Importers' open accounts: submission of original shipping documents not needed: SBP

The State Bank of Pakistan (SBP) Friday said it is abolishing the requirement of submission of original shipping documents to the Authorized Dealers (ADs) by importers for payments against imports made on open account basis. Earlier, importers were, inter alia, required to present original shipping/transport documents to Authorized Dealers for effecting the related import payments. However, as per revised instructions regarding imports made on open account basis, the SBP has announced to waive this requirement.
"In the wake of successful implementation of Electronic Import Form (EIF) module, it has been decided to do away with the requirement of submission of original shipping documents for making payment against goods imported on open account basis (open account includes import transactions in which documents have been received by importer or AD directly from the foreign supplier)," said FE Circular No. 09 of 2017, issued Friday.
According to SBP, the initiative has been taken in the wake of requests from different stakeholders including various chambers of commerce, importers, banks, etc, as international trade is witnessing a shift from physical transfer of original transport documents to electronically transmitted transport documents, telex release, etc, to save cost and time involved in physical transfer of such documents from foreign seller to the importer.
Further, implementation of EIF by the State Bank and Pakistan Customs has strengthened the monitoring of imports into Pakistan and related payments, thus, the possibility of multiple payments against single import consignment through different banks stands eliminated. The SBP is expecting that this move would not only provide facilitation to importers but equally be beneficial for the exporters who import inputs/raw materials for manufacturing of exportable goods/products.
According to SBP's circular, a new procedure will be adopted to make payments against goods imported on open account basis. As per procedure, an importer will get the EIF approved from an AD before clearance of goods by Pakistan Customs. The ADs will approve the EIF request upon submission/retention of photocopies of shipping documents, proforma invoice and commercial invoice, etc.
ADs are required to perform Customer Due Diligence (CDD)/Know Your Customer (KYC) of the importers, being their account holders/customers, as per applicable instructions. The ADs shall take all possible measures to verify the bona fides of importer and genuineness of the transaction before approving the EIF.
ADs will ensure that the goods imported into Pakistan are in conformity with the prevailing Import Policy Order issued by the Ministry of Commerce and payments against goods imported on open account basis are made by the importer within six months from the date of filing of Goods Declaration Form for which proper follow-up must be made with the importer.
ADs will also obtain copies of GD(s) and duty paid challan/payment receipt, wherever applicable, and make payment after verifying, through WeBOC user ID, attachment of GD(s) with the respective EIF. In case of bonded import, AD shall obtain duty paid challan(s)/payment receipt(s) from the importer in due course.
According to SBP, ADs must ensure that the payment being made against imported goods is not more than the declared value of goods imported into Pakistan and ADs will fill in Bank Debit Advice (BDA) for each EIF in WeBOC at the time of making import payment as provided in EIF module and settle the EIF in WeBOC as per applicable instructions.
ADs are also required to ensure compliance of proper AML/CFT guidelines while handling trade transactions. While, in case the importer fails to make remittance/payment of goods imported on open account basis within the stipulated time, appropriate regulatory/legal action may be initiated against the importer.
In case the importer/AD is unable to fulfill any of the conditions/requirements, Authorized Dealers will refer the case to the Foreign Exchange Operations Department, SBP-BSC, Head Office, for prior approval. The SBP said that all other terms, conditions and instructions in the matter will remain unchanged.