Transit trade: Insurance firms to cut risk premium

Authorities to prepare list of sensitive items.

ISLAMABAD:

Insurance companies have agreed to reduce the risk premium on insurance guarantees for transit goods to be included in the list of sensitive items. The risk premium will be brought down to 1 per cent from 1.8 per cent. In addition to this, insurance charges on edible items will also be reduced.

According to documents, Pakistani and Afghan officials, in consultation with all stakeholders, will prepare a list of sensitive items to be imported under the transit trade agreement between the two countries. These items will attract a higher risk premium compared to edible items which will have a lower premium.

In a recent meeting of the sub-committee formed to resolve outstanding issues, Pakistani and Afghan authorities held extensive deliberations to remove the hurdles coming in the way of implementing the new transit trade agreement.

Pakistan assured Afghanistan that it would try to convince its banks, having branches in Afghanistan, to provide guarantees for Afghan trucks entering Pakistan to lift cargo under the transit trade agreement.

Pakistan and Afghanistan also agreed to curtail bank guarantee from 25% to 10% for trucks coming to lift transit goods.

Published in The Express Tribune, September 16^th, 2011.