Amendments in Customs Rules, 2001 (addition of new chapter XLVII Freight Forwarders Licensing Rules)

Government of Pakistan

(Revenue Division)

Federal Board of Revenue

*****

Islamabad, the/Zs^May, 2025.

NOTIFICATION

R.O.5 / (I)/2025.- The following draft of further amendment in the

SJ

s Rules, 2001, which the Federal Board of Revenue proposes to make in

Customs Rules,

exercise of the powers conferred by section 219 of the Customs Act, 1969 (IV of

1969), section 50 of the Sales Tax Act, 1990, section 40 of the Federal Excise

Act, 2005 and section 237 of the Income Tax Ordinance, 2001 (XLIX of 2001),

is hereby published for information of all persons likely to be affected thereby

and, as required under sub-section (3 A) of the said section 219, notice is hereby

given that objections or suggestions thereon, if any, may be sent for consideiation

of the Board, within fifteen days of publication of this Notification in the official

Gazette Objections or suggestions which may be received from any person,

before the expiry of the aforesaid period, shall be taken into consideration by the

Federal Board of Revenue, namely: -

DRAFT AMENDMENT

In the aforesaid Rules, after Chapter-XLVI, following new Chapter-XLVII

shall be added, namely: -

“Chapter XL VII

FREIGHT FORWARDERS LICENSING RULES

1. Definitions - In this chapter, unless there is anything repugnant in

the subject or context: -

(a) “air shipment” transportation of goods/cargo by air viz aircraft;

(b) “airways bill” means a document which serves as a contract of

carriage for goods shipped by air, and is construed as a contract of

carriage between the shipper and the airlines;

(c) “dispute resolution committee (DRC)” means the committee

established under rule 1261 for resolving disputes;

(d)“e-commerce shipment” means goods/cargo handled through e-

commerce’s channel by 3PL, 4PL, and 5PL manner;

1

(e) “freight forwarder” means a person or a company, as an agent,

concluding a contract with a customer on freight forwarding

services relating to carriage, consolidation, deconsolidation,

storage, handling, packing or distribution of the goods, as well as,

ancillary and advisory services in connection therewith;

(f) “freight forwarder association” an association registered in

Pakistan, under Directorate General of Trade Organizations

(DGTO), Ministry of Commerce vide Trade organization Act, 2013,

and Trade Organization rules, 2013, such as PIFFA (Pakistan

International Freight Forwarders Association);

(g) “form” means a form in this chapter;

(h) “house bill of lading” means a document issued by the Freight

Forwarder or a Non-Vessel Operating Common Carrier (NVOCC),

to the shipper/consignee, representing a specific individual

shipment within the larger cargo, each having its own set of terms

and conditions;

(i) “license” means a license granted under this chapter to act as a

freight forwarder;

(j) “licensee” means a person or a legal entity to whom a license is

granted under this chapter to act as a freight forwarder;

(k) “licensing authority” means a committee comprising of the

Collector of Customs HQ (Exports-IOCO), Collector of Customs

(Enforcement), Karachi and Collector of Customs JIAP, Karachi;

and

(1) “master bill of lading” means a document issued by the carrier

(shipping line or airline) to the shipper or the freight forwarder,

serving as a contract of carriage of goods, against the entire

shipment, encompassing all individual consignments.

1. Application.- (1) No person shall operate as freight forwarder

unless licensed under these rules.

(2) Any person who seeks to obtain licence as freight forwarder

shall make an application to the licensing authority on the format as set

out in Form-A along with the following documents with treasury challan

evidencing payment of five thousand rupees in favour of the Collector of

2

Customs, on account of application processing fee, which shall be non-

refundable, namely:-

(a) NTN and applicable STRN;

(b) copy of CNIC (in case of proprietorship), partnership deed

registered with the registrar of firms, along with CNICs of all the

partners (in case of partnership), certificate of incorporation Form

29, Form A or 3A (in case of a single member company, limited

liability partnership or a private limited, issued by the Securities and

Exchange Commission of Pakistan), as the case may be;

(c) valid membership certificate issued by the freight forwarder

association in accordance with Trade Organization Act, 2013 (II of

2013) and the rules made thereunder; and

(d) photographs (4x passport size) of proprietor in case of

proprietorship, all partners in case of partnership and all directors in

case of company.

1. Eligibility to file an application - An applicant is eligible to

make an application with the licensing authority, subject to the following

conditions if he:-

is a citizen of Pakistan, and a legal entity duly registered

(a)

under the relevant laws of Pakistan;

is not below the age of 18 years at the time of filing of the

(b)

application;

is having valid membership certificate issued by freight

(c)

forwarder association in accordance with the Trade

Organizations Act, 2013 (II of 2013) and the rules made

thereunder; and

demonstrates the existence of an insurance coverage (upon

(d)

written instruction by the shipper or carrier).

1. Approval of license.- (1) Upon receipt of application, the licensing

authority shall issue license subject to fulfilment of the following

conditions, namely:-

(a) the applicant fulfills the conditions for grant of licence under these

rules;

3

(b) deposits a sum of two hundred thousand rupees as security deposit

for operating in one customs station and five hundred thousand

rupees as security deposit for operating in more than one customs

station, in the shape of Defense Saving Certificates, pledged to the

Collector of Customs; and

(c) execute a bond for ensuring good conduct and to follow customs

rules and regulations.

(2) The Collector of Customs HQ (Exports-IOCO) shall be responsible

to receive applications for processing and maintain records of the freight

forwarders.

.A V s

1. License and its conditions.- (1) The licensing authority may, on

fulfilling all conditions under rule 1209 of these rules, grant a non-

transferable license initially for a period of two years which shall be

renewable after every two years subject to the following conditions, namely:-

(a) the licence shall not be transferable or sub-let and no licensee shall

bring about a change in the composition of the company,

proprietorship or firm, as the case may be;

(b) change of status of firm from proprietorship to partnership to

company shall be allowed on submission of partnership deed duly

attested by notary public on successful passing of interview or test

or both by the new proprietor or partner, to be conducted by the

licensing authority or any officer authorized in this behalf;

(c) retirement of partner shall be allowed on submission of an

additional undertaking that the existing partner may take the

responsibility of all previous and future acts of the company and

shall be responsible for payment of any outstanding government

dues accrued on the company before and after retirement of the

partner;

(d) dissolution of partnership shall be allowed on submission of

dissolution deed and an under taking that the person continuing the

firm shall be responsible for the payment of all or any outstanding

government dues accrued in the name and title of the firm;

(e) change of status of firm from proprietorship / partnership to limited

company or changes of directorship in case of a company shall only

be allowed if duly approved by the Securities and Exchange

Commission of Pakistan;

(f) in case of death of an individual licensee, the license may be re­

issued to his legal heir if he fulfills the requisite criteria under the

4

law. The new licensee shall execute a fresh bond for the said

purpose; however, the licensing Authority may allow the transfer

of the security deposit held in the name of the deceased licensee to

the name of new licensee subject to adjustment of the liabilities

attached to such deposit:

Provided that subject to enhancement of fee and satisfactory

performance of licensee, the license may be renewed for a period

of five years, if it has remained valid for the last ten years and no

criminal proceedings have been initiated or pending against the

licensee; -/I

(g) in case the license is lost or damaged, a duplicate copy thereof may

be issued on a written request by the licensee, duly supported by

the documentary evidence regarding loss or damage and on

payment of fee of five thousand rupees.

1. Renewal of license - (1) An application as set out in form-B

for the renewal of license shall be made to the licensing authority two months

before its expiry, along with the following documents: -

proof of undertaking transactions in capacity of a freight

(a)

forwarder; and

proof of payment of the renewal fee, which shall be rupees

(b)

ten thousand for renewal of license for a period of five years.

The licensing authority may refuse to renew the license if it

(2)

finds that -

the licensee has failed to apply for the renewal of license

(a)

within the prescribed time;

the licensee has become insolvent or bankrupt or is involved

(b)

in cases of tax fraud or criminal cases, established through

conviction under any law for the time being in force;

the licensee is declared to be of unsound mind by a competent

(c)

court or medical authority;

the licensee had violated any applicable law including the

(d)

provisions of the Customs Act, 1969 and the rules made

thereunder; and

the licensee has been revoked under these rules.

(e)

5

1. Authorization to sign and submit documents on behalf of 9

the Licensee.- A licensee may authorize not more than three permit

holders to sign customs documents on his behalf.

1. Issuance of permits - (1). The licensee shall apply to the

licensing authority as set out in form-C for the grant of Customs permit to

such clerks as he/she employs for transacting business at the customs

station such as custom house, seaport, airport, rail station or land customs

station.

(2) Such application shall bear a court-fee stamp of rupees fifty,

accompanied by three passport size photographs of the persons whose

permits are applied for.

(3) The person for whom the permit has been sought, must at

least have passed intermediate examination and holds a valid CNIC.

(4) A customs permit shall not be transferable and shall be valid

only for the person in favor of whom it was issued.

(5) A customs permit shall be issued on payment of rupees one

thousand and shall be valid for two years, unless suspended or earlier

revoked in accordance with these rules.

(6) The licensee shall apply for the renewal of the customs permit

issued in favor of his clerk at least one month prior to its expiry, duly

accompanied with a renewal fee of rupees five hundred.

(7) The licensee shall immediately inform the licensing authority

in case the service of any permit holder is terminated, where after, the

licensee shall surrender the permit with the licensing authority for

cancellation.

(8) A customs permit shall be liable to be revoked or suspended

at any time by the licensing authority for any irregularity, misbehavior or

for any other reason for which a license may be revoked or suspended.

(9) The customs permit shall always be carried by the person to

whom it has been issued and shall be produced before the relevant officer

of customs, on demand.

(10) The licensee shall be responsible for all the acts of any person

holding a customs permit on his behalf.

1. Responsibilities of licensee.- (1) A licensee shall;

6

(a) act as an intermediary between the cargo owner and the

earner;

(b) exercise due diligence and take reasonable measures in

the performance of freight forwarding services;

(c) arrange inland transportation of goods, maintaining

effective communication with the exporter/transport

companies so as to ensure that the goods are timely

delivered to the port/airport;

(d) manage multimodal transportation iin a situation where

the goods are required to be delivered to the destination

through sea, land and/or air route, simultaneously;

(e) negotiation of freight rates on behalf of the

exporter/importer with the carriers;

(f) consolidating shipments when necessary to optimize

costs and efficiency;

(g) arranging storage and warehousing facility for the goods

as and when required by the exporter/importer;

(h) prepare and process documents related to all shipment

activities, including issuing their own house bill of

lading/airway bill;

(i) prepare and submit customs manifest;

(j) issuance of delivery orders and managing FCL, LCL, air,

sea land and rail shipments;

(k) manage or undertake e-commerce logistics through 3PL

(third party logistics), 4PL (fourth party logistics) and

5PL (fifth party logistics) manner or services; and

(1) responsible to carry out his service according to the

exporter’s instructions, as agreed, and as per the correct

information provided by the consignor or consignee.

1. Dispute resolution mechanism.- (1) For the purpose of any

dispute requiring resolution, there shall be a dispute resolution committee

7

(DRC) to be constituted by the Pakistan International Freight Forwarders

Association (PIFFA).

(2) The DRC under sub-rule (1) shall comprise such representatives

as the PIFFA may determine.

(3) Upon receiving a written complaint with supporting

documentation, the DRC shall issue notices to the concerned parties within

seven days, requiring their replies within ten days.

(4) A hearing shall be scheduled within five days after receipt

of all replies.

(5) The DRC shall resolve the dispute amicably and issue

decision within fifteen days of the hearing.

(6) A report regarding settlement of disputes through DRC

shall be submitted to the Collector of Customs HQ (Exports-IOCO).

(7) If the dispute is not resolved by the DRC within thirty days

from the date of the complaint, the matter shall be brought in appeal before

the Customs Dispute Resolution Committee (CDRC) consisting of the

following, namely:-

(a) Collector Export (HQs) - Chairman

(b) Additional Collector of Customs (Enforcement) -

Member;

Chainnan/Member PIFFA-South Zone - Member; and

(c)

Chairman/Member of PIFFA-North Zone - Member

(d)

(8) The CDRC shall convene its meeting at Customs House,

Karachi for hearing the parties including online hearings where necessary

with recorded justification.

(9) In respect of the notices, hearings, proceedings and decisions

the CDRC shall follow the same timelines as are applicable to the DRC.

(10) The appeal by the CDRC constituted under sub-rule (8) shall

be decided through a speaking order.

(11) Where any party is aggrieved by decision in appeal under sub­

rule (10), it may opt to challenge the decision before the competent court

of law in accordance with the applicable laws.

8

(12) Any freight forwarder or licensee, aggrieved by any decision

or order of the licensing authority denying, revoking or suspending a

license under this chapter, may prefer an appeal as set out in form-D along

with a copy of the impugned order and grounds of appeal, with the Chief

Collector of Customs (Exports-IOCO) within sixty days of the passing of

such decision or order.

1. Action in case of a violation of the conditions of license ­

fl). The licensing authority may revoke or suspend a license or permit of

any freight forwarder for the following reasons

the licensee has made or cause to be made, in any application

(a)

for any license or permit under this chapter, or report filed with

the customs, any statement which was, at the time and in light

of the circumstances under which it was made, false or

misleading with respect to any material fact or has omitted to

state in any such application or report;

the licensee has been convicted at any time for larceny, theft,

(b)

robbery, extortion, forgery, counterfeiting, fraud,

concealment, embezzlement, fraudulent conversion, or

misappropriation of funds;

the licensee has knowingly employed or continues to employ

(c)

any individual who has been convicted of any offence referred

to under clause (b);

the licensee has, in the course of its freight forwarding

(d)

business, with the intent to defraud, in any manner, willfully

and knowingly deceived, mislead or threatened any client or

prospective client;

violation by the licensee of any provisions of the rules,

(e)

regulations, notifications, instructions or orders passed

thereunder;

aiding or abetting any individual, firm or company, as the case

(f)

may be, for violation of any provision of these rules.

negligence and inefficiency of the licensee in the discharge of

(g)

his/her obligations;

attempt by the licensee to influence the conduct of any

(h)

employee on the customs house, customs station, port or

aiiport by the use of force, intimidation, duress, bribery or by

offering any special inducement or gift; and

(0 the licensee’s previous performance has not been satisfactory

or has not been true to the customs.

In case of revocation of license under sub-rule (1), the

(2)

licensing authority after issuing show cause notice to the licensee, forfeit

9

the whole or part of the security deposited by the licensee under rule 1210

for the settlement of any outstanding dues. Whereas, in case if the security

deposit is not forfeited, it shall be returned to the concerned person within

six months from the date of revocation or surrender of license.

(3) The licensing authority may, in case where immediate action

is considered necessary against the licensee, suspend his licence forthwith

after recording reasons in writing pending the final action under the rules.

(4) The license shall stand revoked immediately if the licensee-

(a) is declared insolvent;

(b) fails to apply for renewal of license after three years from

the last renewal;

(c) files an application seeking cancellation of license;

(d) fails to renew membership with PIFFA; and

(e) cancellation/Suspension of PIFFA membership by its

executive committee.

1. Training and capacity building.- Freight Forwarding agents

shall be required to undertake mandatory annual training program from the

Customs Academy of Pakistan subject to the terms and conditions as set

out by the Academy. The annual training program conducted by Pakistan

Customs Academy shall be subject to a fee notified from time to time by

the Academy and shall be borne by the licensee. Failure to attend the

mandatory training without sufficient cause may lead to suspension of

license.

1. Transitional provision - Existing freight forwarders

operating at the time of commencement of these rules shall apply for

licensing under these rules within six (6) months of this notification.

1. Penalty for non-compliance - Any licensee failing to comply

with these rules shall be liable to penalties as prescribed under the Customs

Act, 1969 (IV of 1969) and may face suspension or revocation of license

as well as WeBOC ID.

10

Form-A

[see rule 1208]

Application for Grant of Freight Forwarder License

To,

The Licensing Authority.

Subject: Application for Grant of Freight Forwarder License

Sir / Madam,

I, the undersigned, hereby apply for the grant of a Freight Forwarder License

under the Freight Forwarders (Multimodal) Licensing Rules.

I submit the following particulars for your kind consideration:

1. Name of Applicant (Individual/Company/Firm):
2. Nature of Legal Entity:

(Proprietorship / Partnership / Company)

1. Registration Details:

. NTN Number:

. STRN (if applicable):

. CNIC No. (for individuals/partners):

1. Business Address:
2. Phone No.: Email:
3. Proof of Valid Membership:

(Membership Certificate of Freight Forwarder Association, e.g., PIFFA)

Attached: [Yes/No] jJ©

1. Educational Qualification (for individuals/partners/directors):
2. Experience in Freight Forwarding (if any):

11

1. Treasury Challan No. and Date:

Deposited Rs.vide Challan No. , dated

10.Security Deposit (upon approval):

[ ] Rs. 200,000 f