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Petroleum sector: SBP amends forex manual for remittance process

KARACHI: The State Bank of Pakistan (SBP) on Tuesday has amended the Chapter 14, of the Foreign Exchange Manual for the process of remittance for Petroleum Sector According to SBP, based on representations received from various stakeholders, it has been decided to amend Para 27 of Chapter 14, of Foreign Exchange Manual in terms of which SBP notified the process of remittance for Petroleum Sector operating under Petroleum Concession Agreement(s).

As per revived Para 27 titled “Remittance for Petroleum Sector Operating under Petroleum Concession Agreement(s)” Authorized Dealers are allowed to effect remittances on account of purchase of Oil and Gas from Oil & Gas Exploration and Production (E&P) Companies operating in Pakistan under Petroleum Concession Agreements.

All such remittances may be effected by the Authorized Dealer after satisfying itself about the genuineness of the transaction by reviewing the following documents:

i. Request letter from the applicant (Remitter).

ii. Copy of duly executed valid Concession Agreement (to be submitted once during the validity period).

iii. Details of Seller’s Working Interest.

Commercial remittances: SBP notifies revision in FE instructions

iv. Copy of valid underlying agreement/contract, etc., between Applicant (purchaser) and seller (to be submitted once during validity period) – wherever applicable.

v. Form “M” duly filled signed and stamped by the applicant

vi. Invoices complying the above mentioned underlying agreements, with complete details including quantity, description of goods, price, and conversion rate duly signed and stamped by the seller.

vii. Verification of each invoice by a designated senior officer of the buying company along with stamp and signature.

viii. Foreign Exchange allocation /No objection/approval of Ministry of Finance, where applicable.

ix. Undertaking from the applicant to the effect that no payment has been made against the invoice(s) in question. The undertaking can also be made part of the request letter.” According to SBP, in case of any exemption from documentary requirements stipulated above, the Authorized Dealer will approach Foreign Exchange Operations Department, SBP-Banking Services Corporation Karachi with proper rationale and recommendations.

SBP has advised authorized dealers to bring these instructions to the notice of all their constituents for meticulous compliance. It may be mentioned here that previously only six documents were required for the process of remittances, now the companies will need to submit some nine documents.

Copyright Business Recorder, 2021

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