ISLAMABAD – The Ministry of Commerce has proposed key amendments to Pakistan’s Barter Trade Mechanism (SRO 642(I)/2023) to simplify trade with Iran, Afghanistan, and Russia. The draft proposals were prepared after consultations with public and private stakeholders, the State Bank of Pakistan (SBP), the Ministry of Foreign Affairs (MoFA), and the Pakistan Single Window (PSW), according to a release by Wealth Pakistan.
Launched on June 1, 2023, the barter trade framework was designed to enable non-cash trade with neighbouring countries. The Ministry of Commerce has proposed several key changes to make operations more flexible. One major amendment is the removal of the fixed list of importable products in the SRO, aligning it instead with the Import Policy Order and Export Policy Order 2022.
Another key proposal allows private entities to replace mandatory verification by Pakistan Missions or MoFA with self-undertakings confirming compliance with UN and international sanctions. Additionally, the “import followed by export” condition may be replaced with a flexible “imports/exports” formula.
The amendments also allow multiple Pakistani firms to form consortiums for barter trade, enabling joint contracts with foreign partners. Traders will need to net off goods’ values on a quarterly basis, within 120 days of transactions, under Customs’ oversight. To safeguard compliance, the FBR has suggested that both Pakistani traders and foreign chambers provide undertakings confirming that entities are not sanctioned. All consortium members will be jointly and severally liable under the Customs Act, 1969, and the Imports and Exports (Control) Act, 1950.
While MoFA and SBP have agreed on the revised framework, PSW noted that undertakings uploaded on the WEBOC platform cannot be electronically validated, leaving Customs responsible for confirming non-sanctioned status. The Law Division has vetted the revised draft, and the Ministry of Commerce has submitted it for federal cabinet approval. Once approved, an amended SRO will operationalise the reformed barter trade mechanism.
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