Falls under domain of Ministry of Commerce: SBP says it can’t impose ban on import of any item

ISLAMABAD: State Bank of Pakistan (SBP) has stated that it cannot impose a ban on import of any item as it falls under the domain of Ministry of Commerce (MOC).

While in a brief submitted to the last meeting of the Senate Finance Committee on opening of LCs by SBP to import EV cars, the SBP told the committee recently on June 23, 2023, SBP has withdrawn its advisory related to prioritising essential imports, as per commitment provided to the International Monetary Fund (IMF); hence, now banks are free to execute all import transactions (including CBU imports) as per their risk assessment and liquidity flow available in the interbank market and now there is no restriction placed by SBP.

The meeting was also told that in May 2022 to manage the balance of payment situation, Ministry of Commerce (MOC) and SBP took synchronized administrative measures to curtail imports.

SBP withdraws all import restrictions

In this regard MOC on May 19, 2022, issued an SRO specifying 33 commodity groups Pakistan Customs tariff headings (PCT) codes as banned Items. These included mobile phones, automobiles (CBU) home appliances, and 30 other luxury item groups.

There were 49 HS codes related to automobile (CBU) which were banned by MOC.

SBP on May 20, 2022, issued EPD circular letter wherein banks were instructed to seek prior permission before initiating transactions for import of 25 HS codes pertaining to motor Cars (completely knocked down CKD), mobile phones (CKD) and others pertaining to machinery.

Later, 58P extended the list dated July 5, 2022 for banks under which prior permission requirement was made applicable on all us codes of (machinery), while CKDs of motor cars and mobile phones remained part of the list.

On August 19, 2022, MOC issued SRO and removed the ban placed on items dated May 19, 2022 and allowed the release of all stuck up cargos, including automobile (CBUs).

On December 27, 2022, SBP withdrew the requirement of prior approval for certain import, (falling under HS codes 84, 85 and certain items under HS code 87) with effect from January 2, 2023 vide EPD circular and instead provided general criteria to banks to prioritize import of certain essential items/ sectors like food, pharmaceutical, energy, exporters etc.

Further, in line with the instructions received from concerned ministries regarding vehicles, banks were advised by SBP not to facilitate any further transactions related to CBU imports.

In this regard, some imports of CBUs have been made during the period January-June 2023 from the banking sector; however, these transactions were mostly initiated prior to issuance of SBP instructions, as per directions of the government. The SBP cannot impose a ban on import of any item as this falls under the domain of MOC.

Copyright Business Recorder, 2023