Nepal – Export
– Import Policy
Exports Transit Procedure
Under the Foreign Exchange (Control) Act and Rules, exports are permitted
only against advance payment or documentary credit (L/C) to ensure that the
payment for the goods is received in Nepal. Therefore, Nepalese Customs
releases export shipments only after verifying the bank certificate of advance
payment or L/C copy certified by a commercial bank. The exporter has to declare
in form BBN I at the time of export that the export earnings will be
repatriated within six months in case of transactions under L/C. If payment is
not received within 6 months or such extended time as authorized by NRB, the
commercial bank has to inform NRB for inquiry into the matter.
There is no limit on
advance payment but the buyer has to remit the foreign exchange through a bank
or has to exchange foreign currency with a bank while visiting Nepal. The bank
issues a certificate of advance payment in a specified format (Annex 16) to the
seller or exporter as nominated by the foreign buyer at the time of exchanging
the currency. This certificate has to be produced to the Customs at the time of
export. However, foreign nationals can carry out as accompanied or
unaccompanied baggage Nepalese products up to a value of US $ 1000 without
producing foreign exchange certificate of a bank.
When using the other
payment method, the L/C specifies the terms and conditions for shipment. After
the L/C is received from its correspondent bank, the bank sends a copy to the
exporter. It is the responsibility of commercial banks to see that L/C terms
and conditions are fully met before accepting shipment documents and releasing
payments to an exporter. Nepalese exporters prefer the irrevocable L/C, as it
is normally withdrawn only when the exporter does not meet the terms and
conditions of shipment leading to the rejection of documents for negotiation by
the bank. Therefore, this type of L/C ensures safety of payment to the
exporter. Currently banks at the both ends normally mention in most L/C
documents that the credit is subject to the UCP 500 (1993).
The commercial banks
experience on average 4 shipments out of 1000 that exceed the shipment date
specified by the L/C, and most of the documents are subject to discrepancies.
Therefore, it has become a normal practice to accept such documents on
exporter's risk for negotiation with the correspondent bank. Depending upon the
credit status of an exporter, the bank may or may not release payment to the
exporter against discrepant documents before confirmation of acceptance of such
documents from the correspondent bank. If the payment received from the
correspondent bank is not more than USD 500 less than the stipulated L/C
amount, the bank can accept the payment with information to NRB. But if the
discrepancy in payment is more than USD 500, the bank has to obtain prior
permission of NRB to accept the payment. Partial shipment and part payments are
allowable only as per the terms of L/C. While releasing payment to the exporter
before realizing payments from the correspondent bank, the bank deducts some
amount as interest. The interest rate may vary from bank to bank. For instance,
one of the commercial banks is charging 12 days interest at 14%. Another
commercial bank levies 15 days interest at 12% assuming that the payment will
be received within 14-15 days. Most exports are on FOB Kathmandu Airport or
Calcutta although a separate payment for freight is allowed subject to the
submission of documentary evidence including quotation for freight rates.
Certificates for exports.
export of specific products like readymade garments takes place regularly in
sizable lots requiring timely delivery, uniform quality and tailoring, overseas
buyers tend to either permanently station their own staff in Nepal or send
experts from India to inspect quality whenever shipments are ready for export.
The L/C specifically provides for the production of quality certificate from a
nominated agency/person in garment exports.
of Origin. There are two private sector associations called
Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Nepal
Chambers of Commerce (NCC) which issue Certificate of Origin (COO) required by
Nepalese Customs on all exports.
seven-copy set of COO (Annex 17) is printed and issued at a cost of NPR 5 per
set. Then a charge of 12 paisa per NPR 100 (0.12%) of FOB invoice value is
levied at the time of putting stamp and signature on COO when it is filled by
an exporter. An exporter needs to apply with an invoice and sometimes L/C copy
to verify the value of goods by the concerned district chamber of commerce to
obtain the COO.
FNCCI does not itself issue COO but arranges
its printing in the name of the each district chamber by allocating a separate
code number on the COO. FNCCI has delegated its authority of issuing COO to the
following district Chamber of Commerce offices, which are its members:
Nepal Chamber of Commerce, Kantipath, Kathmandu.
Lalitpur Chamber of Commerce and Industry, Lalitpur.
Birgunj Chamber of Commerce and Industry, Parsa.
Bhaktapur Chamber of Commerce and Industry, Bhaktapur.
Morang Merchants' Association, Morang.
Makwanpur Chamber of Commerce and Industry, Makwanpur.
Pokhara Chamber of Commerce and Industry, Kaski.
Siddharthanagar Chamber of Commerce and Industry, Rupandehi
Morang Chamber of Industries, Morang.
Butwal Chamber of Commerce and Industry, Butwal.
Janakpur Chamber of Commerce and Industry, Janakpur.
Narayangarh Chamber of Commerce and Industry, Chitwan.
Nepalgunj Chamber of Commerce and Industry, Bankey.
Kailali Chamber of Commerce and Industry, Dhangarhi.
Gorkha Chamber of Commerce and Industry, Gorkha.
Nawalparasi Chamber of Commerce and Industry, Nawalparasi.
Krishnanagar Chamber of Commerce and Industry. Kapilbastu.