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Pakistan Customs have introduced "De minimis Rules for Imported Goods" on 22-10-2020 within the scope of section 19C of the Customs Act, 1969. The Rules are aimed at exempting the goods imported by the public at large either by post or through air courier from the payment of customs duty and taxes, provided the value of such goods does not exceed five thousand rupees. Accordingly, vide Rule 782(a), the term “de minimis value” means the value of goods upto five thousand rupees in terms of section 19C ibid, while “postal goods” means goods cleared in terms of the provisions of the "Landing and Clearing of Parcels Rules" (Chapter XVI of the Customs Rules, 2001), and “courier goods” means air cargo cleared by couriers.
For the purpose of application of the provisions of "De minimis Rules for Imported Goods", the value mentioned on the label of the postal good or the courier receipt is to be considered as the declared value. For conversion of invoice value into Pak Rupees, the postal or courier authorities shall take the official exchange rate of the previous day. The postal or courier authorities will further be required to submit a separate list of the goods along with invoices and other documents, if any, to show that the declared value is upto five thousand rupees within the scope of Rule 366 ibid.
The Customs authorities will scrutinize the list and shall have the right to examine or detain any goods to verify the declared value or compliance to the requirements of any other law applicable thereon.
Pakistan Customs have added Chapter XXXV in the Customs Rules, 2001, whereby the Customs (Advance Ruling) Rules, 2020, have been introduced. This step is in consonance with the international best practices, more particularly with the WCO's Revised Kyoto Convention, whereby the Customs authorities in Pakistan will now issue Advance Ruling on matters relating to -
(a) classification of goods under the First Schedule to the Customs Act, 1969;
(b) origin of the goods under the preferential rules of origin; and
(c) applicability of notifications on imposition of duties under the Customs Act, 1969, or any tax or chargeable akin to customs duty collected under the Customs Act, 1969.
As per Rule 792 ibid, an applicant desirous of obtaining an advance ruling under these Rules will apply in the format prescribed under Annex A & B to the Secretary, Advance Ruling Committee, stating the question on which such advance ruling is sought. An undertaking from the applicant that no issue in relation to the goods on which the ruling is sought, is pending before a Customs office, port of entry, adjudicating authority, tribunal or court, will be mandatory. As such, Customs authorities have been empowered to reject such an application if -
(a) the applicant furnishes incomplete, or incorrect or false or misleading information;
(b) the facts or circumstances of the case undergo any change;
(c) the issue is found pending before an adjudicating authority, appellate tribunal, or a court of law; or
(d) the issue has already been decided by an adjudicating authority, appellate tribunal or any court of law.
Likewise, the Advance Ruling shall be void where the Advance Ruling Committee finds that an advance ruling pronounced by it under sub-section (1) of section 212B of the Customs Act, 1969, has been obtained by the applicant by providing incomplete, incorrect, false or misleading information.
Pakistan Customs have added Chapter XXXII in the Customs Rules, 2001, titled the Authorized Economic Operator Rules.
Authorised Economic Operator or “AEO” means a certified entity which fulfills the security criteria stipulated under the Rules and fulfills the prescribed obligations. Eligible entities may include manufacturers, importers, exporters, custom house agents, brokers, shipping lines, earners, consolidators, intermediaries, ports operators, airports operators, terminal operators, integrated operators, warehouses, distributors, freight forwarders and logistic service providers.
The AEO certifying authority in this context is the Director or Collector under section 212A of the Customs Act, 1969, in whose jurisdiction the business premises of the authorized economic operator is located. Such certification is to be granted after approval from the AEO Board.
There will be three categories of AEOs under the Rules: Gold, Platinum and Silver. Separate criterion has been stipulated for each category.
Any economic operator applying for the AEO status must fulfill the following criteria:
(a) Compliance with Customs laws;
(b) Satisfactory system of managing commercial and transportation records;
(c) Financial solvency;
(d) Professional competence; and
(e) Observance of safety and security standards.
The introduction of the AEO regime in the customs context means implementation of the WCO Framework of Standards to Secure and Facilitate Global Trade. The certification of Pakistani businesses in the AEO matrix would be beneficial for them in regards to their risk-scoring in the national customs risk-management system.
Pakistan Customs have added Chapter XXXIII titled Electronic Auction (e-Auction) Rules in the Customs Rules, 2001
Pakistan Customs have floated draft amendments in the TIR Rules to facilitate and streamline traffic-in-transit to and from Pakistan under the UNECE's TIR Convention, 1975. The proposed amendments, inter alia, include -
- incorporation of 'Pakistan National Committee of International Chamber of Commerce (PNC-ICC Pakistan)' as a 'body';
- inclusion of insurance guarantee from an “A”rated insurance company in the term 'encashable guarantee';
- mandatory requirement for a TIR applicant to have sound financial standing, to be proved by bank statements and audited accounts and filed income tax returns. In case of a newly formed or converted entity to a private limited company, the applicant entity shall provide a certificate of sound financial standing, along with an undertaking to provide audited financial statements of three years subsequently;
- furnishing of a supplementary financial guarantee by the national guaranteeing association in the form of an insurance guarantee from an “A” rated insurance company for a sum of fifteen million rupees or defence saving certificates of equivalent amount in terms of clause (xxvi) of sub-rule (1) of Rule 689 of the Customs Rules, 2001, to the Director, Directorate of Transit Trade, Pakistan Customs, Karachi/
The amendments are aimed at refining the nascent TIR transit system in Pakistan, which has seen a little over 20 TIR cross-border movements so far since its inception a few years ago. The proposed amendments seek to remove the hardships in meeting the stringent TIR enrollment criteria for the aspirant logistics companies belonging to the informal or SME sectors.
Pakistan Customs have introduced Transportation of Coastal Goods Rules by virtue of addition of Chapter XXXVI in the Customs Rules, 2001.
The new Rules will regulate the transportation of goods in a coasting vessel from one port in Pakistan to another, barring such imported goods on which customs duty has not been paid, or goods classified as baggage or stores. The Rules will encompass FCL containerized cargo carried either in domesticated or imported containers, and LCL or bulk cargo. Sections 48, 60, 64, 65 and 66 of the Customs Act 1969, will apply to coastal goods and vessels in a manner akin to imported goods or goods meant for export.
The procedure for the transportation of coastal goods will comprise the following steps:
- the master of the coasting vessel or his authorized shipping agent will file an outward coastal general manifest specifying details of the goods;
- no vessel shall take on board any coastal goods until the outward coastal goods declaration relating to such goods has been passed by the designated customs officer;
- the coasting vessel will complete its voyage on the prescribed route, and will report to the unloading port within a specific time period; and
- on completion of the voyage, the master of the vessel or his authorized shipping agent will file inward coastal general manifest specifying all details of goods and crew loaded or boarded on the vessel; and
- standard procedure on goods clearance shall apply.
The transportation of coastal goods mechanism will extend the customs outreach to the marine traffic in coastal goods. This mechanism should, in due course, reduce congestion in overland transportation of goods.
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