Procedure to make imports on open account

Procedure to make imports on open account

Procedure to make imports on open account has been issued by the State Bank of Pakistan (SBP). The SBP updated 13th Chapter of Foreign Exchange Manual to incorporate major changes made to the manual.

In a move aimed at streamlining import procedures, the State Bank of Pakistan (SBP) has issued a comprehensive procedure for conducting imports on an open account basis. This significant development comes as the SBP updated the 13th Chapter of the Foreign Exchange Manual, incorporating major changes to the manual.

Understanding Open Account Basis Imports

Open account basis imports refer to import transactions in which the documents are received directly by the importer or the Authorized Dealer from the foreign supplier. In line with the Import Policy Order, importers are allowed to carry out imports without the need to open Letters of Credit or register indents, proforma invoices, or orders with Authorized Dealers. Importers can make remittances after the goods have been received in Pakistan.

The procedure issued by the SBP offers clarity on how to handle imports on an open account basis and introduces certain conditions and safeguards. Here are some of the key points outlined in the procedure:

1. Import Categories Eligible for Open Account Basis

Manufacturing and industrial concerns, as well as commercial importers, may make payments on an open account basis for imports of spare parts and raw materials intended for ultimate use by manufacturing or industrial concerns.

Payments on an open account basis are also permitted for specific categories, including life-saving medicines and devices, essential medicines and devices, aircraft-related spare parts/components, lab equipment/instruments imported by educational institutions for their use, and newspapers, magazines, periodicals, books, etc.

2. Certification Requirement for Life-Saving or Essential Medicines & Devices

Before making payments on an open account basis for the import of life-saving or essential medicines and devices, Authorized Dealers must obtain a certificate issued by the principal of a public sector teaching hospital or the head of a government specialized hospital confirming that the imported items fall under the life-saving/essential category.

3. Procedure for Making Payments on Open Account Basis

Importers must initiate the process by obtaining Electronic Import Form (EIF) approval from an Authorized Dealer before the customs clearance of goods in the WeBOC system.

To approve the EIF, Authorized Dealers are required to perform Customer Due Diligence (CDD)/Know Your Customer (KYC) in accordance with SBP’s guidelines.

Authorized Dealers should ensure that the imported goods conform to the prevailing Import Policy Order.

Payments against goods imported on an open account basis must be made by the importer within one year from the date of filing the Goods Declaration Form (GD).

Authorized Dealers must verify and cross-check the GD(s) and duty paid challan/payment receipt for bonded imports, ensuring the payment does not exceed the declared value.

Bank Debit Advice (BDA) should be filed in the WeBOC system at the time of making import payments.

4. Process in Case of Pakistan Single Window (PSW)

Importers filing declarations in PSW must declare the bank account from which the payment will be made.

Authorized Dealers will perform post-clearance due diligence in accordance with applicable regulations.

Payments should be made within one year from the date of filing the declaration in PSW.

Authorization Dealers should verify the release of goods to the importer and ensure payments do not exceed the declared value.

5. Exceptional Circumstances

In cases where Authorized Dealers are unable to fulfill the specified conditions, they may refer the matter to the Foreign Exchange Operations Department (FEOD) at SBP-BSC Head Office, Karachi, along with supporting documents and justification for seeking an exception.

The introduction of this procedure is expected to simplify and expedite the import process while ensuring compliance with regulatory requirements. It provides clear guidelines for conducting open account basis imports and emphasizes due diligence to prevent any misuse of the system. Importers and Authorized Dealers are encouraged to adhere to these procedures to facilitate efficient and transparent import operations.

Disclaimer: The text of the procedure is provided for information purposes, and stakeholders are encouraged to refer to the official communication and guidelines from the State Bank of Pakistan for complete and up-to-date information.