State
Bank of Pakistan is taking the following measures with
immediate effect in order to streamline the foreign exchange
markets:
1)
Advance Payment against Imports
a) Attention of the Authorized Dealers is invited to FE
Circular No.04 dated September 13, 2007 in terms of which
importers were allowed to effect advance payment against
irrevocable letters of credit and firm registered contracts
up to 100% of the FOB or CFR value of the goods subject
to the terms and conditions mentioned therein. It has
now been decided that the said facility will be available
only against irrevocable letters of credit and to the
extent of 50% of the FOB or CFR value of the goods. In
case importers desire to make advance payments up to a
maximum of 50% of the FOB or CFR value of the goods against
registered contract, they will have to provide bank guarantee
from the bank of supplier abroad for the amount of advance
payment and will have to approach Exchange Policy Department,
SBP on a case-to-case basis with the rationale of the
advance payment to be made. Further, the penalty rate
mentioned in para d) of the above referred FE Circular
has been enhanced from 0.25% to 0.50%. All other terms
and conditions of FE Circular No.04 dated September 13,
2007 would remain unchanged.
b)
Authorized Dealers may also note that the advance payment
facility up to US$10,000/-, or equivalent thereof in other
foreign currencies, per invoice for import of eligible
items as allowed vide FE Circular No.12, dated August
2005 will now remain available to the importers only against
import of spare parts/raw materials by manufacturing and
industrial users for their own use without requirement
of L/C or bank guarantee. In case of cancellation of an
import transaction against which advance payment has been
affected, the punitive action/mechanism provided in FE
Circular No.04 dated September 13, 2007 alongwith above
amendments will also be applicable on all such transactions.
All other terms and conditions of the FE Circular 12,
dated August 2005 would remain unchanged.
2. Tenor of Forward Cover Facility
Attention of Authorized Dealers is invited to Para - 4
of FE Circular No. 24 of December 31, 2002, in terms of
which forward cover facility for a tenor of less than
one month was allowed. It has now been decided that henceforth
Authorized Dealers will be allowed to provide forward
cover facility against imports on L/C basis for a period
not less than one month and up to a maximum period of
one year on rollover basis subject to observance of all
other related rules and regulations. Furthermore, close
out of any forward contract cannot happen within one month
of its booking. In case payment has to be made against
letter of credit within one month of the forward contract,
the prevailing spot selling rate will be applied and the
relevant forward contract will be closed out at the end
of one –month from the booking date. All other instructions
in this respect would remain unchanged.
Authorized
Dealers are advised to bring the above to the notice of
their constituents, for strict compliance.