Draft rules issued for Uzbekistan-Pakistan transit trade

Draft rules issued for Uzbekistan-Pakistan transit trade

ISLAMABAD: Federal Board of Revenue (FBR) on Thursday issued draft rules for Uzbekistan-Pakistan Transit Trade (UPTT).

The FBR issued SRO 1256(I)/2021 dated September 20, 2021 to propose amendment in Customs Rules, 2001. The revenue body invited suggested or objections to the draft rules within 15 days from the issuance of the SRO.

The draft rules have been issued for the purpose of Uzbekistan-Pakistan Transit Trade Agreement, for processing of transit trade cargo under Customs Computerized System, to and from Uzbekistan, namely:

(a) Uzbekistan’s cargo imported through Karachi Port, Port Muhammad Bin Qasim, Gwadar Port; and

(b) Uzbekistan’s cargo to other countries via Karachi Port, Port Muhammad Bin Qasim, Gwadar Port.

Basis of entry of commercial vehicles.-

Vehicles transporting transit and bilateral goods shall be licensed by the competent authorities of the contracting parties as transport operator authorized to conduct international transportation.

Every vehicle while exiting or entering Pakistan shall carry valid permit issued by the competent authority on the prescribed format. The vehicle details shall be mentioned on the permit.

The permit shall be valid for one vehicle and for single round trip and only for the transport operator to whom it is issued; it shall be non-transferable to other carriers or third parties.

The period of validity of permit in the normal circumstances shall be 20 days from date of entry i.e., equal to number of days allowed for stay in Pakistan in visa for each trip. However, in exceptional circumstances, the vehicle can stay up to 90 days from date of entry into Pakistan under intimation to the Customs. No further approval will be required from Customs on basis of principle of reciprocity, as agreed by the two contracting parties.

Permits submitted within the current calendar year shall be valid until 31st January of the next year.

Permit shall also be required for empty run (deadheading).

Uzbekistan’s registered vehicles holding valid permits and are being utilized for the transport of transit and bilateral trade cargo shall enter Pakistan without the requirement of submission of any financial security for the duty and taxes leviable on the vehicle, on the basis of reciprocity, as agreed by the two contracting parties.

The Logistics Facilitation Center shall record particulars of both driver and vehicle in the CCS and these details should be linked with the FIA’s immigration module so that driver can only exit Pakistan, if his vehicle, on return journey, has entered the border Customs station and gate-in event has been recorded in the CCS and vehicle has completed all customs formalities for exiting Pakistan. Both Customs and FIA officials posted at the Customs border stations shall carry out weekly reconciliation to ensure the implementation of the above mechanism and to ascertain any overstayed vehicles.

A tracker shall be installed, on each vehicle upon entry into the territory of Pakistan as per its national legislations.

In case of any exigency, a foreign driver can exit the country with the prior approval of customs authorities. In these cases, the concerned transport operator shall request customs authorities for a replacement driver, so that his details can be linked with the vehicle. The vehicles of third countries can also transport transit and bilateral trade cargo, if these vehicles have the requisite permits or authorizations.

The Logistics Facilitation Center shall keep the record of all the Uzbekistan’s vehicles entering Pakistan on permits and a weekly re-conciliation shall be carried out to ensure compliance of these rules.

The system shall generate alerts for vehicles that have not exited Pakistan’s territory within the prescribed time for further necessary action by the concerned officer of Customs. However, in cases of exceptional circumstances the said time limit may be extended upto 90 days in the system, on intimation to the Customs by the carrier.

All transport operators and custom clearing agents and brokers handling transit goods shall be required to open and maintain a “Revolving Insurance Guarantee PD Account” with Customs. The foreign trader, entity or his authorized Customs clearing agents, brokers or transport operators in Pakistan shall furnish a customs security in the form of revolving insurance guarantee, having sufficient financial coverage, from an insurance company of repute, acceptable to Pakistan Customs, in the prescribed form (Annex-III) or in any other form prescribed by the Board which shall be valid for at least one year and shall be en-cashable in Pakistan, for ensuring the fulfillment of any obligation arising out of customs transit operation within territory of Pakistan.

Revolving Insurance Guarantee shall provide the financial risk cover for the amount of duty and taxes leviable on the transit goods, while these are passing through the territory of Pakistan.

The hard copies of all Revolving Insurance Guarantees shall be kept with the Bank/Insurance Guarantee section of the concerned Directorate of Transit Trade for the safe custody during their validity period. The CCS shall allocate a Personal Deposit (PD) account number to all Customs clearing agents/brokers and transport operators authorized to handle transit cargo, for maintaining sufficient financial risk coverage through submission of Revolving Insurance Guarantees.

Procedure for monitoring of transit operations and encashment of financial security.-

The Deputy/Assistant Director Securities of the office of departure shall monitor the data of all GDs and identify the vehicles which has not completed the transit journey within the stipulated time. The officer shall enquire the whereabouts of such vehicles from the respective Directorate of Transit Trade and the tracking company and take appropriate action accordingly.

In case, the gate-in event is not recorded in the system by office en-route in the stipulated time or there is non-fulfillment of any condition against which the security was furnished by the trader or customs broker or transport operator, the concerned officer at the Office of Departure shall take action for enforcement or encashment of the financial guarantee for recovery of government revenue involved therein.

Upon finalization of action, Deputy/Assistant Director Securities at the port of departure shall forthwith instruct the concerned Insurance Company or bank, to en-cash the guarantees and remit the amount in favor of the concerned Director of Transit Trade. After receipt of Payment Order from the concerned Insurance Company or bank, Director of Transit Trade shall deposit the same in National Bank of Pakistan for transfer into the government treasury within three days positively. Any delay in submitting the pay order of the requisite amount, shall result in black-listing of the said insurance company or bank in addition to any other action against the said entities under the Customs Act, 1969 and the rules made thereunder.

In case any en-route pilferage, theft etc, the amount equal to leviable duty and taxes shall be paid by the concerned insurance company/bank to the customs in the form of pay order drawn on the name of Director General, Directorate General of Transit Trade, Karachi within forty-eight hours of the service of the “Encashment Notice”.

Filing of goods declaration for transit cargo at the office of departure at seaports Karachi, Port Muhammad Bin Qasim and Gwadar.-

The transit cargo shall not be subjected to payment of import or export duties and taxes provided the activities are in conformity with these rules. The transit cargo shall be distinctly manifested as such in the IGM/carrier declaration uploaded electronically in the Customs Computerized System by the shipping line or its agent. The importer’s country’s name and address shall be of the said foreign country for which goods are intended to be imported.

The GD shall be filed by the trader or his authorized customs agent or the bonded carrier (having valid clearing agent license). In case, a GD is filed by the trader or his customs agent, he shall nominate the bonded carrier including details of transport unit at the time of filing:

Provided that if a container is selected for examination, the details of bonded carrier or transport unit can be modified by the customs agent/broker or bonded carrier. The trader or his agent (customs agent or bonded carrier) at the time of filing the GD, shall ensure that sufficient credit/financial coverage is available in their revolving insurance guarantee account maintained with customs, to cover the leviable duty and taxes on transit goods within territory of Pakistan.

The trader or his agent (customs agent or bonded carrier) shall upload scanned copies of bill of lading, commercial invoice and packing list at the time of filing of GD.

The GD shall be assessed by the Customs Computerized System (CCS) on pattern of GDs filed for local home consumption and the amount equal to leviable duty and taxes shall be deducted from the face value of revolving insurance guarantee as customs security.

The CCS shall send an email/SMS to the concerned person regarding the amount deducted from revolving insurance guarantee and the balance available in Customs security for future transit operations.

The amount, so deducted, will be credited to Customs security/ revolving insurance guarantee on completion of cross border formalities at the border customs station and end of transit journey through territory of Pakistan.

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