Amendments in the Customs Rules, 2001

GOVERNMENT OF PAKISTAN (REVENUE DIVISION) FEDERAL BOARD OF REVENUE NOTIFICATION (CUSTOMS) Islamabad, the 2" April, 2024. S.R.O. 56g (1)/2024.- In 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), the Federal Board of Revenue is pleased to direct that the following further amendments shall be made in the Customs Rules, 2001, which, as required under sub-section (3A) of the said section 219, were previously published vide Notification No.S.R.O. 59(1)/2024, dated the 1' day of February, 2024, namely:- In the aforesaid Rules, after Chapter-XLIV, the following new Chapter XLV shall be added, namely:- "CHAPTER XLV PRELIMINARY (1) These rules shall be called the 1124. 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. (2) These rules shall come into force at once. (1) These rules shall apply to international oil suppliers, in,(j)V- 1125. 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 June, 2023 and circulated by the Petroleum No. 382/Rule-19/2023, dated the 28th Division, Ministry of Energy, vide letter No. PL-2(5)/2023-Bonded Storage dated the July, 2023. The import, domestic sale, and re-export shall be regulated in terms of 7th the Import Policy Order, 2022 as amended vide Notification No.S.R.O. 1259(1)/2023 day of September, 2023 and Export Policy Order, 2022 as amended vide dated the 7th September, 2023 and policy Notification No. S.R.0.1260(1)/2023 dated the 7th directions by Petroleum Division and the 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 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. (3) Where a foreign supplier or its subsidiary opts to store their imported Petroleum products, imported under this scheme, in customs public bonded warehouse, he will pay the warehouse rent, port dues and other service charges to the licensee of customs public bonded warehouse, in foreign currency (US Dollars) through banking channels. The foreign supplier or its subsidiary shall follow all the instructions issued by the State Bank of Pakistan or Customs in this regard. 1126. 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; 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 warehouse under section 12 or as a private warehouse under section 13 of the Act having the requisite storage facility duly licensed by OGRA; 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 import of POL products from sanctioned origin or entity. 1127. Procedure for customs clearance. - 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 ST, as the case may be; samples of the imported petroleum product shall be drawn and referred to the Hydrocarbon Development Institute of Pakistan (HDIP) for testing, analysis and confirmation of the 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 IB in a customs public or private bonded warehouse: Provided the consignee has furnished adequate securities to the Customs as per rule 1128; and The provisions of Chapter XI of Customs Act, 1969 and rules made thereunder shall remain applicable where no specific provision is provided in these rules. (b) sale of the petroleum products from the bond in the domestic market by the consignee shall be as under:- 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 Import Policy Order (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 the Federal Government; in order to sell the bonded goods to the local purchaser, the consignee shall file the GD 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 GD. 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; and (iv) 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; and (c) re-export of the warehoused petroleum products by the consignee shall be as under:- the consignee shall be allowed re-export of bonded petroleum products as per export procedure in vogue subject to fulfillment of conditions, restrictions and limitations 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 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 GDs for re-export against the relevant into-bond GDs through customs computerized system (WeBOC or PSW). The export shall be allowed without any requirement of 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 GDs filed at the time of IB under the supervision of in-charge assistant 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; and 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).

1128. Securities by the consignee for petroleum products on foreign supplier's account through customs bonded facilities at the time of IB.- The assessing officer shall ensure that consignee has submitted securities (1) 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 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. 1129. Reconciliation of warehoused petroleum products on foreign supplier's account through customs bonded facilities and its exports or subsequent domestic sale.- (1) A 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. 1130. Release of securities furnished at the time of IB petroleum., --7.1---- 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. 1131. Unaccounted goods of a warehouse.- If any consignee or 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 consignee or licensee, as the case may be, 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. 1132. Short landing notice.- If any quantity of imported goods was short-landed and not deposited in the warehouse, the licensee of a warehouse shall submit the short landing or deposit 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. 1133. 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 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. 1134. Access to appropriate officer.- The consignee (in case of imports) and the consignor (in case of re-exports) shall be responsible for providing logistics from port and necessary means to ensure 24/7 access to appropriate officer to the warehouse and any conveyance on which the goods are to be exported, provided reasonable notice is given to the consignee to make such arrangements. 1135. Responsibilities of the consignee.- The consignee shall be M51/.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 MIS 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

.(description of goods), earlier deposited in of Customs Public / Private Bonded Warehouse / Terminal of against Customs Goods Declaration (GD) for In-M/s dated .to M/sbonding (IB) Machine No (name of buyer) and received CFR price of the datedgoods from them through LC No (Name of bank with branch and city) BOR Bopened at advance payment made through bank instrument reference (with name of bank, branch andNo dated 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 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 dated We do customs Into-bond GD No hereby confirm its genuineness. Signature of licensee: Name: Designation: PWL No.: [C. No.10(2)L&P/2005(Pt) Samad) Secretary ( aw & Procedure)