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DGFT allows exporters to submit FIRC in case of exports made to OFAC listed countries including Russia
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Laxmi Yadav, Mumbai
March 21 , 2022
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Amid the ongoing Russia-Ukraine war leading to OFAC’s imposition of sanctions on Russia which accounts for 2.4 per cent of total pharmaceutical exports from India, the Directorate General of Foreign Trade (DGFT) has amended guidelines of ANF-4F of Handbook of Procedures, 2015-2020 to allow submission of Foreign Inward Remittance Certificate (FIRC) in case of exports made to OFAC listed countries under Advance Authorization.
This has brought relief to pharma exporters who were worried about the fate of India’s trade with Russia amid the sanctions imposed on Moscow by the OFAC.
An FIRC is similar to electronic Bank Realisation Certificate (e-BRC) which is a certificate issued by a bank against money received from a foreign country. An exporter needs an e-BRC to avail of the various export incentives (duty exemptions, subsidies, low-cost loans, etc) offered by the government as part of its Foreign Trade Policy (FTP).
The DGFT also implements the e-BRC platform, which allows banks to electronically upload to the DGFT server all foreign exchange realisation-related information pertaining to exports. This information is transmitted through a digital certificate – the e-BRC.
However, in GST refund claims, an FIRC – like an e-BRC – acts as proof of export.
The DGFT in a notification on March 17, 2022 introduced amendments to the guidelines of Ayat Niryat Forms (ANF) -4F of Handbook of Procedures, 2015-2020 permitting exporters to submit FIRC along with the self-declaration that e-BRC could not be generated by the concerned bank in case of export to OFAC listed countries.
ANF-4F deals with application for redemption/no bond certificate against Advance Authorisation.
The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the US Department of State imposed a slew of sanctions on Russia in response to the Russian invasion into Ukraine.
The DGFT’s recent amendment to guidelines of ANF-4F has provided succour to drug exporters having exposure to the Russian market.
Welcoming this, chairman of Small and Medium Pharma Manufacturers Association (SMPMA) Nipun Jain said “Banks are often reluctant to issue e-BRCs to companies exporting products to OFAC countries. Due to this, exporters’ names fall under the caution list in the Export Data Processing and Monitoring System (EDPMS) introduced by the Reserve Bank. Caution-listed exporters are denied packing credit which in turn hampers their exports. Caution-listing also leads to non-negotiation of ‘non-letter of credit bills’ (non-LC bills). As a result, though goods reach the buyer on time, they have to wait for banking documents. This leads to delays and huge demurrage charges that need to be cleared by the exporters. This causes severe financial hardships to small scale drug exporters.”
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