Third party payments allowed for import and export transactions
15th November, 2013
Reserve Bank of India has allowed third party payments
for import and export transactions. As per A.P. DIR Circular No. 70, dated 8-11-2013,
such transactions shall be subject to the conditions such as availability of
tripartite agreement, declaration in Export Declaration Form (EDF), mention in
bill of entry and invoice, reporting of outstanding, etc. These third party
payments further should come from, or made to, a Financial Action Task Force
(FATF) compliant country and through the banking channel only.
Normally payment for exports should be received from
the overseas buyer named in the EDF. It shall be received in a currency appropriate
to the place of final destination mentioned in the EDF irrespective of the
country of residence of the buyer. Payments for imports should be made to the
original overseas seller of the goods and the importer should furnish relevant
documents. This has now been liberalised by allowing receipt of payments from /
effecting payments to third parties also, taking into account the evolving
international trade practices.
The present instructions state that the exporter will
be responsible for realization and repatriation of export proceeds from the
third party named in the EDF. This facility of third party payment is
restricted to USD 100,000 for import transactions.