The Federal Board of Revenue (FBR) on Friday suspended operations relating to the Afghanistan Pakistan Transit Trade Agreement (APTTA) and Afghanistan Pakistan Transit Trade Rules for 60 days to defer implementation of the relevant provisions of the agreement/rules regarding collection of customs securities/ insurance guarantees from Afghan importers.
In this connection, the FBR issued here instructions to the Model Customs Collectorates (MCCs) of Karachi, Peshawar and Quetta on Friday night.
Sources told Business Recorder that the Afghan importers would continue to clear their transit consignments without submission of customs securities and insurance guarantees etc for 60 days' period, starting from July 7, 2011. During 60 days, the customs department of the FBR would not collect any customs security from the Afghan importers on goods for clearance of stuck up containers at Karachi Port. In this regard, only relevant provisions of the APTTA and Afghanistan Pakistan Transit Trade Rules have been suspended for 60 days period.
The FBR instructions said that consequent upon the approval of the Prime Minister, in order to help the brotherly people of Afghanistan, to defer the operation of Article 3 of Protocol 3 of Afghanistan Pakistan Transit Trade Agreement (APTTA), 2010, the Board is pleased to defer the operation of provisions of Afghanistan Pakistan Transit Trade Rules, notified vide SRO 601(I)/2011, pertaining to Customs security for goods for a period of 60 days, starting from July 7, 2011.
It is important to mention that Pakistani customs authorities have temporarily deferred condition of customs guarantees as insurance companies have refused to accept guarantees of Afghan banks. Pakistani insurance companies are worried about the possibility of pilferage of transit goods during the transportation process.
Insurance companies have also conveyed to the government that in case of missing goods, the companies would have to bear high cost of insurance. If the containers did not reach the destination in Afghanistan, there would be very high risk in such cases. Both countries had agreed that financial guarantee equivalent to the amount of customs duty will be applicable on the goods imported under APTTA for Afghanistan. Insurance guarantee equivalent to the amount of customs duty from 'AAA' and 'AA' insurance companies is prerequisite according to the pact.
Under the Afghanistan Pakistan Transit Trade Rules, the Afghan based importer of goods or his authorised Customs clearing agents, brokers or transport operator in Pakistan shall furnish Customs security in the form of insurance guarantee from an insurance company of repute, acceptable to Customs, in the prescribed form, which shall be valid for at least one year and shall be en-cashable in Pakistan, for ensuring the fulfilment of any obligation arising out of Customs transit operation between Pakistan and Afghanistan.