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PAKISTAN’S FIRST INDEPTH NEWSPAPER ON CUSTOMS

Daily

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Karachi, Sat February 3, 2018

LAHORE

M HAYAT

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he Customs Collectorate of Appraisement, Lahore, has surpassed revenue collection target for the month of January, 2018 by collecting Rs 6,356 million against the assigned target of Rs 5,138 million and thus has collected Rs 1,218 million more than the target. According to the documents available

with Customs Today, Customs Appraisement collected Rs 4,654 million during the month of January 2017. Compared to the last year, the Collectorate posted growth of 45 percent and 37 percent respectively in collection of customs duty and overall taxes. Collector Jamil Nasir while chairing a performance review meeting expressed his conPidence in the trade facilitation measures adopted by the Collectorate and appreciated his team members for putting in their best ef-

Vol 2, Issue No. 328

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forts for the satisfaction of the stakeholders and meeting revenue targets. He further said that in coming few weeks, mobile apps for onsite examination of goods and bonded warehouses will be introduced for effective monitoring of these customs facilities and working of customs staff. It is also necessary to mention here that Collector Customs Appraisement Jamil Nasir adopted a comprehensive strategy to enhance revenue collection.

Customs Appraisement surpasses assigned revenue collection target for Jan

Adjudication-II recovers Rs 6.48m from M/s Usman Textile & Exports

‘FBR authorised to issue SROs with approval from federal minister’

Dreamers’ nabbed smuggling illegals into US

Gwadar Customs seizes smuggled goods & narcotics worth Rs52.58m

Customs Appraisement, has surpassed revenue collection target | SEE PAGE 01 |

Customs Adjudication-II showed excellent performance by taking actions against tax | SEE PAGE 02 |

‘FBR is primarily delegated with a duty to oppose the grant of tax, | SEE PAGE 05 |

Lives of two “Dreamers”just turned into a nightmare. Cops say two men | SEE PAGE 07 |

Gwadar Customs has impounded huge quantity of smuggled items | SEE PAGE 08 |


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FBR receives 1.4 million income tax returns Saturday, February 3, 2018

National

ISLAMABAD: The Federal Board of Revenue (FBR) has received about 1.4 million income tax returns. According to weekly Active Taxpayers List (ATL), the total number of income tax return filers has reached by 1.4 million for tax year 2016. The filing of income tax returns has increased by around 30 percent when compared with 1.074 million returns filed as numbers revealed through Tax Directory for Tax Year 2015.

Adjudication-II recovers Rs 6.48m from M/s Usman Textile & Exports

KARACHI

KARACHI

CUSTOMS BULLETIN REPORT

WAQAR AHMED ANSARI

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he Directorate of Customs Post Clearance Audit (PCA) has detected duty and tax evasions of Rs 9.5 million allegedly by M/s Alwani M Traders, it is learnt. Official sources told Customs Today that M/s Alwani M Traders imported a consignment of different kinds of surgical items under the PCT Heading 2548.2504 and got it cleared from the Port Qasim Karachi vide GDs on November 17, 2017 by paying customs duty at 6 percent after claiming a benefit of SRO 566/2007 through Examiner Ayoub Khaskheli. However, the subject item is correctly classifiable under the PCT 2558.2541, attracting customs duty at 10 percent and income tax at 12 percent. So by doing mis-declaration of classification, M/s Alwani M Traders evaded to pay Rs 9.5 million. So the importer has violated the provisions of Section 49 (5) & (6B) of the Customs Act-1969, Section 5, 8 read with Section 56 of the Sales Tax Act-1990 and Section 132 of Income Tax Ordinance 2001 punishable under clauses (6) and 49 of Section 160(7) of the Customs Act-1969, Section 32 (4) of the Sales Tax Act-1990 and Section 140 & 147 of Income Tax Ordinance 2001 and Section 7-A of the Sales Tax Act-1990 read with chapter X of the Sales Tax Special Procedure Rules 2007.

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he Customs Adjudication-II showed excellent performance by taking actions against tax defaulters and issuing notices during the 25 days of January. Sources told Customs Today that the Customs Adjudication-II served a Pinal notice on a defaulter company named M/s Usman Textile and Export Karachi and recovered Rs 6.48 million from M/s Sarfaraz Handicrafts Hyderabad. M/s Usman Textile and Export Karachi was involved in the tax evasion. The company imported a consignment of used and new digital cameras on November 14, 2017 and used the wrong Pakistan Custom Tariff heading. After a careful investigation, the Customs Adjudication-II issued a final notice to the company and got cleared the outstanding amount of Rs 7.25 million. Source said that another company M/s Sarfaraz Handicrafts got cleared a consignment of brass pipes and brass nuts bolts on November 8 and evaded tax amount of Rs 6.48 million. After the investigation, Customs Adjudication-II served a show cause notice on the company on November 27 but it failed to get clear the outstanding tax amount. Collector Customs AdjudicationII Tahir Qureshi issued a Pinal no-

PCA detects tax evasion of Rs 9.5m by M/s Alwani M Traders

tice to the company on January 2, 2018. After receiving the notice, the company deposited Rs 6.48 million in favor of the Customs Department. Meanwhile, The Customs Adjudication-I showed an excellent performance in 20 days of January 2018.

The adjudication has issued six show cause and Pive Pinal notices to defaulter companies in 20 days. Source told Customs Today that the Customs Adjudication-I has retrieved Rs4.52million from M/s Haris Textile Industries Karachi. The company was allegedly

involved in tax evasion. Sources told our reporter that Collector Customs Adjudication-I M Javed served a show-cause notice on said company for allegedly causing the treasury a loss of Rs4.52million by way of misdeclaration of classiPication.

IHC relists customs cases filed by M/s Lakson Tobacco

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ISLAMABAD

NAEEM ULLAH TARIQ www.customsbulletin.com

he Islamabad High Court, during a recent week of January, relisted the customs cases Piled by M/s Lakson Tobacco Corporation Limited against the Pield ofPice of the Federal Board of Revenue (FBR). The IHC Division Bench, comprising of Justice Athar Minallah and Justice Mian Gul Hassan Aurangzeb, heard the case and relisted it for

hearing along with other cases. M/s Lakson Tobacco Corporation Limited had named additional Collector Customs in its petition against the FBR. Meanwhile, another bench dated in ofPice the hearing on M/s Hasas Engineering and Construction Company Private Limited’s case. The appellant had challenged the act of recovery of said amount by Commissioner Inland Revenue of Large Taxpayers Unit Islamabad. The ATIR was also made respondent in the case as the tribunal had upheld the de-

partmental decision regarding the issuance of show cause notice and demand of recovery of outstanding tax amount under head of federal excise duty. M/s Hasas Engineering and Construction Company Private Limited had prayed the court that the FBR ofPice had issued a recovery notice to the company which did not hold lawful grounds. The appellant had prayed the court to declare the act as illegal and without any lawful authority and an interim stay may be granted against the recovery proceedings.


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ISLAMABAD

M ARSHAD

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he Federal Board of Revenue (FBR) is primarily delegated with a duty to oppose the grant of tax, duty and any other kind of exemptions which may hurt the national revenue collection. However, the FBR does not require any approval from the federal government for the issuance of any statutory regulatory order (SRO) for the granting any kind of exemption. The board enjoys full authority to issue SROs with the approval from the Minister Incharge. FBR Member Inland Revenue-Policy Dr. Muhammad Iqbal and Member Customs Muhammad Zahid Khokhar made this observation here on Thursday while explaining FBR’s position before the Senate Standing Committee on Finance and Revenue on the issuance of SRO No. 47(1)2018 dated January 23, 2018. Under this SRO one particular company had been exempted from payment of sales tax and federal excise duty. In this regard, some 12 senators including the Chairman Senate Standing Committee on Finance and Revenue Salim Mandviwala had submitted a calling attention notice in the

House and matter was referred to the committee for further consideration. Therefore, both the FBR members explained before the committee that said SRO was issued in pursuance of the decision of Economic Coordination Committee of the Cabinet which was later rectiPied by the federal cabinet. ECC made this decision on a summary moved by Ministry of Communications which sought exemption from sales tax and federal excise duty in respect of imported construction materials and goods whether or not locally manufactures for China State Construction Engineering Corporation Limited for

construction of Karachi Peshawar Motorway (Sukur-Multan section), on the four early harvest projects under China-Pakistan Economic Corridor (CPEC). They observed that said exemption had been granted under clause (a) of sub-section (2) of section 13 of the Sales Tax Act 1990 and sub-section (2) of section 16 of the Federal Excise Act 2005. After amendments made in the relevant provisions of law exemption can be by the Board with approval of federal minister in charge pursuant of to approval of ECC of the cabinet. Even then, Muhammad Zahid Khokhar said that FBR opposed the grant of exemption to Chinese company; however, perhaps it was necessary under bilateral agreement between Pakistan and China for the construction of said section of motorway. Moreover, he said that FBR usually issued SROs under special circumstances and situations because exemptions often hurt the national revenue collection. Earlier, almost majority of movers of the said calling attention notice, strongly criticized the federal government, Pinance ministry and FBR for granting exemption to Chinese company tantamount to discrimination between Chinese and local companies.

ahid mad Z m a h ms Mu n here rvatio r Custo e e s b b m o s Me de thi sition ar ma R’s po h B k F o g h K nin ding explai e Stan t a while n e venue the S nd Re a e before c n 018 ina 47(1)2 e on F . e t o t i N Comm of SRO 018 uance s s i e h y 23, 2 r a u on t n Ja dated


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Founder & Chairman Zulfiqar Ali Editor Rahil Yasin editor@customsbulletin.com.pk For advertising & subscription marketing@customsbulletin.com.pk www.customsbulletin.com Phones: 042-35781643-4, Fax: 042-35781645 Address: 627, Siddiq Trade Centre, Gulberg, Lahore

EDITORIAL

Pushing exports to $36 billion

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he government is considering launching another Strategic Trade Policy Framework to push exports to $36 billion in the next five years. Earlier, the Strategic Trade Policy Framework launched by the PML-N government ended in failure as it could not even maintain the export volume of $25 billion which was achieved during the PPP government. Now the government is involving business community in the process of planning, but it is yet to be seen how much the Ministry of Commerce has the will and resources to implement incentives it is going to offer in the trade policies. Unfortunately, the previous three-year strategic framework policy could not come close to meeting the set targets because of failures at the implementation stage. In the absence of practical steps and solid mechanism, the situation on the ground will hardly change and the new framework could be another failure in the government’s cap. Mere a wish to push exports to $36 billion or beyond without changing the priorities will not bring any positive results. The government will have to relax rules for doing business, give tax and duty concessions to lower the cost of production and overhaul the industry to improve export competitiveness. So far, the export volume has declined by 16 percent from the peak of $25 billion reached in fiscal year 2011-12 to $20.4 billion in 2016-17. The proposed export target of $36 billion would not be achieved until basic and structural changes are made in the manufacturing sector and increase country’s share in regional as well as global trade. The exports are showing moderate growth of over 10 percent since the start of the current fiscal year, but the industry has the potential to achieve higher growth. The government has recently imposed regulatory duty on non-essential items, but those also included raw material for exportable items. When the officials will work blindly, this kind of follies would not remain uncommon. The industrial sector needs to be encouraged by offering tax concessions to local and foreign investors. However, the focus of exports should not be food items, but value added goods as Pakistan has already been placed in the list of countries facing food insecurity. The successive governments have signed free trade agreements which allowed free flow of foreign goods into the country at the cost of local industry.

Need for new airlines I

LAHORE

DR AFTAB AFZAL

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n the backdrop of its open skies policy, the government is likely to allow at least five new airlines to become part of Pakistan’s aviation industry in one year. The new entrants will not only create competitive environment in Pakistan, but will also break the monopoly of the airlines already operating in the country. However, the new airlines will also challenge the financial health of sinking titanic, the national carrier Pakistan International Airlines. The domestic air traffic has exceptionally increased during the last five years and it is growing at

the rate of nine percent annually. In the absence of bullet trains, people desperately want to travel by air. Unfortunately, the airlines prefer to fly empty aircraft rather than lowering their fares. The government should also open new air routes for far flung cities, especially in Balochistan and Gilgit Baltistan. However, the conditions of aircraft must be in line with international standards and approved by International Air Transport Association. Pakistan has also becoming an attractive tourist destination and opening the routes of Gwadar, Turbat and Skardu for foreign tourists will be a good option for airlines to bag profits.

The new airlines will not only resolve the issue of connectivity within remote areas of Pakistan, but also will connect it with foreign countries. Reports suggest the PIA is incurring Rs 300 billion annually losses and there is no reason to keep it within the government fold. Politicization of one of the best organizations of the country has killed the legend. However, it is a lesson for private airlines to minimize their expenditures and concentrate on marketing aspects of their businesses. The price cut is the best option for private airlines, especially foreign carriers, which can bag good profit in the race. People should be allowed to enjoy good service at lower

fares. According to reports, Turkey, Thailand, Malaysia and Dubai with combined population of 250 million operate over 1,000 aircraft, but Pakistan with 210 million populous has a total fleet of 80 aircraft. Malaysia earns $30 billion and Thailand $48 billion by attracting foreign tourists. Pakistan with great potentials of tourist industry is nowhere in the sight. Qatari and Turkish airlines are making billions of dollars profits and are considered top airlines of the world. It is hoped the new aviation policy will prove to be good for the nation and all the business facilities will be provided to the airline owners investing in Pakistan.


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Japan Inc sees strong run of economic growth Saturday February 3, 2018

World

TOKYO: Nearly three-quarters of Japanese companies expect the economy to keep expanding at least another year, extending an already strong run, although they were not as bullish as market estimates, a Reuters poll shows. Japan has logged seven straight quarters of economic expansion to end-September, its longest uninterrupted stretch of growth since 1994. Tokyo stock prices are at their highest in 26 years while quarterly data shows corporate profits are near an all-time high. But roughly half of firms expect the economy to stop expanding by the middle of next year with that number rising to 71% for predictions to end-2019. A planned sales tax hike, the petering out of public works spending related to the Tokyo 2020 Olympics as well as a deepening labor shortage were cited as impediments to future growth.

Dreamers’ nabbed smuggling illegals into US

Hong Kong police arrest two, seize HK$10m in goods HONG KONG

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ISTANBUL

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he lives of two “Dreamers” just turned into a nightmare. Cops say two men in the U.S. under the Deferred Action of Childhood Arrivals (DACA) program were arrested for human smuggling, ofPicials said. Border Patrol agents reportedly arrested the two men in separate incidents on Jan. 24-25. U.S. Customs and Border Protection received a tip-off from a witness who observed human smuggling in the San Diego area. OfPicials arrived and conducted an immigration check. A 20-year-old man in the car was a DACA recipient and his 22year-old cousin was illegal along with another 21-year-old illegal. “Both the driver and his cousin admitted their involvement with human smuggling in the area,” Customs and Border Protection said in

Japan accord to boost brown coal renewed commitment by Australia and Japan to pursue opportunities in coal, gas and hydrogen has fuelled hopes of increased trade and renewed momentum for Victoria’s brown coal-to-hydrogen ambitions. Following annual bilateral talks in Tokyo late last week, Prime Minister Malcolm Turnbull and Japan’s Shinzo Abe pledged to further work to develop regional coal and LNG markets and on hydrogen energy supply as Japan wrestles with its transition to cleaner energy amid divisions over the future of nuclear power. Their accord is expected to promote the use of Japanese technology for smaller LNG import terminals in the region that would open up new supply opportunities for Australia’s expanded band of gas exporters. –CB Report

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a release. The driver’s DACA has expired and is being held in custody. In the second incident at a border checkpoint, a 22-year-old DACA recipient was stopped and admitted he was scouting for the coyotes who smuggle illegals across the U.S.-Mexico frontier. An investigation revealed he had long been involved in smuggling illegals across the border. He was in violation of the terms

of his DACA status and is being held in custody by the Department of Homeland Security custody. Meanwhile, The United States Customs and Border Protection (CBP) agency says ofPicers from the Area Port of Philadelphia have seized the largest local cocaine load in 10 years when they discovered 709 pounds concealed inside cabinets that was shipped from Puerto Rico.

Iran’s home appliance exports reach 180 million USD in 9 months

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ran exported 183 million U.S. dollars of home appliances during the past nine months until Dec. 2017, Financial Tribune reported. Iraq, Afghanistan, Sudan, Tajikistan, Turkey and Italy were the main customers of Iranian-made home appliances during the nine-month period, Masoud Kamali Ardakani, an ofPicial with the Trade Promotion Organization of Iran, was quoted as saying. The exported products included evaporative cooler,

fridge, gas appliances, sewing machine and washing machine. Iran’s home appliance industry has a turnover of eight billion U.S. dollars and meets 70 percent of domestic demand, Chief of Home Appliances Association Habibollah Ansari said. Meanwhile, Chairman of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) Gholamhossein Shafe’ei put Iran’s share of global export market at 0.24 percent. –CB Report

ong Kong authorities have arrested two men suspected of smuggling HK$10 million (US$1.28 million) worth of goods destined for the black market in mainland China after a high-speed chase on the open sea. The operation was mounted by police and customs ofPicers on afternoon. The pursuit began when police crafts were dispatched to apprehend two mainland-bound speedboats that were spotted off the southeast coast of Hong Kong Island. According to police, the two speedboats were intercepted near Ng Fan Chau island during the chase. “Sixty-eight boxes of smuggled goods were found on board the speedboats. The goods included mobile phones, digital cameras, camera lens, watches and electronic

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components. The haul has a market value of HK$10 million [US$1.3 million],” police said. Two men – both Hongkongers – aged 31 and 58, were arrested on board the speedboats. In Hong Kong, exporting unlicensed and unmanifested goods carries a maximum penalty of a seven years in jail and a HK$2 million Pine. Meanwhile, Immigration authorities in Hong Kong are assisting a local crewman in custody in the Philippines and accused of smuggling about HK$19 million worth of cocaine into a country caught in the grip of a deadly drug war. Responding to an inquiry by the Post, the Immigration Department said it received a request for help from a family member of the man. “In response to a Hongkonger who was involved in a suspected drug case in the Philippines, the department immediately sought to understand the situation through … the Chinese Embassy in the Philippines and the Chinese consulate in Cebu,” the statement read.

Brazil Beef exports tipped to rise

ompetition in global markets is set to become more intense in the coming year, as global beef production is pegged to increase by 1.3million tonnes in 2018, according to Rabobank’s latest Global Beef Quarterly report. With production volumes expected to outpace domestic consumption, the report says exports will become ‘‘more critical’’ and ‘‘shift the balance of power in favour of importers’’. The United States and Brazil are likely to see the biggest increases in beef exports, but the report says the expansion in global production will come out of all major producing areas, including Australia.

‘In the US, beef exports are expected to increase by seven per cent in 2018, as their cattle herd expands for the third consecutive year,’’ Rabobank senior animal proteins analyst Angus Gidley-Baird said.‘While beef consumption is also expected to increase, it will not keep pace with their production growth, and exports are expected to grow to 12 per cent of US production.’’Mr Gidley-Baird said widespread rains across parts of Queensland and northern NSW in spring reignited producer demand, ‘‘shaking cattle prices out of their declining trend to rise through October and into November’’. –CB Report

Saudi Arabia bans botox from camel beauty pageant

T RIYADH

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he dromedaries paraded down a dusty racetrack as judges rated the size of their lips, cheeks, heads and knees. Crowds of men watched from the bleachers, hooting when the beasts representing their own tribe loped down the track. A

dozen beasts have been disqualiPied from this year’s Saudi “camel beauty contest” because their handlers used Botox to make them more handsome. “The camel,” explained the chief judge of the show, Fawzan al-Madi, “is a symbol of Saudi Arabia. We used to preserve it out of necessity, now we preserve it as a pastime.” Much is changing in Saudi Arabia: the country is getting its Pirst movie theaters. Soon women

will be permitted to drive. The authorities eventually hope to diversify the economy away from the oil that has been its lifeblood for decades. But as they seek to transform the conservative kingdom, the Saudi authorities are trying to smooth the path for reform by emphasizing traditional aspects of their culture. And for the Bedouin of Arabia, nothing is more essential than the camel, used for centuries for food,

transport, as a war machine and companion. So, the authorities have ramped up the country’s annual month-long camel festival, which was relocated last year from the remote desert to the outskirts of the capital. On a rocky desert plateau, the government has erected a permanent venue to host the headline events: races and show competitions with combined purses of 213 million riyals ($57 million).


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Customs court awards 15-day imprisonment to HSD smuggler KARACHI: Customs Court Judge Syed Faiz Rasool Rashdi awarded a 15day imprisonment and a fine of Rs100000 to a suspect named Khair Muhammad S/o Noora Khan booked in a case of attempting to smuggle non-duty-paid foreign origin 17,000 liters of high speed diesel. During the hearing, abovementioned suspect appeared before the court along with his counsel and moved an application with the confession to the crime.

Saturday, February 3, 2018

CUSTOMS BULLETIN

Gwadar Customs seizes smuggled goods & narcotics worth Rs52.58m during January GWADAR WAQAR AHMED ANSARI www.customsbulletin.com

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he Customs Collectorate Gwadar has impounded huge quantity of smuggled items which included Iranian diesel, Indian silk, Iranian brake oil, computer accessories, electronics items, imported watches, Pine quality of hashish, cameras, chassis, tyres and other different non duty paid items worth Rs 52.58 million during the month of January 2018. Sources told Customs Today that Customs Collectorate has impounded various types of luxury vehicles tyres and radiator worth more than Rs 8.50 million on Wednesday morning. Sources told , that on the directives of the deputy collector Gwadar operation against smuggled items and non-duty paid luxury vehicles is going on in full swing and several raids have been conducted during previous month of December and operation of smuggled items and continue on month of January. Sources told that on Wednesday morning deputy collector Gwadar constituted a team of Customs Anti-Smuggling Organization (ASO) under the supervision of Customs Preventive Inspector Mushahid

Ali and others. The team, during a search operation on Gwadar highway, intercepted a truck bearing registra-

tion QD-4562 which was going out of the city. During the raids, the customs team impounded 100 tires of luxury

vehicles, and 50 imported radiators worth Rs 8.50 million. The customs team arrested two smugglers who

were involved in smuggling and registered an FIR against the accused persons and started investigations.

Egypt keen to promote trade with Pakistan: Envoy ISLAMABAD

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mbassador of Egypt to Pakistan, Ahmed Fadel Yakoub has said that his country was keen to promote trade relations with Pakistan as both countries have good potential to do trade in many items with each other. He said given the size of economies of both countries, bi-

lateral trade of around $200 million between Egypt and Pakistan was not rePlective of their actual potential and serious efforts from both sides were needed to improve trade volume. He said this while talking to a delegation of Islamabad Chamber of Commerce and Industry (ICCI) that called on him led by its President Sheikh Amir Waheed, said a statement issued here. Ahmed Fadel Yakoub said that Egyptian investors considered Pakistan’s construction sector a promising area for investment. He said an Egyptian investor has al-

ready invested $2 billion in a real estate project in Islamabad while more were looking for partners in Pakistan for investment and joint ventures. He said that China-Pakistan Economic Corridor would have positive implications for Egypt as it would lead to easy movement in Suez Canal. He said tourism was another potential area of cooperation between Egypt and Pakistan. He said that Asia was emerging as a big market and Pakistan was an important country for Egypt to reap business and economic benePits from this region. He said Pakistan and Egypt have

great prospects for developing cooperation in many Pields and establishing direct contacts between the entrepreneurs of both countries was way forward to realize these objectives. He said Pakistan could also get better market access to African market by developing strong cooperation with Egypt. Speaking at the occasion, Sheikh Amir Waheed, President, Islamabad Chamber of Commerce & Industry said that Pakistan has developed ‘Look Africa Plan’ to boost trade with African countries and Egypt was an important country for Pakistan to penetrate the

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African market. He said Pakistan and Egypt have good potential to cooperate in many Pields and they should focus on developing strong linkages between their private sectors to explore all untapped areas of mutual cooperation. He said many Pakistani products including pharmaceuticals, fruits & vegetables, textiles, sports goods, surgical instruments, IT and others could Pind good market in Egypt. He said Pakistan and Egypt should identify all the hurdles hampering bilateral trade and take required measures to address them for boosting bilateral trade.


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