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, 2024)

GOVERNMENT OF PAKISTAN (REVENUE DIVISION) FEDERAL BOARD OF REVENUE NOTIFICATION (CUSTOMS) February, 2024. Islamabad, the Pt (1)/2024.- The following draft of certain further amendments in the S.R.O. 51 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 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. These rules shall come into force at once. (2) (1) These rules shall apply to international oil suppliers, in 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 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. 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; 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 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.,o) 1127. 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

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

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). 1128. 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

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) 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 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. 1131. 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. 1132. 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. 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 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. 1135. 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

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: PWL No.: 55 [C. No.10(2)L&P/2005(Pt) (Fa le Samad) Secretary (Law & Procedure)