52. 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 Nepal Rastra Bank (NRB), the commercial bank has to inform NRB for inquiry into the matter.

53. 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.

54. 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 Nepalese exporters prefer the irrevocable L/C, as it is normally withdrawn only when the exporter does not meet the terms and conditions of shipment leading to the rejection of documents for negotiation by the bank.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).

55. 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.

56. As the 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.

57. Certificate 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.

58. FNCCI- A 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.

59. 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:

60. FNCCI also arranges issuance of COO for exports to SAPTA (SAARC Preferential Trading Arrangement) member countries under the similar arrangements for certification and charges. The format as specified by the SAPTA agreement is very similar to GSP Form A. The colour of COO used for export to SAPTA countries is different from that used for overseas exports.

61. Under the terms of the bilateral Treaty of Trade signed between Nepal and India on December 1996, the export of Nepalese manufactured products is given duty free preferential market access in India. Such product must be manufactured in Nepal and accompanied with a certificate of origin issued by authorized district chambers of FNCCI in the format prescribed by the Treaty. A technical committee headed by the Director General of Department of Industry and consisting of public and private sectors representatives examines in detail the application form and supporting documents submitted by an exporter of manufactured products to confirm the manufacturing process of the product intended for export to India. Examination is usually made of a new product for exporting first time to India. For export of products other than manufactured goods under the preferential market access this prescribed format of COO is not required.

62. NCC - NCC has also been issuing its own COO (Annex 18) for a long time in Kathmandu. An exporter is required to submit following documents to obtain COO from NCC:

63. NCC takes a charge of NPR 4 per set at the time of issuing and 12-paisa (0.12 %) per NPR 100 of invoice value at the time of certifying the COO. If FOB value is declared, then the charge will be based on FOB value.

64. NCC also issues COO for exports to India for preferential market access as per the format prescribed by the Treaty of Trade with India. It is issued against a charge of NPR 3 per set. Then for certification a fixed rate of NPR 11 per consignment is charged from the exporter.

65. NCC has also been operating a separate branch office at Sinamangal near the Tribhuvan International Airport to issue COO for third country exports for the last two years.

66. Issuance of Generalized System of Preferences Form A (GSP). An exporter has to fill in a separate standard document called as GSP Form A for stamping and certifying by the Nepalese Customs at the time of export provided the product is eligible for the tariff preference under the GSP scheme of the destined preference giving country. GSP Form A is printed in a special format and colour approved by UNCTAD for acceptance by preference giving countries. The original GSP Form A (Annex 19) is stamped and certified by the Customs at the time of export. On the strength of this certified original GSP the overseas buyer obtains tariff reduction facility while releasing goods from the Customs in the importing country. GSP Form in Nepal is distributed by two agencies.

67. A carpet exporter first has to request the Carpet and Wool Development Board (CWDB) for the issuance of GSP. Then a three-member team consisting of representatives from the Ministry of Commerce, Central Carpet Industries Association and CWDB makes field inspection at the applicant's production site to verify whether carpets intended for exports are produced locally. On the recommendation of the team CWDB issues GSP Form A to the exporter who submits an application form with a copy of advance payment certificate or L/C copy. CWDB issues GSP form for the export of Nepalese hand knotted woolen carpets at a cost of NPR 2 per square meter.

68. For export of products other than woolen carpets, Trade Promotion Centre (TPC) issues the GSP Form A to exporters who apply in a covering letter enclosing copies of certificates of enterprise registration and income tax registration. The charge for each four copies GSP set Form is NPR 15.

69. Letter of recommendation for export visa for readymade garments. HMG/Nepal has constituted a Readymade Garments Export Promotion Committee under the chairmanship of Commerce Secretary and represented by various public and private sector organizations to frame visa issue procedures including documentation and inspection. In this respect Garment Association-Nepal (GAN) provides various services as explained in paragraphs 70-75 below.

70. The European Union allows, under the GSP rules of origin, tariff preference on readymade garments manufactured in Nepal from woven fabrics or yarn originating in an ASEAN member country (except Myanmar), SAARC or Lome Convention country, and imported into Nepal for manufacturing garments. As per the recent protocol concluded between HMG/N and European Union, a new system is introduced since I March, 2000. According to it, for exporting textiles products of five categories - (a) Knitted Shirts, (b) Knitted Pullovers (T-Shirts), (c) Men's or Boys Woven Breeches, Shorts, (d) Women's or Girl's Blouses, Shirts and Shirt Blouses, (e) Women's or Girl's Dress, exporters need to obtain export license from the Department of Commerce. Separate type of Certificate of Origin is also being issued from Chamber of Commerce, (Annex-ISA). The EU has fixed a quota for different types of garments to be imported from Nepal. This quota is applicable only for the purpose of tariff preference under GSP Scheme in the EU market. For exporting to EU market, exporters need to apply to GAN in a covering letter by enclosing the following documents:

71. After receiving the application, an inspection team of GAN is sent to the applicant's factory to verify the garment production. Thereafter, GAN issues a letter of recommendation to the concerned Customs staling that the garments in question are produced from the fabrics imported from abroad or manufactured locally, and requesting issue of a GSP certificate. On the strength of this recommendation letter the Customs makes endorsement by putting' its stamp and signature on GSP Form A at the time of export.

72. For export to the USA and Canada where quota has been fixed for specific categories of garments, GAN is required to issue a recommendation letter (Annex 20) to the Readymade Garments Visa Cell (RGVC) of National Productivity and Economic Development Centre Limited (NPEDC). RGVC is located at the same premises of GAN at New Baneswor, Kathmandu.

73. A Visa is required on all readymade garments exported to the USA whether a quota has been fixed or not except for garments made of 100 percent silk or woolen garments. The visa, which is also called 'Special Customs Invoice', is issued by the RGVC in the format approved by the US Government.

74. Exporters intending to export garments under quota to Canada or the USA need to apply to GAN with the following documents:

75. On receiving the documents, GAN may send a team to inspect the factory of the applicant, but the factory may not be inspected depending upon the credit status of the applicant, in which case the recommendation letter states that inspection is not required. Then a letter of recommendation is issued in a printed or computerized format in the name of RGVC and handed over to the applicant. However, such inspection is not required for the issue of a Visa for exporting to Canada. GAN levies following charges for issuing recommendation letters to the Customs for certifying GSP Form A on garment exports to EU and to RGVC for issuing Visa on garment exports to the USA and Canada:

76. For the USA categories numbers 363 (Cotton Terry Towel) and 369-S (Cotton Shop Towel) as well as for non-quota category number 369-0 (other types of cotton towel like dust towel), there is an another agency called Nepal Cotton Towel Exporter Association (NCTEA) that issues a recommendation letter (Annex 21) to the RGVC by following almost the same procedures and documentation as applied by GAN. An exporter needs to apply to NCTEA with the following documents:

77. After verification of the documents, NCTEA issues a letter of recommendation to RGVC for the issuance of a visa to the applicant against a fee of 20 paisa per kg. Of the two copies of the recommendation letter, one copy is handed over to the applicant for submission to RGVC and one copy is kept for official record. If an applicant requests a recommendation letter for more than the stipulated quantity, NCTEA inspects the applicant's industry to verify the production capacity and the stock of garments ready for shipment before issuing the letter. In the case of new applicants also NCTEA issues recommendation letter only after inspecting their production sites. The garment and towel manufacturers are required to use temporarily admitted or locally produced fabrics/yarn.

78. Issuance of visa for export of readymade garments. Exporters of garments and towel to the USA and Canada apply for visa to RGVC of NPEDC with the following documents:

79. After the documents are verified, RGVC issues four copies of visa form (Annex 22) certified with a visa number stamp and authorized signature. The form is entitled Special Customs Invoice. The four copies of the set are used as follows;

For the issuance of visa, RGVC makes a charge of 0.2% of the invoice value on all garment exports to the USA and Canada. Overseas buyers require the original visa for releasing the consignments from their Customs; it is not endorsed by Nepal Customs.; The visa remains valid for only five days, and the exporter must ship consignments within that time.

80. Additional documents for the export of readymade garments. For the export of garments to the US market the documents described in paragraphs 81-84 are also prepared by the exporter.

81. Special Customs Invoice (SCI). A visa is itself an SCI, but some American buyers continue to demand a separate SCI in addition to a visa. It does not have to be certified.

82. Multiple country declaration (MCD). MCD (Annex 23) is a requirement of the US Customs and without it the garment consignment is not permitted entry into the USA. The main purpose of this document is reportedly to verify the value addition and manufacturing process in Nepal as a precautionary measure against possible transshipments of garments of another country of origin.

83. Beneficiary statement (BS). This extra document is prepared only at the request of the buyer. BS is simply a statement off actual details on the shipment of cargo and transmission of documents as specified by L/C.

84. Quota charge statement (QCS). QCS is an extra document prepared only at the request of the buyer and contains a declaration as to the inclusion of all manufacturing charges in the FOB price.

85. Valuation certificates for handicraft products. Nepalese Customs assesses customs export valuation of different handicraft products on the basis of recommendations of the Handicraft Association of Nepal (HAN). The documentary requirements are described below in paragraphs 86-89.

86. Valuation certificate for handicrafts. Handicraft exporters take export samples and five invoice copies to HAN. Except for the suspicious and doubtful cases for which all export quantity are brought to HAN for detailed examination, an authorized official of HAN puts stamp and signature on all copies of the invoice and writes a letter of recommendation (Annex 24) addressing the concerned Customs mentioning the certified total value of the particular consignment. HAN makes a fixed charge of NPR 50 up to the export value of NPR 10,000 and NPR 100 for more than NPR 10,000 value.

87. Certification for handicrafts produced from domestic animal none, leather and horn. For the export of handicrafts like buttons, tie-pins and other articles produced from bone, leather and horn of domestic animals, HAN examines samples brought to it by an exporter and certifies the invoice by issuing a no-objection letter (Annex 25) certifying that the goods are made from domestic animals. The fee charged for this purpose is NPR 20 up to the value of NPR 4,000 as minimum charge and then 0.5 percent of invoice for any excess value.

88. Valuation certificate for silver handicrafts. Under the regulations of NRB, a minimum value addition of 3 5 percent to the market value based on the international price of silver is required for exporting silver based handicraft products like jewelry, decorative articles and utensils. NRB sends a copy of international price list transmitted periodically to the Department of Mint. After checking the value addition in the invoice value, GAN puts its stamp and signature on the back of the invoice, which is made in seven copies as per the approved format of NRB. A letter of value recommendation is also issued. HAN makes a fixed charge of NPR 50 up to the export value of NPR 10,000 and NPR 100 for more than NPR 10,000 value.

89. Certification for gold handicrafts. For the export of gold handicrafts a valuation certificate is not required. Under the NRB regulations, only the Customs is required to check the minimum value addition of 10 percent in the invoice value for permitting exports. As in silver handicrafts, the invoice has to be made for exporting gold handicrafts in the approved format of NRB for checking by the Customs. The main function of HAN is to issue a Passbook to an applicant-exporter by charging NPR 700 to HAN members and NPR 1,000 to others. The Passbook is to be produced to the Customs at the time of export. The Passbook contains detail entries made by NRB at the time of selling gold to the exporter who is required to submit all export documents as an evidence of utilization of gold purchased previously. Export of silver and gold based handicraft products are at present shipped only through Tribhuvan International Airport and Foreign Post Office, both located at Kathmandu.

90. Archeological Certificates. The export products of archeological importance and artistic values, which generally include idols, curios and thanka paintings of more than 100 years old is prohibited. Only ordinary products do not require such examination by the Department of Archeology (DOA). Exporters intending to sell such items need to fill in an application form giving detailed particulars about the size, weight, quantity and making date, and then submit to DOA by affixing a postage stamp of NPR 5. The application form is available in the printed format at DOA office. Then the exporter is also required to affix postage stamp of NPR 3 on the second copy of a certificate, which is also printed in an approved format of DOA. The total cost for completing the examination by DOA is thus NPR 8. On the basis of the application details, experts at DOA examine each and every item depending upon the nature of the product. The DOA staff put a lac seal on each and, if the pieces are small, put a joint seal on the mouth of the plastic/paper bag containing a number of pieces. Then it issues a certificate in two copies giving details of the products examined by them. Out of the two copy certificate (Annex 26) the original is handed to the exporter and the second copy containing the postage stamp of NPR 3 is retained at DOA office for record purposes.

91. Certification for exports of plants and forest products. Approval has to be obtained from the concerned department for the export of plant and forest products, which are not prohibited for export in raw or unprocessed form.

92. First, a release letter has to be obtained from the District Forest Office (DFO). An application containing details on the type of herbs to be collected, collection area, expected collection quantity and purpose (export or domestic-'uses) is to be submitted to the DFO located in all districts except Mustang. The DFO issues a written permission letter (Annex 27) to the applicant. After collecting, storing and weighing, stipulated quantity of the herb on the strength of this letter, the exporter has to approach the DFO, which, after any necessary examination, charges the stipulated royalty payment and issues a release letter (Annex 28). The release letter as a proof of royalty payment allows domestic transportation and uses of the herb. In addition, if the product is intended for export, the exporter also has to apply to the DFO for a recommendation letter to the concerned Customs. All the procedures along with the royalty rate are prescribed in the Forest Rules 2051 BS (1995).

93. For the export of extracts and by-products of plants and herbs, permission from the Department of Plant Resources (DOPR) has to be obtained. DOPR has prescribed a format of application (Annex 29) for submission by an exporter in two copies by affixing NPR 5 postage stamps. For forest based products like herbs the release letter of DFO also is to be submitted. After receiving an application, DOPR deputes its staff, if necessary for large lots, to the manufacturing/storage sites to draw samples from each box/container. These samples are tested in the lab of DOPR and if found satisfactory all boxes/containers are sealed. Thereafter, DOPR issues a recommendation letter (Annex 30) to the concerned Customs to allow exports of the consignment. DOPR also issues permit letter to export waste and by-products after verifying whether such products can be farther processed or put for better utilization inside the country. DOPR levies a fixed charge of NPR 150 per sample for lab test.

94. Most countries permit imports of plants and plant products only on the basis of a Phytosanitary Certificate (PC). Nepal's Plant Protection Act 1972 and Plant Protection Rules 1975 have made it mandatory to obtain PC for exporting plants and plant products. An exporter has to submit an application (Annex 31) to Plant Quarantine Section (PQS) of Department of Agriculture along with supporting documents like income tax certificate, enterprise registration certificate, copy of customer's order, and, if products are forest based, a release letter of DFO. PQS has made arrangements to send its staff to the production site if it is necessary for examination of plants and plant products. If plants are found in healthy conditions, PC (Annex 32) is issued by PQS. This service is also available from the seven plant quarantine offices located at the Customs Posts of Kakarvita, Biratnagar, Jaleshwar, Birgunj, Bhairahwa, Nepalgunj and Tribhuvan International Airport. No charge is levied for the issue of PC on export.

95. An exporter or CA has to submit the following documents to the Nepalese Border Customs:

96. After the consignment is checked and verified with related documents, the Nepalese customs officer endorses the CTD (Annex 33).

97. After the payment of customs charges, CA is given clearance to export and move the cargo to the Indian border. If a container was booked with prior arrangement with a shipping line, the cargo is loaded into the container at the customs premises. Containers are also brought to Kathmandu and other factory sites for the loading of export consignments, but the goods are subject to customs check at the border.

98. The exporter or CA approaches the corresponding Indian Border Customs with the cargo and submits the following documents:

In the 1999 Treaty of Transit it has been stated that no additional documents other than invoice, packing list and certified copy of L/C will be asked for by the Indian Customs except when considered necessary for the clearance of any specific goods.

99. The Indian Border Customs check OTL of containerized cargo and, if found intact, allow onward transportation without physical examination of cargo unless there are valid reasons to do otherwise. If OTL is found broken or defective, the goods are checked to see that they are in accordance with CTD. Then a fresh OTL is put on the container with its serial number endorsed on CTD before allowing onward transportation to the seaport of exit. The Indian Border Customs make a selective examination of non-containerized goods to check that they are as per the CTD. As with imports, specified sensitive goods must be transported in closed railway wagons or pilfer-proof containers, which can be securely locked. Containers or wagons are locked and duly sealed after examination by the Customs.

100. After examining the cargo, documents and seals, the Indian Border Customs endorses all four copies of CTD and hands the original to the CA, and retains the fourth copy for its record. The duplicate and triplicate copies are to be sent by post to the Calcutta Customs, but to avoid delay in postal transmissions, they are handed to the CA in a sealed envelope. However, this facility will not be allowed for any exporter who defaults in the timely production of these documents

101. Duty Insurance. As with import cargo, duty insurance for export cargo is required only for specified sensitive goods, and a legally binding undertaking is required for other goods.

102. CA sends documents including the original CTD and seal cover generally with the driver of the vehicle carrying the cargo or by courier service or send a personal carrier for delivering to the authorized agent in Calcutta. Normally it takes two to four days for containers to reach Calcutta port.

103. When documents reach Calcutta, CA files documents at the Customs House. The Customs House compares the original CTD with the duplicate and triplicate copies received separately in a sealed envelope from CA. Documents are cleared permitting exports by Calcutta Customs normally within 24 hours of filing. After documents are cleared by the Calcutta Customs, CPT approval is obtained for taking the cargo inside the port. At the same time booking of container with a shipping line is also confirmed. The export cargo is then taken inside the port where the Customs EO or PO checks seals and locks on the wagons or containers and packages, and compares with the declaration made on CTD.

104. If seals and locks are found intact, EO endorses all copies of CTD. In cases where seals and locks are not intact or there is otherwise suspicion, the goods are checked on percentage basis to ensure that they correspond with the information on CTD before endorsing all copies. Then the cargo is loaded onto a vessel or handed over to the ship's agent inside the port. After necessary endorsements, EO gives back the original, duplicate and triplicate copies of CTD to CA who takes them again to the Calcutta Customs. After the Calcutta Customs makes necessary entries on all copies, the original is handed back to CA for submission to the Border Customs, the triplicate copy is sent to the Border Customs and the duplicate copy retained for records.

1. Purchases from India are normally paid for in Indian Rupees since the currency is fully convertible in Nepal. When Indian suppliers sell their products to Nepalese importers, Indian excise duty must be paid and included in the sale price by the supplier. The rate of excise duty varies widely from product to product. However, if payment is made in hard currency, the goods are exempted from payment of excise duty in India, i.e. the supplier does not have to charge it.

2. His Majesty's Government of Nepal (HMG/ Nepal) also allows imports of specified products from India with payment in foreign currency. The Nepal Rastra Bank (NRB) currently enlists 29 such products (Annex 1) for importation from India by Nepalese industries against payment in foreign currency.

3. All 13 commercial banks deal in foreign exchange transactions in accordance with the Foreign Exchange (Regulation) Act 1962, Foreign Exchange (Regulation) Rules 1963 and directives issued from time to time by NRB. The policy of liberalization allows open imports without a license. NRB issues general directives with modifications from time to time to the commercial banks on the opening of Letters of Credit (documentary documentary credits-L/C) and the release of payments for imports accordingly.

4. Advance payments for goods and separate payments for freight are not allowed. Therefore, the normal type of purchase is CIF/C&F Calcutta for sea and CIF/C&F Kathmandu for air. Project cargo and public sector purchases by sea are imported also on CIF Nepal basis. Only by opening an L/C through an authorized bank can payment be made in hard currency. The banks at the both ends normally mention in most L/C documents that the credit is subject to the ICC Uniform Customs and Practice for Documentary Credits-UCP 500 (1993).

5. With the exception of prohibited and quantitatively restricted goods (Annex 2), there is no restriction on the release of foreign currency for importing any type and quantity of goods. But to obtain foreign currency from the commercial bank the importer has to open a documentary credit (L/C) by fulfilling the requirements of the bank. Irrevocable L/C is the commonly used documentary credit for the settlement of payment in imports from third countries. Under the usual terms of L/C, the correspondent bank normally releases payment to an exporter or beneficiary on production of shipment documents.

7. It is customary for a bank to sanction total amount of credit limit to the importer on different headings/transactions like loan, overdraft and L/C payments on an annual basis. For other type of customers/importers requiring only casual transactions, the bank fixes a credit limit on ad-hoc basis for L/C purpose.

8. An importer fills in a foreign exchange control form BBN 3 (Annex 3) requesting the bank to open a L/C in the name of a nominated overseas exporter. Then the BBN 3 is submitted along with an undertaking of the importer indemnifying the bank against any liability, and other supporting documents like pro-forma invoice, Registration Certificate of Department of Commerce (Annex 4) or Department of Industry (Annex 5) or Department of Cottage and Small Industry (Annex 6) or Company Registrar Office (Annex 7), Registration Certificate of Department of Income Tax (Annex 8) and Registration Certificate of Department of Value Added Tax (Annex 9). Since November 1999, Kathmandu Tax Payers Service Centre is issuing computer-based Permanent Account Number (PAN) Card to all the tax payers of Kathmandu valley for gradual extension later to other districts. PAN is issued with a new tax certificate (annex 9a, 9b & 9c) for identification of all taxes including VAT & Customs. For importing raw wool, the Carpet and Wool Development Board (CWDB) issues a recommendation letter specifying the quantity and standard of wool to be imported by an applicant/importer in the name of the concerned bank.

9. Depending upon the credit limit sanctioned by the bank for L/C purpose and the relation with the bank, the importer is generally required to deposit an amount ranging from 10 to 100 percent of the L/C value at the bank.

10. As negotiated with the importer, the bank contacts its corresponding bank located at the exporter's place for opening L/C based on sight payment or deferred payment terms.

11. Under the widely used 'Sight L/C', full payment is made to the exporter by the correspondent bank at the time of submission of shipment documents as specified in L/C. Similarly, the Nepalese importer is also required to make full payment to his bank at the time of release of shipment documents.

12. Another type of L/C payment is called 'Usance or Time L/C' under which terms the payment is deferred for a certain period of time as specified in the L/C. Under the term the correspondent bank is required to release payment to the exporter only after 30 days or 60 days or 90 days from the date of receiving shipment documents. This L/C is also named as 30/60/90 days Sight L/C.

13. The customs entry point in Nepal has to be stated in the L/C. The bank can make necessary agreed amendments in L/C clauses except the customs entry point. In order to change the customs entry point in L/C, the importer has to apply substantiating reasons for the change to the Department of Commerce, which then issues a letter to the concerned bank with copies to the applicant and the concerned Customs. The process for changing the customs entry point costs NPR 5 as postage stamp and NPR 10 as application fee to apply to the Department.

14. After the overseas exporter sends documents through the correspondent bank on the completion of shipment of goods, the importer collects the documents from his bank and confirms that the documents are complete and free of any discrepancies. When the importer had not made full payment at the time of opening L/C, the bank instructs its correspondent bank through stipulation in the L/C a clause to consign shipment documents particularly the air waybill or bill of lading (B/L) in the bank's name or to show the bank as consignee in the documents. In such case the importer obtains the bank's endorsement on the documents or a delivery order to the concerned agencies at the time of releasing the documents from the bank.

15. Except for prohibited and quantitatively restricted items, no license is required for imports.

16. In order to maintain export quality of hand knotted woolen carpets HMG/Nepal has specified that the imported wool is required to have a minimum length of 4" with a thickness of not more than 38 microns for which a test certificate from an authorized agency is to be produced at the time of customs clearance. Only suspicious cases as and when reported and observed by the concerned Customs become subject to detention, inspection and test by a team from the concerned agencies including the Department of Quality Standards and Measurement. Restrictions on old vehicles, including three wheelers and two stroke motorcycles, in terms of the permissible level of smoke emission are also in application. In most cases, a test certificate issued by the manufacturer/producer/certifying authority at the place of origin is required for customs clearance purposes.

17. Under the Plant Protection Act 1972 and the Plant Protection Rules 1975, an import permit is required for plant and plant products including fruits, leaves, and seeds. However, no permit is required for the import of processed food, packed and tinned food, dried fruits and vegetables, cocoa, tea and tobacco.

18. For importation of plant and plant products, an importer has to apply to the Plant Quarantine office for import permit. The application form (Annex 10) is to be filled in with details of the plant and purpose of importation. Documents like income tax registration and enterprise registration, and recommendation letter of a concerned institute, if imported for research purposes, are also submitted along with the application. After examining the application, an import permit (Annex II) is issued to the importer. A fee of NPR 10 per application is charged for issuing an import permit. If imported plant and plant products require treatment, the quarantine office levies a charge of NPR 2 per cubic feet fumigation chamber space and NPR I per kg for seed treatment.

19. The Department of Agriculture has a separate Plant Quarantine Section (PQS) at its Harihar Bhawan premises in Pulchowk in addition to seven quarantine checkpoints at the customs posts of Kakarvita, Biratnagar, Jaleshwar, Birgunj, Bhairahwa, Nepalgunj and Tribhuvan International Airport. All these eight offices conduct quarantine examination and issue import permits and phytosanitary certificates. Normally the phytosanitary certificate is issued. abroad at the place of origin and produced at the Customs for the clearance of imported plants. Only doubtful cases are examined at the quarantine customs checkpoints.

20. There is no generalized system of pre-shipment inspection (PSI). A few commodities like wool, pharmaceuticals and industrial chemicals may need pre-shipment quality inspection certificates to maintain certain standards in Nepal.

21. Most imports by sea arrive at Calcutta Port or Haldia Port. Both the ports fall under the administrative control of the Calcutta Port Trust (CPT). The port of Haldia is about 120km southwest of Calcutta. For cargo clearance from Haldia port, the customs processing of documents is completed at the Customs House, Calcutta. The bilateral Treaty of Transit and its Protocol and Memorandum prescribe in detail the cargo clearance procedures, customs processing of documents, mode of transport, transit route, border entry points and duty insurance requirements. The Treaty of Transit as renewed on 5 January 1999 for a period of seven years has incorporated 'an important provision for its automatic renewal thereafter for periods of seven years.

22. The system of insuring import goods against the payment of import duty accruing from the loss and pilferage of transit cargo while in transit in India, is called duty insurance.

23. Under the Treaty of Transit, three types of duty insurance policy coverage depending on the means and ownership of transport are required as follows:

Mode of Transport	Insured Value
1 Rail	Customs Duty.
2. Road-trucks belonging to NTWCL/NTC	Customs duty plus an Undertaking by NTWCL to pay the difference of MV- (GIF + Customs Duty).
3. Goods moving by road other than 2) above	MV- CIF

(NTWCL-Nepal Transit and Warehousing Company Limited, NTC-Nepal Transport Corporation, MV- Market value of goods in India, normally calculated as 250% of the CIF value, CIF- Cost, insurance and freight.)

24. The cost of duty insurance is 0.30 percent of insured value as premium plus 5 percent of the premium amount as service tax plus INR 1 as stamp duty.

25. The requirement of duty insurance is waived on goods imported by public sector agencies in Nepal provided an undertaking is given by NTWCL. NTWCL's charge for issuing the letter of undertaking to the Indian Customs is 0.07 "/o for cement and fertilizer, and 0.15 % for other products on GIF imports. There is also a provision for making Indian Railways, where liable as carriers under the Indian Railways Act, liable to pay the GIF price to the importer in the event of loss.

26. The duty insurance policy is assigned to the Commissioner of Customs, Calcutta and the insured amount becomes payable if the goods do not reach Nepal.

27. Under the 1999 Treaty of Transit duty insurance is required only on those goods which are specified as sensitive by the Government of India with prior intimation to HMG/Nepal and that the importer will have the option of giving a bank guarantee in lieu of such insurance subject to the satisfaction of the Commissioner of Customs. For goods other than the specified sensitive ones, the importer is required to furnish, to the Commissioner of Customs, Calcutta, a legally binding undertaking that the amount equal to the difference between the market value of the goods in India and their GIF value shall be paid, on demand, to the Commissioner in the event of the goods not reaching Nepal.

28. At present only the Calcutta office of the Indian National Insurance Company Ltd. (NICL) is issuing the duty insurance policy (Annex 12) to the satisfaction of the Commissioner of Customs, Calcutta.

29. Processing of documents at Calcutta Customs can proceed only after the filing of an import general manifest (IGM) by the shipping line or ship's agent because the ship's rotation no. and manifest line no. have to be shown on the customs transit declaration (CTD) (Annex 13). Normally the IGM is filed before the arrival of a vessel.

30. The importer has to send all original shipment documents with a letter of authority to a clearing agent (CA) who is licensed by the Indian Customs for cargo clearance in Calcutta. Calcutta Customs require that the signature on the letter of authority must be certified by the importer's bank that issued the L/C. The importer is required to endorse B/L in the name of the nominated CA.

31. After receiving documents from the importer, the CA obtains 'Delivery Order' (DO) against B/L from the concerned Shipping Line. If any payment is to be made to the Shipping Line, the CA pays the dues for obtaining the delivery order. CA also has to obtain a document of duty insurance policy from NICL for private sector imports or a letter of undertaking from the NTWCL for public sector imports. Then CA prepares six copies of CTD and files to the Nepal Section of the Customs House, Calcutta with the following documents:

32. For moving containerized cargo some additional procedures need to be complied with. CA has to submit a cash deposit or bank guarantee or a bond equivalent to the value of the container (the container valuation differs also with Shipping Lines) to the Shipping Line to obtain permission to take container to Nepal and bring it back. Some of the Shipping Lines also ask for insurance of the container against any damage or loss. Permission of the Customs is also obtained by submitting the permission of the Shipping Line and a duty insurance of an insured value of INR 100,000 for a TEU. For the Government cargo a letter of undertaking for the Value of only INR 30,000 per TEU and INR 60,000 per FEU from NTWCL in lieu of duty insurance is submitted to the Calcutta Customs

33. The 1999 Treaty of Transit has clearly specified that only four documents, namely B/L, invoice, packing list and a copy of the L/C authenticated by the Royal Nepalese Consulate in Calcutta or the issuing bank will be required for submission along with CTD to the Calcutta Customs and that no other additional document may be asked for, except where considered necessary for clearance of specific goods.

34. When documents are filed at Calcutta Customs, the CTD is stamped as a receipt of the document. An Assistant Commissioner of Customs (AC) heads the Nepal Section of Calcutta Customs, which also deals in the Bhutanese cargo. The customs clearance of documents normally takes two to four days. The appraiser and AC put their signatures on originals including the certificate of origin for recognition by the Port Customs before returning these to CA. The Calcutta Customs retains three copies of invoice, 5th and 6th copies of the CTD, and one copy each of other documents.

35. Depending upon the request made in CTD by CA, the CTD is stamped on its back with a rubber stamp instructions in the name of a Shed Appraiser/Preventive Officer (PO) to check one-time-lock (OTL) for taking containers to Nepal, or for allowing loading of the cargo into an open truck/container. AC and appraiser at the Calcutta Customs jointly sign the rubber stamp instruction on CTD. Then CA approaches the Customs shed appraiser and Examining Officer (EO) at the concerned shed with documents cleared by the Calcutta Customs. At the same time CA obtains a bill for port dues from the port shed, and makes payment at the Calcutta Port Trust (CPT) payment counter, which is also located close to the Calcutta Customs in the city area. CA again goes back with the payment receipts to the concerned shed and the staff/stevedore of the Shipping Line, and obtains their clearance.

36. At the dock shed both the appraiser and EO normally examine only the seal number and condition of OTLs of containers. If the goods are to be de-stuffed, about 5 % of the total packages are checked to ensure that the contents are in accordance with the declaration in CTD. The Treaty of Transit contains a specific provision to facilitate the movement of containerized cargo sealed with OTL whereby the Indian customs officer posted at the seaport will merely check OTL and if found intact, allow onward transportation of container without examination of the contents unless there are valid reasons to do otherwise. In case OTL is damaged or tampered with, the Customs will allow CA or Shipping Line to put a fresh OTL by endorsing OTL number in CTD. After checking, the appraiser and EO issue 'Pass Out' order on the back of CTD. Normally PO works during office hours, and EO works before and after office hours; both perform the same job. After booking of port workers and mobile crane of the private operator or Port, and lock & key from the Customs for non-containerized cargo, the container is allowed loading onto a flat truck or loading of break bulk from shed or containers to trucks, as the case may be, in the presence EO or PO. After the loading is completed, PO makes necessary endorsements on the back of CTD by mentioning the seal number of OTL and, incase of the break bulk, the lock and key numbers. The Port Customs does not write anything on other documents except some markings, for instance, a circle on the OTL number in B/L or DO and on the invoice value. The fourth copy also called as queen copy of CTD and DO, and one photocopy each of invoice and packing list are retained by the port shed for record purposes.

37. After completion of the loading at the dock shed, PO issues a temporary permit called Transit Pass (TP) to CA or driver of the vehicle for allowing clearance at border pending the issuance of the sealed cover containing the second and third copies of CTD especially for those cases where full consignment could not be cleared in one day. Recently due to objections raised by the Raxaul Border Customs, TP is almost abandoned except for bulk cargo, which requires a number of days to clear from the port. Generally after the final endorsement on CTD by the Port Customs, a photocopy is made and signed by the Port Customs for carriage along with the cargo by the driver. This is used as a replacement of TP and accepted by the Border Customs for clearance.

38. When the Port is open but the Customs closed on some holidays, CA has to book the Customs to work overtime at port by paying a fee of INR 600 per 8 hours-shift. No other Indian customs fees are payable in respect of transit goods. As the cargo is subject to heavy port demurrage charge after a lapse of 7 days free time, which is allowed only to Nepal and Bhutan transit cargo in comparison to 3 days to local cargo, cargo clearance at holidays is not an uncommon practice.

39. After the delivery of cargo and endorsements on documents by the Port Customs, which normally takes one full working day, CA goes to the Calcutta Customs in the following working day for obtaining a sealed cover (an envelope closed with customs seal). Another section of the Calcutta Customs, after recording details of cargo delivery and CTD number, hands over the original CTD to CA and makes' a sealed cover containing a key of customs lock put on the transport, the duplicate and triplicate copies of CTD, and the Railway Receipt for cargo dispatched by rail. In most cases, CA supplies locks used as a customs seal for conventional transportation of cargo. The sealed cover is sent to the concerned Border Customs by post. But as an option to avoid delay in postal transmission, the sealed cover is handed over to CA. This facility is not allowed to the importer or the authorized representative who defaults in the production of these documents within a reasonable period to the Indian Border Customs Office.

40. CA dispatches the sealed cover with other documents by courier to his authorized agent or to the importer's nominated agent stationed at the Indian border customs post or sometimes to the importer in Nepal.

41. When the goods arrive at the Indian Border Customs, the importer or his authorized CA presents the original CTD and the sealed cover to the Customs at the Indian border. In case the original CTD or the sealed cover is not available or where part shipments done by breaking CTD in different lots, TP or the photocopy of CTD endorsed by the dock customs is produced to the Customs. The Indian customs officer compares the original CTD with the duplicate and triplicate copies received in the sealed cover. The officer examines OTL of containerized cargo, and the lock and seal of other conventional transport. In cases where seals and/or locks on the wagons or containers and on packages are intact, the customs officer identifies the consignment against CTD, and if satisfied, endorses all copies of CTD without examining the goods. The officer permits onward transportation or unloading or breaking bulk as the case may be under the customs supervision. If the seals and locks on wagons or on containers or on the packages are not intact, or there is otherwise suspicion, the officer examines the goods to ensure that they correspond with the information contained on CTD before endorsing it.

42. After checking at the border, the goods are allowed to move onward by road. As per the provisions of the Transit Treaty, the Indian customs officer will provide necessary escorts or supervision to ensure that the goods cross the border and reach Nepal, and certify on the copies of CTD that the goods have crossed into Nepal. Then the original CTD is given to the importer, the duplicate CTD is sent to the Indian customs house of entry-Calcutta Customs and the triplicate CTD to the corresponding Nepalese Border Customs, which is then retained at the Indian Border Customs after it is received back duly endorsed by the corresponding Nepalese customs officer.

43. If a consignment in transit particularly bulk cargo is received at the border in more than one lot, the Indian border customs officer releases the goods in lots after necessary examination, and makes endorsement on the relevant documents only after release of the entire consignment as covered by CTD and sends the triplicate copy of CTD to the Nepalese Border Customs.

44. If duplicate and triplicate copies of CTD are not received at the time of arrival of the goods at the Indian border, the Border Customs will contact, by telephonic or other quick means of communication with the Calcutta Customs to seek confirmation to prevent delay, and on the basis of confirmation so received allow dispatch of goods.

45. The Customs valuation provides a basis for declaration of value by an importer in the Nepalese Customs Declaration Form (Annex 14) for the calculation of applicable duty and tax. After following the set customs valuation system for a long period in the past, the Customs has been assessing customs duty on the basis of the transaction price declared by the owner of the goods for the last two years as per the amendments to the Customs Act of 1962 in July 1997.

46. The customs duty on imported goods is assessed on the basis of their transaction price. The owner of the goods is required to submit to the Customs bills and invoices showing their price, as well as such other necessary documents relating to imports as demanded by the Customs for the purpose of verifying their transaction price. If such quoted price does not conform to the procedure of fixing the actual transaction price, the Chief Customs Authority, or a Customs Officer designated by him, shall fix the price of the goods on the basis of the recorded price, price-list or the prices of the goods of the same nature, and assess customs duty accordingly. While fixing the price of goods for the purpose of assessing customs duty, the Chief Customs Authority, or a Customs Officer designated by him, may do so on the basis of the recorded price or the price-list submitted by the manufacturer of distributor, or the available data or information, or the suggestions of an expert or the concerned agency or institution. No demurrage is charged on the imported goods until they are valued for the purpose of assessing customs duty. In case the price declared by the owner is found under- invoiced up to 20% of the actual value, the customs duty will be assessed on the full value by adding the differential value to the price of the goods. Similarly, if the under-invoice is in the scale of between 20% and 50% of the actual value, it will be subject to full customs valuation by adjusting the differences and also an additional payment of 50% duty as penalty. If the declared value is found under-invoiced by more than 50%, the Chief Customs Authority may decide to purchase, by the Customs itself or others, the imported goods at the price declared by the owner.

47. After the cargo reaches Nepal border, the importer or CA goes to the Nepalese Customs with the following documents:

Note: 1. The documents numbered 11,12 and 13 bear the renewal date for every fiscal year as certified by the concerned Departments. Therefore, the production of these documents to the Customs for cargo clearance implies that they have been renewed to date with payment of all the dues to the concerned authority.

II. The documents numbered 10 to 13 are not normally required for clearance of duty free goods or imports by the Government. For duty free project/aided goods only main documents including duty free certificate and related project documents are required by the Customs.

III. The above documents do not include the copy of BBN 3 received earlier by the Customs from a L/C opening bank.

48. The requirement of certificate of insurance by the Customs is only for customs valuation, which is calculated on GIF Nepal/border basis. In the absence of such insurance document the cargo clearance is not stopped but the Customs adds 2 % of C&F invoice value as insurance cost for customs valuation. But if a document showing insurance only up to Calcutta is produced, no extra valuation is added to the invoice value in order to cover insurance from Calcutta to border for the purpose of customs valuation. Therefore, any insurance document submitted by the importer is acceptable to the Customs for valuation purposes. Regarding the transportation charge from Calcutta to Nepal border to convert the GIF Calcutta value to GIF border value, the Customs adds NPR 1.03 per kg on the basis of weight of the cargo.

49. The Customs verifies BBN 4 document issued by a commercial bank with BBN 3 received previously from the same bank at the time of opening L/C. After the goods are cleared, the Customs certifies BBN 4 and hands over to the importer for delivering to the issuing bank. If the commercial bank is not located in the same place or city area. the certified copy of BBN 4 is send by post to the bank.

50. After the documents have been checked. Customs assess the applicable duty and VAT for payment by the importer before releasing the cargo. When the goods are cleared after the payment of customs dues, the Nepalese customs officer endorses the original and triplicate copy of CTD, and the original is returned to the importer and sends back the triplicate copy in lots of about 7 days with a covering letter for delivery to the corresponding Indian Border Customs.

51. The importer is required to submit the original CTD to the corresponding Indian Border Customs within 15 days of the date on which the goods were released at the Indian port of entry or such extended time as the concerned Assistant Commissioner of Customs House may allow. A penalty of INR 1.00 for every INR 1,000 of the Indian market price of the goods per week is payable by the importer for delay in presenting the original CTD.

1. Nepal and Bangladesh signed a Trade and Payments Agreement and a Transit Agreement in 1976. The following six places have been approved for the movement of traffic-in-transit through the ports and other territory by all means of transport:

2. Benapole is a road crossing point near Calcutta and its Indian side border point is Petra pole. Chilhati is a broad gauge rail terminal which used to be connected with the Indian side of border rail station Haldibari before 1971. Currently Nepal is using the border crossing points of Biral and Banglabandh, which will be described in the following paragraphs.

3. Biral which is a meter gauge rail point at Bangladesh border was brought under regular use for the movement of Nepal's trade traffic to and through Bangladesh after the Government of India allowed the rail connection from its border station Radhikapur to Biral.

4. India has allowed use of the road connection from its Phulbari border point with Bangladesh. The Kakarvita (Nepal Border)-Panitanki (India Border with Nepal)-Phulbari (India Border with Bangladesh) route provides a shortest access of only 44 km to Banglabandh border for Nepal's trade with and through Bangladesh. As the short route was very congested, a new route of about 55-km passing through Bagdogra and Ghose Pukur by-pass is made open for truck transportation all days of the week.

5. Compared to Radhikapur-Biral rail route connecting the India-Nepal border transit points and requiring to follow all the transit procedures as laid down in the Treaty of Transit, the Phulbari-Banglabandh route was allowed only for one border crossing point of Kakarvita- Panitanki road with the application of different operational modalities as follows:

6. Transit procedures as laid down in the Treaty of Transit signed between Nepal and India for the movements of third country trade traffic apply to Nepal's trade with and transit traffic through Bangladesh. The Calcutta Customs has authorized the border customs offices of Radhikapur and Phulbari to process CTD and other documents for the clearance of Nepal's transit traffic. Nepalese exporters and importers are not required to go to the Calcutta Customs for processing of documents.

7. With the stationing of NTWCL offices at both the transit points of Radhikapur and Kakarvita, an undertaking letter in lieu of duty insurance to the Indian customs is easily obtainable on the spot for trading with and through Bangladesh For goods moving through the Phulbari- Banglabandh route, the private sector importers and exporters also obtain NTWCL's undertaking letter and clearing services as per the operational modality applicable to this route. From 1984 the branch office of NICL at Raigunj City, which is close to Radhikapur border also started issuing duty insurance policy coverage for the goods passing through the rail route of Radhikapur-Biral. The duty insurance is issued by NICL after the Radhikapur land border customs examines CTD indicating the customs valuation for duty insurance.

8. NTWCL levies a clearing fee of 0.20% of the FOB value on Export and 0.30% of the CIF value on import trade traffic moving through the Phulbari-Banglabandh route. The charges for issuing the letter of undertaking to the Indian Customs are 0.07% for cement and fertilizer, and 0.15% for other products on FOB exports and CIF imports.

9. The bilateral Transit Agreement between Nepal and Bangladesh has prescribed documentation procedures and formatted a document called 'Transit Declaring Invoice' (TDI) separately for imports and exports via Bangladesh routes. The procedures elaborated by the Standing Order No 6 dated 27 June 1979 of the Customs House of Chittagong constitute import and export procedures in Bangladesh.

10. For the movement of goods to and through Bangladesh in Radhikapur-Biral rail route or Phulbari-Banglabandh road route, documentation requirements of the Indian Customs as well as of the Bangladesh Customs in regard to the processing of both the CTD and TDI have to be met by the Nepalese traders.

11. Imports through Bangladesh. After an IGM containing a separate sheet called 'Nepal Transit Cargo Manifest' (NTCM) for Nepal destined transit cargo is filed by the master of the vessel or Shipping Line at the import section of the Chittagong Customs House, NTCM is sent to the principal appraiser in-charge of the transit group. While working on behalf of Nepalese importer, CA has to submit for each consignment duly filled six .copies of Transit Declaring Invoice (TDI) along with B/L, invoice, packing list and authority letter of the importer to the transit clerk of Transit Group. After processing the documents, the transit clerk hands to CA all six copies of TDI for presentation to the Superintendent, Preventive Service, Jetties, and retains the other documents in the file.

12. CA approaches the customs superintendent of the jetty with all copies of TDI. The superintendent deputes a preventive officer (PO) to inspect the consignment externally, and if found intact, to allow loading of the cargo on rail wagons or tarpaulin covered trucks. After completion of loading, the PO seals the wagons or trucks and makes necessary endorsement on all copies of the TDI. The PO obtains on all copies of TDI endorsement of a railway official as a receipt of goods, and then hands the duplicate and triplicate copies in a sealed cover to the railway official. The remaining three copies are returned to CA after obtaining acknowledgement on the reverse of the original TDI. The original is sent to the Transit Group in the Customs House. If transit goods are to be carried by road, a similar procedure with regard to endorsement and acknowledgement is to be followed

13. If the PO finds any package damaged or broken, the contents are surveyed in the presence of the importer or CA and representatives of Chittagong Port Authority and ship's agent. After sealing of such packages, loading of the packages on the wagon or truck is allowed. The damages or short landings are noted on all certified copies of TDI, which will be counter signed by all the representatives present.

14. On arrival of the goods at the point of exit, the Border Customs receives the sealed cover containing duplicate and triplicate copies of TDI from the railway guard or the truck driver and also three copies of TDI along with the Railway receipt (RR) from CA. The border customs officer examines the seal on the wagons or truck, and if found intact gives clearance for onward transportation beyond Bangladesh. When the transit procedure is completed and necessary entries made on all five copies of TDI, the customs officer at exit retains the quadruplicate copy for his record and sends back the triplicate copy by registered post to the principal appraiser in-charge Transit Group, Customs House, Chittagong. The duplicate copy as well as the remaining two copies are handed back to the owner of the goods or CA to facilitate onward movement of traffic-in-transit.

15. If the consignment has moved without seal or with broken seals, the goods are physically examined in the presence of the importer's representative and railway guard/truck driver. In such cases, if the goods are found missing, the shortage is recorded on all five copies of TDI and countersigned by the representatives present. After resealing of the wagon or truck, the goods are permitted to move onwards.

16. On arrival of the imported goods at the Indian Border Customs, the importer or CA is required to complete all the transit formalities by submitting all original copies of import documents including RR but without B/L. After obtaining RR from Indian Railway and processing of CTD, the transit cargo is allowed for onward transportation.

17. When the triplicate copy of TDI is received from the exit customs at the Transit Group, Customs House, Chittagong, it is tallied with the original. If the goods have crossed the border, the Nepal Transit Trade (Import) Register will be completed with necessary entries. But, if any missing of goods is reported in the triplicate copy of TDI, the appraiser will immediately assess applicable customs duty and sales tax on missing goods and raise demand under order of the concerned assistant collector of customs against the carrier-railway authority or truck owner.

18. All the procedures prescribed for third country trade have to be followed at the border at both the Indian and Nepalese Customs.

19. Exports through Bangladesh. All the documentation formalities as applicable to third country exports through Calcutta have to be completed at Nepal Border Customs and India Border Customs except the declaration to be made on relevant documents including CTD that the cargo is going to be routed through Bangladesh.

20. On arrival of goods at Bangladesh border, CA has to produce to Customs six copies of TDI with invoice and packing list. After completing necessary checking, the Border Customs endorses all copies of TDI, which are also subsequently endorsed by the carrier. The original copy is retained at the Border Customs, duplicate and triplicate copies are handed over in a sealed cover to the railway guard or truck driver to be delivered to the exit Customs and remaining three copies to CA.

22. On arrival of the cargo at the Port of exit, the Port Customs will compare the duplicate and triplicate copies of TDI received from the rail guard or truck driver with the three copies along with RR produced by CA and also check the seals on the rail wagon or truck. After necessary verification by the customs the goods are cleared for shipment and entries are made on all TDI copies. The quadruplicate copy is retained by the Port Customs for ultimate submission to the Customs House and triplicate copy is send back by registered post to the border entry Customs Office. The remaining three copies including duplicate are handed back to CA.

1. After necessary clearance by the Port Customs, the CA pays port dues and obtains port clearance before handing over the cargo to the Ship's agent inside the port.

1. Tribhuvan International Airport (TIA), Kathmandu, is the only international gateway for passenger and goods traffic by air in Nepal.

2. TIA Customs has three godown of which No. I is used for the storage of unlearned and seized cargo and for the clearance of personal effects. Godown No. 2 is used for the storage of import cargo, and godown No. 3 for export cargo.

3. A new air cargo complex with an area of about 7,700 m^ on ground level and a two storey office of 2,500 m is planned for completion by April 2001 under the Tribhuvan International Airport Improvement Project. The new cargo complex has a cargo area of 3,500 to 4,000 m2 each for export and import.

4. NTWCL receives import cargo from the airline in accordance with the cargo manifest and air waybill copies. For release of cargo, an importer or CA has to submit an application in the prescribed form to NTWCL with a delivery order issued by the airline. NTWCL makes the following storage charges:

In addition to the storage charge, NTWCL also levies handling charges as follows:

5. After receiving information from the exporter or airline about the arrival of the cargo, the importer or CA approaches the TIA Customs with the following documents:

6. Customs use the transaction value as the basis for customs valuation. The chief customs officer is authorized to approve variation from reference values up to 10%. In addition the chief customs officer is fully authorized to approve valuation of the following five products:

The requirement by Customs for a certificate of insurance is for customs valuation purposes. In the absence of an insurance certificate, Customs add 2% of the C&F (CAR) invoice value to obtain the CIF Kathmandu value on which duty is assessed.

7. After the documents have been checked. Customs assess their charges for payment by the importer before releasing the cargo. Customs certify form BBN4 and hand it to the importer for delivery to the issuing bank.

8. The importer or CA pays the customs dues and approaches NTWCL with the customs declaration and payment receipt to obtain release of the cargo. The importer arranges loading and transportation of cargo from airport godown to his warehouse.

9. An exporter or CA has to bring cargo with complete documents for customs examination and clearance. The following documents are required for submission to TIA Customs:

10. After the export cargo has been examined against documents, the checked packages are sealed and cleared for storage by Customs. NTWCL accepts cargo for storage only after customs clearance. The godown run by NTWCL has a separate cabin that can be locked and an iron safe for the storage of valuable exports like gold and silver handicrafts. There are private loaders at the godown to load and unload cargo at the expense of the exporter, but only airline workers load and unload at the apron area. After the exporter produces the air waybill for the cargo confirming space booking with the concerned airline, NTWCL allows loading of the cargo into a container truck, which is jointly managed by NTWCL and TIA Customs. After checking and sealing of the container truck by the Customs, the cargo is transported to the apron area. After the seals of the container truck have been opened by the Customs, the cargo is unloaded at the apron area.

11. NTWCL allows 7 days free time on rental charges but goods are still liable to the handling fee. The handling fee is based on weight of the cargo as follows:

For gold and silver handicrafts, a different rate has been fixed as NPR 100 up to 5 kg, NPR 150 for 5-1000 kg and NPR 200 for above 1000 kg.

Similarly NTWCL levies cargo rent charges after 7 days free time as per the following tariffs:

A separate form as prescribed by NTWCL is to be submitted by an exporter or CA. to obtain permission for the storage of cargo.

Note: Documents listed as Annex numbers 4 to 9 are the same for both imports and exports.

1. All industrial chemicals (except chemical used for making medicine for mankind) HS 28.
2. Carbon black HS 28.03.
3. Palm stearin DFA and palm kernel DFA HS 3823.19.
4. Natural rubber HS 40.01.
5. Synthetic rubber HS 40.02.
6. Silk yarn HS 50.04 and 50.05.
7. Woollen yam (except hosiery yarn) HS 51.06, 51.07 and 51.08
8. Cotton HS 52.01.
9. Polyester partially oriented yarn (POY) HS 5402.42.
10. Manmade artificial fibre HS Chapter 55, 55.01 to 55.07(excluding 55.05).
11. Polyester fibre HS 5503.20.
12. Viscose rayon (fibre) HS 5504.10.00.
13. Tyre cord fabric HS 59.02.
14. Sponge iron HS 7203.90.
15. Mild steel scrap HS 7204.49.
16. Iron (ingot) HS 72.06.
17. Mild steel billets HS 72.07.
18. Hot rolled sheet in coil HS 7208.27, 7208.36, 7208.37, 7208.38, 7208.39,7208.51 & 7208.52.
19. Cold rolled sheet in Coil HS 7209.15, 7209.16, 7209.17 & 7209.18.
20. Tin plate HS 7210.12.
21. Mild steel wire rod in coil HS 7213.91.10.
22. Bead wire (copper coated) HS 7217.20, HS 7217.30 and 7217.90.
23. Steel bloom HS 7218.99.
24. Steel plate HS 72.19.
25. Aluminum ingot billet HS 76.01.
26. Aluminum rod in coil HS 76.04 and 76.05
27. All machinery, equipment (except spare parts) HS Chapter 84.
28. Electric motor, generating set HS 85.01 and 85.02.
29. Fabrics for use as raw materials by the readymade garments industries up to 50 percent of their export earnings.*

Note: * The import of fabrics from India under hard currency payment system was allowed only from 2051.1.1 (Mid-April 1994). Then, such imports were permitted up to 30% of export earnings.

A.1.1 National and Foreign coins Of Archeological value,
A.1.2 Idols of god and goddesses, palm leave inscription (Tad Patra), plant leave inscription (Bhoj Patra),
A.1.3 Scroll (Thanka Paintings) of historical importance.

A.2.1 Wild animals,
A.2.2 Bile and any part of wild animals,
A.2.3 Musk,
A.2,4 Snake skin, lizard skin,
A.2.5 Cow and ox.

Marijuana, opium, hashish (as defined in the Single Convention on Narcotics 1961).

Valuable metals including Gold, Silver (except ornaments) and Jewelleries (except those allowed under Bag and Baggage Rules).

A.5.1 Explosive materials and related fuse or materials needed for fuse,
A.5.2 Materials used in the production of arms and ammunition.

A.6.1 Raw hides and skin (including dry salted),
A.6.2 Raw wool,
A.6.3 All imported raw materials, parts and capital goods,
A.6.4 Raw Silk (export import permitted only up to 100 kg without L/C).

However, import of similar materials is permitted as replacement if the purpose of the import is not met. And, if the materials are not consumed in Nepal and are required to be send back, against repatriation of foreign exchange paid for imports, customs duties and other taxes incurred for import and export may be refunded.

All goods imported from countries other than India ((except those allowed under Bag and Baggage Rules)

Products as notified by His Majesty's Government in the Nepal Gazette from time to time;
1. Rice.

All products other than banned ones and which are under quantitative restrictions.

Notes: 1. The Ministry of Commerce will decide from time to time the goods to be included under the category of quantitative restrictions and volume of their exports.

Notes: 2. The Ministry of Commerce will interpret as to which of the products listed above will be permitted to export.

A.1.1 Narcotic drugs like opium and morphine,
A.1.2 Liquor containing more than 60 percent alcohol (except for use as industrial raw materials).

A.2 Arms and ammunition, and explosives (except under import licence of His Majesty's Government):

A.2.1 Materials used in the production of arms and ammunition,
A.2.2 Gun and cartridges,
A.2.3 Capes without paper,
A.2.4 Arms and ammunition, other explosives.

Wireless, walkie-talkie and similar other audio communication equipment (except under import licence of His Majesty's Government).

Valuable metals (including Gold, Silver) and Jewelleries (except those allowed under Bag and Baggage Rules).

B.1 Products under quantitative restriction by His Majesty's Government for imports:

B.1.1 Products included under the Bidding from time to time (except one item each of goods allowed for individual purpose without licence),
B.1.2 Products to be imported in excess of the fixed quantity notified as allowable imports for individual purpose;
B.1.2.1 Poppy seeds.

C. Products allowed for importation from overseas without import licence and L/C (except those products, which are listed under Bidding and Prohibition):

C.1 Products imported under agreement by the Office Corporation of His Majesty's Government, Social Institution or Authority or Project on the recommendation of the concerned Ministry,
C.2 Necessary emergency medicine send as gift by an individual or Institution to a seriously ill patient residing in Nepal,
C.3 Printed materials such as poster, calendar etc. brought for publicity,
C.4 Products notified as free from customs duty and sales tax -by His Majesty's Government, Ministry of Finance,
C.5 Products of a value up to US $ 100 received as gift or prize while participating in a meeting, conference in an invitation of the foreign Government or International Institution,
C.6 Products donated or gifted to Nepalese institution/association with the permission of the concerned Ministry by a friendly country or International/Regional Association, Institution, Social Organization or Individual,
C.7 Products imported for personal use by a foreigner employed under an agreement in Project and Joint Venture Project in Nepal on the recommendation of the concerned Ministry,
C.8 Advertisement, label, sticker and sample materials bearing the logo of a Company or Firm up to a value of US $ 100,
C.9 Office related products up to a value of US $ 100 send by the Head Office of Foreign Company, Joint Venture Company or Foreign Airlines to their Nepal based Representative office. Branch office or General Sales Agent (G. S. A.),
C.10 Goods notified under Bag and Baggage Rules, and gold, silver upto the fixed quantity.

D. With the exception of the cases as explained above, the Ministry of Commerce will, on the recommendation of the concerned Ministry, decide on merit basis, for products donated to any institution not for business purpose but as gifts.

E. Unless otherwise mentioned in this Notification, import is not allowed without approval of His Majesty's Government without opening a letter of credit or an import licence.

Note: This is an unofficial translation of the Nepal Gazette Part 3, Section 42 and Number 33 dated 2049.8.15 (Nov/Dec 1992) and incorporates changes to date.

No.	Heading
1.	Products permitted for imports with payment in convertible foreign exchange from India.
2.	List of banned, restricted and freely tradable exports and import Products.
	IMPORT DOCUMENTS
3.	Application Form to the bank to open a letter of credit (BBN 3).
4.	Firm registration certificate of Department of Commerce.
5.	Registration certificate of Department of Industry (Pvt. Firm).
5a.	Registration certificate of Department of Industry (Partnership).
5b.	Registration certificate of Department of Industry (Company).
6.	Registration certificate of Department of Cottage and Small Industry Firm).
6a.	Registration certificate of Department of Cottage and Small Industry (Company).
7.	Registration certificate of Company Registrar Office (Public Ltd.).
7a.	Registration certificate of Company Registrar Office (Private Ltd.)
8.	Registration certificate of Department of Department of Income Tax.
9.	Registration certificate of Department of Value Added Tax.
9a,b,c	Registration certificate of Permanent Account Number.
10.	Application form of Plant Quarantine Section of Department of Agriculture to obtain permit to import plants and plants products.
11.	Import permit of Plant Quarantine Section of Department of Agriculture.
12.	Duty insurance policy of National Insurance Company Limited.
13.	Customs transit declaration form.
14.	Nepalese customs declaration form.
15.	Foreign exchange control form (BBN 4).
	EXPORT DOCUMENTS
16.	Bank's certificate for receipt of advance payment.
17.	Certificate of origin of Federation of Nepalese Chambers of Commerce & Industry.
18.	Certificate of origin of Nepal Chamber of Commerce.
18a	Certificate of origin for Textile Products
19.	Generalized system of preference (GSP) form A.
20.	Letter of recommendation issued by Garment Association-Nepal for visa for export of readymade garments.
21.	Recommendation letter of Nepal Cotton Towel Exporter Association for visa for export of cotton towel.
22.	VISA form of Readymade Garments Visa Cell.
23.	Multiple Country Declaration, for garments export to the USA.
24.	Valuation certificate of Handicraft Association of Nepal for handicraft exports.
25.	Letter of no objection of Handicraft Association of Nepal for exports of handicraft products made of domestic animal.
26.	Certificate of Department of Archeology for handicraft exports.
27.	Permission letter of District Forest Office for the collection of herbs.
28.	Release letter of District Forest Office for the transportation of herbs.
29.	Application form of Department of Plant Resources for permission to export extracts and by-products of plants and herbs.
30.	Export permission letter of Department of Plant Resources to Customs.
31.	Application form of Plant Quarantine Section of Department of Agriculture.
32.	Phytosanitary certificate of Plant Quarantine Section for the export of plant and plant products.
33.	Customs Transit Declaration Form (CTD).
34.	Foreign exchange control form No. I of Nepal Rastra Bank (BBN 1)-first copy.
34a.	Foreign exchange control form No.I of Nepal Rastra Bank (BBN l)-second copy.
35.	Foreign exchange control form No.I of Nepal Rastra Bank (BBN l)-third copy.
35a.	Foreign exchange control form No.I of Nepal Rastra Bank (BBN l)-fourth copy

A Guide on Exports and Imports Procedure and Documentation