FBR files a dozen more references in missing containers scam

FBR insiders fear politicking may influence investigation.

ISLAMABAD:

As part of its effort to crack down on smuggling, the Federal Board of Revenue said on Thursday that it would be filing more than a dozen fresh references with the National Accountability Bureau in what is now known as the “missing containers” scam.

In the latest allegations, the FBR is charging several entities with attempting to defraud the national exchequer of customs duties and other taxes to the tune of Rs20 billion.

Added to the eight cases the FBR has filed earlier with NAB, the fresh ones will take the number to 21 and the amounts involved now total Rs33 billion, said Hafiz Mohammad Anees, the head of the FBR’s audit division.

A two-member bench of the Supreme Court, headed by Chief Justice Iftikhar Muhammad Chaudhry is conducting hearings into the alleged scam, which involves companies falsely declaring goods at Pakistani ports of entry as being destined for Afghanistan. Such a declaration exempts them from Pakistani taxation. The missing containers, however, never arrived at the Afghan border, leading the government to suspect that the Afghan Transit Trade is being used as a means to smuggle goods into Pakistan while evading taxes.

The government has records of 28,808 containers that came into Pakistan under the Afghan Transit Trade gone missing. The corresponding number for containers passing through Pakistan ostensibly for supplies to North Atlantic Treaty Organization and International Security Assistant Force troops in Afghanistan is around 18,995.

FBR Chairman Salman Siddiqui estimates that the government has lost about Rs55 billion in revenues as a result of this smuggling.

Anees said that the FBR had earlier filed charges against customs clearing agents, officials of the FBR itself as well as the military-owned National Logistics Cell. Some of the clearing agents charged with assisting this smuggling are Abdul Hafeez Brothers, Abdul Quyum & Sons, Trading Enterprises, Adnan and Co, JJ Enterprises, Nawaz Brothers, Mohammad Ameen & Sons and EAL Systems.

He added that the FBR had filed references not against specific individuals at FBR or NLC but rather the supervising officials at the time. This was contradicted by Siddique, however, who said that no specific reference had been filed against the head of the Customs division at the FBR.

Some FBR insiders feel that internal rifts between officials may be used to influence the direction of the investigation.

Part of the FBR’s problem in investigating the smuggling is the fact that the US military has not sent any electronic acknowledgement of receiving 95,374 containers on the Afghan side of the border, a number that represents more than 60% of the more than 150,000 containers transported by the US military between January 2007 and December 2010.

Published in The Express Tribune, January 6^th, 2012.