The Ministry of Commerce has rescinded the suspension of Statutory Regulatory Order (SRO) 760 of 2013, which governs the trade of precious metals, allowing for the import and export of gold, it emerged on Saturday.
In May, the government had enacted the 60-day import and export ban on precious metals and gemstones to stabilise its foreign exchange reserves. The restriction was also linked to the military conflict with India as a potential strategy to limit the flow of precious metals via Dubai. In a fresh SRO2198 dated November 21, the Ministry of Commerce rescinded its May directives for the ban, thereby allowing the import and export of gold and other precious metals.
The ministry further said the period of suspension so far under SRO760 was “accordingly condoned, thereby enabling exporters to avail the mandatory entitlement period of 120 days under the entrustment scheme”.
The entrustment scheme provides a facility for the export of jewellery against imported gold supplied as a partial advance payment, by the foreign buyer in the manufacturing of jewellery to be exported. In addition, exporters are required to only export eligible and authorised items within 120 days from the date of import. Gold is still used as a traditional store of value and is an important part of Pakistan’s cultural, financial, and manufacturing sectors. Pakistan predominantly imports gold from the United Arab Emirates, Switzerland and other gold-trading hubs.
Industry leaders had previously stated that the restrictions on gold trade had effectively paralysed the gold and jewellery export sector, with exporters unable to fulfill orders despite having received raw gold under legal contracts from international buyers.
In a letter to Prime Minister Shehbaz Sharif, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Atif Ikram Sheikh had called for the immediate restoration of SRO 760 to protect the jewellery export industry. In October, the Economic Coordination Committee had approved the continuation of the existing framework with enhanced transparency and automation measures to improve efficiency and traceability on the import and export policy for precious metals and jewellery. Separately, the Ministry of Commerce also made several amendments to SRO760, originally titled ‘Import and Export of Precious Metals, Jewellery and Gemstones Order 2013’.
It renamed SRO760 to ‘Import and Export of Precious Metals and Jewellery Order 2013’. Further, the definition of “jewellery passbook”, issued by the Trade Development Authority of Pakistan (TDAP), has been expanded to include “either paper or digital” versions of it by amending Clause 2(j). TDAP monitors the import of gold and export of jewellery. All transactions are recorded in ‘jewellery passbook’ which is authenticated by the authority.
Further, the scope of trade allowed under Clause 3(2) has been clarified from “the import or export of precious metals, gemstones and jewellery” to “the import of precious metals and gemstones and export of jewellery”. Regarding customs stations where exports or imports are allowed under Clause 3(9), the government has specified the procedure in case of operational issues by adding: “In the event of operational constraints, a no objection certificate shall be required from the respective additional or deputy collector of customs to allow one-time change of customs stations.”
On imports allowed under the entrustment scheme, the second provision of “import” under Clause 4(2) now includes that the contract may be apostilled under the Apostille Convention, 1961. The provision now reads: “TDAP shall ensure that the contract signed by the supplier is notarised from the relevant foreign country’s legal authorities, duly attested by the relevant Pakistan Missions abroad or apostilled under the Apostille Convention, 1961 where applicable. The contract shall contain inter alia, all information as prescribed in Annex-D.” Lastly, a new paragraph (iii) has been inserted into the “export proceeds” heading under Clause 4(2): “All the transactions under the entrustment scheme shall be processed exclusively through the same bank, ie export of jewellery from the same bank that processed or handled the corresponding import of precious metals.”