Govt To Prepare List of ‘Reputable’ Suppliers To Import of Solar Panels ; SBP

import solar panels

ISLAMABAD(B-Trams)::The Director of the State Bank of Pakistan, Dr. Asif Ali, sent a letter to Tariq Bajwa, the Special Assistant to the Prime Minister on Finance and Revenue, requesting that the federal ministries compile a list of reputable suppliers to import solar panels in order to avoid money laundering and over-invoicing. Some local importers have established trade entities abroad that run the risk of over-invoicing.

In response to a letter from SAPM on Governance Effectiveness, Jehanzeb Khan, SBP, wrote that banks used to have to get permission from SBP before starting transactions or LCs to import items that fall under HS codes Chapter 84 and 85 (like solar panels, inverters, and other items).

In its Circular Letter No. 20 of December 27, 2022, SBP decided to end the requirement for prior authorization. As a result, SBP approval is no longer required for import transactions or LCs; instead, all importers in this category must now approach their banks.

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According to SBP, it is aware that banks are accommodating import requests in light of the Balance of Payments (BoP) situation based on their own evaluations of liquidity and risk. Additionally, the company states that banks would be in a better position to facilitate import transactions once the BoP situation improves.

Director SBP argued that SBP has already issued the necessary instructions to banks for one-time facilitation for release of shipping documents to alleviate congestion at ports due to stuck-up containers (i.e. demurrage-related cases).

Bidding process will begin next week, PM informed Director SBP. Banks have been advised to release shipping documents for goods shipped before January 18, 2023, in this regard:

  • i) in the event of deferment, upon receipt of a SWIFT message from a foreign bank indicating that imports have been deferred for at least 180 days;
  • (ii) the funding arrangement was made overseas, based on confirmation from the banks of the suppliers.

The central bank insists that it is aware that issuing such instructions has significantly resolved the issue of stuck shipments, including solar panel shipments.

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According to SBP, it is aware that solar panels (HS code 8541.4300) are exempt from customs duties under the current Customs Regulations; As a result, it’s possible that unscrupulous individuals will overcharge for the import of solar panels in order to conceal their illegal funds abroad.

Dr. Asif Ali stated, “In our assessments, some of the suppliers providing deferred payment terms turn out to be related to Pakistani importers or the local importers have established trade entities abroad, which carry the risk of over invoicing.” These suppliers may also be related to Pakistani importers.

SBP has suggested that the relevant ministries compile a list of reputable suppliers from which imports of solar panels could be permitted without the risk of money laundering or excessive billing.

In addition, the federal government may consider implementing a policy to encourage domestic entrepreneurs to establish manufacturing facilities for clean and environmentally friendly energy producing equipment like solar panels and other related components in order to reduce Pakistan’s reliance on imported fossil fuels in the future and act as a mitigation factor for managing environmental risk. This would also help reduce Pakistan’s reliance on imported fossil fuels in the future.

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