Provided by Bank Alfalah Limited.

Objective: An essential component of growing your business involves selling your product in the international Market. In order to do so, a business may avail trade facilities from Banks. The following are the primary steps involved in the import Process:

The first step towards importing a Product involves printing a Letter Head of your company to open an account with a Bank from which the Business chooses to avail importing facilities. Before a business starts importing, it’s crucial for it to have the following registrations:
1. National Tax Number (NTN)
2. Sales Tax registration
3. Association Membership with Chamber of Commerce A business must then find potential Sellers to whom it can export its products. It can find buyers through the following sources:
1. Agents
2. Internet
3. Trade Fairs
4. Personal Visits
5. Personal Contacts

Note: The Importer must ensure that the Product he/she demands and Seller he/she decides upon do not fall under negative HS Codes. HS code contains the approved products and sellers from whom a buyer can import as per the government’s policies. The HS code also provides information regarding which products require the Importer to have an import license, and which products do not require a license.

Once the Importer has found a potential seller, he must then request them for a quotation. A quotation is a written statement containing an offer to sell goods at a particular price. The buyer and seller may then negotiate on the price and other terms of trade to reach a mutual agreement. Once an agreement has been reached upon, the importer must wait for the seller to send him the Performa Invoice in order to proceed further.
The next crucial step in the Import process is to open a Letter of Credit with a Bank or establish a contract or make advance payment. A letter of Credit is a facility offered by Banks, whereby, the importers Bank Guarantees Payment on his behalf, provided the seller meets the defined conditions and submits the required documents within the fixed time frame. In order to open a Letter of Credit, the importer must first request for an LC facility. To open such a facility, the Bank will require adequate security which can take the following forms:

1. Cash collateral
2. Pledge
3. Hypothecation
4. Lien
5. Mortgage

Once the facility is approved, the importer must provide the following documents to open a Letter of Credit with the Bank:

1. Letter of Credit application Form (Provided by the Bank)
2. Performa Invoice duly signed by the Buyer and the Seller
3. Insurance Cover Form (The insurance Cover must be for a 110% of the LC Value, covering all risk in favor of LC issuing Bank)

Once a letter of Credit has been opened, the Importers Bank will send the Letter of Credit to its Advising Bank in the Exporters country, for where the Exporter can collect it. Once the exporter has received the Letter of Credit, he/she will send the goods for transportation and send the export documents to the importer Bank.

Upon receiving the export documents, the importers Bank will intimate the Importer for any discrepancies IF found. If no discrepancy is found, then the importers Bank will Debit his/her account or through FATR/FIM and make the payment to the seller. However, if the documents contain discrepancies, a written consent for payment would be required within 5 business days. The importer has the choice to accept the discrepancies and allow the Bank to make the payment, or reject it and refuse payment to the seller.

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