The Head/Principal Offices of all

Authorized Dealers in Foreign Exchange

Dear Sir/Madam,

6% RESEARCH AND DEVELOPMENT SUPPORTTO THE GARMENTS INDUSTRY

Attention of the Authorized Dealers is invited to FE Circular # 06 dated June 18, 2005 on the above subject.

In terms of Para 3 (i & ii) of the above Circular, exporters are required to lodge their claims of R&D support with Field Offices of SBP-Banking Services Corporation through their respective Authorized Dealers. Authorized Dealers are required to scrutinize the application carefully and submit the same under their certification to the Field Offices of SBP-Banking Services Corporation.

It has, however, been observed that in most of the cases, adequate attention is not given by the Authorized Dealers to ensure proper scrutiny of material aspects of 6% R&D support claims before submitting these at SBP-BSC Offices. Further, Authorized Dealers do not approach Field Offices for receiving back the rejected/ discrepant cases for rectification and subsequent resubmission inspite of repeated telephonic reminders from SBP-BSC Officials.

The above state of affairs has been viewed seriously as this has not only resulted in delays in payments to the exporters, but also accumulation of unpaid claims at SBP-BSC Offices. It has, therefore, been decided that henceforth, penal action will be taken against the Authorized Dealers who fail to carry out the expected minimum evaluation and scrutiny of R&D cases. Authorized Dealers forwarding R&D Applications containing material discrepancies, due to lack of proper scrutiny at their end shall be penalized on per case basis.

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