By Abdul Wajid Khan ISLAMABAD, March 29 (INP-WealthPK): The State Bank of Pakistan (SBP) has said its regulatory framework allows the receipt of export proceeds from Afghanistan through banking channel as well as bringing foreign currency (FCY) cash (convertible currencies) from across the border and depositing it with banks. According to an official brief of the SBP, a copy of which was available with WealthPK, the central bank has not imposed any restriction on trade with Afghanistan and it is playing the role of a facilitator, however, a customer has to provide evidence by using customs declaration form as per applicable laws or regulations of Pakistan Customs for bringing in the export proceeds from across the border. Notably, the earlier instructions also required the banks to ensure the funds of export proceeds are brought from abroad. Hence, the assumption that the SBP has disallowed FCY cash over the counter is incorrect. The SBP has just reemphasized the requirement of cash declaration in the updated foreign exchange regulations, which was already in place. Upon the feedback from the business community, the SBP recently issued a letter and requested the Federal Board of Revenue (FBR) to ensure convenient mechanism for issuance of cash declaration certificates. However, the central bank has highlighted that the Pakistani banks are not getting any cooperation from their correspondent banks for settlement of trade with Afghanistan due to sanctions imposed by United States and United Nations. Accordingly, correspondent banks have been reluctant to deal with Pakistani banks if they undertake any trade-related transaction where Afghanistan is involved. Also, Pakistan is already under increased scrutiny due to inclusion in Financial Action Task Force (FATF) list of “jurisdiction under increased monitoring”. Correspondent banks frequently ask for additional information pertaining to all transactions routed through their accounts. Besides, the US has imposed restrictions on the central bank of Afghanistan by freezing its account due to which Pakistani banks are facing difficulties and are unable to transfer money from Pakistan to Afghanistan for import-related transactions. The SBP conveyed these issues to the Ministry of Foreign Affairs with the request to diplomatically engage countries significant for correspondent banking and persuade them to provide ease to their banks for allowing such transactions. Additionally, in the wake of inactive banking channels and liquidity crisis in Afghanistan, the SBP has proposed a barter mechanism for consideration of the Government of Pakistan, as an alternate for trade settlement with Afghanistan. The Ministry of Commerce is in touch with the Afghan side to proceed in the matter. In view of the above and the difficulties in trade with Afghanistan, the Ministry of Commerce has already allowed 14 more items (in addition to currently allowed four perishable goods) to be exported to Afghanistan without requirement of electronic export form i.e., in Pakistani rupee. As per suggestion of the Inter-Ministerial Coordination Cell (AICC), imports from Afghanistan have been allowed by Pakistan Customs without requirement of electronic import form for limited time (45 days) till the barter mechanism is finalised. The Senate Standing Committee on Finance has also taken up and reviewed the issues encountered by Pakistani exporters to Afghanistan in its recent meeting and recommended that a robust framework must be formulated to ensure that trade between the two countries does not dwindle. Chairman of the Senate Standing Committee on Finance Talha Mehmood said that the government should fast-track its work to resolve the issues pertaining to Pakistan’s trade with Afghanistan because further delay will bring loss to the national economy. He said that due to emerging challenges and the situation in Afghanistan, Pakistan’s exports to Afghanistan are on a downward trajectory, and all relevant institutions should produce tangible solutions as soon as possible.