Insurers Warned Against Underwriting Afghan Transit Trade

Federal Board of Revenue has warned insurance companies to immediately correct their systems, as some of them are not complying with the requirements including fee condition with respect to guarantees on Afghan transit goods.

In a tweet, FBR Chairman Shabbar Zaidi said that FBR has observed that some insurance companies are not properly complying with the requirements and asked them to immediately correct their systems.

https://twitter.com/ShabarZaidi/status/1183717392100347904

The customs have found that billions of rupees will be stuck on account of guarantees encashment for insurance companies in case the goods under Afghan Transit Trade (ATT) are not transported safely to Afghanistan, sources said.

The insurance companies are not charging the average fee as instructed by FBR so they were warned to comply with the instructions of the FBR immediately.

Under the customs laws, Afghan importers, through customs agents or transport operators in Pakistan, are required to furnish financial security in the form of insurance guarantee for goods destined for Afghanistan, from an insurance company. This remains valid for at least one year and encashable in Pakistan for ensuring the fulfillment of any obligation arising out of customs transit operation between Pakistan and Afghanistan.

These guarantees cannot be en-cashed from banks and the stuck amount has increased to billions of rupees, said the sources.

The financial security for transit operations is determined by the system on the basis of the assessment done by customs at the office of departure so that it covers all import levies according to the customs rules.

FBR chairman took this step as Pakistan is ready to open up the Torkham border on a 24/7 basis. Although Pakistan has placed a clearing system on a 24-hour basis, the Afghan side closes gates in the evening and nights. Afghan trade transit has recently resumed.


  • It is not ATT which is hurting the local economy but the porous borders with Afghanistan and Iran which has always created problems for the local industry. Once the borders with Afghanistan and Iran are sealed only than will this issue be closed.

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