Islamabad
Islamabad has made a decision to sign a deal with Moscow to settle a four-decade-old exporters’ claim pending since the disintegration of the Soviet Union.
The claim is 39-year-old and will pave the way for Russia to invest over $8 billion in Pakistan.
According to a report in Express Tribune, Pakistan has authorised its ambassador to Russia to sign the deal, under which Pakistan would return $93.5 million to Russia within three months of the signing. The deal also entails clearance of exporters’ claims of about $23.8 million as per settlement agreements reached in October 2016 and December 2017.
The efforts to sign the deal were initiated by the government of Pakistan Muslim League-Nawaz.
According to Russian law, the country cannot invest in countries with which it has disputes. Moscow has told Islamabad that it would invest $8 billion in Pakistan’s energy sector and the Pakistan Steels Mills.
In the 1980s, the Union of Soviet Socialist Republics (USSR) and its companies were engaged in the practice of buying textile and other material from Pakistani companies. The former USSR opened two bank accounts in the National Bank of Pakistan, with the funds in these accounts being deposited by the Economic Affairs Division through the State Bank of Pakistan.
When the USSR disintegrated, some exporters remained unpaid. Moreover, Pakistani companies made claims for unshipped goods as they had paid sea freight charges.
As the dispute continued, Pakistani companies got stay orders from the Sindh High Court, which restrained NBP from transferring funds of the Russian banks, which amounted to about $104.93 million.
During the 3rd Pakistan-Russia Inter-Governmental Commission in 2015, both sides started an agreement between the two governments, whereby Islamabad would be returning $93.5 million to Moscow.
However, the settlement failed to be implemented as Pakistani companies did not withdraw their cases from court.
Islamabad has made a decision to sign a deal with Moscow to settle a four-decade-old exporters’ claim pending since the disintegration of the Soviet Union.
The claim is 39-year-old and will pave the way for Russia to invest over $8 billion in Pakistan.
According to a report in Express Tribune, Pakistan has authorised its ambassador to Russia to sign the deal, under which Pakistan would return $93.5 million to Russia within three months of the signing. The deal also entails clearance of exporters’ claims of about $23.8 million as per settlement agreements reached in October 2016 and December 2017.
The efforts to sign the deal were initiated by the government of Pakistan Muslim League-Nawaz.
According to Russian law, the country cannot invest in countries with which it has disputes. Moscow has told Islamabad that it would invest $8 billion in Pakistan’s energy sector and the Pakistan Steels Mills.
In the 1980s, the Union of Soviet Socialist Republics (USSR) and its companies were engaged in the practice of buying textile and other material from Pakistani companies. The former USSR opened two bank accounts in the National Bank of Pakistan, with the funds in these accounts being deposited by the Economic Affairs Division through the State Bank of Pakistan.
When the USSR disintegrated, some exporters remained unpaid. Moreover, Pakistani companies made claims for unshipped goods as they had paid sea freight charges.
As the dispute continued, Pakistani companies got stay orders from the Sindh High Court, which restrained NBP from transferring funds of the Russian banks, which amounted to about $104.93 million.
During the 3rd Pakistan-Russia Inter-Governmental Commission in 2015, both sides started an agreement between the two governments, whereby Islamabad would be returning $93.5 million to Moscow.
However, the settlement failed to be implemented as Pakistani companies did not withdraw their cases from court.