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Trade Facilitation Network

Policy Brief- Non-Implementation of SRO 691: Institutional Barrier to Transit Trade

Issued by: The Trade Facilitation Network

Date: May 2026

1. Executive Summary

The Government of Pakistan, through the Ministry of Commerce, has issued SRO 691(I)/2026 – Transit of Goods through Territory of Pakistan Order 2026, enabling transit of third-country goods to Iran via Pakistan.

The order:

• Is legally in force
• Defines procedures and corridors
• Is intended for immediate implementation

However, cargo destined for Iran arriving at Pakistani ports and borders is not being allowed to transit through Pakistan.

This reflects a clear institutional implementation failure, primarily at the level of enforcement by Federal Board of Revenue.

2. Policy Position

TFN asserts:

➢ SRO 691 is not ineffective. It is not being implemented.

There is:

• No policy ambiguity
• No legal gap
• No shortage of licensed operators

➢ The barrier is institutional, not structural.

3. Established Legal and Operational Framework

3.1 Valid Legal Instrument

SRO 691:

• Provides a complete legal basis for transit
• Applies to third-country cargo destined for Iran
• Is effective immediately upon issuance

3.2 Existing Operational Mechanisms

Transit is already supported through:

Customs bonded carriers
TIR operators
Ministry-approved transporters

Additionally:

• Procedures fall under existing Customs laws and systems
• No new operational regime is required

• 👉 Conclusion:

The system is already designed to operate.

4. The Actual Problem: Institutional Non-Executioncution

Despite:

• Legal notification
• Available operators
• Established procedures

Transit cargo is being stopped from moving across Pakistani territory toward Iran.

This indicates:

A. Breakdown Between Policy and Enforcement

  1. Ministry of Commerce has enabled transit
  2. Implementation authority lies with Customs (FBR)
  3. Execution is not aligned with policy intent

B. Administrative Resistance

  1. Field-level restrictions overriding federal policy
  2. Excessive controls beyond notified framework
  3. Absence of clear execution directives

4. Institutional Fragmentation

C. Policy issued by one ministry

D. Implementation controlled by another authority

E. No unified command or accountability

F. 👉 Result:

A legally valid corridor remains blocked in practice.

5. Implications

Failure to implement SRO 691 has immediate consequences:

• Loss of transit trade credibility
• Diversion of cargo to alternative regional routes
• Increased informal trade flows
• Erosion of investor and operator confidence

At a strategic level, Pakistan risks losing its position to regional competitors such as:

• Iran
• China
• Afghanistan

6. Key Policy Concern

A fundamental governance issue emerges:

When a federal policy is notified but not implemented by the executing authority, the challenge is no longer regulatory—it is institutional.

7. Required Action (Immediate)

TFN recommends the following non-negotiable steps:

7.1 Enforcement Alignment Directive

The Federal Government must issue a clear directive ensuring that:

• Federal Board of Revenue fully implements SRO 691
• Field formations comply without deviation

7.2 Removal of Operational Restrictions

• Transit cargo to Iran must be allowed to move without administrative obstruction
• No additional conditions beyond the SRO framework should be imposed

7.3 Institutional Accountability

• Assign clear responsibility for implementation
• Establish monitoring and reporting mechanism

7.4 Immediate Activation of Transit Flows

• Cargo already at ports/borders must be cleared for onward transit
• Licensed operators must be allowed to operate

8. Conclusion

Pakistan has already:

• Issued the policy
• Defined the corridors
• Enabled the legal framework

• Yet: 👉 Transit is not happening

➢ This is not a capacity issue.

➢ This is not a policy issue.

➢ This is an implementation failure at the institutional level.

9. TFN Position

The Trade Facilitation Network states:

➢ A corridor that is notified but not operational is not a policy success—it is an institutional failure

10. Final Call

The Government of Pakistan must ensure:

➢ Immediate enforcement of SRO 691
➢ Alignment between policy and execution
➢ Restoration of credibility in transit trade

Prepared by:

The Trade Facilitation Network (TFN)

Policy & Corridor Development Desk

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