Draft Amendment in the Customs Rules, 2001 (Addition of new chapter XLV-Import, Domestic Sale and Re-Export of Petroleum Products on Foreign Suppliers Account under the Customs Bonded Facilities Rules

GOVERNMENT OF PAKISTAN

(REVENUE DIVISION)

FEDERAL BOARD OF REVENUE

NOTIFICATION

(CUSTOMS)

Islamabad, the Pt February, 2024.

(1)/2024.- The following draft of certain further amendments in the

51

S.R.O.

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

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

1969), is hereby published for information of all persons likely to be affected thereby

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

that objections or suggestions thereon, if any, may be sent for consideration of the

Board within fifteen days of publication of the draft amendments 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 AMENDMENTS

In the aforesaid rules, after Chapter XLIV, the following new Chapter XLV

shall be added, namely:-

"CHAPTER XLV

PRELIMINARY

(1) These rules may be called the

1. Short title and commencement.—

Import, Domestic Sale and Re-export of Petroleum Products on Foreign Supplier's

Account under the Customs Bonded Facilities Rules, 2024.

These rules shall come into force at once.

(2)

(1) These rules shall apply to international oil suppliers, in

1. Scope. —

accordance with the policy guidelines issued by the Federal Government, for the

import of crude oil and other petroleum products on foreign supplier's account

through customs bonded storage facilities ratified by the Federal Cabinet vide Case

and circulated by the Petroleum Division, Ministry of Energy,

No. 382/Rule-19/2023

vide letter No. PL-2(5)/2023-Bonded Storage. The import, domestic sale, and re-

export shall be regulated in terms of the Import Policy Order, 2022 as amended vide

SRO 1259(1)/2023 dated 07.09.2020 and Export Policy Order, 2022 as amended vide

SRO 1260(1)/2023 dated 07.09.2023 and policy directions by Oil and Gas Regulatory

Authority (OGRA) and State Bank of Pakistan (SBP).

The foreign supplier shall have the option to establish its own registered

(2)

business or operate through a subsidiary company registered in Pakistan. They will

be allowed to maintain an inventory of crude oil and other petroleum products in bulk

Page 1 of 7

in customs bonded warehouses located anywhere in Pakistan, without foreign

exchange remittances, pending its sale to local purchasers or its re-export therefrom

to other foreign countries.

1. Definitions. —

In these rules unless there is anything repugnant in the

subject or context,-

(a)

"Act" means the Customs Act, 1969 (IV of 1969);

(b) "consignee" means the

foreign supplier having its own registered business in

Pakistan. In case of its own dedicated storages, foreign

supplier shall have storage licensed by OGRA under the

Pakistan Oil (Refining, Blending, Transportation, Storage,

and Marketing), Rules 2016; or

its subsidiary company registered as an importer and

exporter with FBR in Pakistan; and

having bank account(s) in Pakistan;

(c) "customs bonded warehouse" means a warehouse licensed as a

public bonded warehouse under section 12 or as a private bonded

warehouse under section 13 of the Act having the requisite storage

,o)

facility; and

(d)

"Petroleum products" means crude oil, motor spirit, or high-speed

diesel excluding petroleum products listed under

Appendix-A of

the Import Policy Order in vogue, any sanctioned products and

V

import of POL products from sanctioned origin or entity.

1. Procedure for Customs Clearance. —

(1) The following procedure

shall be followed for the import, domestic sale and re-export of petroleum

products by the consignee, namely:-

(a)

Procedure for import of petroleum products by consignee for

storage in customs bonded facilities shall be as under:

(i)

on arrival of the petroleum products at port, the consignee or

his authorized customs agent shall file a goods declaration

(GD) through the Customs Computerized System (WeBOC or

PSW) for in-bonding (TB)

or safe transportation (ST) thereof

to private or public bonded warehouse, as the case may be.

The consignee shall not be required to attach a financial

instrument (Fl) with the GD at the time of in-bonding or safe

transportation (ST), as the case may be.

samples of the inrp-orted

pert urn product-shall

be drawn and

referred to the Hydrocarbon Development Institute of

Pakistan (HDIP) for testing, analysis and confirmation of the

Page 2 of 7

specifications in line with policy guidelines of sampling and

testing of petroleum products, issued by the Federal

Government and notified by OGRA. The Collector, where

required after recording reasons, may get the testing and

analysis of the imported product by any other approved

Government Lab.

The examination process shall be completed by the

appropriate customs officer as per the procedure in vogue after

duly verifying the quantity and specifications of the imported

goods.

Thereafter, the Assessing Officer (AO) shall complete the

assessment of the GD as per law for subsequent in-bonding in

a customs public or private bonded warehouse.

(b) Sale of the petroleum products from the bond in the domestic

market by the consignee:

The consignee shall be allowed to supply bonded petroleum

products to local purchasers (refineries or OMCs) having

prior online permission from OGRA for each consignment as

per the applicable provisions of the IPO and all other relevant

regulations, guidelines, etc., contained in any other law for

the time being in force.

Sale and purchase of petroleum products between the

consignee and the Pakistani purchasers will be on a

commercial basis without any liability on the part of Federal

Government.

In order to sell the bonded goods to the local purchaser, the

consignee shall file the Goods Declaration for ex-bonding

and shall also provide the details of local buyer therein. The

consignee shall however attach Financial Instrument at the

time of filing of the ex-bond Goods Declarations. The

Consignee shall also submit NOC to Assistant or Deputy

Collector for change of ownership of goods stored in bonded

warehouse in the form as set out in Appendix-I.

The consignee shall be responsible for payment of leviable

duty and taxes as per law and shall also comply with

applicable import policy conditions, restrictions and

limitations.

(c) Re-export of the warehoused petroleum products by the

consignee:

(i) The consignee shall be allowed re-export of bonded

petroleum products as per export procedure in vogue subject

Page 3 of 7

to fulfillment of conditions, restrictions as envisaged in the

Export Policy Order and any other law in force;

The consignee shall inform the OGRA and Oil Companies

Advisory Council (OCAC) fifteen days in- advance prior to

filing of goods declaration (GD) for the export of the bonded

petroleum products;

In order to monitor the import, the domestic sale and re-

export of the bonded products, the OGRA shall be provided

the online visibility of bonded petroleum products stored by

the consignee and the OMCs by the Customs Computerized

System (WeBOC);

The consignee or its authorized customs agent shall file the

Goods Declarations for re-export against the relevant into-

bond Goods Declarations through Customs Computerized

System (WeBOC or PSW). The export shall be allowed

without any requirement of financial instrument (Fl);

Samples shall be drawn from the storage tanks and

forwarded to Hydrocarbon Development Institute of

Pakistan (HDIP) Laboratories for analysis, in order to

confirm that the goods stored in the warehouse are the same

as per declaration in import GD. The Collector, for reasons

to be recorded in writing, may get the analysis done by any

other lab;

At the time of re-export of the bonded products, the

specifications shall be verified at the respective bonded

warehouse in the light of goods declarations filed at the time

of in-bonding under the supervision of in-charge Assistant

A5V or Deputy Collector of Customs. After satisfying with the

specifications of the product, the re-export goods

declarations shall be processed and loading on vessel shall

be allowed accordingly;

The verification report to the effect that the goods have been

loaded on the vessel shall be fed into the system by the

concerned Collectorate of Customs (Exports).

1. Securities by the Consignee for petroleum products on foreign

supplier's account through customs bonded facilities at the time of in-

bonding.— (1) Assessing officer shall ensure that consignee has submitted

securities in the shape of postdated cheque and indemnity bond, as per

requirement of section 86 of the Act for warehousing of the goods.

(2) The securities furnished by the consignee under section 86 of the

Act at the time of warehousing of the goods, shall continue to be in force

Page 4 of 7

notwithstanding the transfer of the goods to any other person or firm unless all

leviable duty and taxes including warehousing surcharge (if payable) on the

warehoused goods are paid or the bonded goods are re-exported to other foreign

countries, as the case maybe.

1. Reconciliation of warehoused petroleum products on foreign

supplier's account through customs bonded facilities and its exports or

subsequent domestic sale.— (1) Consignee shall reconcile the import GD

after each transaction of domestic sales and re export and submit the

Reconciliation report online through Computerized clearance system to the

concerned collector.

(2) The consignee (licensee of customs public or private bonded

warehouse) shall be responsible to provide logistics and means to Customs staff

for their access to the bonded warehouse, as and when necessitated.

1. Release of securities furnished at the time of In-bonding

petroleum products on foreign supplier's account through customs

bonded facilities and its exports or subsequent domestic sale.— (1)Upon

completion of Ex-bonding of entire quantity of warehoused goods, on the basis

of import GD, whether upon clearance for local sale or re-export, the securities

furnished to the customs authorities in the shape of postdated cheque and

indemnity bond by the consignee at the time of import or warehousing shall be

released and returned to the consignee

(2) The securities shall be released after reconciliation of the record

online.

1. Unaccounted goods of a warehouse.— If any, consignee /

licensee fails to provide proper account of the warehoused goods i.e. imported

goods, exported goods or goods cleared for home consumption to the

satisfaction of an officer of customs not below the rank of an Assistant

Collector, the licensee shall pay on demand an amount equal to the amount of

all duty and taxes leviable thereon, as if they were imported and used for home

consumption and shall also be liable to penalties imposed for such violation

under the Act.

1. Short landing notice.— The licensee of a warehouse shall

submit the short landing of goods notice in writing to the officer of customs,

not below the rank of Assistant Collector, within a week from date of

warehousing of the goods or before filing the first Ex-bond goods declaration

whichever is earlier.

1. Stock taking of goods lying in a warehouse.— An appropriate

officer of customs, authorized by the concerned Assistant Collector of

Customs, shall conduct stock taking and detailed audit of a warehouse as and

Page 5 of 7

when so directed but at least once in a year. The auditors shall specifically

examine the mandatory requirements of the scheme, availability of all

prescribed records and shall submit findings or report to the concerned

Collectorate and a copy thereof to the licensee for his records.

1. Access to appropriate officer.— The licensee shall be

responsible at all times to provide logistics from port and necessary means to

ensure 24/7 access to appropriate officer(s) to the warehouse and any

conveyance on which the goods are to be exported, provided reasonable notice

is given to the licensee to make such arrangements.

1. Responsibilities of the consignee.— The consignee shall be

responsible for the due receipt therein, delivery therefrom and safe custody of

the goods while deposited in warehouse in accordance to the quantity and

specifications declared to the Customs.

Appendix-I

[see rule 1127(b)(iii)]

The Assistant/ Deputy Collector of Customs,

Collectorate of Customs

Subject: NOC FOR CHANGE OF OWNERSHIP OF GOODS, STORED,

DEPOSITED IN CUSTOMS PUBLIC BONDED WAREHOUSE

OF M/S ON FOREIGN SUPPLIER'S ACCOUNT

AGAINST GD FOR IN-BONDING BEARING MACHINE

NO DATED

Sir / Madam,

We M/s (foreign supplier / owner name) have

sold (quantity) out of total quantity

of (description of goods), earlier deposited in Customs

Public / Private Bonded Warehouse / Terminal of M/s against

Customs Goods Declaration (GD) for In-bonding (TB) Machine

No dated to M/s (name of

buyer) and received CFR price of the goods from them through LC

No dated opened at (Name

of bank with branch and city) BOR B advance payment made though bank instrument

reference No dated (with name of bank, branch

and city

We have therefore, no objection on transfer of the ownership of the above quantity of

goods, in the name of above said buyer. The buyer shall take delivery of the goods

Page 6 of 7

from the above said customs public / private bonded warehouse/terminal after duty

and taxes are deposited by the Consignee.

Signature:

Name:

Designation:

Contact No.

E-mail address:

VERIFICATION / AUTHENTICATION OF THE NOC BY THE

WAREHOUSE OWNERS / KEEPERS

We have received the above NOC from the foreign suppliers (owners), for change of

ownership of the goods currently stored in our public / private bonded warehouse on

the above said foreign supplier's account against customs Into-bond (TB) GD

We do hereby confirm its genuineness.

No dated

Signature of licensee:

Name:

Designation:

55

PWL No.:

[C. No.10(2)L&P/2005(Pt)

(Fa le Samad)

Secretary (Law & Procedure)

Page 7 of 7

II