Group E: Ojaswi Baidya Pallabi Sinha Sarashree Dhungana Shradha Khanal Nepals Trade Policy and Export & Import Procedures

Foreign Trade Trade Policy 1961 of Nepal made provisions for Export Exchange Entitlement (EEE) scheme and export diversification and import substitution strategies were opted Refined Trade Policy 1977 with a duel exchange rate system New Trade Policy 1983 made effective with additional provisions A more liberal trade policy 1992 introduced

Trade Policy 1992 Introduced with the objectives of 1. Promoting internal and external trades 2. Encouraging private sectors participation 3. Diversifying trade in terms of both commodities and markets 4. Strengthening backward linkages 5. Expanding employment oriented trades 6. Reducing trade imbalances

Nepal-India Trade Treaty (1991) Supported a positive response and speedy trade growths with India during 1990s Considering the sensitivity of trade relations with India, policy makers in Nepal always poked there noses on some critical aspects which include: Geo-physical forces Trade Policy forces Labor forces Financial forces Trading forces Competitive forces Protection of welfare of the citizens through proper support to Poverty Reduction Strategy Full commitment made to regional and multilateral trading system

Foreign Trade Policy 2009 Considered the norms and practices of World Trade Organization as well as other regional trade agreements under SAARC and BIMSTEC Special emphasis to all four modes of service trades including tourism, education and health High priority given to Special Economic Zone (SEZ) to operate all commercial activities including manufacturing of goods that are subject to free of all tariffs, duties and taxes

Tariffs Import Tariffs 1. Highest rates (40% - 80%) in luxuries 2. High rates (25% - 40%) on clothing and finished goods 3. Lower rates (15% - 25%) on prepared and preserved food and construction materials 4. Lowest rates (0 – 10%) on basic food, industrial inputs, machineries and fertilizers During the past 15 years import tariffs have been substantially reduced

Continued…. Preferential Tariff Zero tariff on imports from India and Tibet 1% tariff on imports of agricultural inputs Nepal provides tariff concessions on items subjected to MFN (Most Preferred Nation) tariffs. MFNs: India, Tibet, members of SAFTA Export Tariffs and Fees Tariffs based on ad valorem tax based on the value of real estate or personal property

Continued…. Other Duties and Charges (ODC) Levied on imports for revenue generation producers protection purpose Gradual reduction of all ODC phasing out every two years and finally make it zero by end of the year 2013

Trade Procedures Register at 1. A proprietorship firm under the Private Firm Registration Act A Partnership Firm Act Public/Private company under the Company Act An Agency under the Nepal Agency Act 1958 Register with the Inland Revenue Office (IRO) to receive Permanent Account Number (PAN) and also open VAT account Proceeds forward to open bank account and get fully ready to commence its business

Export Procedures Talks about what procedures we must follow in order to export goods from Nepal After a firm is established it should get registered with the IRO to get a PAN Opening a bank account in order to have transactions with foreign customers Different documents and procedures for different products and transportation.

In context of Nepal, for international can be done through 4 routes. 1. Air transport from TIA 2. Sea transport from India and Bangladesh 3. Direct export to India by land border crossing 4. Direct export to Tibet by land routes

1 st REGISTRATION CONTACTS/SUPPORTING OFFICES: Chamber of commerce Department of commerce Company registrars office DOCUMENTS REQUIRED: Citizenship certificate Photographs Recommendation letter from COC Partnership agreement MOA AOA Business scheme or plan

2 nd OBTAIN PERMANENT ACCOUNT NUMBER CONTACTS/SUPPORTING OFFICES: Inland Revenue Office (IRO) DOCUMENTS REQUIRED: Copies of all above documents Copy of registration certificate Introduction letter of business and persons involved

3 rd MANAGEMENT CONTACTS/SUPPORTING OFFICES: Commercial Banks Your Office DOCUMENTS REQUIRED: Application to the bank with a photocopy of decision of the Board of director in case of a Company Copies of all registration certificates

4 th ESTABLISH RELATIONSHIP WITH IMPORTERS Identification and selection of the most potential exportable products Identification of target markets Send pro-forma invoice to buyer Arrange production or procurement of goods/services CONTACTS/SUPPORTING OFFICES: Trade and Export Promotion Center Federation of Handicraft Association of Nepal Chamber of Commerce

DOCUMENTS REQUIRED: Consult previous export history Refer trade statistics of other countries Analysis of rate of import growth and volume of exports

5 th PREPARE DOCUMENTS required for all products Prepare invoice yourself CONTACTS/SUPPORTING OFFICES: Commercial banks Trade and export promotion center Federation of Nepalese Chambers of Commerce and Industries Local Chamber of Commerce Insurance companies

DOCUMENTS REQUIRED: Invoice Letter of credit Certificate of Origin GSP certificate Business registration certificate PAN registration certificate Letter of Authority Customers Declaration Forms Foreign Exchange Control Declaration Forms Customs Transit Declaration Form Insurance policy

6 th PREPARE DOCUMENTS required depending on the type of product EXPORT PROCEDURES: Documents required depending on the type of product CONTACTS/SUPPORTING OFFICES: FHAN or any other product association provide separate certificate Curio Pass Office of the Archaeological Department Customs Office Freight Forwarders ECON or GAN Department of Agriculture Department Plant Resources

DOCUMENTS REQUIRED: Invoice certificate of concern Curio pass certificates- metal products, artistic jewelleries, pauvas, thankas, wood carvings, etc Bonded warehouse certificate Double or multiple country declaration Value added certificate for jewellery in format prescribed by Nepal Rastra Bank applicable for jewelleries. no objection letter for domestic animal and product Letter of permission to customs

7 th FREIGHT FORWARDING EXPORT PROCEDURES: Submit prepared documents along with cargoes to the customs office directly of through a forwarding agent. Export charge, Rs. 500/consignment CONTACTS/SUPPORTING OFFICES: Customs office- Mechi, Birathnagar, Birgunj, Sidharthnagar, Nepalgunj, Dhangadi and Kathmandu airport (TIA)

8 th MAKE TRANSPORT ARRANGEMENTS EXPORT PROCEDURES: Get certified Customs Declaration Form, COO, GPS Form A and other documents and hand them over to shipping agencies who will provide Airway bill, Bill of Landing or Railway Receipt CONTACTS/SUPPORTING OFFICES: Freight Forwarder or Forwarding Agency with the help of transport agencies

DOCUMENTS REQUIRED: Master Airway Bill – MAB House Airway Bill – HAB Master Bill of Lading – MBL Bill of Lading - B/L Road consignment Note – C/N Handing-over Certificate

9 th INTIMATE IMPORTER You must be in communicated and in good terms with your foreign customer so as for the business to go smoothly. Prepare to forward necessary documents.

10 th FINAL PAYMENT EXPORT PROCEDURES: Submit relevant documents to the bank for negotiation or final payment. When you send your product, the importer should send an LC to the bank. The bank will pay you the amount when the goods reach its destination.

DOCUMENTS REQUIRED: Customs Declaration Form Invoice and Packing list GPS or COO Nepal Rastra Bank Form Other negotiations forms of the bank

Import Procedures Import of all products other than banned or quantitatively restricted items stated below are permitted without license under Open General License (OGL) system a) Products injurious to health b) Arms and ammunition and explosive materials c) Communication equipment d) Valuable metals and jewelries e) Beef and beef products Imports are normally grouped into three sources: India, Tibet and Third countries

Continued…. Import from India Import from Tibet, Autonomous Region of Public Republic of China Import from Third Countries

Thank You