Afghan transit trade: Customs to swiftly clear perishable items

Insurance firms refuse to provide guarantees beyond Torkham border.

Express July 28, 2011


The government on Thursday instructed customs authorities to clear perishable items meant for Kabul on a priority basis as Pakistan and Afghanistan are struggling to cope with problems arising out of the reluctance of insurance companies to extend financial guarantees, a necessity to control smuggling.

Finance Minister Dr Abdul Hafeez Shaikh directed officials of the Federal Board of Revenue and the Ministry of Communications to ensure that shipments of perishable items to Afghanistan through transit trade facility are not blocked.

A meeting was convened to streamline the process of transporting vegetables, food, spices and other items to Afghanistan.

President Asif Ali Zardari during his recent visit to Kabul had assured his counterpart that Pakistan would facilitate the shipment of transit cargo despite initial hiccups after the new Afghanistan-Pakistan Transit Trade Agreement (APTTA) came into force.

It was also decided in the meeting that a report on daily movement of containers carrying perishable items and crossing the Pak-Afghan border should be submitted to the finance minister. Customs authorities being the facilitators of Afghan transit trade would start working on the issue of insurance guarantee, which is for 60 days for perishable items, and file a report so that a mechanism could be devised for mutual satisfaction of the two countries.

This arrangement is in contrast to what was agreed under APTTA. The agreement calls for furnishing financial guarantees by Afghan-based importers of goods or their authorised customs clearing agents, brokers or transport operators in Pakistan will furnish customs security in the form of insurance guarantee from an insurance company of repute, acceptable to customs, in the prescribed form which will be valid for at least one year and will be en cashable in Pakistan, for ensuring the fulfillment of any obligation arising out of customs transit operation between Pakistan and Afghanistan.

Insurance companies have refused to provide guarantees for the transit cargo beyond Torkham border due to the high risk involved in it, said Senator Ilyas Bilour, who participated in the meeting. He said insurance firms were ready to extend guarantees up to Peshawar. Under the agreement, in order to discourage smuggling, the importers would provide guarantees equivalent to the value of duties. The insurance companies should have ‘AAA’ or ‘AA’ ratings. Bilour said during the meeting the government also agreed to allow Pakistani and Afghan trucks to carry Afghan goods to India. The meeting was called for speedy transportation to and from Afghanistan through Wagah border and Karachi Port.

Other issues discussed in the meeting included making more viable the utilisation of dry port at Peshawar, strengthening customs control and monitoring of Afghan transit trade so that no leakage takes place from Karachi to Torkham and backward, and so on from Afghan border to Wagah.

In order to make the transit regime more efficient, the transportation capacity between Karachi Port and Torkham border was also reviewed.

Published in The Express Tribune, July 29th, 2011.


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