The Presidents/Chief Executives of all
Authorized Dealers in Foreign Exchange

Dear Sirs/Madam,

Export of Sugar

1. Authorized Dealers (ADs) may find enclosed Commerce Division, Ministry of Commerce and Textile Office Memorandum (O.M.) No.7(2)/2012-Exports-III dated October 18, 2018 regarding the above subject. In terms of the above O.M., Government of Pakistan has allowed sugar mills to export 1,000,000 MT (One Million Metric Ton) sugar as per the terms and conditions mentioned therein.
2. ADs are advised to process the export of sugar quota allocation cases as per following mechanism:

1. ADs will forward the requests of sugar mills through their respective Departmental/ Business/Group Heads to the Director, Foreign Exchange Operations Department (FEOD), SBP-Banking Services Corporation (BSC), Head Office, Karachi for approval quoting the reference of this circular letter along with the attested/ authenticated copies of the following documents:
   1. Clearance Certificate issued by the concerned Cane Commissioner to the effect that concerned sugar mill has cleared outstanding dues of the farmers for sugarcane crop upto 2017-18. Further, after November 15, 2018 the said clearance certificate shall also certify that concerned sugar mill has started crushing at full capacity.
   2. In case export quota is granted prior to November 15, 2018, the sugar mill shall provide an undertaking to the effect that it will commence crushing from the said date.
   3. Confirmation from the respective AD that the said sugar mill is not a defaulter of any bank in Pakistan.
   4. Latest ECIB Report.
   5. Sugar export contract.
   6. Manual Form-E or print out of EFE request in case of electronically generated Form-E through WeBOC.
   7. Irrevocable L/C or advance payment voucher alongwith swift message and reporting schedule/credit advice, as the case may be.
2. FEOD will allocate sugar export quota to sugar mills on first come first served basis.
3. There will be no freight or financial support by the Federal/ Provincial Governments for export under the above scheme.
4. Sugar mills who are defaulters of banks will not be allowed to export sugar.
5. ADs will ensure receipt of a minimum 15% of total contract value as advance payment (evidenced by advance payment voucher, swift message and reporting schedule/credit advice) or obtain an irrevocable L/C from the buyer.
6. All exports including those destined for Afghanistan and Central Asian Republics will be subject to receipt of export proceeds by wire transfer through banking channel.
7. Exporters must ship the sugar within 60 days from the date of FEOD’s approval regarding quota allocation. Both date of approval and date of shipment are included in counting of the 60 days period. For shipment by sea, the date of shipment is the “Shipped on Board” date on Bill of Lading. For shipment by land route, the “Out of Charge” date will be considered as the date of shipment.
8. There shall be no provision of surrendering the quota once allocated by FEOD.
9. In case of non-performance within the stipulated time against the quota allocated by FEOD, ADs will:
   1. Recover a penalty of 15% of total contract value from the exporter and deposit the same with the FEOD, SBP-BSC, Head Office, Karachi through DD/ PO in favor of Government of Pakistan. In case of partial shipment, the penalty shall be recovered by the AD proportionately.
   2. Obtain prior permission from FEOD, SBP-BSC, Head Office, Karachi for return of advance payment received there against from the importer.
      
      The penalty will be calculated by applying SBP Weighted Average Rate (WAR) of date on which sugar quota was allocated.
10. ADs will submit sugar export shipment update to the Director, FEOD, SBP-BSC, Head Office, Karachi on weekly basis as per the enclosed reporting format (Annexure-I) at [email protected].

3. Incomplete requests shall not be considered.
4. Authorized Dealers are advised to bring the same to the notice of all their constituents.