F.E.
Circular No. 50 |
November 03, 1998 |
All
Authorised Dealers
In Foreign Exchange,
Dear
Sirs,
COMMODITY
EXCHANGE ARRANGEMENT WITH FOREIG
-
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.
-
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".
-
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.
-
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:-
-
the
value of goods exported, alongwith the copies of invoice
and Triplicate 'E'
Forms;
-
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;
-
the
opening and closing balances.
While
forwarding the above statements to State Bank of Pakistan,
the Authorised Dealer will code the items exported
/ imported.
-
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.
-
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.
-
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:-
- Exporter
shall fill in the complete set of the Form 'E' in quadruplicate.
Each copy shall be branded as under:-
"Shipment
under Commodity Exchange Agreement dated __________
approved by the State bank of Pakistan vide letter No.
__________ dated __________."
- The
certificate to be given by the Authorised Dealers on
Page 2 of the Form 'E' shall be substituted by the following
wordings:-
"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."
-
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.
-
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.
-
You
will also issue the freight certificates prescribed
in para 27 Chapter XII of the Foreign Exchange Manual
for production to the carrier.
-
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.
-
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:
-
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.
-
The
Director, Statistics Department, State Bank of Pakistan,
Central Directorate, Karachi.
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