ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has approved business-to-business (B2B) barter trade mechanism in view of the absence of banking channels in a few countries to facilitate trade.

The meeting of the ECC presided over by Finance Minister Ishaq Dar was informed by the Commerce Ministry that the Federal Board of Revenue (FBR) and the State Bank of Pakistan (SBP) have supported the proposal of establishing a mechanism/ procedure with oversight to ensure sanctions screening (commodities and entities) dispute resolution, and accounting/ settlement of transactions, trade balance and time to time updating of operational modalities.

The meeting was told that Commerce Ministry issued SRO dated 01-04-2022, whereby, provisions with regard to barter trade have been incorporated into Import Policy Order (IPO) and Export Policy Order (EPO). Thus, providing a legal framework for carrying out trade transactions through barter mode. Only to the extent of Pak-Iran trade, the Ministry of Commerce has notified a comprehensive procedure (SOPs) for operationalisation of barter trade mechanism between the two counties.

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Quetta Chamber of Commerce and Industry (QCCI) from Pakistan side and Zahidan Chamber of Commerce and Industry (ZCCI) from Iran side are responsible for the registration of importers and exporters and recording and monitoring of trade transactions, etc., under the barter system. It is; however, vital that a standardised procedure, with due safeguards, for the regulation of barter trade through B2B mode is notified.

In consultation with stakeholders, the Ministry of Commerce prepared a draft SRO for affecting B2B barter trade and shared it with the SBP and the FBR for seeking their comments thereto.

In view of the absence of banking channels in the few countries of the region and for purpose of facilitating trade in general, it is proposed that a general B2B Barter Trade Mechanism, through a notification, placed at Annex-Ill, may be approved.

In terms of section of the Imports and Exports (Control) Act, 1950, the federal government is empowered to prohibit or restrict import and/ or export of any good or class of goods, and to regulate generally all practices, including trade practice and procedure connected to the import and export of such goods.

The ECC was submitted draft B2B barter trade mechanism which was discussed with the FBR, the SBP, the MOFA, the Ministry of Law and Justice, the Finance Division, Pakistan Single Window, and AG Office in an inter-ministerial meeting held on 13 January 2023 and requested to approve a general B2B barter trade mechanism, through a notification.

Copyright Business Recorder, 2023