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CHAPTER XII
EXPORTS
1. General.
2. Exports exempted from Foreign Exchange Regulations.
3. Export Control Regulations.
4. Registration of Exporters.
5. Forms prescribed for declaring Exports.
6. Method and Period of Payment.
7. Retention Period of Export Proceeds.
8. Certification of Export Forms by Authorised Dealers.
9. Export by Country Craft, Motor Launch or Truck.
10. Printing and Distribution of Export Forms.
11. Making out and Delivery of Shipping Documents.
12. Export of Software.
13. Exports to Afghanistan.
14. Endorsement of Shipping Documents by Authorised Dealers.
15. Functional Utility of the Copies of Form 'E'.
16. Submission of Export Documents to Authorised Dealers.
17. Scrutiny of Documents.
18. Exports subject to receipt of Advance Payments on Irrevocable Letters of Credit.
19. Special Requirements for Export of Wool and other Commodities subject to Grading Scheme.
20. Part Drawings and Advance Remittances.
21. Short Shipment.
22. Shipments Shut-out Entirely.
23. Shipment Lost or Damaged in Transit.
24. Advance Remittances Against Exports.
25. Exports Against Payments Tendered by Buyers in Person.
26. Export on DA/TR basis- Non-payment by Foreign Buyers.
27. Verification of Export Proceeds Realisation Certificate.
28. Issue of Duplicate Export Proceeds Realisation Certificate.
29. Payment of Freight in Rupees.
30. Reporting of Overdue cases.
31. Export of Jewellery/Precious or Semi-precious Stones.
32. Remittance of Export Commission, Brokerage and Discount.
33. Export of Services.
33A. Retention of a part of incremental export earnings.
34. Private Commodity Exchange Arrangement with Foreign Parties.
35. Internet Merchant Accounts.
1. General.
The Government of Pakistan have, by their Notification Nos.I(6)-ECS/48 and I(7)ECS/48 both dated the 1st July, 1948 issued in pursuance of Section 12 of the Act, prohibited the export by post and otherwise than by post, of any goods either directly or indirectly, to any place outside Pakistan, unless a declaration is furnished by the exporter to the Collector of Customs or to such other person as the State Bank may specify in this behalf that foreign exchange representing the full export value of the goods has been or will be disposed of in a manner and within a period specified by the State Bank. This chapter deals with the regulations governing exports from Pakistan.
2. Exports exempted from foreign Exchange Regulations.
The prohibition mentioned above does not apply to exports to Afghanistan, exports to Iran by land route under special arrangement and to the export of:
i) Bonafide trade samples of articles exported as such by an exporter registered under the Registration (Importers and Exporters) Order, 1993 as amended from time to time, or who has been exempted from registration thereunder provided the FOB value of samples supplied free of charge does not exceed the limit notified by the Ministry of Commerce from time to time. Leather garment manufacturers are entitled to export 50 (fifty) samples in a calendar year irrespective of monetary ceiling.
ii) personal effects whether accompanied or unaccompanied of travellers,
iii) ship stores and transshipment cargo,
iv) goods shipped under the orders of the Government of Pakistan or of such officers as may be appointed by the Government of Pakistan in this behalf or of the Military, Naval or Air Force authorities in Pakistan for Military, Naval or Air Force requirements. In the case of export by post, a certificate signed by a Gazetted Officer or by any person entitled to use service postage stamps should be pasted on the outer cover of the parcel to the above effect,
v) gift parcels where they are accompanied by a declaration by the sender that the contents of the parcel are of a value not exceeding the ceiling notified by the Ministry of Commerce for gift parcels and that the dispatch of the parcel does not involve any transaction in foreign exchange, and
vi) where the packet is covered by a certificate issued by the State Bank to the effect that the export of the parcel does not involve any transaction in foreign exchange.
Customs authorities will not allow exports without declaration on the export forms except in the cases listed above.
3. Export Control Regulations.
Exchange policies regarding exports cover all goods exported from Pakistan irrespective of whether they are subject to licence under the Export Trade Control Regulations or not. Similarly, nothing in the Exchange policies relieves the exporters from the necessity of complying with the Export Trade Control Regulations as laid down by the Government from time to time, including the necessity of obtaining an export licence wherever necessary. The Government of Pakistan has under the Export Trade Control Regulations banned exports to Israel.
4. Registration of Exporters.
Under the Registration (Importers and Exporters) Order, 1993, as amended from time to time, no person can export any goods from Pakistan unless he is duly registered as an exporter with the Export Promotion Bureau. Authorised Dealers should, therefore, ensure before certifying any export form 'E' as required in para 8 ibid that the person is so registered. The registration number should be quoted on the relative export forms.
5. Forms Prescribed for declaring Exports.
As required under the Federal Government Notification Nos.I(6)-ECS/48 and I(7)ECS/48 both dated the 1st July, 1948 the exporters are required to declare their exports to the Customs/Postal authorities in form 'E' (Appendix V-11).
6. Method and period of Payment.
(i) Full export value of goods exported from Pakistan and declared to the Custom authorities should be received in an approved manner, as embodied in State Bank's Notification No. F.E. 3/2001-SB dated the 28th September, 2001 on the due date for payment or within six months from the date of shipment/posting, whichever is earlier, or within a period as may be prescribed by the State Bank through specific or general instruction, through an Authorised Dealer either in convertible foreign currency in which the Authorized Dealer maintains accounts or in U.S. Dollar or in Pakistan rupee from a non-resident bank account. However, where the terms of sale/irrevocable letter of credit provide for payment on 180 days’ usance/270 days' usance in the case of Hand Knotted Carpets, from the date of shipment/posting, it shall be permissible for the exporter to repatriate the export proceeds within 195/285 days from the date of shipment/posting. Similarly, in the case of exports to South American countries Authorised Dealers may certify Form ‘E’ if the letter of credit provides for payment on 270 days sight/usance from the date of shipment and the export proceeds may be repatriated within 285 days from the date of shipment. Prior approval of the State Bank should be obtained before arranging for payment in any manner other than that indicated above.
(ii) As an exception to the above, payment for goods exported to countries other than those with which Pakistan has special payment arrangements e.g. Asian Clearing Union member countries etc., may also be accepted from foreign currency accounts maintained with banks in Pakistan including an account maintained by the exporter himself. The transaction shall be reported first on Schedule E-4 as payment to the account holder and simultaneously on Schedule A-1/A-2 as purchase on account of export proceeds.
(iii) Where the terms of sale provide for payment earlier than six months, Authorised Dealers may allow extension in the realisation period if they are satisfied with the explanation given for delay in realisation, provided such extension does not extend the period beyond six months from the date of shipment.
7. Retention period of Export Proceeds.
It is permissible for exporters to retain the export proceeds including ‘Advance Payments’ in foreign currency with an Authorised Dealer in Pakistan for three working days and to sell the same within this period to any Authorised Dealer. The foreign currency so retained shall be kept by the Authorised Dealers in ‘ Special Exporters’ Account’ outside their ‘Exposure’ limits.
8. Certification of Export Forms by Authorised Dealers.
i) Before the export forms are lodged by the exporters with the Customs/Postal authorities all the copies thereof are required to be certified as under by the Authorised Dealers:-
a) Certified that the above exporter(s) is/are known to us, that he/they is/are bonafide businessman/businessmen in Pakistan and that he/they has/have made arrangements with us for the realisation of the export proceeds, of the goods declared on this form on the due date for payment or within six months from the date of shipment/posting, whichever is earlier, in accordance with the State Bank’s Notification No. FE. 3/2001-SB dated the 28th September, 2001 and that we are satisfied with said arrangements. We have also satisfied ourselves about the bonafides of the importers/consignees abroad and their credentials etc.
b) We undertake to ensure that export proceeds against shipment on firm contract shall be received by us on the due date for payment or within six months from the date of shipment/posting, whichever is earlier, in accordance with the State Bank’s Notification No. FE 3/2001-SB dated the 28th September, 2001. In the event of non-compliance due to reasons beyond our control we shall furnish to the State Bank of Pakistan a full explanation as to the reasons and circumstances resulting in our inability to comply.
c) We undertake that in the event of non-realisation of export proceeds against shipment on consignment sale within the stipulated period of six months, we shall obtain from the exporter(s) and furnish to the State Bank of Pakistan a full explanation as to the circumstances resulting in non-realisation. We further undertake that in the event of short realisation, we shall obtain from the exporter(s) and furnish to the State Bank of Pakistan a fully documented account sale certified by the consignees/Chamber of Commerce of the country of import.
ii) Authorised Dealers shall not certify any export form unless they have satisfied themselves with regard to the following:
(a) Arrangements have been made for realisation of export proceeds of the goods covered by the relative export forms.
(b) Bonafides of the importers/consignees abroad and their credentials have been verified. Wherever necessary they should make discreet enquiries through their foreign correspondents. In case of shipments against T.R. (Trust Receipts) or D.A. (Documents against Acceptance) greater care should be exercised by the Authorised Dealers in certifying the relative export forms. Where Authorised Dealers doubt the bonafides or standing of the importers/consignees or where they suspect collusion with the intent to evade or delay repatriation of full export proceeds, they should report such cases promptly to the State Bank.
(c) Arrangements have been made for receipt of documents of title to goods like Railway Receipt, Bill of Lading, Airway Bill and Truck Receipt.
(d) Genuineness of the charter party where shipment is to be made against a charter party Bill of Lading has been verified. Discreet enquiries should be made about the carrier and the importers as indicated in sub-paragraph (b) above to safeguard against any loss of cargo or foreign exchange in such cases.
(e) The export form has been signed by the exporter or his authorised agent. The signatory should disclose his status/capacity in the concerned firm/company etc., i.e. Director/Partner/Proprietor/Manager etc. In case the form is signed by the agent of the exporter, it should be ensured by the Authorised Dealers that he holds a valid legal power of attorney from the exporter & the terms of the power of attorney are such that the exporter as well as the attorney can be held responsible severally and jointly for the repatriation of the export proceeds to Pakistan.
(f) Letter of credit for export to Asian Clearing Union member country has been received under the ACU Arrangement, unless the export is covered by a loan/credit extended to the importing country by International Agencies like IBRD/Asian Development Bank etc., in which case letters of credit will be established envisaging payment in convertible currencies outside the Asian Clearing Union Arrangement.
(g) In the case of re-export of imported goods, the conditions laid down by the Ministry of Commerce through the existing export policy have been complied with.
9. Export by Country Craft, Motor Launch or Truck.
Authorised Dealers can also advise letters of credit or confirm arrangements and certify export forms for exports by means of country-craft or motor-launch or truck subject to normal procedure followed in case of exports.
10.(i) Printing and Distribution of Export Forms.
Head/Principal Offices of Authorised Dealers are required to maintain a complete record of all export forms printed by them and of their distribution to their branches and customers. For this purpose, they should maintain a Stock Register which should show branch-wise distribution of the export forms. It is the responsibility of the Head/Principal Offices to keep their branches adequately stocked with the export forms.
(ii) Maintenance of Party-wise Record of Certified Export Forms.
Authorised Dealers should maintain another register for recording therein the particulars of export forms issued and certified by them in respect of each exporter. In this register they should record against each form the date of submission of the export documents in cases where shipments have been made, or of the surrender of complete set of export forms in cases where goods have not at all been entered for shipment or of submission of complete “shut-out notice” in cases where the goods have been entered for shipment but have been shut-out. Against each export form, the Authorised Dealers should also indicate the date of realisation of the export proceeds wherever the documents are negotiated or collected through them. In cases where none of the above documents are received by them within the period of 21 days from the date of certification on the relative export forms, the Authorised Dealers should immediately get in touch with the exporter concerned to ascertain whether or not the shipment has been effected. If the Authorised Dealer is satisfied that the exporter has not yet been able to ship the goods against the certified export form, it should make a suitable notation against the entry in the register of the relevant certified export form and follow it up till the documents referred to above are submitted to it. All other cases where the exporters do not respond to the notices of the Authorised Dealers should be reported to the State Bank on monthly basis in the prescribed form (Appendix V-12).
11. Making out and Delivery of Shipping Documents.
For more information please visit us at our website:
CHAPTER XII
EXPORTS
1. General.
2. Exports exempted from Foreign Exchange Regulations.
3. Export Control Regulations.
4. Registration of Exporters.
5. Forms prescribed for declaring Exports.
6. Method and Period of Payment.
7. Retention Period of Export Proceeds.
8. Certification of Export Forms by Authorised Dealers.
9. Export by Country Craft, Motor Launch or Truck.
10. Printing and Distribution of Export Forms.
11. Making out and Delivery of Shipping Documents.
12. Export of Software.
13. Exports to Afghanistan.
14. Endorsement of Shipping Documents by Authorised Dealers.
15. Functional Utility of the Copies of Form 'E'.
16. Submission of Export Documents to Authorised Dealers.
17. Scrutiny of Documents.
18. Exports subject to receipt of Advance Payments on Irrevocable Letters of Credit.
19. Special Requirements for Export of Wool and other Commodities subject to Grading Scheme.
20. Part Drawings and Advance Remittances.
21. Short Shipment.
22. Shipments Shut-out Entirely.
23. Shipment Lost or Damaged in Transit.
24. Advance Remittances Against Exports.
25. Exports Against Payments Tendered by Buyers in Person.
26. Export on DA/TR basis- Non-payment by Foreign Buyers.
27. Verification of Export Proceeds Realisation Certificate.
28. Issue of Duplicate Export Proceeds Realisation Certificate.
29. Payment of Freight in Rupees.
30. Reporting of Overdue cases.
31. Export of Jewellery/Precious or Semi-precious Stones.
32. Remittance of Export Commission, Brokerage and Discount.
33. Export of Services.
33A. Retention of a part of incremental export earnings.
34. Private Commodity Exchange Arrangement with Foreign Parties.
35. Internet Merchant Accounts.
1. General.
The Government of Pakistan have, by their Notification Nos.I(6)-ECS/48 and I(7)ECS/48 both dated the 1st July, 1948 issued in pursuance of Section 12 of the Act, prohibited the export by post and otherwise than by post, of any goods either directly or indirectly, to any place outside Pakistan, unless a declaration is furnished by the exporter to the Collector of Customs or to such other person as the State Bank may specify in this behalf that foreign exchange representing the full export value of the goods has been or will be disposed of in a manner and within a period specified by the State Bank. This chapter deals with the regulations governing exports from Pakistan.
2. Exports exempted from foreign Exchange Regulations.
The prohibition mentioned above does not apply to exports to Afghanistan, exports to Iran by land route under special arrangement and to the export of:
i) Bonafide trade samples of articles exported as such by an exporter registered under the Registration (Importers and Exporters) Order, 1993 as amended from time to time, or who has been exempted from registration thereunder provided the FOB value of samples supplied free of charge does not exceed the limit notified by the Ministry of Commerce from time to time. Leather garment manufacturers are entitled to export 50 (fifty) samples in a calendar year irrespective of monetary ceiling.
ii) personal effects whether accompanied or unaccompanied of travellers,
iii) ship stores and transshipment cargo,
iv) goods shipped under the orders of the Government of Pakistan or of such officers as may be appointed by the Government of Pakistan in this behalf or of the Military, Naval or Air Force authorities in Pakistan for Military, Naval or Air Force requirements. In the case of export by post, a certificate signed by a Gazetted Officer or by any person entitled to use service postage stamps should be pasted on the outer cover of the parcel to the above effect,
v) gift parcels where they are accompanied by a declaration by the sender that the contents of the parcel are of a value not exceeding the ceiling notified by the Ministry of Commerce for gift parcels and that the dispatch of the parcel does not involve any transaction in foreign exchange, and
vi) where the packet is covered by a certificate issued by the State Bank to the effect that the export of the parcel does not involve any transaction in foreign exchange.
Customs authorities will not allow exports without declaration on the export forms except in the cases listed above.
3. Export Control Regulations.
Exchange policies regarding exports cover all goods exported from Pakistan irrespective of whether they are subject to licence under the Export Trade Control Regulations or not. Similarly, nothing in the Exchange policies relieves the exporters from the necessity of complying with the Export Trade Control Regulations as laid down by the Government from time to time, including the necessity of obtaining an export licence wherever necessary. The Government of Pakistan has under the Export Trade Control Regulations banned exports to Israel.
4. Registration of Exporters.
Under the Registration (Importers and Exporters) Order, 1993, as amended from time to time, no person can export any goods from Pakistan unless he is duly registered as an exporter with the Export Promotion Bureau. Authorised Dealers should, therefore, ensure before certifying any export form 'E' as required in para 8 ibid that the person is so registered. The registration number should be quoted on the relative export forms.
5. Forms Prescribed for declaring Exports.
As required under the Federal Government Notification Nos.I(6)-ECS/48 and I(7)ECS/48 both dated the 1st July, 1948 the exporters are required to declare their exports to the Customs/Postal authorities in form 'E' (Appendix V-11).
6. Method and period of Payment.
(i) Full export value of goods exported from Pakistan and declared to the Custom authorities should be received in an approved manner, as embodied in State Bank's Notification No. F.E. 3/2001-SB dated the 28th September, 2001 on the due date for payment or within six months from the date of shipment/posting, whichever is earlier, or within a period as may be prescribed by the State Bank through specific or general instruction, through an Authorised Dealer either in convertible foreign currency in which the Authorized Dealer maintains accounts or in U.S. Dollar or in Pakistan rupee from a non-resident bank account. However, where the terms of sale/irrevocable letter of credit provide for payment on 180 days’ usance/270 days' usance in the case of Hand Knotted Carpets, from the date of shipment/posting, it shall be permissible for the exporter to repatriate the export proceeds within 195/285 days from the date of shipment/posting. Similarly, in the case of exports to South American countries Authorised Dealers may certify Form ‘E’ if the letter of credit provides for payment on 270 days sight/usance from the date of shipment and the export proceeds may be repatriated within 285 days from the date of shipment. Prior approval of the State Bank should be obtained before arranging for payment in any manner other than that indicated above.
(ii) As an exception to the above, payment for goods exported to countries other than those with which Pakistan has special payment arrangements e.g. Asian Clearing Union member countries etc., may also be accepted from foreign currency accounts maintained with banks in Pakistan including an account maintained by the exporter himself. The transaction shall be reported first on Schedule E-4 as payment to the account holder and simultaneously on Schedule A-1/A-2 as purchase on account of export proceeds.
(iii) Where the terms of sale provide for payment earlier than six months, Authorised Dealers may allow extension in the realisation period if they are satisfied with the explanation given for delay in realisation, provided such extension does not extend the period beyond six months from the date of shipment.
7. Retention period of Export Proceeds.
It is permissible for exporters to retain the export proceeds including ‘Advance Payments’ in foreign currency with an Authorised Dealer in Pakistan for three working days and to sell the same within this period to any Authorised Dealer. The foreign currency so retained shall be kept by the Authorised Dealers in ‘ Special Exporters’ Account’ outside their ‘Exposure’ limits.
8. Certification of Export Forms by Authorised Dealers.
i) Before the export forms are lodged by the exporters with the Customs/Postal authorities all the copies thereof are required to be certified as under by the Authorised Dealers:-
a) Certified that the above exporter(s) is/are known to us, that he/they is/are bonafide businessman/businessmen in Pakistan and that he/they has/have made arrangements with us for the realisation of the export proceeds, of the goods declared on this form on the due date for payment or within six months from the date of shipment/posting, whichever is earlier, in accordance with the State Bank’s Notification No. FE. 3/2001-SB dated the 28th September, 2001 and that we are satisfied with said arrangements. We have also satisfied ourselves about the bonafides of the importers/consignees abroad and their credentials etc.
b) We undertake to ensure that export proceeds against shipment on firm contract shall be received by us on the due date for payment or within six months from the date of shipment/posting, whichever is earlier, in accordance with the State Bank’s Notification No. FE 3/2001-SB dated the 28th September, 2001. In the event of non-compliance due to reasons beyond our control we shall furnish to the State Bank of Pakistan a full explanation as to the reasons and circumstances resulting in our inability to comply.
c) We undertake that in the event of non-realisation of export proceeds against shipment on consignment sale within the stipulated period of six months, we shall obtain from the exporter(s) and furnish to the State Bank of Pakistan a full explanation as to the circumstances resulting in non-realisation. We further undertake that in the event of short realisation, we shall obtain from the exporter(s) and furnish to the State Bank of Pakistan a fully documented account sale certified by the consignees/Chamber of Commerce of the country of import.
ii) Authorised Dealers shall not certify any export form unless they have satisfied themselves with regard to the following:
(a) Arrangements have been made for realisation of export proceeds of the goods covered by the relative export forms.
(b) Bonafides of the importers/consignees abroad and their credentials have been verified. Wherever necessary they should make discreet enquiries through their foreign correspondents. In case of shipments against T.R. (Trust Receipts) or D.A. (Documents against Acceptance) greater care should be exercised by the Authorised Dealers in certifying the relative export forms. Where Authorised Dealers doubt the bonafides or standing of the importers/consignees or where they suspect collusion with the intent to evade or delay repatriation of full export proceeds, they should report such cases promptly to the State Bank.
(c) Arrangements have been made for receipt of documents of title to goods like Railway Receipt, Bill of Lading, Airway Bill and Truck Receipt.
(d) Genuineness of the charter party where shipment is to be made against a charter party Bill of Lading has been verified. Discreet enquiries should be made about the carrier and the importers as indicated in sub-paragraph (b) above to safeguard against any loss of cargo or foreign exchange in such cases.
(e) The export form has been signed by the exporter or his authorised agent. The signatory should disclose his status/capacity in the concerned firm/company etc., i.e. Director/Partner/Proprietor/Manager etc. In case the form is signed by the agent of the exporter, it should be ensured by the Authorised Dealers that he holds a valid legal power of attorney from the exporter & the terms of the power of attorney are such that the exporter as well as the attorney can be held responsible severally and jointly for the repatriation of the export proceeds to Pakistan.
(f) Letter of credit for export to Asian Clearing Union member country has been received under the ACU Arrangement, unless the export is covered by a loan/credit extended to the importing country by International Agencies like IBRD/Asian Development Bank etc., in which case letters of credit will be established envisaging payment in convertible currencies outside the Asian Clearing Union Arrangement.
(g) In the case of re-export of imported goods, the conditions laid down by the Ministry of Commerce through the existing export policy have been complied with.
9. Export by Country Craft, Motor Launch or Truck.
Authorised Dealers can also advise letters of credit or confirm arrangements and certify export forms for exports by means of country-craft or motor-launch or truck subject to normal procedure followed in case of exports.
10.(i) Printing and Distribution of Export Forms.
Head/Principal Offices of Authorised Dealers are required to maintain a complete record of all export forms printed by them and of their distribution to their branches and customers. For this purpose, they should maintain a Stock Register which should show branch-wise distribution of the export forms. It is the responsibility of the Head/Principal Offices to keep their branches adequately stocked with the export forms.
(ii) Maintenance of Party-wise Record of Certified Export Forms.
Authorised Dealers should maintain another register for recording therein the particulars of export forms issued and certified by them in respect of each exporter. In this register they should record against each form the date of submission of the export documents in cases where shipments have been made, or of the surrender of complete set of export forms in cases where goods have not at all been entered for shipment or of submission of complete “shut-out notice” in cases where the goods have been entered for shipment but have been shut-out. Against each export form, the Authorised Dealers should also indicate the date of realisation of the export proceeds wherever the documents are negotiated or collected through them. In cases where none of the above documents are received by them within the period of 21 days from the date of certification on the relative export forms, the Authorised Dealers should immediately get in touch with the exporter concerned to ascertain whether or not the shipment has been effected. If the Authorised Dealer is satisfied that the exporter has not yet been able to ship the goods against the certified export form, it should make a suitable notation against the entry in the register of the relevant certified export form and follow it up till the documents referred to above are submitted to it. All other cases where the exporters do not respond to the notices of the Authorised Dealers should be reported to the State Bank on monthly basis in the prescribed form (Appendix V-12).
11. Making out and Delivery of Shipping Documents.
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