1,000 old, used vehicles stuck at ports: government examining proposals to deal with issue

The government is examining different proposals to deal with the issue of granting permission for clearance of over 1,000 old and used vehicles stuck up at ports, which were imported in violation of import policy order. Sources told Business Recorder here on Monday that the issue came to light during a meeting held at Finance Division on issues relating to the import of vehicles under personal baggage, transfer of residence and gift schemes for overseas Pakistanis.
One of the proposals under consideration is to allow clearance of such old and used cars on payment of fine and penalty due to heavy demurrages being paid by the commercial importers.
It has been decided that both the Ministry of Commerce and FBR will sit together to finalize the policy to deal with the issue, but final decision would be taken by the Commerce Ministry because the issue is related to the violation of import policy order.
It has been further decided that there would be no change in the said provision that all vehicles in new/used condition to be imported under transfer of residence, personal baggage or under gift schemes, the duty and taxes shall be paid out of foreign exchange arranged by Pakistan nationals themselves or local recipient supported by banks encashment certificate. The meeting was attended by the officials of Ministry of Finance, FBR and Ministry of Commerce and Ministry of Textile.
According to sources, there is a demand to grant one time relaxation which requires changes in the existing rules to benefit the importers. However, no final decision has been taken on the idea of one time waiver for clearance of such vehicles.
The meeting discussed possibility of introducing scheme for the commercial importers taking into account the views of Finance Division, Commerce Ministry and Federal Board of Revenue (FBR).
The FBR and Commerce Ministry officials submitted their own viewpoint on the issue. According to the Finance Division, the Import Policy Order, 2016 of the Commerce Division envisages various vehicles import schemes eg personal baggage, transfer of residence and gift schemes for overseas Pakistanis. This regulatory instrument allows import of new or used vehicles and is aimed to facilitate bona fide overseas Pakistanis.
However, the schemes have been reported to be misused by the commercial importers, who used to import vehicles using overseas Pakistanis passports and only around 5 percent of the cars were actually being imported by genuine overseas Pakistanis. This had led to outflow of foreign exchange from the country through Hawala/Hundi and there was need of corrective measures to deter this practice. Hence, the Commerce Division prescribed a clear transaction mechanism to curb this practice and moved a summary for the ECC of the Cabinet which introduced following mechanism through amendment in the Appendix-E of the Import Policy Order.
"All vehicles in new/used condition to be imported under transfer of residence, personal baggage or under gift schemes, the duty and taxes shall be paid out of foreign exchange arranged by Pakistan nationals themselves or local recipient supported by banks encashment certificate showing conversion of foreign remittances to local currency, as under:- (i) the remittance for payment of duties and taxes shall originate from the account of Pakistani national sending the vehicle from abroad and; (ii) the remittance shall either be received in the account of Pakistani national sending the vehicle from abroad or, in case his account is nonexistent or inoperative, in the account of his family."
After placement of this revised mechanism, over 1000 imported old and used cars could not clear at ports and now it is being examined whether one time waiver is possible for clearance of these vehicles or not.