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CHAPTER
XII
EXPORTS
1(i). 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.
(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
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.
In exercise of the powers vested in it under Section 20(3) of the Act, all
carriers whether common or private (railway, steamship, motor trucking or airline
companies) and their agents have been directed by the State Bank as under:
(i) (a) In respect of export of goods from Pakistan to foreign countries by land
route or by sea, the Railway Receipts, Bills of Lading, Truck Receipts or any other
documents of title to cargo should be drawn only to the order of an Authorised Dealer
designated for the purpose by the exporter. This restriction will not apply if the
exporter produces a certificate to the carrier from the Authorised Dealer concerned in the
prescribed form (Appendix V-13). The certificate will be issued by the Authorised Dealer
only if the shipment is being made against an advance payment or against an irrevocable
Letter of Credit which calls for drawing of documents of title to cargo to the order of
the opening bank, or the importer, or the exporter or to order and blank endorsed. In all
cases the railway receipt, bill of lading and other documents of title to cargo should be
delivered by the carriers to the authorised representative of the Authorised Dealer
concerned holding authority letter for collecting these documents.
(b) A Seaway bill may be accepted by the Authorised Dealers if the export is
being made against receipt of advance payment or against an irrevocable letter
of credit opened/confirmed by a reputable bank abroad, envisaging payment on the
basis of seaway bill in addition to the above, it shall
also be permissible for Authorized Dealers to release the export documents etc.
to the concerned exporter for despatch directly to the foreign buyer in such
cases where advance payment in full (100%) has been realized from the consignee
abroad against the export of goods from Pakistan
(ii) In respect of export of goods to foreign countries by air, the airway bills and
any other documents of title to cargo should be drawn to the order of a bank in the
country of import nominated by the Authorised Dealer designated for this purpose by the
exporter. However, in the case of export of goods against advance payment or against
irrevocable letter of credit which contains a condition that the airway bill and other
documents should be drawn to the order of the importer abroad, the airway bill and other
documents of title to cargo may be drawn to the order of the importer abroad, provided the
exporter produces to the carriers a certificate to this effect from the Authorised Dealer
concerned in the prescribed form (Appendix V-13). In all cases the airway bill and other
documents of title to cargo will be delivered by the carriers to the authorised
representative of the Authorised Dealer concerned holding authority letter for
collecting these documents in addition to the above, it
shall also be permissible for Authorized Dealers to release the export documents
etc. to the concerned exporter for despatch directly to the foreign buyer in
such cases where advance payment in full (100%) has been realized from the
consignee abroad against the export of goods from Pakistan
(iii) The directions contained in sub-paragraphs (i) and (ii) do not apply to the
following cases:/
(a) Bonafide trade samples provided the F.O.B. value of each consignment supplied
free of charge does not exceed the limit prescribed by the Ministry of Commerce.
(b) Personal effects, whether accompanied or unaccompanied, of travelers.
(c) Ship stores and transshipment cargo.
(d) Goods shipped under the orders of Federal Government or of such officers as may
be appointed by the Federal Government in this behalf or by Military, Naval or Air Force
authorities in Pakistan for Military, Naval or Air Force requirements.
(e) Exports covered by exemption certificates issued by the State Bank.
(f) Exports of fresh fish, vegetables, fruits, poultry and other goods of perishable
nature.
(iv) In case where irrevocable Letter of Credit contains a condition that documents
shall accompany a certificate from the beneficiary stating that one original (1/3rd or
2/3rd) Bill of Lading or Airway bill has been dispatched to the buyer/consignee,
Authorised Dealers may allow dispatch of original 1/3rd or 2/3rd Bill of Lading or Airway
Bill to the party named in the letter of credit only after the documents have been
presented for negotiation under the letter of credit.
12. Export of Software.
i) The following procedure will be adopted for the export of computer
software and realisation of the proceeds of such exports:
(a) The Software houses/companies will get themselves registered with the concerned
area office of the Exchange Policy Department.
(b) Whenever an exporter concludes an agreement for the export of software, he will
submit a copy of the same to the area office for information.
(c) Each exporter will submit a monthly statement of his exports/earnings in the
prescribed form (Appendix V-14) alongwith the Export Proceeds Realisation Certificates
issued by the Authorised Dealer through which the value of exported software is
repatriated to Pakistan.
ii) It is permissible for exporters of software to retain amounts upto 35% of their
export earnings in Special Exporters Foreign Currency accounts opened with the Authorised
Dealers exclusively for payment of commission/discount to the overseas agents/buyers and
to use the same to meet other expenses such as promotional publicity, import of
Hardware/Software, foreign consultant’s fee etc.
13. Exports to Afghanistan.
As stated in paragraph 2 ibid, exports to Afghanistan are not required to be
declared on form ‘E’. In the case of any foreign exchange becoming due to an
exporter against such exports, he is required to repatriate the same to Pakistan and sell
it to an Authorised Dealer against payment in Pakistan currency. Exports to the
Central Asian Republics via Afghanistan by land route would, however, be subject to
declaration on form ‘E’.
14. Endorsement of Shipping Documents by Authorised Dealers.
The Authorised Dealers to whose order the relative railway receipts, bills of
lading etc., are drawn shall endorse the same to the order of their foreign correspondent
but in no case shall they make any blank endorsement thereon or endorse them to the order
of the consignor unless they have obtained specific or general approval of the State Bank.
However, in the case of exports through third country intermediary i.e. under merchanting
arrangements, it will be in order for Authorized Dealers to make blank endorsement where
advance payment has been received or where documents are negotiated under letters of
credit which call for such blank endorsement.
15. [Functional Utility of the Copies of Form ‘E]’.
All exports from Pakistan which are subject to Foreign Exchange regulations are
required to be declared on Form 'E' which is in sets of four copies each. The exporter
should submit the full set of Form 'E' to the Authorised Dealer for certification as
described in paragraph 8 (i) ibid only after it has been completed and signed by the
exporter himself or his authorised agent. While certifying Form 'E', Authorised
Dealers should ensure that exporters give only one address in Form 'E'. After the form is
certified by the Authorised Dealer, it should be submitted to the Customs/Postal
authorities at the time of shipment alongwith the shipping bill. The Customs authorities
will detach the original copy and after filling in the portion relating to them and
affixing their seal and signature thereon forward it to the State Bank. The Customs
authorities will return the duplicate, triplicate and quadruplicate copies to the exporter
or his authorised agent who will retain the quadruplicate for his own record and submit
the duplicate and triplicate copies to the Authorised Dealer alongwith the shipping
documents within 14 days from the date of shipment. The Authorised Dealer will forward the
triplicate copies of the export forms to the State Bank alongwith the monthly returns in
which realisation of export proceeds is reported, retaining the duplicate for his record.
In cases where receipts of export proceeds are reported by an Authorised Dealer in respect
of exporters residing in the jurisdiction of an area office of Exchange Policy Department
other than that to which the returns are being submitted, separate area-wise schedules
A-1/A-2 with one additional copy will be prepared and submitted to the Exchange
Policy Department. The name of the area office of Exchange Policy Department to which the
schedules pertain will be prominently indicated on top thereof.
Para ‘15-A’.
(ref: F.E. Circular
No. 5 of 2004 dated 4th May 2004)
i) Export of educational course books for schools and colleges for Pakistani
students and other running under respective Embassies abroad are exempt from ‘E’
form procedure. While making such transactions, Exchange Policy Department, SBP
BSC (Bank) will issue a No Objection Certificate with the condition that
exporter will obtain an endorsement from the Customs Authorities on reverse of
the NOC about Name/Title, Number of books exported and their invoice value. The
date of export should also be mentioned specifically. The Exporters will submit
a statement on monthly basis to Exchange Policy Department, SBP BSC (Bank)
showing the amount due and receipts on account of foreign exchange arising
therefrom.
The NOC issued in view of above exemption would be initially valid for a period
of one year only which may be renewed subject to satisfactory performance.
However, if exporter fails to submit the required statement or keeps large
balances abroad, the facility should not be renewed and the case should be
submitted to Exchange Policy Department, SBP BSC (Bank), Enforcement Section for
necessary action at their end.
ii) While issuing NOC, Exchange Policy Department, SBP BSC (Bank) should advise
the Customs Authorities that the items are exempt from ‘E’ form procedure.
iii) The export of above-mentioned items being exempt from E-form procedure will
be reported on schedule A-1/O-1 with authentication of exempted “E-form”.
16. Submission of Export Documents to Authorised Dealers.
All shipping documents covering goods exported from Pakistan and declared on Form
'E' must be passed through the medium of an Authorised Dealer within 14 days from the date
of shipment. The exporter must submit the duplicate (bearing Customs seal and signature of
Customs Officials with Code number) and triplicate copies of Form 'E' alongwith the
shipping documents, invoices etc., to the Authorised Dealer who had certified the Form
'E'. An extra copy of the shipper's invoice must be attached to the triplicate copy of the
Form 'E'. In the event of payment being received through an Authorised Dealer other than
the one who had certified the export form, the Authorised Dealer negotiating or collecting
the export documents should convey the particulars of the export form to the Authorised
Dealer which had originally certified the export form to enable the latter to make a
suitable note in the relative register.
17. Scrutiny of Documents.
On receipt of the bill of lading/airway bill/railway receipt etc., alongwith the
Form 'E' and the export documents, the Authorised Dealers should compare the bills and/or
documents with the relative export form and satisfy themselves that they conform in all
respects to the declarations made on the relative export forms and the amount of the bills
and invoices is not less than the value declared on them. In the case of those commodities
which are subject to Export Price Check (EPC) procedure, the invoice should also be
compared with the EPC form approved/registered by the relevant authority, to ensure that
the quantity, quality, value, destination and terms of sale/payment shown therein agree
with those declared on the EPC form, and the quantity and value should be endorsed on the
reverse of the EPC form. All such cases where the Authorised Dealers consider that the
value declared to the Customs and accepted by them does not represent the true value of
the goods should be promptly reported to the State Bank. The Authorised Dealers may,
however, accept bills/documents for negotiation/ collection if the difference between the
value stated on the relative export form and the amount of the bill/invoice represents
legitimate adjustments on account of short weight or actual freight and other items of
similar nature. Details of such adjustments must be given on the relative export forms and
must be authenticated by the Authorised Dealers under their stamp and signature.
18. Exports subject to receipt of Advance Payments or Irrevocable Letters of
Credit.
In the case of commodities export of which is permissible only on receipt of
advance payment or irrevocable letter of credit, shipments will be allowed by the Customs
only on the basis of the certificate of the Authorised Dealer on the export forms to the
effect that either advance payment or irrevocable letter of credit has been received
covering export of the goods mentioned on the export form.
19. Special Requirements for Export of Wool and other Commodities subject to
Grading Scheme.
(i) Under the Wool Grading Scheme of the Government of Pakistan every
exporter of wool is required to obtain a test report from the Government Test House for
all shipments of wool intended for export whether on firm contract or on account basis. In
all such cases the exporter of wool is required to forward to the State Bank through an
Authorised Dealer a copy of the test report of the Wool Test House duly initialed by the
Customs alongwith the invoice and triplicate copy of the relative export form. In the case
of firm sales, the exporters should also mention in the invoice:
(a) the quality of wool,
(b) the rate per pound and
(c) yield basis on which the sale has been made.
Sale of wool on consignment basis is required to be made only by public auction through
recognized Auction Houses abroad. Account Sale from these recognized Auction Houses should
be forwarded to the State Bank alongwith the relative triplicate copy of the export form.
(ii) The procedure governing other commodities which may, in future, be subjected to
Grading Scheme will be notified to Authorised Dealers separately.
20. Part Drawings and Advance Remittances.
(i) If it is customary in any particular trade for exporters to draw bills
for only a percentage of the invoice value and to receive the balance after arrival of the
goods at destination, Authorised Dealers may negotiate/collect bills in the part amount
provided they obtain an undertaking from the exporters that they will realize the balance
within the prescribed period. Authorised Dealers should report such part receipts on
“Form 'E' not attached Voucher" on Schedule 'A-2'. It is the responsibility of
the Authorised Dealers to follow up each such case and to ensure that the balance amount
is also realised within the prescribed period. This exemption will not, however, apply in
the case of shipments of those goods which are subject to either 100% advance remittance
or to the opening of irrevocable letter of credit for the full amount of the export.
(ii) When a part of the invoice value has been received in advance by the shippers,
the Authorised Dealers when negotiating/collecting documents for the balance should
certify on the triplicate copy of the export form that part of the amount had been
received by them in advance quoting reference to the return in which the receipt was
reported on an "Advance Payment Voucher" (Chapter XXII).
(iii) In both the above cases the triplicate copy of the export form should be kept
outstanding by the Authorised Dealer and submitted to the State Bank only after the full
value of the export has been received.
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