Procedure to make imports on open account State Bank of Pakistan

Procedure to make imports on open account

KARACHI: The State Bank of Pakistan (SBP) has issued a procedure to make imports on an open account basis.

The SBP updated 13th Chapter of Foreign Exchange Manual to incorporate major changes made to the manual.

The central bank issued the procedure for imports without letter of credit/registration of the indent/proforma invoice/order (open account basis).

(i) Imports made on an Open Account basis include import transactions in which documents have been received by the importer or the Authorized Dealer directly from the foreign supplier. In terms of the Import Policy Order, importers are permitted to carry out imports without opening Letters of Credit or registering the indents/proforma invoices or orders with the Authorized Dealers and make remittances there against after receipt of goods in Pakistan.

(ii) In this regard, Authorized Dealers may allow manufacturing & industrial concerns and commercial Importers to make payments on an Open Account basis for imports of spare parts/raw materials only for the ultimate use by the manufacturing / industrial concern. Besides, Authorized Dealers may also allow payments against imports on Open Account basis as per the below detail:

a) Up to USD 50,000 or equivalent for import of life-saving medicines & devices.

b) Up to USD 10,000 or equivalent for import of the following items:

i. Essential medicines and devices.

ii. Aircraft related spare parts/components.

iii. Lab equipment/instruments imported by educational institutions for their own use.

iv. Newspapers, magazines, periodicals, books etc.

(iii) However, before effecting payment on Open Account basis for import of life-saving or essential medicines & devices, Authorized Dealers shall obtain a certificate issued by the principal of a teaching hospital in public sector or head of a Government specialized hospital confirming that the medicines/devices/ instruments being imported fall under the life-saving/essential category.

(iv) In this regard, the following procedure shall be adopted to make payment against goods imported on Open Account basis:

A – Issuance of EIF in WeBOC

a) An importer shall get the EIF approved from an Authorized Dealer before clearance of goods by Pakistan Customs in WeBOC. The Authorized Dealers shall approve the EIF request upon submission/retention of photocopies of shipping documents (e.g. B/L, AWB, TR, RR, Courier Receipt etc.), proforma invoice, commercial invoice etc.

b) Before approving the EIF, Authorized Dealers are required to perform Customer Due Diligence (CDD)/Know Your Customer (KYC) of the importers in line with the Framework for managing risks of Trade Based Money Laundering and Terrorist Financing issued by SBP.

c) Authorized Dealers shall ensure that the goods imported into Pakistan are in conformity with the prevailing Import Policy Order.

d) Authorized Dealers shall ensure that payments against goods imported on Open Account basis are made by the importer within one year from the date of filing of Goods Declaration Form (GD) for which proper follow up must be made with the importer.

e) In addition to the documents mentioned at sub-para (a) above, Authorized Dealers shall obtain copies of GD(s) and duty paid challan/payment receipt, wherever applicable, and make payment after verifying, through WeBOC user ID, attachment of GD(s) with the respective EIF. In case of bonded import, Authorized Dealer shall obtain duty paid challan(s)/payment receipt(s) from the importer in due course.

f) Authorized Dealers must ensure that the payment being made against imported goods is not more than the value of goods declared on the Goods Declaration Form filed by the importer with Pakistan Customs.

g) Authorized Dealers shall file Bank Debit Advice (BDA) for each EIF in WeBOC at the time of making import payment as provided in EIF module and settle the EIF in WeBOC as per applicable instructions.

h) In case the importer is unable to make payment of goods imported on Open Account basis within the above stipulated time, the importer through its Authorized Dealer shall approach Foreign Exchange Operations Department, SBP-BSC Head Office, Karachi for extension in time for making the payment or take appropriate action as prescribed under Para 6B(xii) above.

B – Process in case of Pakistan Single Window (PSW)

a) The importer shall file declaration in PSW and declare the bank account from where the importer intends to make the payment. Only those importers shall be eligible to file declaration under Open Account who have been permitted by their Authorized Dealers to import under this mode by allowing in their Customer Profile shared with PSW.

b) Authorized Dealers shall perform post clearance due diligence of the transaction in line with the applicable regulations including the Framework for managing risks of Trade Based Money Laundering and Terrorist Financing issued by SBP.

c) Authorized Dealers shall ensure that payments against goods imported on Open Account basis are made by the importer within one year from the date of filing of declaration filed on PSW platform for which proper follow up must be made with the importer.

d) ADs shall verify with the supporting documents that the goods have been released to the importer before making payment. In case of bonded import, Authorized Dealer shall obtain duty paid challan(s)/payment receipt(s) from the importer in due course.

e) Authorized Dealers must ensure that the payment being made against imported goods is not more than the value of goods declared in the Declaration filed by the importer in PSW.

f) Authorized Dealers shall share Bank Debit Advice (BDA) with PSW through EDI upon making import payment as per the prescribed procedure and share settlement message against the respective declaration with PSW as per applicable instructions.

g) In case the importer is unable to make payment of goods imported on Open Account basis within the above stipulated time, the importer through its Authorized Dealer shall approach Foreign Exchange Operations Department, SBP-BSC Head Office, Karachi. The request for extension in time for making the payment should be submitted along with tenable justification, supported by documentary evidence, for not making the payment within the stipulated time.

(iii) In case of exceptional circumstances where Authorized Dealers are unable to fulfill any of the above conditions, they should refer the matter to Foreign Exchange Operations Department (FEOD), SBP-BSC Head Office, Karachi along with supporting documents and cogent justification for seeking exception.

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