Decks have been cleared for the launching of the Afghanistan-Pakistan Transit Trade Agreement (APTTA) on June 12, 2011.
According to the minutes of the second meeting of Afghanistan-Pakistan Transit Trade Co-ordination Authority (APTTCA), held on May 31 and June 1 in Kabul, available with Business Recorder, the Minister of Commerce & Industries of Afghanistan, Dr Anwar ul Haq Ahady, expressed satisfaction that significant progress was made during the previous meetings in resolving outstanding implementation issues, and indicated the openness of Afghanistan to address the remaining issues in a rapid manner for the launching of APTTA on June 12, 2011.
Pakistan Commerce Secretary Zafar Mahmood expressed satisfaction on the successful conclusion of the negotiation process and signing of APTTA in October 2010. He appreciated the growth of bilateral trade and expressed hope that trade between the two countries would cross $2 billion by the end of the financial year. He expressed his desire to resolve all outstanding issues so that APTTA can be implemented at the earliest. Both Dr Anwar ul Haq and Zafar Mahmood indicated the importance of APTTA as a model agreement for transit trade that can be followed by other countries.
The meeting approved the agenda, which included: discussion on truck guarantee and temporary admission document and discussion on other provisions of APTTA as financial guarantee and tracking devices and biometrics device.
It reviewed the implementation of decisions of first APTTCA meeting held on May 11-12, 2011 in Islamabad. Draft rules of business have been framed by Afghanistan and will be submitted to the government of Pakistan for its views/comments soon. The issue of provision of financial security for goods had been resolved in APTTCA subcommittee meeting held on May 7, 2011.
Pakistan side informed that the Ministry of Communications has already notified the transit/transport routes, the ports of entry/exit as provided in APTTA. Afghanistan will similarly notify the designated routes to be used under APTTA to all relevant agencies in Afghanistan.
Pakistan side also informed that in compliance with the announcement of Prime Minister of Pakistan during his visit to Kabul in December 2010, the government of Pakistan has decided to waive demurrage charges. Relevant information will be officially shared with the government of Afghanistan through diplomatic channels.
On the problems faced by Pakistani exporters, in Afghanistan, the agenda item was reviewed. The Afghanistan side requested for removal of collection of 'Rahdari' imposed by tribal administration in Pakistan.
The meeting considered the minutes of APTTCA subcommittee meeting held on May 7, 2011 at Kabul. The minutes and recommendations of the subcommittee were approved. For the purpose of clarity, para 5 of the minutes of the meeting, on customs security for goods, was reproduced as follows:
"Both parties agreed that customs security as envisaged in Article three of Protocol three, shall mean, insurance guarantee for the amount of the import levies on transit goods. Insurance guarantee shall be issued by any reputable insurance company, submitted to the customs by the importers or their authorised customs clearing agents, brokers or transport operators."
On customs security for vehicles, Afghanistan raised the following points with regard to provision of bank guarantee for transport vehicles:
(a) The provisions of Article 14, Protocol-2 made it mandatory for all transport vehicles crossing into Pakistan/Afghanistan to deposit bank guarantee/revolving bank guarantee equivalent to duties/taxes leviable in the host country.
(b) Although the provisions are reciprocal but in Afghanistan rate of leviable duty/taxes on transport vehicles is much less than in Pakistan. The deposit of heavier amount of bank guarantees by Afghan transporters would make it financially non-viable for Afghan transporters to operate. Such a situation is highly unfair and one sided. It was requested by them that as the bank guarantee is only a safeguard measure, Pakistan shall consider accepting an encashable revolving bank guarantee equivalent to 25 percent of the leviable duties/taxes of the host country. It may be provided either by a transport operator or on his behalf by a clearing agent, the Chamber of Commerce or the concerned government department. In case an operator desires to operate less than four trucks he shall provide a bank guarantee of 100 percent of the leviable duties and taxes for each truck. If a vehicle does not return to the home country as per provisions of the agreement the bank guarantee shall be encashed for the full amount of the duties/taxes leviable on the vehicle. The above arrangement may be reviewed by APTTCA on the request of either contracting party.
Pakistan side appreciated and noted the concerns of Afghans. It was agreed to take up the case to appropriate authorities in Pakistan for formal approval on the lines suggested above.
On the issue of biometric system, both parties agreed to install the biometric system as soon as possible. Pakistan side indicated that it will endeavour to install the system at Torkham by October 30, 2011. Until biometric system is installed, both countries will continue the current practice.
Item No 6 related to tracking device, customs to customs information and non-containerised sealable vehicle. The meeting referred to para 11 of the minutes of the first meeting of APTTCA where this issue was discussed and both sides agreed that the traffic in transit in respective countries will not be hampered for want of tracking devices, if the system is not already in place.
It was decided that a sub-group of customs officials of both countries shall meet in June 2011 in Islamabad to discuss the modalities and mechanism relating to: tracking device, customs to customs sharing of information, and reaching an agreement to define the standards for sealable and non-containerised vehicles within one month.
Other issues discussed at the meeting related to: Validity of Temporary Admission Document (TAD), and Request of Afghan Chamber of Commerce and Industries.
On TAD, Afghan side requested for review of Article 25, sub-clause 2 of Protocol 1, that the transit time allowed under Type 'A' and 'B' of TAD may be enhanced to 45 days, in place of existing 15 days, and 30 days. Pakistan side agreed to consider the request of Afghan government to enhance the transit time for both categories of TAD, after operationalisation any difficulties are encountered.
The Afghan Chamber of Commerce and Industries raised the following issues, which are causing delays in clearance of their consignment. As a result they have to pay demurrage and extra payments to the shipping companies as detention charges for containers.
It was pointed out that Peshawar and Quetta collectorates are not clearing partial consignments. In one case, 10 containers arrived at Amangarh, whereas one container was lying at Karachi. Railways didn't have the capacity to transport it to Peshawar. As a result, 10 containers are being held at Amangarh for a long time. Similar situation exists at Chaman, where Afghan importers have to suffer for no fault on their part.
The Chamber further pointed out that in a number of cases containers are booked only up to Karachi. Such cargo (sugar) is de-stuffed at Karachi, but customs does not allow re-stuffing of such cargo in other containers.
The Chamber stated that bulk cargo is allowed to be carried in open vehicles as per provisions of APTTA 2010. They cited an example of vehicles which were imported in bulk through car carrier ship. Pakistan customs are not allowing these vehicles in car carriers, and insisting to carry the vehicle in container. Pakistan side agreed to raise the issue with the concerned authorities for resolution.
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