HS Code Chapters 84, 85 and certain items of Chapter 87: SBP withdraws curbs on import permission

KARACHI: The State Bank of Pakistan (SBP) Tuesday announced withdrawal of restrictions on prior permission before initiating any import transaction pertaining to HS Code Chapters 84, 85 and certain items of Chapter 87.

The SBP has also asked banks to prioritize/facilitate imports related to essential items, energy, agriculture inputs, imports by export-oriented industry, and imports on deferred payment basis.

In May and July this year, the SBP imposed some restrictions on imports and directed banks for the prior permission from Foreign Exchange Operations Department (FEOD), SBP-BSC before initiating transactions for import of several goods pertaining to HS Code Chapter 84, 85 and certain items of Chapter 87. These chapters include power generating machinery, electrical machinery, mobile phone (CKD) and motor cars (CKD).

On Tuesday, the SBP issued fresh instructions on import of goods, wherein Authorized Dealers (ADs) were required to seek prior permission from Foreign Exchange Operations Department SBP-BSC before initiating any import transaction pertaining to HS Code Chapter 84, 85 and certain items of Chapter 87.

“It has now been decided to withdraw prior permission instructions with effect from January 2, 2023”, the SBP announced through a circular.

Consequently, according to SBP, requests for import transactions already submitted to SBP-BSC pertaining to HS Code Chapter 84, 85 and certain items of Chapter 87 stand returned to the ADs for appropriate disposal at their end.

In addition, the SBP has further advised that ADs may prioritize or facilitate the imports, as under:

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i. Essential imports: Imports related to essential sectors such as food (wheat, edible oil, etc.), and pharmaceutical (raw material, life-saving/essential medicines, surgical instruments including stents, etc.).

ii. Energy imports: Imports related to petroleum group (oil and gas) and coal (for power projects-based upon merit order of Ministry of Energy).

iii. Imports by Export-oriented Industry: Imports, especially of raw material, input goods and spare parts, by the export-oriented industries.

iv. Imports for Agriculture inputs: Import of items required as input for agriculture (seed, fertilizers and pesticides).

v. Deferred payment/self-funded Imports:

a. Imports on deferred payment basis, preferably from parents / sister concerns of the importers, beyond 365 days, from shipment date.

b. Imports funded by foreign exchange available with the importers raised through equity or project loan/import loan from abroad, in accordance with the applicable Foreign Exchange Regulations.

vi. Import for export-oriented projects near completion: Import of plant & machinery for the export-oriented projects near completion where at least 75% of the project’s plant and machinery has already been imported.

The SBP has further advised that ADs may actively engage with all their customers to process their requests, keeping in view the customers’ risk profile and liquidity conditions prevailing in the foreign exchange market.

The SBP has asked the Authorized Dealers to bring the above instructions to the notice of all their constituents.

Copyright Business Recorder, 2022