in Foreign Exchange,
TERM CREDIT US$ 100 MILLION
FOR IMPORT OF PALM OIL FROM MALAYSIA
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.
The following procedure has been prescribed for handling
transactions relating to export from Pakistan:-
buyers will open letters of credit in favour of Pakistani
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.
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
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.
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
'E' directly or through their banks.