Govt initiates 'large-scale' crackdown on currency smuggling

Sources say major policy reforms underway, commodity and currency businesses will be 'transformed'

The government has initiated a large-scale crackdown against elements involved in the smuggling and hoarding of US dollars and against organised criminal cartels involved in such activities, said officials on Wednesday. 

The action will be directed against the enablers, government officials facilitating the smuggling and those patrons who have been identified. Sources added that lists have been made and a prolonged crackdown will be initiated. 

Sources further added that with major policy reforms underway, the commodity and currency businesses will be "transformed".

To implement the new measures effectively, the government will also install and upgrade monitoring systems at land, sea and airports to curtail illegal movement of goods and currency. 

Read: FM asks for action plan to arrest dollar’s rise

Earlier, caretaker Prime Minister Anwaarul Haq Kakar directed the customs authorities to establish a monitoring system at irregular border crossings to prevent smuggling in the country.

The decision to crack down on the dealers was made the day the rupee-dollar parity in inter-bank trading crossed Rs300, a threshold breached for the first time in Pakistan’s history on the back of high dollar demand because of imports, dollarisation of the economy, smuggling and financing of Afghanistan’s imports.

Pakistan’s law enforcement agencies have failed to stop the smuggling of dollars to Afghanistan, which has been going on by using the crates of oranges and in connivance with the law enforcement agencies.

State institutions seem to have failed to guard borders and international airports that have turned into dens of smuggling. The central bank had also lowered the ceiling for the outbound flow of the greenback to $5,000 per person, which created problems for the people but did not help to curb the outflow.

Sources said that a major factor behind the high demand for dollars was the financing of smuggled goods from Iran, mainly diesel and edible oil, and payments for Afghan transit trade.

They pointed out that diesel smuggling from Iran deep into Pakistan was not possible without the involvement of agencies that were responsible to curb smuggling and ensure border security. The smuggled diesel price is paid in US dollars to Iran, according to Pakistan Customs’ officials.

Similarly, Afghan transit trade was also financed by buying dollars from Pakistan’s market but its exact quantum was unknown, said the customs’ officials.