EXPORTING TO GREAT BRITAIN- A GUIDE FOR PAKISTANI WOMEN-LED BUSINESSES IN ACCESSORIES, TEXTILES, APPAREL, AND HOME DÉCOR SECTORS

INTRODUCTION

The Women Chamber of Commerce and Industry (WCCIS) highlights a valuable resource for Pakistani businesses; "Exporting to Great Britain: A handbook for Pakistani women-led businesses in the women's accessories, textiles and apparel, and home décor sectors". This handbook is a collaborative effort by the ITC and UK government which equips Pakistani women-led SMEs in these specific sectors with the knowledge to navigate legal and regulatory requirements for exporting to the markets of England, Wales, and Scotland.

PURPOSE OF THE HANDBOOK

This handbook serves as a roadmap for Pakistani women-led SMEs, especially those venturing into exporting for the first time. It guides them through the regulations for exporting home de´cor, home accessories, women's accessories, textiles, and apparel, with a particular focus on exportable items like garments, apparel, jewellery, handbags, and carpets.

This informative blog post, created by the Women Chamber of Commerce and Industry (WCCIS), summarizes the regulations outlined in the handbook. However, the original handbooks are also available in English and Urdu on the WCCIS website.

1. PREPARING YOUR BUSINESS FOR EXPORTS

   
   

   1. BUSINESS REGISTRATION IN PAKISTAN

      1. Registration of Business

         Launching your Pakistani export business starts with registering your company. Choose a unique name and structure, considering factors like cost and export benefits with a lawyer's help. Secure a business location and open a bank

         account. This guide provides detailed registration steps.

      2. Tax Registration

         Use the IRIS portal to apply for a National Tax Number (NTN) with the Federal Board of Revenue

         Required documents include:

         • Proof of business registration

         • Bank account number

         • Rental agreement

         • Copies of national identity cards of directors or partners The NTN is crucial for paying income tax and is used for exports. For more details on the tax registration process, refer to this guide.

           
           

      3. Register with Chambers of Commerce and Trade Associations

         Registering with a local chamber of commerce is essential. Membership offers services such as export document attestations, capacity-building training, and trade fair participation. Textiles and apparel exporters should consider the Pakistan Textile Exporters Association. Women entrepreneurs can benefit from regional Women Chambers of Commerce and Industry like WCCIS.

         
         

      4. Pakistan Single Window Subscription

         Subscribe to the Pakistan National Single Window (PSW) by paying a PKR 500 subscription fee via bank transfer or online/mobile banking. Complete biometric verification for PKR 200 and upload the required documents.

         Such as:

         • Copies of the business NTN

         • National identity card

         • Certificate of incorporation

         • Payment slip identification

         • Proof of biometric verification

           For detailed subscription guidance, refer to this link.

           
           

      5. Trader Registration

         For those exporting jewellery made of precious metals or gemstones, submit a completed application form with the required documents and a PKR 3,000

         registration fee to TDAP. Upon approval, pay the PKR 1,500 jewellery passbook fee to receive a registration certificate and jewellery passbook. Registration is valid for three years and can be renewed for PKR 3,000.

         More details are available here.

      6. Access to Finance

         Formalizing and expanding a business requires substantial funding. Women entrepreneurs can benefit from the State Bank of Pakistan's Refinance and Credit Guarantee Scheme for Women Entrepreneurs, offering up to PKR 5 million at lower interest rates for up to five years. For more information, visit this link.

         Additionally, the State Bank of Pakistan offers a Working Capital Financing

         Scheme for SMEs in specific sectors. SMEs with annual sales not exceeding PKR 300 million are eligible. More details can be found here.

         
         

      7. Sales Contract

         Establishing a trust-based relationship with buyers is crucial. A detailed sales contract should outline the rights and duties of each party, conditions, and

         breach of contract consequences. Sales contracts must include Incoterms, which define responsibilities in international transactions. Incoterms 2020 specifies 11 rules detailing seller and buyer responsibilities during shipping. Consult your

         commercial bank for financing schemes, interest rates, collateral requirements, and repayment terms.

         
         

   2. EXPORTING TO GREAT BRITAIN

      1. Harmonized System (HS) Codes and Product Classification

         Sellers must include the correct product classification or HS code in the proforma invoice and sales contract. For imports into Great Britain, each product has a 10- digit code in the UK Commodity Code (UKCC). Identifying the correct UKCC product code is essential. Tariff notices by HM Revenue and Customs provide specific classification information, such as Tariff Notice 21 of 2022.

         
         

      2. Export Finance

      Ensuring sufficient liquidity is crucial as payment from buyers may not be immediate. The State Bank of Pakistan's Export Finance Scheme allows exporters to access finance through transaction-based or performance-based facilities.

      Major value-added commodities exported from Pakistan are eligible. Input suppliers or manufacturers to the direct exporter can also benefit. More information is available here.

   3. UNITED KINGDOM DEVELOPING COUNTRIES TRADING SCHEME

      Under the Developing Country Trading Scheme (DCTS), Pakistan is an 'Enhanced Preference' country, allowing exporters to benefit from zero or reduced tariffs on several product lines. The DCTS guide outlines four steps to claim these benefits.

      1. Applicable Tariffs

         Determine applicable tariffs, duties, standards, and regulatory requirements after identifying the correct UKCC. Different tariff types may apply depending on the product.

         
         

      2. Rules of Origin

         Rules of origin specify the extent to which raw materials can be sourced from other countries while still claiming the product as 'Pakistani' to benefit from

         preferential tariffs. Producers/exporters must retain proof of the value, cost, and production processes of imported raw materials.

         
         

      3. Standards and Regulatory Requirements

         The DCTS guide on standards and regulatory import requirements is available here.

         
         

      4. Claiming Preferences under the DCTS

         To claim preferences, Pakistani exporters must confirm eligibility and provide proof of the goods' origin, typically in the form of an origin declaration on the

         commercial invoice, packing list, or Form A. Ensure that selected products can be exported from Pakistan and imported into Great Britain. Check the Pakistan Export Policy Order, 2022 for export permissibility.

         
         

2. MEETING PRODUCT AND PRODUCTION REQUIREMENTS

   Once the business is registered and eligible to export, the next crucial step is to satisfy all production requirements and product specifications to successfully export to Great Britain. There are compulsory requirements provided under British laws, rules, and regulations, and voluntary certifications demanded by buyers and consumers.

   Producers must satisfy six categories of compulsory legal requirements before their products are ready for export.

   The detail is given as:

   
   

   1. PRODUCT SAFETY

      All products must be safe for consumers, with no direct or indirect risks to health and safety. Include safety information on product labels. Ensure all products

      comply with the REACH Regulation, which controls the use of Substances of Very High Concern (SVHCs). Purchase REACH-compliant raw materials and collect invoices and testing certificates. Confirm with suppliers if biocides are used in raw materials. Products containing biocides are treated articles and must comply with

      relevant regulations. Ensure raw materials do not contain banned POPs or stay within permissible limits. Children's nightwear must meet flammability

      requirements. Ensure appropriate labelling for both children's and adult nightwear.

      
      

   2. PRODUCTS FROM ENDANGERED PLANTS AND ANIMALS

      Comply with the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) if using materials from endangered species. Obtain the

      necessary permits and register with the relevant Provincial Forest Department. Check if a species is listed in any of the CITES Appendices here.

      
      

   3. INTELLECTUAL PROPERTY RIGHTS

      Respect IPR rules in Great Britain to avoid infringement issues. Protect your brand in Pakistan by registering trademarks and designs with the Intellectual Property Organization Pakistan. Consult an IPR lawyer for assistance.

      
      

   4. PRODUCT SUSTAINABILITY

      Comply with the Environment Act 2021 and the FRC Scheme for forest-risk commodities. Producers must implement a due diligence system to ensure compliance with local laws and demonstrate a low risk of deforestation.

      
      

   5. PRODUCT PACKAGING

      Ensure packaging meets the requirements of the Packaging (Essential

      Requirements) Regulations 2015. Keep records of technical information proving compliance for four years from the packaging date. Refer to this guide for

      compliance tips.

      
      

   6. PRODUCT LABELLING

   Accurate labels provide consumers with essential information and increase brand value. Label conditions vary by product. Proper packaging considers usability,

   functionality, brand values, quality, aesthetic appeal, and market trends. Familiarize yourself with British packaging market trends through reports like this one.

3. SUSTAINABILITY STANDARDS

   Buyers and consumers may require additional sustainability standards beyond legal requirements. Voluntary sustainability standard (VSS) certifications and compliance with buyer's company codes are key.

   Voluntary Sustainability Standards

   Comply with VSSs to retain a competitive advantage and capture a wider consumer base. Ensure every stage of the supply chain meets requirements such as the International Labour Organization’s principles and applicable environmental quality standards. More information can be found here.

   
   

   Company Codes

   Some buyers introduce company codes highlighting product and production process features. Discuss expectations during sales contract negotiations and include a

   provision in the contract. Consider connecting with certified suppliers for sustainable raw materials. Group certification is a cost-effective option.

   
   

4. CUSTOMS PROCEDURES IN PAKISTAN

   1. CUSTOM REGISTRATION

      Begin by registering with Pakistan Customs via the PSW portal. Once you complete your PSW subscription, register as a 'trader' with Customs authorities. Refer to

      this guide on how to register as a trader on the PSW. Prepare the commercial invoice, packing list, origin declaration, or Form A for online submission.

      
      

      Financial Instrument and Form E

      After registration, link your bank profile by submitting your IBAN, registered email address, and mobile number on the PSW portal. The bank will inform PSW of the authorized payment modes. Then, create and submit the Goods Declaration and Single Declaration. Refer to this guide for detailed instructions on associating financial instruments.

      
      

   2. CUSTOMS CLEARANCE

      After submitting the Single Declaration, consignments are automatically classified into green, red, or yellow categories for inspection. Upon verification and

      completion, pay the terminal charges to receive customs clearance, after which the shipment will be released and loaded for transport.

      
      

      Customs Bonded Warehouses

      Goods reaching the British border are stored in customs bonded warehouses. Importers can manage the flow of consigned goods, rearrange them, and delay customs duties and taxes. Refer to this information about customs bonded warehouses in the UK.

5. TRANSPORT AND LOGISTICS

Choose the right transportation and logistics based on Incoterms provided in the sales contract. Proper transport documentation is crucial to avoid disputes. The bill of lading is essential for sea transport, while the airway bill is for air transport. Ensure that

commercial invoices, packing lists, origin declarations, or Form A are attached along with requisite insurance proof. Incomplete documentation risks customs clearance.

CONCLUSION

The guide "Exporting to Great Britain: A handbook for Pakistani women-led

businesses in the women's accessories, textiles and apparel, and home décor sectors"

is a crucial resource for women entrepreneurs in Pakistan. By adhering to the provided guidelines and making use of the available resources, Pakistani women-led SMEs can effectively handle the complex process of exporting agri-food products to Great Britain.

For insights on exporting agri-food products to the UK, refer to the WCCIS blog "Exporting to Great Britain: A Handbook for Pakistani Women-Led Businesses in the Agrifood Sector".

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