KARACHI: The Federal Tax Ombudsman’s report on containers’ scam highlights the ‘gross inefficiency, maladministration and corruption’ within the notorious customs department of the Federal Board of Revenue (FBR).
The report, a copy of which is available with The Express Tribune, repeatedly stresses that although its focus was on the [International Security Assistance Force (Isaf)] containers’ scam, the real issue is the ongoing large-scale loot and plunder in the garb of the Afghan Transit Trade (ATT) agreement.
Some of the key findings in the report are that at least 7,922 transit containers were pilfered within Pakistan during the last four years. This conservative estimate was based on containers that did the ‘impossible task’ of ‘completing the Karachi-Afghanistan-Karachi round trip’ in less than eight days. It said that if one extrapolated the size of the problem on the basis of the more probable 10-day round trip, the number of containers stolen en-route would work out to 15,314. The loss to the exchequer on account of 7,922 containers would be at least Rs19 billion, and for 15,314 containers Rs37 billion.
It lambasts the quality of data maintained by the Pakistan Revenue Automation Limited (PRAL), a private company owned and managed by FBR, used to monitor the Isaf containers and says it is ‘highly unreliable’. The data of National Logistics Cell was also termed ‘seriously flawed’. It questioned why a separate automated system used to clear the US military cargo that was relatively less prone to pilferage wasn’t being used.
It said the senior management of customs failed to take necessary steps to put in place appropriate countermeasures against repeatedly occurring scams and cited four mega scams of containers in the recent past as examples.
The report said in some instances like the Lunar case, the collector who had failed to prevent wrong clearance of 52 containers laden with liquor was made part of the ‘fact finding committee’, to frustrate the course of investigation by Director General Intelligence and Investigation.
“The modus operandi in these mega scams remains the same; fake / forged documents, primitive and manual clearance and processing systems, wide discretion in the hands of unscrupulous customs officials, lack of transparency and ineffective accountability, involvement of seniors otherwise responsible for oversight,” it said.
The report quotes a ‘knowledgeable person dealing with imports’ as saying that over 80 per cent of his business over the last one year had shifted to smuggling-related ATT regime. Businessmen told the office of the ombudsman that at least 10 per cent of ATT containers were not actually reaching Afghanistan, while at the extreme end of the spectrum it was said that the ratio could be as high as 40 per cent.
The report doesn’t name any individuals and instead says that another criminal investigation team will be formed to find those responsible. A source within the ombudsman office said the task was going to be extremely difficult as some officials were claiming that their signatures on documents were not theirs and it would need forensics expertise.
Published in The Express Tribune, January 20th, 2011.