Regulatory Procedures

Customs Clearance Procedure for Exports

Prepared By: Policy Planning & Strategy (Revised on July 15, 2002) Small and Medium Enterprise Development Authority
Government of Pakistan www.smeda.org.pk
HEAD OFFICE Waheed Trade Complex, 1st Floor , 36-Commercial Zone, Phase III, Sector XX, Khayaban-e-Iqbal, DHA Lahore Tel: (042) 111-111-456, Fax: (042) 5896619, 5899756

Helpdesk@smeda.org.pk
REGIONAL OFFICE PUNJAB Waheed Trade Complex, 1st Floor, 36-Commercial Zone, Phase III, Sector XX, Khayaban-e-Iqbal, DHA Lahore. Tel: (042) 111-111-456 Fax: (042) 5896619, 5899756 helpdesk@smeda.org.pk REGIONAL OFFICE SINDH 5TH Floor, Bahria Complex II, M.T. Khan Road, Karachi. Tel: (021) 111-111-456 Fax: (021) 5610572 helpdesk-khi@smeda.org.pk REGIONAL OFFICE NWFP Ground Floor State Life Building The Mall, Peshawar. Tel: (091) 9213046-47 Fax: (091) 286908 helpdesk-pew@smeda.org.pk REGIONAL OFFICE BALOCHISTAN Bungalow No. 15-A Chaman Housing Scheme Airport Road, Quetta. Tel: (081) 831623, 831702 Fax: (081) 831922 helpdesk-qta@smeda.org.pk

Customs Clearing Procedure for Export

Policy, Planning & Strategy

TABLE OF CONTENTS

1. Introduction to SMEDA 2. Role of Policy Planning and Strategy Group 3. Custom Clearing Process for Exports 4. Flow Chart Custom Clearing Process of Exports 5. Annexes: Sample Forms & Certificates

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Introduction of SMEDA
The Small and Medium Enterprise Development Authority (SMEDA) was established with the objective to provide fresh impetus to the economy through the launch of an aggressive SME development strategy. Since its inception in October 1998, SMEDA has adopted a sectoral SME development approach. A few priority sectors were selected on the criterion of SME presence. In depth research was conducted and comprehensive development plans were formulated after identification of impediments and retardants. The all-encompassing sectoral development strategy involved overhauling of the regulatory environment by taking into consideration other important aspects including finance, marketing, technology and human resource development. SMEDA has so far successfully formulated strategies for sectors, including fruits and vegetables, marble and granite, gems and jewellery, marine fisheries, leather and footwear, textiles, surgical instruments, transport and dairy. Whereas the task of SME development at a broader scale still requires more coverage and enhanced reach in terms of SMEDAs areas of operation. Along with the sectoral focus a broad spectrum of services are now being offered to the SMEs by SMEDA, which are driven by factors like enhanced interaction amongst the stakeholders, need based sectoral research, over the counter support systems, exclusive business development facilities, training and development for SMEs and information dissemination through wide range of publications.

Role of Policy Planning and Strategy Group

The Policy, Planning and Strategy Group (PPSG) of SMEDA plays a key role in providing an overall policy direction to SMEDA, under which SMEDA provides support to SMEs. The PPSG provides guidance based on field realities pertaining to SMEs in Pakistan and other parts of the world. PPSG believes that information dissemination among the SMEs on the existing regulatory environment is of paramount importance and it can play a pivotal role in their sustainable development. In order to facilitate SMEs at the Micro Level PPSG has developed user-friendly systems, which provide them detailed description of the Laws, and Regulations including the process and steps required for compliance. The purpose of this document is to disseminate information amongst the SMEs about the regulatory compliance requirements for exports. The document is accompanied with sample forms to give the reader a fair understanding of numerous procedural details.

Customs Clearing Procedure for Export

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Custom Procedure for Exports

Exports play a vital role in the development of any economy. One of the initiatives taken by the Government of Pakistan to enhance & boost exports, is to provide various export incentives as well as streamlining export processes. Among other steps taken by Government, the simplification of the export clearance procedure is considered to be a vital step in the facilitation of the exporter. The following procedure has been explained in terms of various stages of inspection, clearance and documentation required:

Clearing Procedure
Once the consignment to be exported arrives at the port, usually a clearing agents services are sought so as to facilitate the procedure of clearing the consignments. The documents to be provided by an exporter to the clearing agent are as follows: a) b) c) d) e) Packing list Invoice Form E 1(State Bank form) Letter of Credit or Contract Certificate of Origin

However if the exporter is exporting for the first time, then the following documents have to be provided in addition to those mentioned above: a) Sales Tax Registration Certificate (copy) b) NTN Number (certificate) c) Export Registration Certificate (No longer required according to SRO 490(I)/2002 dated 5th August, 2002) Provided the above mentioned documents are complete, the clearing agent prepares the shipping bill and files the documents with Custom department. A machine number is allotted to the Shipping Bill, and the case is forwarded to the Port Gate. The consignment is allowed to enter the port vicinity, and is registered at the gate according to the allotted number. The Deputy Superintendent (D.S.) marks the consignment for examination to the inspector of the examination hall. Once the inspector has examined the consignment, the case is marked to the D.S. for approval. 2% Export Development Surcharge (EDS) of the invoice value shall be deducted through receiving banks upon remittance of export proceeds against the Export Development Fund (EDF). However, EDS has been waived off for small exporters and those who exceeded their exports more than 10%. Provided the D.S. approves the case, it is forwarded to the Superintendent with the examination report for final approval. The case if approved by the Superintendent is marked to the D.S. for Out of Charge. The container is given a final physical check and is sealed by the bonded carriers or the port customs authority. The loading programme is obtained from the shipping firm/cargo carrier for the country to which the consignment is being exported. Loading programme lists the schedule of various ships leaving port for the export destination along with the availability and
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4 copies of Form E are issued by the intermediary, one copy is handed to the exporter and one copy is retained by the bank. The remaining two copies are required to be sent to the State Bank of Pakistan and the Customs department respectively.

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reservation of space for shipment. Exporters of goods in large quantities generally use the services of shipping companies of their own choice. The flow chart on the following page shows the customs clearance process for exports:

CUSTOM CLEARANCE PROCESS FOR EXPORT

Consignment to be shipped arrives at the port

The clearing agent is engaged

Following documents provided: a) Packing List b) Invoice c) Form E d) Letter of credit (Contract) e) Certificate of Origin If exporting for the first time: a) Sales tax registration b) NTN number c) Export Registration (Copy)

Preparation of shipping bill

Machine Number allotted Case marked to the gate Case number entered

Consignment is allowed to enter the port vicinity

Case is marked by D.S. to inspector for examination

Upon inspection case marked to D.S. for approval

Payment of 2% of invoice value made for export development fund (EDF) through recieving banks upon remittance of export proceeds

Case marked to Superintendent for approval

Case marked to the D.S. for Out of Charge

Loading program is obtained and space is secured on the next available ship for desired port.

The container is sealed for shipment

Customs Clearing Procedure for Export

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Packing List

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Invoice

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E-Form

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Letter of Credit

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Certificate of Origin

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Sales Tax Registration Certificate

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