Updated: Wednesday October 12, 2016/AlArbia’a
Muharram 11, 1438/Budhavara
Asvina 20, 1938, at 07:38:25 AM
The Special Economic Zones Act, 2012
ACT No. XX OF 2012
An Act to provide for setting up and operation of
special economic zones in
WHEREAS it is necessary and expedient
to promulgate a law for the creation, development and efficient operation of
special economic zones through provision of a legal and regulatory frame work
to encourage domestic and international investors for promotion and
establishment of industrial infrastructure and for other matters connected or ancillary
thereto;
It is hereby enacted as follows:---
1. Short title, extent and commencement.—(1) This Act
may be called the Special Economic Zones Act, 2012.
(2) It extends to the whole of
(3) It shall come into force on such
date as the Federal Government may, by notification in the official Gazette,
appoint and different dates may be appointed for coming into effect of
different provisions of this Act and any reference to commencement shall
generally refer to the commencement of this Act but commencement of any
provision that comes into force subsequent to the general commencement shall be
treated from the date of coming into force of the respective provision and not
the general commencement.
2. Act to override other laws. The provisions of this
Act shall have force notwithstanding anything to the contrary contained in any
other law for the time being in force.
3. Definitions. In this Act, unless there is anything repugnant in the
subject or context,---
(a) “Approvals
Committee” means the committee constituted under Section 7;
(b) “arbitration”
shall include arbitration under the applicable laws of Pakistan as well as
arbitration under any applicable international regime, whether selected
contractually through an agreement in writing or available to a party or
parties as a result of an international agreement accorded or ratified;
(c) “BOA”
means the Board of Approvals constituted under Section 5;
(d) “BOI”
means the Board of Investment established under the Board of Investment
Ordinance, 2001 (XV of 2001);
(e) ”capital
equipment” means plant, machinery or equipment, accessories, and component part
of machinery and equipment identifiable for use in or with machinery required
for economic activities and machinery includes machinery and equipment of any
description, such as is used in industrial process, manufacture, production or
processing of other goods and rendering services, except the goods that are
consumed in the manufacturing, production of processing of goods or provision
of services;
(f) ”developer”
means an enterprise which has entered into a development agreement with a SEZ
Authority;
(g) ”development
agreement” means a duly approved agreement between SEZ authorities and agreed
to and endorsed by the BOA and a developer that authorises a developer to
develop, establish and operate a SEZ;
(h) “economic
zone” means a geographically defined and delimited area which has been notified
and approved for economic, industrial and commercial activities;
(i) “existing
zones” means the export processing zones, industrial zones and other similar
entities in existence at the time of the commencement of this Act and includes
but not limited to the following, namely:-
(i) ”export
processing zones” means and economic zone which is established under the Export
Processing Zones Authority Ordinance, 1980 (IV of 1980);
(ii) ”extra-territorial
zone” means an economic zone of a type that is to be deemed to be outside the
customs
(iii) ”free
trade zone” means an economic zone that shall be deemed to be outside the
customs territory of Pakistan with respect to which the BOA shall approve
special facilities for trade, transshipment and re-export operations in
accordance with applicable legislation as for the time being in force in
Pakistan;
(iv) “hybrid
export processing zone” means an economic zone that shall be deemed to be
outside the customs territory of Pakistan in which goods are manufactured and
from which services are provided, both for exportation to countries other than
Pakistan as well for export into Pakistan;
(v) “multilateral
economic zone” means an economic zone in which all zone enterprises are
required to be beneficially owned by national, residents or corporate entities
of one or more particular countries;
(vi) “reconstruction
opportunity zone” means an economic zone from which the exports of goods and
services has been recognized by any country or jurisdiction other than Pakistan
as being eligible for reduced tariff duties and other benefits;
(vii) “regional
development zone” means an economic zone wherein economic activates are
promoted so as to develop particular regions and industries; and
(viii) “sector
development zone” means a regional development zone in which permissible
economic activity shall be limited to one or more sectors as notified by the
BOA;
(j) “misconduct”
means any conduct of a member or Chairperson of the Provincial SEZ Authority
that is prejudicial to the good order and management of the SEZ Authority or a
SEZ and includes but not limited to the following, namely:---
(i) a
failure to disclose an interest of the member or Chairperson in a transaction
related to a SEZ or an interest of the member’s parent, spouse, brother,
sister, child, or spouse of a parent, brother, sister or child;
(ii) any act
or omission which is ultra vires of this Act;
(iii) any
act or omission which lacks good faith; or
(iv) any act
or omission which is inconsistent with the fiduciary duties of such member or
Chairperson;
(k) “Provincial
investment promotion authority” means an investment promotion agency, by
whatever name called, formed by a Province to work as local
authority to promote domestic and foreign investment in that Province such as
Sindh Board of Investment established in Sindh and Punjab Board of Investment
and Trade or any other similar entity;
(l) “SEZ Authorities” mean
the Provincial SEZ Authorities established under Section 10;
(m) “SEZ Committee” means
the authority chartered by the BOA at each SEZ under Section 23;
(n) “special economic zone”
or “(SEZ)” means a geographically defined and delimited area which has been
notified and approved by the BOA. The SEZs shall be deemed to be outside the
customs
(o) “zone admission
criteria” means the criteria under this Act and to be applied by developers in
deciding whether or not to admit an enterprise into a particular SEZ including
thereof zone approval criteria that means the criteria to be applied by the SEZ
Authority and the BOA in deciding whether to allow or not to allow a particular
area to be developed as a SEZ;
(p) “zone application”
means an application submitted in accordance with the provisions of this Act by
an SEZ Authority seeking the notification of an area as a special economic
zone;
(q) “zone development plan”
means a business plan for developing a SEZ;
(r) “zone enterprise”
means an enterprise admitted into a SEZ by a developer; and
(s) “zone regulations”
mean regulations made under this Act.
4.
Establishment of special economic zones. The Federal
Government and Provincial Governments may establish special economic zones by
themselves or in collaboration with private parties under various modes of
collaboration including public-private partnership or exclusively through the
private parties as provided under this Act.
5.
Board of Approvals.—(1) There shall be a Board of Approvals, hereinafter
called BOA, consisting of,---
(i) the Prime Minister of
Pakistan who shall be the Chairperson of the BOA;
(ii) the Minister for
Finance who shall be the Vice Chairperson of BOA;
(iii) the Minister for
Industries;
(iv) the Minister for
Production;
(v) the Minister for
Commerce;
(vi) the Minister for
States and Frontier Regions Division;
(vii) two members of
Majlis-e-Shoora (Parliament) to be nominated by the Prime Minister (one from
each House);
(viii) the Chairman of the
BOI;
(ix) the Deputy
Chairman Planning Commission;
(x) the Chief
Minister of each Province;
(xi) the Chairman of
the Federal Board of Revenue;
(xii) Governor, State
Bank of
(xiii) Secretary BOI;
(xiv) executive heads of the
Provincial investment boards by whatever names known or if no such board is
established a nominee of the Government of such Province, having adequate
relevant professional experience, the tenure of such nominees shall be three
years;
(xv) the President of the
Federation of the Pakistan Chambers of Commerce and Industry;
(xvi) the President of
the Pakistan Business Council;
(xvii) the President of the
Overseas Chamber of Commerce and Industry; and
(xviii) a professional
having relevant adequate experience to be nominated by the Prime Minister of
Pakistan.
(2) The
meeting of the BOA shall be convened on the orders of the Chairman BOA or on
the recommendations of BOI or the Provincial SEZ Authority.
(3) The
BOA shall meet as frequently as required but not less than twice a year.
(4)
Fifty percent of the members shall constitute quorum of the BOA.
(5)
Where the Chairperson is not present, the Vice-chairperson shall chair the BOA’s
meeting and if both are not available, a member designated by the Chairperson
shall preside.
(6) The
decisions of the BOA shall be taken by majority of the total membership present
and voting.
(7) The
BOA shall adopt its own rules of procedure.
(8)
Secretary BOI shall also act as Secretary of the BOA.
6.
Functions and responsibilities of the BOA. The BOA may,---
(a) approve such
regulations for the implementation of this Act as are applicable to all SEZs or
to a particular group of SEZ or a particular SEZ;
(b) approve or reject zone
applications;
(c) approve or reject
development agreements;
(d) examine and decide
upon policy issues submitted to it by SEZ Authorities or by developers;
(e) co-opt on the members
of the Approvals Committee as necessary;
(f) notify with approval
of relevant authorities additional benefits under sub-section (2) of Section
34;
(g) cancel development
agreement;
(h) review and direct
actions on annual reports submitted by SEZ Authorities;
(i) annually review the
implementation of this Act with a view to improving policies relating to SEZs;
and
(j) take any other steps
it deems appropriate in order to advance the objectives of this Act.
7.
Approvals Committee.—(1) There shall be an Approvals
Committee that shall be chaired by the Chairman of the BOI and shall consist of
the following, namely:---
(i) executive heads of the
Provincial investment boards or companies or agencies, and where these do not
exist a representative equivalent to a Provincial Secretary designated by the
concerned Province;
(ii) representatives of the
Ministries of Finance, Commerce, Industries, Production and States and Frontier
Regions Division not below the level of an Additional Secretary to the
Government;
(iii) private sector
representatives representing different sectors and regions to be notified and
two co-opted members by special invitation with a three-year term extendable at
the discretion of the BOA; and
(iv) with approval of BOA,
co-opted members from concerned Federal and Provincial Governments for specific
cases.
(2) The
Approvals Committee shall exercise all such powers and responsibilities as are
delegated to it by the BOA, subject to such conditions as it may deem fit.
(3) The
BOA may delegate all or any of its remaining powers and responsibilities to the
Approvals Committee.
(4) A
decision taken by the Approvals Committee shall be submitted to BOA at its
meetings or by circulation for approval.
(5) The
BOA may, at any time, exercise any responsibility or any power which it has
delegated to the Approvals Committee.
8.
Functions of BOI.—(1) The BOI as the Secretariat of BOA and Approvals
Committee shall,---
(a) be responsible for the
co-ordination of all activities pertaining to SEZs, developers and zone
enterprises, including the preparation of all documentation for consideration
by the BOA and for ensuring the implementation of all decisions of the BOA;
(b) process all zone
applications submitted by SEZ Authorities for consideration of BOA;
(c) process all
applications for additional incentives in accordance with sub section (2) of
Section 34;
(d) review all development
agreements proposed by SEZ Authorities;
(e) be responsible for the
international and domestic promotion of investments into SEZs; and
(f) facilitate the
interaction of developers and zone enterprises with all other Federal,
Provincial and other Governmental authorities as well us with international
financial and developmental institutions.
(2) BOI
shall act as SEZ Authority for the
(3) BOI
shall support and facilitate the SEZ Authorities, if requested.
9.
Responsibilities of Provincial investment promotion authorities.—(1) A Provincial
investment promotion authority shall be responsible within its Province of
jurisdiction for the following, namely:---
(a) to assist in the
operation of the Provincial SEZ Authorities;
(b) to be the focal entity
responsible for the investment promotion;
(c) may assist the SEZ
Authorities and the developers in acquisition and other land related matters
including but not limited to necessary easement issues;
(d) to ensure
infrastructure development linkages between authorities within the SEZ; and
outside the SEZ;
(e) to facilitate the
developers and zone enterprises in dealing with all Provincial Governmental
authorities for smooth and systematic resolution of issues as and when they
arise; and
(f) to facilitate the
developers and enterprises in complying with environmental regimes and social
development.
10.
SEZ Authority.—(1) There shall be established for each Province, an
authority to be known as the SEZ Authority of that Province.
(2)
Every SEZ Authority shall be a body corporate by the name aforesaid, having
perpetual succession and a common seal, with a power, subject to the provisions
of this Act and any regulations, to acquire, hold and dispose of property, both
movable and immovable, and to contract and shall, by the said name, be entitled
to sue and to be sued.
(3) Each
SEZ Authority shall consist of,---
(a) a Chairperson, who
shall be the Chief Minister of the concerned Province or a person appointed by
the Chief Minister;
(b) a Vice-Chairperson,
who may be the Minister or the Advisor in charge of the investment department
and where no such department exists, any member of the Provincial cabinet
nominated by the Chief Minister of the concerned Province;
(c) a Chief Executive
Officer who may be appointed by the Chief Minister of the Province concerned
and may be the Secretary of the SEZ Authority;
(d) Secretary of the
Provincial investment department and where no such department exists, the
executive head of the Provincial investment promotion authority by whatever
name it exists;
(e) Secretaries of the
Provincial industries, finance, commerce, investment, works and services,
livestock, agriculture and planning and development departments;
(f) two members to be
appointed by the Chief Minister of the Province concerned and two other members
to be appointed by the BOA; and
(g) a member to be
appointed by the concerned Chamber of Commerce and Industry where the SEZ is
proposed. If there is no Chamber of Commerce then a member of the Chamber of
Commerce of that respective area to be appointed.
(4) Each
SEZ Authority may acquire land in its respective Province in accordance with
the Land Acquisition Act, 1894 (I of 1894).
(5) Each
SEZ Authority shall, subject to the approval of BOA, establish its rules and
procedures.
(6)
Where the Chairperson is not present, the Vice Chairperson shall chair the SEZ
Authority’s meeting.
11.
Requirements for all zone applications.—(1) Every zone
application submitted for approval to the BOA shall identify the type of SEZ
proposed and include,---
(a) a basic business
concept or model for the proposed SEZ to be submitted;
(b) parameters for zone
admission criteria; and
(c) a preliminary zone
development plan which shall,---
(i) define the geographic
boundaries of the proposed SEZ;
(ii) set out the basic
infrastructure development requirements, both inside and outside the proposed
SEZ, necessary for the proper functioning of the proposed SEZ;
(iii) set out the land
requirements of the proposed SEZ;
(iv) set out the manner in
which land required shall be procured, including specifically whether land will
need to be acquired under the Land Acquisition Act, 1894 (I of 1894); and
(v) set out what
criteria shall be applicable to the admission of zone enterprises into that
SEZ.
(2) The
zone application shall be submitted along with a proposed development agreement
under Section 14 and the criteria on which a developer shall be selected for
that SEZ.
12.
Approval of zone applications.—(1) All zone applications shall be submitted to the
BOA by the SEZ Authority of the Province in which the proposed SEZ shall be
located.
(2) The
BOA shall review every zone application submitted to it by the SEZ Authority to
ensure that the proposal is in conformity with the provisions of this Act, any
applicable regulations made under this Act and other applicable provisions of
law.
13.
Approval of development agreements.—(1) If a zone application is approved by
the BOA, the concerned SEZ Authority shall select a developer in accordance
with any applicable zone regulations except as provided in Section 4. Such zone
regulations shall require that envisaged development agreements be notified for
competitive bidding.
(2)
After negotiating a development agreement, the concerned SEZ Authority shall
submit a final agreement for approval to the BOA.
(3)
There shall be a provisional approval by the concerned SEZ Authority subject to
fulfillment of all such conditions necessary for final approval according to
laid down criteria.
(4) The
BOA may condition its approval of a development agreement on the fulfillment of
such conditions as it deems fit and according to the laid down criteria.
(5)
After final approval, the development agreement shall be signed jointly by the
Secretary of the BOA on behalf of the Federation of Pakistan and by the chief
executive officer of the concerned SEZ Authority on behalf of the respective
Provincial Government.
(6) If
the BOA does not approve a development agreement submitted to it, the concerned
SEZ Authority, that submitted the development agreement, may resubmit the
development agreement after either renegotiating the terms of the proposed
development agreement with the developer concerned or after reaching agreement
with a different developer selected in accordance with the applicable zone
regulations.
(7) In
case of any grievances, a developer may approach BOA directly or through the
SEZ Authority and BOA shall have the authority to consider, modify or set aside
any decision.
14.
Simultaneous approval of zone application and development agreement. The SEZ Authority may
simultaneously submit both a zone application and a development agreement lo
the BOA for provisional approval, provided that,---
(a) the developer in
question either owns all immovable property in the proposed SEZ or holds
leasehold rights; and
(b) no additional
incentives shall be granted by the SEZ Authority under sub-section (2) of
Section 34.
15.
Approval of existing zones.—(1) Any existing zone may apply to the SEZ Authority
in which it is located for submission of a zone application on its behalf.
(2)
Subject to applicable zone regulations, the SEZ Authority may choose to submit
a zone application with respect to an existing zone.
(3) The
BOA may approve a zone application with respect to an existing zone on such
terms and conditions as it deems appropriate, provided that all zone
enterprises in existing zones before the commencement of this Act exercises the
option of availing the benefits already enjoying or the benefits to be offered
by this Act.
(4) The
existing zones shall not avail the two benefits simultaneously.
(5)
Notwithstanding anything contained in sub-section (3) only the new entrants and
new industries that have never availed any such benefits in the past are
eligible for the benefits of SEZ under this Act.
16.
Zone approval criteria.—(1) The BOA shall issue general and particular zone
approval criteria for SBZ compatible with Pakistan’s obligations under its
multilateral and bilateral trade agreements which shall cover,---
(i) customs procedures for
imports into a SEZ and exports out of it; and
(ii) Pakistani certificates
of origin for exports issued by the respective Chamber of Commerce.
(2)
unless otherwise decided by the BOA, the following provisions shall form part
of the zone approval criteria, namely:---
(a) a SEZ shall have a
minimum size of at least fifty acres;
(b) not more than thirty
percent of the entire area of a SEZ shall be used for amenities (including
commercial areas), infrastructure and residential or labour colonies;
(c) public-owned land, if
used for SEZs shall be leased for a period of at least fifty years extendable
for further period as laid down by the competent forum;
(d) Developers must
undertake to comply with all environmental, labour and other applicable
legislation in force in
(e) zone enterprises must
begin construction of facilities within six months and assume regular business
operations within twenty-four months of their approval as zone enterprises and
after receipt of all required licences and permits;
(f) within six months the
developer is bound to take all necessary approvals to start construction
activities failing which that title will be withdrawn and agreement will be
terminated and land will be returned;
(g) title to land may be
registered in the name of zone enterprises only after they have performed
business operations in the SEZ concerned for at least six months;
(h) there shall be no real
estate activities in the zone as this would result in withdrawl of the title of
land and termination of the agreement; and
(i) articles of
association of the zone developer shall be approved by the Provincial SEZ
Authority in accordance with the regulatory framework prescribed by the BOA.
(3) In
case the SEZ Authority is satisfied with the justification put forward for
delay in performance of a responsibility by an enterprise in a SEZ, it may give
reasonable relaxation in time frame for performance of the particular
responsibility.
17.
Functions and powers of SEZ Authorities. The SEZ Authority shall
be responsible to,---
(a) prepare zone
applications in accordance with this Act and applicable zone regulations;
(b) select developers in
accordance with the provisions of this Act and the applicable zone regulations;
(c) negotiate development
agreements in accordance with the provisions of this Act and applicable zone
regulations;
(d) assist developers upon
award of a development in acquiring land and accessing public utilities in
accordance with the zone development plan;
(e) prepare zone
regulations for particular SEZ;
(f) co-ordinate with
Federal and Provincial authorities and ensure the building of infrastructure
outside the boundaries of SEZ;
(g) serve as liaisons and
facilitating agencies in accordance with the provisions of Section 29;
(h) facilitate the
availability of public utilities to zone enterprises in accordance with the
zone development plan;
(i) liaise with all
relevant Federal and Provincial authorities to ensure the security of SBZs;
(j) monitor the proper
implementation of streamlined administrative procedures in SEZs under Section
28;
(k) monitor the compliance
of developers with zone regulations as well as the compliance of developers
with their obligations under development agreements and suspend development
agreements, in case of violation of terms of development agreement by the
developer, pending final decision by BOA.
(l) monitor the compliance
of zone enterprises with their obligations under zone regulations;
(m) review of the
activities of the developers and zone enterprises regularly but not less than
once a year; and
(n) report bi-annually to
the BOA with respect to SEZs in the Provinces concerned.
18.
Suspension and removal of members of SEZ Authorities.—(1) The Chief Minister
may order removal of either the Chairperson, if so appointed by him, or any
member of the Provincial SEZ Authority.
(2) If
either the Chairperson or any member of a Provincial SEZ Authority is removed,
their replacement shall be appointed by the Chief Minister.
19.
Eligibility as developer. Unless otherwise decided by the BOA with respect to
a particular SEZ or type of SEZ, any entity shall be eligible as a developer
which is incorporated under the laws of
20.Responsibilities
of developers.—(1) With the exception of existing zones which have
been approved as SEZs, all SEZs shall be developed and operated by developers
within a specified time period as mentioned in the development agreement.
(2) All
developers shall,---
(i) implement their zone
development plans in accordance with the terms of their development agreement;
(ii) approve zone
enterprises and allot land to such enterprises in accordance with the
applicable zone admission criteria, zone regulations and the terms of the
development agreement; and
(iii) monitor and ensure the
compliance of zone enterprises with all applicable zone regulations.
(3)
Subject to default on the foregoing unless otherwise, the agreement shall stand
terminated.
21.
Development agreements.—(1) Each development agreement shall include,---
(a) all undertakings of
the developer regarding the development and operation of the SEZ concerned,
with the zone development plan or business concept of proposed SEZ model as an
integral part of the development agreements; and
(b) all authorities
conferred on the developer with respect to the SEZ concerned, including
specifically any provisions pertaining to the developer’s authority to,---
(i) admit enterprises into the SEZ in accordance with the
zone admission criteria and allot land to them in accordance with agreed
eligibility criteria and procedures;
(ii) act as a liaison and facilitating agency between the
relevant SEZ authority and zone enterprise;
(iii) all financial obligations of the developer, including
any obligation to make payment for the allocation of land and provision of
services by public authorities; and
(iv) clear provisions regarding the responsibility of
maintenance of infrastructure and utility services.
(2) A
development agreement shall also include,---
(i) rights, protections
and entitlements of the developer with respect to the SEZ concerned,
established or allowed under this Act or any other applicable law:
(ii) rights, protections
and entitlements of zone enterprises in the SEZ concerned established or
allowed under this Act or any other applicable law, together with a prescribed
procedure for the invocation of such rights, protections and entitlements by
the developers;
(iii) provision for the
settlement of disputes, including disputes on behalf of zone enterprises
through arbitrations; and
(iv) rights or titles and
other legal authority of the Provincial SEZ Authorities superior to it in terms
of the provisions of this Act.
22.
Sanctions against developers.—(1) The SEZ Authority may, if it is satisfied after
notice and a hearing that a developer is not acting in accordance with the
terms of its development agreement or is acting in violation of applicable zone
regulations or applicable legislation and has failed to rectify such violation
despite notice to this effect, suspend the development agreement of that
developer and move for cancellation of such agreement to the BOA or impose such
other penalty as may be provided under the applicable zone regulations or the
development agreement.
(2) Upon
receipt of an application from the Provincial SEZ Authority seeking
cancellation of a development agreement, the BOA shall give notice to the
developer concerned, asking it to show-cause why its development agreement
should not be cancelled or why such lesser penalty as may be provided under
applicable zone regulations should not be imposed.
(3)
Pending the final decision of the BOA on a proposal for cancellation of a
particular development agreement, the SEZ Authority may appoint an interim
administrator or take such interim measures as it is necessary to do so,---
(a) in the public
interest; or
(b) to prevent any of the
affairs of any SEZ being conducted in a manner detrimental to the interests of
stakeholders, zone enterprises or other persons whose interest are likely to be
affected or in a manner prejudicial to the interests of the SEZ.
(4)
Pending the final decision of the BOA, on a proposal for cancellation of a
particular development agreement, the SEZ Authority may, if it is satisfied
that it is necessary to secure the proper management of any zone, issue directions
to developers generally or to any developer in particular to carry out such
changes as are necessary to rectify the situation and the developers shall be
bound to comply with such directions.
(5)
Following a hearing in person, in which the developer may be represented by
counsel, the BOA may impose such penalty as is provided by the applicable zone
regulations or the development agreement, which may include cancellation of a
development agreement or cancellation of any benefits allowed to a developer,
provided that any cancellation of benefits to a developer shall be without
prejudice to the rights and privileges of zone enterprises.
(6) The
BOA may only cancel a development agreement if it finds that,---
(i) the developer has
violated its development agreement; and
(ii) that the developer has
failed to rectify such violation despite notice.
(7) In
addition to the rights of a developer to seek relief through arbitration, a
developer aggrieved by any decision of the BOA, BOI or by the imposition of
sanction by the SEZ Authority or by the suspension or cancellation of its
development agreement may appeal before the High Court of the relevant
Province.
23.
SEZ committees.—(1) The BOA shall charter an SEZ Committee for each
SEZ as per the applicable zone regulations.
(2) The
membership of a SEZ committee shall consist of representatives from the
developer, BOI, Provincial investment promotion agency, SEZ Authority and
concerned district Government. The developer shall appoint the chairperson of
the committee.
(3) Each
SEZ committee shall have responsibilities to administer and enforce SEZ
benefits and rules as well as provide facilitation between the SEZ, its
enterprises and the Government with responsibilities including to,---
(a) examine and approve
SEZ entry applications in accordance with zone admissions criteria;
(b) provide for
certification of zone enterprises;
(c) conduct oversight of
enterprises;
(d) enforce the building
code of the SEZ;
(e) coordinate between the
developer and Government entities and utility providers during construction;
(f) assist Zone
enterprises in obtaining approvals and registrations;
(g) serve as the point of
contact between the zone enterprise and utility providers; and
(h) facilitate between
enterprises and Government regulators and tax authorities.
(4) SEZ
Committees shall execute their responsibilities according to their standard
operating procedure in accordance with zone regulations.
24.
Admission of zone enterprises.—(1)
(2) Any
enterprise which is refused admission into a SEZ by a developer may appeal to
the SEZ Authority of the relevant Province, which shall have the power to
direct the relevant developer lo allow admission to the enterprise in question
in accordance with the applicable zone regulations and development agreement.
24.
Admission of zone enterprises.—(1)
(2) Any
enterprise which is refused admission into a SEZ by a developer may appeal to
the SEZ Authority of the relevant Province, which shall have the power to
direct the relevant developer lo allow admission to the enterprise in question
in accordance with the applicable zone regulations and development agreement.
25.
Sanctions against zone enterprises.—(1) The BOA shall issue zone regulations
which provide for sanctions against zone enterprises and the manner in which
such sanctions may be imposed.
(2) The
BOA may, with respect to particular SEZs, delegate its authority under
sub-section (1) to SEZ Authorities.
(3) The
SEZ Authority may if it is satisfied that it is necessary to do so to secure
the proper management of any zone enterprise, issue directions to zone
enterprises generally or to any zone enterprise in particular to carry out such
changes as are necessary to rectify the situation and the zone enterprise shall
be bound to comply with such directions.
(4) The
SEZ Authority may only expel a zone enterprise from a SEZ if it finds that,---
(i) the zone enterprise is
in violation of its obligations; and
(ii) the zone enterprise
has failed to rectify such violation despite notice.
(5) The
SEZ Authority may appoint an interim administrator or take such interim
measures for a period of not more than one month if it is satisfied that it is
necessary to do so,---
(i) in the public
interest; or
(ii) to prevent any of the
affairs of any SEZ being conducted in a manner, detrimental to the interests of
stakeholders, developers, zone enterprises or persons whose interests are
likely to be affected or in a manner prejudicial to the interests of the SEZ.
(6) The
action taken by the SEZ Authority in accordance with sub-section (5) shall be
referred to BOA within seven days for ratification by BOA, The BOA shall decide
the matter and issue the guidelines and instructions about operations of zone
enterprise within fifteen days.
26.
Land regime.—(1) The Provincial Government of each Province or any
concerned authority shall nominate, for each SEZ, a sub-registrar who shall be
the exclusive authority with which all documents relating to that SEZ shall be
liable to be registered under this Act, zone regulations and any other
applicable law.
(2)
Notwithstanding any other law in force, a developer may not sell, sub-lease or
otherwise transfer any rights with respect to any immovable property within a
SEZ except through a duly registered instrument.
27.
Public utilities and transportation links.—(1) Unless provided
otherwise in a particular development agreement, it shall be the responsibility
of,---
(i) the Federal and
Provincial Governments to ensure the provision of gas, electricity and other
utilities at the designated zero point of each SEZ;
(ii) the Federal and
Provincial Governments to ensure adequate road access to the SEZ; and
(iii) each developer to
ensure, within a particular SEZ, the supply of gas and electricity to all zone
enterprises as well as the availability of all other public utilities required
for such areas as envisaged in the development agreement.
(2)
Unless provided otherwise in a particular development agreement and
notwithstanding anything to the contrary contained in the Regulation of
Generation. Transmission and Distribution of Electric Power Act, 1997 (XL of
1997), each developer shall have the right to set up a captive electric power
generation plant or install a hydel power generator of sufficient size to cater
to the expected demand for electricity within a particular SEZ and to sell and
distribute only the excess electricity so generated within and outside that
particular SEZ in accordance with the applicable regulations.
28.
Applicable operating administrative procedures.—(1) The BOA, the BOI
and the SEZ Authorities shall promote the adoption of simplified administrative
procedures for SEZs and zone enterprises with the relevant Federal and
Provincial authorities and agencies. Such procedures shall in particular
facilitate the,---
(i) issuance of licences,
permits and other approvals to zone enterprises required for their business
activities;
(ii) satisfaction of
customs and other export or import requirements by zone enterprises;
(iii) fulfillment of tax
obligations by zone enterprises; and
(iv) authorization of
electronic communications and Modes of e-governance.]
(2)
Procedures under sub-section (1) shall endeavour to,---
(i) substitute
notifications and registrations for licence, permit and other approval
requirements; and
(ii) authorize approvals on
a no objection basis within a specified period.
29.
Assistance by the BOI and SEZ Authorities.—(1) The BOI shall act
as a liaison and facilitating agency between,---
(i) all Federal
Ministries, authorities and agencies; and
(ii) SEZ Authorities,
developers and zone enterprises.
(2) The BOI shall act as a
one stop shop in its responsibilities under sub-section (1).
(3) The SEZ Authorities
shall act as a liaison and facilitating agency between—
(i) all departments,
authorities and agencies of the relevant Province, including all local
Government and municipal authorities and agencies; and
(ii) developers and zone
enterprises.
(4) To
the extent practicable, SEZ Authorities in the Provinces or in any other area
shall seek to enter into administrative arrangements with tax, customs, labour
and other authorities under which SEZ authorities may exercise certain
administrative functions on behalf of such authorities, which arrangements may
include a secondment of officials with decision-making power from such
authorities to SEZ Authorities.
(5) All
Federal and Provincial Ministries and departments, authorities and other
agencies shall fully co-operate with the BOI and SEZ Authorities in
facilitating the activities of developers and zone enterprises and carry out
the requisite functions within the time frame stipulated under the regulatory
framework prescribed by BOA for the implementation of this Act.
30.
Labour laws. All labour and employment laws of
31.
Employment of key persons. Notwithstanding anything contained in any other law,
the BOA may issue special rules for the employment by zone enterprises of key
managerial and technical persons who are not citizens of Pakistan, relating to
the terms and conditions of their contracts as well as with respect to the
issuance of visas, temporary residence permits and temporary work permits for
such key persons and their dependents provided further that such rules shall
only be issued after consultation with,---
(i) the Ministry of
Interior;
(ii) the Ministry of
Foreign Affairs; and
(iii) such other Ministry or
Department as the BOA may direct.
32.
Security.—(1) Each Province or any concerned authority shall
be responsible for providing security for the protection of SEZs.
(2)
Pending the creation of a special police force, each Province or any concerned
authority shall designate special police units responsible for the protection
of SEZs within that area.
33.
Extra territoriality of SEZs.—(1) Subject to the concurrence of the Federal Board of
Revenue, every extra-territorial zone shall from the dale of its approval by
the BOA onwards, be deemed to be a “customs-port” under Section 9 of the
Customs Act, 1969 (IV of 1969), upon notification by the Federal Board of
Revenue.
(2) Any
transport of goods and provision of services from the customs
(3) Any
transport of goods from an extra-territorial zone into the customs
(4)
Notwithstanding any other provision of this Act, zone enterprises in
extra-territorial zones shall be eligible for,---
(i) Pakistani certificates
of origin; and
(ii) any advantages under
trade or similar agreements of
(5) The
BOA, in agreement with the Federal Board of Revenue, shall adopt simplified
procedures for the implementation of this section.
34.
Incentives for SEZs.—(1) On execution of development agreements, the
developer of the particular SEZ as well as all zone enterprises in that SEZ
shall be entitled to benefits set out in Sections 36 and 37 respectively.
(2) With
the objective of promoting hi-tech industries or particular regions, the BOA
may grant additional benefits to a particular category of SEZs, zone
enterprise, regions or sectors provided that,---
(i) such additional
benefits may only be granted if the BOA finds them to be justified on the basis
of an economic impact assessment;
(ii) such additional
benefits, if granted conditionally, may be liable to be forfeited with
retroactive effect if it is finally determined that a developer or zone
enterprise has failed to comply with the conditions prescribed for the
additional benefits in question; and
(iii) the BOA shall make the
economic impact assessment of a SEZ within five years from the date the
agreement is signed and within the first year of the operation of an
enterprise.
(3) Any
additional benefits granted by the BOA,---
(i) shall be deemed to be
included in the relevant development agreement; and
(ii) shall become effective
on such conditions as the BOA may stipulate.
(4)
Nothing in this Act shall be construed to limit the authority of any Federal,
Provincial or Local Government authority to grant such additional benefits to
developers and zone enterprises as are within the scope of their respective
statutory powers.
35.
Protection of benefits.—(1) All incentives under this Act shall be additional
to all incentives, benefits and protections which may be applicable to
developers and zone enterprises under generally applicable legislation and
international agreements of Pakistan.
(2)
These benefits shall not be withdrawn prematurely and any change therein shall
be to the advantage of the developer of the SEZ or the enterprise.
36.
Benefits for developers. Unless otherwise provided in a development agreement,
developers shall be entitled to the following benefits, namely:---
(a) one time exemption
from all customs duties and taxes for all capital goods imported into Pakistan
for the development, operation and Maintenance of a SEZ, entity, subject to
verification and approval from the Board of Investment; and
(b) Exemption from all
taxes on income accruable in relation to the development and operation of the
SEZ for a period of ten years, starting from the date of signing of the
development agreement.
37.
Benefits for zone enterprises. All zone enterprises shall be entitled to
the following benefits, namely:---
(a) exemption from custom
duties and taxes on imports of capital goods into the SEZ for installation
therein; and
(b) exemption from all
taxes on income for a period of ten years starting from the date the developer
certifies that the zone enterprise has commenced commercial operations with the
relevant SEZ.
38.
Jurisdiction of Court. Without prejudice to the provisions of Section 39,---
(a) the High Court of the
Province in which a SEZ is located shall have exclusive original civil
jurisdiction with respect to all disputes between the developer of that SEZ and
any Governmental authority or agency, to the extent that such dispute arises out
of, or relates to, a development agreement; and
(b) the
district vourt of the district within whose boundaries a SEZ is located shall
have exclusive original civil jurisdiction with respect to,---
(i) all
disputes between the developer of that SEZ and a zone enterprise located within
that SEZ; and
(ii) all
disputes between two or more zone enterprises located within that same SEZ.
39. Alternative dispute resolution
procedures.—(1) Development
agreements may provide for the resolution of disputes through arbitration
between developers and any Federal, Provincial or Local Governmental authority
or agency arising out of, or relating to, such development agreement.
(2) Development agreements may
authorize developers to pursue and defend the rights of zone enterprises within
a particular special economic zone through arbitration.
(3) Zone regulations may provide for
the resolution of disputes between zone enterprises in the same SEZ or between
zone enterprises and developers through arbitration and mediation in accordance
with procedures approved by the BOA for this purpose.
40. Rules and regulations for
implementation of this Act. The BOI,
in consultation with SEZ Authorities and with approval of the BOA, may make
rules and regulations as deemed necessary for implementation and to carry out
purposes of this Act.
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