The Federal Board of Revenue (FBR) has issued a draft Insurance Guarantee Format for exporters operating under the Export Facilitation Scheme, marking a significant step toward strengthening the regulatory framework for export support in Pakistan. The updated draft supersedes provisions first notified through SRO 957(I)/2021, and aims to streamline the process for exporters seeking guarantees under the scheme.
The draft insurance guarantee format specifies guidelines for both irrevocable and unconditional guarantees, ensuring that exporters can access financial backing in a standardized and legally compliant manner. This move is expected to enhance transparency and facilitate smoother trade operations for businesses engaged in international markets.
Eligible participants under the scheme include a broad spectrum of exporters, ranging from manufacturers-cum-exporters and commercial exporters to indirect exporters, common export houses, vendors, and international toll manufacturers. By encompassing a wide range of stakeholders, the FBR intends to make the scheme accessible to diverse export-oriented businesses across multiple sectors.
An insurance guarantee, as defined in the draft, must be issued by an insurance company registered with the Ministry of Commerce. Furthermore, the insurance provider must possess a minimum “AA” rating from the Pakistan Credit Rating Agency, ensuring that only financially sound and credible institutions participate in issuing guarantees. This requirement reinforces confidence in the reliability of financial instruments supporting exporters.
The FBR has made the draft format publicly available on its official website, encouraging stakeholders and industry participants to review the document and provide feedback. This collaborative approach allows exporters and industry bodies to contribute insights and suggestions, potentially refining the framework before it is formally adopted.
Industry experts have welcomed the initiative, noting that the availability of a standardized insurance guarantee format could reduce delays in trade documentation and expedite export transactions. The draft also aligns with broader efforts by the government to modernize Pakistan’s export infrastructure and create a more business-friendly environment for local manufacturers and service providers targeting global markets.
The Export Facilitation Scheme has long been viewed as a key instrument for enhancing Pakistan’s export competitiveness. By introducing a clear and structured approach to insurance guarantees, the FBR aims to mitigate financial risks, support cash flow management for exporters, and ensure compliance with international trade standards.
This reform also reflects a growing focus on risk management and institutional accountability within Pakistan’s trade ecosystem. Exporters can leverage the new framework to secure guarantees from reputable insurance companies, providing assurance to both domestic and international buyers.
Stakeholders are encouraged to review the draft carefully and submit feedback within the stipulated period to help shape the final implementation of the insurance guarantee system under the Export Facilitation Scheme. The FBR expects that the finalized format will contribute significantly to the growth of Pakistan’s exports by providing a robust financial safety net for businesses engaging in global trade.
Follow the PakBanker Whatsapp Channel for updated across Pakistan’s banking ecosystem.