Business to Business (B2B) Barter Trade Mechanism 2023

An official of the Federal Board of Revenue (FBR) on Friday said that the newly introduced Business to Business (B2B) Barter Trade Mechanism 2023 would be monitored for a couple of months and changes could be made for improvement in the system in accordance with needs of the business community.

FBR’s Member Customs Operation Mukarram Jah Ansari said this while exchanging his views with Ziaul Haq Sarhadi, Director Pak-Afghan Joint Chamber of Commerce and Industry, on the newly introduced commercial mechanism.

Business to Business (B2B) Barter Trade Mechanism 2023

In exercise of the powers conferred by sub-section (1) of section 3 of the Imports and Exports (Control) Act, 1950 (XXXIX of 1950). the Federal Government is pleased to make following Order, namely:-

Short title and commencement

This Order shall be called the Businessto-Business (B2B) Barter Trade Mechanism. 2023.

(2) It shall come into forte at once.

Definitions

In this Order, unless there is anything repugnant in the subject or context,—

(a)  “Act” means the Imports and Exports (Control) Act, 1950 (XXX1X of 1950):

(b) “Annex” means an Annex to this Order;

(c) “Appendix” means an Appendix to this Order;

(d) “banned item” means a commodity whose import or export is prohibited under the Import Policy Order (IPO) or Export Policy Order (EP’0) iii vogue. respectively;

(e)  “barter trade” means exchange of goods by way of import and export without involvement of any currencies for the purpose of this Order;

(f)  “place of origin” or “origin’s means the country of supply where goods are produced or manufactured..

(g)  “regulatory Collector” means the Collector of Customs in whose jurisdiction the place of business or manufacturing unit or head office of the applicant, duly registered under the Sales Tax Act, 1990, is located: and

(h)  “restricted items” means a commodity whose import or export is subject to compliance with conditions as contained. in WO or EPO in vogue. respectively,

Powers to allow export and import of goods under B2B barter trade. — The regulatory Collector having territorial jurisdiction may allow export and import of goods against an authorization, subject to the conditions stipulated under this Order.

Eligibility criteria. The barter trade facility under this Order may be admissible to the following:—

(I) state owned enterprises: and

(2)  private entities, subject to following condition.s, namely:-

(i) its name appears on active taxpayers’ list of Federal Board of Revenue;

(ii) it is subscribed to Pakistan Single Window (PSW) System; and (iii) it possesses a valid import and export contract registered by Customs authorities in the Customs computerized system (WeBOC).

Authorization process

Application for authorization of import and export of goods under the B2B barter trade facility shall be submitted online by the trader or their authorized agent through the online BT Module in WeBOC system to the regulatory Collector. The application shall contain the following information:-

(i) name and address of importer;

(ii) name and address of exporter:

(iii) description, quantity and value of goods to be imported;

(iv) description, quantity and value of goods to be exported;

(v) validity and expiry dates of the contract; and

(vi) declaration that the goods shall originate from the respective countries
for which the Barter Trade facility has been allowed,

Copy of the contract duly verified by the Pakistani Mission in the country for which barter trade facility has been authorized. certifying the facts that the subject foreign company, individuals and proposed goods for BT are ‘Non-Sanctioned’, as notified by Ministry of Foreign Affairs from time to time. shall be uploaded in support of the application,

The application shall be reviewed and examined under the provisions of IPO arid EPO in vogue and the conditions set out in this Order. If the application is found in order, an approval (authorization) may be accorded by the regulatory Collectorate of Customs and an approval number shall be generated by the system against the NTN of the applicant,

Ministry of Commerce may impose country or commodity specific conditions or restrictions for imports and exports of goods under this B2B barter trade mechanism. Export and import under this Order shall be allowed in respect of the commodities and From the countries as specified in Appendix-A to this Order.

Customs procedure

Trade of goods under a B2B BT arrangement shall be allowed on the principle of “import followed by export-. The export would be made to the extent of value of imported goods, subject to the tolerance mechanism provided hereinafter for any exigency. However, a Pakistani trader shall be responsible to net-off value of goods on quarterly basis. i.e. within 90 days after issuance of authorization,

Upon import and export of goods, the importer shall submit single declaration in the PSW system.

The importer and exporter shall tag the relevant approval number to allow for waiver of the financial instrument required for regular imports and exports,

Import and export of goods under a B2B BT arrangement shall he subject to the provisions of import and Export Policy Orders for the time being in force and shall comply with all relevant regulatory requirements including permits. licences, certificates, quotas, etc. as specified in the WO and EPO,

The import and export of goods shall be subject to applicable duties, taxes, fee arid other charges, etc.

Imports and exports under the B2B barter trade facility shall be admissible to benefits offered under various concessionary and export facilitation schemes. etc,

The *assessed value* of goods shall be taken for the purpose of calculation of the monetary limit of the authorization,

The value of the goods to be imported and exported under this facility shall not exceed the monetary value of the authorization as entered in the WeBOC system for automatic debiting of the monetary value of imported and exported goods.

A tolerance of twenty percent shall be allowed for assessed import value exceeding the authorization and, in case of fw-ther breach of limit. clearance of goods shall he stopped and the regulatory Collectorate may initiate further action under the applicable laws and procedureh, including the Customs Act. 1969 (IV of 1969).

A tolerance of twenty percent shall be allowed for export value exceeding the import value on a one-off basis in accordance with the procedure to be notified by ERR.

All imports under an authorization issued under this Order shall be accompanied by a certificate of origin issued by the relevant authority of the exporting courntry for which the barter trade facility has been allowed.

Reconciliation

The Customs computerized system shall reconcile import and export values automatically against each authorization.

The data for all imports, exports under the barter trade facility shall be available to the regulatory Collectorate for audit purposes,

ERR shall submit a report to Commerce Division on quarterly basis regarding the total number of applications received. authorizations issued and the position of trade balance viz, imports and exports under B2B barter trade authorization’s so issued.

Other terms and canditions

An authorization shall be valid for one year from the date of issuance and there shall be no extension or carry forward for the authorized value.

The regulatory Collector reserves the right to curtail the authorized limit or to stop further transactions in case of unsatisfactory performance of non-reconciliation of trade balance.

For the acts or omissions of the parties arising out of a B2B barter trade transaction, there shall be no liability on the Government of Pakistan.

Commerce Division reserves the right to amend, modify, rescind or withdraw whole or any part of this B28 barter trade mechanism through a notification.

Any dispute or clarification regarding any provision of this mechanism or any transaction held under this mechanism shall be referred to Commerce Division for final decision.

Penalties

Subject to provisions of the Act, failure to comply with any of the conditions laid down in this mechanism or the Conditions contained in an authorization issued under this Order shall lead to cancelmion of authorization, award of penalty or blacklisting of the applicant company for future business under relevant provisions of the law.

Provisions to be in addition and not in derogation

The provisions of this Order shall be in addition to and not in derogation of the provisions of the Export Policy Order and Import Policy Order made under the Act.

Appendix- A

List of Commodities for Barter Trade with Afghanistan Iran arid Russia

Part-1

Export of following products shall be allowed to Afghanistan, Iran and Russia:

Sr. No Commodity lkscription Per Codes

(I) (1) (3)

1 Milk, Cream, Eggs and Cereals 0401, 0407, 1103, 1104, & 1108

2 Meat and Fish products Ch. 02,03 and 16

3 Fruits and Vegetable Ch. 07 (except 0713), 08

4 Rice 1006

5 Confectionary and Bakery items 1702, 1703, 1704, 1806, 1901, 1902, 1904, 1905

6 Salt 2501

7 Pharmaceutical products Ch_ 30

8 L 9 Essential Oils, Perfumes, Cosmetics, Toiletries, Soaps. Lubricants, _Waxes and Matches Tanning. Dying Extracts and Misc. Chemicals products

Ch. 33, 34 and 3605

Ch. 32 and 38

10 Plastics and Rubber Articles Ch. 39. and 4011 – 4015

11 Finished Leather & Leather Apparel 4112, 4113.4114. 4115 and Ch. 42

12 Art icles of Wood

13 Articles of Paper & Paper Board

4409-20, 4601, 4602,4703
4703.4707, and Ch. 48 and 49

14

15

Textiles (Intermediates)

Readymade Garments, Textile’s Made-ups and Carpets

5208, 5209. 5210, 5212, 5310. 5407. 5513, 5514, 5903, 5910, & 6006

Ch. 61, 62, 63 & 57

 

., 16 Footwear Ch. 64

17 Iron and Steel Ch. 72 and 73

18 Copper and Articles thereof Ch. 74

19 Aluminium and articles thereof 7612 & 7615

20 , Tool and Cutlery 8205-15

21 Electric Fans and Home Appliances 8414. 8415, 8418, 8422, 8450

22 Electrical equipment Ch. 85

 

23 Motorcycles and Tractors- excluding components.8711 & 8701 tl’i

24 Surgical Instruments 9018

25 Furniture lterns 9401. 9403

26 Sports Goods 9506, 9507

Part-II

Import Of following products shall be allowed from Afghanistan:

Sr. No Commodity Description Per Codes

(1) (2) (3)

1 Fruits and Nuts Ch. 08

2 Vegetables and Pulses Ch. 07 & 2009 (except 07139090)

3 Spices 0904 & 0909

4 Oil Seeds

Ch. 12 (except 1209.2900, 1214.9000, 1211.3000,1211.40K 1211.9000)

25030000, 25261010. 25151100, 25151200, 25292100,

25309090, 25221000, 25169000, 25111000, 25161100.

5 Minerals and Metals 25171000, 25291000, 26100000, 26080000, 26070000,

2619000IX 26180000, 26011100, 74040010, 74040090,

76011000, 76020090

Coal and its products 2701

7 Raw Rubber Items 4001, 4002, 4003, 4004, 4005

8 Raw Hides arid Skins 4101,4102, 4103,4104,4105

9 Cotton 5201

10 Iron & Steel 72043000, 72044100, 72044910 72044990

Import of following product., shall be allot% ed from Iran.:

Sr, No Commodity Description PCT Codes

(1) (2) (3)

I Fruits, Nuts and Vegetables Ch. 07 & 08 (except 07139090)

Spices 0909

25030000, 25070000, 25081000, 25131000,

 

3 Minerals & Metals

25151100. 25151200, 25231000. 25232100,
          25232900, 74091100, 74092100, 74092900,

 

76042100, 76061100, 79011100

 

4

Coal and its Products, Petroleum Crude Oil, LNG and LPG

2701, 2702, 2703, 2704, 2705, 2706, 2707, 2709, 2711, 2713

 

28030010. 28141000. 28151100.28211010, 28271000, 28299000, 28301010, 28331100, 28362000, 28363000, 28369930, 28391910,

 

5 Misc, Chemical Products

28421000, 29051100, 29053100, 29159000,
29161400, 29171400, 29173500, 29232000,  ‘

 

29336100, 29336990, 33012990, 33029090, 35079000, 38099300, 38160000, 38170000, 38210000, 38231990. 38249980, 38249999

6 Fertilizers 3102

 

Page 5 of 6

 

 

 

7

8

9

10

Article of Plastics and Rubber
nn  • form

Raw Hides and Skins Raw Wool

Articles oflron & Steel

3901, 3902. 3903. 3904. 3905, 3905, 3906, 3907, 3912, 4001. 4002, 4003. 4004,

4101, 4102. 4103, 4104

5101.5102, 5103

72011000. 72022900. 72041010. 72044100, 72044910, 72044990, 89080000

 

 

Part-IV

 

Import of following products shall be allowed from Russian

 

Sr. No Commodity Description I PCT Codes

(I) (2) (3)

1 Pulses 0713 (except 07139090)

2 Wheat 1001

1 701, 2702, 2703. 2704, 2705, 2706. 2707. 2709. 2710,

Coal & its Products. I 2711.2713, (except used Oils under 2710.1951.

3 Petroleum Oils (including 2710.1953, 2710.1994. 2710.1997, 2710.1999,

Cnbde), LNG and LPG 2710.9100, 2710.1952 2710.1991 2710.19962710.1998

2710.2000 2710.9900)

FeniIizers .3101.3102,3103,3104.3105

5 Tanning and Dying Extracts 3202

 

6

Article of Plastics and Rubber (In primary form)

3901. 3902, 3903, 3904, 3905.3905, 3906, 3907. 3912, 4001,4002, 4003.4004,

 

25030000. 25081000, 25151100, 25199010, 25199090,

7 Minerals and Metals 25249000. 76042990, 76052900, 7610900E1, 78011000,

79011100. 79039000

 

8 Articles of If•Vocid & Paper

44039900, 44071100, 44071200, 44071900. 44072900,
440795001, 44079900, 44119390. 44123300. 44129900

 

28013000, 28030010. 28152000. 28191000,28252000, 28275900, 28276000. 28332500, 28341010. 28353100, 28364000, 28413000, 28415090, 28444000,28459000. 28469000, 29031200, 29031300, 29051300. 29051400,

9 Chemicals Products 29071100, 29071900, 29141100. 29161100. 29161200,

29173500, 29181300, 29214200, 29313999. 29336990, 29339990, 33012990, 38021000, 38040000, 38089400, 38111900, 38112100, 38119000. 38140300, 38244000, 38249999

7201, 7202, 7023, 7204, 72081010, 72081090,

72082610, 72082790. 72083610, 72083690, 72083710. 72083790, 72083810, 72083890, 72083910, 72083990.

10 Articles of Iron and Steel 72085110. 72089010, 72089090, 72091510. 72091610.

72091690, 72091710, 72091790. 72099010. 72101210, 72104910. 72124090, 72251100. 722860011 73042900, 73045900. 73049000, 73143900, 89080000

 

11

Items of Textile Industrial Machinery

M431910. 84431990. 84439990. 84452000, 84463000.
—

 

Note: – In case of any discrepancy between EPO/IPO hi vogue and above listed

commodities, the provisions of the EP0.4P0 shall prevail