SBP allows 100 percent advance payment facility for medical equipment import to fight coronavirus

KARACHI: State Bank of Pakistan (SBP) has allowed import of medical equipment for treatment of coronavirus against 100 percent advance payment and open account.

The SBP issued notification on Tuesday to amend Foreign Exchange Manual for providing the facility.

The central bank said that in order to support the measures being taken by the public and private sectors to fight against the pandemic of coronavirus in Pakistan, it has been decided to amend the existing foreign exchange regulations to facilitate the import of medical equipment, medicines, ancillary items etc., which may be required for the medical treatment of the disease.

Accordingly, following changes have been made in the existing foreign exchange regulations till further order:

Authorized Dealers (ADs) may make advance payment up to 100 percent of the value of imports, on behalf of federal and provincial government departments and organizations, public and private sector hospitals or their approved agents, charitable organizations, manufacturers and commercial importers for the import of medical equipment, medicines, and ancillary items for the medical treatment of COVID-19 epidemic.

ADs may also make payment, without any limit, on behalf of federal and provincial government departments and organizations, public and private sector hospitals or their approved agents, charitable organizations, manufacturers and commercial importers for the import of medical equipment, medicines, and ancillary items for the medical treatment of COVID-19 epidemic, on Open Account basis.

In case of commercial importers and charitable organizations, ADs 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 equipment, medicines and ancillary items are related to the medical treatment of COVID-19 epidemic.

In case of approved agent of a public and private sector hospital, AD shall obtain the certified copy of the agency agreement along with the specific authorization of the hospital for the import of specific items as mentioned in sub-para (i) & (ii) above.

Advance payment can be made on the basis of letter of credit/standby letter of credit, registered contract, proforma invoice etc., using any incoterm as per the ICC’s latest publication, without any mandatory requirement of advance payment guarantee/ performance bond. However, the importer may require advance payment guarantee /performance bond to secure the advance payment.

In cases where the value of documents exceeds the amount of the letter of credit and the foreign correspondent negotiates the documents because of the excess amount being small or sends them on collection basis, Authorized Dealers may allow remittance of the excess amount.

ADs may also approve EIF, if required, in case the medical equipments and other related items, for the medical treatment of COVID-19 epidemic, are donated by international donor agencies, foreign governments etc., where no payment from Pakistan is required at the time of import or in future.

The imports shall be subject to compliance with the applicable Import Policy Order and other relevant laws, regulations and instructions issued from time to time including those contained in Chapter 13 of the Foreign Exchange Manual.

Authorized Dealers are advised to bring the above instructions to the knowledge of all their constituents for meticulous compliance.

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