Up to $0.1 million shipments: exporters can send transport documents to buyers abroad: SBP

In the wake of changing global trade practices and to facilitate exporters, the State Bank of Pakistan (SBP) has relaxed its foreign exchange regulations by allowing exporters to directly dispatch transport documents to buyers abroad against shipments valuing up to $0.1 million or equivalent.
In the wake of successful implementation of Electronic Form-E (EFE) module in WeBOC and to facilitate exporters, SBP has decided to allow exporters to directly dispatch shipping documents to the consignees or their agents in the country of final destination in case of exports other than against L/C or advance payment.
Earlier, the carriers (shipping companies, airlines, railways, etc.) were required to draw the transport documents (bills of lading, airway bill, railway receipts, etc.) only to the order of an authorized dealer for exports taking place from Pakistan and the same were required to be dispatched to the buyer abroad through an authorized dealer.
Accordingly, a new paragraph 11A has been inserted after paragraph 11 of Chapter 12 of Foreign Exchange Manual-2017 to implement this relaxation, SBP said in a circular issued on Monday.
As per "Para 11A Making and Dispatch of Shipping Documents by the Exporters" an exception to the instructions contained in Para 11, Authorized Dealers (ADs) may allow making of shipping documents in the name of the foreign importers and dispatch of the same by the exporters to the foreign consignees or their agents in the country of final destination by issuing a certificate to the carriers (ships, airlines, trucks, railways etc).
According to terms and conditions, the value of export consignment must not exceed US dollar 100,000 or equivalent in other currencies and the export overdues of an exporter should not be more than 5 percent of the previous year's exports.
In addition, the total outstanding/unrealized exports allowed by the AD through this facility shall not exceed 25 percent exports of the preceding year.
The SBP said that this facility will be extended only to those exporters who have export performance of at least 3 years with a minimum total export realization equivalent to USD 1.00 million. To this end, the ADs may accept certificates of other ADs showing export performance of the exporter through them.
The AD will be required to obtain an undertaking from the exporter that export proceeds against such exports will be realized as per the prescribed time period. Further, the AD, at its discretion, may obtain the personal guarantees of the directors/sponsors of the firm/company to ensure realization of export proceeds against such shipments.
Before certification of Form-E/EFE, the ADs will also obtain a valid contract/proforma invoice and satisfy itself about the bona fides of the importers/consignees abroad. Further, the AD shall also obtain copies of shipping documents (electronically or manually) within 5 working days of the shipment.
The ADs have been asked to monitor the shipment(s) made by the exporter and ensure realization of export proceeds there against within the prescribed time. In case of non-realization within the prescribed period, the matter will be reported to the Foreign Exchange Operations Department, SBP-BSC as per applicable instructions.
In case of unsatisfactory behavior of the exporter or export overdues exceeding the prescribed limit of 5 percent, the AD will discontinue extending the above facility to the exporter. All other terms, conditions and instructions on the matter shall remain unchanged.
According to SBP, the development is expected to provide manifold benefits to the local exporters including reducing the cost of doing business, efficient processing of export documents and improving competitiveness of Pakistani exports in the international market.