Major Customs scandal turning out to be a farce

ISLAMABAD: The official report of 355 vehicles having escaped from Torkham border without paying taxes is turning out to be a farce leaving the question open as to why the Customs Intelligence gave alleged “fake” information to the government.

Interim report on fact-finding inquiry into the matter reveals that by Monday night, around 240 vehicles had been verified to have paid taxes and were also reflected duly in the system. The verification process is still continuing and till the filing of this report, almost 255 out of the reported 355 vehicles had been cleared from the alleged scam, which made headlines in the media.

Chief Collector Customs (North) in his report submitted to Member Customs (Operations), FBR, on Monday noted, “So far out of 355 vehicles, identified by DG I&I (Customs), Islamabad in its FIR No…. dated 03-02-2020 alleged to have escaped through Customs Station Torkham without filing of GD (Goods Declaration) and payment of duty taxes, around 240 vehicles involving duty/ taxes amounting to Rs130 million have been reconciled.”

The report added, “The exercise for verification of remaining 115 vehicles is under process and shall be completed shortly. Since the reconciliation process is underway, therefore, final count of vehicles, reconciled or otherwise will be given in the final report.”

The Customs Intelligence had charged that 355 vehicles, carrying imported goods, crossed through the Torkham Customs Station without filing the Goods Declaration (GD) and payment of duty and taxes, only during the month of October and November 2019.

Following the DG I&I’s report and without waiting for any inquiry into the matter to ascertain the facts, the prime minister ordered the removal of the then Member Customs (Operation) Jawad Uwais Agha- just a few weeks before his retirement. Besides making Agha OSD, the government also transferred 13 officials of the Customs Group.

Interestingly Agha, who, sources insist, enjoy good reputation, had ordered inquiry into the matter on January 20 but before waiting for its outcome the officer was removed.

But now as the FBR’s own fact-finding inquiry progresses, the DG Intelligence report appears to be untrue. On the basis of what the DG intelligence shared, the media reported it as one of the biggest alleged scandals surfaced in the FBR during last one and a half years’ rule of PTI-led government.

The DG Intelligence had also charged that the certificates of origin being submitted by the importers to show the goods as of Afghanistan origin were allegedly fake and forged, resulting in the importers getting undue benefits of concession in duties and taxes as Afghan origin fresh fruits and subject to lower rate of duty. The probe in the matter revealed that no proper mechanism exists at Torkham Customs station to confirm/ verify genuineness of the presented certificate of origin.

Responding to the above charge, the latest fact-finding interim report said that the concession exists under First Schedule of Customs Act 1969 etc on fresh fruits from Afghanistan. Fresh fruits are being imported from Afghanistan over the past many years; however, no specific verification protocol exists for verification of import certificates of origin from Afghanistan.

It added, “Nevertheless, the matter of verification of Certificates of Origin was daily taken up by the Appraisement Collectorate with the Board to get these verified formally through proper channel. The Board referred the matter to Director General Afghanistan, Turkey and Iran, Ministry of Foreign Affairs, vide its OM . . . followed by a reminder dated 22.01.2020, however, response on the outcome of formal verification is awaiting.

About another charge of filing one GD for multiple vehicles carrying the imported goods, the interim fact-finding report said, “The issue has been examined in the light of Section 44 of the Customs Act 1969. Section 44 requires filing of single IGM (import general manifests) for each conveyance, however, the WeBOC system developed for the land Customs Stations including Torkham does not prohibit multiple vehicles in a single GD and filing one IGM for multiple vehicles.”

According to the report owing to peculiar geographic conditions of Torkham Customs Station, there is little space available for parking and examination of import/ export and transit cargo vehicles. The Terminal Operator- NLC- has not been able to put in place an integrated cargo management system. There is no demarcated/ fenced and secured area for different types of cargo, let alone their controlled entry/ exist.

Resultantly the vehicles are parked in open spaces, mostly on private owned lands, market areas and road side. “Terminal Operator (NLC) has been asked time and again to improve the situation but all in vain,” the report said, adding that the NLC has categorically stated that they cannot act as per Terminal Operator Rules.”