZ’s Units, maintained with them and thereafter allow withdrawals/debits in PKR for equivalent utilization. Authorized Dealers must ensure at all times that total PKR withdrawals/debits to these accounts, do not exceed the total amount of R&D Support received from SBP and credited to Non-Resident PKR Accounts. The reporting of the above transactions will be made on Form A-7 (AppendixV-7) under the existing procedures.

Authorized Dealers are advised to bring the above to the notice of all their constituents.