Circulars/Notifications - Exchange Policy Department  
 F.E. Circular No. 82
October 15, 1992 

All Authorised Dealers
in Foreign Exchange,

Dear Sirs,


The Government of Pakistan and Malaysia have signed a Memorandum of Understanding on the utilization of the export credit for the sale of Malaysian Palm Oil to the Islamic Republic of Pakistan through the nominated bodies viz. Ghee Corporation of Pakistan and Trading Corporation of Pakistan. The arrangement also commodities through sight letters of credit opened by the designated banks in Malaysia. The names of designated banks of both the countries as also the list of eligible commodities which bodies in Malaysia may import are set forth in Annexure I and II to this Circular respectively.

2. The following procedure has been prescribed for handling transactions relating to export from Pakistan:-

  1. Malaysian buyers will open letters of credit in favour of Pakistani exporters.

  2. The designated banks in Malaysia opening the letters of credit for imports from Pakistan shall on the same day notify the Accounts Department, State Bank of Pakistan, Central Directorate, Karachi by telex or facsimile transmission of the letter of credit issued by the designated banks in Malaysia indicating the name of the advising bank. The letters of credit must be prominently marked "Opened under Palm Oil Credit and Payment Arrangement" and must be advised after obtaining clearance from the State Bank of Pakistan. The Accounts Department, State Bank of Pakistan shall issue its clearance only after obtaining necessary authority from the Economic Affairs Division, Government of Pakistan.

  3. After shipment of the goods the negotiating bank shall negotiate the documents, transmit the same to the L/C opening bank in Malaysia and obtain payment from State Bank of Pakistan. While seeking reimbursement from State Bank of Pakistan the negotiating bank will indicate the letter of credit number and amount paid and will also certify that the documents negotiated were strictly in conformity with the terms of the relative letter of credit.

  4. All the letters of credit to be opened under this arrangements shall be denominated in U.S. Dollar and the provisions contained in Uniform Customs and Practices for documentary credit ICC Publication No. 400 shall apply to such Credits/Instruments.

  5. National Bank of Pakistan and Habib Bank Limited have been designated to handle transactions under this credit. However, all exporters will be free to approach any of the designated banks in Pakistan for opening of letters of credit/certification of Form 'E' directly or through their banks.


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