AMENDMENT IN THE FOREIGN EXCHANGE MANUAL CHAPTER 12

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The State bank of Pakistan (SBP) has made certain changes in Chapter 12 of the Foreign Exchange Manual (Manual) vide its circular no. EPD Circular Letter Number 02 dated February 19, 2021.

It allow the exporters to utilize the funds available in their special foreign currency account for the purposes stated below, without prior approval of SBP, except where specifically mentioned otherwise.

  1. Payment of commission/discount to the overseas agents/buyers;
  2. Shortfall in realization up to 10% of the FOB value of export proceeds realized, subject to submission of sufficient documentary evidence for short realization to the satisfaction of concerned Authorized dealer. Any shortfall exceeding 10% limit may also be adjusted through this account subject to the adjudicating process in terms of Section 23B of FERA.
  3. Payment abroad against collection of commercial intelligence, purchase of designs/patterns, market studies, bonafide export claims.
  4. Payment for fee/expenses related to advertisement, promotion, publicity, marketing, brand building, shelf spacing etc. of products abroad through third party agent, ecommerce platforms or through company’s own subsidiary/liaison/marketing office abroad.
  5. Subscription fee for participation in foreign exhibitions, fairs for promotion/marketing of company’s products;
  6. Payment to foreign consultant for acquisition of services from abroad in relations to enhancing exports of goods/services;
  7. Payments for hotel booking and other travel expenses abroad, in lieu of official visits of company’s employees;
  8. Payment for warehousing services including insurance of goods warehoused through third party agent or through company’s own subsidiary/liaison/marketing office abroad;
  9. Payment of lab testing charges, audit/inspection/certification charges, logistics/other charges for clearance of goods at destination port, as per the terms of contract;
  10. Payment of debit notes to importer for chargebacks / penalties or any other charges incurred by the importer on behalf of the exporter;
  11. Refund of advance payment received against goods/ services on account of cancellation of the underlying contracts within one year from date of receipt of advance payments.
  12. Payments for registration of patents, copyrights, drug registration, license fee etc.
  13. Payment for import of IT equipment and software by software exporters, subject to compliance with applicable Import Policy Order and related laws/regulations issued by any government department and SBP;
  14. Payment for acquisition of digital services from abroad in accordance with the provisions of Para 14A, Chapter 14
  15. Operational expenses of liaison/ marketing/ representative offices abroad of local Companies in accordance with the provisions of Para 13, Chapter 20;
  16. Investment abroad by residents in accordance with the provisions of Para 13, Chapter 20.