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December 25, 2018

Customs bars direct clearance of 500 imports


December 25, 2018

KARACHI: Pakistan Customs has made it mandatory for importers to file goods declarations for clearance of some shipments through customs agents, in a major move to reduce trade deficit and curb money laundering in a cross-border trade, officials said on Monday.

Officials said the customs authorities barred importers from self-filing of goods declarations (GDs) for clearance of more than 500 products falling under 15 tariff lines. “The importers have been asked to file declaration through customs agents,” a customs official said.

The official said import payments are the major source of money laundering and some importers taking advantage of self-assessment are getting their goods cleared. “After clearance examination, most of the GDs have been found that the importers don’t exist,” the official said.

The official said it has been made mandatory for importers to file GDs for tariff lines based on single item clearance through customs agents. The customs official said Chief Collector of Customs Appraisement South has already issued notification to ensure compliance. Previously, there were only few items for which GD filing through customs agents was required. Now, the customs authorities expanded the list to prevent illegal outflows of foreign exchange reserves.

Officials said a reason for making GD clearance through customs agents mandatory is to ensure documentation of importers and goods imported into Pakistan. “The customs agents are licenced under the customs laws and they [customs agents] have been made responsible for any discrepancy in the GDs,” another official said.

Officials said the self-clearance is major factor behind massive under-invoicing and mis-declaration. Alone, under-invoicing and mispricing between China and Pakistan trade has been estimated at around three billion dollars. The customs authorities have taken many other initiatives to prevent such unfair trade practice through scrutiny of data provided by Chinese customs to ascertain the authenticity of goods declared by Pakistani importers.

Pakistan is facing a huge trade deficit due to influx of luxury and unnecessary imports. The initiative will also discourage such imports, officials said. The country planned to deploy the system for its neighbouring China with which trade deficit ballooned to nearly $10 billion in the last fiscal year of 2017/18. Pakistan was estimated to save five billion dollars, which are lost to under-invoicing or mispricing in a year by signing electronic data-sharing agreements with all its trading partners. “Protocols for electronic data interchange should be agreed with all the main trading partners to stop an estimated annual under-invoicing of $5 billion,” Ehsan Malik, chief executive officer of Pakistan Business Council said in a letter to the Finance Minister Asad Umar in September. “A comprehensive review of import valuations is necessary to stem misuse and under-invoicing. Import duty at the higher value, weight, volume or quantity should apply.”

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