Circulars/Notifications - Exchange Policy Department  
 F.E. Circular No. 23
February 24, 1994 

All Authorized Dealers
In Foreign Exchange,

Dear Sirs,


It has been represented to us that in view of the foreign exchange constraints prevailing in Azerbaijan, Kazakhstan, Kirghyztan, Tajikistan, Turkmenistan and Uzbekistan, traders in these countries are not at present in a position to settle the value of goods purchased by them from Pakistan in convertible currencies but they are prepared to pay the same in the shape of supply of goods. In view of this position, it has been decided to withdraw the condition for export against confirmed irrevocable letter of credit from a first class bank, and for imports against payment in convertible currency as laid down in F.E. Circular No.6 of 14th January, 1992, in respect of the above mentioned countries. Henceforth, it would be in order for traders in Pakistan to conduct transactions with parties in the above countries either in convertible currency/non-resident rupee account of a foreign bank in the normal manner or through Private Commodity Exchange Arrangements. In the case of private barter or Private Commodity exchange arrangement, the party in Pakistan will be required to obtain our approval in any of the above countries, for the purpose of accounting of the trade transactions. Such accounts may be maintained in any currency.

2. Applications for conducting transactions through private Commodity Exchange arrangement may be submitted to the Foreign Exchange Department through banks authorized to deal in foreign exchange for approval alongwith the past performance with respect to value of exports and imports made by the applicant in each year during the preceding three calendar years and the recommendation of the bank whether in view of its past dealings, the party may be given permission to conduct business through private barter arrangement. A copy of the agreement entered into between the party in Pakistan and the counter-party in the concerned country abroad will also be required to be submitted. In the case of both exports and imports by the party in Pakistan, the normal laws, regulations, rules governing such export/import will continue to is applicable barring the exemptions granted through this Circular. The party shall be required to deposit import fee at the time of placing order for imports and submit a copy of the Challan/Annexure 'A' to F.E.Circular No.31 of 1991 showing deposit of the import fee in the State Bank of Pakistan/National Bank of Pakistan. The approvals will be given by us substantially in the format attached with this Circular as 'Annexure B'.

3. The party permitted to undertake business transactions under such arrangement will be exempted from the existing requirement for drawing title documents to cargo to the order of an Authorized Dealer in case of export and it can also receive the import documents from the counter party direct. Authorized Dealers shall also be required to certify form 'E' in the modified form as indicated in Annexure 'B'.

4. The party will nominate an Authorized Dealer to maintain proforma accounts in its name for the purpose of accounting trade transactions. Separate proforma account will be maintained in respect of transactions with each party in the above-named States. The concerned Authorized Dealer will be required to submit a monthly statement in duplicate in the enclosed form (Annexure 'A') showing:-

    1. The value of goods exported alongwith the copy of invoice and Triplicate 'E' form;

    2. The value of goods imported from abroad alongwith copies of the invoices, bills of lading, triplicate copy of Customs Bills of Entry evidencing import of the goods into the country;

    3. The amount settled in convertible currency either by an outward remittance from Pakistan or an inward remittance from abroad.


While forwarding the above statement to State Bank of Pakistan, the Authorized Dealer will code the items exported/imported.

5. It is clarified that no forward exchange facility either for export or import transactions shall be admissible. However, it would be in order for the party in Pakistan to settle the balance appearing in these accounts in convertible currencies by way of remittance from Pakistan in case of an adverse balance and by repatriation of the amount in convertible currencies in case of a credit balance. Application for remittance from Pakistan will be made to the State Bank of Pakistan on Form 'I'.

6. Please bring the contents of this Circular to the notice of your constituents.

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