Pakistan: Govt implements strict ban on contaminated compressor scrap imports

In a decisive move to protect the environment, Pakistan has imposed a complete ban on the import of compressor scrap containing hazardous materials. Announced by senior Customs officials, this significant measure underscores the country's commitment to preventing harmful substances from entering its borders.

The new regulations aim to align Pakistan's import practices with international standards, particularly those set by the Basel Convention. This ban highlights Pakistan's dedication to environmental stewardship and marks a critical step toward adhering to global norms.

Pakistan's new scrap regulations

The regulations specifically address the issue of compressor scrap, which often arrives without proper dismantling and is contaminated with hazardous substances such as oil and gas. To support this decision, the revised Customs tariff now includes HS Code 8549, in accordance with the World Customs Organisation's Harmonised System 2022.

These measures were initially introduced through the Finance Bill 2023.

In April 2024, the Federal Board of Revenue (FBR) formalised the ban with the issuance of SRO 628, officially prohibiting the import of these hazardous materials.

Statutory Regulatory Order (SRO) 628. It is a type of notification issued by the FBR or other regulatory bodies in Pakistan to formalise and enforce specific regulations, rules, or bans.

Senior Customs officials have emphasised that these new rules aim to close loopholes that some importers have exploited to bring in hazardous compressor scrap, which poses significant environmental risks.

Pakistan's ferrous scrap import volumes

• In the seven months of calendar year 2024 (7M CY'24), Pakistan imported 1.59 million tonnes (mnt) of ferrous scrap, a substantial 56% increase from 1.o2 mnt in the corresponding period of last year (CPLY).
  
  
• The UK and UAE were the major suppliers for Pakistan.
  
  
• In July alone, Pakistan's ferrous scrap imports touched 210,786 t, down 3% m-o-m from 216,809 t in June, 2024 compared to July, 2023 (181,178 t). However, imports surged 16% y-o-y.
  
  

Outlook

Importers are expected to support this move to enhance the country's import policy in line with international standards and to enforce these regulations rigorously. Strengthening both the legal framework and its implementation will be crucial for protecting the country's natural resources and public health from hazardous materials.