https://arab.news/gf45b
- New order introduces definitions for “sanctioned entities” and quarterly value reconciliation requirements
- Move narrows scope of barter trade framework first launched in 2023 to ease dollar shortages
ISLAMABAD: Pakistan has amended its barter trade framework to restrict transactions under the business-to-business (B2B) mechanism to Afghanistan, Iran and Russia, tightening oversight of non-cash trade conducted outside the dollar system, according to a notification issued by the Ministry of Commerce this month.
Pakistan first introduced the B2B Barter Trade Mechanism through SRO 642 in June 2023, enabling trade in goods such as energy, food and minerals with Afghanistan, Iran and Russia.
The updated order now limits eligible partners, imposes new compliance obligations and integrates sanction-screening requirements aligned with the Foreign Office notifications.
“This Order shall apply to Afghanistan, Iran and Russia only,” the notification, dated Oct. 17, said.
The amendment also introduced new definitions and responsibilities for traders.
“‘Sanctioned entity’ means any individual or company that is prohibited from engaging in trade activities due to the enforcement of trade prohibitions by the United Nations (UN) and others, as notified by the Ministry of Foreign Affairs from time to time,” it stated.
Under the revised framework, Pakistani traders must reconcile the value of goods quarterly and within a specified timeframe.
“The Pakistani trader shall be responsible to net-off value of goods on a quarterly basis, within one hundred and twenty days of the transaction allowed by the concerned regulatory Collectorate of Customs in the authorization,” the document said.
The notification further specifies that all companies forming part of a trading consortium share liability for tax or customs violations.
“In case of a consortium of traders, all entities who are part of a consortium shall be jointly and severally responsible if found involved in or having committed any offence or failed to pay duties or taxes under the Customs Act, 1969.”
The move to operationalize barter trade is seen as a response to Pakistan’s acute foreign-exchange crunch and the need to bypass traditional dollar-based trade channels.
Key export items under the mechanism include agricultural products, textiles and leather goods, while permitted imports cover crude oil, LNG, fertilizers and industrial machinery.
"Many concerns of business community of both Iran and Pakistan have been taken into account and addressed in the new SRO," Muhammad Mudassir Tipu, Pakistan's ambassador to Iran, wrote on X.
"We hope it will substantially elevate Pakistan-Iran trade & diversify its base. I urge industry and business community of both countries to take full benefit from the new SRO and help expand the bilateral trade. I also urge Pak-Iran Chambers and Trade bodies to share this SRO with their members enabling them to gain mutually-beneficial trade dividends."