20000113

Govt. of Pakistan SRO.

ISLAMABAD: The following is the text of the SRO on Textile Quota Management Policy, issued by the Ministry of Commerce on Wednesday:

GOVERNMENT OF PAKISTAN

MINISTRY OF COMMERCE

Islamabad, 06th January, 2000

ORDER

S.R.O.1(1)/2000- In exercise of the powers conferred by sub-section (1) of section 3 of the Imports and Exports (Control) Act, 1950 (XXXIX of 1950), and in supersession of the Textile Quota Management Policy Order, 1999, the Federal Government is pleased to prescribe the following procedures for management and allocation of textile quotas, namely:Ð

1. Short title and commencement.- (I) This Order may be called the Textile Quota Management Policy Order, 2000.

(2) It shall come into force on the 1st January 2000.

2. Management.- There shall be a Quota Supervisory Council for the management of textile quotas and the allocation and authentication of textile quotas shall be the responsibility of Textile Associations.

3. Quota Supervisory Council (QSC).- The Quota Supervisory Council shall

(a) ensure implementation of Quota Management Policy by the Textile Associations;

(b) be responsible for verification of quota entitlements determined by the Textile Associations on the basis of performance;

(c) appoint and arrange audit of quota allocations through professional chartered accountants approved by the Export Promotion Bureau. The chartered accountants shall carryout proprietary audit of quota, is allocation by the Textile Associations and issuance of visas by the Export Promotion Bureau on continuous audit basis. The chartered accountants (so appointed) shall also carryout scrutiny of quota category pass-books of all performance holders of all categories and submit monthly reports to the Quota Supervisory Council and the Export Promotion Bureau;

(d) arrange audit of funds generated through security deposits on annual basis and for this purpose shall engage the services of qualified chartered accountants with approval of the Export Promotion Bureau and shall furnish such aud it reports to the Export Promotion Bureau along with recommendation by the 31st day of March of each year;

(e) obtain from Textile Association statements of receipts of security deposits of each association along with details of expenditure from the income of the deposit on a quarterly basis. The Export Promotion Bureau, on recommendation of the Quota Supervisory Council, shall withdraw the functions of quota management from the association which fails to provide its financial statement in time;

(f) ensure that income generated from security deposits by the Textile Associations is utilised to provide essential management capabilities in order to improve thier functioning including acquisition of computer hardware and software, development of date base, improvement of marketing skills and any other appropriate expenditure determined by the Quota Supervisory Council or the Export Promotion Bureau.

(g) if at any stage, it or the Export Promotion Bureau detects any mistake, error, is declaration, or irregularity in authentication, calculation, valuation or allocation of quotas, immediately effect deductions or make adjustmenets in quota;

(h) adjudicate all issues relating to quota management, etc., which are brought before it by the exporters or Textile Associations; and

(i) deal with any other matter that may be assigned to it by the Export Promotion Bureau or the Federal Government.

4. Product Group Committees. (PGCs).- (1) There shall be five Product Group Committees to be constituted by the Chairman, Quota Supervisory Council, one each of (i) knit; (ii) woven; (iii) towel and allied made-ups; (iv) bedlinen and allied made-ups; and (v) yarn and fabrics sector. The Product Group Committee shall consist of one representative each from the authorised Textiles Associations, listed in the Schedule to this Order for each Product Group. Two members of each Product Group Committee shall be nominated by the Chairman, Quota Supervisory Council.

(2) The Product Group Committees shall advise and assist the Quota Supervisory Council in resolving day-to-day operational problems of the Policy.

5. Basics of entitlement and allocation.- (1) The performance holders shall receive allocation of quotas equal to the actual quantity exported by them under each category during the preceding year to a specific quota country, i.e. one hundred percent on performance basis.

(2) Subject to clause (3) additional quota quantity may be allocated to exporters on the basis of comparative higher value exports. These additional quotas shall be allocated from the quota available with the Government commencing from the next quota year i.e. 2001 on higher value during preceding year that is commencing with higher value obtained in 2000. The additional quota shall be allocated to the exporters in each category as per the following formula:Ð

(i) 5% additional quota over authenticated entitlement if unit price in the preceding year was 25% above the national average.

(ii) 3% additional quota if unit price was 15% to 24% above the national average.

(iii) 2% additional quota if unit price was 5% to 14% above the national average.

(iv) No additional quota if increase in unit value was less than 5%.

(3) The additional quota allocation,-

(a) for higher value shall be non-transferable;

(b) for higher value shall be for one time use;

(c) for higher value quota shall be admissible to those exporters who bring in higher unit value of at least 5% in respective categories as compared to the export price during the preceding year; and

(d) for higher value shall be subject to pre-audit.

(4) Ninety percent provisional allocations shall be made on the 1st January. The remaining ten percent shall be allocated after audit of quota entitlement of the exporter in the preceding year. It shall be the responsibility of the exporter to arrange relevant documents for audit directly or through Textile Association concerned latest by 31st March failing which the unallocated quota will stand forfeited:

Provided that allocations shall be made after necessary adjustments to ensure that the net allocation does not exceed the base level of proceeding year:

Provided further that in all categories wherever necessary, Quota Supervisory Council of the Federal Government may make adjustments during the current year, for past over-allocations, over shipments or for any other reason. For this purpose, the Textile Association concerned shall identify each exporter whose quota is to be adjusted for the aforesaid reasons:

Provided also that where a non-quota textile product is brought under restraint, the period for the purpose of determining the performance shall be the performance during the twelve month period terminating two months preceding the month in which the request for consultations was made.

(5) By the 15th January, the Quota Supervisory Council shall announce the quantities of residual quota through Public Notice in each category where utilisation was eighty percent or below of the base ceiling during the preceding year after protecting the carry over quantities as per bilateral agreements and allow export of these quantities by registered exporters on a first come, first served basis for one time use only. Such exports shall not be treated as performance for quota entitlement in the following quota year:

Provided that first come, first served quota quantities may be allocated on post shipment as well against advance reservation in the following ratios:

(a) 70% of quota in each category, placed on first come, first served, will be allocated to an exporter after shipment has been made.

(b) 30% of quota in each category placed on first come, first served shall be available against advance reservations on the following conditions and rates of bank guarantees:Ð

(i) For shipment within 60 days, provided an irrevocable Letter of Credit/contract is produced, on furnishing a bank guarantee equal to 2% of the FOB value of the quota quantity being reserved.

(ii) For shipment within 60 days on furnishing a bank guarantee equal to 3% of the FOB value of the quota quantity being reserved.

(iii) For shipment within 90 days, on furnishing a bank guarantee equal to 5% of the FOB value of the quota quantity reserved.

(iv) For shipment within 120 days, on furnishing a bank guarantee equal to 7.5% of the FOB value of quota quantity being reserved.

The bank guarantees shall be valid for ninety days over and above the period of reservation. In case of default, no extension shall be allowed and the bank guarantee shall stand forfeited:

Provided further that percentage of the f.o.b. value for the purpose of calculation of amount for bank guarantees shall be made on the basis of the year 1999 national average determined in all categories:

Provided further that only those performance holders who have utilised ninety percent of their authenticated quota entitlement would be eligible to avail first come, first served basis facility:

Provided further that amount from bank guarantee equal to the f.o.b. value of quota quantity not exported or shipped from the reserved quantity shall be forfeited pro rata if such quantity is five percent or more.

Provided also that last date for shipment in each case will be 31st October. On expiry of reservation period or the last date of 31st October, whichever is earlier, the bank guarantee shall stand forfeited and unutilised quota shall revert to first come, first served pool.

(5) Performance shall include exports of garment manufacturing units in a Export Processing Zone (EPZ) having exported cotton products, or man made fibre or merged (cotton as well as man made fibre) products to any country where such products are brought under restraint.

Explanation.Ñ For the purpose of this paragraph, the expression "performance" means export of textile items to quota countries made on the basis of entitlement determined under the relevant Textile Quota Management Policy and Public Notice.

6. Textile Associations.Ñ (1) The Textile Associations registered on all Pakistan basis and authorised under this Order may perform textile quota management functions as specified in paragraphs 3 and 4.

(2) Ñ The list of authoirsed Textile Associations, along with the product group to be dealt with by them, is given in Schedule to this order. Authorised Textile Associations shall extend necessary service to the members of other Textile Associations not authorised to deal with a Product Group.

(3) For the purposes of this Order an exporter who was registered as a member in the preceding year shall cease to be a member of a Textile Association unless he is a holder of quota category pass book valid for the year.

(4) If a Textile Association is unable to function under this Order, the Export Promotion Bureau on the recommendation of the Quota Supervisory Council, may withdraw the Textile Association's functions and powers in respect of textile quota management and the responsibility of quota allocation entrusted to that Textile Association shall revert to the Quota Supervisory Council which may entrust these functions to another Textile Association handling same or similar products.

(5) The Export Promotion Bureau may in its discretion withdraw the functions and powers of quota management of any Textile Association if it is of the opinion that such functions and powers are not being performed or exercised in accordance with the provisions of this Order, or the Textile Association's own articles and memorandum of association. For this purpose, the Export Promotion Bureau itself, or on the recommendation of the Quota Supervisory Council, shall check the membership and working of the Textile Association.

(6) Only such Textile Associations, who handle quota over 15% in a particular category shall be authorised to deal with such category in year 2001 onwards. Any association which does not handle quota upto 15% in a particular category shall not be eligible to handle that category.

7. Transfer of quotas.Ñ (1) Subject to provisions of this Order, quotas allocated to exporters on performance and purchased from open market, shall be transferable.

(2) Garment manufacturing units in an Export Processing Zone may purchase quota from the tariff area through foreign exchange encashment certificates at price not less than that of last auction.

8. New Category Pass Book.Ñ Exporters who open new Category Pass Book with transfer in quota shall have to ship 90% of the quota transferred in. Transfer out from new Category Pass Book shall not be allowed in excess of 10% of total quota.

9. Export visas and certificates.Ñ Export visas prepared and forwarded by the Textile Associations on the basis of shipments made and quota category pass-book authenticated by the Textile.

Association shall be issued by the Export Promotion Bureau. In case where advance licensing is a statutory requirement, the Export Promotion Bureau shall issue pre-shipment export visa or license on the basis of authenticated quota category passbook.

10. Customs Declaration.Ñ Exporters shall declare quota and non quota categories and quantities separately on the shipping documents i.e. shipping bills and invoices.

11. Security deposit.Ñ (1) Allocation of quotas authorised by Textile Associations to both the performance holders and other exporters shall be made against periodical security deposits as follows:-

(i) First quarter Nil.

(ii) Second quarter Nil.

(iii) Third quarter 0.5%

(iv) Foruth quarter 1%

(2) There shall be no security deposit for quota obtained through auction or quota reserved on first cum first served basis.

(3) The periodical security deposits shall be calculated on the basis of average f.o.b. prices obtained for the categories in the preceding year.

(4) The periodical security deposits shall be refunded on completion of export.

(5) The periodical security deposit shall be liable to forfeiture in proportion to the deficiency in performance.

12. Auction of textile quota.Ñ (1) The quantities of growth quota each year shall be notified and put to auction in commercial lots by the Export Promotion Bureau. The auctions each year may not be held later than the 7th March, 15th May, and 15th July, respectively. Fifty percent of the total growth quantity shall be placed in 1st auction, twenty-five percent each in 2nd and 3rd auctions:

Provided that the Schedule of terms and conditions for auction of residual quantities shall be notified by the Export Promotion Bureau from time to time:

Provided further that the exporters who purchase residual quota in auction shall utilise the same for shipment in the relevant categories and swing and inter-category transfers of such quotas shall be allowed for shipment subject to conditions specified in paragraph 13.

(2) Registered exporters, who are members of a Textile Association, shall be eligible for purchase of quotas through auction in accordance with the procedure as may be notified by the Export Promotion Bureau:

Provided that the reserved unit price for each category placed in the Quota Supervisory Council shall recommend auction to the Export Promotion Bureau:

Provided further that a bidder shall be allowed up to a maximum of twenty percent of quantities offered in the auction which shall not be less than a commercial lot:

Provided also that in the cases where twenty percent may be less than a commercial lot or the quota relates to a small importing country or category, commercial lots for such categories shall be notified by Export Promotion Bureau.

(3) Auction quota shall be offered for allocation to bidders in descending order of auction price basis.

(4) Quantities of quota categories not lifted up to the last auction many be disposed of on such terms and conditions as may be notified by the Export Promotion Bureau:

Provided that those who have purchased quota in an auction shall not be entitled to any compensation in case it is decided to open a category for allocations on first come, first served basis subsequently.

(5) The garment manufacturing units located in an Export Processing Zone shall be eligible to participate in auction of quotas. The premium in such auction shall be paid against foreign exchange encashment certificates.

(6) Quotas allocated through auction shall be non-transferable.

13. Use of flexibilities. Ñ The Quota Supervisory Council shall announce the percentage of flexibilities, including swings and shift, on the 1st day of January each year. The flexibilities will be calculated on the basis of quota available in the passbook of the exporter on the day of application. Exporters shall be entitled to utilise the flexibilities, after physical shipment of at least 70% of quota.

14. Carry over. Ñ Exporters shall be allowed to carry over admissible percentages as specified in the bilateral agreements of unused portion of their quota entitlements for use in the following year for the same category. Separate coloured sheets with consecutive page numbers shall be added to the existing quota category pass books on which necessary entries relating to carry over shall be made for shipment only:

Provided that performance holders who have shipped seventy percent or more of their authenticated entitlement during the quota year shall be eligible for carry over.

15. Carry forward. Ñ Exporters shall be allowed carry forward quotas up to the admissible percentage specified in bilateral agreements, of authenticated entitlement, subject to the condition that this quota shall not be transferable.

16. Exceptional flexibility. Ñ (1) Criteria for allocating quantities from exceptional flexibility of three thousand metric tonnes in the European Union shall be value and export potential as determined by the Quota Supervisory Council and intimated to the Export Promotion Bureau. Following acceptance by the European Union, the Export Promotion Bureau shall inform the Quota Supervisory Council which shall allow the use of exceptional flexibilities on terms and conditions notified by the Quota Supervisory Council.

Provided that use of exceptional flexibilities by the exporter shall be subject to physical shipment of at least 70% of their quota entitlement available in the category by 30th September each year the latest.

(2) The allocations under sub-paragraph (1) Shall be for one time use and shall be non-transferable.

17. Surrender of performance quota. Ñ Quota holders shall be eligible to surrender their performance quota upto the 15th September 2000, without forfeiture of security deposits. The Textile Associations shall immediately provide details of such surrender of quota to Quota Supervisory Council for placing the same on first come, first served basis.

18. Export of handloom and traditional textile items. (1) Export of handloom and traditional textile items shall fall outside the purview of the quota restriction.

(2) Necessary certificates which are specified in the agreements shall be issued by the Export Promotion Bureau and whether or not an item is handloom and traditional textile product may be determined by the customs authorities of the importing countries. Exporters shall, therefore, make shipment of such items at their own risk.

(3) The export of cotton, filament and blended yarn shall be allowed subject to procedure and terms and conditions as the Export Promotion Bureau may, from time to time, by Public Notices, notify.

19. Export of samples. Ñ The Export Promotion Bureau may issue authorisations for the export of samples of textile products, mutilated and marked as such, to registered exporters for the value of twenty-five thousand rupees per annum without any claim on quota allocation.

20. Contravention of the policy. Ñ (1) No allocation shall be valid unless it is in accordance with the provisions of this Order.

(2) Any exports made in contravention of the provisions of this Order shall not count towards performance of the exporter and shall be treated as irregular and void.

(3) Cases of shipments in contravention of the rules, and other malpractices including circumvention of bilateral agreements, exports against forged, fake visas, export licences, shipment in excess of the allocated quantity, misdeclaration of value, weight and category shall be liable to any or all of the following penalties, namely:-

(a) Suspension or cancellation of part or the whole of export quotas whether acquired on the basis of performance or purchase or any other means whatsoever, imposition of a fine up to two hundred percent of the f.o.b. value of the consignment or any or all of the above; and

(b) suspension or cancellation of export registration or other action under the Registration (Importers and Exporters) Order, 1993.

(4) Cases of imposition of fines or suspension of quota, whether as an interim measure or by way of punishment, or cancellation of quotas shall be decided by the Vice-Chairman, Export Promotion Bureau, either on recommendation of the Chairman, Quota Supervisory Council, or on reports or complaints received from any other source.

(5) Any person aggrieved by an order of the Vice-Chairman, Export Promotion Bureau, may, within thirty days of the order, apply for review to the Secretary, Ministry of Commerce, whose decision thereon shall be final.

(6) The Quota Supervisory Council or Export Promotion Bureau may correct, if necessary, any quota allocation or quota authorisation, if it finds that any error or discrepancy has occurred in determining alllocation or authorisation. The Quota Supervisory Council or Export Promotion Bureau shall make adjustment for any error of act of omission or commission in the past that may be detected by it or so recommended by the Textile Association.

21. Power to issue clarification. Ñ As and when necessary, the Quota Supervisory Council may issue clarifications of this Order with the approval of the Ministry of Commerce.

22. Re-export. Ñ Quota category visas in cases of re-export shall be issued by the Export Promotion Bureau where Ñ

(i) the re-export was pre-planned or in cases of force majeure proved to the satisfaction of the Quota Supervisory Council;

(ii) visas for re-export of consignments shall be allowed on surrender of quota in the applicable category for the relevant quota year.

23. Issuance of duplicate quota category passbook. Ñ (1) In case of loss of original quota category pass-book, duplicate quota category pass-book shall be issued to the exporters on their request subject to the fulfilment of the terms and conditions to be notified by the Quota Supervisory Council through a public notice.

(2) The Quota Supervisory Council shall ensure that original quota category passbooks reported lost are not misused in any manner.

24. Issuance of duplicate or substitute visa or licence. (1) The circumstances and terms and conditions under which duplicate or substitute visa or license may be issued shall be notified by the Quota Supervisory Council through a public notice.

(2) On request of an exporter and on fulfilment of the terms and conditions notified by the Quota Supervisory Council and Export Promotion Bureau, a Textile Association shall prepare duplicate or substitute visa or license and forward the same to the Export Promotion Bureau for issue.

SCHEDULE

[See paragraph 4 and 6]

TEXTILE QUOTA MANAGEMENT ASSOCIATIONS AUTHORISED

TO DEAL WITH PRODUCT

GROUPS

A. PRODUCT GROUP (YARN).

Country Category Description Textile Association

(1) (2) (3) (4)

E.U/Turkey 1 Cotton Yarn 1. All Pakistan Textile Mills Association

2. Pakistan Yarn Manufacturers Association

B. PRODUCT GROUP (FABRICS)

Country Category Description Textile Association

(1) (2) (3) (4)

U.S.A. 219 Duck CMMF. 1. All Pakistan Textile Mills Association

226/313 Sheeting, CMMF 2. All Pakistan Cloth Exporters Association

314 Poplin and 3. Pakistan Cloth Merchants

broadcloth cotton Association

315 Printcloth, cotton 4. Pakistan Art Silk Fabrics and

Garments Exporters Association

5. Pakistan Canvas & Tents

Manufacturers & Exporters Association

6. All Pakistan Bedsheets & Upholstery

Manufacturers Association

317/617 Twills, CMMF

613/614 Sheeting, MMF

615 MMF Printcloth

625/ MMF

626/627/ Staple/Filament

628/629 Combinations:

Poplin and

Broadcloth.

E.U/Turkey 2/2A Woven Fabrics of cotton other

than unbleached or bleached.

3 Woven fabrics of synthetic fibers.

C. PRODUCT GROUP (KNIT/WOVEN).

Country Category Description Textile Association

(1) (2) (3) (4)

U.S.A. 237 Playsuits, CMMF

239 InfantS' wears

331/631 Gloves and mittens, CMMF

334/634 CMMF other coats, M&B

335/635 Coats, CMMF, 1. Pakistan Hosiery Manufacturers Association

M&B/W&G

2. Pakistan Knitwear and Sweaters

Exporters Association

336/636 Dresses, CMMF 3. Pakistan Ready-made Garments

Manufacturers and Exporters Association.

338 Shirts, knit, cotton, M&B 4. Pakistan Cotton Fashion Apparel

Manufacturers and Exporters Association.

339 Blouses, knit, 5. Pakistan Art Silk, Fabrics and

cotton, W&G Garments Exporters Association.

6. Pakistan Gloves Manufacturers

& Exporters Association.

334/640 Shirts, woven, CMMF M&B

341/641 Blouses woven, CMMF

342/642 Skirts, CMMF.

347/348 Trousers, slacks

and shorts cotton, M&B/W&G.

351/651 Nightwear and

pajama, CMMF

352/652 Underwear, CMMF.

359-C/ Coveralls, CMMF.

659-C

638/639 Shirts & blouses knit

MMF, M&B/W&G.

647/648 Trousers, slacks,

and shorts, MMF,

M&B/W&G

E.U/Turkey. 4 Knitted shirts.

5 Knitted jerseys.

6 Woven breeches, shorts and trousers.

7 Blouses, shirts only

8 Woven shirts

18 Woven under garment and

bath robes

26 Women's and girls' dresses

28 Trousers bib and brace overall.

Canada 2 Winter outwear

3/4 Suits and ensembles.

5A Trousers and shorts

7 Woven shirts and blouses

8A Knitted shirts,

blouses, T-shirts and

sweatshirts.

9 Underwear.

10A Sleepwear

Norway 2 Trousers slacks,

Jeans breeches, etc. M&B/W&G.

D. PRODUCT GROUP (BEDLINEN AND ALLIED MADE-UPS).

Country Category Description Textile Association

(1) (2) (3) (4)

U.S.A. 360 Pillowcases cotton.

361 Sheets cotton. 1. Pakistan Bedwear Exporters Association.

666 (p) & (s) Pillow cases and sheets 2. All Pakistan Cloth

Exporters Association.

E.U./Turkey 20 Bed linen. 3. All Pakistan Textile Mills Association.

39 Table toilet and 4. All Pakistan Bed Sheet &

kitchen linens other Upholstery Manufacturers

than of terry Association

toweling or similar 5. Pakistan Cloth Merchant Association

terry fabrics.

Canada 41A & 41B Bed sheets and 6. All Pakistan Commercial Towel

pillow cases Exporters Association.

7. Towel Manufacturers Association.

E. PRODUCT GROUP (TOWELS AND ALLIED MADE-UPS).

Country Category Description Textile Association

(1) (2) (3) (4)

U.S.A. 363 Terry and other pile 1. Towels Manufacturers Association.

towels cotton.

369-R Bar mops. 2. All Pakistan Commercial

Exporters of Towel Association.

369-S Shop towels, cotton

369-F/ Flat and pile cotton

369-P dishtowels.

E.U./Turkey 9 Terry towelling, toilet

and kitchen linen of cotton

woven terry fabrics.

18 Woven under garment

and bathrobes.

39 Table toilet and

kitchen linens other than of

terry toweling or similar

terry fabrics.

Canada 42A Toilet and kitchen linen.

No. 7(1)/2000-E-I

Sd/-

(Ahmad Nawaz)

Deputy Secretary