The Economic Coordination Committee (ECC) on Friday approved the replacement of bank guarantees – imposed on October 7, 2023 – for the import of Di-Ammonium Phosphate (DAP) under Afghanistan–Pakistan Transit Trade Agreement (APTTA) with insurance guarantees, the Finance Division said.
The ECC meeting, chaired by Finance Minister Muhammad Aurangzeb, reviewed a proposal from the Ministry of Maritime Affairs regarding the withdrawal of bank guarantees for Afghan transit trade facilitation through Gwadar Port.
“The ECC approved replacing the bank guarantees, imposed on October 7, 2023, for the import of Di-Ammonium Phosphate (DAP) under APTTA, with insurance guarantees,” the statement read.
media reported on Thursday that the government might replace the bank guarantee system with an insurance guarantee to facilitate transit trade under the bilateral agreement between Pakistan and Afghanistan, specifically for goods passing through Gwadar Port.
The APTTA was signed in 2010 to facilitate the movement of goods between the two countries. The Ministry of Commerce allowed the import of Afghan bulk cargo—wheat, sugar, and fertilisers—at Gwadar Port, with onward transit to Afghanistan using bonded, insured, and sealable trucks equipped with tracking devices.
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The cargo handling was part of special initiatives, including the introduction of an Insurance Guarantee. The Insurance Guarantee for Afghan transit goods was introduced under Customs Rules 2021 (Rule 471, clause-xi), and was later replaced by SRO No.1402(1)/2023 on October 7, 2023.
The Ministry of Maritime Affairs, in a summary to the ECC, noted that the requirement for bank guarantees in Afghanistan’s transit trade had a negative impact, particularly on bulk cargoes such as wheat, sugar, and fertiliser, which in turn affected investors and ease of doing business. As a result, investors in Gwadar, along with the Port Operator and Gwadar Port Authority, have repeatedly requested the withdrawal of the bank guarantee requirement, proposing instead the use of an Insurance Guarantee to streamline trade operations.
Salaries of Pakistan Steel Mills employees
Meanwhile, the ECC also deliberated upon a proposal of the Ministry of Industries and Production regarding the disbursement of salaries to Pakistan Steel Mills (PSM) employees for the financial year 2024-25 (projected).
“The committee authorised the Finance Division to approve the payment of the projected net salary of Rs935.78 million for FY2024-25, to be disbursed monthly according to the salary demand of PSM. These funds will be provided from the already approved budgetary allocation of Rs3.5 billion,” the Finance Division said.
Revision in annual rebasing determination timeline
The ECC further discussed and approved a proposal from the Power Division regarding the revision in the annual rebasing determination timeline.
“Policy guidelines were approved to be issued to NEPRA for revising the annual tariff determination process timeline by amending the legal and regulatory framework.”
The ECC directed that rebasing should be notified with effect from January 1, 2025, onward each year, following the completion of regulatory proceedings. The Power Division was authorised to approach NEPRA for the implementation of the policy guidelines.
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Meanwhile, the Ministry of Commerce presented a proposal seeking an extension of regulatory duties on finished flat steel products.
The ECC approved the extension of duties on relevant iron and steel flat products until March 31, 2025, as recommended by the Tariff Policy Board during its 61st meeting held on December 26, 2024.
“However, the ECC emphasised that no further extensions will be entertained, referencing the Federal Government’s authority under Sub-section 3 of Section 18 of the Customs Act, 1968.”
Delay in EOBI audits
The ECC also considered a proposal of the Ministry of Overseas Pakistanis and Human Resource Development for budget proposals for FY 2024-25 and revised estimates for FY 2023-24 regarding Employees’ Old-Age Benefits Institution (EOBI).
“The ECC expressed strong displeasure over the delayed submission of the proposals by EOBI and MOPHRD. While the budget proposals for FY 2024-25 were reluctantly approved, the revised estimates for FY 2023-24 were not approved.
“The ECC also registered its concerns over the delay in EOBI audits, with the last audit conducted in 2019. Relevant authorities were directed to thoroughly investigate the delay and submit an update to the ECC within one week,” the Finance Division said.
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