In order to support the measures being taken by the public and private sectors to fight against coronavirus in Pakistan, State Bank of Pakistan (SBP) has allowed the import of medical equipment, medicines, and ancillary items for the medical treatment of COVID-19 epidemic against 100 percent advance payment.
According to a notification issued by the central bank, it has decided to amend the existing foreign exchange regulations to facilitate the import of medical equipment, medicines, ancillary items, etc., which may be required for the medical treatment of the disease.
Accordingly, the following changes have been made in the existing foreign exchange regulations until further notice.
Authorized Dealers (ADs) may make an advance payment of up to 100% of the value of imports, on behalf of federal and provincial government departments and organizations, public and private sector hospitals or their approved agents, charitable organizations and commercial importers for the import of medical equipment, medicines, and ancillary items for the medical treatment of COVID-19.
ADs may also make a payment, without any limit, on behalf of federal and provincial government departments and organizations, public and private sector hospitals or their approved agents, charitable organizations and commercial importers for the import of medical equipment, medicines, and ancillary items for the medical treatment of COVID-19 on an Open Account basis, read the notification.
It further added that, in case of commercial importers and charitable organizations, ADs shall obtain a certificate, issued by the principal of a teaching hospital in the public sector or head of a government specialized hospital, confirming that the equipment, medicines, and ancillary items are related to the medical treatment of COVID-19 epidemic.
In the case of an approved agent of a public and private sector hospital, AD shall obtain the certified copy of the agency agreement along with the specific authorization of the hospital for the import of specific items as mentioned in sub-para (i) & (ii) above.
The notification added that advance payment can be made on the basis of a letter of credit/standby letter of credit, registered contract, proforma invoice, etc., using any incoterm as per the ICC’s latest publication, without any mandatory requirement of advance payment guarantee/ performance bond.
However, the importer may require an advance payment guarantee /performance bond to secure the advance payment.
In cases where the value of documents exceeds the amount of the letter of credit and the foreign correspondent negotiates the documents because of the excess amount being small or sends them on a collection basis, Authorized Dealers may allow remittance of the excess amount.
ADs may also approve EIF, if required, in case the medical equipment and other related items, for the medical treatment of COVID-19 pandemic, are donated by international donor agencies, foreign governments, etc., where no payment from Pakistan is required at the time of import or in future, added the notification.
The imports shall be subject to compliance with the applicable Import Policy Order and other relevant laws, regulations, and instructions issued from time to time including those contained in Chapter 13 of the Foreign Exchange Manual.
SBP advised the Authorized Dealers to bring the above instructions to the knowledge of all their constituents for meticulous compliance.
