ISLAMABAD: Pakistan has initiated the process of collecting bank guarantees for goods intended for Afghan transit trade to enhance security measures and curb pilferage of Afghan transit goods on Pakistani soil.
The Federal Board of Revenue (FBR), the country’s apex revenue collecting agency, issued SRO 1402(I)/2023 , making bank guarantees mandatory for Afghan transit goods.
The FBR amended Customs Rules, 2001, through this statutory regulatory order to implement the new conditions on Afghan transit trade. This move is a response to incidents of Afghan transit goods being pilfered or brought back into Pakistan, causing significant economic losses.
Previously, Pakistan had implemented a revolving insurance guarantee for Afghan goods. However, to strengthen security measures, the FBR has now mandated a bank guarantee system.
According to the outlined procedure, authorized customs agents, brokers, or transport operators in Pakistan must provide financial security in the form of a bank guarantee for goods destined for Afghanistan. This guarantee, issued by a scheduled bank, must be on the prescribed format, valid for at least one year, and encashable in Pakistan. It aims to ensure the fulfillment of any obligation arising from customs transit operations between Pakistan and Afghanistan.
The FBR emphasizes that the amount of the bank guarantee for transit operations will be determined by the Customs Computerized System or assessing officer at the departure office, covering all import levies. The designated customs officer at the office of departure will verify the bank guarantee’s details and ensure its conformity with the consignment particulars.
The FBR also outlines that the bank guarantee should cover the duty and taxes related to vehicles or goods accurately, aligning with the system’s or assessing officer’s calculation. Deputy or assistant directors of securities at the departure office are tasked with fortnightly reconciliation, encashment, revalidation, or physical release of bank guarantees, ensuring timely compliance.
This move is expected to bolster the integrity of the Afghan transit trade route and protect both nations’ economic interests. The implementation of bank guarantees adds a layer of financial accountability, aiming to minimize the risk of goods pilferage and enhance the overall efficiency of the transit trade process.
