LAHORE: The German Pakistan Chamber of Commerce and Industry (GPCCI) has penned a letter to Jameel Ahmad, Governor State Bank of Pakistan, about what they believe is targeted propaganda in terms of their access to letters of credit.
The GPCCI states the propaganda has impaired their members’ ability to access letters of credit from commercial banks. Protests at the highest international forums, and a possible strain in Pakistan-German ties are to be expected as a consequence per the GPCCI’s letter.Â
The letter urges Ahmad to intervene and enable German to restore their regular operations, and assist the German companies against what the GPCCI believes is discrimination.Â
The accusationÂ
The letter opens by highlighting the trade ties between Pakistan and Germany, and then moves to to highlight the issues faced by German brands operating in Pakistan stating “Imports have been almost non-existence, as Financial Institutions are refusing to establish LCs for German brands requested by their local representative companies.” Â
The letter then proceeds to highlight, and define the alleged propaganda against German automotive companies in Pakistan stating, “Adding to the already difficult situation and misery, recent news in the mainstream and social media targeted specifically German automotive companies being represented in Pakistan. Fabricated and inaccurate news is being spread that LC’s are being established for German Automotive Brands operating in Pakistan with ludicrous sums, which are far from the ground realities.”Â
“As a result, official importers of Audi, BMW, & Mercedes-Benz are being humiliated by commercial banks in Pakistan. As of today, Commercial Banks operating in Pakistan are refusing to establish ANY LCs (irrespective of the amount) for any imports especially for German Brands for both vehicles & spare parts. Not only is this a targeted operation towards German brands, but further having no legal basis or regulation. Banks have been advised by forces unknown to us not to entertain any C s for German Automotive Brands. Added to this, banks are trusting these malicious take mainstream & Social Media news coverage of import numbers without analyzing easily available real data (SWIFT transmission records),” the letter continues.Â
The response taken by the German companies
The letter highlights the action that the German companies have opted for by stating, “Unfortunately, these tactics have now been brought tothe attention of the German Automobile companies* highest echelon in Germany; accordingly, protests are likely to be launched with not only the Foreign Office, but also the European Union and the WTO, highlighting that these restrictions (without any legal basis) seem to be specifically targeted towards German companies only!”Â
The ramifications of the propagandaÂ
“The ripple effect of the same will be quite damaging considering Germany announced an additional 84 million euros to support Pakistan as part of both countries’ climate partnership in the wake of catastrophic flooding which struck Pakistan in 2022”, the letter states.Â
“On the other hand, the EU in total has also pledged substantially large amounts for reconstruction efforts, which will include humanitarian support which is growing further.
On the one hand Pakistan is expecting help from Germany and the EU in these dire times, but on the other hand, Pakistan is targeting German automotive companies (EU based companies) operating in Pakistan”, the letter continues.Â
The letter then moves on to highlight how actions such as these could impair Pakistan’s prospects of renewing its GSP+ status with the EU which is set to expire this year. Â
The allegations in questionÂ
The Government of Pakistan has been hit with a series of allegations pertaining to their authorisation of the imports of luxury vehicles into Pakistan in November and December. The decision many argued came at a time when the country’s foreign exchange reserves were dwindling. Amongst these luxury cars, it is alleged that multiple luxury electric vehicles belonging to the German trifecta of Mercedez, BMW, and Audi have been imported.Â
The issue gained particular notoriety when local exporters and traders alleged that the imports had been authorised because members of the Cabinet had imported some of the vehicles. The traders highlighted their dismay at the matter stating that they had been deprived of access to letters of credit, whilst luxury automotive importers were being given preferential treatment. The Government of Pakistan has denied these allegations. However, domestic traders continue to allege otherwise.
