All
Authorised Dealers
in
Foreign Exchange.
Dear
Sirs,
Payment
Of Royalty/Franchise & Technical Fee Or
Commission/Service Charges In Financial Sector
Attention
of all Authorised Dealers is invited to Para 10, Chapter
XIV of the Foreign Exchange Manual containing the definition
and procedure for payment of Royalty and Technical Fee in
the Manufacturing sector or Service Charges in Agriculture,
Social, Infrastructure and Service Sectors.
It
has now been decided that remittance of Royalty/Franchise
and Technical Fee or Service Charges may also be allowed
in Financial Sector. Accordingly Para 10 of Chapter XIV
of Foreign Exchange Manual is amended as under:
The
following Para may be inserted in Chapter XIV after Para
10(ii) and the existing Para 10 (iii), (iv) and (v) may
be amended to read as 10(iv), (v) and (vi) respectively:
“Para
10(iii)
The
remittance of Royalty/Franchise and Technical Fee or Commission/Service
Charges for the financial sector may be allowed on the following
guidelines:
a)
The applications for remittances of such payments by the
Commercial Banks as well as Non-Banking Financial Institutes
(NBFIs) including leasing/modaraba companies and investment
banks, to the foreign collaborators in respect of their
branded financial products/services within the area of their
authorized business, would be processed and approved by
the State Bank of Pakistan, on a case to case basis, on
submission of an attested copy of the agreement and other
relevant information/documents.
b)
The one time lump sum upfront Royalty/Technical Fee/Franchise
Fee should not exceed US$500,000/-. This would be allowed
from the interbank market.
c)
Continuing royalty payments, service/technical charges/commission
or handling charges/any other directly related charges not
exceeding 0.25% in aggregate of customers’ billing
net of taxes/surcharges would be allowed which would either
be recovered from the customers or met through the financial
institution’s own resources. No foreign exchange would
be provided/utilized for this purpose from the interbank
market.
d)
Permission for standby LC/guarantee, if required, would
be granted on the merit of each case.”