Circulars/Notifications - Exchange Policy Department  
 F.E. Circular No. 50
November 03, 1998 

All Authorised Dealers
In Foreign Exchange,

Dear Sirs,

COMMODITY EXCHANGE ARRANGEMENT WITH FOREIG

  1. It has been decided by the Government to allow private parties in Pakistan to enter into Commodity Exchange Arrangements (CEA) with foreign parties (including undertakings controlled by foreign governments and public sector agencies but excluding foreign governments). The Ministry of Commerce will prescribe, from time to time, a negative list of commodities which cannot be exported under this scheme.

  2. Applications for conducting transactions through Private Commodity Exchange Arrangement may be submitted to the Foreign Exchange Department (Policy Division, Central Directorate, Karachi) through banks authorised to deal in foreign exchange, for approval alongwith copies of Export / Import Registration Certificates, the past performance showing the value of exports made by the applicant in each year during the preceding three financial years duly certified by their bankers, and the recommendation of the bank whether in view of its past dealings, the party may be given permission to conduct business through private Commodity Exchange Arrangement. Exporters having less than three continuous years export performance would not be eligible. 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 be applicable barring the exemptions granted through this Circular. The approvals will be given by the State Bank in the format attached with this Circular as "Annexure A".

  3. The party permitted to undertake business transactions under such arrangement will be exempted from the existing requirement of drawing the document of title to export cargo to the order of an Authorised Dealer in case of export, and it can also receive the import documents from the counter-party direct. Authorised Dealers shall also be required to certify Form 'E' in the modified form as indicated in the Annexure A. The parties will ensure that imports at least equal to the value of exports are made by them within four months from the date of export, failing which the value of exports should be repatriated in convertible foreign currency within the prescribed period of four months from the date of export. However, if the imports exceed exports, no remittance in convertible currency would be allowed for settlement of the adverse balance.

  4. The party will nominate an Authorised Dealer to maintain proforma account in its name for the purpose of accounting the trade transactions. Separate proforma account will be maintained in respect of each Commodity Exchange Arrangement. The concerned Authorised Dealer will be required to submit a monthly statement in duplicate in the enclosed form (Annexure 'B') in respect of each CEA showing:-

    1. the value of goods exported, alongwith the copies of invoice and Triplicate 'E' Forms;

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

    3. the opening and closing balances.

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

  1. It is clarified that no forward exchange facility either for export or import transactions shall be admissible. Export under this scheme is not negligible for the purpose of Export Refinancing Scheme.

  2. The withholding tax leviable on the export as per Notifications issued by the Central Board of Revenue from time to time will be recovered by the Authorised Dealers at the time of passing the entry in the account in respect of exports from Pakistan.

  3. Please bring the above to the notice of your constituents.

Annexure 'A'

Annexure 'B'

 

ANNEXURE 'A'

 

STATE BANK OF PAKISTAN
FOREIGN EXCHANGE DEPARTMENT
CENTRAL DIRECTORATE
KARACHI

No. Dated:

The Manager,

Bank Limited

___________________________

___________________________ 

Dear Sir,

 

PRIVATE COMMODITY EXCHANGE
ARRANGEMENT A/C ________________

M/s ______________________________ have entered into a Commodity Exchange Agreement dated __________ with M/s ______________________________ of ______________________________ and have nominated you as their bankers to handle trade transactions under the above Agreement. You are, there fore, permitted to certify Form 'E' for export transactions. This permission is subject to adherence and compliance of the following conditions:-

    1. Exporter shall fill in the complete set of the Form 'E' in quadruplicate. Each copy shall be branded as under:-
    2. "Shipment under Commodity Exchange Agreement dated __________ approved by the State bank of Pakistan vide letter No. __________ dated __________."

    3. The certificate to be given by the Authorised Dealers on Page 2 of the Form 'E' shall be substituted by the following wordings:-
    4. "Certified that the above exporter(s) is/are known to us, that he/they are bonafide businessman/businessmen in Pakistan and they he/they has/have made their own arrangement to realize the export proceeds of the goods declared on the form on the due date for payment or within four months from the date of shipment whichever is earlier, either through the import of goods from the country of import or in convertible foreign currency."

    5. The documents i.e. bills of Lading, Airway Bills, Railway Receipts, Truck Receipts or any other documents of title to cargo shall be issued to the order of the exporter or the foreign counter-party. The exporter shall also make his own arrangement to dispatch the documents to consignees. The instructions contained in para 10 Chapter XII of the Manual ibid shall be deemed to have been rescinded in this case.

    6. Similarly, it will be in order for the party in Pakistan to import the goods and to receive the import documents directly from the counter-party. On clearance of the goods, the value of the documents as assessed by Customs shall be entered in the account.

    7. You will also issue the freight certificates prescribed in para 27 Chapter XII of the Foreign Exchange Manual for production to the carrier.

    8. The exporter shall present a copy of the export invoice alongwith the duplicate and triplicate copies of the 'E' form and a non-negotiable copy of the bill of lading / airway bill etc. to you within a week of the shipment. These documents will be retained by you and necessary entry made in the proforma account. Similarly, he will submit a copy of the import invoice, bill of lading and bill of entry on the basis of which the entry will be passed by you in the proforma account.

    9. You will submit a monthly statement in respect of each CEA duly supported by attachments to the Joint Director, Foreign Exchange Department, State Bank of Pakistan, ____________________ on the format enclosed as Annexure 'B' in duplicate.

 

Endorsement No. /FEP.9(54-C)-98 of date

Copy Forwarded To:

    1. The Joint Director, Foreign Exchange Department, State Bank of Pakistan, ____________________. This work will be handled by the Export Section. It should be ensured that either goods are imported or export proceeds repatriated within four months. Submission of the prescribed monthly statement should also be watched and a copy of the same should be sent to the Director, Statistics Department, State Bank of Pakistan, Central Directorate, Karachi.

    2. The Director, Statistics Department, State Bank of Pakistan, Central Directorate, Karachi.

       
Home
About SBP
Publications
Economic Data
Press Releases
Circulars/Notifications
Laws & Regulations
Monetary Policy
Help Desk
SBP Videos
Feedback
Contact us
What's New?
Speeches
Online Tenders
Web Links

Educational Resources
Regulatory Returns
Library
Rupey ko Pehchano
Events
Zahid Husain Memorial Lecture
Careers
Sitemap
 
Best view Screen Resolution : 1024 * 768
Copyright © 2016. All Rights Reserved.