State Bank of Pakistan has proposed revision in the regulatory framework for the exporters to facilitate them with export goods through digital marketplaces such as Amazon, eBay, Alibaba, etc. under Business to Business to Consumer (B2B2C) e-Commerce models.
These changes aim at promoting ease of doing business by simplifying the existing instructions in the foreign exchange regulations.
The amendments required in export regulations to implement the Pakistan Single Window Project, which would eliminate the requirement of Electronic Form-E, are also part of the revised draft. Likewise, in some other areas, regulatory approvals required from SBP have been proposed to be delegated to banks to facilitate the business community.
Opening of Account with Authorized Dealer
Authorized Dealers shall open a specific account of the customer for facilitating the B2B2C e-Commerce exports. Authorized Dealers shall open the account following the applicable regulations on KYC/CDD. AD shall obtain, inter alia, the documentary evidence of registration of the exporter with the international platform. Electronic Form-E/ Financial Instruments issued against such exporters shall be issued with remarks B2B2C exports.
Exports of Goods under Open Account
The goods under this framework will be exported to a ‘Consignee’, who may not be the ultimate buyers of the goods and are just providing the warehousing services. Authorized Dealers may allow the exporter to make shipping documents in the name of the consignee, which may be a foreign marketplace or third-party warehousing services provider, and dispatch the same directly to the consignee or its agent in the country of final destination.
The ADs, for this purpose, shall issue a certificate as per Appendix V-12A to the carriers (ships, airlines, trucks, railways, etc.). In this regard, ADs shall obtain a copy of the contract/agreement entered into between the exporter and the consignee for the provision of warehousing services.
Method of Realization of Export Proceeds
The value of exports proceeds, as declared by exporters on goods declaration/declaration filed in WeBOC/PSW, can be received from abroad by an Authorized Dealer through
- Banking channel directly
- International payment scheme/gateway
- In Pakistan Rupee from Non-Resident Rupee Account Repatriable (NRAR).
Settlement of Export Shipments
In the case of sale through platforms, the export proceeds realized may relate to the sale of different products exported through different shipments. Therefore, it may be difficult to match the export proceeds realized with the respective shipments.
Accordingly, the Authorized Dealers may settle the export shipments made for sale through a particular platform from the exports proceeds realized through that platform in order of exports shipments made following First-in First-out principle, i.e., the first shipment made shall be settled first and then second, third and so on.
Period of Realization of Export Proceeds
The full export value of goods exported from Pakistan must be realized by the exporter within 180 days from the date of shipment of goods. In case of non-realization of export proceed within 180 days, Authorized Dealers shall follow up with the exporters asking reasons for non-realization of exports proceeds and the expected period for realization.
However, in case of non-realization of export proceeds within 270 days from the date of shipment, the AD shall report the exports as overdue to SBP-BSC as per the applicable procedure. In case of realization of export proceeds in excess of the declared value of the shipment, the exporter shall be required to submit a statement to the bank on annual basis giving details of shipments against which excess value has been realized.
Discounts, Payments, and Retention in Foreign Currency Account
As provided in Para 35, Chapter 12, Authorized Dealers may allow exporters to make payment of commission/fee for any services obtained from the platform or third party service provider/agents/ allow discount up to 10 percent of the FOB value of goods exported from Pakistan.
In cases where the exporter is not required to pay any such commission/service fee or allow a discount or where the amount of commission/service fee/discount is less than the prescribed limit of 10 percent, as mentioned above, the differential amount (10 percent of the FOB value less the actual amount of commission/service fee/discount) can be retained in Exporter’s Special Foreign Currency Account with the Authorized Dealers in Pakistan.
The funds available in these accounts may be utilized for making different types of payments abroad, as prescribed at Para 40 of Chapter 12 including referral fee, shipment, handling or fulfillment charges, warehousing or storage fee, marketing /promotion, settlement of overdue/ shortfall export proceeds, replacements and other services related to e-commerce exports, etc.
Merchanting Business/ Sourcing of Goods from Third Country
In case of sourcing of goods from a third country, Authorized Dealers may allow such exporters to undertake merchanting business as per instructions contained in Para 46, Chapter 12 of FE Manual. Reporting by Authorized Dealers Authorized Dealers shall ensure proper reporting of B2B2C e-Commerce exports, on prescribed schedule-JO/3 under the below-mentioned purpose codes in their monthly foreign exchange returns to the State Bank.
State Bank encourages and welcomes feedback/suggestions from the business community, banking industry, and other stakeholders, on the revised draft of Chapter-12 (Exports) of FE Manual, for any further value addition/ improvement.
Last month, Amazon had added Pakistan to its sellers’ list. Adviser to the Prime Minister on Commerce, Textile and Investment Abdul Razzaq Dawood noted that “It is a big accomplishment for our e-commerce and will open up vast opportunities for a new breed of young men and women entrepreneurs. We congratulate everyone involved.”