The Economic Coordination Committee (ECC) of the Federal Cabinet waived the requirement for bank guarantees on Afghan transit cargo of imported urea passing through Gwadar Port, replacing it with insurance guarantees.
This decision aims to facilitate transit trade while maintaining oversight, according to the Ministry of Finance.
This initiative is being implemented under the Afghanistan-Pakistan Transit Trade Agreement (APTTA), signed in 2010, as the bank guarantee requirement has posed significant challenges for the movement of goods between the two countries, especially for bulk cargo imports such as wheat, sugar, and fertilizers.
The recent waiver of bank guarantees applies solely to urea imports, a critical agricultural input for Afghanistan, which imports approximately 900,000 tons annually.
Pakistan had previously imposed stricter transit trade conditions in October 2023 to counter smuggling and exert economic pressure on Afghanistan to address the threat posed by banned militant groups.
According to reports, investors in Gwadar, along with the Port Operator and Gwadar Port Authority, repeatedly called for the removal of the bank guarantee requirement and the introduction of an insurance guarantee instead.
The Ministry of Commerce had previously allowed the import of Afghan bulk cargo at Gwadar Port, with the onward transit to Afghanistan using bonded, insured, and sealable trucks equipped with tracking devices. This was aimed at improving efficiency and transparency in transit trade and was initially introduced under Customs Rules 2021 (Rule 471, clause-xi). The Insurance Guarantee for Afghan transit goods was later replaced with SRO No.1402(1)/2023 on October 7, 2023.
The Ministry of Maritime Affairs also termed the requirement for bank guarantees a major hurdle, particularly for bulk cargo imports, which negatively impacted the ease of business.
