FBR Intelligence pulls the cover from missing containers scam
June 22, 2013
KARACHI: In a surprising move, the Intelligence Directorate of FBR has opposed its own headquarters, the FBR, and supported the Supreme Court and Federal Tax Ombudsman Dr Shoaib Suddle’s report in the missing containers case. The FBR has been suffering from confusion and shifting positions on the issue of these missing containers. The official position finally taken by FBR for over two years now was of denial, that insignificant numbers of containers were missing and that all Customs employees were free of blame.
The recent report of Directorate of Customs Intelligence, Karachi office of FBR, however, pulls the rug from under the “all is well” position of FBR. Under instructions from the previous chairman, Ali Arshad Hakeem, to determine undiluted facts in the issue, the Customs intelligence took a novel approach to the whole issue. Instead of focusing on the movement of containers, they focused on the movement of trucks that were carrying the containers. They found that the trucks, supposedly carrying the containers to Afghanistan, never left Karachi.
The trucks were simply taking the containers out of the ports and dropping these at various godowns in Karachi or other parts of country, and that the Collectorates at Peshawar and Quetta were simply generating fictitious record to provide legal cover to the crime.
Referring to the plying of trucks of Afghan Transit Trade within Karachi, the report says: “We are so far in the initial stages of our investigation, but we already have about 3000 such trips for 2010 alone. As we continue our investigation in greater detail and into the years 2008 and 2009 other pilfered consignments will also be identified”.
In 2010, ISAF container scam, which in fact is not an ISAF issue, but an issue of pilferage of commercial Afghan Transit Trade (ATT) cargo within country, surfaced in the media of Pakistan.
The Chief Justice of Pakistan took suo motu notice of the scandal and nominated Federal Tax Ombudsman (FTO) Dr Shoaib Suddle to investigate the matter. Dr Suddle and his team probed the matter for over 6 months and came up with eye-opening findings. Dr Suddle mentioned in his report that “the investigation conducted by the Office of Federal Tax Ombudsman establishes that at least 7,922 transit containers were pilfered within Pakistan over the past almost four years. This conservative estimate is based on containers that did the impossible task of ‘completing the Karachi-Afghanistan-Karachi round trip’ in less than eight days. This may however be only a tip of the iceberg”.
The report set the alarm bell ringing in the Federal Board of Revenue, which started its own investigation under the supervision of the then Member IMS Hafiz Muhammad Anees. Many sections of society were of the view that FBR conducting an inquiry involving itself is tantamount to acting as a judge in its own cause.
The team led by Hafiz Mohammad Anees produced several reports to the Supreme Court. According to these reports 28,802 containers of commercial cargo or Afghan Transit Trade (ATT) never left Pakistan and were consumed within the country without paying duties and taxes. As many as 3,742 containers of ISAF/NATO stationed in Afghanistan and more than 6,000 containers of American troops never crossed the border.
According to Mr Anees national exchequer bore the brunt of Rs67 billion due to pilferage of more than 38,000 containers.
Refuting the findings of Anees-led probe committee, the customs intelligence reports says: “Hafiz Anees presented a wildly exaggerated and incorrect report before the Honorable Supreme Court of Pakistan, thereby confusing the issue and diverting focus away from himself, paving way for an endless investigation that could never be proved”. Interestingly, after the completion of Hafiz Mohammad Anees team’s probe, chairman Federal Board of Revenue (FBR), Mumtaz Rizvi submitted the report to the Supreme Court stating that except a few the FBR had reconciled all other pilfered containers. He took the position that all of them have reached Afghanistan. Moreover, the officers who were suspended were reinstated.
Giving the rationale of the approach of investigation the report says “it is possible for the unscrupulous elements to offload their container within Pakistan, retain custody of the container for a few days before returning it to the port; it is not possible for them to retain the truck, since the truck does not belong to them. The truck is inevitably released after offloading of the container. The moment a truck is released, it returns to its normal business of picking and dropping other containers. Our logic is to track the movement of the trucks and to confirm whether the same truck which picked up a container in transit to Afghanistan, subsequently picked up or dropped another container at the port during the same time that it is supposedly on an Afghan Transit trip”.
The finding of the report is that “the same truck which picked up an Afghan Transit container, has subsequently picked another container during the same time as it is supposed to be in the Afghan transit trip”. The customs intelligence has detected 3000 such trips for 2010 alone.
During the probe, it was observed that the same truck that is picking up or delivering cargo in Karachi, has been de-sealed at a border Customs station, with the same container as it picked up for Afghanistan, 19 days after its supposed departure from Karachi. Either the de-sealing registers of the Collectorates are correct, in which case we are confronted with the question of the whereabouts of the container for 19 days after leaving Karachi, which in any case erodes the department’s existing stance that the Afghan transit trip takes less than 6 days; or the customs registers are fabricated in which case we would have to determine the intent, interest, motive and involvement of the customs officials at Quetta and Peshawar. In either case pilferage of the consignment within Pakistan is confirmed. This aspect erodes the credibility of the customs de-sealing, cross border record and receipt of cargo by Afghan authorities”.
The custom Intelligence probe focused on the movement of trucks carrying the containers. The reason for this approach is that when trucks pick up or drop cargo, complete evidence of the transaction is available, with receipts, names of companies, truck drivers etc. The probe team acquired the pick-up & drop record of all trucks that visited the terminals at Karachi during the years 2008, 2009 and 2010. After identifying the trucks the next step was to identify the drivers and record their statements, which led to discovery of the godowns where the containers were offloaded. The record of the godowns was taken into custody and the statement of the godown owners led to uncovering the identity of the basic beneficiaries of the crime.
The Islamabad High Court ordered removal former Chairman of FBR, Ali Arshad Hakeem because his appointment was against the law. His removal is a sigh of relief for the corrupt elements. But, the new prosecutable evidence now available with the customs intelligence is rocking the boat of the high and mighty in FBR.
The intelligence officials are of the view that investigation into the years 2008 and 2009 will definitely lead to identifying more pilferages. Officers involved in the investigation of containers case revealed that custom officials from grade-12 to grade-22 are thickly involved in fracturing the economy of the country. “How can they let this transparent investigation continue when they are part of this whole saga” intelligence officials argued? But, they [intelligence officials] are optimistic and confident saying that “law will prevail because Justice Iftikhar Mohammad Chaudhry is heading the bench that is hearing the containers case”. The interim report of the directorate of Customs Intelligence has been presented to the apex court, which contains irrefutable evidence.
The recent report of Directorate of Customs Intelligence, Karachi office of FBR, however, pulls the rug from under the “all is well” position of FBR. Under instructions from the previous chairman, Ali Arshad Hakeem, to determine undiluted facts in the issue, the Customs intelligence took a novel approach to the whole issue. Instead of focusing on the movement of containers, they focused on the movement of trucks that were carrying the containers. They found that the trucks, supposedly carrying the containers to Afghanistan, never left Karachi.
The trucks were simply taking the containers out of the ports and dropping these at various godowns in Karachi or other parts of country, and that the Collectorates at Peshawar and Quetta were simply generating fictitious record to provide legal cover to the crime.
Referring to the plying of trucks of Afghan Transit Trade within Karachi, the report says: “We are so far in the initial stages of our investigation, but we already have about 3000 such trips for 2010 alone. As we continue our investigation in greater detail and into the years 2008 and 2009 other pilfered consignments will also be identified”.
In 2010, ISAF container scam, which in fact is not an ISAF issue, but an issue of pilferage of commercial Afghan Transit Trade (ATT) cargo within country, surfaced in the media of Pakistan.
The Chief Justice of Pakistan took suo motu notice of the scandal and nominated Federal Tax Ombudsman (FTO) Dr Shoaib Suddle to investigate the matter. Dr Suddle and his team probed the matter for over 6 months and came up with eye-opening findings. Dr Suddle mentioned in his report that “the investigation conducted by the Office of Federal Tax Ombudsman establishes that at least 7,922 transit containers were pilfered within Pakistan over the past almost four years. This conservative estimate is based on containers that did the impossible task of ‘completing the Karachi-Afghanistan-Karachi round trip’ in less than eight days. This may however be only a tip of the iceberg”.
The report set the alarm bell ringing in the Federal Board of Revenue, which started its own investigation under the supervision of the then Member IMS Hafiz Muhammad Anees. Many sections of society were of the view that FBR conducting an inquiry involving itself is tantamount to acting as a judge in its own cause.
The team led by Hafiz Mohammad Anees produced several reports to the Supreme Court. According to these reports 28,802 containers of commercial cargo or Afghan Transit Trade (ATT) never left Pakistan and were consumed within the country without paying duties and taxes. As many as 3,742 containers of ISAF/NATO stationed in Afghanistan and more than 6,000 containers of American troops never crossed the border.
According to Mr Anees national exchequer bore the brunt of Rs67 billion due to pilferage of more than 38,000 containers.
Refuting the findings of Anees-led probe committee, the customs intelligence reports says: “Hafiz Anees presented a wildly exaggerated and incorrect report before the Honorable Supreme Court of Pakistan, thereby confusing the issue and diverting focus away from himself, paving way for an endless investigation that could never be proved”. Interestingly, after the completion of Hafiz Mohammad Anees team’s probe, chairman Federal Board of Revenue (FBR), Mumtaz Rizvi submitted the report to the Supreme Court stating that except a few the FBR had reconciled all other pilfered containers. He took the position that all of them have reached Afghanistan. Moreover, the officers who were suspended were reinstated.
Giving the rationale of the approach of investigation the report says “it is possible for the unscrupulous elements to offload their container within Pakistan, retain custody of the container for a few days before returning it to the port; it is not possible for them to retain the truck, since the truck does not belong to them. The truck is inevitably released after offloading of the container. The moment a truck is released, it returns to its normal business of picking and dropping other containers. Our logic is to track the movement of the trucks and to confirm whether the same truck which picked up a container in transit to Afghanistan, subsequently picked up or dropped another container at the port during the same time that it is supposedly on an Afghan Transit trip”.
The finding of the report is that “the same truck which picked up an Afghan Transit container, has subsequently picked another container during the same time as it is supposed to be in the Afghan transit trip”. The customs intelligence has detected 3000 such trips for 2010 alone.
During the probe, it was observed that the same truck that is picking up or delivering cargo in Karachi, has been de-sealed at a border Customs station, with the same container as it picked up for Afghanistan, 19 days after its supposed departure from Karachi. Either the de-sealing registers of the Collectorates are correct, in which case we are confronted with the question of the whereabouts of the container for 19 days after leaving Karachi, which in any case erodes the department’s existing stance that the Afghan transit trip takes less than 6 days; or the customs registers are fabricated in which case we would have to determine the intent, interest, motive and involvement of the customs officials at Quetta and Peshawar. In either case pilferage of the consignment within Pakistan is confirmed. This aspect erodes the credibility of the customs de-sealing, cross border record and receipt of cargo by Afghan authorities”.
The custom Intelligence probe focused on the movement of trucks carrying the containers. The reason for this approach is that when trucks pick up or drop cargo, complete evidence of the transaction is available, with receipts, names of companies, truck drivers etc. The probe team acquired the pick-up & drop record of all trucks that visited the terminals at Karachi during the years 2008, 2009 and 2010. After identifying the trucks the next step was to identify the drivers and record their statements, which led to discovery of the godowns where the containers were offloaded. The record of the godowns was taken into custody and the statement of the godown owners led to uncovering the identity of the basic beneficiaries of the crime.
The Islamabad High Court ordered removal former Chairman of FBR, Ali Arshad Hakeem because his appointment was against the law. His removal is a sigh of relief for the corrupt elements. But, the new prosecutable evidence now available with the customs intelligence is rocking the boat of the high and mighty in FBR.
The intelligence officials are of the view that investigation into the years 2008 and 2009 will definitely lead to identifying more pilferages. Officers involved in the investigation of containers case revealed that custom officials from grade-12 to grade-22 are thickly involved in fracturing the economy of the country. “How can they let this transparent investigation continue when they are part of this whole saga” intelligence officials argued? But, they [intelligence officials] are optimistic and confident saying that “law will prevail because Justice Iftikhar Mohammad Chaudhry is heading the bench that is hearing the containers case”. The interim report of the directorate of Customs Intelligence has been presented to the apex court, which contains irrefutable evidence.
