Diplomatic Bonds

Diplomatic Bonded Warehouse is the warehouse licensed under section 13 of the Customs Act’1969 for warehousing the dutiable goods Imported exclusively for diplomats / privileged persons.

1. A Bonded Warehouse License is issued under the provisions of section 13 of Customs Act’1969. However, in case of Diplomatic Bonded Warehouse, the licenses were issued with the prior approval of the C.B.R.

2. As provided under sub-section(2) of section 13 of the Customs Act’1969, an application for the grant of license shall be made in the prescribed form Annex-B along with following documents :-
   
   
   

   • Map of the proposed area.

   •  Article and Memorandum of Association in case of company and copy of partnership deed in case of partnership firm.

   • Certificate from a scheduled bank showing soundness of financial position.

   • Income Tax Registration Certificate.

   • Details of Directors and authorized persons.

   • Certificate of Membership of Chamber of Commerce and Industry.

   • Lease / Tenancy Agreement.

   • Copies of National identity Card(s) & Character Certificate(s).

   • Comprehensive Insurance Policy from an approved Insurance Company.

   • Survey Certificate issued by the approved surveyor.

3. Besides the requirements mentioned above, all other conditions required under the
   customs Act’1969 or any other law for the time being in force shall also be fulfilled.
   The permission for Import of liquor is, however, granted to non-Muslims only.

4. The diplomatic bonded warehouses are dealing in Import of goods Imported exclusively for the use of diplomats, foreign missions and privileged persons. As such, all such goods / items which are used by the diplomats, foreign missions and privileged persons can be Imported.

5. The goods are not Imported against L/C. The Importer (holding diplomatic bonded warehouse license) Import goods on contract basis and store the same in his warehouse. Subsequently goods are sold to diplomats / privileged persons according to their requirement and exemption certificates issued by the Ministry of Foreign Affairs.

6. The purchase will be made strictly according to the quota fixed by the Ministry of Foreign Affairs and quantities mentioned in the exemption certificate.

7. Quota is allotted and purchases are authorized by the Ministry of Foreign Affairs.

8. The strength of the diplomatic community in the country which benefits from the warehouses is maintained by the Ministry of Foreign Affairs.

9. The licensee of a bonded warehouse cannot open its sub-office in other cities.

10. Periodical stock taking is conducted. The audit is also carried out by the staff of the Director General, Revenue Receipt Audit on quarterly basis. Moreover, insurance policy is obtained from the bonders covering all risks including pilferage etc. Besides there are specific provisions in Chapter-XI and Chapter-XVIII of the Customs Act’1969. In case of detection of any pilferage or misuse of the facility, penal action under the relevant clauses of sub-section (1) of sectin 156 of the Customs Act’1969 can also be initiated.

11. Every bonder cannot Import liquor. The Import permission from Ministry of Commerce is necessary for the Import of liquor for a diplomatic bonded warehouse.

12. A Muslim can not Import or deal in liquor in the diplomatic bonded warehouse.

13. Liquor is allowed to Diplomats against the Exemption Certificates issued by the Ministry of Foreign Affairs.

14. Liquor can be purchased by diplomats according to the quantities mentioned in the exemption certificates issued by the Ministry of Foreign Affairs. Privileged persons can purchase liquor according to the quota provided in the Model Rules and CGO.15/96 which is as under :-

15. According to CGO.15/96, the Import / purchase of alcoholic beverage is restricted to US$ 200/= per family per month by expatriate employees of foreign or local companies, loan funded projects or media personnel.

16. According to the Model Rules dated 15-04-1963 for customs concessions to privileged personnel arriving under various foreign aid programmes or projects, Import / purchase of liquor can be made as per following quota.

    Privileged Person

    • On first arrival in Pakistan a privileged person shall be allowed to Import free of duty and taxes foodstuff and other consumable stores including liquors and tobacco up to C&F value of US$ 200/- under chapter III of SRO 450(i)/01.

    • During the period of his assignment he shall be allowed to Import free of duty and taxes foodstuff and consumable stores including liquor and tobacco up to C&F value of US$ 150/- per month but the value of liquor will not exceed US $50/- per month.

    • In addition to above, the privileged person shall be allowed to Import on payment of duty and taxes foodstuff and consumable stores including liquor and tobacco up to a C&F value of US$ 200/- per month but the value of liquor will not exceed US$ 100/- per month.

    • The privileged personnel may Import the monthly quotas cited above for a maximum period of six months at a time.

17. As per practice in vogue, the license of the Diplomatic Bonded Warehouse is renewable every year.

18. There is no fee prescribed for the grant / renewal of diplomatic bonded warehouse license. Only establishment charges are realized (forty thousand only) is charged on annual basis.

19. The requisite information in respect of Preventive Collectorate is enclosed as Annex-C.

20.  Procedure of Clearance of Liquor From
    Diplomatic Bonds / Warehouses

21. A diplomatic bonded warehouse is a bonded warehouse licensed under section 13 of the Customs Act’1969.

22. Provisions of Chapter XI (Warehousing) are relevant for Importing and clearance of liquors in these warehouses that is :-

23. On Import, the liquor is warehoused on in-bond bill of entry.

24. Clearance from warehouse is made on ex-bond bill of entry filed under section 104 of the Customs Act’1969.

25. The procedure for handling transactions in diplomatic bonds is almost the same as is applicable to goods warehoused and ex-bonded from private / public bonded warehouse. The legal provisions have been given in Chapter XI (sections 84 to 119 of the Customs Act’1969).

26. The difference in the operation of diplomatic bonds and other bonds is that the diplomatic bonds deal exclusively in goods required to be supplied to the diplomatic missions, diplomats and privileged personnel etc. These goods include liquor also.

27. The warehoused lipuor is cleared for supplying on ex-bond bills of entry. The ex-bond bill of entry is prepared by the bonders according to quantities mentioned in the exemption certificates issued by the Ministry of Foreign Affairs for the diplomats and diplomatic missions and according to prescribed quota fixed by the FBR from time to time in respect of privileged personnel.

28. The ex-bond bill of entry after completion is forwarded to Examining Officer (Incharge) diplomatic bond / concerned.

29. Proper ledgers are maintained at the bonded warehouses.

30. On receipt of duly completed bill of entry, EO Bond enters the particulars of the supplies in the Bond Ledgers and gives duplicate copy of the bill of entry to bonders for making supplies to concerned diplomat / privileged personnel. In fact, the warehouse keeper gives delivery against receiving payment in foreign exchange which is ultimately to be reported to the State Bank of Pakistan on monthly basis.

31. Up to Serial No. 8, Customs formalities are required to be completed. Then starts proceeding under Provincial Excise Department who reportedly issues TPs in case of supplies to be made to upcountry personnel / diplomats and the goods are generally dispatch through transport companies.

32. The role of the warehouse keeper can be termed as "Commission Agent". He arranges Import of liquor and warehouse the same in his licensed warehouse. From the warehouse, he makes supplies to designated diplomatic mission, diplomat or privileged person etc. He charges the value of liquor so supplied in shape of cheques in foreign currency accounts and after deducting his commission remits the balance to the shippers. All these transactions are governed under the provisions of Foreign Exchange Regulations Act’1947 through the State Bank of Pakistan.