The combined decision of the National Directorate General of Financial Action Task Force (FATF) and Civil Aviation Authority (CAA) to make it mandatory for inbound international passengers to declare all the foreign currency in possession would increase pressure on the rupee, State Bank of Pakistan (SBP) has said.
The decision was made just 12 days ahead of FATF’s on-site visit and interestingly neither the Finance Ministry nor the Federal Board of Revenue (FBR) was aware of the notification issued by the CAA on August 16, the proceedings of the Senate Standing Committee on Finance have revealed.
Exchange companies had complained to the SBP that CAA’s decision to make the currency declaration mandatory was one of the reasons behind the pressure on the rupee, Deputy Governor SBP Inayat Hussain has said further adding that the passengers were reluctant to bring foreign currency.
FBR Chairman Asim Ahmed has said that FBR did not have the authority to impose restrictions on inward currency movement, under the Customs Act, and it was not part of the decision.
According to a media report, Minister of State for Finance Aisha Pasha was also unaware of the decision, whereas Finance Ministry’s additional secretary, upon contacting National FATF Cell, was informed that the restriction was imposed for compliance with FATF requirements.
According to the notification, all international passengers were bound to declare the foreign currency in their possession. The visit of the FATF delegation had completed on September 2. The passengers have been bound to fill and hand over a declaration to the airline staff showing details of all domestic and foreign currency in their possession.