Money laundering unveiled in solar panel imports
PHOTO: AFP
Startling revelations have emerged regarding the commercial activities of solar panel importers, exposing a staggering case of over invoicing and money laundering. The Directorate of Post Clearance Audit Customs South has published a report shedding light on this illicit practice.
According to the report, the audit conducted by PCA South uncovered over invoicing worth a whopping Rs69.50 billion at the import level. This alarming revelation points to the movement of black money out of the country, raising serious concerns about illegal financial activities.
Sources indicate that the National Accountability Bureau (NAB) has intervened and alerted the Federal Board of Revenue (FBR) to take appropriate action against those involved. NAB’s involvement is expected to ensure that the perpetrators face justice and safeguard the economic integrity of the country.
Officials from PCA stated that the State Bank of Pakistan (SBP) has also urged federal ministries to compile a list of reputable solar panel importers who can be granted import permissions without the risk of money laundering and over-invoicing. The findings of the FBR’s audit will play a crucial role in this process.
The PCA audit report reveals that 63 importers filed 6,232 goods declarations and imported solar panels at prices significantly higher than their market value. Moreover, a substantial portion of the funds used for these imports are suspected to be illegal money transferred out of Pakistan. The report highlights that the importers exploited the duty and tax-free import system applicable to solar panels. It further notes a stark discrepancy between the income tax returns of 39 importers and the value of their imported goods, equity, liabilities, and volume. These 39 importers have a financial volume of Rs14.7 billion but imported solar panels worth Rs201 billion. The report also exposes significant cash deposits of Rs47 billion, constituting 24% of the total bank deposits, in the bank accounts of 44 solar panel importers.
Furthermore, the report reveals that over Rs50 million was transferred by 22 importers, particularly to the UAE and Singapore, despite the solar panels being imported from China. The report points out the lack of due diligence by commercial banks, which allowed the transfer of import remittances from Chinese exporters to third countries without obtaining the necessary No Objection Certificate (NOC), thus violating foreign exchange regulations and SBP guidelines.
Insiders claim that the FBR assigned the PCA South Directorate to conduct sector-wise audits of solar panel importers to investigate both over invoicing and trade-based money laundering (TBML). Director PCA South, Shiraz Ahmed, promptly formed a team, including Additional Director Ghulam Nabi Kumbo and Auditing Officers Abdul Ghaffar, Haban Chaudhry, and Rehan Iqbal, to scrutinise the solar panel sector.
Published in The Express Tribune, July 11th, 2023.
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