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Regarding the payment issue in Pakistan
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TRACKING NO. 20251223 / GLOBAL Zhongshen Trade · 23+ Years of Expert Trade Agency
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We have an old Pakistani client who recently placed an order, but said that due to foreign exchange shortages at their bank, they can only pay a 30% down payment and the balance needs to be paid 90 days after delivery. I've heard that Pakistan is on the FATF grey list, which poses significant payment risks. I'd like to ask if this payment method is acceptable? What are the potential risks involved? How can we arrange logistics and contracts to ensure greater security?
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
Pakistan is still on the FATF grey list，and the State Bank of Pakistan imposes very strict foreign exchange controls. The 30% down payment + 90-day payment term you mentioned carries extremely high risks. We recommend the following measures。
1) Must verify the client’s payment capacity through official channels and require them to provide an SBP foreign exchange quota certificate。
2) Include a clause in the contract explicitly stipulating the legality of the payment source，adding a provision that "if the buyer fails to make payments due to foreign exchange controls，they will bear breach of contract liability"。
3) Do not accept payments from any third-party personal accounts，as this easily triggers money laundering reviews。
4) Consider switching to payment methods such as immediate letters of credit or payment guarantees issued by Pakistani banks。
In the cases we’ve handled，letters of credit opened through formal banking channels，even with extended payment terms，pose far lower risks than TT payments.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
Under this payment structure, logistics arrangements must adhere to the following principles:
1) Strictly use CIF or CFR terms, and ensure that the bill of lading is issued under the "to order" heading with the consignee field left blank to maintain ownership of the goods.
2) Clearly state in the booking process that "the release of the documents will be conditional upon full payment," and sign a written agreement with the freight forwarder.
3) If the final payment is not received after the goods arrive at the port, immediately apply for warehouse transfer or return shipment. Pakistani port storage fees are relatively low, and the cost of delayed storage can be controlled.
4) It is recommended to ship goods in batches, with each batch’s value within the cost range covered by the down payment. In practice, many suppliers adopt a rolling model of "clearing the payment for one batch before shipping the next," completely avoiding the risk of unpaid final payments.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
When discussing payment terms with Pakistani clients, you need to maintain a firm stance while speaking politely:
1) First, express understanding for their foreign exchange difficulties, but insist on an equivalent position: "We also face funding pressures." Suggest a phased payment plan: "30% down payment + 40% upon receipt of the bill of lading copy + 30% paid before the goods arrive at the port."
2) If the client has a good credit record, introduce China Export & Credit Insurance Corporation (Sinosure) or a third-party escrow account. Split the fees equally.
3) Key negotiation points: Emphasize "We’re open to long-term cooperation, but a sustainable payment model is essential." Shift the focus from "Will you trust us?" to "How can we solve this together?"
4) Finally, propose alternative solutions: Accept partial barter trade or have them pay through subsidiaries in third-party locations like Dubai. The key is to make the client feel you’re helping them find solutions rather than simply pressuring them.