Pakistan approves tax exemption on payment to Chilean firm in Reko Diq case

The Pakistan government has approved the tax exemption on the payment of USD 900 million to Chile's firm, Antofagasta, under an exit deed for the settlement of the Reko Diq dispute.

Antofagasta is one of the companies that were engaged in the settlement of the Reko Diq dispute, The Express Tribune reported

In a recent meeting that took place on March 25, the Economic Coordination Committee (ECC) of the cabinet considered a summary regarding the Reko Diq settlement deal titled "Settlement of the Reko Diq Dispute (Tethyan Copper Company vs the Islamic Republic of Pakistan".

The ECC also approved the proposals as contained in para-11 of the summary along with the grant of exemption from taxes as per the new exit deed subject to the approval of the federal cabinet.

On another hand, the petroleum division of Pakistan sought the approval of the ECC for the new development of the Antofagasta exit deed and the changes suggested by the Attorney General's office along with the decision on tax exemption suggested by the Federal Board of Revenue (FBR), According to The Express Tribune.

Pakistan's law and Justice division was informed about the Antofagasta exit deed and asked Petroleum Division to look for the comments of the Attorney General on clauses 2.6 and 12.1 of the subject deed.

The Pakistan government was penalised with a fine of almost USD 6 billion by a global arbitration body in favour of the Tethyan Copper Company (TCC).

The TCC was a joint venture between Antofagasta and Canada's Barrick Gold, where TCC was blocked by the Pakistani Supreme Court in 2013 from developing the Reko Diq, one of the world's biggest untapped deposits of copper and gold.

After Supreme Court ordered the block on TCC, the International Centre for Settlement of Investment Disputes ordered the Pakistan government to pay USD5.8 billion in damages after the joint venture took it to court.

Under the terms of the settlement, the government would pay Antofagasta a sum of USD900 million, the amount in lieu of the latter's share of the award, USD3.25 billion, according to The Express Tribune.

( With inputs from ANI )

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