EPZA Year Book 2010

YEAR BOOK 2010

Export 14%

Presumptive Tax 14%

Investment Portfolio 11%

Capital Investment 60%

Export Processing Zones Authority was established on 28th

February, 1980 after approval from the ECNEC with the mandate to

plan, develop and manage the Zones and to provide for matters

connected therewith or ancillary thereto.

The first EPZ at Karachi was established / developed from the

Government Grants. The funds were released through Annual

Development Plan. An amount of Rs. 362.589 million was released

for the development of KEPZ which was completed in 1989. Now

KEPZ is completely colonized. Since inception, EPZA has shown

consistent growth in exports, employment and revenue generation.

The targets and benefits envisaged in the PC- I for KEPZ have

adequately been met.

The achievements and contributions of the EPZA to the economy

and its financial strength were not aptly marketed in the past. It is

a great accomplishment that EPZA has so far contributed an

amount of Rs. 854 million in the development projects from its own

resources. It has also deposited an amount of Rs.1.25 billion in

Government treasury on account of Presumptive Tax. EPZA is now

a financially stable organization.

Mr. Aftab Ahmed Memon, Chairman EPZA took the initiative and

directed to take out the Year Book of EPZA. The book contains

basic information about EPZA and its achievements & contributions

during the year 2009 – 2010 along with the forecast for next five

years. EPZA Ordinance and relevant SROs are also included for

reference.

1

INTRODUCTION

MESSAGE

3

It gives me immense pleasure to know that Export

Processing Zones Authority is publishing its first ever Year Book for

2010.

Investment plays a key role in country‘s overall

development and progress. The present Government attaches top

priority to all those efforts which are instrumental in increasing

exports. Our Government has taken several initiatives to facilitate the

growth / enhancement in overall business activities in the country

through privatization, deregulation & inviting FDI.

It is encouraging to learn that the efforts of Export

Processing Zones Authority have been impressive, particularly during

last two years, EPZ has played a major role in promoting

diversification in exports. Besides, it has also successfully created

employment opportunities and manifested the growth of allied

manufacturing sector.

I am confident that this report will give deep insight of the

organization to the stakeholders and help foreign / local investors to

choose EPZA as their investment destination.

Mir Hazar Khan Bijarani

Federal Minister

Ministry of Industries & Production

Govt. of Pakistan

MESSAGE

5

I am delighted to learn that Export Processing Zones

Authority is taking out its first Year Book 2010.

Export Processing Zones Authority has successfully

traversed a long way of 30-years with a new dimension to increase

the volume of investment, diversification of exports and generating

employment and strengthening the economic base of the country.

With active support of the Government, EPZA is showing a

consistence growth in exports despite economic recession of 2007-

08. It is indeed a matter of appreciation that EPZA has worked in

improvement of social and environment compliance within

manufacturing units operating in the Zone.

I hope EPZA will continue its efforts to achieve the desired

goals.

Abdul Ghaffar Soomro

Secretary


Govt. of Pakistan

MESSAGE

7

Export Processing Zones AuthorityMinistry of Industries & Production

Govt. of Pakistan

It is my privilege to present the first ever Year Book of EPZA. EPZA

could not optimize the means of communication to keep informed all concerned

about the happenings and achievements. The strengths and weaknesses of EPZA

were, therefore, neither available to analytical minds, nor were there any efforts to

attract analysis or even criticism. EPZA has, at best, been an isolated and

insulated compartment in the past. For any organisation to be vibrant and

dynamic, the dissemination of information, openness and transparency have to be

the hallmark if the organisation has to adopt a move-forward strategy.

For the past two years, EPZA has started posting the relevant

information, progress and developments of the Authority on its website as well as

publishing in the print media. Budget, income/expenditure statements, progress

reports are now available on the website. EPZA has also published its quarterly /

annual performance reports. Year Book 2010 is the latest addition to this

information sharing effort. This is not only to ensure transparency, but also to find

out where we erred and what the remedial measures could be.

Despite global economic recession since 2007, exports from EPZs have

grown consistently from US$ 348 Million in 2007-2008 to US$ 396 Million in 2009-

2010. For the financial year 2010-2011, the export target has been set at US$ 500

Million. We, at EPZA, are confident that with consistent and supportive policies of

Government of Pakistan, the exports would surely touch the benchmark of US$

One Billion by the Year 2015.

Recognizing the role of corporate social responsibility for uplift and

benefit of the people, EPZA has decided to provide financial assistance to

organizations like SIUT, FATMID, LRBT and SHAUKAT KHANAM for rehabilitation

of patients. EPZA will also contribute to the education sector in the form of

scholarships to the deserving students. The allocations for these activities have

been made in the budget estimates of 2010-2011. EPZA has also contributed to

the flood relief funds of Prime Minister of Pakistan and Chief Ministers of

Provinces with Rs.10 million and Rs.4 million for each province respectively.

This report is a clear reflection of improvement in financial health,

enhancement in exports and revenues of the organisation. We strongly believe

that we will continue to achieve our targets.

I am hopeful that this Year Book 2010 would provide the insight of this

organisation to all its stakeholders. The local / foreign investors would also benefit

from this book.

Aftab Ahmed Memon

Chairman

Making all arrangements for planning,

development and management of the

zones and to provide for matters

connected therewith or ancillary thereto.

8

MANDATE

9

Proactively facilitate the investors and

create enabling environment for them to

enhance export-led manufacturing, trade

and investment so as to achieve export of

USD one billion by 2015.

VISION

11

S. # DESCRIPTION PAGE #

1. Report Highlights 13

2. Editorial Board 15 – 17

3. Corporate Information 18-19

4. Management 21-23

5. Why Invest in EPZ 24-25

6. We Provide 26

7. We Offer 27

8. EPZs of Pakistan 29-43

9. Performance 2010 45-55

10. Monthwise Import & Export 2010 57-62

11. Financial Highlights 63-72

12. Key Visits 2010 73-76

13. Top Exporters 77-81

14. Future highlights 83-88

Appendices

15. EPZA Ordinance 91-102

16.SROs & Standing Orders, Public Notices &

Regulations103-192

CONTENTS

13

EPZA was established in 1980 by Government of

Pakistan through ordinance i.e., EPZA Ordinance IV

of 1980.

First EPZ at Karachi was completed in 1989. it is

completely colonized and in operation. Now

Management has developed Phase-II.

EPZ‘s established at different locations are as follows:

i. Risalpur EPZ 2002

ii. Saindak EPZ 2003

iii. Sialkot EPZ 2005

iv. Tuwairqi Steel EPZ 2006

v. Duddar EPZ 2009

PERFORMANCE OF 2009 - 10

Exports increased by 14%.

Tax revenues increased by 14%.

Investment of surplus funds increased by 11%.

Foreign Investment increased by 60%.

REPORT HIGHLIGHTS

Patron

Aftab Ahmed Memon

Editor –in-Chief

Shahid Ikram Hashmi

Editorial Board

Muhammad Yusuf Soomro

Mr. Riaz Ahmed Shaikh

Agha Sohail Asif

Mr. Umer Kazi

Mr. Asim Jawed

Mr. Bilal Islam

Design & Layout

Samreen Mangi

Shazia Shaikh

Mehwish Hussain

15

EDITORIAL BOARD

16

Aftab Ahmed MemonMr. Aftab Ahmed Memon, Chairman EPZA and Patron of Year Book

2010 is a Civil Servant from the District Management Group Batch of

1980. He did his Bachelors in Mechanical Engineering in 1973.

Besides his engineering degree. Mr. Memon has done his L.LB. and

Masters in Public Administration. Additionally, Mr. Memon has to his

credit Post Graduate Diplomas in Public Administration, Business

Administration and International Relations. He has served in various

capacities in the Provincial governments of Punjab and Sindh and has

the distinction of heading nine departments as Secretary to

Government of Sindh which include Excise, Agriculture, Local

Government, Services & General Administration, Information, Inter

Provincial Co-ordination and Land Utilization besides having worked in

Finance and Industries at different levels. He has also served in the

Federal Government at different levels.

Muhammad Yusuf SoomroBSc (Hons), MSc (Chemistry). Is a civil servant from the Railways

(Commercial & Traffic) Group Batch of 1983. Served for 34 years

in different Government departments in various capacities. He

attended local & foreign trainings. His core strength is

administration. Presently working as Secretary EPZA.

Riaz Ahmed Shaikh

Graduated in Electrical Engineering and Master in International

Trade Law & Economics. Served for 6 years in private sector

and for 11 years as civil servant in different capacities &

departments. His core strength is trade & commerce issues.

Presently working as GM (Finance) in EPZA.

Agha Sohail Asif

Graduation in Commerce & Master in Economics. Served 27

years in EPZA in various division & capacity. Attended various

trainings locally & abroad. His core strength is economic &

business related issues. Presently working as DGM (Finance)

in EPZA.

PATRON

EDITORIAL BOARD

Shahid Ikram Hashmi

BSc (Engg.), MBA (Finance). Served for 35 years in various

capacities. He attended local & foreign trainings. His core

strength is trade and investment issues. Presently working

as Administrator KEPZ.

EDITOR-IN-CHIEF

17

Asim Jawed

MBA (Finance), 14 years experience in the field of finance, &

accounts with multinational & government organizations. His

Core strength is Management Reporting, Budgeting, Financial

Accounting. Joined EPZA in January 2006 and presently

working as Manager (Accounts).

Bilal Islam

BS in Information Technology and certified Microsoft

professional. Masters in International Relations. Serving in

EPZA since 2005. His core strength is networking. Presently

working as Assistant Manager (IT).

Samreen Mangi

MIT- worked as a Lecturer Computer Science – Szabist

Larkana. Joined EPZA in November 2010.

Shazia Shaikh

BS (Software Engineering).

INTERNSHIP - IT Department of Sui Southern Gas

Company (SSGC) through National Internship Program of

Pakistan. Joined EPZA in November 2010..

Mehwish Hussain,

BS (Computer Engineering), Worked as an Instructor

:Roshi Computer Institute. Joined EPZA in November 2010.

DESIGN & LAYOUT

Ghulam Umer Kazi

Bsc.(Hons), MSc. (Electronics), PGD in (HR/Admin) . Served for

20 years in Government departments in the field of Admin &

HR. His core strength is Administration HR and Training

Development. Presently working as DGM (Admin & HR) in

EPZA

Export Processing Zones Authority is a body corporate working under the

Ministry of Industries & Production, Government of Pakistan. The

management and its affairs are run by the Board of Directors which is

constituted by Federal Government in pursuance of sub-section (1) of section

6 of Export Processing Zones Authority Ordinance, 1980 (IV of 1980).

The Board comprises of following members:

1. Mr. Aftab Ahmed Memon

Chairman

Export Processing Zones Authority

Karachi.

2. Mr. Ahmed Bukhsh Lehri

Chief Secretary

Government of Balochistan

Quetta.

3. Mr. Muhammad Niaz Butt

Joint Secretary (I & F)


Government of Pakistan

Islamabad.

4. Syed Ghulam Ali Shah

Chief Secretary

Government of Sindh

Karachi.

5. Mr. Anis-ul-Hassnain

Secretary

Board of Investment,

P.M. Secretariat USAID Old Building

Islamabad.

6. Sheikh Muhammad Tanveer

Chairman

Din Group

Lahore.

7. Engr. M.A.Jabbar

Managing Director

Qaim Automotive Industries

Karachi.

18

CORPORATE INFORMATION

8. Mr. Zaigham Adil Rizvi

Director (Project)

M/s. Al-Tuwairqi Steel Mills limited

Karachi.

9. Mr. Abdur Rauf

Chief Executive

M/s. Shahzad Adpparels (Pvt) Ltd.

Karachi

HEAD OFFICE

Landhi Industrial Area , Extension

Mehran Highway Landhi,

Karachi – 75150

Web: www.epza.gov.pk

Email: [email protected]

REGIONAL OFFICE

5th Floor , LDA Plaza, Egerton Road,

Lahore.

BANKERS

National Bank of Pakistan

Habib Bank Limited

United Bank Limited

MCB Bank Limited

Bank Al-Habib Limited

Allied Bank Limited

Habib Metropolitan Bank Limited

AUDITORS

M/s. Anjum Asim Shahid Rehman,

Chartered Accountants

Karachi.

19

21

MANAGEMENT

22

Aftab Ahmed Memon

Chairman

Nusrat Iqbal Jamshed

Director (IP)

Shahid Ikram Hashmi

Administrator (KEPZ)Muhammad Yusuf Soomro

Secretary EPZA

MANAGEMENT

Riaz Ahmed Shaikh

GM (Finance)

Zahoor Ahmed

GM (Facilities)Mumtaz A. Memon

GM (Engineering)

23

Ghulam Rasool Shaikh

GM (IP)Agha Sohail Asif

DGM (Finance)

Salahuddin Soomro

DGM (Facilities)

Asif Aftab

DGM (North)

Muhammad Ashraf Ali

GM (North)

Ghulam Umer Kazi

DGM (Admin/HR)

1. One window operation with simplified procedures.

2. Secured environment.

3. Customs bonded area.

4. Uninterrupted power supply .

5. Gas provided by utility company on priority.

6. Continuous water supply by EPZA .

WHY INVEST IN EPZ

24

7. Environment friendly atmosphere .

8. Easy access to sea and air port.

9. Abundance of skilled and educated workforce.

10. Developed land available at competitive rates for 30 years lease.

11. Relief from double taxation subject to bilateral agreement.

12. Off-shore Banking Units available to facilitate financial transactions.

13. Offices of Clearing & Forwarding agents within the zone.

25

26

1. Power supply through dedicated Grid Station up to 50 MW.

2. Water supply of one million gallons per day.

3. Telephone exchange of 4000-lines.

4. Emergency medical facilities.

5. Dedicated security round the clock.

6. Fire Station within the Zone.

7. Fire hydrants infront of every unit.

WE PROVIDE

1. Duty free import of machinery, equipment and materials.

2. Freedom from national import regulations.

3. Exemption from Exchange Control Regulations of Pakistan.

4. Repatriation of capital and profit allowed.

5. No sales tax on input goods including electricity/ gas bills.

6. Import of duty free vehicles allowed with certain conditions.

7. Supply of goods to Customs Manufacturing Bonds allowed.

8. Sub-contracting outside the zone and vice versa allowed.

9. Inter-transfer of finished goods among the units of EPZ allowed.

10. Domestic market available to the extent of 20%. Exceptions allowed

under certain conditions.

11. Presumptive tax collected by EPZA @1% on FOB value of exports as

final tax liability.

12. Obsolete / old machinery can be sold in the local market upon payment of

applicable taxes.

13. Sale of defective goods/waste permitted in local market up to maximum

of 3% of total value upon payment of duties / taxes.

27

WE OFFER

29

EPZs of PAKISTAN

The management after successful colonization / operation of KEPZ has

started the efforts for its expansion. Five new EPZ‘s have been

established in all the four provinces with following modus operandi:-

1. With funding from Govt. of Pakistan:

First project at Karachi (KEPZ) was developed under Public

Sectors Development Plan (PSDP). The funds for development

were provided through ADP. It is fully colonized. EPZA provides

maintenance and operational facilities to investors.

2. Under Joint Venture:

EPZ at Sialkot was developed through joint venture between the

EPZA and Punjab Small Industries Corporation (PSIC). Another

EPZ at Risalpur was established by Sarhad Development

Authority (SDA) in Khyber Pukhtoonkhwa. Responsibility for

maintenance of the Zone lies with respective J.V partner whereas

EPZA provides the necessary operational facilities to the

investors.

3. Exclusive Project Declared as EPZ:

The mining projects at Saindak, Reko Dig and Duddar were

granted status of exclusive EPZs by Government of Pakistan.

Land to all these mining projects was leased by the Federal

Ministry of Petroleum & Natural Resources and the Govt. of

Balochistan for specific period and purposes. These EPZs were

notified under the cabinet decision.

Al-Tuwairqi Steel Mill is another exclusive project of Al-Tuwairqi

Group. It will produce pellets through DRI technology. The role of

EPZA in these exclusive projects is to facilitate import / export

operations in collaboration with FBR.

31

DEVELOPMENT STRATEGY

Location : Karachi

Zone area : 305 acres

Number of industrial plots : 434 (Phase – I)

242 (Phase – II)

Industries in operation : 119 (Phase-I) – 284 plots

10 (Phase-II) – 90 plots

Units under construction : 4 (Phase-II) – 7 plots

Type of Industries : Value added garments, Gems &

Jewelry, Chemicals, Plastic

goods, Food processing

Key Attractions : Secured area

Green environment

Uninterrupted Power is provided

by the EPZ‘s own Grid Station

KARACHI EXPORT PROCESSING ZONE

32

KARACHI

Export Processing Zone

It is a first project of EPZA established in

Karachi. It is located at a distance of 18

Kilometers from Jinnah International Airport.

KEPZ has been developed on an area of

305 acres (Phase-I & II). 58% of total area

is occupied by Roads and Greenbelts due

to which the zone has become

environmental friendly.

Phase – I

Phase-I comprises of 211 acres of land. It

was completed in 1989. In phase - I, 434

Plots were created for setting up of

industries, 22 plots for the banking sector

and 10 plots for the supporting enterprises.

At present there is no vacant plot in Phase -

I.

Phase – II

Phase-II comprises of 94 acres of land.

There are 242 plots out of which 146 plots

have already been allotted to 34 industrial

units.

33

EPZs OF PAKISTAN

Location : Sialkot


Number of industrial Units : 223

Industries in operation : 07

Type of Industries : Surgical instruments

Sports goods

Leather garments & products

Engineering goods

34

SIALKOT EXPORT PROCESSING ZONE

SIALKOT


Sialkot EPZ was established on an area

of 238 acres on specific demand of

Sialkot Chamber of Commerce and

Industries. It is a joint venture between

EPZA & Punjab Small Industries

Corporation (PSIC). Infrastructure was

developed at the cost of Rs. 184 million

with funds generated by the private

sector/ allottees of the project. All plots

have been allocated / given on

ownership basis to the allottees by

PSIC. All operational facilities are

provided by EPZA as per rules &

procedures. The prospective sectors for

investments are sports / surgical goods,

leather products & garments, furniture,

imitation jewelry etc. This zone was

formally inaugurated by Governor

Punjab on June 22, 2002, and the Zone

became operational in 2005.

35

EPZs OF PAKISTAN

Location : Risalpur


Number of industrial Units : 53

Industries in operation : 04

Type of Industries : Trading & Warehousing

Furniture

36

RISALPUR EXPORT PROCESSING ZONE

RISALPUR


The specific objective for developing EPZ

at Risalpur was to promote trade and

industries targeting the market of Central

Asian States to / through Afghanistan.

REPZ was established on an area of 92

acres on the demand of Provincial

Government. It is a joint venture between

EPZA and Sarhad Development Authority

(SDA). All operational facilities are provided

by EPZA as per rules & procedures. The

cost of infrastructure development is

Rs.138 million which was funded by SDA

from its own resources. The Zone has 50

plots of various sizes for industrial units

and 87 for warehousing / trading units. The

Zone is in operation since 2002.

37

EPZs OF PAKISTAN

Location : Saindak,

District Chagai Balochistan


Project Operation : Federal Ministry of Petroleum &

Natural Resources and Govt. of

Balochistan on behalf and for

Saindak Metal Corporation along

with MRDL /MCC

Product : Extraction of Blister Copper &

Gold

Employment : 1000 Foreigners

500 locals

38

SAINDAK EXPORT PROCESSING ZONE

SAINDAK


This is a single entity zone for mining of Copper & Gold. It is located at

Saindak, district Chagai Balochistan. The area of 1284 acres was leased

by the Government of Pakistan to a Chinese Company i.e., M/s.

MRDL/MCC Resources Development Company (Pvt.) Ltd. for a period of

ten years. EPZA role is confined to facilitate import /export operations in

collaboration with FBR. This Zone started its operation in August 2003. It

is providing employment to 1500 locals and foreigners.

39

EPZs OF PAKISTAN

Location : Duddar,

District Lasbella, Balochistan


Project Operation : Federal Ministry of Petroleum &

Natural Resources and Govt. of

Balochistan along with MDMD /

MCC

Product : Extraction of Zinc & lead

Employment : 250 Foreigners

250 locals

40

DUDDAR EXPORT PROCESSING ZONE

DUDDAR


This is a single entity zone for mining of Zinc and lead. It is located in

district Lasbela, Balochistan. The area of 1500 acres was leased by the

Government of Pakistan to a Chinese company i.e., M/s. MDMD/MCC

Duddar Minerals Development Company (Pvt.) Ltd. EPZA‘s role is

confined to facilitate import/export operations in collaboration with FBR.

Operational activities started in September 2009. The zone is providing

employment to 500 locals & foreigners .

41

EPZs OF PAKISTAN

Location : Bin Qasim

Karachi


Leased to : M/s. Tuwairqi Steel

Product : Pellets through Direct Reduced

Iron (DRI) process

Project Capacity : 1.5 million tons per year

Employment : 1000

42

TUWAIRQI STEEL MILLS LIMITED, EPZ

TUWAIRQI STEEL MILLS LIMITED


Tuwairqi Steel Mills Limited (TSML), a subsidiary of Saudi Arabia‘s AL-

Tuwairqi Holdings, has been established on an area of 220 acres. It is located

at Port Qasim Karachi. Government of Pakistan has granted the status of

EPZ to the TSML along with option to export 100% of its production to Tariff

Area apart from ATH plant and neighboring Gulf countries. TSML has adopted

world‘s most advanced Direct Reduction Iron (DRI) technology to produce

Pellets. The production is closely supervised by DRI experts of Midrex (USA),

Kobe (Japan), MMTE (Iran) and ATH (Saudi Arabia). The design capacity of

plant is 1.5 million tons per annum of high quality pellets.

a) Project Status: Phase-I of TSML is nearing completion. It will offer its

pellets for sale in domestic / international market in 2nd quarter of 2011. In

phase-II, Electric Arc Furnace and continuous caster will be set up. The

Pelletization Plant has been envisaged in phase-III.

b) Environment, Health & Safety Standard: Internal processes at TSML

are well defined in the areas of health, safety, environment & quality.

TSML have obtained the NOC from the Environment Protection Agency

besides adhering to National Environment Quality Standards (NEQS) and

also conducts audit of Environment Management System periodically. The

company plans to study various options to recycle / reuse its production

waste in the second and third phase. Occupational health and safety

standards at the site are regularly monitored & managed by the team of

competent professionals.

c) Benefits: TSML will not only be a source of transfer of latest technology of

quality steel making but will also provide the impetus to industrial growth in

Pakistan. The project will create 1000 direct jobs and 3500 indirect jobs

opportunities. The project has also established technology centre in

Karachi for future needs of the country & also for ATH worldwide.

43

EPZs OF PAKISTAN

2008-09

US$ 348.169 million

2009-10

US$ 395.467 million

EPZA EXPORT

45

PERFORMANCE

EPZA is contributing to the economy by enhancement of foreign

investment, generation of employment and setting up of allied

manufacturing industries. It is constantly diversifying and expanding its

operation with commitment to achieve its mandate through sustainable

policies & support of Government.

Contribution of EPZA to the economy on following accounts:

Description US $Equivalent to

PKR

Presumptive Tax19.119

million1.3 Billion

46

CONTRIBUTION TO ECONOMY BY EPZA

Description

Contribution

Amount

(PKR)

Railcop Bridge on railway crossing at

Landhi Industrial Area133 million

Mehran Highway, Cattle colony to Port

Qasim 151 million

PRESIDENT KARACHI PACKAGE:

Description

Aggregate

Cost

(PKR)

Infrastructure development of KEPZ

Phase – II on 100 acres570 million

DEVELOPMENT OF KEPZ PHASE - II:

47

The Financial Year 2007-08 was a turbulent year for the world economy.

The economy witnessed soaring energy prices, unprecedented surge in

food inflation and financial market crises to match the great depression.

These developments have caused adverse effects of different degrees on

the economies in different part of the world. These international crises had

multiple effects on the US / European economies resulting in reduction of

buying power of their people. The international recession as well as direct

and indirect cost of war against terror by Pakistan have also affected its

economy particularly on export based manufacturing sector.

Despite prevailing recession, exports from EPZs has registered

reasonable growth. It contributed in creating the employment for the local

youth, generation of revenue for the Government of Pakistan, increase in

investment of surplus funds and foreign investment in the Zone. EPZA

also initiated extensive media campaign in the last quarter of 2009-10 to

apprise the stakeholders about its achievements.

The performance of EPZA for the year 2009-10 is summarised below:

Description 2008-09 2009-10Variance

(%)

Export 348.169 395.584 14%

Presumptive Tax 3.481 3.956 14%

Investment of surplus

funds16.463 18.206 11%

Foreign Investment 14.080 22.445 60%


Note: Duddar EPZ came in operation in September 06, 2009.

48

Description 2008-09 2009-10

Variance

over 2008-

09 (%)

KEPZ 215.431 235.899 10%

Saindak 131.106 151.179 15%

Sialkot 0.584 0.643 10%

Risalpur 1.003 1.255 25%

Duddar - 6.491 -

Total 348.169 395.467 14%

(Amt in million US$)

EXPORT 2009-10

EXPORT FROM EPZs

235.899

151.179

6.491

1.255

0.643

Karachi

Saindak

Duddar

Risalpur

Sialkot

EXPORT 2009 - 10 Vs. 2008 -09

49

205

210

215

220

225

230

235

240

2008-09 2009-10

215.431

235.899

120

125

130

135

140

145

150

155

2008-09 2009-10

131.106

151.179

KEPZ SAINDAK

0.55

0.56

0.57

0.58

0.59

0.6

0.61

0.62

0.63

0.64

0.65

2008-09 2009-10

0.584

0.643

0

0.2

0.4

0.6

0.8

1

1.2

1.4

2008-09 2009-10

1.003

1.255

SEPZ REPZ


50

Sectors 2008-09

Share

of

Sector

in Total

Export

2009-10

Share

of

Sector

in Total

Export

Variance

over

2008-09

Garments 143.221 67% 162.355 69% 13%

Worn Clothing 25.487 12% 27.017 11% 6%

Plastic Products 6.997 3% 8.387 4% 20%

Paper 0.210 - 0.601 - -

Print &

Packaging

Products

2.539 1% 3.618 2% 42%

Chemicals &

Allied Products8.856 4% 10.416 4% 18%

Trading Units 9.484 4% 7.015 3% (26%)

Others 18.636 9% 16.490 7% (12%)

Total 215.430 100% 235.899 100% 10%


143.221

25.487

6.997 0.210 2.539 8.856 9.484 18.636

162.355

27.017 8.387 0.601 3.618 10.416 7.015 16.490

2008-09

2009-10

EXPORT COMMODITY WISE (KEPZ)

143.221

25.487

6.997

0.210

2.539

8.856

9.484

18.636

2008-09

Garments

Worn Clothing

Plastic Products

Paper

Print & Packing Products

Chemicals & Allied Products

Trading Units

Others

162.355

27.017

8.387

0.601

3.618

10.416 7.015

16.490

2009-10

Garments

Worn Clothing

Plastic Products

Paper

Print & Packing Products

Chemicals & Allied Products

Trading Units

Others

51


52

Description 2009-10 (%)

Europe (ECC) 2.109 1%

USA / Canada 31.676 14%

Gulf / Middle East 5.477 2%

African Countries 2.420 1%

Tariff Area 99.538 42%

Central Asia 21.883 9%

Australia / New Zealand 37.489 16%

South Africa 18.760 8%

Europe (Other than ECC) 0.590 -

Far East Asia 8.642 4%

Japan / Korea 7.315 3%

Total 235.899 100%


EXPORT REGION WISE (KEPZ)

2.11

31.77

5.48

2.42

99.54 21.88

37.49

18.76

0.59 8.64 7.31

EUROPE (ECC) USA / CANADA

GULF / MIDDLE EAST AFRICAN COUNTRIES

TARIFF AREA CENTRAL ASIA

AUSTRALIA / NEW ZEALAND SOUTH EAST ASIA

EUROPE (OTHER THAN ECC) FAR EAST ASIA

JAPAN / KOREA

53


2008-09 2009-10Variance

(%)

3.481 3.956 14%

0

5

10

15

20

25

2008-092009-10

54


CONTRIBUTION TO GOVT. REVENUE

(PRESUMPTIVE TAX)

2008-09 2009-10Variance

(%)

14.080 22.445 60%

0

5

10

15

20

25

55


FOREIGN INVESTMENT (KEPZ)

2008-092009-10

57

IMPORT & EXPORT

58

Month

IMPORT EXPORT

Tariff

AreaAbroad Total

Tariff

AreaAbroad Total

July 3.406 6.203 9.609 2.403 14.200 16.603

August 3.252 5.912 9.164 2.136 13.843 15.979

September 3.374 6.919 10.293 2.061 12.837 14.898

October 4.755 6.839 11.594 2.570 15.626 18.196

November 3.375 6.018 9.393 2.300 13.490 15.790

December 4.396 7.660 12.056 2.504 14.612 17.116

January 4.156 8.007 12.163 2.433 19.083 21.516

February 4.048 7.134 11.182 2.457 16.563 19.020

March 5.331 9.512 14.843 3.137 18.678 21.815

April 4.993 9.809 14.802 3.189 21.397 24.586

May 5.522 12.476 17.998 3.197 20.604 23.801

June 6.375 11.831 18.206 3.294 23.285 26.579

Total 52.983 98.320 151.303 31.681 204.218 235.899


MONTHWISE IMPORT & EXPORT

(KEPZ)

59

Month

IMPORT EXPORT

Tariff

AreaAbroad Total

Tariff

AreaAbroad Total

July - 0.065 0.065 - 0.063 0.063

August - 0.030 0.030 - 0.098 0.098

September - 0.174 0.174 - 0.010 0.010

October - 0.106 0.106 - 0.093 0.093

November - 0.166 0.166 0.103 0.029 0.132

December - 0.131 0.131 0.063 0.091 0.154

January - 0.100 0.100 0.075 0.094 0.169

February - - - 0.137 - 0.137

March - - - 0.044 0.076 0.120

April - 0.049 0.049 - 0.086 0.086

May 0.034 0.092 0.126 - 0.038 0.038

June - 0.086 0.086 - 0.155 0.155

Total 0.034 0.999 1.033 0.422 0.833 1.255



(REPZ)

60

Month

IMPORT EXPORT

Tariff

AreaAbroad Total

Tariff

AreaAbroad Total

July - 0.002 0.002 - 0.009 0.009

August 0.024 0.269 0.293 - 0.007 0.007

September 0.022 - 0.022 - 0.041 0.041

October - - - - 0.024 0.024

November 0.002 0.044 0.046 - 0.031 0.031

December 0.018 0.002 0.020 - 0.007 0.007

January 0.002 0.095 0.097 - 0.009 0.009

February 0.007 - 0.007 - 0.019 0.019

March 0.017 0.189 0.206 - 0.097 0.097

April 0.005 0.051 0.056 - 0.127 0.127

May 0.007 0.004 0.011 - 0.093 0.093

June - 0.001 0.001 - 0.179 0.179

Total 0.104 0.657 0.761 - 0.643 0.643



(SEPZ)

61

Month

IMPORT EXPORT

Tariff

AreaAbroad Total

Tariff

AreaAbroad Total

July 0.198 0.125 0.323 - - -

August 0.247 0.012 0.259 - - -

September 0.336 0.168 0.504 - 1.121 1.121

October 0.409 0.162 0.571 - - -

November 0.240 0.065 0.305 - - -

December 0.316 0.443 0.759 - - -

January 0.415 0.154 0.569 - - -

February 0.553 0.647 1.200 - 1.876 1.876

March 0.558 0.007 0.565 - 1.478 1.478

April 0.449 0.742 1.191 - 0.713 0.713

May 0.609 0.291 0.900 - 1.303 1.303

June 0.088 0.221 0.309 - - -

Total 4.418 3.037 7.455 - 6.491 6.491



(DUDDAR)

62

Month

IMPORT EXPORT

Tariff

AreaAbroad Total

Tariff

AreaAbroad Total

July 4.036 1.303 5.339 0.134 23.969 24.103

August 3.376 1.323 4.699 0.058 20.180 20.238

September 2.403 0.488 2.891 0.035 15.373 15.408

October 3.999 2.168 6.167 0.075 21.131 21.206

November 2.894 1.072 3.966 0.135 7.401 7.536

December 4.275 1.298 5.573 0.068 10.890 10.958

January 1.171 1.545 2.716 0.142 7.012 7.154

February 2.519 1.531 4.050 0.071 - 0.071

March 4.737 0.865 5.602 0.238 - 0.238

April 3.92 0.030 3.950 0.066 21.199 21.265

May 5.06 0.111 5.171 - 23.002 23.002

June 4.624 1.715 6.339 - - -

Total 43.014 13.449 56.463 1.022 150.157 151.179



(SAINDAK)


63

2008 - 09 2009 - 10

Rs. 106.250 million Rs. 151.008 million

GROWTH IN INCOME


IMPROVING

FINANCIAL POSITION

FINANCIAL HIGHLIGHTS

PERFORMANCE OF 2009 - 10PERFORMANCE OF 2009 - 10

65

2008 - 9

DESCRIPTION

2009 - 10

BUDGET ACTUAL BUDGET

VARIANCE

(%) Vs.

2008-09

260.000 247.920 TOTAL REVENUE 275.000 11%

284.000 266.532 OPERATING

EXPENDITURE

WITHOUT EXTRA

ORDINARY ITEM

275.000 (3%)

(24.000) (18.612) OPERATING

SURPLUS /

(DEFICIT) WITHOUT

EXTRA ORDINARY

ITEM

(0.000) -

100.000 124.862 INVESTMENT

INCOME

117.00 (6%)

76.000 106.250 NET SURPLUS

BEFORE EXTRA

ORIDNARY ITEM

117.000 10%

EXTRA ORDINARY

ITEM:

60.000 - RESTRUCTURING

EXPENSES

60.000 (100)

16.000 106.250 NET SURPLUS

AFTER EXTRA

ORDINARY ITEM

57.000 (46%)

(Rs. in millions)

BUDGET 2009 - 10

66

S. # DESCRIPTION AMOUNT

BUILDING & STRUCTURE

(i) Construction of Visitors Room at Main Gate 20.00

(ii) Construction of Custom Examination Office 11.00

(iii) Construction of Underground Reservoir 20.00

(iv)Construction of Boundary Wall around Pump

House4.00

(v) Garment Training Center 2.50

(vi) SB Park 5.00

(vii) Upgradation of Gate House 1.50

(viii)Construction of wall on the Easter Flank of

approach road5.00

(ix)Construction of Garbage Dumping Places at

KEPZ Phase – II1.00

(x) Building of IP & Facilities Division 10.00

TOTAL 80.000

WATER DISTRIBUTION SYSTEM & SEWERAGE SYSTEM

(i) Upgradation of Water Distribution System 15.00

TOTAL 15.00

ELECTRICAL UPGRADATION

(i) Upgradation of electrical installation 10.00

TOTAL 10.00

(Rs. in millions)

CAPITAL BUDGET 2009 - 10

67

S. # DESCRIPTION AMOUNT

DEVELOPMENT WORKS

(i) Development of KEPZ Phase-II 85.00

(ii) Mehran Highway 40.00

(iii) Feasibility of Gwadar EPZ 50.00

TOTAL 175.00

MACHINERY & EQUIPMENTS

(i) New Weighbridge 5.00

(ii) NADRA Security System 35.00

(iii) ACs / Refrigerators/Photocopiers 2.00

TOTAL 42.00

FURNITURE & FIXTURE

(i)Upgradation of Administration &

Engineering Offices3.00

TOTAL 3.00

IT & OFFICE EQUIPMENTS

(i) IT Hardware / Networking 5.00

(ii) IT Software 5.00

TOTAL 10.00

(Rs. in millions)

69

During the year under review, EPZA managed to

generate surplus income of Rs. 151.008 million, which is

favourable by 157% from the budget estimates.

The effective managerial control on resources &

diversification of investments resulted in maximizing the

earnings and revenues despite the financial crunch. An

amount of Rs. 411.641 million has been realized vs.

budget estimates of Rs. 393.680 million reflecting 5%

increase.

Due to increase in inflation, salaries were increased by

the Government of Pakistan in the Finance Bill 2009-10.

Moreover, utility tariff was also enhanced and KEPZ

Phase-II came into operation. However, the effective

financial control has been exercised, which resulted in

substantial reduction in the expenditure which are

favorable by 78% compared with budget estimates.

INCOME & EXPENDITURE

ACCOUNT 2009 - 10

(Rs. in millions)

BUDGET ACTUALVARIANCE

(%)

INCOME

Revenue 248.440 271.890 9%

Interest income 117.000 126.560 8%

Other income 26.560 11.511 -57%

Amortization of deferred

income1.680 1.680 0%

393.680 411.641 5%

EXPENSES

Administrative and general

expenses275.000 260.633 5%

Other extra-ordinary

expenses60.000 - 100%

335.000 260.633 78%

SURPLUS FOR THE

YEAR58.680 151.008 157%

70

INCOME & EXPENDITURE

ACCOUNT 2009 - 10

411.641, 50%260.633, 32%

151.008, 18%

INCOME

EXPENSES

SURPLUS

BUDGET

ACTUAL

INCOMEEXPENSES

SURPLUS

392

335

57

411.641

260.633

151.008

BUDGET ACTUAL

ACTUAL VS. BUDGET

ACTUAL

71

2008-09 2009-10Variance

(%)

16.463 18.206 11%

0

5

10

15

20

25

2008-09

2009-10

72


INVESTMENT OF SURPLUS FUNDS

73

KEY VISITS

2010

74

VISIT OF MIR HAZAR KHAN BIJARANI, HONOURABLE MINISTER

FOR INDUSTRIES & PRODUCTION (MOIP) TO EPZA

Minister MOIP visiting M/s. Casual Sportswear in KEPZ

Minister MOIP visiting M/s. YKK in KEPZ

75

Mr. Mushtaq Soomro, Proprietor MAK Enterprises briefing the Minister.

Visit of Mr. Tariq Birlas, Vice Chairman / CEO of Tuwairqi Holding

Company, KSA.

76

Chairman EPZA presenting momento to Ms. Fisun AKTUG, Trade

Attaché, Consulate General of Turkey, Karachi.

Mr. Abdullah Caliskan, Secretary General ECO Chamber of Commerce

& Industry discussing issues of mutual interest with Chairman EPZA

77

TOP EXPORTERS

2009 - 2010

78

S.

#DESCRIPTION

2008 -

2009

2009 -

2010

LINE OF

PRODUCTION

1 Beltexco Ltd. 29.3 39.2

Industrial/medical safety

gloves, household and

industrial allied safety

products

2 Prime Safety Ltd. 25.2 33.8

Manufacture industrial

work gloves, PVC dipped

gloves, for DIP gloves

And Garments

3 J&M Clothing Co. 29.0 28.1

Manufacture of Ready

Made Garments

'Burmuda, Trousers,

Shirts, Jeans, Woven

Pants, Etc.

4YKK Pakistan (Pvt.)

Ltd.12.2 18.8 Manufacturing of Zippers

5 Casual Sportswear 14.0 13.7

Unisex Jeans/Trousers,

Dying /Finishing and

Manufacturing of Jeans

6Retex Global (Pvt.)

Ltd.10.3 10.7

Trading activities of

grading,sorting and

recycling of 2nd hand

textiles,shoes and toys

7 Rija Fashions 9.0 10.1

Manufacture of Ready

Made Garments

'Burmuda, Shirts,

Summer Short /Denim

Jacket /Denim Trousers

/Mens Set of 3 Western

Shirts / Etc.

8Denim Clothing

Company (Pvt.) Ltd.5.6 8.9

Manufacturing of

garments (Trousers) and

in house washing facility

9Star Jewelry (Pvt.)

Ltd.4.3 3.5

Production of gold, silver,

platinum & stone studded

jewelry


TOP EXPORTERS 2009 - 10

79

S. # Unit Name2008 -

2009

2009 -

2010Line of Production

10Ahmed Import

Export House (T/U)3.1 3.2

Food Products,

Machinery, Construction

Material, Tea, General

Items i.e. Sugar etc.

11

International

Fragrance

Corporation

3.0 3.1Agarbatti Incense Sticks

& Attar

12Ahmed Food

International1.8 3.0 Jams, pickles, spices

13Crystal Holdings

Limited3.0 2.9 Grading of Used Cothing

14Sunrise Rags Co.

(Pvt.) Ltd.3.0 2.6

Processing of Second

Hand Used Clothing

15Polygal Habib Gums

N.V.2.0 2.3

Auxiliary for Textile

Printing /(Guar

Derivative) /Dehusked

Guar Gum Splits

16Universal Rags

(Pvt.) Limited1.6 2.0

Recycling of Used

Clothes, Wiping Clothes

/Clothing /Zippers &

buttons

17Modern Plastic

Industries1.6 2.0

Recycling of plastic

moulding compound

manufacturing cum-

processing of paper

items, metallic yarn from

polyester



TOP EXPORTERS (KEPZ) 2009 - 2010

80


2009

2009 -


18United International

Industries0.0 2.0

a) Assembly/

Manufacture of Audio

Video Cassettes,

Compact Discs, Floppy

Discs, Computers, Data

Processing Equipments

(b) Plastic Injection

Moulding (c) Coating of

Magnetic Tapes, Video

Tapes, Adhesive Tapes,

Coating of NOR Paper

(Carbon-less) Special

Coatings for Magnetic

Door Entry Cards, Credit

Cards, Security Cards,

Fax Paper, And Special

Security Papers, Heat

Sensitive Papers etc.

19Sunpo Industries

Ltd.2.5 1.9

Textile Garments

Manufacturing (Industrial

Garments /Coveralls

/Overalls)

20 ABC Rag Company 0.0 1.9Processing of Used

Clothing

21S.A.H. Enterprise

Inc.0.0 1.8

Bonded Fiber, polyester

fiber wedding,

Corrugated cartons and

readymade garments

(jackets, pants, shirts,

garments



81


2009

2009 -


22 Shaan Technologies 1.7 1.8

Electronic component

assembly unit for

assembly of light emitting

diodes (led) wire, plastic

or metal components

23Pakistan Japan

Petrochemical Ltd.2.8 1.7

Manufacturing of

Polypropylene bags, P.P

woven bags, jumbo

bags, monofilament

anted bags & P.P tape

24-03-90 / 12-07-99

Recycle polypropylene

P.P granule from pp

waste generated 30-05-

2006 / Recycling of used

clothing.

24M. Mawji & Sons

Int'l (Pvt.) Ltd.0.0 1.6

Trading of Used Textile

Clothing

25A.Q. & Company

International0.0 1.5

Manufacture of Hashmi

Kajal



83

FUTURE HIGHLIGHTS

85

2009 - 10

DESCRIPTION

2010 - 11

BUDGET ACTUAL BUDGET

VARIANCE

(%) Vs.

2009 - 10

275.000 285.081 TOTAL REVENUE 310.00 9%

275.000 260.633 OPERATING

EXPENDITURE

WITHOUT EXTRA

ORDINARY ITEM

299.00 (15%)

- 24.448 OPERATING

SURPLUS /

(DEFICIT) WITHOUT

EXTRA ORDINARY

ITEM

11.00 (50%)

117.000 126.560 INVESTMENT

INCOME

127.00 -

117.000 151.008 NET SURPLUS

BEFORE EXTRA

ORIDNARY ITEM

138.00 (9%)

60 EXTRA ORDINARY

ITEM:

- - Contribution for flood

effectees

26.00 -

57.000 151.008 NET SURPLUS

AFTER EXTRA

ORDINARY ITEM

112000 (26%)

(Rs. in millions)

BUDGET 2010 - 11

86

EXPORT PROJECTIONS

2011 – 2015 (5 YEARS)

ZONE 2010-11 2011-12 2012-13 2013-14 2014-15

KEPZ 251.00 275.00 305.00 335.00 375.00

Saindak 152.50 157.00 166.25 175.50 184.50

Sialkot 1.25 1.50 1.75 2.00 2.25

Risalpur 0.50 0.75 1.00 1.25 1.50

Duddar 15.25 16.75 18.25 20.25 22.75

TSML - 205.00 246.00 369.00 451.00

Total 420.50 656.00 738.25 903.00 1037.00


87

-

200.00

400.00

600.00

800.00

1,000.00

1,200.00

2010-11 2011-12 2012-13 2013-14 2014-15

420.50

656.00

738.25

903.00

1,037.00

EXPORT PROJECTIONS

2011 – 2015 (5 YEARS)


-

50.00

100.00

150.00

200.00

250.00

300.00

350.00

400.00

450.00

500.00

KEPZ SAINDAK REPZ SEPZ Duddar TSML

2010-11

2011-12

2012-13

2013-14

2014-15

88

In the wake of recent floods which were national catastrophe, EPZA

contributed Rs. 26 million towards different Flood Relief Funds as per

following details:

Beneficiary Amount

• Prime Minister Relief Fund Rs. 10 million

• Chief Minister Punjab Flood Relief Fund Rs. 4 million

• Sindh Flood Relief Fund Rs. 4 million

• Balochistan Flood Relief Fund Rs. 4 million

• Kyber PakhtoonKhwa Flood Relief Fund Rs. 4 million

Apart from above, EPZA has allocated following amounts in the budget of

2010-11.

Beneficiary Amount

• SIUT Rs. 1 million

• LRBT Rs. 0.5 million

• Fatmid Foundation Rs. 0.5 million

• Skin Hospital Rs. 0.5 million

• Shaukat Khanum Hospital Rs. 0.5 million

• Scholarships to student of

all five provinces & Saindak Rs. 3 million

• Scholarship for disabled students Rs. 0.5 million

CORPORATE SOCIAL RESPONSIBILITY (CSR)

89

APPENDICES

1. EPZA ORDINANCE

2. SROs, STANDING

ORDERS & PUBLIC

NOTIES

91

EPZA ORDINANCE

(IV OF 1980)

CHAPTER – I : Preliminary

CHAPTER – II : Constitution of the Authority

CHAPTER – III : Power and Duties Of the Authority

CHAPTER – IV : Acquisition of Land

CHAPTER – V : Establishment

CHAPTER –VI : Finance

CHAPTER – VII : Miscellaneous

93

EXPORT PROCESSING ZONES AUTHORITY

ORDINANCE IV OF 1980

THE GAZETTE OF PAKISTAN

EXTRAORDINARY

PUBLISHED BY AUTHORITY

ISLAMABAD, WEDNESDAY, FEBRUARY 6, 1980

PART – I

Acts, Ordinance, President‘s Orders and Regulations including Martial Law

Orders and Regulations.

GOVERNMENT OF PAKISTAN

MINISTRY OF LAW AND PARLIAMENTARY AFFAIRS

(Law Division)

(Islamabad, the 6th February, 1980)

No.F.17(1)/80.Pub.- The following Ordinance made by the President is

hereby published for general information:-

ORDINANCE NO. IV OF 1980

AN

ORDINANCE

to establish an Export Processing Zones Authority

WHEREAS it is expedient to establish an Export Processing Zones Authority

for making all arrangements for the planning, development and management

of the Zones and to provide for matters connected therewith or ancillary

thereto;

AND WHEREAS the President is satisfied that circumstances exist which

render it necessary to take immediate action;

Now, THEREFORE, in pursuance of the Proclamation of the fifth day of July

1977, read with the Laws (Continuance in Force) order, 1977 (C.M.L.A.Order

No. 1 of 1977), and in exercise of all powers enabling him in that behalf, the

President is pleased to make and promulgate the following Ordinance:-

94

CHAPTER – I

PRELIMINARY

1. Short title, application and commencement..- (1) This Ordinance

may be called the Export Processing Zones Authority Ordinance, 1980.

(2) It shall apply to all industrial undertakings set up or operating in the

Export Processing Zone.

1[(3) It shall come into force on such date as the Federal Government may,

by notification in the official Gazette, specify.

2. Definitions.- In this Ordinance, unless there is anything repugnant in

the subject or context:-

(a) ―Authority‖ means the Export Processing Zones Authority

established under section 4;

(b) ―Board‖ means the Board constituted under section 5;

© ―Bonded area‖ means an area declared as a public warehouse

under section 12 of the Customs Act, 1969 (IV of 1969);

(d) ―Chairman‖ means the Chairman of the Authority;

(e) ―Industrial undertaking‖ means an industry, undertaking or

establishment engaged in the production, distribution or

processing of such goods or the providing of such services as

may be specified in this behalf by the Federal Government;

(f) ―Investor‖ means a person or company investing in an industrial

undertaking located in a Zone;

(g) ―manufacture‖ with its grammatical variations and cognate

expressions, means the process of converting materials into a

new product or article, whether or not by power operated

machinery, whereby a change in tariff classification has been

effected;

(h) ―prescribed‖ means prescribed by rules;

(i) ―rules‖ means rules made under this Ordinance;

(j) ―tariff area‖ means any area in Pakistan outside the limits of a

Zone; and

(k) ―Zone‖ means such area as the Federal Government may, by

notification in the official Gazette, declare to be a Zone for the

purposes of this Ordinance.

3. Zone to be bonded area.- Every Zone shall be a bonded area.

1[(3) Specified by S.R.O. 208(1)/80, dated 02-02-1980 for the following;

In exercise of the power conferred by sub-section(3) of section-1 of the

Export Processing Zones Authority Ordinance, 1980 (IV of 1980), the

Federal Government is pleased to specify the 20th day of February

1980, to be the date on which the said Ordinance shall come into force.

95

4. Establishment of the Authority.-(1) There shall be established an

Authority to be known as the Export Processing Zones Authority for

carrying out the purposes of this Ordinance.

(2) The Authority shall be a body corporate, having perpetual succession

and common seal, with power, subject to the provisions of this

Ordinance, to acquire and hold property, both moveable and

immovable, and shall by the said name sue and be sued.

5. Management.- The general direction and administration of the

Authority and its affairs shall vest in a Board.

6. Constitution of the Board.- (1) The Board shall consist of not more

than nine members, including the Chairman to be appointed by the

Federal Government.

(2) The Chairman and other members of the Board shall hold office during

the pleasure of the Federal Government and unless sooner removed

shall hold office for a period of three years.

(3) No act or proceeding of the Board shall be invalid merely on the

ground of the existence of any vacancy in, or defect in the constitution

of, the Board.

(4) The Chairman and each member of the Board shall receive such

salaries and allowances or such fee as may be determined by the

Federal Government in each case.

7. Duties and functions of Chairman and members.-(1) The Chairman

and members shall discharge such duties and perform such functions

as are assigned to them under this Ordinance or by the Federal

Government.

(2) Until the Board is duly constituted, the Chairman shall, subject to such

directions as the Federal Government may, from time to time, give,

exercise the powers, discharge the duties and perform the functions of

the Board.

8. Headquarters of the Authority.- The headquarters of the Authority

shall be situated at Karachi.

96

CHAPTER – II

CONSTITUTION OF THE AUTHORITY

9. Master Plan and master programme.- The Authority shall prepare a

master plan and a phased master programme for the development of

the Zones.

10. Preparation of scheme for infrastructure.- The Authority

may, pursuant to the master plan, prepare schemes in respect of:-

(a) land use, zoning and land reservation;

(b) public buildings;

© industrial warehousing and buildings;

(d) transportation and communications;

roads, streets, railways, jetties, walls, workshops, sheds, godowns, navi

gation channels;

(e) telecommunication, including wireless, telex and telephones;

(f) community facilities, including water supply, sewerage

disposal, electricity supply, gas supply and other public utilities; and

(g) environmental control and prevention of pollution.

11. Sanctioning of industries, etc.- (1) The Authority may, with the

approval of the Federal Government, frame schemes and lay down

procedure in respect of sanctioning the establishment and operation of

industries in the Zones.

(2) An industry sanctioned under sub-section(1) shall operate subject to

such terms and conditions as may be enunciated in the letter of

sanction issued by the Authority.

(3) The materials and manufactured goods shall not be exported from the

Zones into the tariff area except to the extent and in the manner to be

specified by the Authority in each case with the prior approval of the

Federal Government.

12. Power of the Authority.- (1) Subject to the other provisions of this

Ordinance and the rules, the Authority may take such measures and

exercise such powers as may be necessary for carrying out the

purposes of this Ordinance.

(2) In particular, and without prejudice to the generality of the powers

conferred by sub-section(1), the Authority may:-(i) incur any expenditure;

(ii) undertake any work in the Zones in pursuance of any scheme;

(iii) procure plants, machinery, instruments and material required for its

use;

(iv) enter into and perform all such contracts as it may consider necessary;

(v) cause studies, surveys, experiments and technical research to be made

or contribute towards the cost of any such

studies, surveys, experiments or technical research;

(vi) restrict or prohibit by general or special order any change in the use of

land and alteration in buildings and installations; and

(vii) cause removal of any work obstructing the execution of any of its

schemes.

CHAPTER – III

POWERS AND DUTIES OF THE AUTHORITY

97

13. Liability to acquisition.- All land within the Zones shall be liable to

acquisition at any time in accordance with the provisions of this

Chapter.

14. Acquisition of Land.- (1) Where any land or interest in any land within

any Zone is required by the Authority for any of its purposes, that land

or interest shall be acquired under the Land Acquisition Act, 1894 (I of

1894), by the Provincial Government concerned at the request of the

Authority.

(2) The acquisition of land or interest therein shall, for the purposes of the

Land Acquisition Act. 1894(I of 1894), be deemed to be required for a

public purpose.

98

CHAPTER – IV

ACQUISITIION OF LAND

15. Establishment.- (1) The Authority may, from time to time, appoint

such officers, servants, experts or consultants as it may consider

necessary for the performance of its functions, on such terms and

conditions as it may deem fit;

Provided that the Chairman may, in cases of urgency, appoint such

officers, servants, experts or consultants and on such terms and

conditions as he deems fit, subject to subsequent approval by the

Board.

(2) The Authority shall be competent to take disciplinary action against

its officers and servants.

16. Chairman, members, officers, etc., to be public servants.- The

Chairman, members, officers, servants, experts and consultants of

the Authority shall, when acting or purporting to act in pursuance of

any of the provisions of this Ordinance, be deemed to be public

servants within the meaning of section 21 of the Pakistan Penal

Code (Act XLV of 1860).

17. Indemnity.- No suit, prosecution or other legal proceeding shall lie

against the Authority, the Chairman, any

member, officer, servant, expert, or consultant of the Authority in

respect of anything done or intended to be done in good faith under

this Ordinance.

18. Delegation of powers.- The Authority may, by general or special

orders, delegate to the Chairman or a member or officer of the

Authority any of its powers, duties or functions under this

Ordinance, subject to such conditions as it may think fit to impose.

99

CHAPTER – V

ESTABLISHMENT

19. Authority‟s Fund.- (1) There shall be established a fund to be

known as the Export Processing Zones Authority Fund which shall

vest in the Authority and shall be utilized by the Authority, in

accordance with the general or specific directions of the Federal

Government to meet charges in connection with its functions under

this Ordinance, including the payment of salaries and other

remuneration to the Chairman, members, officers, servants, experts

and consultants of the Authority.

2) The Export Processing Zones Authority Fund shall consist of:-

(a) grants made by the Federal Government;

(b) loans obtained from Government;

© grants made by the local bodies;

(d) sale proceeds of moveable and immoveable property and

receipts for services rendered;

(e) Loans obtained by the Authority with the special or general

sanction of the Federal Government;

(f) foreign aid and loans obtained from any source outside

Pakistan with the sanction of, and on such terms as may be

approved by, the Federal Government;

(g) all rates, taxes, fees, charges levied and fines imposed by the

Authority under the regulations made under this Ordinance;

(h) all revenues derived by the Authority from any property

administered by the Authority; and

(i) all other sums receivable by the Authority.

100

CHAPTER – VI

FINANCE

20. Authority to be deemed to be a local Authority.- The Authority shall

be deemed to be a local authority within the meaning of the Local

Authorities Loans Act. 1914 (IX of 1914), for the purpose of borrowing

money in accordance with the said Act and the execution of any

scheme under this Ordinance shall be deemed to be a work which

such authority is legally authorized to carry out.

21. Borrowing, etc., by the Authority.- The Authority may, with the prior

approval in writing of the Federal Government, raise funds for the

purpose of its working capital by issuing bonds and debentures

carrying interest at such rates as may be approved by the Federal

Government.

22. Budget.- In the month of January each year, the Authority shall submit

to the Federal Government for approval a statement of the estimated

receipts and expenditure in respect of the next financial year in such

manner and form as may be prescribed.

23. Audit and accounts.- (1) The Accounts of the Authority shall be

audited every year by the Auditor-General of Pakistan in such manner

as may be prescribed.

(2) Copies of the audit report shall be sent to the Authority and the

Authority shall send the report along with its comments to the Federal

Government.

(3) The audit report shall be available for public inspection.

(4) The Federal Government may issue directions to the Authority for the

rectification of matters objected to by the Auditor-General and the

Authority shall comply with every such direction.

101

CHAPTER – VI

FINANCE

24. Disputes to be referred to arbitration.-(1) Any dispute relating to the

interpretation of the provisions of any agreement made under any

scheme prepared under section 10 between the Authority and an

investor or the rights of the parties to such agreement or any rights

conferred or any liability imposed by this Ordinance shall be referred

for arbitration to an arbitrator appointed by the parties.

2) Any award made upon such reference shall be final and binding on

the parties and shall not be subject to any appeal or any other

remedy.

(3) The provisions of the Arbitration Act, 1940, (X of 1940) shall, so far as

they can be made applicable, apply to arbitrations under sub - section

(1).

25. Power to exempt.- The Federal Government may, by notification in

the official Gazette, exempt any Zone from the operation of all or any

of the provisions of any law for the time being in force which relates to

any matter within the legislative competence of Parliament.

26. Power to make rules.- The Federal Government may, by notification

in the official Gazette, make rules for carrying out the purposes of this

Ordinance.

27. Power to make regulations.- (1) The Authority may, with the

approval of the Federal Government, make regulations, not

inconsistent with the provisions of this Ordinance or the rules, for

carrying out the purposes of this Ordinance.

2) In particular and without prejudice to the generality of the foregoing

power, such regulations may provide for the levy of fees, rates and

charges for services rendered by the Authority.

GENERAL M. ZIA-UL-HAQ

PRESIDENT

K. M. A. SAMDANI

SECRETARY

102

CHAPTER – VII

MISCELLANEOUS

103

SROs, STANDING ORDERS

& PUBLIC NOTICES

105


MINISTRY OF INDUSTRIES

NOTIFICATION

Islamabad, the 23rd September, 1981

EXPORT PROCESSING ZONES AUTHORITY RULES, 1981

S.R.O. 1058(1)/81.- In exercise of the powers conferred by section 26 of the Export

Processing Zones Authority Ordinance, 1980 (IV of 1980), the Federal Government

is pleased to make the following rules, namely:-

1. Short title and commencement.- (1) These rules may be called the Export

Processing Zones Authority Rules, 1981

(2) They shall come into force at once.

2. Definitions.- In these rules, unless there is anything repugnant in the subject or

context:

(i) ―application‖ means an application to the Authority for setting up industrial

undertaking in the Zones in such form as may be specified from time to

time by the Authority;

1[(ia) ―foreign collaborator‖ means an investor, whether a foreigner or a non-

resident citizen of Pakistan, who makes investment in a Zone in a joint

venture with a resident citizen of Pakistan;

2[(iaa) ―Controller of Insurance‖ has the same meaning as in the Insurance

Act, 1938 (IV of 1938);

3[(ii) ―Foreign investment‖ means an investment made by foreigner and/or a

non-resident citizen of Pakistan in form of cash, foreign exchange or

equipment or in any other form approved by the Authority;

4[(iii) ―foreign investor‖ means an investor who is not a citizen of Pakistan or is

non-resident citizen of Pakistan or a company incorporated outside

Pakistan by a foreign national and/or non-resident citizen of Pakistan;

5[(iiia) ―insurer‖ shall have the same meaning as in the Insurance Act, 1938 (IV

of 1938).

1[(ia) Added by S.R.O. 580(1)/85, dated 09-06-1985.2[(iaa) Added by S.R.O. 857(1)/82 dated 08-09-1982.3[(ii) Sub. By S.R.O. 165(KE)/89, dated 30-08-1989 for the following:

“foreign investment” means investment made by a foreigner in an industrial

undertaking in a Zone, in the form of cash, foreign exchange, imported

machinery or equipment, or in any other form approved by the Authority;4[(iii) Subs. By S.R.O. 165(KE)/89, dated 30-08-1989 for the following;

“foreign Investor” means an investor who is not a citizen of Pakistan or a

company incorporated outside Pakistan by foreigners;5[(iiia)Added by S.R.O-857(i)/82, dated 08-08-1982.

106

6[(iv) ―Joint Venture‖ means an industrial enterprise set up with participation

between foreign investors or between a foreign investor and a resident

citizen of Pakistan or a company incorporated in Pakistan whose share in

investment shall not exceed 40% of the total investment;

7[(v) ―non-repatriable investment‖ means an investment in foreign currency

which is purchased from the State Bank of Pakistan by a resident citizen

of Pakistan or company incorporated in Pakistan on the condition that

capital, dividends and profits shall not be repatriated outside Pakistan;

(vi) ―Ordinance‖ means the Export Processing Zones Authority Ordinance

1980 (IV of 1980);

(vii) ―registration‖ means registration of an investor with the Authority;

(viii) ―regulations‖ means regulations made by the Authority under section 27

of the Ordinance; and

(ix) ―Scheme‖ means a scheme prepared under section 10 or framed under

section 11 of the Ordinance.

(ix) Eligibility.- The following categories of persons shall be eligible to establish

industrial undertaking in a Zone, namely:-

(1) a foreign investor;

8[(2) a foreign investor in collaboration with a resident citizen of Pakistan or a

company incorporated in Pakistan through exchange investment under

the provisions of the State Bank of Pakistan F/E Circular No. 12; and

9[(3) a resident citizen of Pakistan or resident forms and companies of

Pakistan, are allowed to make equity investment in companies whether

incorporated or not or joint ventures, through foreign exchange

investment up to 100% under the provisions of the State Bank of Pakistan

F.E. Circular No. 12 of 2001.

6[(iv) Sub. by S.R.O. 165(KE)/89, dated 30-08-1989 for the following:

“Joint venture” means an industrial enterprise set up with participation

between foreign investors or between foreign investor and a non-resident

citizen of Pakistan with non-repatriable investment;7[(v)a.Subs. by S.R.O.165(KE)/89, dated 30-08-1989 for the following:

“non-repatriable investment” means an investment in foreign currency out of

the earnings abroad by a non-resident citizen of Pakistan, who has not

surrendered his Pakistan passport, on the condition that capital, dividends

and profits would not be repatriated outside Pakistan;

b. The words “in joint venture with a foreign investor” omitted by

SRO.915(1)/92, dated 23-09-1992.8[(2) Subs. by SRO.80(KE)/2005, dated 03-07-2005.9[(3) Subs. by SRO.80(KE)/2005, dated 03-07-2005.

107

4. Investment to be in foreign currency.- All investments made in a Zone shall

be in foreign convertible currency.

5. Type of industries to be set-up etc. (1) Export oriented industries requiring

sophisticated technology, advanced marketing arrangement, using local raw

materials and labour shall be preferred.

(2) Industries which compete with similar export industries in the tariff area

would normally not be allowed to be set up in the Zone.

(3) Supporting enterprises to provide essential services to industrial

undertakings in the Zone shall be allowed to be set up.

10[(4) Consignment and distribution services for receiving and storing goods

meant for export to foreign markets and to the tariff area subject to the

provisions of national import policy shall be permitted.

(5) Industries manufacturing prohibited items, such as, narcotics, alcoholic

drinks, armaments or those causing serious environmental pollution shall

not be permitted to be established in the Zones.

6. Application for setting up industrial undertaking.- 11[(1) Investors desiring to

establish an industrial undertaking in a Zone shall submit 11 (…..) their

application to the Authority complete in all respect.

(2) Each application shall be accompanied by a non-refundable fee specified

by the Authority from time to time.

7. Power of the Authority to accept or reject any application.- (1) The Authority

may accept or reject any application without assigning any reasons.

(2) If the application is accepted, the Authority shall issue a letter of sanction

to the investor containing the terms and conditions subject to which the

sanctioned industry shall operate.

8. Time for implementation of the sanction.- On receiving the letter of

sanction, the applicant shall be required to implement and complete the industry

within the period specified in the letter of sanction failing which the sanction shall

stand cancelled, provided the Authority may, for sufficient cause, extend the said

period.

10[(4) Subs. by SRO.165(KE)/89, dated 30-08-1989 for the following:

Consignment and distribution services for receiving and storing foreign

goods meant for re-export shall be permitted.

11[(1) The words “twelve copies of” omitted by SRO. 1287(I)/84, dated 26-12-1982

108

9. Registration.- If an industrial undertaking is sanctioned for a Zone, the

investor shall register himself or itself with the Authority before commencing

work on the project or site by entering into an agreement in such form, as

may be specified from time to time, by Authority containing the general

terms, conditions and procedure under which an industrial undertaking is

sanctioned to operate in the Zone:

Provided that the Authority may exempt any investor from one or more of the

general conditions laid down in the agreement.

12[9.A Power of the Authority to cancel sanction.- If in the opinion of the

Authority an investor has failed to carry out the purpose for which, or has not

fulfilled the conditions of, the sanction accorded to him under sub-section (1)

of section 11 of the Ordinance, it may, after giving him notice to show

cause, cancel, revoke or withdraw the sanction.

10. Issue of licenses to banks to open branches, etc.- (1) Licenses for

opening of branches in a Zone to banks may be issued by the State Bank of

Pakistan hereafter in this rule and rule 11 referred to as the Bank:

(a) to foreign banks operating in Pakistan outside the licensing policy on

merit; and

(b) to Pakistani banks on merit.

(2) The banks to whom licenses are issued under sub-rule(1) shall meet

all preliminary expenses of opening of branches from their external

resources.

(3) The Bank shall not allow the incorporation of any bank or

subsidiaries thereof in a Zone.

(4) The branches of the banks opened in the Zones, hereafter in this rule

and rule 11 referred to as branches, shall not be eligible for any

financial assistance from the Bank.

(5) The branches may, in addition to the business of banking, engage in

all or any of the forms of business enumerated in section 7 of the

Banking Companies Ordinance, 1962 (LVII of 1962).

(6) The banking statistics of the branches shall not form part of the

banking statistics of Pakistan:

Provided that the Bank may, with a view to obtaining statistical data about

the operations of the branches, call such periodical returns from such

branches from time to time as it may think fit.

11. Dealings in foreign exchange, etc.- (1) The Bank may issue licenses to the

branches for transacting foreign exchange business in the Zones.

(2) The rules applicable to the import into, and export from, Pakistan of

Pakistani currency shall apply to the import into, and export from, the

Zones to the tariff area.

12[9.A Added by SRO.1287(I)/82, dated 26-12-1982

109

(3) Foreign currency notes and other foreign currency instruments may

be exported from the Zones to the tariff area.

Provided that all such foreign currency notes shall, immediately after

entry, be surrendered to an authorized dealer in the tariff area.

(4) All imports into the Zones shall be paid for out of the importers own

foreign exchange resources abroad without involving, either directly

or indirectly, Pakistan resources.

(5) Imports into the Zones from the tariff area shall be deemed to be

exports from Pakistan and imports into the tariff area from the Zones

shall be deemed to be imports from abroad and shall be subject to

the same conditions and restrictions as are applicable to similar

imports from abroad.

13[11-A Issue of licenses to Insurers to open branches, etc.- (1) Licenses for

opening of branches in a Zone to an Insurer may be issued by the Authority:-

(a) to Pakistani insurers on the recommendations of the Standing

Committee constituted under the Federal Government Resolution

No.12/11/1973 Ins.2, dated the 8th December, 1975; and

(b) to non-Pakistani insurers on the recommendations of the Controller of

Insurance.

(2) The Insurers to whom licenses are issued under sub-rule (1) shall

meet all preliminary expenses of opening of branches from their

external resources and all expenses on the maintenance of such

branches shall be met either out of the earnings of these branches or

from the insurers external resources.

(3) The Authority shall not allow the incorporation of any insurer or

subsidiary thereof in a Zone.

14[11-B Furnishing of information report, return, etc.- All insurers operating in a

Zone shall furnish information and submit returns or reports from time to time

to the Controller of Insurance in the manner required by him in writing.

12. Travel of Pakistanis, etc., in the Zones.- (1) Pakistanis of occupant

industries holding identity cards from a Zone‘s administration and

proceeding on official visit shall pay the cost of the ticket in convertible

foreign exchange.

(2) The expatriates employed by the occupant industries shall, in respect

of their foreign travel both on private and official account, pay the cost

of the ticket in convertible foreign exchange.

13[11.A Added by SRO.857(I)/82, dated 08-09-1982.14[11.B Added by SRO.857(I)/82, dated 08-09-1982.

110

13. Maintenance of accounts and credit facilities.- (1) Persons resident of the

tariff area shall not be permitted to maintain accounts with the branches of

bank in the Zones.

(2) Foreign exchange funds of the enterprises may be kept with the

banks in a Zone in any convertible currency.

(3) No industrial undertaking in a Zone shall be extended any credit

facility out of Pakistan resources including financing by the Industrial

Development Bank of Pakistan.

14. Rebate of excise and customs duties for supplies to Zones.- The

normal excise and customs duties and other taxes leviable on raw

materials, machinery, or goods in the tariff area shall be eligible for rebate

under the existing rules when supplied to a Zone.

15. Facilities.-(1) The Authority shall undertake to provide infrastructure

facilities such as electricity, water, gas, telephone and telex which are

considered necessary for efficient industrial operations in a Zone:

Provided that the cost of providing such facilities shall be borne by industries

set up in a Zone.

(2) The Authority may also provide to investors a list of contractors for

providing necessary services such as stevedoring, movement of

goods to and from a Zone, factory design and construction for their

information and guidance.

(3) Postal, fire services, first aid station and medical centers shall be

provided within a Zone.

15[(4) Supporting enterprises including banking, insurance and such

services as may be specified by the Federal Government from time to

time shall also be provided within a Zone.

16. Imports and exports.- A 16(i) service charges of 16(ii) 0.5% on the F.O.B

value of all goods 16(……) exported from any Zone shall be payable to

the Authority.

17. Entry into and exit from a Zone.-(1) Entry and exit of persons and

goods into and from a Zone shall be in accordance with the regulations

framed by the Authority.

15[(4) Added by SRO.1287(I)/82, dated 26-12-198216 Omitted by SRO.165(KE)/89, dated 30-08-1989, for the following;

In rule 16, the words “imported into or” shall be omitted.

16(i) Added through cirular No. Fin-FR(CIR) /001/005 dated April 20, 2005

subsequent to BOD decision taken 67th meeting held on July 27,

2002.

16(ii) Substituted by SRO –(1)/2000 dated August 24, 2004 MOI NO.

1(8)/2000-INV-IV

111

(2) Payments for raw materials, machinery or goods and services

purchased by a Zone investor from the tariff area shall be made in

convertible foreign currency.

18. Monetary transactions.- All payments to labour, managerial staff and for

services and facilities within a Zone shall be made in Pakistani rupees

against the surrender of foreign exchange to an authorized bank or banks as

may be designated by the Authority.

19. Environmental pollution.- Industries whose operation results in the

creation of harmful affluents that cause environmental pollution shall be

required to adopt such measures as are necessary for the proper treatment

of the pollutants before they are disposed of.

20. Cost of additional services.- The Authority may impose such fees or

charges for services which it may additionally provide from time to time in

connection with-

(a) development and maintenance of public utilities and installations;

(b) measures for maintenance of environmental, sanitation and public

safety; and

(c) such other related services which the Authority may deem necessary.

21. Suspension and cessation of operations.- (1) If an industrial undertaking

in a Zone decided to cease or suspend its registered operations, a written

notice thereof shall be se4nt to the Authority before the decision is

implemented.

(2) Subject to the provisions of the relevant laws and the rights of

mortgage creditors, the cessation of business operations shall have

the effect of automatically cancelling the certificate of registration

upon which the industrial undertaking shall cease to be entitled to the

incentives provided for it.

22. Employment of foreign nationals.- (1) An investor may employ foreign

nationals for which an application shall be made in the form prescribed by

the Authority.

(2) A foreign national employed under sub-rule (1) shall be granted an

initial term of employment of three years, extendable from year to

year.

(3) Request for further extension shall be filed with Authority atleast thirty

days before the expiry date of the authorized stay.

112

23. Exclusion of items detrimental to public health & safety.- The Authority

may at any time, order the exclusion from a Zone of such

goods, chemicals, materials, processes or operations which in its judgement

are detrimental to the public interest, health or safety.

24. Privilege of the Authority to call for reports.- The Authority may order any

industrial undertaking or its supporting enterprise to report on the following

particulars, namely:

(i) monthly report on manufacturing process or assembly of

commodities;

(ii) monthly report on commodity import and export;

(iii) status of arrival of commodities imported into the Zone;

(iv) suspension of business operation for over one month;

(v) any other information which is considered necessary by the Authority

concerning the business activities of the industrial undertaking and its

supporting enterprise.

17[24.A Change in incentive package.- Change in the incentive package, under

which an investment has been sanctioned in a Zone, shall not be made

except where such change is more advantageous to the investor and is also

accepted by him.

25. General Provision.- (1) The Authority may, from time to time issue

memoranda and circulars to implement the provisions of these

rules, regulations and schemes

(2) The Authority may, with the approval of the Federal Government set

up on Advisory Committee for the Authority which may include

representatives of the private sector.

HASINUDDIN AQUIL

Deputy Secretary

17[24.A Added by SRO.165(KE)/89, dated 30-08-1989.

THE CUSTOMS RULES, 2001

Notification No. S.R. O. 450(1)/2001, 18th June, 2001

CHAPTER XII

EXPORTS

SUB CHAPTER (c)

EXPORT PROCESING ZONE

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

the subject of context,-

(a) ―Authority‖ means the Export Processing Zones Authority established

under the Ordinance;

(b) ―Collector of Customs‖, in relation to a Zone, means the Collector of

Customs, in whose jurisdiction such Zone is established;

(c) ―import‖, in relation to a Zone, means import from abroad and includes

goods introduced into a Zone from the Tariff Area‘

(d) ―investor‖ and ―industrial-undertaking‖ shall have the same meaning as

are, respectively, assigned to them in the Ordinance;

(e) ―Ordinance‖ means the Export Processing Zones Authority Ordinance

1980 (IV of 1980);

(f) ―Tariff Area‖ means any area in Pakistan outside the limit of a Zone; and

(g) ―Zone‖ means such area as is declared by the Federal Government to

be a Zone under the Ordinance.

226. Import of goods into the Zones.--(1) Subject to sub-rules (7) and

(8), any goods can be imported into the Zones from abroad or from the Tariff Area.

(2) A separate bill of entry in respect of goods imported for a Zone along

with other documents showing details of the goods as required under the Act and

the Rules made thereunder shall be presented to the Customs authorities for

assessment and clearance.

(3) Goods imported into a Zone shall be assessed in accordance with the

existing procedure.

(4) The exemption granted under Board‘s Notification No.SRO.

881(I)/80, dated the 23rd August, 1980 shall, be applicable to

machinery, equipment, materials to be used solely within the limits of a Zone and

goods imported into the Zone for warehousing purposes:

Provided that Investors in Export Processing Zones shall be allowed to dispose

off their machinery in tariff area after three years from date of filing of the bill of entry

of its import subject to import policy order and payment of duties and taxes.

(5) An investor or his licensed clearing agent duly approved and authorized

by the Authority shall carry out necessary formalities regarding Customs clearance.

113

(6) All goods so cleared shall be secured and forwarded to the Zone under

Customs supervision, a pass shall be sent with the goods specifying the name of the

importer and the clearing agent, if any, number of vehicle, description and quantity

of goods with the marks and numbers and contents thereof and, on receipt of the

goods in the Zone, the officer of Customs allowing the goods to enter the Zone shall

retain the pass.

(7) Admission of goods imported for a Zone shall not be refused except

when the goods are liable to restrictions or prohibitions imposed on the grounds of

public morality or order, public security hygiene or health or for veterinary or phyto-

pathological consideration, or relating to the protection of patents, trademarks or

copy-rights.

(8) Hazardous goods may be allowed to be admitted to a Zone only when

an area specially designed for its storage is made available within the Zone.

(9) Goods admitted to a Zone may remain there for such period as may be

prescribed by the Authority.

1[(10)(a) Import of vehicles shall be allowed without payment of customs duty and

other taxes as per the entitlements given in the table below, namely:-

TABLE

S.No. Quantum of Investment in EPZ Vehicles Allowed

(1) (2) (3)

1. US$ 10.00 million or more upto US$ 25 million; 03

2. More than US$ 25 Million but less than US$ 50 Million; 05

3. Equal to or more than US$ 50 Million but less than

US$ 75 Million 10


US$ 100 Million 15


US$ 125 Million; and 20

6. Equal to or more than US$ 125 Million, 25

(b) subject to a maximum of one motor car of up to 1600 c.c. within the

number of vehicles allowed and shall be further subject to the verification of the

amount of investment and completion of the project within a time period of three

years by the Export Processing Zones Authority.}

2[(11) Units employing upto 25 workers will be allowed to import or purchase

one coaster while units employing more than 25 will be allowed to import or

purchase a bus upto 50 seats. Similarly, units with turnover of US$ 5.00 million or

more per annum will be allowed to import or purchase one cargo vehicle or truck.]

1[(10)a. Sub-rule (10) substituted by Notification No. S.R.O 889(1)/2007, dated 1st September, 2007

reported as PTCL 2008 St.578 (ii). Before substitution sub-rule (10) was added by

Notification No. S.R.O 461(1)/2004, dated 12th June, 2004, reported as PTCL 2004 St. 1181.2[(11) . Sub-rule (11) added by Notification No. S.R.O 461(1)/2004, dated 12th June. 2004, reported

as PTCL 2004 St. 1181.

114

3 [(12) Mining Projects in the notified Export Processing Zones may import

vehicles, free of customs duty and sales tax, according to their requirements on

production of full justification supported by the Ministry of Petroleum and Natural

Resources.]

227. Introduction of goods into the Zones from Tariff Area.- (1) Goods

from the Tariff Area required for further processing in a Zone shall be admitted after

completion of export formalities which normally observed for export out of the

country.

(2) Goods which are entitled to exemption or repayment of Customs-duties

and sales tax on exportation shall qualify for such exemption or repayment

immediately after these have been admitted in to a Zone in accordance with the

provisions of the Board‘s Notification No. S.R.O 882(1)/80, dated 23rd August, 1980.

228. Export of goods from the Zones.- (1) Any goods removed from a

Zone for exportation shall be exported under the export procedure as laid down in

the Act and the rules made there under 1[***].

(2) Goods cleared for export shall be forwarded to the exporting station

under Customs supervision; a pass shall be sent with the goods, specifying the

name of the Exporter and the clearing agent, if any, number of vehicles, description

and quantity of goods with the marks and numbers and, on receipt of the goods shall

retain the pass.

(3) All Customs formalities regarding removal of goods from the Tariff Area

shall be completed at the main Customs Check Post or any place within the Zone

approved for this purpose by the Collector of Customs.

(4) Export Processing Zones manufactures shall be treated at par with the

bonded manufacturers in tariff area.

2 [(5) The units established in the Export Processing Zones 3[excluding the

units as mentioned in the table below, shall export only upto twenty per cent of their

total production to tariff areas in Pakistan while eighty per cent shall be exported to

other countries 4[:]]

3 [(12)Sub-rule (12) added by Notification No. S.R.O. 492(1)/2005, dated 23rd

May, 2005, reported as PTCL 2005, St. 603(ii).1[***] The words, letters, full stop, figures and comma ― and documentation shall be

completed on the basis of exemption from duties and taxes under the Board‘s

Notification NO.S.R.O881(1)/80, dated 23rd August,1980‖ omitted by Notification No.

S.R.O. 461(1)/2004, dated 12th June, 2004 reported as PTCL 2004 St. 1181.2 [(5) Sub-rule (5) inserted by Notification No. S.R.O. 461(1)/2004, dated 12th

June, 2004, reported as PTCL 2004 St. 1181.3[ Substituted for the words ―excluding M/s. Al-Tuwairqi Steel Mills Karachi‖ by

Notification No .S.R.O 483(1)/2007, dated 9th June, 2007, reported as PTCL 2007 St.

1770(i) Earlier The words and comma ―excluding M/s. Al-Tuwairqi Steel Mills Karachi‖

inserted by Notification No. S.R.O. 23 (1)/2006M dated 5th January, 2006, reported as

PTCL 2006 St. 1147(I).4 [:]] Substituted for the full stop by Notification No. S.R.O. 240(1)/2006, dated 13th

march, 2006, reported as PTCL 2006 St.1255 (ii).

115

5[Provided that the limit of twenty per cent on exports to tariff areas in Pakistan shall

not apply to the goods supplied free of charge for relief operations in earthquake hit

areas through Federal Relief Commissioner or NGOs approved by the Economic

Affairs Division, Government of Pakistan.]

1TABLE

S. No. Name of Unit Maximum Level of Export

to Tariff Area

(1) (2) (3)

1. M/s. Al-Tuwairqi Steel Mills, Karachi 100% of the production

2. M/s. Filling & Packing Material 50% of the production]

Manufacturing Company (FIPCO), Karachi

2[3. M/s. MRDL Saindak 100% of the production of

magnetite concentrate to

Pakistan Steel]

3[4. Units established in the Export Processing 50% of the production]

Zone, Gawadar

229. Removal of goods from the Zone to Tariff Area:- (1) Removal of

imported raw materials, imported goods in the same state and goods produced by

investors in a Zone to Tariff.

Area for home consumption may be allowed subject to the import restrictions and

formalities applicable to imports from abroad; customs-duties and other taxes levied

on imports into Tariff Area from the Zone shall be the same as duties and taxes

levied on similar imports from abroad.

(2) Any goods permitted by the aforesaid authority for entry into the Tariff

Area under sub-rule (1) may be taken out of the Zone after fulfilling all the

requirements prescribed under the Act and the Rules made hereunder for the direct

import from aboard into the Tariff Area.

(3) The point in time to be taken into consideration for the purpose of

determination of value and the rate of duties and other taxes applicable on goods

removed for home consumption shall be determined in accordance with provision of

the Act and the Rules made thereunder.

(4) The goods produced in a zone and removed to Tariff Area for home

consumption shall be chargeable to customs-duties in the state in which they enter

the Tariff Area.

Explanation:- `The normal value of the goods manufactured in the E.P.Z., on

entry into the Tariff Area and vice versa shall be assessed as per the provisions of

section 25 of the Customs Act, 1969.

5[ Provisio added by Notification No. S.R.O. 240(1)/2006, dated 13th March 2006, reported as

PTCL 2006 St. 1255(ii)1T Table added by Notification No. S.R.O. 483(1)/2007, dated 9th June, 2007, reported as PTCL

2007 St. 1770(1).2[3. S. No 3 and the entries relating thereto added by Notification No. S.R.O (1)/2009, dated 19th

February, 2009.3[4. S. No 4 and the entries relating thereto inserted by Notification No. S.R.O 600(1)/2009, dated

26th June, 2009.

116

230. Subcontracting for units of the Tariff Area.- Units operating in a Zone

shall be allowed to undertake subcontracting for units of the tariff area subject to

payment of duty and taxes on value addition only and sales tax if chargeable on the

value of supply with the prior permission of the Collector of Customs on such

conditions, restrictions and limitations as may be prescribed by the Collector or as

otherwise provided in the Act or the Rules made thereunder:

Provided that in case of chargeability of central excise duty or sales tax, shall be

collected in the same manner and time as if it were duty of customs payable under

the Customs Act, 1969 (IV of 1969).

231. Destruction.- Any goods admitted to a Zone on having been rendered

unfit for consumption may be allowed to be destroyed or rendered commercially

value-less by an officer of Custom not below the rank of Assistant Collector of

Custom in such manner as may be prescribed by the Collector of Customs:

Provided that manufacturer in Export Processing Zone is allowed to remove @

3% of the total value of export, the defective ‗B‘ grade goods, waste, used packing

materials, empty drums and cartons generated or produced in the Zone to tariff area

on payment of duties and taxes.

232. Unaccounted good.- If any importer fails to give proper account of the

imported goods to the satisfaction of an officer of Customs not below the rank of an

Assistant Collector of Customs, the importer shall pay on demand an amount equal

to the duties and taxes leviable thereon and shall also be liable to pay penalties

imposed for such violation under the Act and the rules made thereunder.

233. Remission of dutie.- Subject to the satisfaction of the Collector of

Customs, the duties and other taxes, if any, may be remitted in full or in part, as the

case may be, in the following cases, namely:-

(i) When any goods are damaged or destroyed by unavoidable

circumstances or causes beyond the control of the importer or the owner;

(ii) When the waste or refuse of the goods is destroyed in accordance with

rules 231; and

(iii) When goods imported are bona fide samples for study, testing or design.

234. Restriction on removal of goods from the Zone.- No goods shall be

ttaken out from any Zone except as provided in rules 228,229,230 and 231, or for

transfer to another Zone or to a customs manufacturing bond in a tariff area or for

subcontracting with the prior permission of the Collector of Customs on such

conditions, restriction and limitation as may be prescribed by him or as otherwise

provided in the Act or the rules made thereunder.

117

235. Transfer of ownership: Transfer of ownership of goods admitted to a

Zone may be allowed:

Provided that retail sale of such goods shall not be allowed‘ 1[:]

2[Provided further that exporters from tariff area may be allowed to purchase

goods from within the units in the Zone to be exported to foreign destination directly

from Export Processing Zone under the supervision and seal of Export Processing

Zone and Customs authorities duly escorted by Customs fulfilling all the related

formalities.]

236. Security of the Zones: (1) Each Zone shall be delimited and bounded

with secured boundary fending and suitable check posts may be established after

approval of the Collector of Customs.

(2) The construction of the check post shall be carried out by the Authority in

accordance with the layout plan approved b y the Collector of Customs.

(3) The Collector of Customs may impose restriction on means of access to

a Zone and establish the hours of business. The Collector of Customs may keep the

means of access to a Zone under permanent or intermittent supervision, and make

spot checks on the goods introduced into the Zone to ensure that these are subject

to only authorized operations and to see that no unauthorized goods have been

introduced.

1[:] Substituted for the full stop by Notification No. S.R.O. 493(1)/2009, dated 13th

June, 20092[ Provisio added by Notification No. S.R.O. 493(1)/2009, dated 13th June, 2009

118

119

THE CUSTOMS RULES, 2001

Notification No. S.R. O. 450(1)/2001, 18th June, 2001

Sub-Chapter IX

Export Processing Zones under PACCS

Import and Export of goods to and from the Zones

(Transshipment scheme)

511. Customs clearance at the Zones: - All cargo to and from the Zones shall be

cleared by the Collector of Customs or Collectorate exercising jurisdiction over the

Zone.

512. Transshipment of cargo:- All cargo to and from the Zones shall be allowed

transshipment facilities by the port of entry in case of imports and the port of exit in

case of exports.

513. Limitations: - Only such goods shall be allowed transshipment facilities from

the first port of entry to a Zone as have been distinctly manifested for that Zone.

514. Procedure at the port of entry or exit: - The procedure hereinafter laid down

for the transshipment of goods from the first port of entry to the Zones shall be

applicable under PACCS.

515. Transshipment permits:- No separate declaration at the port of entry or, for

that matter, any permit except the manifest shall be required for transshipment of

goods through PACCS and on receipt whereof, PACCS shall electronically

authorize the Terminal Operator to hand over those consignments to a bonded

carrier that approaches the Terminal Operator with delivery orders from the shipping

line for the goods where the address of the importer in the manifest is of a Zone.

516. Safe Carriage: - The Terminal Operator shall, subject to authorization by

PACCS handover the cargo to the carriers as may approach the Terminal Operator

under rule 515 for carriage of goods to the Zone and, soon where after, the Terminal

Operator shall electronically communicate the relevant particulars to PACCS. For

purposes of safe carriage the carrier shall be governed by rule 329.

517. Delivery of cargo: - All cargo consignments for transshipment to the Zone may

be delivered by the Terminal Operator to the bonded carriers on 24 hours a day and

seven days a week basis.

518. Intimation of transshipment: - As soon as a consignment for the Zone leaves

the exit gate of the terminal at the first port of entry, PACCS shall electronically

intimate the Collectorate of Customs exercising jurisdiction over the Zone regarding

the particulars of the departed consignment.

519. Arrival of cargo at destination:- Where any transshipment of cargo

consignment arrives at the Zone of destination, the concerned office of the

Collectorate exercising jurisdiction over the4 Zone shall electronically intimate

receipt of such consignment to the Model Collect orate of Customs.

120

520. Reminder to Zones: - In case no acknowledgement for receipt of departed

consignments is received from the concerned office of the Collect orate of

jurisdiction after lapse of 72 hours of departure from the port of entry, a reminder or

notice to that effect shall be electronically communicated to the Collect orate of

jurisdiction.

521. Non-response by Collectorate of jurisdiction:- The Collectorate exercising

jurisdiction over a Zone shall acknowledge the receipt of transshipment of goods or

cargo consignment within 144 hours of the intimation thereof, contrary whereto, the

matter shall be electronically communicated to the Collector of Customs, and in

case no response is received from the Collector of Customs within 72 hours of such

communication to him, the matter shall be electronically communicated to the Board.

522. Non-receipt of departed consignment:- In case non-receipt of consignment

is reported by the concerned office of the Collectorate of jurisdiction on lapse of 144

hours of the intimation of departure of goods, the PACCS shall, notwithstanding any

other action that may be taken under the law, proceed to take action against the

bonded carrier blocking their future carriage until the matter is resolved.

523. Application of risk management system:- All goods under transshipment to

the Zones shall be subject to the PACCS, it shall either be scanned by the Terminal

Operator or examined by the customs authorities before handing over the

consignment to the bonded carrier, whereupon, either the scanned image or

examination re4port, as the case may be, shall be transmitted online before the

Terminal Operator hands over the consignment to the bonded carrier.

524. Examination of goods under transshipment to the Zone: - No consignment

under transshipment to the Zones shall be subject to examination at the first port of

entry, unless:

(a) Illicit fire arms or explosive material is detected during scanning.

(b) The goods have been classified as risky and are not claimed from the

first port of entry for carriage to a Zone despite lapse of 72 hours of the arrival of

goods.

525. Exports from Zones:- The Collectorate exercising jurisdiction over the Zone

shall forward the cargo to the Model Collectorate of Customs after clearing it for

exports and an intimation whereof shall be made online soon after the consignment

departs from the Zone through a bonded carrier whereto rules 514 to 523

shall, mutatis mutandis, apply.

526. Examination of exports: - Export consignment under transshipment from the

Zones shall not be subjected to either risk management system or examination at

the Model Collectorate of Customs, unless:

(a) The seals of the containers upon arrival at the port of exit are found to be

either missing or broken.

(b) The container has been damaged en-route.

(c) The Collectorate of jurisdiction from where the consignment has

originated, requests the Model Collectorate of Customs to examine the consignment

on basis of specific information.

Explanation: Provisions relating to scanning of goods shall be effective from the date

the scanners become operational at the port.

S.R.O. 881(I)/80.- In exercise of the powers conferred by section 19 of the

custom act ,1969 (IV of 1969),and section 7 of the Sales Tax Act,1951 (III of

1951), the Federal Government, subject to such conditions, limitations and

restrictions as the Central Board of Revenue may impose from time to

time, is pleased to exempt from the whole of customs-duties and sales tax

leviable on all the goods imported into and exported from the Export

Processing Zones established under the Export Processing Zones Authority

Ordinance, 1980 (IV of 1980).

[C. No. 9(10)-SS(CB)/77]

G. A. JAHANGIR,

Joint Secretary

121

Exemption from custom duty and sales tax for all goods imported into

and exported from the Export Processing Zones.

MINISTRY OF FINANCE AND ECONOMIC COORDINATION

Islamabad, the 23rd August, 1980

Customs

Repayment of Custom – duties and sales tax paid on the raw materials

used in the manufacture of goods admitted into the Export Processing

Zones from the Tariff Area of Pakistan.

MINISTRY OF FINANCE AND ECONOMIC COORDINATION

Islamabad, the 23rd August, 1980

Customs

S.R.O. 882(I)/80.- In exercise of the powers conferred by clause (c) of

section 21 of the Customs Act, 1969 (IV of 1969), and sub-section (2A) of

section 27 of the Sales Tax Act, 1951 (III of 1951), the Central Board of

Revenue is pleased to authorize the repayment of customs-duties and sales

tax paid on the raw materials used in the manufacture of goods admitted into

the Export Processing Zones established under the Export Processing Zones

Authority Ordinance, 1980 (IV of 1980), at such rates and subject to such

conditions as are applicable to the goods exported outside Pakistan.

[C.No.9(10)-SS(CB)/77]

NASIR AHMED

Secretary

122

Notification S.R.O. 582(1)/80, dated 02-06-1980

relating to exemption of Karachi Export Processing Zone

from Import & Export Regulations.


Islamabad, the 2nd June, 1980.


Export Processing Zones Authority Ordinance, 1980 (IV of 1980), the Federal

Government is pleased to exempt Karachi Export Processing Zone from the

provisions of the Registration (Imports and Exports) Order, 1952, 1[the import

Trade Control Order, 1973], the Import Policy Order issued from time to time

and Schedules I to IV and VI annexed to the Ministry of Commerce‘s

Notification NO. SRO. 685(1)/79, dated the 31st July, 1979, except in so far

as they relate to supplies from Karachi Export Processing Zone to the tariff

areas of Pakistan.

(No.5(1)/80-P.1)

HASINUDDIN AQUIL

Deputy Secretary

1[ Inserted by S.R.O. 853(1)/81 dated July 30, 1981

123


Relating to exemption of the Export Processing Zones

from State Bank of Pakistan Act, 1956 (XXXIII) of 1956) and Banking

Companies Ordinance 1962 (LVII of 1962).


Islamabad the 23rd November, 1981



Government is pleased to exempt the Export Processing Zones from all the

provisions of the State Bank of Pakistan Act, 1956 (XXXIII of 1956), and the

Banking Companies Ordinance, 1962 (LVII of 1962), except sections

7, 25A, 32, 40, 41 and 42 thereof*.

HASINUDDIN AQUIL

Deputy Secretary

3124


Relating to exemption of the Export Processing Zones

from Foreign Exchange Regulations Act 1947

(VII of 1947)


Islamabad the 13th December, 1981



Government is pleased to exempt the Export Processing Zones established

under the said Ordinance from the provisions of the Foreign Exchange

Regulations Act, 1947 (VII of 1947).

HASINUDDIN AQUIL

Deputy Secretary

125

MINISTRY OF FINANCE, PLANNING

AND PROVINCIAL COORDINATION

FINANCE DIVISION

(External Finance Wing)

Islamabad, the 25th May, 1980

S.R.O. 535(I)/80:- In exercise of the powers conferred by sub-section (1) of

section 12 of the Foreign Exchange Regulation Act, 1947(VII of 1947), the

Federal Government is pleased to direct that the following further amendment

shall be made in its Notification No. 1(7)-ECS/48, dated the 1st

July,1948, namely:-

In the aforesaid Notification, in the proviso,-

(a) in item 4, for the full-stop at the end a semi-colon and word ― ; and ‖

shall be substituted ; and

(b) after item 4 amended as aforesaid, the following mew item shall be

added namely :-

―5. Goods processed or manufactured or processed and manufactured

in and exported from Export Processing Zones established under

the Export Processing Zones Authority Ordinance, 1980 (IV of 1980).‖

[Case No. 8(1)-EF(G)/74 (Vol-I).]

MIRZA AFZAL BAIG,

Section Officer.

126

MINISTRY OF FINANCE, PLANNING

AND PROVINCIAL COORDINATION

FINANCE DIVISION

(External Finance Wing)

Islamabad, the 25th May, 1980


section 12 of the Foreign Exchange Regulation Act, 1947(VII of 1947), the

Federal Government is pleased to direct that the following further amendment

shall be made in its Notification No. 1(6)-ECS/48, dated the 1st

July,1948, namely:-

In the aforesaid Notification, in the proviso,-

(a) in item 6, for the full-stop at the end a semi-colon and word ― ; and ‖

shall be substituted ; and

(b) after item 6 amended as aforesaid, the following mew item shall be

added namely :-

―7. Goods processed or manufactured or processed and manufactured

in and exported from Export Processing Zones established under the

Export Processing Zones Authority Ordinance, 1980 (IV of 1980).‖

[Case No. 8(1)-EF(G)/74 (Vol-I).]

MIRZA AFZAL BAIG,

Section Officer.

127

Notification S.R.O. 858(I)/82, dated 08-09-1982

relating to exemption of the Export Processing Zones

from the Insurance Act, 1938 (IV of 1938) and Pakistan Insurance

Corporation Act, 1957 (XXXVII of 1952).

Islamabad, Wednesday, September 8, 1982

S.R.O.858(1)/82:- In exercise of the powers conferred by section 25 of the


Government is pleased to exempt the Export Processing Zones from all the

provisions of the Insurance Act, 1938 (IV of 1938), and the Pakistan

Insurance Corporation Act, 1952 (XXXVII of 1952).

[No. 5(6)/81-P1)

MUHAMMAD HASIN KHAN

Chief Research Officer

128

Exemption from central excise duty on such goods

manufactured in the Tariff Area of Pakistan as are imported into an

Export Processing Zone for use as raw materials or intermediary goods

for further manufacture of goods in the Zone for export.

CENTRAL BOARD OF REVENUE

Islamabad the 18th October, 1992

Central Excise


section 12A of the Central Excises and Salt Act, 1944 (I of 1944), the Federal

Government is pleased to exempt from the whole of central excise duty such

locally manufactured goods used as raw materials or intermediary goods by a

manufacturer located in an Export Processing Zone for further manufacturing

of goods in that Zone for export provided that the provisions of rule 13 of the

Central Excise Rules, 1944, read with chapter IX thereof, have been

observed.

Explanation. – ―Export Processing Zone‖ means such area as is declared by

the Federal Government to be a Zone under the Export Processing Zones

Authority Ordinance, 1980 (IV of 1980).

[C. No. 16 (28)-CEB/84]

MUMTAZ ALI

Additional Secretary

129


Revenue Division

CENTRAL BOARD OF REVENUE

Islamabad the 7th June, 2003

C.No. 1(1)-CEB/03

7. Import of excisable goods by units located in export processing

zones:

CED exemption to all excisable goods was available if imported by

manufacturers located in Export Processing Zones while at local

stage, only raw materials/semi-finished excisable goods were exempted

if purchased by the units located in EPZ and used as raw

materials/intermediary goods. This distortion has been done away with.

Now CED exemption is available to raw materials/intermediary goods

imported or locally purchased by the manufacturers located in EPZ for

use as raw materials/intermediary goods used in manufacturing of

finished goods. No exemption of CED on finished goods

(cement, beverages, cigarette etc.) will be available on import/locally

purchased goods. The prevailing notification for imported goods S.R.O.

54(1

)/2000, dated the 18th August has been rescinded concurrently.

UMAR FAROOQ

Chief (Central Excise)

130


Islamabad, the 10th October, 1982

EXPORT PROCESSING ZONES

(CONTROL OF EMPLOYMENT) RULES, 1982

S.R.O. 1003(I)/82:- In exercise of the powers conferred by section 26 of the


Government is pleased to make the following rules, namely:-

1. Short title and commencement.- (1) These rules may be called the

Export Processing Zones (Control of Employment) Rules, 1982.

(2) They shall come into force at once.

2. Definitions:- In these rules, unless there is anything repugnant in the

subject or context;

(i) ―employee‖ means a person employed or engaged for hire or for

any pecuniary consideration to work within a Zone and includes a

worker and workman;

(ii) ―Ordinance‖ means the Export Processing Zones Authority

Ordinance, 1980 (IV of 1980); and

(iii) all other words and expressions used but not defined in these

rules shall have the meaning assigned to them in the Ordinance.

3. Terms and conditions of service.-(1) The service of an employee

shall be governed by the terms and conditions as laid down in his letter

of appointment issued under sub-rule (2) by the employer under his

signature and accepted by the employee.

(2) The employer shall issue a letter of appointment in duplicate

containing the agreed terms and conditions of employment in details to

every employee except to a person engaged on day-to-day basis.

(3) The employee shall put his signature or thumb impression on the

duplicate copy of his letter of appointment in token of his acceptance

and return the same to the employer.

131

(4) The employer shall be responsible to make payments of all

contributions which would have been required to be paid by the

employer under section 20 of the Provincial Employees Social Security

Ordinance, 1965 (West Pakistan Ordinance No. X of 1965), and

section 9 of the Employees Old-Age Benefits Act, 1976 (XIV of

1976), had the Zones not been exempted from the provisions thereof.

(5) The Authority may from time to time issue instructions to employers

regarding minimum wages, payment of wages, over-time

work, leave, holidays, daily and weekly working hours, health and

safety measures and other compensations not specifically mentioned

in these rules and the letter of appointment issued under sub-rule (1)

and any violation of the instructions so issued shall render the sanction

for the establishment of the industrial undertaking liable to be

cancelled.

(6) Any agreement of employment contrary to these rules shall be void.

4. Prohibition of strike. No employee shall.-

(a) refrain from or refuse to work or go slow or go on strike, or

(b) commence, continue, instigate, incite or compel others to take

part in or support, go slow or strike.

5. Termination of service.- The service of an employee may be

terminated by an employer in accordance with the terms and

conditions contained in his letter of appointment referred to in sub-rule

(1) of rule 3;

Provided that, if the letter of appointment contains no provision in that

behalf the employer may terminate the service by giving thirty days

notice in writing or on payment of substantive pay or wages in lieu

thereof.

6. Resignation.- An employee may resign from service by giving thirty

days notice in writing or on payment of substantive pay or wages in

lieu thereof.

132

7. Adjudication.- (1) An employee may refer a dispute as to the terms

and conditions of his service or interpretation of these rules, within

thirty days of an order passed by the employer, to the Labour Welfare

Officer of the Zone, to be appointed by the Authority for the purpose.

(2) Upon receipt of an application under sub-rule (1), the Labour Welfare

Officer shall, after hearing the parties, adjudicate and determine the

dispute.

(3) The decision of the Labour Welfare Officer shall be in writing.

(4) Any party aggrieved by a decision of the Labour Welfare Officer

may, within thirty days of the date thereof, file an appeal to the

Manager, Labour, of the Zone, to be appointed by the Authority for the

purpose.

(5) An appeal filed under sub-rule (4) shall be heard and determined by

the Manager, Labour, whose decision shall be final.

(6) If the parties to a dispute or appeal, at any time before the final

decision of the case, satisfy the Labour Welfare Officer or

Manager, Labour, that the dispute has been resolved amicably, such

dispute or appeal may be allowed to be withdrawn.

(7) No counsel shall be allowed to appear in any proceedings before the

Labour Welfare Officer or the Manager, Labour;

Provided that the employer may be represented by an officer

nominated by him for this purpose.

MUHAMMAD HASIN KHAN


133

Notification S.R.O. 1004(I)/82, dated 10-10-1982

relating to exemption of Export Processing Zones from

various labour laws.



EXPORT PROCESSING ZONES


S.R.O.1004(1)/82.- In exercise of the powers conferred by section 25 of the


Government is pleased to exempt the export processing zones from all the

provisions of the following laws, namely:-

(1) The workmen‘s Compensation Act, 1923 (VIII of 1923);

(2) The Factories Act, 1934 (XXV of 1934);

(3) The payment of Wages Act., 1936 (IV of 1936);

(4) The Minimum Wages Ordinance, 1961 (XXXIX of 1961);

(5) The Provincial Employees‘ social Security Ordinance, 1965 (W.P.

Ordinance No. X of 1965);

(6) The West Pakistan Industrial and Commercial Employment

(Standing Orders) Ordinance, 1968 (W.P. Ordinance No. VI of

1968);

(7) The Industrial Relations Ordinance, 1969 (XXIII of 1969);

(8) The West Pakistan Shops and Establishment Ordinance, 1969

(W.P. Ordinance No. VIII of 1969); and

(9) The Employees‘ Old-Age Benefits Act, 1976 (XIV of 1976).

[No.5(6)/81-P-1]

MUHAMMAD HASIN KHAN


134



E.P.Z. CONTROL OF EMPLOYMENT ORDER NO. 1 OF 1983

In experience of power conferred by the sub-rule (5) of rule 3 of Export

Processing Zones Authority (Control of Employment) rules 1982, the

Competent Authority is pleased to issue the instructions, regarding working

hours and rest periods as follows:-

1. SHORT TITLE AND COMPENCEMTNT:

i. These instructions may be called EPZ Control of Employment order

No. 1 of 1983.

ii. They shall come into force at once.

iii. They shall apply to all Employers & employees as defined in the

E.P.Z.A. (Control of Employment) as rules 1982.

2. WEEKLY WORKING HOURS OF WORK:

i. No employee shall be allowed of required to work in an

establishment/industrial undertaking for more than forty eight (48)

hours a week the factory is seasonal one, for more than fifty hours

in a week.

ii. Hours worked shall include all time during which an employee is on

duty, or allowed leave by the circumstances.

3. DAILY HOURS OF WORK:

i. No employee shall be asked to work more than eight hours in any

day excluding meal periods tea and prayer breaks. However if the

hours of work on one or more days are less than eight, the limit of

eight hours may be exceed in remaining days but in no case more

then (48) hours per week.

ii. In the case seasonal establishment, the daily working hours of

employee shall be so adjusted as not to exceed 50 hours in a week.

4. MEAL PERIODS, TEA & PRAYERS TIME OFFS:

Employers shall provide reasonable time for meals, tea and prayers

during working hours in addition to daily working hours.

135

5. WEEKLY REST PERIOD:

i. Every employer shall provide his employees a rest period not less

than twenty four (24) consecutive hours after every day for six

consecutive normal work days.

ii. The employer shall determine the schedule of weekly rest day for

his employees.

6. GAZEETED HOLDYS:

i. All the gazetted & optional holiday announced by Govt. of Pakistan

shall be treated as holidays for every employee of Industrial

undertaking/Establishment provided that the establishment is not

running shift.

ii. In case of shifts, the employer shall provide compensatory leave or

overtime payment by mutual consent.

7. OBLIGATION TO WORK ON A REST DAY:

i. The employer may require his employees to work on any day.

ii. In case of actual or impending emergencies caused by serious

accident, fine flood, typhoon, earthquake, epidemic of other disaster

or calamity to prevent loss of life and property, or imminent danger

to public safety.

iii. In case of urgent work to be performed on the machinery, equipment

or installation, to avoid serious loss which the employer would

otherwise suffer.

iv. In the event of abnormal pressure of work out to special

circumstances, where the employer cannot ordinary be expected to

resort to other measure.

v. To prevent loss or damage to perishable goods.

vi. Where the nature of work requires continuous operations and the

stoppage of work may result in irreparable injury or loss to the

employer and

vii. Under other circumstances analogous, or similar to the forgoing as

determined by the authority.

(PERVAIZ AKHTAR SANKHLA)

Dy. General Manager (Facilities)

136



E.P.Z. CONTROL OF EMPLOYMENT ORDER NO. 2 OF 1983

In exercise of powers conferred by sub rule (5) of rule 3 of Export

processing Zones Authority ( Control of Employment) Rules 1982, the

Competent Authority is pleased to issue the instructions regarding minimum

wages allowance and overtime work.

1. SHOET TITILE & CIMMENCEMENT:

i. These instructions may be called E.P.Z. control of Employment

Order No.2

ii. They shall come into force at ones.

iii. They shall apply to all employers and employees as defined in the

EPZ (control of Employment) rules 1982.

2. DEFINITION:

i. Unskilled workers means a worker who does not possess

institutionalized training or reasonable experience of recognized

technical skill of the trade.

ii. I―Apprentice‖ manes a person who is employed whether on payment

of wages or not, for the purpose of being trading in any trade and

craft or employment in any Industrial Undertaking.

3. Minimum Wages:

i. Every unskilled worker, other than apprentice employed in the

industrial undertaking of zone shall be paid wages at the rate not

lower than Rs.600/- per month.

ii. IThe said rate of wages shall be applicable to all time rated workers

including temporary and piece rated workers.

iii. IThe employer shall fix the rate of remuneration for piece rated

workers so as to ensure that workers in such piece works

occupations are enabled by working 8 hours per day and six days in

each week to earn not less than Rs.600/-p.m.

iv. The wages of skilled and supervisory staff shall be determined by

the employer himself Commensurate with his qualification and

experience.

v. Other allowances and perquisites shall be the sole discretion of the

employer.

137

4. OVERTIME WORK:

When any employee is required to work overtime in any industrial undertaking

more than forty eight (48) in a week, the wages payable to such employee in respect

of overtime work shall be calculated at double the rate wage payable to him.

5. CASUAL,SICK & EARNED LEAVE:

i. Every employee shall be entitiled to casual leave with full wages for

minimum ten (10) days in every year. Such leave shall not ordinarily be

granted of more than three days and shall not be accumulated.

ii. Every employee shall be entitled to sick leave with full wages for a total

period of 8 days in every year. Such leave, if not availed of by any

employee during a calendar year, may be carried forward, but total

accumulation shall not exceed sixteen (16) days at any time.

iii. Every employee shall be entitled to earned leave with full wages for

minimum period of (14) days after continuous employment for a period of

twelve (12) months. Such leave if not availed of by any employee in any

year may be accumulated upto 30 days, No further accumulation of or

addition to such leave will be permissible.

iv. The employee, may at his request in lieu of warned leave not availed of by

him, be paid by the employer full wages for such leave.

NOTE: The employee must, as far as possible, seek prior permission for the

leave from his employer. In case of emergency and illness, he should ensure t

inform his employer the reason for not attending his duties at the earliest

opportunity).

6. DEDUCTION ASSENCE FROM DUTY:

The employer may deduct wage on account of the unauthorized absence of an

employer from the place of work, such absence being for whole of any part of the

period during which he is required to for whole or any part of the period during which

he is required to work.

7. MEDICAL CARE AND RELIEF FOR DEATH AND ENJURY UNDER

SOCIAL SECURITY SCHME:

Till such time as arrangements are made with the social security

Institution, the employer shall undertake to provide the following benefits to each

employee, other than casual worker:

i. Medical care, through a recognized medical institution, to be extent

available to a secured person under the social security scheme.

ii. Group insurance – for injury and / or death in the course of

employment, such that the compensation received by the affected person

or his/her hiers is not less than that admissible under the social security

scheme and sec. 10(B) of west Pakistan (Standing order ordinance.)

SHAHID I. HASHMI

Manager (Facilities)

138

KARACHI PROCESSING ZONE

No. Fac-17-005 February 19, 1984

E.P.Z. CONTROL OF EMPLOYMENT ORDER NO. 3

In exercise of powers conferred by the rule (5) of rule 3 of Export

Processing Zones Authority Rules 1982, the Competent Authority is pleased

to issue instructions regarding apprenticeship as follows:-

1. SHORT TITLE & COMMENCEMENT

i. These instructions may be called E.P.Z.

Control of employment Order No.3

ii. They shall some into force at once.

iii. They shall apply in all employers and Employees as defined in the

E.P.Z (Control of Employment) rules 1982.

2. DEFINITIONM:

i. ‗Audit‘ means a person who has completed his seventeen year.

ii. ‗Adolescent‘ means a person who has completed his fifteenth but

has not completed has seventeen year:

iii. ‗Child‘ means a person who has not completed his fifteenth year.

3. MINIMUM AGE OFR APPRENTICESHIP:

i. The minimum age for enrolment as an apprentice shall be 15 years.

ii. Every apprentice must be physically fir at the time of recruitment.

iii. The medical examination shall be done qualified doctor nominated

by and at the cost of employer.

DURATION OF APPRENTICESHIP:

The duration of apprenticeship for every trade, expected degree of skill

and minimum educational qualification laid down at the time of entrance.

139

5. STIPEND & INCENTIVE DURING PERIOD OF APPENTICESHIP:

i. The employer shall pay to apprentice, during the period of

apprenticeship stipend of at least Rs. 400/-

ii. No apprentice shall be paid stipend on the basis of pace of work.

iii. Note withstanding the provision of 5(i) and 5(ii) the employer shall

be free to offer and pay monetary and other in incentives to an

apprentice for good progress during his apprenticeship.

6. WORKING HOURS, LEAVE & HOLIDAYS:

i. Working hours, leave and holidays for an apprentice shall be the

same as for other employees in the industrial undertakings.

ii. No. person other than adult shall be allowed to work in night shift or

overtime. Adult women shall also not be allowed to work between

2200 to 600 hours.

7. It shall not be obligatory on the part of employer to offer an employment

to an apprentice on the completion of apprentice to serve the employer after

the completion of his apprenticeship. An employer shall not recruit the same

person as an apprentice more than once.

8. CERTIFICTION:

The employer shall arrange to issue certificate to his apprentice on

successful training during apprenticeship period. The certificate shall indicate

the specific trade, period or nature of training including related instructions

undergone, the degree of proficiency achieved etc.

SHAHID I. HASHMI

Manager (Facilities)

140



E.P.Z. CONTROL OF EMPLOYMENT ORDER NO. 4

In exercise of the power conierred by rules IV & V of the Export Processing Zones

Authority (Control of Employment) Rules 1982, the Employment Authority is pleased to issue

the following instructions regarding Social Security benefits for the workers of industrial

Undertaking at Karachi Export Processing Zone.

1. SHORT TITLE AND COMMENCEMENT:

i. These instructions may be called E.P.Z. Control of Employment Order No.4

ii. They shall come into force on the first day of May, 1985.

iii. They shall apply to all the industrial undertaking in KEPZ.

2. DEFINITIONS:

―Employee‖ –means any person working, normally for at least twenty four hours per

week, for wages in or is connection with the worker of any Industrial undertaking under

any written contract of service or apprenticeship.

―employer‖-means the owner of the industrial undertaking and includes any

agent, manager or representative of the owner.

―Wages‖-means remuneration for service payable in cash to a person, not being less

than remuneration based on the minimum rates of wages declared under the EPZ

control of Employment order No. 2 without taking in to account deduction for any

purpose, under a contract of service or apprenticeship, and shall be other additions in

respect of the cost of living and any payment by the employer to the worker in respect

of any period of authorized leave.

EXCLUSTON:

Payment of overtime,

Any payment to defray special expenses.

3. REGISTRATION OF THE EMPLOYEES WITH AN INSURANCE CO.

All the employees working in the Industrial undertakings of the Karachi Export

Processing Zone shall be insured for providing social security benefits and workmen

Compensation with an insurance Company on the terms and conditions which are not

less favorable than those mentioned in appendix-I, the employers shall set apart 7% of

the premium shall be paid to the Insurance Company for providing cover to the

employee as detailed in Appendix-I, and the balance shall be paid to the employee till

such time as alternative arrangements for providing these benefits are made.

4. SUBMISSION OF STATEMENT:

Every employer shall submit a monthly statement t oEPZA/KEPZ Administration in

which the details of the premium paid to the Insurance Co., and the balance disbursed

to the employee are given.

5. NON- COMPLIANCE:

Failure to comply with these Instructions shall render an employer liable to action

under EPZA (Control of Employment) Rules 1982.

(MIRZA JAFAR HUSAIN)

General Manager (Facilities)

141

142

No.1/4/83-visa

Government Of Pakistan

Ministry Of Interior

______________

Islamabad ,The 21st May 1986.

Office Memorandum

Subject: Grant of visas to investors and foreign persons in KEPZ and their registration .

The undersigned is directed to refer to minister of industries O.M NO.9(30)/84-

admn.IV dated 17th march ,subjected noted above and to say that it has been

decided that following procedure may be adopted for insurance of visas and

registration etc. of the foreign investors and their personnel working in Karachi

export processing zone:

I. 1.The intending visitors would be granted a single journey entry visa valid

by three months by our concerned on production or a letter from the khi

authority in each case ,after due checking.

II. On arrival in Pakistan they and their family members would be issued

multiple journey valid for one year by the regional passport office

concerned on clearance by the concerned agencies.

III. Multiple journey visas would be rendered for such periods as

recommended by the said authority, on yearly basis.

IV. As regard registration of foreigners ,it would be done in the office of the

foreigners registration officer Karachi. officer of KEPZA should take care

of the foreigners to avoid hardship to them.

The ministry is requested to bring the above procedure to the notice of all the

attending investors/ visitors, under intimation to this ministry.

Mushataq Ahmed Gujar

Section officer

143

144


MINISTRY OF COMMERCE

NOTIFICATION

Islamabad, the 7th March, 2002


section 3 of the Imports and Exports (Control) Act, 1950 (XXXIX of 1950), the

Federal Government is pleased to direct that the following further amendments shall

be made in the Export Policy and Procedure Order, 2000, namely:-

In the aforesaid Order,

(1) for paragraph 8 the following shall be substituted, namely:-

(8) Export to Afghanistan and through Afghanistan to Central

Asian Republics

(1) In Pak Rupees.- Subject to provisions of sub-paragraph (1) of paragraph

5, export of all commodities produced or manufactured in

Pakistan, excluding those manufactured in manufacturing bonds, shall be

allowed via land route, against Pak-rupee on filing of regular shipping

bills without Form ‗E‘. Such exports shall not be entitled to (i) zero-rating

of sales tax on taxable goods, (ii) rebate of central excise duty; and (iii)

repayment of drawback of customs-duty.

(2) In convertible currency.- Subject to provisions of sub-para (1) of

paragraph 5 and Schedule IV, all items and commodities produced or

manufactured in Pakistan exported, via land route or by air against

irrevocable letters of credit, or advance payment, in convertible foreign

currency, shall be allowed (i) zero-rating of sales tax on taxable

goods, (ii) rebate of central excise duty and (iii) repayment for drawback

of customs-duty, subject to the following conditions, namely:-

(a) the Pakistan Embassy or Consulate in Kabul, Kandhar and

Jalalabad shall verify the arrival of export consignments from

Pakistan. (This condition of verification from Pakistan Missions shall

remain suspended until these Missions or Sub-Missions become

fully functional);

(b) packages or retail packing shall prominently and indelibly be

marked with the expression "For Export Only", and in case of

international donor agencies "For Export only – supply for aid to

Afghanistan (insignia of the organization) – not for sale in Pakistan";

(c) export shall be allowed only through authorized export land routes

i.e. Torkham and Chaman; and

(d) export from Export Processing Zones and manufacturing

bonds, except vegetable ghee and cooking oil, shall be allowed but

these exports shall not be entitled to (i) zero-rating of sales tax on

taxable goods, (ii) rebate of central excise duty; and (iii) repayment

or drawback of customs duty.

145

(3) Export by international donor agencies.- Export of such goods as are

made by or on behalf of UNCHR, World Food

Programme, UNDP, UNFPA, ICRC, WHO, FAO, UNICEF against

international tenders, as relief goods to Afghanistan, shall be allowed the

facility of normal duty drawback against payment in convertible foreign

currency, through all standard modes of payment including letters of

credit, advance payment and DA/DP basis.

(4) Normal duty drawback shall remain available on exports to the Central

Asian Republics via Iran.

(5) Export of acetic anhydride to Afghanistan shall not be allowed till further

order.

(2) after paragraph 12A, the following new paragraph shall be

inserted, namely:-

"12B. Export of petroleum and petroleum products to Afghanistan:- The

export of petroleum & petroleum products shall be made by

refineries and approved oil marketing companies only. Zero-rating of

sales tax, rebate of central excise duty and normal repayment /

drawback of customs duty shall be allowed on these products

against irrevocable letters of credit or advance payment in

convertible currency";

(3) in Schedule 1, for serial No. 9 in column (1) and the entries relating

to in columns (2) and (3) the following shall be substituted, namely:-

"9. Vegetable ghee and cooking oil.- The export of vegetable

ghee and cooking oil shall be allowed (excluding that manufactured

in manufacturing bonds in case of exports to Afghanistan only)

provided there is value addition of fifteen per cent for edible uses in

packs up to five liters for cooking oil and five kilograms for vegetable

ghee and fifty per cent value addition in non-edible uses in packs up

to one half litre or half kilogram"; and

(4) after Schedule III the following new Schedule shall be

added, namely:-

"SCHEDULE –VI

(See paragraph 8)

Negative List of items for exports to Afghanistan under Duty Drawback Scheme.

(1) Cigars, cheroots, cigarillos and cigarettes of tobacco or of tobacco

substitutes.

(2) Dyes and chemicals.

(3) Yarn all types.

(4) PVC and PMC materials.

(5) Polyester metalized film.

(6) Ball bearings.

(7) Vegetable ghee and cooking oil (if exported from Export Processing Zones

or manufacturing bonds.)―

[F.No.18(11)/2000-E.IV]

(MOHAMMAD ASHRAF)

Deputy Secretary

146


MINISTRY OF INDUSTRIES AND PRODUCTION

(Export Processing zones Authority)

Islamabad, the 21st November, 1994

NOTIFICATION

S.R.O. 214(KE)/94:

In exercise of the powers conferred by sub-section (I) of section 27 of the Export

Processing Zones Authority Ordinance, 1980 (IV of 1980), and rule 17 of the Export

Processing Zones authority Rules, 1981, the Export Processing Zones Authority, with

the approval of the Federal Government , is pleased to make the following

regulations, namely :-

1. Short title, application and commencement.-- (I) These

regulations may be called the Export Processing Zones (Control of Entry and Exit of

Persons and Goods) Regulation, 1994.

(2) They shall apply to all zones.

(3) They shall come into force at once

2. Definitions.-- (I) in these regulations, unless there is anything

repugnant in the subject or context.—

(a) ―authorised officer‖ means an officer authorised in this behalf by

the chairman, to issue a past to person for entry into a Zone; and

(b) ―Ordinance‖ means Export Processing Zones Authority Ordinance

1980 (IV of 1980)

(2) The words and expressions used but not defined in these

regulations shall have the meanings assigned to them in the Ordinance.

3. No entry without a valid pass.-- No person shall enter in Zone

unless he is in possession of valid pass issued by the authorised officer.

4. Person eligible for issuance of passes.-- (I) The following

categories of persons shall be eligible to be issued passes for entry into a

Zone, namely :--

(a) the investor ;

(b) any duly authorized representative of the investor ; and

© authorized clearing agent

Provided that a person against whom an enquiry or investigation is pending or

who is involved in any unlawful act in the vicinity or within a Zone shall not be allowed

to enter or re enter the Zone and a register of all such persons shall be maintained for

the guidance of the authorities concerned with the enforcement of these regulations.

(2) Any person aggrieved by any order, other than an order passed under sub

regulation (1) of regulation 9, refusing his entry or re-entry in the Zone may prefer an

appeal to the Chairman of the Authority whose decision shall be final.

147

5. Entry without obtaining pass in certain cases.-- Customs Police

officers, fire-fighting personnel and equipments and hospital ambulance may be

allowed entry, while on duty, on production of their identity cards if they cannot obtain

passes due to exigencies of situation.

6. Mutilation and destruction of pass to be reported.-- In case of

mutilation or destruction of a pass the holder there of shall immediately report this fact

to the authorised officer who may after such enquiry as he may deem fit, issue a new

pass.

7. Passes not transferable.-- Passes issued under these regulations

shall not be transferable.

8. Persons and vehicles liable to search.-- All persons and vehicles

entering in or going out of a Zone shall be liable to be searched at the gate or any

where within the Zone.

9. Prosecution of persons involved in unlawful acts.-- (I)Where a

person is found involved in theft or smuggling including abetment thereof, In a Zone

or vicinity thereof, he shall be handed over to the concerned authorities for

prosecution according to law and in case such person is convicted of the offence, he

shall not be allowed entry in the Zone.

(2) If an information is received that an attempt is being made to

smuggle out goods by concealing them in a car, or through an export

consignment, the Shift Incharge or, as the case may be, the Inspector shall stop the

car or vehicle and issue a detention Order specified in Annex to these regulations and

forth-with report the matter to the Incharge of the Zone.

(3) After the issue of aforesaid detention Order the car or the vehicle

carrying the consignment shall not be removed from its place till such time the matter

has been investigated by Customs authorities and clearance given by them in writing.

10. Gate pass for entry of goods.--The authorised officer may issue a

gate pass to a person, specified in regulation 4, in quadruplicate consisting of

blue, pink, white and yellow copies.

11. Entry of dutiable goods in a Zone.-- Where the dutiable goods are

brought into a Zone, the investor, his representative or his authorised clearing agent

shall present all the four copies of the Entry Gate Pass to the Shift Incharge, Inspector

(Security) or the Security Guard at the gate.

12. Duties of the Shift Incharge, etc.---The Shift Incharge, Inspector

(Security) or the Security Guard, on presentation of the pass, shall :-

(a) Check that the seal of the packages or container is intact ;

(b) check that the number of the vehicle is the same as mentioned in

gate pass ;

© verify the marks and numbers on th packages ; and

(d) verify the number of packages or container.

148

13. Procedure after checking--- (I) After checking any of the officials

specified in regulations 12 shall---

(a) sign and stamp all the four copies of the gate pass ;

(b) write down the name of the driver with time and date the white copy

of the gate pass and retain it ; and

© return the remaining three copies of the gate pass to the investor, or,

as the case may be, to his representative or his authorised Clearing

Agent, for presenting them, alongwith goods, to the Customs Check

Post.

(d) After customs-clearance the pink copy of the pass should be handed

over to the Shift Incharge or Inspector and goods shall be taken to

the industrial undertaking.

14. Entry and exit of petty items.--- (I) Petty Item including

construction material like sand, earth or crush stone shall be brought into the Zone

subject to such directions as the Authority may specify and the name of the driver with

time and date shall be written on the while copy of the gate-pass.

(2) The item like shuttering, mixing machine or tool tackles shall be

brought into the Zone in accordance with procedure specified in sub-regulation (I) and

the custom officer concerned shall, at the time of entry, affix a stamp ―RETURNABLE

― on the white copy of the gate pass.

(3) The contractor shall, at the time of removing the goods from the

Zone, retrieve the white copy from the security official on duty, obtain clearance from

the customs both on the white and yellow copies and thereafter hand over the white

copy to the security official to remove the goods from the Zone.

15. Exit gate pass.---The authorised officer may issue Exit Gate Pass

to any of the persons specified in regulation 4, for taking out goods from the Zone, in

quadruplicate consisting of blue, pink, white and yellow copies.

16. Exit of dutiable goods.--- The Investor, his representative or, as

the case may be, his authorised Clearing Agent may be remove from the zone

dutiable goods on presenting all the four copies of the Exit Gate Pass to the Customs

authorities at the check post.

17. Custom Officer to sign and stamp certain copies, etc.--- After

necessary processing, the Custom Officer on duty shall sign and stamp all the four

copies, retain blue copy of the gate pass and return the remaining copies to the

person presenting the gate pass.

149

18. Presentation of three copies.---On receiving the pink, white and

yellow copies of the pass from the Custom, the same shall be presented to the Shift

Incharge, inspector (Security), or, as the case may be, the Security Guard at the gate who

shall---

(a) ensure that all the three copies of the Gate Pass bear signature and

stamp of the Custom Officer ;

(b) check that vehicle number is the same as specified in the gate pass ;

© Check that seal on the packages of the container is intact ;

(d) count the number of the packages or container and verify with those

specified in the gate pass ; and

(e) verify the marks and numbers given on the packages of the containers.

19. Procedure after checking.---After checking, any of the officials specified in

regulation 18 shall---

(a) sign and stamp all the four copies of the pass ;

(b) write name of the driver with time and date on the white copy and retain it

with the pink copy ; and

© return the yellow copy to the investor, his representative or, as the case

may be, his authorised Clearing Agent for presenting the same along with

goods at the Custom Check Post.

20. Passes to be entered in a register.--- All gate passes shall be entered

in a separate register and the white copies of the passes shall be retained for record in

the Security Division while the pink copy shall be sent to the Facilities Division of the

Authority.

21. Gate passes to be deposited.--- The gate passes received in one shift

shall be handed over to the Shift Incharge or the Inspector of the next shift and so on till

the next working day when all gate passes shall be deposited with Assistant Manager

(Security).

22. All passes to be noted.--- All entry and exit gate Passes of goods and

persons shall be noted in the Daily Round Book by the respective Shift Incharge or the

Inspector immediately after the consignment enters into, or moves out of, the Zone gate.

23. Relaxation.--- (I) The provisions of these regulations shall be strictly

complied with by all functionaries of the Authority responsible for their enforcement and

no official of the Authority shall relax any provisions thereof :

Provided that where in any emergent situation the compliance of the regulations is

not possible he case shall be referred to the Incharge of the Zone who for reasons to be

recorded in writing, may relax any provision of the regulations and if such a situation

arises after the office hours the verbal permission from the said officer shall be obtained

on telephone and entry to this effect shall be made in the Daily Round Book.

(2) The Shift Incharge or, as the case may be, the inspector (Security) shall, on

the next working day, obtain written confirmation, on Daily Round Book, from the Incharge

of the Zone of the verbal relaxation referred to in sub-regulation (1).

(No. SEC/3/020)

JAVED AHMED

Secretary

150

PART lll THE GAZETTE OF PAKISTAN, EXTRA, DEC 22, 1994 2329

DETENTION ORDER

WHEREAS Vehicle No……………….. (Loaded with ……………………………..

Un-loaded)

Packages) has made a request or the exit from ………………………………………..

Export Processing Zone today at____________________________________

(Time)

WHEREAS on the basis of the information received. I have reason to

believe that some unspecified quantity of unauthorized unaccounted of or good are

being illegally removed from the side Zone through above mentioned vehicle;

I, therefore, in pursuance of sub-regulation (2) of regulation 9 of Export

Processing Zones Authority (Control of Entry and Exit of Goods and

Persons)Regulations, 1994, seize above said vehicle and put the same under

detention and direct that the vehicle No………………………..(Loaded with…………….

Un-loaded

Packages) shall not be removed from its present unit Customs authorities have

satisfied themselves about the suspected illegal removal of good.

INSPECTOR /SHIFT INCHARGE

………………..Export Processing Zone Gate House.

Copy to:

i. Mr./M/s……………………………………………

……………………………………………………………………..

ii. Incharge ……………………………………….Export Processing Zone

Custom Check Post……………………………………………

151

INCOME TAX ORDINANCE – 2001

GOVT. OF PAKISTAN

FEDERAL BOARD OF REVENUE

(REVENUE DIVISION)

CHAPTER X

Part – V

Advance Tax and Deduction of Tax at Source

Division III

(Deduction of Tax at Source)

Section – 154

Export

5[(3A) The Export Processing Zone Authority established under Export

Processing Zone Authority Ordinance, 1980 (VI of 1980), shall at the

time of export of goods by an industrial undertaking located in the areas

declared by the Federal Government to be a Zone within the meaning of

the aforesaid Ordinance, collect tax at the rate specified in Division IV of

Part III of the First Schedule.]

5[ Inserted by the Finance Act, 2003

152

INCOME TAX ORDINANCE – 2001

GOVT. OF PAKISTAN


(REVENUE DIVISION)

THE FIRST SCEDULE

Part – III

(Deduction of Tax at Source)

Division IV

(Export)

1[(1) The rate of tax to be deducted under sub-section (1), (3), (3A), (3B) or (3C)

of section 154 shall be 1% of the proceeds of the export.]

1[ Substituted by the Finance Act, 2009.

153


REVENUE DIVISION


*****

Islamabad, the 29th June, 2009.

NOTIFICATION

(INCOME TAX)

S.R.O. 606(I)/2009.- In exercise of the powers conferred by sub-

section (2) of section 53 of the Income Tax Ordinance, 2001 (XLIX of

2001), the Federal Government is pleased to direct that the following further

amendment shall be made in the Second Schedule to the said

Ordinance, namely:-

In the aforesaid Schedule, in Part I, after clause (126C), the

following new clause shall be inserted, namely:-

―(126D) Profit and gains derived by a taxpayer from an industrial

undertaking set up in the Gwadar declared by the Federal

Government to be a Zone within the meaning of Export

Processing Zone Authority Ordinance, 1980 (IV of 1980) as

Export Processing Zone, Gwadar, for a period of ten years

beginning with the month and year in which the industrial

undertaking is set up or commercial operation

commenced, whichever is later.‖.

_______________________________________________________________

[C.No.1(51)INC/2007]

(Khalid Aziz Banth)

Member (Direct Taxes)/Additional Secretary


COLLECTORATE OF CUSTOMS (EXPORTS)

CUSTOM HOUSE KARACHI

NO.SI/MISC/216/98-CUS/EPZ Dated 28-09-2002

STANDING ORDER NO.05 /2002-(EXPORTS)

Subject: PROCEDURE FOR TRANSFER OR GOODS FROM TARIFF AREA TO

KARACHI EXPORT PROCESSING ZONE FOR SUB-CONTRACTING AT

KEPZ

In order to facilitate the Investors at KEPZ, Central Board of Revenue has

allowed the facility of reverse sub-contracting in the Export Processing Zone by units

based in tariff area and in this regard CBR has added rules 230 in sub-chapter (C ) of

SRO 450(1)/2001, dated 18.06.2001. Accordingly in-order to prescribe the detailed

Customs procedure for availing the facility of Sub-Contracting, the following

instructions are hereby issued for immediate compliance by all concerned:-

2. CENTRAL GUIDE LINES:

The facility of sub-contracting shall be restricted only to such type of items

which are capable of identification at the time of entry into and removal from the

KEPZ, after the goods have been processed, embellished, worked and further

manufactured, as the case may be.

3. APPLICATION BY INVESTOR:

The investor, in the KEPZ, shall apply for reverse subcontracting work to

be carried out by him on the prescribed format (annexed as ‗A‘) in quadruplicate to the

Assistant/Deputy Collector of Customs 1directly. Each copy shall be duly marked as

‗original‘, ‗duplicate‘, ‗triplicate‘ and ‗quadruplicate‘. The investor shall declare on each

copy of application the relevant particulars of the reverse sub-contracting work e.g.

name of the unit in the tariff area from which the goods are brought in, nature of the

sub-contract, materials to be brought into the Zone, quantity, value of the imported

inputs to be used by the unit in the KEPZ, its processing charges, etc.

1 The word ―directly‖ added by letter No. SI/MISC/216/98-CUS/EPZ dated

May 05, 2005

154

4. DOCUMENTS TO BE SUBMITTED BY THE INVESTOR:

At the time of submission of application to the 2Assistant/Deputy Collector

of Customs, the Investor shall submit the following documents along-with the

application:

a) A copy of the reverse sub-contracting agreement.

b) An Indemnity Bond (as per annex-B) equal to double the amount of

the value of the goods as given in the agreement.

c) A post-dated cheque equal to the amount of Indemnity Bond.

d) An undertaking to the effect that the sub-contracting work will be

completed within the stipulated period.

5. 3deleted

6. ACTION TO BEA TAKEN BY CUSTOMS (KEPZ):

i. 4After approval of the case by the Assistant /Deputy Collector of

Customs, the Customs shall process the case in the light of rule-230, sub-

chapter (C ) of SRO 450(1)/2001 dated 18.06.2001. The concerned

Appraising Officer shall scrutinize and process the case for detachment of

Indemnity Bond and post-dated cheque. The Appraising Officer, while

processing the case, shall ensure that the value of the material being

brought into the Zone and the value of the goods after processing are fair

and in accordance with Section 25 of the Customs Act, 1969. He shall

also check that the undertaking, Indemnity Bond and post-dated cheque

submitted by the investor are equal to twice the amount of ascertained

value of the material to be admitted into KEPZ for reverse sub-

contracting.

ii. The Principal Appraiser (KEPZ) shall maintain a master register for each

unit in KEPZ availing the facility of reverse sub-contracting. The Principal

Appraiser shall also ensure that the relevant data of the application has

been entered in the register maintained for the reverse sub-contracting.

The Indemnity Bond and Post-dated Cheque shall be detached after

approval from Assistant/Deputy Collector (KEPZ). The Assistant /Deputy

Collector (KEPZ) shall allow the entry of sub-contracting goods into KEPZ

for a period as he may deem fit. However, a maximum period of one year

may be allowed by AC/DC (KEPZ) and, in rare circumstances, further

extension may be allowed by the Additional Collector which shall not be

more than 180 days in any circumstances.

2 Assistant /Deputy Collector of Customs substituted by letter No.

SI/MISC/216/98-CUS/EPZ dated May 05, 2005.

3 Deleted vide letter No. SI/MISC/216/98-CUS/EPZ dated May 05, 2005

4 ―After approval of the case by the Assistant/Deputy Collector of Custom‖

added by letter No. SI/MISC/216/98-CUS/EPZ dated May 05, 2005

155

iii. The Original copy shall be kept in the relevant file; duplicate, triplicate and

quadruplicate copies of the application shall be handed over to the

applicant or his authorized representative. The duplicate copy of the

application, duly processed by Customs, shall be handed over to KEPZ

Authority for issuance of Gate Pass. The applicant or his authorized

representative shall deliver the triplicate copy to Customs Preventive staff

at KEPZ Gate, while the investor shall retain quadruplicate copy for his

own record. The Customs staff poste4d at the KEPZ gate shall endorse

particulars of passing in of the material on the triplicate copy. They shall

send the triplicate copy to Principal Appraiser (KEPZ) after all the

material, to be admitted in the Zone, has been passed in or after the

expiry of the time period allowed for sub-contracting. The Principal

Appraiser (KIEPZ) shall get the consignment examined as and when the

goods are admitted into KEPZ. He shall verify the particulars declared in

the application and also have the unit surveyed, if required, for the

issuance of analysis card. Such survey shall be conducted in case where

consumption of the imported raw material by the investor is involved. If an

earlier survey of identical nature has already been conducted, which is

not more than one year old, re-survey shall not be required.

7. REMOVAL OF FINISHED GOODS FROM KEPZ TO TARIFF AREA

i. After completion of the sub-contracting work, the Investor shall approach

the Customs Authorities at KEPZ on the prescribed format (Annex-C) for

removal of the manufactured goods,. He shall submit the final break-up of

processed goods in terms of the total value, processing charges and

value of imported inputs, if utilized.

ii. On the basis of this application, the terms of contract and the unit

consumption mentioned in the Analysis Card, if any, the Customs

authorities shall examine the goods and endorse examination report on

the serially numbered assessment slip, with five copies of each serial

number (Annex-D). Duty and taxes shall be worked out on value addition

only, keeping in view the provisions of Section 25 of the Customs

Act, 1969.

iii. Principal appraiser (KEPZ) shall retain the first copy of the assessment

slip. Four copies of the assessment slip shall be detached and handed

over to the Investor for payment of duty and taxes as worked out by the

concerned appraising officer. The bank shall make endorsement of the

payment on each of the four copies of the assessment slip. The duplicate

copy shall be handed over to Customs Preventive Staff posted at the gate

at the time of removal of goods from KEPZ to tariff area. The investor

shall deliver the triplicate copy to KE4PZ authorities for issuance of gate

pass.. The Investor shall retain the quadruplicate copy for his record.

156

iv. Removal of the goods shall be allowed in the presence of the ―Examining Officer

of Customs (KEPZ). The Custms Staff posted at the gate shall endorse the

vehicle number and the number of packages on the duplicate copy of the

application.

8. RELEASE OF INDEMNITY BOND/POST-DATED CHEQUE:

After removal of goods, the Investor shall apply to Assistant/Deputy

Collector (KEPZ) for release of the Indemnity Bond and Post-dated Cheque submitted

at the time of admission of the material into Zone. On being satisfied that all mate3rial

brought into the Zone has been utilized and there after cleared on payment of duties

and taxes in accordance with the procedure prescribed in this regard, he shall release

the post-dated cheque and Indemnity Bond within three days of the receipt of

application.

9. ACTION AGAINST THE INVESTOR:

In case the investor fails to complete the sub-contracting or contravenes

any provisions of law for the time being in force, the, the Assistant / Deputy Collector

of Customs (KEPZ) shall proceed against the investor in terms of the Indemnity Bond

submitted by him and the relevant penal provisions of the Customs Act, 1969 and the

Rules made there under.

(AFTAB ANWAR BALOCH)

Collector

157

158

Note: The declaration in point 4 & 6 must be compared with units, their form and

shape actually brought as given against Serial Nos. 13 & 14 and discrepancies

noted.

Signature and Seal of Customs Officer

Export Processing Zone, Karachi

Annexure

P A R T-1

Forrm No.EPZA 19 adition October, 1983

_________________________________

_________________________________

EPZA REGISTRATION NO.__________

DATED __________________________

The Assistant Collector of Customs,

Export processing Zone.

Karachi.

SUBJECT:- APPLICATION FOR PERMISSION OF SUB-CONTRACTING

Kindly permit our firm to transfer raw-material/semi-finished goods to Tariff

Area for further processing. Necessary Particulars are given below:-

1. Name of the firm/Enterprise in the ______________________

Tariff Area to whom the sub-contract is awarded. ______________________

______________________

2. Nature of sub-contract work _______________________________

(use separate sheet to give the details)

3. Mate rial to be transferred _______________________________

4. Form & Shape of end-product _______________________________

5. Material used/unit of end Product _______________________________

(use separate sheet to given the details)

6. Value added in the Tariff Area that will _______________________________

be surrendered to State Bank of Pakistan (Attach the terms & conditions of sub-

contract in support of it)

7. Units of end-product that will

be brought back to the Zone. _______________________________

8. Expected date of return of goods back to

the Zone. _______________________________

9. Description of Security attached _______________________________

It is certified that the above mentioned particulars given in this application are true

and correct and we undertake that goods shall be brought back to the zone as per

declaration given above.

Name, Signature and seal of the

Authorized person of the investor

159

PART-II

CERTIFICATE FOR TRANSFER OF GOODS TO TARIFF AREA/KEPZ

10. Permission is hereby granted to transfer the raw material/semi processed

material/goods to Tariff Area that will eventually return to KEPZ after partial

processing in the form, shape and quantity as stated above.

Name, signature and seal of

Authorized officer of Karachi


Forwarded to

Assistant Collector

Of Customs, Incharge,

EPZ.

NOTE: Issuance of this certificate of transfer of goods is based on the

statement & representations contained in this application. Any false statement or

mis-representation in this application will render the applicant liable to such action as

may be considered appropria to by EPZA and Customs.

PART-III

11. Goods as per declaration against serial number 3 above are allowed to be

removed from the zone to Tariff Area.

____________________________

Seal of Custom Officer at EPZ

Note: (Any discrepancy in the quantity actually removed and those declared must be

recorded below).

160

PART-IV

12. I/We hereby certify that an amount of ______________________ has been paid

to Messrs…………………………………………………………………………………..

(Name of firm)

With the details of work and payment in respect thereof vide Bank Draft No./Pay

Order/Cheque No…………………………………………………………………………

_________________________________

Signature & Seal of Investor/or his

Authorized representative.

PART-V

13. Units of End Product actually brought back into the Zone. ___________________

14. Form and shape of End product units.___________________________________

Annexure-“A”

CUSTOMS MACHINE NO._________________

DATED:_________________________________

NAME OF UNIT:_________________________

EPZA REGISTERATION NO._______________

DATED:_________________________________

The Assistant/Deputy Collector of Customs,

Export Processing Zone,

Karachi.

SUBJECT: APPLICATION FOR PERMISION OF SUB-CONTRACTING AT KEPZ.

Kindly permit our firm to transfer raw material/semi-finished goods from tariff area to EPZ

for further processing Necessary particulars are given below:

1.

NAME OF THE FIRM/ENTERPRISE IN ________________________________

THE TARIFF AREA WITH WHICH THE ________________________________

SUB-CONTRACT HAS BEEN MADE ________________________________

2. MATERIAL TO BE TRANSFERRED TO ZONE

Material ________________________________

Quantity ________________________________

Unit Value (Foreign Currency) ________________________________

Total Value (Foreign Currency) ________________________________

3. DUTY FREE IMPORTED MATERIAL TO USE BT THE INVESTOR.

4. PROCESS TO BE CARRIED OUT:

i). ________________________________

ii) ________________________________

iii) ________________________________

iv) ________________________________

5. MANUFACTURED/PROCESSED GOODS ULTIMATELY TO BE

CLEARED FOR TARIFF AREA:

Material ______________________________________________

Quantity ______________________________________________

Unit Value ______________________________________________

Total Value ______________________________________________

6. VALUE ADDITION AS PER TERMS OF CONTRCT (No-----2).

7. DUTY AND TAXES LEVIABLE

Customs Duty ____________________________________________

Sales Tax ____________________________________________

Income Tax ____________________________________________

8. i) Indemnity Bond Number & Date ______________________________

ii) PDC Number & Date _____________________________________

iii) Others ___________________________________________________

It is certificated that the above mentioned particulars given in this application are true

and correct and we undertake that the goods shall be brought back to the Zone as per declaration given

above.

Name Signatures and seal of the


161

PART-II

PERMISION FOR TRANSFER OF GOODS FROM TARIFF AREA TO KEPZ

This is to certify that the above referred particulars have been verified and

found correct. It is therefore recommended that permission may please be granted to the

above material to be transferred to K.E.P.Z from Tariff area.

1 Name, Signatures and seal of _______________________________

Authorized Officer of Karachi] _______________________________

Export Processing Zone _______________________________

Forwarded to Assistant/Deputy

Collector of Customs, Incharge EPZ

Annexure-“B”

ON APPROPRIATE NONJUDICIAL STAMPED PAPER

Indemnity Bond:

Date of Issue ______________________________

Date of Expiry _____________________________

Amount Rs.________________________________

This indemnity is made on the _______________________ day of 2 year

between the M/s. __________________________________(Manufactures/Investors in

EPZ). Through Deputy Collector/Assistant Collector of Customs Exports.

Whereas, the Assistant/Deputy Collector of Customs has in accordance with

terms of Standing Order_________________________________ dated _____________

has allowed us to release the consignment for transfer of goods from Tariff Area to

Karachi Export Processing Zone for sub-contracting under the conditions that we shall:

i. Observe rules, procedure and instructions that may be prescribed in respect

of sub-contracting in terms of aforesaid Standing order.

ii. Pay on demand a sum of Rupees__________________ that becomes the

double the value of the goods in question as penalty imposed by the

Collector of Customs/Adjudicating Officer for violation of rules and act.

iii. Maintain record of input goods and output goods.

iv. Abide by such further conditions imposed by the Collector of Customs a may

be necessary for the purposes of identification and accounting of input goods

used in the sub-contracting of the goods.

v. We shall compete the sub-contracting work within the time period allowed by

Deputy/Assistant Collector (KEPZ).

vi. Take away the input goods which have not undergone sub-contracting within

the stipulated period. If not so, abide by the decision of Collector of

Customs/Adjudicating Officer, regarding imposition of penalties and other

action.

162

Now therefore in pursuance of this Bond the Manufactures M/s.

______________ hereby agrees to indemnity if the said Collector of Customs

(Exports) to the extent of Rs.______________ (Rupees

_______________________________________) and also against costs and

expenses which may be incurred by the Collector of Customs in recovery of the

above amount.

It is further agreed that the above amount may be recovered by Customs

as an arrears of Land Revenue under sub-Section (2) of section 202 of Customs Act

1969 (IV of 1969), if the Manufactures fail to abide by any condition laid down in rules

and aforesaid Standing Order.

In witness of the parties hereto have hereon put their hands and seals the

day above mentioned.

1. M/S.________________________________

Name _______________________________

Position in the Firms____________________

Zone Registration No.___________________

NIC No._______________________________

2. Deputy/Assistant Collector of Customs

Exports for and on behalf of the

Collector of Customs (Exports).

Annexure “C”

Machine No. of _________________________Application

CUSTOMS MCHINE NO.________________

DATE________________________________

NAME OF UNIT________________________

EPZA REGISTRATION NO.______________

DATED_______________________________

163

Annexure “C”

Machine No. of _________________________Application

CUSTOMS MCHINE NO.________________

DATE________________________________

NAME OF UNIT________________________

EPZA REGISTRATION NO.______________

DATED_______________________________

The Assistant/Deputy Collector of Customs,

Export Processing Zone,.

Karachi

SUBJECT:- APPLICTION FOR PERMISSION FOR TRANSFER OF GOODS FROM

KEPZ TO TARIFF AREA ON COMPLETION OF SUB-CONTRACTING.

Kindly permit our firm to transfer finished goods from EPZ to tariff area on

completion of sub-contracting work necessary particulars are given below:-

1. NAME OF THE FIRM/ENTERPRISE IN ______________________

THE TRIFF AREA WITH WHICH THE ______________________

SUB-CONTRACT HAS BEEN MDE ______________________

2. MATERIAL TO BE TRANSFERRED TO ZONE.

Material _________________________________________________

Quantity _________________________________________________

Unit Value _________________________________________________

Total Value ________________________________________

3. DUTY FREE IMPORTED MATERIAL USED BY THE INVESTOR.

4. PROCESS CARRIED OUT:

(i) _________________________________________________

(ii) _________________________________________________

(iii) _________________________________________________

(iv) _________________________________________________

5. INPUT OUTPUT RATIO OF MATERIAL USED & ANALYSES CARD NO &

DATE

Material ________________________________________

Quantity ________________________________________

Unit Value ________________________________________

Total Value ________________________________________

6. VALUE ADDITION AS PER TERMS OF CONTRACT (No—2)

7. DUTY & TAXES LEVIABLE:

Customs Duty (only value addition) ______________________

Sales Tax _______________________________

Income Tax _______________________________

8. i) Indemnity Bond Number & Date ________________________

ii) PDC Number & Date ______________________________

iii) Others ___________________________________________

164

It is certificated that the above mentioned particulars given in this

application are true and correct and we under take that the goods shall be brought

back to the zone as per declaration given above.

Name, Signatures and seal of the


Permission is hereby granted to transfer the processed goods/material to

tariff area after processing in the form, shape and quantity stated above.

PRINCIPAL APRAISER


Forwarded to Assistant/Deputy

Collector of Customs, Incharge EPZ

Note:- Issuance of this certificate of transfer of goods is based on the

statement & representation in this application will render the applicant liable to such

action as may be considered appropriate by EPZA and customs.

165

166

Machine No. of

Inward Application:

________________

Date:

___________________________

Machine No. of Outward

Application:

______________________

Date:

___________________________

Name & Address of unit

____________

Unit in Tariff Area

_________________

Name of Unit in EPZ to

_____________

Which sub-contracting

______________

Was allowed

_____________________

EPZA Registration No.

_____________

Date of Registration:

_______________

ASSESSMENT SLIP FOR PROCESSED GOODS

UNDER REVERSE SUB-CONTRACTING

1. Description of goods

2. Tariff Heading

3. Quantity

4. Unit Value

5. Total Value

6. Value Addition in EPZ

7. Duties & Taxes payable

(a) Custom Duty

(b) Sales Tax

© Income Tax

(d) Others

(e) Total

Examiner Appraiser Principal Appraiser

Annex - D


NAME CUSTOM HOUSE

Karachi dated 06.02.1987

STANDING ORDER NO. 2/86 (P).

SUBJECT:- PROCEDURE OF TRANSFER OF GOODS FROM EXPORT PROCESSING

ZONE TO TARIFF AREA FOR PARTIAL PROCESSING FACILITY OF

SUB-CONTRACTING REGARDING.

In pursuance of Para 10 of SRO.249 (1)/81 dated 25.03.81, the following

procedure is laid down to avail the facility of sub-contracting in theTariff Area by the

Investors of Export Processing Zone, Karachi:-

1. The facility of sub-contracting shall be restricted to only such type of goods

which are capable of identification before leaving the EPZ area, and re-entry

in to the EPZ after the goods have been

processed, embellished, decorated, worked and further manufactured.

2. The investor in the EPZ area shall make out an application in triplicate in the

name of Assistant Collector of Customs 2by declaring the particulars like the

name of the enterprises whom the sub-contract has been granted, the nature

of sub-contract, the material to be transferred, value and its

quantity, form/shape of end product, material used in it of end-

product, Customs duty and taxes involved, particulars of bank

guarantee, name of the bank etc. for processing in the Tariff Area in the form

given in part-1 of the Annexure.

3. 3 Deleted

4. The processing staff in the EPZ would examine the consignment in the place

within the zone approved ed for the purpose and tally particulars given

already in the application made by the investors and would calculate the

amount of duty and taxes involved on the goods in the light of para. 6 of

SRO No.249(1)/81 dated 25.03.81.

5. The investor would then furnished a bank guarantee equivalent to the

amount of duty and taxes involved from a scheduled bank of Pakistan in case

the goods are otherwise importable in the import tariff area of the country

and if the goods are not importable then in addition to the amount of duty and

taxes laviable equal to the value of the goods. After a certificates in the form

set out in Part-III of the Annex. Issued by the EPZA is produced and the

bank guarantee is furnished, the Assistant Collector of Customs Incharge

EPZ would then allow the removal of the goods to the Tariff Area for the

purpose of processing by another party by way of sub-contracting.

2 In para-2 line 3 the words ―and submit it through EPZ Authority‖ deleted by

letter No. SI/Misc/216/98-Cus/EPZ dated May 05, 2005

3. Para -3 wholly deleted vide letter No. SI/Misc/216/98-Cus/EPZ dated May

05, 2005

167

6. No. Customs escort would be provided as it would be the responsibility of the

investor to safely transfer the goods to the destination and bringing it back to

zone. The investor will then take the goods outside the Zone at his own risk

and cost for purpose of further processing and would be responsible to return

the goods back to the zone within the specified time for the purpose. On the

basis of these documents, the Customs Officer at the gate will issue a gate

pass bearing these particulars.

7. After the completion of the processing, the goods shall be brought back to

the EPZ and would be examined and verified by the gate staff as well as the

appraising staff in the form given in Part-V of the annex. On satisfying the

same, the Assistant Collector of Customs will release the bank guarantee to

the investor, after a certificate in the form set out in Part-IV of the Annex. Has

been given by him.

8. Where the investor thinks that the job of further processing is not expected to

be completed within the specified time due to cartain reasons beyond the

control of the other party to whom the job of the sub-contracting has been

given , he may apply to the Assistant Collector before the expiry of the said

period for granting extension in the time limit. The Assistant Collector after

satisfying himself would allow the extension in the time period upto a

maximum limit of two months.

9. In case the investor fails to bring back the goods to the EPZ, the Assistant

Collector of Customs shall forthwith encash the bank guarantee lying already

with the Customs under Rule 8 of SRO.249(1)/81 dated 25.03.81 and the

importer shall for such violation also be liable to pay penalty laid down in the

Act & the Rules made thereunder.

Sd/-

(MAHMOOD AHMED)

COLLECTOR OF CUSTOMS

(Preventive)

Copy to all concerned as per Distribution list.

(SHAHID BASHIR)

for COLLCTOR OF CUSTOMS

(Preventive)

Note: The declaration in point 4&6 must be compared with units, their form

and shape actually brought as given against Serial Nos. 13 & 14 and discrepancies

noted.

_________________________________

Signature and Seal of Custom Officer

Export Processing Zone Karachi.

168

P A R T-1

Forrm No.EPZA 19 adition October, 1983

_________________________________

_________________________________

EPZA REGISTRATION NO.__________

DATED __________________________

The Assistant Collector of Customs,

Export processing Zone.

Karachi.

SUBJECT:- APPLICATION FOR PERMISSION OF SUB-CONTRACTING

Kindly permit our firm to transfer raw-material/semi-finished goods to Tariff

Area for further processing. Necessary Particulars are given below:-

1. Name of the firm/Enterprise in the ______________________

Tariff Area to whom the sub-contract is awarded. ______________________

______________________

2. Nature of sub-contract work _______________________________

(use separate sheet to give the details)

3. Material to be transferred a. Quantity _______________________________

b. Value _______________________________

4. Form & Shape of end-product _______________________________

5. Material used/unit of end Product _______________________________

(use separate sheet to given the details)

6. Value added in the Tariff Area that will _______________________________

be surrendered to State Bank of Pakistan (Attach the terms & conditions of sub-

contract in support of it)

7. Units of end-product that will

be brought back to the Zone. _______________________________

8. Expected date of return of goods back to

the Zone. _______________________________

9. Description of Security attached _______________________________

It is certified that the above mentioned particulars given in this application are true

and correct and we undertake that goods shall be brought back to the zone as per

declaration given above.

Name, Signature and seal of the


169

PART-II

CERTIFICATE FOR TRANSFER OF GOODS TO TARIFF AREA/KEPZ

10. Permission is hereby granted to transfer the raw material/semi processed

material/goods to Tariff Area that will eventually return to KEPZ after partial

processing in the form, shape and quantity as stated above.

Name, signature and seal of

Authorized officer of Karachi


Forwarded to

Assistant Collector

Of Customs, Incharge,

EPZ.

NOTE: Issuance of this certificate of transfer of goods is based on the

statement & representations contained in this application. Any false statement or

mis-representation in this application will render the applicant liable to such action as

may be considered appropria to by EPZA and Customs.

PART-III

11. Goods as per declaration against serial number 3 above are allowed to be

removed from the zone to Tariff Area.

____________________________

Seal of Custom Officer at EPZ

Note: (Any discrepancy in the quantity actually removed and those declared must be

recorded below).

170

PART-IV

12. I/We hereby certify that an amount of ______________________ has been paid

to Messrs…………………………………………………………………………………..

(Name of firm)

With the details of work and payment in respect thereof vide Bank Draft No./Pay

Order/Cheque No…………………………………………………………………………

_________________________________

Signature & Seal of Investor/or his

Authorized representative.

PART-V

13. Units of End Product actually brought back into the Zone. ___________________

14. Form and shape of End product units.___________________________________

171



CUSTOM HOUSE, KARACHI

No. SI/MISC/170/07-Cus-EPZ

9th July, 2007

STANDING ORDER NO. 02/2007-EXP

SUBJECT: PROCEDURE FOR REPAIRING OF GOODS BY THE INVESTORS OF

KEPZ IN TARIFF AREA.

It has been observed that the goods other than raw material and

finished goods having value less than US$ 500/- are brought into / out from Export

Processing Zone Karachi to tariff area for the purpose of repair of goods and there is

no customs procedure to regulate it. The issue was discussed in a meeting with

Export Processing Zone Authorities on 25-06-2007 and the following procedure has

been worked out to regulate the movement of goods for the purpose of repairs;

i. For the goods having value less than US $ 500/-, the Investor shall apply

on its letterhead (in triplicate) to the Principal Appraiser (Export

Processing Zone Karachi), stating the value, purpose and duration of time

for which they need to be taken in /out from the Zone. The Appraising

staff after examining the case, shall grant the permission for the period as

considered necessary for the same. After the grant of permission by

Appraising staff, the Export Processing Zone Authority shall issue gate

pass and the Preventive staff at gate shall allow it accordingly by

recording the particulars in their register and detaining a copy of the

application.

ii. The goods having value more than US $ 500/- shall be regulated as per

procedure laid down in Standing Order No. 2/87 (P) dated 5-2-1987

amended vide Standing Order No. 4 / 1999 (Exports) dated 22-07-1999.

(KHALID MAHMOOD)

Collector

172




No. SI/MISC/635/CUS-EPZ/2001 June 19, 2001

PUBLIC NOTICE NO. 4/2001-EXP

Subject: CLEARANCE OF WASTE/USED PACKING MATERIAL, ETC FROM

KARACHI EXPORT PROCESSING ZONE

With a view to streamline the removal/export of waste materials form the EPZ

and to meet the demand of stake-holder, legal provision have been mark. In addition to

the custom formalities as required under the existing procedure, these provisions shall

apply mutatis mutandis. The following instructions are issued fro compliance by all

concerned:

i. An investor who intends to clear any or all such materials to tariff area on

payment of duty and taxes, shall apply on the prescribed proforma in triplicate as

per annex – A to Export Processing Zones Authority with complete details of all

items and value of exports so that the limit of 3% of the total value of their annual

exports can be monitored. Export Processing Zones Authority alongwith customs

shall verify and certify the contents of all information contained in the application

form and affix signature and stamp of the authorized person in the relevant

column. Duplicate copy shall be retained by EPZA for its record. Original and

triplicate copy shall be handed over to the investor. Original copy shall be

attached with Bill of Entry and triplicate copy shall be retained by the investor for

its record.

ii. With a view to smoothen the removal of waste and difficulties in the clearance of

such waste, value of aforesaid goods have also been assessed and given at

Annexure – B to ensure its transparent clearance. In case, any item is nint listed

in annex-B the investor may approach in advance Export Processing Zone

Authority and Customs for taking necessary action.

2. The investors of Karachi Export Processing Zone can remove the following

materials up to 3% of the value of their annual exports to tariff area, on payment of duty

and taxes:-

i. Defective or ‗B‘ grade goods

ii. Waste

iii. Used packing materials

iv. Empty drums

v. Empty cartons

3. The information contained in annex – ‗B‘ is being circulated for the sake of

reference, transparency and guidance of the investors. The same may change from time

to time.

(Munir Qureshi)

Collector

Encl: As above.

173

174

S. No. Description of Waste PCT Heading Assessable Value

1. Cotton Yarn Waste 5202.9900 $ 410/ Bale

2.Blended/Cotton Fabrics Waste upto 9‖

(Cutting of Curtain and Bed Sheets)

6310.9000

6309.0000

$0.17 Per Kg

$0.12 Per Kg

3.

Blended/Cotton Fabrics Waste from 9‖

to 2 meters (Cutting of Curtain and Bed

Sheets)

6310.9000 $0.50 Per Kg

4.

Cotton/Blended Fabrics Waste

Garment Cutting (Tailoring Cutting) up

to 5‖ in irregular shape.

6310.9000 $ 0.03 Per Kg

5.

Nylon Fabric Waste with Wadding

(Tailoring Cutting) --------- do -------------

------(Lace Curtain)

6310.9000

6309.0000

$ 0.04 Per Kg

$ 0.31 Per Kg

6 Scrape of GI Pipe & Steel Bar 7204.4190 $550/MT

7. Paper Role Bobbin/Card Board Waste 4707.9000 $110/MT

8.Empty Plastic Tanks with Metal

Fencing (1000) Liters3915.9000 $15/- Per Piece

9 Acrylic Sheet Cutting Waste 3915.9000 $400/- MT

10

Empty Plastic Drum/Can (Serviceable)

(Capacity 205 Kg)

(Capacity 100 Kg)

(Capacity 25 Kg)

3915.9000

Rs.250 p/d Amen:

PN: 02/02 (Exp)

Rs.100 p/d

Rs. 20 p/d

11

Empty Iron Drum 200/205 Ltr.

Empty Used Iron Drum Capacity 100

Ltr

Empty Used Iron Drum 25 Kg

----------------- do -----------------21 Kg

7310.2900

Rs. 105 p/d

Rs. 100 p/d

$1.00 /PC

12 Scrape of Plastic Drum 3915.9000 $320/ MT

13Scrape of Polyester Film/Video

Pancake Cutting3915.9000 $250/ MT

14

Empty Edible Oil Canes Capacity 5

Liters

---------------do-------------- 10 Ltrs (of tin)

3923.9000$0.50/PC

1.00/PC

Annexure-B to the Public Notice No. 4/2001/Exp. dated 19-06-2001

MINIMUM ASSESSABLE VALUES OF WASTE AND SCRAP

FOR KARACHI EXPORT PROCESSING ZONE

175

Annexure-A to the Public Notice No. 4/2001/Exp. Dated 19-06-2001

APPLICATION FOR REMOVAL OF WASTE, USED PACKING MATERIALS AND

DEFECTIVE OR „B‟ GRADE GOODS ETC.

Name & Address of the investor : M/s. _________________________

Description of goods manufactured : _____________________________

Description of raw material imported : _____________________________

Total value of exports for the year___ : _____________________________

Description & value of material intended to be cleared

Quantity Value

Defective Goods. _________________ ___________

‗B‘ grade goods _________________ ___________

Waste _________________ ___________

Used packing material _________________ ___________

Empty drums _________________ ___________

Carton _________________ ___________

Total _________________ ___________

Percentage in terms of total value of exports ______%

_________ .

for use by Export Processing Zone Authority

Total value of exports US$ ____________________

Items allowed to be cleared ____________________

Value & quantity of items allowed to be cleared. US$._____________________

Signature & stamp of

authorized person.

Remarks, if any.__________________________________________________

__________________________________________________________________.

for use by Customs

Import permit No._______________________________________________

Quantity allowed by Export Processing Zone Authority_________________

Quantity cleared vide Bill of Entry No.______________ dated___________

Signature of Signature of Signature of

Examiner Appraiser Principal Appraiser


COLLECT ORATE OF CUSTOMS (EXPORTS)


No. SI/MISC/19/99-CUS/EPZ Dated: 18-07-2001

PUBLIC NOTICE NO. 5/2001 - EXP

It has been observed that presently there is no prescribed procedure

governing the incoming and outgoing of the machinery/equipment brought into the Export

Processing Zone Karachi, on rental basis for a limited period, against a fixed and agreed

amount of rent, between the investor in EPZ and the lender in the tariff area. To facilitate

the investors in EPZ and to streamline the system, the following procedure is laid down:

i. Any investor desirous of temporary import of machinery/equipment into EPZ, on

rental basis, shall approach the Export Processing Zones Authority with the following

documents:

a) Agreement signed between the lender of the machinery/equipment and the

investor showing the value of machinery in Pak rupees or US$ (as is

conveniently available) and agreed rental amount in US$ alongwith the period

agreed.

b) Complete description of the machinery/equipment, machine number/marks,

model, brand, type etc. if the machinery is locally made with no proper

identification marks etc, then the investor shall attach photographs for the same.

c) Evidence of payment of rental charges in foreign exchange (US Dollars) through

an encashment certificate issued by EPZ-Offshore Banking Units.

ii. EPZA shall issue an authorization letter/permission to the investor to ring the

machinery/equipment.

iii. Then the investor shall approach Customs Staff with an undertaking binding himself

that in case of default in return (export) of the rental machinery within agreed/allowed

or extended period, the investor shall pay the amount equal to the value of the rental

machinery in foreign exchange (US$) to the lender in tariff area.

iv. Assistant Collector of Customs shall allow the entry of machinery/equipment after the

examination proves that there is no discrepancy between the description given in the

documents and its physical being.

v. On the expiry of initially agreed period, the Authority can extend the same as long as

it is satisfied that machinery/equipment in use is contributing to the export of goods.

vi. At the end of agreed or extended period, on the application of the investors, the

Authority shall allow return of the said machinery/equipment.

vii. At the time of exit, the Customs shall carry out the examination to verify that the

same machinery/equipment is being returned/removed to tariff area.

2. The above procedure is applicable from the date of issuance of this Public

Notice and all the previous cases shall be dealt as per past practice.

(Munir Qureshi)

Collector

176


MODEL COLLECTORATE OF CUSTOM EXPORTS

CUSTOM HOUSE

KARACHI

NO. SI/MISC/96/2009/CUS/EPZ September 28, 2009

OFFICE ORDER NO. 04/09/EXP/EPZ

Subject:- PROCEDURE FOR THE EXCHANGE OF FAULTY/DEFECTIVE GOODS

To streamline the exchange of faulty goods exported to Tariff Area,

following procedure is laid down.

i. Importers in Tariff Area will make a written request to the investor in EPZ for

the exchange of faulty goods along-with the relevant documents i.e. GD,

Invoice, Packing list.

ii. The concerned investor will approach customs authority for seeking

permission to bring back the faulty goods in Zone. After procuring permission

to bring back the faulty goods to the examination area adjacent to the

Customs EPZ by getting incoming gate pass from the EPZ Authority.

iii. The custom examination staff will endorse the examination report on the

request of the investor after satisfying himself to the effect that the goods

brought in are identified as the same goods as were earlier exported from

the Zone and are faulty/defective.

iv. The custom staff posted at check post will examine the goods being replaced

and after verifying the quantity etc. will endorse his report on the reverse of

the request of the investor, on the basis of which the zone authority will

issue an outgoing gate pass and the goods will be replaced.

v. A master register shall be maintained by the customs office in EPZ to

account for such transactions in the format given in Annexure ―A‖.

vi. The EPZ Authority shall also maintain a register on the for referred to as

―Annexure-A‖ as a permanent record.

2. The facility will only be available to the exporters when the request for the

exchange of faulty goods is furnished within 07 days from the export of their

consignment to Tariff Area.

(Amer Rashid)

Collector

177


MODEL COLLECTORATE OF CUSTOM EXPORTS

CUSTOM HOUSE

KARACHI

NO.SI/MISC/96/2009/CUS/EPZ September 28, 2009

OFFICE ORDER NO. 05/09/EXP/EPZ

Subject: PROCEDURE REGARDING SHORT SHIPMENT OF GOODS IN

CASE OF EXPORT TO TARIFF AREA.

It has come to the notice of undersigned that some investors of KEPZ are

facing hardships as there is no laid down procedure for short shipment. It often

happens that the investor is not able to export complete shipment i.e. as per the

quantity mentioned in GD and NOC. In such cases, in order to facilitate the investors

of KEPZ, and to streamline the working, the following procedure for short shipment is

prescribed:

i. The Investor who intends to avail the short shipment will endorse on the

reverse of GD the details of short shipped goods in the following manner:

ii. The Examining Officer upon receipt of such information will examine the

goods and will physically endorse the short shipment statement

examination report.

iii. The Zone will make the necessary changes in their record regarding

short shipment of goods before issuing gate pass.

02. No remission of custom duty and other taxes on account of short

shipment will be admissible to the importers.

(Amer Rashid)

Deputy Collector

178

Short shipped No. of cartons

Short shipped Weight

Short shipped Value

Short shipped Quantity

179

S.No GD No

& Date

IGM

No.

Index

No

Importer

Name

Exporter

/Investor

Description

of Goods

Total

Quantity

Date of

Pass

out

Defective

/Rejected

Quantity

Value of

Defective/

Rejected

Goods

Date of

pass in

Defective/

Rejecte

Re

m

ar

ks.

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (1

3)

Annex - A

180

INTERNAL SALE

GOODS IMPORTED BY SELLER:

GOOD SOLD TO: M/S,

IMPORT DETAILS:

S.No. G.D. No. DESCRIPTION

OF GOODS

QUANTITY VALUE US$ E’ FORM NO. &

DATE

1.

2.

3.

TOTAL

DETAILS OF GOODS/PURCHASED:SALE INVOICE

NO.

SALES INVOICE

DATE

COMPLETE

DESCRIPTION

OF GOODS

PURCHASE

ORDER NO.

PURCHASE

ORDER DATED

VALUE (US$) QUANTITY

SIGNATURE OF SELLER SIGNATURE OF PURCHASER

FOR OFFICE USE

PERMISSION FOR SALES / TRANSFER OF GOODS IS GRANTED VIDE

RULE 235 OF S.R.O 450(1)/2001, Dated: 18th June, 2001 AFTER

RECORDING OF GOODS INTO KEPZ COMPUTER SYSTEM.

CASE NO. ________________________________

Dy. Manager (FAC) Manager (FAC) Dy. General Manager (FAC)

COPY TO:

1. AC Customs KEPZ.

2. Manager Security KEPZ.

D.O.No:1(13)/2000-INV.V


Ministry of industries &production

Islamabad

Islamabad, the 5th September,2000

Mr.Maqsood ISMAIL

Chairman,

Export processing zones authority,

Karachi

Subject:- EXPORT IN SAME STATE OF IMPORTED MERCHNDISE TO

TARIF AREA ON PAYMENT OF DUTIES AND TAXES

Dear Sir,

Kindly refer to your letter No.INV-091(A), dated 16th August,

2000 on the subject noted above.

The Minister for Commerce, Industries and Production has

been pleased to approve the following list of raw materials to be allowed to

tariff area as per decision of the ECC 14th July, 2000:-

i. Raw cotton

ii. Dyes

iii. Aluminum ingots

iv. Hides and skins

v. Iron sheet

vi. Aluminum foil

vii. Unblended tea

viii. Supari

ix. Newsprints

x. Spices in raw form

xi. Raw material for pesticide &insecticide

The export processing zones authority is required to kindly take

further necessary action in the matter ,under intimation to this ministry.

Yours faithfully

(Muhammad Hafiz)

Deputy chief

181

182

State Bank of Pakistan

Exchange Control Department

Karachi

F.E circular NO.13

1st February, 1984

All authorized dealers

in foreign exchange

Dear Sir,

CODE LIST NO.3 PROVIDING REGION

AND COUNTRY /TERRITORY CODES.

Attention is invited to the Code List No.3 circulated vide F.E

circular no.72 dated the 5th July, 1972 last amended vide F.E circular no.32

dated the 17th June 1980.

2. It is advised that country code no.2557 has been allotted to

―export processing zones authority ―which may please be added to the above

code list no.3.

Att:

EXPORT PROCESSING ZONE

KARACHI

Yours faithfully,

SD/-

(Muhammad Karim)

Senior Deputy Director

183

State Bank of Pakistan

Exchange Control Department

Karachi.

F.E. Circular No. 12 September 01, 2001

All Authorized Dealers

in Foreign Exchange.

Dear Sirs,

INVESTMENT ABROAD BY RESIDENTS OF PAKISTAN

In supersession of the instructions contained in F.E. Circular No.11 of 1995, it has

been decided to allow residents of Pakistan including firms and companies to make

equity based investment (other than portfolio investment) in companies (whether

incorporated or not)/Joint Ventures abroad on Repatriable basis, with prior

permission of State Bank of Pakistan and subject to the following guideline:

Criteria for Permission to Allow Investment Abroad by Residents.

i. Investment abroad is allowed only for those countries that allow repatriation of

profits, dividends and capital.

ii. Only companies incorporated in Pakistan including foreign controlled

companies and firms owned by Pakistani Nationals resident in Pakistan will be

allowed investment under the scheme.

iii. The business activity of the company, firm, joint venture in which investment is

desired to be made should ordinarily be of the same nature as that in which the

investor is already engaged in Pakistan, or in which the investor has the

potential to acquire sufficient expertise from the market for running the business.

iv. The investor should be financially sound as shown by its audited accounts for

the last three years. In the case of a company in the I.T. business, however, the

condition of three years may be reduced to one year.

v. The proposal should be economically viable as evidenced from a feasibility

report. It should have the potential for future earnings of foreign exchange

coupled with other advantages to the country such as employment opportunities

for Pakistani nationals and improvement in national human resources.

vi. The funds proposed for investment should be legitimate and tax paid, and the

investor should have a clean record of loan repayments.

vii. Funding for the proposed investment abroad would be allowed only from the

inter-bank market or from funds available in the foreign currency accounts of

investors opened in terms of FE 25 of 1998, or out of funds available in the

incremental deposits of frozen foreign currency accounts, or from Foreign

Currency accounts maintained by exporters in terms of Para 29 Chapter XII of

Foreign Exchange Manual/FE 25 of 2000 (net of amount paid to foreign

importers/agents).

viii. Small investments by individuals in a few shares of listed companies abroad

including participation by Pakistani employees of subsidiaries of foreign

companies in Pakistan in their share option plans would, however, be permitted

without the detailed scrutiny outlined above.

ix. The State Bank under the aforesaid guideline would also deal with the

proposals emanating from the Public Sector Organizations providing financial

services whereas the concerned ministry would deal with the investment

proposals from all other public sector organizations.

184

2. After making investment with the approval of State Bank of Pakistan, the

investor would be required to:

i. Make a return to State Bank on the prescribed form V-97 through their

banker within one month of making the investment;

ii. To provide a copy of Certificate of Incorporation and Certificate of

Commencement of Business in the country where investment will take place

to the Authorized Dealer along with copies of the share certificates so

invested and bonus issues, if any.

iii. To repatriate the dividend/disinvestments proceeds of the shares (including

capital gains) to Pakistan through normal banking channels. The amounts so

received would be converted to local currency by the bank concerned and a

Proceeds Realization Certificate in original evidencing the same shall be

filed by the owner with the State Bank. Such amounts shall not be allowed

for credit to a Foreign Currency Account or for purchase of Pakistani

securities on Repatriable basis.

Detailed applications for the purpose along with audited accounts, particulars of

Directors/Partners of the investor company/firm (not required in case of individuals),

name and address of the foreign company/firm in which investment is desired to be

made, it‘s line of business and particulars of it‘s Directors/Partners, should be

forwarded to Joint Director (Investment) Exchange Policy Department, State Bank of

Pakistan, Central Directorate, Karachi.

Please bring the above to the notice of your constituents concerned.

Yours faithfully,

(M.R. MEHKARI)

DIRECTOR



NOTIFICATION

Islamabad, the 13th September,1981

S.R.O.1018(I)/81:- In exercise of the powers conferred by clause(K) of

section 2 of the Export Processing Zones Authority Ordinance (IV of

1980),the Federal Government is pleased to declare the area of L and

measuring about three hundred acres situated near Landhi-4, Industrial Area,

Karachi, duly demarcated and fenced and bounded as under, to be a Zone

for the purposes of the said Ordinance:-

On the north Landhi Metroville Block-2.

On the south Sind Alkalis.

On the east Cattle Colony.

On the west Muzzafarabad Colony

HASINUDDIN AQUIL,

Deputy Secretary

185


Islamabad, the 23rd February, 1998

S.R.O.151(I)/98:- In exercise of the power conferred by clause (k) of section

2 of Export Processing Zones Authority Ordinance, 1980 (IV of 1980), the

Federal Government is please to declare the area measuring about two

hundred acres situated in Risalpur Tehsil and District Nowshera duly

demarcated, fenced and bounded as under to be a Zone for the purpose of

the said Ordinance:-

On the north Private Agricultural Land of village

Kutar Panr

On the South Special Industrial Zone/Nowshera

Industrial Estate.

On the East Nowshera Industrial Estate/Special

Industrial Zone

On the West Private Agricultural Land of village

Maira Kandan

MUHAMMAD BASHIR CHAUDHRY,

Deputy Secretary

186



NOTIFICATION

Islamabad, the 2nd April 2001

S.R.O.212(I)/2001:- In exercise of the power conferred by clause (k) of

section 2 of Export Processing Zones Authority Ordinance, 1980 (IV of

1980), the Federal Government is please to declare the area measuring

about one hundred and nine acres situated in Village Jathike, Tehsil

Daska, District Sialkot duly demarcated, fenced and bounded as under to be

a Zone for the purpose of the said Ordinance:-

On the north Private Agricultural Land of village Jathike

On the South Sialkot – Wazirabad Road

On the East WAPDA Grid Station, Sambrial

On the West Export Processing Zone, Sialkot, declared

under the Industries Division‘s Notification

No. S.R.O. 1239(1)/96, dated the

21st October, 1996

MUHAMMAD HAFIZ,

Deputy Secretary

187



NOTIFICATION

Islamabad, the 13th October 2001

S.R.O.718 (1)/2001:- In exercise of the powers conferred by clause (k) of

section 2 of the Export Processing Zones Authority Ordinance, 1980 (IV of

1980), the Federal Government is pleased to declare the Saindak Copper-

Gold Project , Saindak measuring about one thousand two hundred and

eighty four acres located within following coordinates in Survey of Pakistan

Toposheet Nos. 30 G/11 and 12 in Chagai District., Baluchistan, duly

demareated , fenced and bounded as under to be a Zone for the purposes of

the said Ordinance:-

Mining Area

Points Easting in Northing in

Meters Meters

A-1 2,124100 572,551

B-1 2,121898 572,551

C-1 2,121898 573,844

D-1 2,122093 573,844

E-1 2,122093 575,625

F-1 2,123233 575,625

G-1 2,123233 574,399

H-1 2,124100 573,445

[3918 (2001)/Ex. Gaz.]

188



NOTIFICATION

Islamabad, the 13th March 2002

S.R.O.43 (KE)/2002:

In exercise of the powers conferred by clause (k) of section 2 of the Export

Processing Zones Authority Ordinance, 1980 (IV of 1980), the Federal Government

is pleased to declare H4 Copper Project , Reko Diq, measuring about 15 sq.km,

located within the following co-ordinators in Survey of Pakistan Toposheet Nos. 30K

and 30-G in Chagai District, Baluchistan, duly demareated, fenced and bounded as

under to be a Zone for the purpose of the said Ordinance:

Mining and Processing Plants Area:

LAMBERT CO-ORDINATES

Points Easting in Meters Northing in Meters

I 2,168,039.87 555,366.40

II 2,173,039.87 555,366.40

III 2,173,039.87 555,366.40

IV 2,168,039.87 555,366.40

2434 THE GAZETTE OF PAKISTAN, EXTRA, OCT,19, 2001 [PART II]

Industrial AreaA 2,122,841 571,623

B 2,122,258 571,019

C 2,121,400 571,400

D 2,121,250 571,623

E 2,121,550 572,700

F 2,121,650 572,700

G 2,122,046 571,655

H 2,122,415 572,038

2. The subject project shall be an Export Processing Zone for the lease period of ten

years subject to the following conditions, namely:-a. the mining and project area specified will be walled and fenced by the respective

company and will not be used for residential purposes;

b. the Export Processing Zone Authority will not provide any infrastructure facility in the

area declared as Export Processing Zone;

c. the Export Processing Zone Authority development surcharge and the presumptive tax

will be leviable on the exports from the mining areas at the prevailing rate and rules;

d. the Zone will be zero rated for the imports into the project as specified above;

e. all transactions in the Export Processing Zone will be in foreign exchange; and

f. all other rules and regulations of Export Processing Zone Authority shall also be

applicable.

[No. (20)/2001-INV-III.]

MUHAMMAD HAFIZ,

Deputy Secretary

189



NOTIFICATION

Islamabad, the 12th May 2004

S.R.O. 307(1)/2004:- In exercise of the powers conferred by clause (k) of section 2

of the Export Processing Zones Authority Ordinance, 1980 (IV of 1980), the Federal

Government is pleased to declare H4 Copper Project , Reko Diq, measuring about

fifteen hundred acres located within the following coordinates in Survey of Pakistan

Toposheet Nos. 353/16 in Lasbella District, Balochistan, dully demarcated, fenced

and bounded as under to be a Zone for the purpose of the said Ordinance, for the

lease period of ten years beside construction period of two years, namely :-

Points Easting Northing

A 2215750 Yards 1033665 Yards

2026081.800 Meters 945183.276 Meters

B 2218465 Yards 1033665 Yards

2028564.396 Meters 945183.276 Meters

C 2219325 Yards 1031000 Yards

2029350.780 Meters 942746.400 Meters

D 2216590 Yards 1031000 Yards

2026849.896 Meters 9242746.400 Meters

[No. 1(13)/2002-FAC]

[390 (2004)/Ex. Gaz]

IQBAL AHMED,

Section Officer

190



NOTIFICATION

Islamabad, the 12th May 2004

S.R.O. 308(1)/2004:- In exercise of the power conferred by clause (k) of section 2 of

the Export Processing Zones Authority Ordinance 1980 (IV of 1980) the Federal

Government is pleased to declare one hundred and thirteen acres of land of

Gujranwala Industrial Estate-II, located about three kilometers short of Gujranwal on

Lahore-Gujranwala main G.T. Road, duly demarcated, fenced and bounded as

under to be a Zone for the purposes of the said Ordinance namely:-

On the North Mouza Qila Chand

On the South Mouza Attawa

On the East G.T. Road, Lahore- Gujranwala

On the West Canal Upper Chanab

[No. 1(21)/2001-FAC]

IQBAL AHMED,

Section Officer

191



NOTIFICATION


S.R.O. 130 (KE)/2005:- In exercise of the power conferred by clause (k) of section 2

of the Export Processing Zones Authority Ordinance 1980 (IV of 1980) the Federal

Government is pleased to declare [ two hundred and twenty point two one (220.21)]

acres of land leased out by Pakistan Steel Mills Limited at Bin Qasim, Karachi, to

M/s. Tuwairqi Steel Mills Limited, demarcated, fenced and bounded as under to be a

zone for the purposes of the said Ordinance namely:-

i. On the North East, Seawater intake channel;

ii. On the North West, Seawater disposal channel;

iii. On the South West, 220 KV transmission line of Karachi Electric Supply

Corporation ; and

iv. On the West (tip of triangle) Railway track transmission line.

[No. 1(44)/2003-FAC]

JEHANZEB AHMED

Section Officer

192

Documents

EPZA Year Book 2010