ISLAMABAD: Pakistan and Iran have decided to start barter trade through approved crossing points and sans any monetary transactions due to international sanctions on Iran, sources in Commerce Ministry told Business Recorder.
The pact was signed during a recent visit of Prime Minister's Advisor on Commerce and Investment, Abdul Razak Dawood, to Teheran wherein the two countries expressed their intention to increase bilateral trade to $5 billion per annum and remove all bottlenecks.
"It has been decided in consultation between the Government of Pakistan and Government of Iran that a barter trade mechanism will be established between Quetta Chamber of Commerce and Industry and Zahidan Chamber of Commerce and Industry (and other counterpart chambers)," the sources added. Both sides have already identified over 50 items for bilateral trade with rice and petroleum products at the top of the list.
The Barter Trade Mechanism will work in following ways: (i) the barter trade shall be done via land route through legal customs notified border crossing points between the two countries; (ii) there will be no monetary transaction under the barter trade arrangement. Pakistani importers will pay Pakistani exporters in lieu of goods and services exported by them in Pak Rupees and the same mechanism will apply on the Iranian side; (iii) on imports/exports of goods by either side, the party will submit documentary evidence such as Good Declaration to the focal persons in Quetta Chamber of Commerce and Industry, and counterpart Chambers viz. Zahidan Chamber of Commerce and Industry; (iv) in order to meet the objective of barter trade mechanism both parties must finalise international mechanism to remove difficulties in barter trade; (v) a copy of the contract for import and export with Iranian parties should also be submitted to Quetta Chamber of Commerce and Industry and Zahidan Chamber of Commerce and Industry; (vi) both Chambers of Commerce and Industry will forward a monthly statement to each other, within 15 days from the close of the month and would finalise a dispute settlement mechanism in order to sort out the trade disputes in barter trade; (vii) periodic review of the agreement will be carried out after each year by mutual consultations; and (viii) each party may terminate/rescind the agreement through a written communication addressed to the other party, with a minimum notice of three months. However, the transactions already initiated will be protected even if the MoU is terminated.
Copyright Business Recorder, 2021
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