SBP eases import payment rules, sets delay fine

KARACHI: The State Bank of Pakistan (SBP) has eased the rules for import advance payments, allowing authorized dealers to make full payments in advance without prior approval, subject to due diligence and anti-money laundering measures.

“Authorised Dealers are henceforth allowed to effect import advance payment with appropriate due diligence, without prior approval of SBP, against irrevocable letters of credit or invoices, up to 100 percent of the value of the letter of credit or invoice,” the central bank said in a circular issued late on Tuesday.

The SBP said when goods were imported, "authorised dealers (ADs) will process the advance payment against them, provided that they comply with the trade-based money laundering (TBML) framework and exercise adequate due diligence".

However, the authorised dealers will impose an interim penalty of 0.1 percent per day for the time of delay on the outstanding amounts of advance payment if goods purchased against advance payment are not imported or the funds remitted in advance are not repatriated for any reason.

The interim penalty amount accruing on each day will be calculated by using the prevailing market exchange rate starting from the first day after the lapse of 730 days or 120 days, till the date of goods import into Pakistan.

The SBP instructed banks that the amount of the import advance payment should be commensurate with the profile of the customers, the quantity and nature of goods being imported, and the pricing trends prevailing in the international/domestic markets.

"Authorised dealers shall be responsible for ensuring that goods are imported within the stipulated time or the funds remitted in advance are repatriated back in a timely manner," the SBP said.

The dealers also need to take necessary measures to examine the transactions and verify the bona fides and genuineness of the beneficiaries to mitigate the risk of any misuse, it added.

"The Authorised Dealers should establish a monitoring mechanism to ensure that the importer does not misuse import advance payment and may take appropriate actions against any delinquent importers, including the filing of suspicious transaction reports in cases involving trade-based money laundering, debarring the importer from making any future advance payments, etc." the SBP said.