Pakistan and Afghanistan are set to operationalise Afghan-Pakistan Transit Trade Agreement (APTTA) from June 12 as both sides have amicably resolved the issue of financial guarantee and its approval would be sought from Afghan Pakistan Transit Trade Co-ordination Authority in its meeting scheduled in Kabul on June 2.
A senior government official told Business Recorder that it has been agreed that the bank guarantee equivalent to amount of customs duty applicable on goods imported under APTTA for Afghanistan through Pakistani land route would not be implemented. "Now, an insurance guarantee equivalent to the amount of customs duty from Pakistani or foreign insurance company would be accepted by Pakistani authorities", he added. The sources said that sub-committee of APTTCA which met in Kabul on May 7, 2011 have resolved the issue of financial guarantees for goods, however, bank guarantee for transporters is still unresolved.
Second meeting of the APTTCA proposed to be held in Kabul on June 2, 2011 and issue of bank guarantee will be discussed in the meeting, sources said, adding that both sides have agreed to operationalise the APTTA by June 12. According a presentation of the commerce ministry to NA body on commerce, APTTCA in its first meeting held on February 11-12 in Islamabad agreed that traffic in transit will not be hampered due to the want of tracking device.
Till installation of bio-metric system, existing system will prevail, the presentation said, adding that Afghan-Pakistan Transit Trade Rules, 2011 have been finalised by the Federal Board of Revenue (FBR), however, held back due to the Afghan reservations regarding definition of customs security for goods and bank guarantee for vehicles. These two issues will be discussed in next meeting of the APTTCA scheduled on June 2, 2011 at Kabul. The customs security for goods as explained in the agreement mean that en-cashable financial guarantee acceptable to customs, submitted by the trader or through authorised broker, on transit goods, for an amount equivalent to the import levies of contracting parties.
The bank guarantee for vehicles as explained in the agreement means a bank guarantee or revolving bank guarantee or Cornet-de-Passage (when operational) as a pre-requisite for temporary admission document on his convenience, acceptable to host country.
It was mutually agreed to extend the date of operationalisation of APTTA agreement up to four months and this deadline is to expire in second week of June and with the holding of APTTCA meeting and resolution of the pending issues APTTA would be operationalised by June 12.
Pakistan's position on customs security for goods is that financial guarantee shall be negotiable instrument issued by a scheduled bank and en-cashable in Pakistan. Customs Pakistan's position on Customs Security for Vehicles is that bank guarantee or revolving bank guarantee issued by scheduled bank.
On the other hand Afghan side considers Pakistan's interpretation of these guarantees as unilateral and says that Article 28, sub-clause F states: "To establish a customs transit system including customs guarantee coverage for cargo as mutually agreed". According to the presentation of the ministry, Afghan side has agreed to allow 13 land routes for bilateral trade and these routes will be operationalised on a later date to be agreed mutually. Pakistan side will facilitate Afghan exports to India through Wagah. Afghan trucks will be allowed access on the designated routes up to Wagah. Afghan cargo will be off loaded on Indian trucks back to back at Wagah and the trucks on return from Wagah will not carry Indian exports to Afghanistan.
Pakistan has also gained a transit facility for Central Asian Republics (CARs) markets and entry and exit points for Pakistan's exports have been secured on permanent basis and legal cover have been secured. These routes included Torkham to Hairtam with Uzbekistan, Torkham to Torghundi with Uzbekistan, Torkham to Sher Khan Bandar with Tajikistan, Torkham to Aqina with Turkmenistan, Torkham to Torghundi with Turkmenistan, Chaman to Islam Qila with Iran and Chaman to Zaranji with Iran.