Ban on import of luxury items: Govt decides to release ‘stuck goods’

ISLAMABAD: The federal government has decided to release all those “stuck consignments” as one-time special permission, which have landed at ports or airports in Pakistan on or before June 30, 2022, sources close to Secretary Commerce told Business Recorder.

Sharing the details, sources said, Ministry of Commerce on the directions of the Prime Minister initiated a summary for imposing ban on import of luxury and non-essential items in consultation with Federal Board of Revenue (FBR), Ministry of Finance and Ministry of Industries & Production.

The ban was imposed under sub-section (1) of Section 3 of the Imports and Exports (Control) Act, 1950 (XXXIX of 1950) by amending the Import Policy Order (IPO), 2022 on Ministry of Commerce SRO 598(l)/2022 of May 19, 2022.

The restrictions were imposed on May 19, 2022; however, under proviso to para-4 of the IPO 2022, the imports for which Bill of Lading, Airway Bill or irrevocable Letter of Credit were issued prior to the notification of the SRO were exempted from the ban.

In order to safeguard the local industry, the import of raw materials, intermediate goods and industrial equipment/ machinery required by industrial/ manufacturing concerns and foreign grant-in-aid projects were exempted.

As per approval of the Cabinet, the prohibition on import was to be reviewed after two months. However, immediately after the imposition of ban, several commercial importers, as well as, government departments approached Ministry of Commerce for release of their consignments against which payment was made or which were ready to be shipped but were delayed due to freight congestion and in the meantime the ban was imposed on May 19, 2022.

Ban on import of luxury items: Around 600 to 900 containers stuck at Karachi ports

The Federation of Pakistan Chambers of Commerce & Industry (FPCCI) has also requested to either defer the imposition of SRO or allow release of held up/ in-transit consignments, which would give ample time to business to realign their business strategies. A number of such consignments have either reached Pakistan and are lying at ports or are due to reach shortly.

In order to analyse the impact and issues arising from the ban imposed on import of non-essential and luxury items, a meeting was held on June 27, 2022 in the office of the Minister for Finance. It was decided during the meeting that a summary for the ECC of the Cabinet may be moved to seek permission for one-time release of those consignments of items banned vide SRO 598(l)/2022 of May 19, 2022, which have reached Pakistan or would reach Pakistan by June 30, 2022 and for early review of the ban.

According to sources, since the consignments do not comply with the requirements of the policy, hence, are in contravention of the IPO. Para 20 of the IPO 2022 authorizes the Federal Government to condone such contraventions upon payment of surcharge or on such conditions as it may prescribe.

In order to resolve the hardship cases, Commerce Ministry has proposed that ECC of the Cabinet may grant one-time special permission (under Para-20 of IPO) for release of consignments stuck at the ports due to contravention framed under SRO 598(1)/2022 of May 19, 2022 (if otherwise importable under IPO-2022). However, this one-time condonation shall be only for those consignments, which have landed at ports or airports in Pakistan on or before June 30, 2022.

Commerce Ministry has also requested the ECC to also allow review of the import prohibition before the prescribed two months’ period decided on May 19, 2022. Commerce Ministry further contends that since the decision to submit this summary was taken during the meeting held on June 27, 2022, in which relevant stakeholders were in attendance; therefore, necessary consultation required before submission of summary to ECC of the Cabinet has been done.

Copyright Business Recorder, 2022