Foreign Exchange Laws and Regulations
Not publishedof exam
International Trade and Regulation
Not publishedof exam
Foreign Currency Remittance Modalities
Not publishedof exam
SBP FE Returns and Applications
Not publishedof exam
Quick Facts
- Program
- Foreign Trade Certificate
- Owner
- NIBAF with SBP-BSC FEOD
- Modules
- Four official typologies
- Weights
- Not published
- Format
- Not published
- Pass mark
- Not published
- Fee
- Not published
- Entry
- Bank nomination, no public route
- Core law
- FERA 1947, FE Manual
- Key rules
- UCP 600, URC 522, Incoterms
Export Clock Ladder
45 sight | 120 normal | 135 usance | 180 carve-out
45: DP, CAD, sight120: general rule135: 120-day usance180: discounted or B2B2C
120 Days vs 180 Days
General rule
- Due date or 120
- Whichever comes earlier
- F.E. 1/2022-SB
Carve-outs
- Discounted, sold forward
- B2B2C platform exports
- Both 180 days
180 days is exceptional
Export Realization Clock
- Standard firm contract→120 days(Or due date)
- DP, CAD or sight→45 days(From shipment)
- Usance 120 days→135 days(From shipment)
- Discounted, sold forward→180 days(Within 14 days)
- B2B2C platform sale→180 days(Overdue at 270)
- Proceeds just received→Three working days(Then sell)
- Exporter seeks extension→Dealer may allow(Never past 120)
- Already reported overdue→No extension(FEOD case)
FERA 1947 Essentials
- FERA 1947
- Governing foreign exchange statute
- FE Manual
- SBP directions issued under FERA
- FERA section 3
- Authorizes dealing in exchange
- FERA section 3B
- Withdraws dealer authorization
- FERA section 4(2)
- Dealers set own rates
- FERA section 23K
- Penal action against dealers
- Exchange Policy Department
- Issues dealer licences
- FEOD SBP-BSC
- Operations approvals and reporting
- Spread cap
- Fifty paisa per dollarRetail only
- Interbank exempt
- Spread cap does not apply
- Licence scope
- May restrict currencies, transactions
Import Advance Clock
120 goods | 730 machinery | 0.1% daily penalty
120 days ordinary goods730 days plant, machinery0.1% per delayed dayRTGS account 427518
Authorized Dealer Duties
- Pre-transaction declaration
- Customer must satisfy dealer
- Refuse and report
- On refusal or suspected evasion
- Evasion reporting
- Immediately, as it arises
- Returns
- Filed on prescribed due dates
- Branch reporting
- Consolidated by head office
- Appendix IV
- List of Authorized Dealers
- Appendix V
- All prescribed forms, returns
- Branch designation
- Dealer decides, SBP codes
- Licence refusal
- No reason need be given
Export Realization Clocks
- General rule
- Due date or 120 daysEarlier wins
- Authority
- F.E. 1/2022-SB, 5 January 2022
- DP, CAD, sight
- 45 days from shipment
- 120-day usance terms
- 135 days from shipment
- Discounted, sold forward
- 180 days from shipment
- Forward-sale deadline
- Before shipment or 14 days
- B2B2C platform exports
- 180 days, overdue at 270
- Retention on realization
- Three working days maximum
- Special Exporters' Account
- Holds funds during retention
- IT, freelancer retention
- USD 5,000 monthly or 50%
- Extension limit
- Never beyond 120 days
- Overdue reporting
- Fortnightly on V-20, V-21
Import Advance Payment
- Advance limit
- Up to 100% value
- Goods deadline
- 120 days from payment
- Plant, machinery
- 730 days from payment
- Interim penalty
- 0.1% per delayed day
- Penalty deposit
- RTGS account 427518, monthly
- Appendix V-27A
- Overdue advances, 10th monthly
- Importer undertaking
- Prescribed Appendix V-31 form
- Final penalty
- FEAD adjudicates under FERA
- Dealer exposure
- Penal action under 23K
UCP Number Line
5 examine | 21 present | 110 insure | 39 articles
5 banking days examine21 days to present110% insurance cover39 articles total
UCP 600 vs URC 522
UCP 600
- Documentary credit
- Banks examine documents
- Five banking days
- Bank undertaking to pay
URC 522
- Documentary collection
- Check listing only
- Advise without delay
- No bank undertaking
Credit pays, collection delivers
Import Payment Mode Picker
- Need bank undertaking→Letter of credit(UCP 600)
- Documents against payment→Documentary collection(URC 522)
- Long-term supply deal→Registered contract(Financial instrument)
- Trusted supplier, spares→Open account(Manufacturers mainly)
- Supplier demands prepayment→Advance payment(Appendix V-31)
- Clean or transferable credit→Refer FEOD(Not permissible)
UCP 600 Core Articles
- Article 1
- Applies only if incorporated
- Article 4
- Credit separate from contract
- Article 5
- Documents, not goods
- Article 14(b)
- Five banking days maximum
- Article 14(c)
- 21 days after shipment
- Article 14(d)
- Data must not conflict
- Article 14(j)
- Same country address suffices
- Article 14(k)
- Shipper need not be beneficiary
- Article 16
- Single notice, every discrepancy
- Article 33
- No duty outside banking hours
- Article 36
- Force majeure never extends expiry
- Total articles
- 39, ending with assignment
Sea-Only Four
FAS, FOB, CFR, CIF stay on water
FAS: alongside shipFOB: on boardCFR: freight paidCIF: freight plus insurance
Honour vs Negotiation
Honour
- Pay, defer or accept
- Issuing bank included
- Discharges own undertaking
Negotiation
- Nominated bank purchases
- Advances before reimbursement
- Issuing bank never negotiates
Paying is not purchasing
Incoterm Picker
- Containerised, seller delivers early→FCA(Any mode)
- Bulk cargo, buyer freight→FOB(Sea only)
- Bulk, seller pays freight→CFR(Risk on board)
- Bulk, seller insures→CIF(Clauses C)
- Container, seller insures→CIP(Clauses A)
- Deliver, buyer unloads→DAP(Any mode)
- Deliver and unload→DPU(Replaced DAT)
- Seller clears import→DDP(Maximum seller duty)
UCP 600 Document Rules
- Article 18
- Invoice in credit currency
- Invoice description
- Must correspond with credit
- Article 14(e)
- Other documents may generalise
- Article 20
- On-board notation dates shipment
- Intended vessel
- Notation must name actual vessel
- Container transhipment
- Allowed despite credit prohibition
- Article 28
- 110% of CIF or CIP
- Article 28(e)
- Cover effective from shipment date
- Cover notes
- Never acceptable
- Article 30(a)
- About means 10% tolerance
- Article 30(b)
- 5% quantity, not packing units
- Article 30(c)
- 5% less drawing allowed
- Article 31(b)
- Same conveyance is not partial
Six TBML Typologies
Misprice, misship, misdescribe, or ship nothing
Under and over invoicingShort and over shipmentObfuscated goods descriptionPhantom ships nothing
CIF vs CIP
CIF
- Sea and waterway only
- Institute Cargo Clauses C
- Risk on board
CIP
- Any mode of transport
- Institute Cargo Clauses A
- Risk at first carrier
CIP insures more widely
URC 522 Collections
- Total articles
- 26, in seven sections
- Clean collection
- Financial documents only
- Documentary collection
- Commercial documents involved
- Principal
- Entrusts the collection
- Remitting bank
- Receives from the principal
- Collecting bank
- Any bank besides remitting
- Presenting bank
- Presents to the drawee
- Article 7 default
- Silence releases against payment
- Article 12
- Check listing, not contents
- Article 20
- Interest waivable unless barred
- Article 21
- Charges waivable unless barred
- Article 26
- Advise without delay
- Sixty days
- Then documents may return
FOB vs FCA
FOB
- Sea and waterway only
- Risk when on board
- Wrong for containers
FCA
- Any mode of transport
- Risk at handover
- Optional on-board bill
Containers belong under FCA
Incoterms 2020 Rules
- Rule count
- Eleven rules, two groups
- Any mode
- EXW, FCA, CPT, CIP
- Any mode delivered
- DAP, DPU, DDP
- Sea, waterway only
- FAS, FOB, CFR, CIF
- DPU
- Replaced DAT, seller unloads
- CIF insurance
- Institute Cargo Clauses C
- CIP insurance
- Institute Cargo Clauses A
- Insured amount
- 110% of contract price
- EXW
- Maximum obligation on buyer
- DDP
- Maximum obligation on seller
- Export clearance
- Seller, except under EXW
- Import clearance
- Buyer, except under DDP
- FCA change
- Optional on-board bill of lading
- Title
- Incoterms never transfer ownership
Payment vs Acceptance Release
D/P
- Documents against payment
- Default when silent
- Buyer pays first
D/A
- Documents against acceptance
- Must be stated
- Buyer accepts draft
Silence means against payment
Pakistan Import Terms
- Permitted terms
- FOB, FCA, FAS, CFR, CPT
- EXW condition
- Pay against documents, insure warehouse
- Other Incoterms
- Need prior FEOD permission
- Import modes
- Credit, contract, collection, open, advance
- Clean credits
- Not permissible, refer FEOD
- Transferable credits
- Not permissible, refer FEOD
- Revolving credits
- Time-based ones permitted
- Open account medicines
- USD 50,000 life-saving items
- Open account others
- USD 10,000 essential items
- PSW instrument
- Issued before declaration attaches
- Bank Debit Advice
- Reports the import payment
- EIF inaction
- Expires after 15 days
TBML Typologies
- Under invoicing
- Priced below fair market value
- Over invoicing
- Priced above fair market value
- Short shipment
- Ships less than invoiced
- Over shipment
- Ships more than invoiced
- Obfuscation
- Disguises goods or services
- Phantom shipment
- False invoice, nothing shipped
- Framework source
- EPD Circular Letter 08, 2025
- Dual use goods
- Civil and military application
- Overdue export bill
- Proceeds unrealized within period
- Overdue open-account import
- Unpaid one year after clearance
Account Family Map
Rupee: NRAR, NRAN | Value: NRVA, FCVA
NRAR: repatriable rupeesNRAN: non-repatriable rupeesNRVA, FCVA: individualsNRBVA, FCBVA: entities
NRAR vs NRAN
NRAR
- Repatriable balances
- Usable abroad
- Overseas card allowed
NRAN
- Non-repatriable balances
- Pakistan payments only
- No overseas card
Repatriable or not
Account Picker
- Non-resident wants repatriable rupees→NRAR(Rupee account)
- Resident becomes non-resident→NRAN(Non-repatriable)
- NRP investing in Pakistan→NRVA(Individuals only)
- Foreign entity, NRP owned→NRBVA(51% test)
- NRP wants foreign currency→FCVA(Individuals only)
- Foreign entity, currency account→FCBVA(51% test)
- Ordinary depositor→FE-25 account(Ten currencies)
- STZA licensed entity→Special STZ account(No cash)
Chapter 10 Remittance Basics
- Inward remittance
- Any purchase of foreign currency
- Outward remittance
- Any sale of foreign exchange
- Form I
- Remittance against imports
- Form T-1
- Exchange sold for travel
- Form M
- All other outward remittances
- Home remittance credit
- Instant, or 24 hours interbank
- Delay compensation
- Sixty-five paisa per thousand daily
- Approval validity
- Thirty days unless stated otherwise
- Cancelled outward remittance
- Reported as inward remittance
- Cancelled inward remittance
- Reported outward on Form M
- Application route
- Always through an Authorized Dealer
- e-PRC
- Electronic proceeds realization certificate
FCVA vs FCBVA
FCVA
- Individuals only
- Non-resident or declaring resident
- Real estate eligible
FCBVA
- Legal entities only
- 51% NRP ownership
- No sole proprietorships
Person versus company
Foreign Currency Accounts
- FE-25 currencies
- Ten currencies permitted
- Cash deposit check
- Above USD 10,000 daily
- Resident cash feeding
- Filer status required
- Banned feeding
- Export proceeds, local services
- Personal account limit
- No commercial or business use
- Lien cap
- Facilities capped at balance
- FCVA
- Individual non-resident or declaring resident
- FCBVA
- Foreign entity, 51% owned
- STZ account
- STZA licensee, no cash
- Entity data threshold
- Above USD 25,000 monthly
Non-resident Rupee Accounts
- NRAR
- Repatriable non-resident rupee account
- NRAN
- Non-repatriable, usable in Pakistan
- NRVA
- Individual NRP or POC holder
- NRBVA
- Foreign entity, 51% owned
- Residency test
- Income tax law, not days
- NRAR initial deposit
- Rupees 5,000 from domestic sources
- Property capital gain
- Repatriable after three years
- Valuation tolerance
- Plus or minus 10%
- Valuation age
- Not older than three months
- Title document
- Within six months of payment
Commercial Remittance Caps
- Manufacturing royalty
- Up to 8% net sales
- Export-related royalty
- Up to 10% export sales
- Service sector royalty
- Up to 5% net sales
- Brand name only
- Restricted to 2% sales
- Financial sector
- 0.25% of customer billing
- Digital services
- USD 400,000 yearly per entity
- Unlisted providers
- USD 40,000 of that limit
- IT services
- USD 100,000 per invoice
- Acquired services
- USD 25,000 without FEOD
- Designated dealer
- One bank per agreement
- Dividends
- No prior SBP approval needed
Private Remittance Rules
- Family remittance cap
- Net income less Pakistan expenses
- Excluded nationals
- Indian and Afghan nationals
- Permit basis
- Yearly and non-cumulative
- Accumulation limit
- Two months without SBP approval
- Social club fees
- No exchange made available
- Professional body fees
- Allowed at actuals
- Bonus treatment
- Spread over twelve months
- Asset transfer
- Refer to the State Bank
- Employment certificate
- Ten years before retirement
- Residual purposes
- Form M to SBP-BSC
Return Deadline Run
4 portal | 5 office | 17 branches | 12 quarterly
4th: Form E data5th: head office summaries17th: Schedules O, P12th: quarterly Schedule K
Schedule A-1 vs J
Schedule A-1
- Export receipts
- Certified Form E
- Country and HS codes
Schedule J
- All other receipts
- Form R, IRV
- Invisible receipt codes
Exports never on J
Schedule Picker
- Certified Form E→Schedule A-1(Export receipt)
- Export advance payment→Schedule A-2(No Form E)
- Re-export imported goods→Schedule A-3(Export receipt)
- Receipt, not export→Schedule J(Form R)
- Import payment→Schedule E-2(Form I)
- Travel exchange sale→Schedule E-3(Form T-1)
- Other outward remittance→Schedule E-4(Form M)
- Private non-resident account→Schedule K(Quarterly)
- Aid import, no remittance→Schedule LAC-NR(No payment)
Summary Statements
- S-1
- All foreign currency transactions
- S-4
- Non-resident bank rupee accounts
- S-6
- Foreign currency note transactions
- S-6 copies
- Submitted in duplicate
- One currency each
- Never mix currencies together
- Balanced abstract
- Opening and closing balances
- Single S-4
- Covers all non-resident accounts
- Absent statements
- No S-2, S-3, S-5
S-1 vs S-4
S-1
- Foreign currency transactions
- One statement per currency
- Excludes note holdings
S-4
- Non-resident bank rupees
- One consolidated statement
- Rupee amounts only
Currency versus rupee accounts
Export Receipt Schedules
- A-1
- Certified Form E purchases
- A-2
- Advance payments, part realizations
- A-3
- Re-export of imported goods
- Grand total rule
- A-2 and A-3 into A-1
- Nil A-1
- Still filed showing nil
- Schedule J
- All receipts except exports
- Form R
- Above USD 10,000 receipts
- IRV
- USD 10,000 or less consolidated
- Family maintenance
- Always consolidated on one voucher
- Receipt branch schedules
- O-1, O-2, O-3
Payment and Position Schedules
- E-2
- Form I import sales
- E-3
- Form T-1 travel sales
- E-4
- Form M other remittances
- Schedule B
- Purchases against other currencies
- Schedule C
- Purchases from Pakistani dealers
- Schedule D
- Bought from, sold to SBP
- Schedule F
- Sales against other currencies
- Schedule G
- Sales to Pakistani dealers
- Schedules H, L, M
- Non-resident bank account movements
- Schedule N
- Closing non-resident bank balances
- Schedule R
- Credits from other non-resident accounts
- Schedule K
- Quarterly private non-resident accounts
- EL2, EL3
- Loan, credit financed imports
- LAC-NR
- Aid imports, no remittance
- Payment branch schedules
- P-2, P-3, P-4
Return Filing Deadlines
- Branch summaries
- Third of following month
- Head office summaries
- Fifth of following month
- Form E data
- Fourth, via Data Acquisition Portal
- Pending Form I list
- Fifth, with running serial numbers
- Schedules O, P
- Seventeenth of following month
- Schedule K
- 12 April, July, October, January
- Import commitments
- Fortnightly, by 22nd and 7th
- Blocked accounts
- Yearly, reaching SBP 7 January
Code Lists and NTN
- Code-3
- Country codes
- Code-4, Code-6
- Replaced by HS classification
- Code-5
- Invisible receipts, Schedule J
- Code-7
- Invisible payments, Schedules E-3, E-4
- Code-8
- Department codes for payments
- IMF basis
- Balance of Payments, fifth edition
- NTN
- Recorded on E, I, R
- Supervisory check
- Rupees 100,000 and above
- Misreporting
- Regulatory action under FERA
Common Traps
Realization deadline
General rule 120 days ≠ Not 180 days
Which 180 days
Discounted, sold forward ≠ Or B2B2C platforms
Insurance clauses
CIF uses Clauses C ≠ CIP uses Clauses A
Tolerance article
Tolerances live in 30 ≠ Not Article 18
Force majeure
Article 36 excuses banks ≠ Expiry never extends
Collection default
Silence releases against payment ≠ Not against acceptance
Collection advice
Advise without delay ≠ 60 days returns documents
Bank examination
UCP checks compliance ≠ URC checks listing only
Schedule choice
Exports on A-1 ≠ Never on Schedule J
Incoterms scope
Risk and cost only ≠ Never title or ownership
Non-resident test
Income tax law governs ≠ Not 183 days
Last Minute
- 1.Exports realize in 120 days
- 2.Sight, DP, CAD realize in 45
- 3.180 days: only two carve-outs
- 4.Import advance 120 goods, 730 machinery
- 5.Late advance costs 0.1% daily
- 6.UCP examines in 5 banking days
- 7.Present within 21 days shipment
- 8.Insure 110%; CIF C, CIP A
- 9.URC silence means against payment
- 10.EXW buyer max; DDP seller max
- 11.Imports: FOB, FCA, FAS, CFR, CPT
- 12.Clean and transferable credits barred
- 13.Certified Form E goes to A-1
- 14.Import Form I goes to E-2
- 15.Form M remittances land on E-4
- 16.Branch 3rd, head office 5th
- 17.S-1 currency; S-4 rupee accounts
- 18.Non-resident: income tax law test
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