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Vol 1 issue no. 25 ,
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Karachi, tue Aug 06 - Mon Aug 12, 2013
Member Customs discusses
strategytoimproveperformance In order to meet tax targets and stabilise economy, the government will come up with better relief measures for businessmen by reducing tax rates, says Ishaq Dar | See PAGe 6 |
fBR plans to achieve target
In order to broaden the tax base, the FBR has established centralised database network for sending 100,000 notices to potential tax dodgers. | See PAGe 3 |
Guarding govt revenue
The major role of the department is intelligence gathering, to find out the roots where there is a shortfall in collection due to unacceptable reason. | See PAGe 8 |
Ports lifeline of economy
Efficient ports are the lifeline of the economy by virtue of their key role for promotion of trade, says Capt Haleem A Siddiqui | See PAGe 14 |
One of the senior officials in Customs House informed this correspondent that the officials, while following the directives of Member Customs and Chairman FBR, are eyeing to achieve the revenue target in the first quarter in the current fiscal year 2013-14. KARACHI
Amanullah Khan/Sohail Rab Khan www.customstoday.com.pk
ember Customs, Nisar Muhammad Khan, carrying special directives of Prime Minister for improving performance of the customs and swift growth in foreign trade, is aiming at enhancing the revenue from Rs240 billion of the previous year to Rs300 billion in the current fiscal. Nisar, who visited Karachi, last week convened closed door meetings of the Customs high-ups in which head of each department of Customs House presented their performance report and future strategy. He also appreciated the Customs department’s performance in the previous year in which it remained on top among the revenue collecting agencies and expressed his confidence that the customs official would keep up their performance with special emphasis on good governance and conduct with the trade and industry. Sources in Customs Department told Customs Today that the Member Customs held meetings with the Chief Collectors (Appraisement), Chief Collector (Enforcement) and other officials including collectors, additional collectors, deputy collectors and assistant collectors. Inside sources said Member Customs during all such meetings specially stressed upon the need for revenue generation and the achievements of the targets on quarterly basis. They further informed that it had decided that meetings on weekly basis would be held by the heads of the Model Customs Collectorates (MCCs) in order to streamline the revenue recovery on weekly basis. One of the senior officials in Customs House informed this correspondent that the officials, while
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Member Customs during all such meetings specially stressed upon the need for revenue generation and the achievement of the targets on quarterly basis. following the directives of Member Customs and Chairman FBR, are eyeing to achieve the revenue target in the first quarter in the current fiscal year 2013-14. Sources further informed that Member Customs also called for making an effective strategy to eradicate corruption from the department and enhance the efficiency of the officials. It is pertinent to mention here
that the Customs Department did not manage to achieve the revenue target for the fiscal year 2012-13 and shortfall of Rs 39billion reported in the revenue target of previous year. Over the pathetic performance of the FBR and Custom Department, Prime Minister Muhammad Nawaz Sharif while taking action on this replaced FBR Chief Ansar Javed with new FBR Chief Tariq Bajwa and then further
transfers and postings were also reported soon after the appointment of Bajwa.
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02 ExCLuSIvE
AuguSt 6- AuguSt 12, 2013
Bid to smuggle foreign currency to dubai foiled
ISLAMABAD: The Pakistan Customs have foiled an attempt to smuggle foreign currency to Dubai and arrested two culprits involved in capital flight from the country. According to details, the Pakistan Customs thwarted an attempt to smuggle 273,000 Saudi Riyals and 80,000 UAE Dirhams from Benazir Bhutto International Airport to Dubai. The passenger, who was identified as Ameer Zeb and his accomplice, Amanullah Khan were taken into custody.
fBR to issue Sales tax General order soon: dar LAHORE
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ederal Finance Minister Ishaq Dar on Tuesday made it clear that no new powers have been conferred on the Tax Commissioners for initiating or conducting audit. Only an explanation has been added to the law to make the matter unambiguous. The Federal Minister was talking to a delegation of Lahore Chamber of Commerce & Industry headed by LCCI President Farooq Iftikhar and comprising former LCCI Presidents Mian Misbah-urRehman, Sheikh Muhammad Asif, Convener Finance & Taxation Tanveer Ahmad Sufi and Co-Convener Sales Tax Committee Akhtar Ali. Since the announcement of the Finance Bill, it was fourth meeting of the Lahore Chamber of Commerce and Industry in connection with
anomalies in the Federal Budget. The Finance Minister also agreed to omit S.No.36 of the Third Schedule of the Sales Tax Act, 1990 saying that it was too confusing and would give lot of discretionary powers to Inland Revenue Authorities. It was, therefore, decided to omit the said S.No.36 from the Third Schedule of the Sales Tax Act, 1990. It was agreed that instead of inward/outward gate passes and transport receipts, sales tax invoices will be used as the appropriate document for Sales Tax Records. However, if any information is missing from present format of sales tax invoice, necessary changes in the sales tax invoice will be made by the government so that the said invoice is issued by the registered persons. It was agreed that inward/ outward gate passes and transport receipts will be dispensed with. Both the sides also discussed in detail Withholding Tax under section 236G & 236H of the Income Tax Ordinance, 2001 and the practical problems being faced by man-
dAR deCideS to oMit
fRoMSAleStAxACt
PM directs to Revenue Division and FBR
no room for inefficient, corrupt officials KARACHI
T
AMAnullAh KhAn
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he Revenue Division and the Federal Board of Revenue (FBR) under the fresh directives of Prime Minister Nawaz Sharif have to work in accordance with the aspirations of the general public to give a new look to the government to eliminate the menace of corruption and nepotism from the presently deployed staff. According to informed sources, the PM in his directives through a letter to Revenue Division pointed out the menace of corruption and said it had thwarted all the efforts aimed at institution-building and improving public service delivery. The governance could not be improved unless corruption, nepotism, inefficiency and conflict of interest were weeded out from the ranks and files of the government functionaries. Hence the Revenue Division and Federal Board of Revenue (FBR) were directed to conduct proper screening and strict scrutiny of the staff to purge the corrupt and inefficient elements.
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“Clear directions must be issued to the officers and staff working under the administrative control of Revenue Division and Federal Board of Revenue (FBR) to perform their assigned duties professionally and in the interest of the general public. There is no room for corrupt and non-transparent practices in the present dispensation,� Prime Minister said in his letter. Curbing this menace of corruption is on top of the agenda of the present government because the masses have reposed confidence and we have to come up to their expectations, said the PM letter.The positive outcome of the much-desired good governance cannot be achieved without strict adherence to official code of conduct, as well as compliance of general principles of transparency, respect of rules and laws, it further stated. In order to generate a new look of the government; we need to select best team having sincerity to the purpose of the people. Instructions must be strictly followed to bring improvement in the performance of respective domains, the PM advised in a firm tone.
ufacturers in deducting and filing of withholding tax statement. The Finance Minister agreed to look into the matter favourably. Dar very kindly agreed that the FBR will issue Sales Tax General Order in few days to ensure that no liability is created against buyers/suppliers if they have not made
collusive arrangements with their buyers/suppliers. As a result thereof, bona fide buyers and suppliers will be protected. The LCCI delegation thanked Dar for making appropriate changes in the law for appointment of Technical/Judicial Members to the Appellate Tribunal Inland Revenue. The LCCI pointed out that due to levy of sales tax at 16% by PRA on Services of Toll Manufacturing/Conversion Charges, double taxation is resulting as the Federal Government is also demanding sales tax at 17%, considering these items as goods. A representation in this regard was also handed over to the Minister as well as to the Chairman FBR and they agreed to look into the matter and take appropriate decision.
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INtERvIEW
AuguSt 6- AuguSt 12, 2013
03
Customs seizes $26,000 in switchblade knives shipment
WASHINGTON: US Customs and Border Protection seized a shipment of 2,400 switchblade knives and 1,200 butterfly combs from China July 12 at BWI airport. CBP’s Baltimore Trade Enforcement Team examined the shipment and found that the confiscated combs were constructed in such a way that allowed easy removal of the comb and insertion of a knife blade. Officers also concluded that the sharp metal teeth of the combs could be potentially harmful to users if left as a comb.
FBR figures out plan to achieve
ambitious tax collection target ISLAMABAD
SM haider
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n order to broaden the tax base for securing $5.3 billion bailout package from the IMF, the Federal Board of Revenue (FBR) has decided to establish centralised database network for sending 100,000 notices to potential tax dodgers in the current fiscal year. Tariq Bajwa, Chairman FBR, has finalised an effective enforcement plan for the current fiscal year which will be unveiled before September 4, 2013 when the IMF’s Executive Board will consider Islamabad’s request for approving $5.3 billion bailout package under 36 months Extended Fund Facility (EFF). “We have decided to utilise data of those 50,000 people who have availed amnesty scheme for regularising their non-duty paid vehicles,” a senior member of the FBR said. The FBR will send notices to 10,000 potential rich people in the ongoing month and 15000 to another in next month. The FBR has envisaged revenue collection target of Rs 2475 billion for the current fiscal year as compared to collection of Rs 1942 billion in last financial year. In the last financial year, the revenue collection went up by just 3 percent as it ended up with revenue figure of Rs 1942 billion in 2012-13 against a collection of Rs 1884 billion in 2011-12.
Now envisaging a growth of over 27 percent revenue collection is highly ambitious and the FBR’s target should have been fixed at maximum Rs 2350 billion. When contacted, renowned economist Dr Hafiz A Pasha said that the Sensitive Price Index (SPI) went up from 4 percent to 9.5 percent and recent developments suggest that the inflationary pressure would be entered into double digit in the range of 11 to 13 percent. The rupee devalued by Rs 1.50 against dollar in interbank in last 12 days as compared to depreciation of Rs 1 in last five months. “Any effort to impose further taxes will be deathblow and totally unacceptable,” he said that the FBR’s tax target of Rs 2475 billion
regime keeping in view the election year budget that caused a loss in the range of Rs 70-80 billion, including rampant changes of Chairman FBR and in last four months 450 officials were transferred in the tax machinery. He said that there were risky foreign inflows in shape of CSF, 3G auction, $800 million on privatisation proceeds and $500 million Eurobond. The government expected foreign inflows of Rs 576 billion in the budget 2013-14 against Rs 244 billion in the last financial year. He said that NFC award was a right step and the IMF had no authority to explicitly point out approval of the CCI for ensuring revenue surplus by the provinces.
tARiq BAjwA, Chairman FBR, has finalised an effective enforcement plan for the current fiscal year which will be unveiled before September 4, 2013 was highly ambitious as the FBR was eyeing to increase taxation by over 27 percent against a growth of just 3 percent in last preceding year by collecting just Rs 1942 billion. “Our assessment shows that the taxation target should be fixed at Rs 2350 billion but the government set it at Rs 2475 billion,” he added. He said that there were different reasons for lowest ever growth in revenue collection in last financial year in the whole history of the country and first reason was concession provided by the PPP
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04 NAtIONAL
AuguSt 6 - AuguSt 12, 2013
Pakistan seizes drugs worth $30m
ISLAMABAD: The Pakistani government says it has seized hashish and cocaine worth at least $30 million in a joint operation with Belgian authorities. Pakistan's Anti Narcotics Force said that it had seized 3,000 kilograms of hashish transported from Afghanistan and headed for Belgium. The drugs were packed in cartons and concealed in white towels as a cover for export. Pakistani authorities also seized 1,000 kilograms of cocaine being smuggled from South America in a container.
easecustomsrules toprosper Pakistan should take lead from Dubai and Singapore for economic revival, says President iCCi Zafar Bakhtawari ISLAMABAD
FAIzA ISRAR
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— Exclusive Customs Today photo
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resident Islamabad Chamber of Commerce and Industry (ICCI) Zafar Bakhtawari has said onlya few countries have made their position significant on economic horizon of the world and amongst them the most outstanding are Singapore and Dubai. “These two countries are small but only because of their trade plans they have achieved success in the economic world. And the most important factor behind achieving this status is that these countries have adopted easy customs rules or even no customs duty. If we have to put Pakistan on the road of prosperity, we should at least follow these simple rules regarding customs duty.” He said that Pakistan enjoyed a unique geopolitical importance and it could become a transit trade corridor by facilitating regional countries through Gwadar. It could become an economic giant by riding on its regional value like Singapore and Dubai. “What is needed initially is to make business friendly policies and reduce customs duties up to minimum except where there is a need to protect our local industry.” The ICCI chairman pointed out that European Union (EU), a bloc of more than 25 countries, was enjoying zero custom duty on the internal movements of goods within the zone. He said by adapting such measures European economy had shown an amazing development. He said the ASEAN bloc was also following these lines and 10 countries in this bloc had also developed a free market economy and were reaping its rewards. “Presently it is not possible for a single country to safeguard its economic interests alone. So there is a need that Pakistan should take initiative to make such regional bloc. It is unfortunate that SAARC and ECO (Economic Corporation Organisation)
have failed due to lack of interest by the stakeholders.” Bakhtawari said there was no substantial change in the existing customs duty tariffs by the new government. Referring to the increase in sales tax which has an indirect effect on every business especially imports and exports, he said that sales tax was the tax which would replace the custom duty in future. He said the increase in sales tax from 16% to 17% was not a big change considering the economic state of the country. He said the businesses were more affected by the worst energy crises, adjustment of Rs 500 billion circular debts. “If one considers all the facts, 1% increase in the sales tax is justified and not a big change but at the same time. But the government should decrease GST gradually upto 10% by decreasing it one percent every year as soon as the economy becomes stable. This one percent increase will definitely affect everybody but current circumstances in Pakistan
demand that everybody should pay his share to economy.” Bakhtawari terming the budget business friendly said the tax relief on export processing zone from 5 years to 10 years would help grow the economy of Pakistan. “The government has announced to create an industrial zone and induction of Gwadar port in economic zone indicates
finery there and can meet the future requirement of oil through Gwadar by rail tracks and road links, which has already been discussed by Chinese and Pakistani premiers in last meeting.” Answering a question about the major exports of Pakistan, Bakhtawari said the textile was considered as the top export of the country and Pakistan’s 60 per-
Pakistan enjoys a unique geopolitical importance and it can become a transit trade corridor by facilitating regional countries through gwadar that the idea of generating the economic corridors through Pakistan is materialising.” He said the he believed that inclusion of Gwadar in the special economic zone, which would be tax free and would be considered tax holiday, be beneficial for Chinese investors in Pakistan. “China is interested in Gwadar for the reasons that it can make oil re-
cent export was based on textile industry. However he lamented the fact that Pakistan was still lagging far behind in access to international market because the customs duties are far heavy in Pakistan on textile as compared to Bangladesh and a country like Bangladesh, which has no cotton production, was exporting more textile than Pakistan.
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AuguSt 6 - AuguSt 12, 2013
ADvERtISEMENt 05
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06 NAtIONAL
AuguSt 6 - AuguSt 12, 2013
nAB arrests clearing agent in container scam
KARACHI: National Accountability Bureau (NAB), Sindh, have arrested a customs clearing agent for his alleged involvement in ISAF container scam. According to NAB, the Accountability Court has issued arrest warrants of accused Muhammad Imran son of Saif-ur-Rehman, proprietor of M/s Saif-ur-Rehman & sons, in Isaf container scam.
Only Chairman FBR can access bank accounts ISLAMABAD
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Pakistan receives
$13.92b remittances in FY12-13
O KARACHI
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verseas Pakistanis remitted an amount of US $13,920.26 million during the last fiscal year (July 2012-June 2013), showing a growth of 5.56 percent or $733.64 million more as compared with $13,186.62 million received during the same period of the last fiscal year. According to the State Bank of Pakistan, the inflow of remittances during July 2012-June 2013 from Saudi Arabia, UAE, USA, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman) and EU countries amounted to $4,104.73 million, $2,750.17 million, $2,186.21 million, $1,946.01 million, $1,607.88 million and $357.37 million respectively as compared with the inflow of $3,687.00 million, $2,848.86 million, $2,334.47 million, $1,521.10 million, $1,495.00 million and $364.79 million respectively in July 2011-June 2012. Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during the last fiscal year (July 2012June 2013) amounted to $967.79 million as against $935.36 million received in the last fiscal year (July 2011-June 2012). The monthly average remittances for July 2012-June 2013 period comes out to $1,160.02 million as compared to $1,098.89 million during the corresponding period of the last fiscal year.Last month (June 2013), an amount of $1,164.79 million was sent home by overseas Pakistanis, up by 4.23 percent, as compared with $1,117.52 million received in the same month of 2012. In June 2013, the inflow of remittances from Saudi Arabia, UAE, USA, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman) and EU countries amounted to $353.18 million, $218.60 million, $179.93 million, $171.94 million, $138.18 million and $31.03 million respectively compared with the inflow of $333.68 million, $219.14 million, $206.60 million, $126.72 million, $128.12 million and $29.24 million respectively in June 2012. Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during June 2013 amounted to $71.93 million as against $73.98 million received in the same month (June 2012) of the last fiscal year.
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n order to meet tax targets and stabilise economy, the government will come up with better relief measures for businessmen by reducing tax rates and facilitating trade & industry to flourish. Giving FBR access to bank accounts would not create any problems for businessmen and other bank customers as only Chairman FBR has the authority to access bank accounts for assessment. This was said by Federal Minister for Finance Mr. Ishaq Dar while talking to Mr. Iftikhar Ali Malik Vice President SAARC Chamber of Commerce & Industry, Zafar Bakhtawari, President Islamabad Chamber of Commerce & Industry and M/s. Farooq Iftikhar President & Irfan Iqbal Sheikh Senior Vice President of Lahore Chamber of Commerce & Industry on the sidelines of a dinner hosted by Mian Shahbaz Sharif, Chief Minister, Punjab.
“Giving FBR access to bank accounts would not create any problems for businessmen and other bank customers as only Chairman FBR has the authority to access bank accounts for assessment,” the minister said. The Finance Minister said that strengthening the economy and resolving energy crisis are on top priority of the government and for this purpose, some hard decisions have been taken in the budget to improve tax revenue. Moreover, the existing assessees would not be asked any questions and added that if anybody has some complaints on this account, they can contact his office for redressal of complaint. Ishaq Dar said the economic team of the government has prepared a pragmatic strategy to cope with all the prevailing challenges and Pakistan will emerge as an important economic player at the regional & global level to assert its national dignity by implementing the said strategy. Iftikhar Ali Malik, Vice President, SAARC Chamber of Commerce & Industry expressed his confidence that the government
will take all possible measures to bring country out of economic crises. He said it was vision of Mian Nawaz Shartif to make Pakistan economic tiger of Asia and expressed hope that he will take all possible steps to realise his vision. Speaking at the occasion, Za-
far Bakhtawari, President, Islamabad Chamber of Commerce & Industry said that government should take business leaders on board on all important economic and other matters of national importance to develop consensus policies. He said the hike in turnover tax from 0.5 percent to 1 percent in recent budget would hurt businessmen’s interests and urged that it should be brought down to at least 0.75 percent to provide some relief. He further demanded that the government should bring agriculture and other exempted sectors into the tax net to improve tax collection. He said businessmen want political and economic stability as these are essential to create enabling environment for growth of trade and industry and hoped that the government would take measures to establish stability in the country. He also invited the Finance Minister to visit ICCI and Finance Minister assured that whenever he got some time from his busy schedule, he would visit Islamabad Chamber of Commerce.
Mughalpura dry Port road in shambles D LAHORE
M hAYAt
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espite the fact that the government earns billions of rupees from the Lahore Dry Port, the important over 200-metre long road leading to the main entrance of the Port has been left unpaved, creating problems for movement of vehicles, for the last several years. The broken road of the dry port causes serious inconvenience to the visitors and has also led to many accidents. At least 20
to 25 containers of 20 to 40 feet length enter and leave the port daily. “Due to the dilapidated and bad condition of the road, the containers often meet with serious mishaps,” a customs agent said. He said that when rainy season starts the situation gets even worse as the ratio of containers’ accidents goes up but no one is there to address this grave problem. “Most of the times, goods and articles suffer major damage, causing millions of rupees loss to the importers,” he said. “Being the custodian of the port, the responsibility of building the road and providing basic infra-
structure lies with the Railways, and the Customs Department has nothing to do with the issue. The Railways has been earning good revenue from the port but it is not ready to invest in the construction of dry port’s road,” Customs Agents Association President Agha Iftikhar said. A Railways official, speaking on the condition of anonymity said that the financial position of the Railways is an open secret. The department is not able to run trains and in these conditions the Railways has no funds to undertake repair works at the Dry Port.
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NAtIONAL 07
AuguSt 6 - AuguSt 12, 2013
Border officer gets nine years for letting up to 165 illegally enter uS
WASHINGTON: A former US Customs and Border Protection officer in Texas was sentenced to nine years in prison in conspiracy to smuggle illegal immigrants into the US. Guerrero, 39, pleaded guilty to bribery and smuggling last year. His girlfriend, a nephew and two associates received lesser sentences for their roles in the scheme. Guerrero admitted letting between 80 to 165 people illegally cross into the US.
industrial parks at Port qasim to change economic landscape KARACHI
AMAnullAh KhAn
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pcoming mega industrial zones especially Bin Qasim Industrial Park and Creek Industrial Park, with the booming industrial activity and creation of tremendous job opportunities, are bound to bring a positive socio-economic change in the port city Karachi. Mohsin Syed, CEO of National Industrial Park (NIP) on the occasion of signing ceremony of an agreement with the KESC power supplies expressed the hope that Bin Qasim Industrial Part (BQIP) at Port Qasim would be a game changer for new industrial landscape of the metropolis and would play an important role in creating employment for the Karachiites, besides generating a huge chunk of revenue for the national exchequer. It may be noted that National Industrial Park Management Company signed an MoU with the KESC for supply of 4 MW power to the NIP for meeting the initial requirement of Bin Qasim Industrial Park (BQIP) project to ensure sustained growth of economy and industrial sector in the
city. The NIP is intended to build its own grid station with the increase of power demand and for strengthening the power supply after appropriate arrangement by the KESC. Besides generating a huge chunk of revenue for the exchequer, these industrial parks would also help transfer the technology with the arrival of foreign investment in these parks. A new Japanese motorcycle manufacturer was all set to bring in Foreign Direct Investment (FDI) of $150 million in this park. This venture would create 45,000 jobs and promote ancillary industries. The project would lead to transfer of technology in manufacturing of motorcycles and the company would set up exclusive training centres for developing skills and capacity of vendors. Syed said that the Park was being developed with a focus on provision of salient features integral to an industrial park. It would accommodate those clusters with linkages to the existing Down-Stream Industrial Estate with medium and small scale industries based on plastic sector, electronics and food and beverage production units. He remarked that BQIP was the largest project being developed by the NIP on 930 acres
‘FBR to merge divided Collectorate as KAP-Central’
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ISLAMABAD
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he authorities concerned in the Federal Board of Revenue (FBR) are mulling over to merge again the divided PaCCs Collectorate. The sources in the Customs Department told Customs Today that the division of PaCCs Collectorate into East Wharf (KAP-E) and West Wharf (KAP-W) has not yet produced the desirable results as per the expectations of the FBR. “The division of a Collectorate into two is just for a trial to enhance the revenue generation, adding that the Collectorate would be combined again by the title of KAP-Central in future”, he added. It is pertinent to mention here that the FBR had issued directives to divide the PaCCs Collectorate into two on July 1. However; the importers and agents’ association strongly condemned the division of Collectorate and termed it an attempt of bureaucracy to create more opportunities in the Customs Department to invite more corruption. On the other hand, the top brass in the Customs Department welcomed the decision of the FBR and termed it an attempt to increase revenue generation.
Speaking about NIP’s Korangi Creek Industrial Park (KCIP) project where arrangements of setting up of 48 MW power plant is in its final stages, he proudly announced that five companies have already started construction of their manufacturing plants at the land allotted to them while three others were all set to break the ground. Construction of these industrial units which include consumer, food & pharmaceutical, garments/textile, light engineering, packaging and printing will take the city of Karachi into a
A new japanese motorcycle manufacturer was all set to bring in foreign direct investment (fdi) of $150 million in this park. land of Pakistan Steel. After completion it would match with any state-of-the-art industrial zone, providing best infrastructure facilities at par with international standards which will easily cater to the business needs of medium and large enterprises, he added. He appreciated the KESC support and expressed gratitude to the KESC’s new management for their efforts towards ensuring uninterrupted power supply to industrial sector and assuring their best support in future.
new era of economic prosperity. As soon as the industrial units established at the KCIP start production, this industrial zone alone will start contributing Rs. 40 billion annually to GDP and provide approximately 30,000 direct and 180,000 indirect employments. The project designed by Jurong Singapore, renowned internationally for their expertise is being developed at an estimated cost of Rs. 3.3 billion which will have an investment opportunity of Rs. 20 billion.
08 SPECIALREPORt
www.customstoday.com.pk AuguSt 6 - AuguSt 12, 2013
Customsintelligence safeguardsgovtrevenue:RiazKhan the Director general Intelligence and Investigation Customs (Dg I&I)Muhammad Riaz Khan has said that the role of Directorate Intelligence and Investigation is to safeguard government’s revenue which has not been accounted for due to inability of the department to detect fraudulent activity, smuggling or lack of cognizance of tax in revenue collection.
fAiZA iSRAR
www.customstoday.com.pk The major role of the department is intelligence gathering, to find out the roots where there is a shortfall in collection due to unacceptable reasons, and also to partially interdict the negative activities. After getting the information the department gives alerts to the custom members.” Riaz Khan, while discussing the role of intelligence department, said it is the major duty of the department to coordinate with the local and international organisations including UNODC, RILO, law enforcement agencies and international money laundering task forces and to deal with the issues like drug control on international level. “Initially we were also dealing with sales tax and central excise duty but now we are dealing with custom related issues only. Our vigilant and competent employees work hard to meet the targets. Our working strength in office is forty employees and other staff is also limited. We have not more than 100 field officers but de-
spite that they are performing well.” Appreciating the work of his subordinates he said that last year performance was up to the mark. He said that last year the department had indicted 930 non custom paid cars and other goods, the value of which is 2.37 billion. He said the department confiscated 611
vehicles the value of which is 750 million, 1.6 million yards fabrics worth 143 million, tyres and tubes of 30 million and auto spare parts worth 40 million. He detailed that apart from these 331 thousand bottles of liquor, electronic goods worth 43 million and other miscellaneous items of one million were also con-
fiscated. “The procedure we adopt is simple but practically very difficult. we follow the culprit on roads and also follow them up to their godowns. We have nobody on borders so we work on information only. We had reported 18 drugs cases and arrested 12 people and confiscated 2500 kgs of hashish, 99 kgs of opium and 31.3 kg heroine. These were complicated cases to be dealt upon,” added the DG Intelligence. The Director General explained that customs contravention cases were those cases in which importers and exporters pay less duty. “We make recoveries and take the goods under control and after that we make auction. The auction is made to generate revenue. Last year the recoveries through auction were of Rs 590 million. This year we are expecting a recovery of 1.6 billion.” Answering a question, Muhammad Riaz said the department was concentrating on anti-money laundering cases and we needed to work more to conduct investigations. “There are 95 cases and rest are special transaction report. Secondly, the more important cases are about the duplication of things in
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Pakistan and there is a dire need to intercept them. Thirdly there is alarming situation in bulk cash smuggling through Afghanistan and Iran.” The DG said the main reason of smuggling is the major price difference which is beneficial for the traders. “Traders normally adopt this way but this is very harmful to the legitimate importers and exporters and also the local industry. We work upon the information gathered and also have a separate department and cell for import and export data. We have keen observations on the changing trends. After confirmation, we take the luggage into custody. Further either we go for criminal proceedings by launching FIR or go for quasi judicial proceeding which in turn moves towards departmental proceedings. There may be collector, deputy collector, and additional collector appeals and then there is adjudication for determination. We have to divide the items among the departments. After the proceedings if somebody found guilty, he may be sentenced or fine may be imposed on him.”
SPECIALREPORt 09
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uhammad Riaz is an officer (BS-21) of Pakistan Customs Service who took over as Member (Customs) at FBR Headquarters, Islamabad on July 13, 2012. Having worked as Commercial Consular Paris (1995-99), Counsel General Istanbul (2002-2006) and subsequently as Director General, Prime Minister’s Secretariat and Director General Customs Intelligence/Investigation, he has attained vast and diversified experience in is professional career. He holds Master’s degrees in Development Economics from Williams College, Massachusetts USA and Defence Strategic Studies from National Defence University, Islamabad. Though he has spent just few years in Istanbul and Paris as a diplomat in his whole
career but he remained lucky as almost all members of visiting delegations in both cities during his tenure usually remember him as an efficient, dedicated and nationalist Pakistani envoy who loved to take care of expatriate Pakistanis living in Turkey and Paris. He helped these expatriates out of the way and tried his level best to solve their grievances. A retired Pakistani diplomat on the condition of anonymity has revealed that during his visit to Istanbul Mohammad Riaz gave his delegation a lavish and delicious reception. They found him solving the problems of Pakistanis living there during their three days visit. It is beyond the shadow of doubt that there is dire need of officials like Mohammd Riaz in Pakistanis embassies in the world, particularly in countries where Pakistani workforce is living in
bulk and sending back precious remittances to their homeland but it is also a sane decision to keep such dedicated and nationalist officials in country so that they could curb corruption element from governmental institutions. In this regard, government has kept him in the country and awarded him sensitive and lucrative slots to get more and more benefits for the country. Incumbent Federal Board of Revenue (FBR) Chairman Tariq Bajwa keeping this element in his mind recently transfer him as Director General Intelligence and Investigation Customs (DG I&IC) once again in a bid to achieve the ambitious tax collection target of Rs2.47 trillion for the current financial year.
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10 EDItORIAL
AuguSt 6 - AuguSt 12, 2013
Founder & Chairman Zulfiqar Ali Editor nasim Ahmed editor@customstoday.com.pk For advertising & subscription marketing@customstoday.com.pk +92-324-4404694 www.customstoday.com.pk Phones: 042-35781643-4, Fax: 042-35781645 Address: 627, Siddiq trade Centre, gulberg, Lahore
editoRiAl
RefoRMinG fBR he reform process in FBR initiated by the new Chairman,tariq Bajwa, was long overdue. FBR is the source of the lifeblood needed by the national economy for sustenance and growth. But, because of the loopholes and gaps in the working of FBR, the government is not getting the revenue it needs to run its affairs. FBR has continuously failed to meet the target of revenue collection set by the government.the result of this failure is that the government has to resort to deficit financing which accentuates inflationary pressures. Last year, the revenue collection target, to start with, was set at around Rs 2.3 trillion, but later due to the sluggish performance of the taxation machinery in the first six months, it was revised downward to a little over Rs 2.1 trillion. But even this target was not met. Due to the lackadaisical performance of FBR, the tax-togDP ratio in Pakistan is around 9 percent, which is one of the lowest in the world. In India this ratio is around 15 percent and in other countries as high as 25-28 percent.there are many reasons why our tax income is so deplorably low.there is no culture of paying tax here. According a recent media report, two-thirds of the elected representatives pay no taxes.there is no tax on agricultural income while exemptions and relaxation in rules for various sectors and special interests deprive the exchequer of billions of rupees every year. the element of corruption that permeates all layers of the taxation system makes matters worse. According to an estimate, the unholy alliance between dishonest tax collectors and cheating tax payers results in the loss of Rs 500-600 billion to the national exchequer every year. the virus runs through all parts of the machinery, including income tax, sales tax, customs duty, etc. As against the supine attitude of the previous government, the new PML-N government has adopted a pro-active attitude in the matter. It has started the process of reform by selectingtariq Bajwa, a senior bureaucrat, to head FBR.the appointment oftariq Bajwa, an upright and honest officer with a distinguished record of service, has been widely hailed as the right choice for the challenging assignment. He has the requisite professional expertise and experience to tackle the difficult job of putting a new life into FBR. As a dynamic officer, he has promptly launched a drive to ginger up the organization, starting off with large scale transfers and postings to put the right person in the right position. All his decisions are merit based, with an eye to producing quick results. He has chosen Nisar Muhammad Khan for the vital post of Member Customs, while the former Member Customs Muhammad Riaz has been posted as Dg Customs Intelligence. he task ahead is not easy. the target is to increase revenue by over 27 percent to reach the figure of Rs 2475 billion during the current financial year as compared to Rs 1942 billion collected last year.this will require strict monitoring of progress in revenue collection from day to day and initiation of a process of accountability to reward hard working and honest officers and penalize the incompetent and the corrupt.
t
LNg import – a way out of energy woes KARACHI
AMAnullAh KhAn
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A
lthough the import of LNG is one of the viable options to cater to growing energy needs undrlined by a yawning gap between demand and supply due to fast depleting natural gas resources, the option for developing LNG terminal at Port Qasim seems a distant dream.
The government has floated tenders for construction of LNG terminal at Port Qasim, but, none of the tenders was approved by the authorities so far. We are talking about the import of natural gas through a pipeline either from Iran, Qatar and Turkmenistan for meeting the energy shortfall. However, the international pressures kept lingering on this project of national importance for over a decade and it is still on paper only primarily due to political considerations of the decisionmakers in the country. Amidst alarming energy shortfall and rising cost of imported oil, it is high time that the government has to show its grit to resolve the crisis which is wreaking havoc on economic viability. Decisions have to be made to avail all possible options including import of natural gas from Iran, use of Thar coal for power generation, optimum use of wind energy resources as well as development of LNG terminals in view of growing energy demand in future. At the moment, our GDP growth rate is around 3.5 percent but in view of our target to increase pace of GDP growth to 6-7 percent, the demand for energy would multiply and if the supply line of energy resources was not consolidated it would be a sad story on the part of eco-
Floating liquefaction technology can bring additional LNg supply by accessing stranded gas reserves that were previously thought to be too remote.
nomic fate of the country. It would be interesting to note that Liquefied Natural Gas (LNG) technology — from LNG seaborne tankers and LNG trains to floating LNG facilities -has quickly gone from concept to commercialisation, opening up possibilities in new frontiers and rendering the remote — well, much less remote. It’s important to note that liquefaction of natural gas is the process of super-cooling natural gas to minus 260 degrees Fahrenheit (minus 162 degrees
Celsius) at which point it becomes much safer and easier to transport. After shipped to its destination, re-gasification plants at importing or receiving terminals return the fuel to a gaseous state. Floating LNG production, storage and offloading concepts are revolutionary because they have the ability to station a vessel directly over distant fields, removing the need for offshore pipelines and adding the advantage of mobility — these floating facilities can be moved to a new location once existing fields are depleted. Floating liquefaction technology can bring additional LNG supply by accessing stranded gas reserves that were previously thought to be too remote, small or otherwise challenging for conventional land-based LNG development. Shell's most prized LNG project is its Prelude Floating Liquefied Natural Gas (FLNG) Project in Australia, which is moored some 200 kilometers out to sea and will produce gas from offshore fields and liquefy it onboard. This vessel will be six times bigger than the biggest aircraft carrier and will cost between $10.8 and $12.6 billion to build—but it also means that Shell won't have to pay rising prices in Australia's onshore LNG plants. The facility will produce about 3.6 million metric tons of LNG and 1.3 million tons of gas condensate a year.
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LAHORE 11
AuguSt 6 - AuguSt 12, 2013
Customs agents find cocaine hidden inside ford Mustang
HIDALGO: Customs agents at the Hidalgo-Reynosa International Bridge found about 20 kilogrammes of cocaine hidden inside a red Ford Mustang. Agents arrested Iztel, 20, of Mexico after finding the cocaine hidden inside her car, according to a federal criminal complaint. After realizing the Mustang had recently crossed the U.S.-Mexico border several times but never stayed long.
India plans massive duty cut
on Pakistan textile imports
Duty collection of two collectorates not
synchronised with import value LAHORE
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LAHORE
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n an unprecedented move, India is planning to drastically slash tariff on import of textiles from Pakistan in an effort to normalise trading relations between both countries. Currently, India imposes 30-45 per cent duty on textile products from Pakistan. the government is planning to bring it down to five per cent and has not ruled out the option of allowing duty-free access too. this would be done by reducing the sensitive list of items India maintains for Pakistan, under which certain items are not allowed from there. this list is maintained under the South Asian Free trade Agreement (Safta). “Once the reduced sensitive list under Safta is notified, most of the textile lines would be out, for the benefit of Pakistan. We might bring it almost to the level of Bangladesh,” said a senior commerce department official involved in the process. In 2011, India allowed duty-free access to Bangladeshi garments and apparel products. this, however, would be done only when Pakistan grants most favoured nation (MFN) status, or non-discriminatory market access, to India, the official added. Pakistan’s global exports basket has been dominated by products from the textiles and clothing sector, which, however, is not consistent with its exporting pattern to India. these products are found listed in India’s sensitive list, thus restricting the possibility of Pakistan being able to formally export these products. the main items of informal trade from Pakistan to India are textiles and garments. Interestingly, the new Pakistani government under Prime Minister Nawaz Sharif has renamed the official name of their Ministry of Commerce to Ministry of Commerce and textile Industry, probably to highlight the importance of the industry to the world. While Sharif is himself handling the commerce portfolio, Qasim M Niaz has been appointed the new commerce secretary. Nisha taneja of the Indian Council for Research on International Economic Relations said, “Pakistan’s textile export basket is small. It depends on what products under this category would be opened up by India, which is crucial. they are heavily banking on textiles. And, I do not see a problem in granting them easy access because if we can take on Bangladesh, then there would be no problem with Pakistan.” Pervez Lala, chief executive officer of a Pakistani apparel brand, Lala textiles, which recently participated in an exhibition in Surat, told Business Standard Pakistani textile importers also had to face several non-tariff barriers in India, which affected their business. this issue of granting preferential market access to textile imports from Pakistan was discussed last month during the first joint business council meeting in Islamabad.
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he performance of Model Customs Collectorate (MCC) PaCCS, MCC-Appraisement and MCC-Islamabad raises several questions as the customs duty collection by these two Collectorates does not synchronise with the import value of dutiable items in the fiscal year FY12-13 ending June 30, 2013. MCC-PaCCS remained the highest collector of customs duty on the import of dutiable goods during the last fiscal year collecting Rs57.005 billion. It is quite interesting to note that MCC-PaCCS customs duty collection declined nominally to Rs57.005 billion in FY12-13 from Rs57.413 billion in the preceding year despite the fact that import value of dutiable goods increased by 5.1 percent in FY12-13 to Rs576.666 billion from Rs548.183 billion in the preceding year. Revenue experts suggest that decline in customs duty despite increase in dutiable imports could only be attributed to unjust valuation and inefficient assessment. The similar situation was observed at MCC-Appraisement where the collection of customs duty during FY12-13 stood at Rs43.182 billion as compared to Rs43.942 billion while the imports of dutiable goods surged by 8.9 percent in FY12-13 to
MCC-PaCCS remained the highest collector of customs duty on the import of dutiable goods during the last fiscal year collecting
Rs57.005 billion.
Rs265.621 billion as compared to Rs243.795 billion in the preceding year. Experts say that improper valuation and assessment of imported goods could be because of the professional incompetency of the staff or it might be corruption on their part. MCC-Islamabad/Rawalpindi/ SUST observed a 6.25 percent decline in collection of customs duty to Rs3.0 billion in FY12-13 from Rs3.18 billion in FY11-12 despite the dutiable imports value surged by around 13 percent to Rs30.745 billion in FY1213 from Rs27.327 billion in the preceding year. MCC-Port Mohammad Bin Qasim collected customs duty of Rs43.849 billion in FY12-13 up around 15 percent from Rs38.549 billion in FY11-12 while the import value of dutiable goods stood at Rs372.55 billion in FY12-13 up 5.0 percent from Rs355.851 billion in FY1112. The increase of 15 percent in customs duty against increase of just 5.0 percent in import value of dutiable imports proves that this Collectorate observed justified valuation and efficient assessment contrary to the two Collectorates mentioned above. MCC-Preventive’s customs duty collection surged by 11 percent to Rs9.728 billion in FY1213 as compared to Rs8.758 billion last year while the import value increased by 14 percent to Rs117.143 billion in financial year 12-13. Collection of customs duty by MCC-Hyderabad remained almost flat at Rs3.06 billion in FY12-13 as compared to Rs2.99 billion last year while the
dutiable import value stood at Rs35.07 billion in FY12-13 against Rs33.312 billion in FY1112. MCC-Quetta collected duty of Rs1.029 billion in the last fiscal against Rs192 million previously as the dutiable imports surged to Rs19.52 billion from previous Rs2.25 billion. MCC-Lahore collected duty of Rs16.57 billion from imports of Rs145.189 billion in FY12-13 as compared to duty collection of Rs14.88 billion from imports worth Rs142.78 billion in FY1112. MCC-Faisalabad collected duty of Rs2.182 billion from dutiable imports of Rs26.735 billion in FY13 as compared to duty collection of Rs1.46 billion from imports worth Rs18.013 billion in FY11-12. MCC-Multan collected duty of Rs9.013 billion from imports of Rs120.167 billion in FY12-13 as compared to duty collection of Rs8.776 billion from imports worth Rs117.967 billion in FY1112. MCC-Peshawar collected duty of Rs4.787 billion from imports of Rs37.84 billion in FY1213 as compared to duty collection of Rs3.664 billion from imports worth Rs34.737 billion in FY11-12. MCC-Sialkot collected duty of Rs199 million from imports of Rs1.953 billion in FY12-13 as compared to duty collection of Rs193 million from imports worth Rs1.697 billion in FY11-12.
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12 INtERvIEW
AuguSt 6 - AuguSt 12, 2013
two from Boston arrested as part of £6m cigarette smuggling investigation
NEW YORK: Two men with addresses in Boston were arrested as part of a major customs swoop to bust a suspected £6 million cigarette smuggling operation. About 100 officers, helped by Lincolnshire and Cambridgeshire police and Peterborough Trading Standards – carried out 30 searches of homes, shops and warehouses yesterday. The raids were in the Peterborough and Spalding areas.
LAHORE
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onferring Most Favoured Nation (MFN) status on India would not only provide cheap items to the consumers but Pakistan would also get a huge market of 1.5 billion population for exports. Unless government takes steps to build mega hydel projects like Kalabagh Dam, the country would not overcome the energy crisis. These views were expressed by former LCCI President Irfan Qaiser Sheikh in an exclusive interview to Customs Today team. Irfan Qaiser said that there is no need to fear in awarding MFN status to India because ultimately it would prove beneficial for Pakistan. There are only a few sectors including pharmaceutical and automobile which are opposing MFN status to India, otherwise, the fact is that we would capture a fast progressing economy of world having over 1.5 billion population after signing preferential agreements. Irfan Qaiser said that we have a very good experience of trade with China. China has become the world’s second largest economy with a population of above 1.4 billion. Though, the balance of trade is in China’s favour, yet reality is that we got a huge market for our export in the shape of China. It is basically our imperfection that we could not export to China according to our potential. However, it is a good omen that China has promised to help Pakistan in building economic corridor between Gwadar and Kashghar, he said adding that with the establishment of this economic corridor, China would set up industrial zones in Pakistani territories keeping in mind the local cheap labour. Irfan Qaiser further said that similarly Pakistanis are consuming expensive Indian items as these are being shipped through Mumbai to Dubai and then from Dubai to Karachi. The transportation expenses of these smuggled items increase up to 40 per cent because of extraordinary distance. If we could award MFN status to India, the end-consumers in Pakistan would get these items at cheapest rates as goods could be transported from New Delhi to Lahore consuming just eight hours, he claimed. He said that majority of the businessmen in Pakistan do not
Awarding Mfn status
toindia will benefit
Pakistanexports, irfan qaiser Sheikh Former LCCI President
have fear in their minds while trading with India. He said he is also importing raw material for his chemical factory from India and exporting value-added DOP production to India which is being used in making artificial leather. He claimed that though India has as many as 70 plants producing DOP but Indians are keen to purchase my whole production of DOP. Likewise, other traders, he said, are also doing businesses with Indians and are fetching valuable foreign exchange for the cfountry, he added. While criticising the incumbent government, Irfan Qaisar said that enhancing General Sales Tax (GST) from 16 per cent to 17 per cent is a bad decision as it has opened floodgates of inflation in the country. The indirect taxes are being eliminated in the world whilst the ratios of indirect taxes have been increased in our country. While quoting an example, he said that Pakistanis are paying over 70 per cent indirect taxes and 30 per cent direct taxes while there are 70 per cent direct taxes and 30 per cent indirect taxes are imposed in most of the countries in the world, he claimed. Irfan Qaisar revealed that last year he had organised OIC ambassadors’ summit at Bhurban where all participating countries pledged to set up a trade secre-
tariat that would help promote trade activities among OIC countries that are currently at their lowest ebb of 0.5 per cent. He said that after his stepping down from LCCI as President, the movement’s pace has decreased but still he is optimistic and see silver lining in establishing a mechanism for full-fledge trade among Muslim countries. He further revealed that as many as 28 ambassadors of Muslim world participated in the summit and showed their eagerness in establishing trade secretariat among Muslim countries. While replying to a question, Irfan Qaiser Sheikh said that if we carefully estimate losses incurred by war-on-terror and energy crisis, the outcome would stun everyone. He said that regional countries are progressing at the rate of 8 to 9 per cent of GDP but Pakistan is still struggling hard to achieve 4 per cent GPD, he added. Irfan Qaiser claimed that the calculation further revealed that in the last 15 years, Pakistan has been pushed back almost 200 years compared to regional countries. He said that the successive governments failed to anticipate country’s energy requirements and never tried to set up hydel power plants to generate even a single unit. Vested interest groups have created unfavourable circumstances amongst all provinces. They have put aside country’s interests and preferred to have their own interest and concerns regarding building of new mega dams to generate not only electricity but also irrigate barren lands of the country. He was of the view that building mega projects like Kalabagh and Bhasha Dams are inevitable for the rapid progress of the country. If incumbent government, he said, wanted to see country progressing like other regional countries, these mega dams have to be built on war-footing, he added. He further said that Pakistan is losing over $4 billion annually because of energy crisis, adding that Pakistan is bearing colossal losses because of war-on-terror. Irfan Qaiser suggested that government shoul build mega hydel power plants along with small and medium size run-of-the-river hydel plants to generate cheap and environment-friendly electricity to move the economic wheel of the country smoothly so that Pakistan could be put on road to progress and prosperity.
Pakistanis are consuming expensive Indian items as these are being shipped through Mumbai to Dubai and then from Dubai to Karachi. the transportation expenses of these smuggled items increase up to 40 per cent because of extraordinary distance.
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INtERNAtIONAL 13
AuguSt 6 - AuguSt 12, 2013
used clothes trader facing raps
MANILA: The Bureau of Customs (BOC) has filed smuggling complaints against a trader and his broker for allegedly misdeclaring used clothes. Customs Commissioner Rozzano Rufino B. Biazon led the filing of charges against Blue Shadow Trading Owner Rommel A. Marasigan and broker Mel F. Banas for the P15-million contraband goods.
Afghan customs fines hike cost of uS military pullout WASHINgtON
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customs dispute between the Afghan and US governments has disrupted the withdrawal of American military equipment, dramatically inflating the cost of the drawdown, defense officials said. With Afghan authorities insisting the United States owes millions of dollars in customs fines and trucks carrying hardware being blocked at border crossings, the Americans have started flying out most equipment by air at great cost. “The cost is five to seven times more” by aircraft than over land through neighbouring Pakistan, a defense official, who spoke on condition of anonymity, said. The Afghan government is insisting that US forces pay $1,000 for each shipping container leaving the country that lacks what it calls a valid customs form. And authorities now claim the Americans owe $70 million in fines, even though the United States contends that Kabul’s stance contradicts previous agreements, said US officials, confirming a report that first appeared in the Washington Post. The US Congress was warned in May by the special inspector general for Afghanistan reconstruction that Kabul was exacting exorbitant customs fees and taxes in violation of previous agreements regulating imported goods and the
status of US forces. In some cases, Afghan officials were blocking commercial trucks from delivering food and fuel to US forces due to the customs dispute, the inspector general said. Afghan authorities, however, claim that US contractors transporting equipment failed to file proper documents for large amounts of gear shipped into the country since 2010. To collect fines that Washington allegedly owes Kabul, “the only way is to stop all trucks from crossing the border,” Najibullah Wardak, the director general of the
the Afghan government is insisting that uS forces pay $1,000 for each shipping container leaving the country that lacks what it calls a valid customs form Afghan Customs Department, told the Washington Post. What else can we do?” The Pentagon in a statement acknowledged “challenges” with the withdrawal at Afghan border crossings. The disputes are "typically centered on the interpretation of Afghan customs processes," spokesman Lieutenant Colonel Bill Speaks said in the statement.
NATO-led force commanders are talking with Afghan officials and “we are confident that the situation will be resolved soon,” he said. With a massive drawdown of military equipment due between now and the end of 2014, US officers had counted on moving most of the equipment by land routes through Pakistan. Recent tensions with Pakistan have previously forced the US and its NATO allies
A
CALIFORNIA
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51-year-old California man was charged on Tuesday with bulk cash smuggling after attempting to smuggle $128,547 in his socks as he returned to the US from a brief trip to Mexico. Antonio Rakigjija and his son Franco were driving through the San Ysidro, California port of entry in a Ford Focus on June 5 when they were stopped by a US Customs agent, who was ‘conducting roving pre-primary operations’ with his ‘Narcotics/Human detection Dog.’ Rakigjija's son told the agent he and his father had been in Mexico for just a few hours ‘for his father's agriculture business.’ Both men twice denied that they were attempting to bring in anything from Mexico that needed to be declared, according to a probable cause statement filed in US District
Customs nabs man trying to smuggle
$128,000inhissocks Court in San Diego. However, after the federal agent discovered a glass jar containing pot in a jacket on the vehicle’s back
seat, the Rakigjijas were escorted to a security office to be frisked, reveals The Smoking Gun. While being patted down, Antonio
Rakigjija revealed that he ‘had money in his socks and that the money was for business expenses related to his bean export com-
to transport large amounts of cargo by air and by a longer, more expensive route through Central Asia. Over the past month, land routes have driven out only 36 percent of US equipments, the Post wrote, citing a Pentagon official. The disagreement over customs fines threatens to undermine difficult negotiations over a possible future U.S military presence after 2014.
pany.’ He added that the money the denominations of which are not detailed in court filings - had been wired to a Tijuana currency exchange by a Mexican company with which he does business. Rakigjija claims he had planned on declaring the cash, but the drug bust had ‘distracted’ him before he had a chance too. After he attempts to get the cash back, n a court filing last week that he needed the money for his import business as well as for his house payment and his child, who is about to get married and start college at his La Jolla home this Friday. Rakigjija was charged on Tuesday with bulk cash smuggling, a felony. The complaint also seeks the forfeiture of the $128,547. In a court filing last week, Rakigjija petitioned for the return of the cash, which he contended he needed to run his import company. Additionally, Rakigjija reported that he 'has a house payment, a child that is about to start college and is getting married'.
14
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INtERvIEW
AuguSt 6 - AuguSt 12, 2013
Air-hostess arrested for attempting to smuggle 48 smart phones
ISLAMABAD - An airhostess of the Pakistan International Airlines (PIA) was arrested when she tried to smuggle in a large quantity of smartphones. Airhostess named Nusrat arrived at Islamabad via PIA flight PK 786 from London. During routine search, Customs officials found 48 smartphones from her luggage. The Customs officials have taken the airhostess into custody.
— Exlusive Customs Today photo
KARACHI
AMAnullAh KhAn
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E
fficient ports are the lifeline of the economy by virtue of their key role for the promotion of trade and industry and thus contributing significantly to growth of economies around the world, said Capt. Haleem A. Siddiqui, Chairman Marine Group of Companies, in an exclusive interview with Customs Today. Capt. Haleem A. Siddiqui is always confident about economic potential of the country and has achieved a number of milestones in his professional career which gave new impetus to the emerging business houses in Pakistan. His outstanding achievements include the prestigeous development of a well-equipped and modern container terminal i.e. Pakistan International Container Terminal (PICT) at Karachi Port. The container handling operations and quality cargo facilitation speaks volumes about the amount of passion and efforts he put in to develop this landmark project which can be described as second to none in the port facilitation services. The terminal developed by Marine Group of Companies offers modern and deep berths in Pakistan with a planned draft of 13.5 meters and ensures to maintain the sanctioned depth even during monsoon. PICT with its substantial spare yard space on the East Wharf for additional yard handling capacity makes the handling operation more impressive where latest container scanning and radiation detection facility makes the operation well secured, while the terminal works
efficientports lifelineofeconomy Capt haleem Siddiqui
round the clock. Strengthened with handling capacity of over 750,000 TEUs per annum, the terminal supplements its operations with the availability of on-site rail link to upcountry. The upcoming “Dirty Cargo Terminal” at Port Qasim is bound to play an eye catching role in resolv-
be a dedicated terminal for handling coal which is destined to be future of power generation in Pakistan, said Capt. Haleem Siddiqui. The terminal which is likely to go into operation by early 2015 has become the focal point of all major power producing companies which have already gone into contract
agement to enhance its capacity from 9 million tons to 12 million tons. The project being developed with the financial support of the World Bank will be a unique project as it is being supported by an exclusive cargo track from Karachi to upcountry for supplying coal to the
tential in Pakistan. Expressing a great amount of hope and confidence in the economic future of Pakistan despite all persisting odds faced by the country, Haleem was quite optimistic about the economic future of the country. He strongly recommended that private sector in Pakistan
the upcoming “Dirty Cargo terminal” at Port Qasim is bound to play an eye catching role in resolving the nasty issue of power shortage as well as reducing cost of power generation which is the major concern of every citizen in Pakistan ing the nasty issue of power shortage as well as reducing cost of power generation which is the major concern of every citizen in Pakistan. Actually the Dirty Cargo would
signing with the bulk cargo terminal. This terminal was originally designed to deal with 9 million tons of capacity but the growing demand for coal has encouraged the man-
power generating units across the country through the fast rail track. The bulk cargo terminal supported by cargo train is going to set an example for the private sector’s po-
should be given preference in the privatization of ill-performing government owned units, because our own people have the ability to do wonders, he remarked.
using SIM without proper documentation is crime - PtA
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INtERNAtIONAL
AuguSt 6 - AuguSt 12, 2013
15
2 kg of gold bars seized at nedumbassery airport
KOCHI: Two gold bars were seized from a man who arrived at Cochin International Airport from Dubai. Customs officials at Nedumbassery airport intercepted Sameer Kodiyil of Malappuram at the exit gate of the arrival hall when they found his movements suspicious. Customs officials said Sameer had smuggled in the gold bars concealed in carbon paper inside his socks.
HK seizes
baby elephant tusks in major ivory haul HONg KONg
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ore than 1,000 ivory tusks, mainly from baby elephants, were seized by Hong Kong customs in their biggest haul in three years, officials said on Friday.the tusks, which weigh over two tonnes and are worth more than uS$2 million, were discovered at the city's main port in a cargo container from the African country oftogo. It was headed for mainland China and the bags of tusks were hidden beneath planks of wood."We profiled a container fromtogo, Africa, for cargo examination. First, we found irregularities at an x-ray check.then, we opened the container and discovered the tusks of different sizes,"WongWai-hung, a customs' commander, told reporters. He added that the tusks were buried underneath planks of wood in the corner of the six-metre (20-foot) container, which had been declared as carrying wood only.More than 1,148 tusks were seized in the haul at Hong Kong's Kwai Chung terminal, worth around HK$17.5m (uS$2.3m). It was the biggest ivory seizure in the southern Chinese city since 2010, since when another nine cases have been recorded. Ng Kwok-leung, customs' group head of ports control, said that the majority of the tusks seized in the operation were from baby elephants. "It was a big haul, we should be happy. But when I looked at these tusks, we saw very small tusks of baby elephants.We were sad because they were killed for nothing," he said. the international trade in elephant ivory, with rare exceptions, has been outlawed since 1989 after populations of the African giants dropped from millions in the mid-20th century to some 600,000 by the end of the 1980s.
M JAKARtA
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W
hen customs officers at Soekarno-Hatta International Airport thwarted a drug smuggling attempt by Taiwanese LI, 34, early this month, they only explained that the suspect received a secondary check as he was walking “weird” when passing luggage check gates. More than 3 kilograms of crystal methamphetamine that LI attempted to smuggle was worth around Rp 4 billion (US$385,932) in cash. The arrest saved many lives and it was not a random pick. Office head Okto Irianto said that field officers were equipped with a set of skills to do their best in guarding the country from in-
Customs at forefront in fight against drugs More than 3 kilograms of crystal methamphetamine that LI attempted to smuggle was worth around uS$385,932 in cash. the arrest saved many lives and it was not a random pick ternational drug trafficking. Although refusing to elaborate further for security reasons, he said that field officers were trained with specific psychological profiling and analysis, and assisted with tools and intelligence information. “Field officers are trained with a set of psychological skills to observe. If no intelligence exists, incoming passengers possibly carrying illicit drugs would be more frequent,” Okto told The Jakarta
India customs seize
10,000 turtles in luggage
C KOLKAtA
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ustom officers at an Indian airport have found more than 10,000 live turtles in suitcases and arrested the two passengers suspected of trying to smuggle the reptiles from China to Singapore. Authorities at the Netaji Subhas Chandra Bose International airport in the eastern city of Kolkata said the two detained on Thursday were Indian nationals. "10,043 numbers of exotic varieties of the turtles have been seized from two passengers, residents of Chennai, who were coming from China to Singapore, and landed at Kolkata airport," said assistant commissioner of Airport Customs, Nabnit Kumar. Nearly all species of sea turtle are classified as endangered, according to World Wildlife Fund (WWF). Human activities have imposed a threat of extinction on several species of turtles. Increasing pollution, drainage of wetlands and commercial development tend to destroy the habitats and nesting sites of turtles. WWF says that turtles suffer from poaching, are slaughtered for their eggs, meat, skin and shells, and fall prey to over-exploitation.
Post in his office at a recent interview. “As smuggling motives develop, we refresh and renew officers’ knowledge on these characteristics every month,” he said. Okto explained that the skills and instincts of customs officers developed with their experience in the field. This included observing the culprit’s movements, facial expression and appearance. “Let’s say there’s a person seeming anxious when
waiting at the immigration gates. We have an obligation to suspect that this man is hiding something,” he said. The other tools to prevent drug smuggling are intelligence and technological equipment. The former is provided by foreign counterparts; the National Narcotics Agency (BNN), the police and Interpol, and several other cooperating agencies, Okto said. As for the technology, Okto said, their job (field officers) is also assisted by X-Ray scanners and search dogs. “But we are still short on search dogs,” he said. “As a result, we have to use this particular tool with other offices,” he said. Although acknowledging the dogs’ instinct, Okto cited the procurement and maintenance of the unit as “unaffordable for the agency”. Drug smuggling through international gates seems to be on the rise this year despite supposed heavy punishment awaiting drug pushers from Indonesian law.
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AuguSt 6 - AuguSt 12, 2013
Chocolate-shaped ivory Seized in Macao
MACAO: Two South African travelers failed to smuggle 34 kilograms of ivory into Macao, as local customss officials found 15 suspicious chocolate boxes in their luggage. Customs authorities say the two travellers came from Hong Kong and looked nervous when trying to claim their luggage. A total of 583 chocolate bar-shaped objects were inside the boxes, which were later identified as ivory worth 580 thousand Macao dollars.
fBRatcentrestageas govt woos iMf In the wake of growing political polarization, it will be quite hard for the PML-N government to take Sindh and KPK government on board in terms of getting approval of CCI on revenue surplus given by the provinces in the aftermath of 7th NFC Award. ISLAMABAD
SM hAideR
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he upcoming bailout package of International Monetary Fund (IMF) for Pakistan to the tune of $5.3 billion depends upon the performance of Federal Board of Revenue (FBR) as well as cash-bleeding power sector. The much-awaited energy policy, to be unveiled by Prime Minister Nawaz Sharif, will set the tone for moving towards fixing the problem of power sector as its actual losses were standing in the range of $7.5 billion to $8 billion in the last financial year. “The Ministry of Water and Power has moved a summary before the Economic Coordination Committee of the cabinet for getting approval on four to five key points including raising power tariff as well as amending the NEPRA Act, which will require approval of the Parliament,” said the officials of Finance Ministry. There are many doubts shrouding the economic horizon that why the PML (N) was dillydallying unveiling of energy policy. In the wake of delay in prior actions implementation, it was extending wrong signal to the market as the
currency market witnessed surged and rupee reached upto 103 against one US dollar. “When we have agreed with the IMF on certain conditions then why there is delay on implementation,” said top sources. But official circles say that they conducted meeting on daily basis to track down implementation status on prior actions agreed with the IMF to ensure compliance in timely manner before September 4, 2013. Without fixing the problems of taxation and power sector, the international financial institutions (IFIs) are not ready to provide multibillion dollar assistance to rescue Pakistan’s ailing economy. The IMF’s executive board, scheduled to meet on September 4 in Washington D.C will consider Pakistan’s case including possibility of jacking up Islamabad’s request from $5.3 billion (348 percent quota of the country) to $7.3 billion or 500 percent quota but the PML (N) led government would have to implement prior actions till before the due date of early next month including raising electricity tariff, obtaining approval of Council of Common Interest (CCI) for evolving consensus among the provinces for posting revenue surplus and FBR’s action for broadening the narrowed tax base. In the wake of growing political
polarization, it will be quite hard for the PML-N government to take Sindh and KPK government on board in terms of getting approval of CCI on revenue surplus given by the provinces in the aftermath of 7th NFC Award. However, the sources said that assuming all prior actions were completed within the stipulated timeframe -- something that we cannot take for granted -- and the program is viewed as being good enough to warrant Fund support, and assuming our Office of the Executive Director in the Fund does a good job lobbying with senior management and other Executive Directors, we may get something extra. The second important prior action is taking measures for broadening of narrowed tax base. The FBR has prepared an enforcement plan and will target potential tax evaders in the current fiscal year. To achieve the desired target of Rs 2475 billion in the current financial year, the FBR would have to bring new taxpayers into net otherwise another major shortfall would be waiting for tax machinery going to cause derailment of the IMF program half way as the country is being known as one tranche country in the comity of nations.
Published by M. F. Riaz for Customs today and Printed at Dhoom Printing Press Masheer Mahal Building, Off: I. I. Chundrigar Road, Karachi
the much-awaited energy policy, to be unveiled by Prime Minister nawaz Sharif, will set the tone for moving towards fixing the problem of power sector as its actual losses were standing in the range of
$7.5 billion to 8 billion in the last financial year.