The Head Offices/Principal
Offices of all
Authorized Dealers In Foreign Exchange
Dear
Sir,
With a view to further liberalize the foreign exchange regime,
certain amendments/additions have been made in the Foreign
Exchange Manual (Eighth Edition-2002) after incorporation
of the facilities extended to importers and exporters under
Trade Policy 2003-04. The same are appended below:
1.The
Incoterms 2000 introduced by ICC have been adopted.
2.The limit for
retention of export proceeds in Special Foreign Currency
Accounts has been enhanced to 10%.
3.The limit on
imports, without opening letters of credit, by actual/end
users (USD 5,000) has been abolished.
4.The limit on
imports, without opening letters of credit, by industrial
users (USD 30,000) has been abolished.
2. Accordingly, following amendments have been made in respective
chapters of FE Manual (8th Edition, 2002):
i) The para 1 of Chapter XII of FE Manual (8th Edition,
2002) may be re-numbered as 1(i) and following para may
be added as para 1(ii):
“The
Incoterms introduced by ICC for exports to provide a set
of international rules to avoid uncertainty of different
interpretation of the most commonly used trade terms in
foreign trade may be adopted.”
ii) Like-wise, existing para 5 of Chapter XIII of FE Manual
(8th Edition, 2002) may be replaced by the following para:
“The
Incoterms introduced by ICC for imports to provide a set
of international rules to avoid uncertainty of different
interpretation of the most commonly used trade terms in
foreign trade may be adopted. However, prior permission
of the State Bank shall be obtained for import of sugar
and food grains (cereals) on CFR free out basis”.
iii)
Para 32 (i) of Chapter XII FE Manual (8th Edition 2002)
may be replaced by the following paragraph:
“Authorised
Dealers are permitted to allow payment of commission/brokerage/discount
due to foreign importers/or agents by exporters in Pakistan
at the following rates:
Maximum rate of
Commission etc
(a)
Books, journals and magazines Upto 33 1/3
(b)
Engineering goods (Electrical and Upto 10%
Non-electrical)
(c)
Sports goods, surgical instruments,
cutlery,
leather goods, ready-made Upto 10%
garments
and other textile made-ups,
Carpets
and plastic manufactures.
(d)
Cotton Upto 2%
(e)
All other goods except cement Upto 10%”
iv) To further facilitate the exporters to utilize the funds
retained in the special foreign currency accounts (opened
for retention of commission from export proceeds under paras
32(iii) and 33 of Chapter XII), it has been decided to allow
the exporters to utilize these funds for any other legitimate
purpose including purposes as stated in para 32(iii) of
Chapter XII. Accordingly, para 32(iii) may be replaced by
the following para:
“In
cases where the exporter is not required to pay commission
or where he is required to pay an amount less than the maximum
permissible limits for commission, such amounts of commission/differential
not exceeding the limits as stated in paras 32(i) and 33
of the FOB value of goods realized and net foreign exchange
earnings respectively can be retained in foreign currency
account with Authorised Dealers in Pakistan. The funds held
in such foreign currency accounts can be used by the exporters
for promotional publicity, collection of commercial intelligence,
purchase of designs/patterns, market studies, bonafide export
claims, shortfall in realization of export proceeds and
any other legitimate purpose, without any approval from
the State Bank. The foreign currency accounts so opened
will be fed exclusively with the maximum allowable/differential
for commission from export proceeds/net foreign exchange
earnings and no other deposits, whatsoever the nature, will
be accepted for credit to such foreign currency accounts.
The facility is also available where export proceeds are
realized under ACU Arrangement”.
v) Sub paragraph (i) of para 17 of Chapter XIII of Foreign
Exchange Manual (8th Edition, 2002) has been amended as
under: -
“In
terms of the Import Policy, importers are permitted to make
imports without opening of letters of credit or registering
the indents/proforma invoices or orders with the Authorized
Dealers, and make remittances thereagainst. The importers
are free to make remittances in respect of such imports
either in advance or after receipt of goods in Pakistan.
The remittances can be made through demand draft/telegraphic
transfer/mail transfer. In such cases where the importers
make advance payments for such imports, they will be required
to furnish to Authorized Dealers at the time of making a
request for remittance, an undertaking to produce invoice
and bills of lading/airway bill within the period of four
months from the date of advance payment. The Authorized
Dealers will pursue the matter with the importers and report
those cases to the area offices of Exchange Policy Department
where the requisite documents are not produced within the
prescribed time limit. In cases where remittances are made
after receipt of goods in Pakistan, the importers can approach
the Authorized Dealers for remittances on the basis of invoices
and original bills of lading or airway bill. The Authorised
Dealers have general permission to make advance payments
or arrange remittances against the prescribed documents
on receipt of goods in Pakistan”.
vi) Moreover, para 14 of Chapter XVI of FEM has also been
replaced by the following:-
“Authorized
Dealers may approve applications on Form ‘M’
in connection with import of any importable item or items
by actual users on production of the following documents:
-
i)
Proforma invoice/debit note in original.
ii)
Declaration of the applicant that the amounts remitted by
him during the current fiscal year including the amount
of the present application.
iii)
Declaration that the item/items so imported are for his
personal use only.
vii) Sub paragraph (ii) of para 17 of Chapter XIII of FEM
(Eighth Edition) 2002 should be replaced by the following
para:
“At
the request of industrial establishments as importers, Authorized
Dealers may issue foreign currency demand draft for import
of spare parts/machinery, without opening of letter of credit,
provided such imports are made by air or by courier. Authorized
Dealers will maintain a record of such drafts issued by
them. They will also obtain Exchange Control copy of Bill
of Entry and evidence to the effect that the import was
made by air/courier. These records will be retained till
the next inspection of the concerned bank branch by the
State Bank’s Inspectors”.