Advance Remittance for Import of Rough Diamonds – RBI Circular

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RBI/2013-14/548
A.P. (DIR Series) Circular No.116, Dated- April 1, 2014


Advance Remittance for
Import of Rough Diamonds
Attention of Authorised Dealer Category
– I (AD Category –I) banks is invited to A.P. (DIR Series) Circular No
34 dated March 02, 2007 in terms of which we had, based on the recommendations of
Gems and Jewellery Export PromotionCouncil (GJEPC), notified the names
five mining companies (since increased to nine over a period of time) to whom
an importer (other than a Public Sector Company (PSC) or a Department /
Undertaking of the Government of India / State Government) was allowed to make
advance remittance without any limit and without bank guarantee or stand by
letter of credit for import of rough diamonds into India.
2. With a view to
liberalising the procedure further facilitating the import of rough
diamonds, it has now been decided that henceforth Reserve Bank of India will
not notify the names of overseas mining companies from whom an importer (other
than PSC or Department / Undertaking of Government of India / State Government)
may import rough diamonds into India, by way of advance payments, without any
limit / bank guarantee/ stand-by letter of Credit.
3. AD category – I banks are, henceforth, permitted to
take decision on overseas mining companies to whom an importer (other than PSC
or Department / Undertaking of Government of India / State Government) can make
advance payments, without any limit / bank guarantee/ stand-by letter of
Credit.
4. While allowing the advance remittance without bank
guarantee for import of rough diamonds, the AD Category – I banks must ensure
the following:
1.           
The
overseas mining company should have the recommendation of GJEPC.
2.           
The
importer should be a recognised processor of rough diamonds and should have a
good track record.
3.           
AD
Category – I banks should, undertake the transaction based on their commercial
judgment and after being satisfied about the bonafides of the transaction.
4.           
Advance
payments should be made strictly as per the terms of the sale contract and
should be made directly to the account of the company concerned, that is, to
the ultimate beneficiary and not through numbered accounts or otherwise.
5.           
Further,
due caution may be exercised to ensure that remittance is not permitted for
import of conflict diamonds (Kimberly Certification).
6.           
KYC
and due diligence exercise should be done by the AD Category – I banks as per
the existing guidelines.
7.           
AD
Category – I banks should follow-up submission of the Bill of Entry / documents
evidencing import of rough diamonds into the country by the importer, in terms
of the Act / Rules / Regulations / Directions issued in this regard.
8.           
In
case of an importer entity in the Public Sector or a Department / Undertaking
of the Government of India / State Government/s, AD Category – I banks may
permit the advance remittance subject to the above conditions and a specific
waiver of bank guarantee from theMinistry of Finance, Government of
India, where the advance payments is equivalent to or exceeds USD
100,000/- (USD one hundred thousand only).
5. AD Category – I banks
are required to submit a report of all such advance remittances made
without a bank guarantee or standby letter of credit, where the amount of
advance payment is equivalent to or exceeds USD 5,000,000/- (USD five million
only), to the concerned Regional Office of Reserve Bank of India, in the
annexed format, within 15 calendar days of the close of each half year.
6. AD Category-I banks may bring the contents of this circular to
the notice of their constituents and customers.
7. The directions contained in this circular have
been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management
Act, 1999 (42 of 1999) and are without prejudice to permissions/ approvals, if
any, required under any other law.
Yours faithfully,
(C.
D. Srinivasan)
Chief General Manager
Annex
[A. P. (DIR Series) Circular No.116 dated-
April 1, 2014]
Statement of Advance
Remittance without bank guarantee or standby letter of
credit where the amount of advance is equivalent to or more than USD 5 million
for import of Rough Diamonds for the period ended
……………………..
Name
of the AD Category – I Bank :
AD Code (14 digit) :
Sl.
No.
Name of the mining
Company
Name of the
Importer Entity
and IEC No.
Amount of Advance
Payment made
without BG / Standby LC
Whether document for
evidence of import
submitted
1
2
3
Name, Designation & Signature of the authorised
official of the bank :
Date :
Stamp :

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