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Vol 2 Issue no. 04
karachi, tue feb 11 - Mon feb 17, 2014
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Regd. no, MC-1381
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takInG BenefIt of Gsp pLus
Commerce minister urges the industrialists to opt for valueaddition in all sectors to extract maximum benefits out of GsP plus opportunity and address unemployment problem at home. | see paGe 02 |
— Exlusive Customs Today photo
GettInGaDDItIonaLChaRGe
FbR member information Technology Raana ahmed has been given additional charge of CEO PRal while existing CEO imtiaz ahmad Khan has been made General manager. | see paGe 04 | ReGuLatInG fReIGht ChaRGes
The department possesses scanners and other tools to detect and bust smuggling activities by scanning through human bodies and goods islamabad
The government should establish a regulatory body to fix the charges of freight forwarders and shipping companies, suggests KCCi president | see paGe 06 | CReatInG CBM systeM
in an article exclusively written for CustomsToday, Pakistan Customs timely and strategic move towards building up integrated transit trade management system is an important step | see paGe 03 |
faIza IsRaR
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Lack of trained and skilled staff to operate these modern tools/machines against smugglers can undermine the capacity and efficiency, says DG I&I Riaz
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Director General (DG) Customs Intelligence and Investigation (I&I) Riaz Khan said that Pakistan Customs’ unwavering resolve to uproot cross-border smuggling has rendered amazing results. In the past, different departments including ANF, Pakistan Coast Guards, Pakistan Maritime Security Agency, Pakistan Customs and police worked individually against smuggling but after the Supreme Court directives all these departments are working in close collaboration which has augmented the efforts to eradicate the menace of smuggling. DG Customs Intelligence and Investigation Riaz Khan expressed these views during an exclusive chat with Customs Today. The DG informed that all these departments are working in close coordination which has curtailed the ex-
penses while timely exchange of information has enhanced the efOiciency of all the departments. He said that there is a dire need for securing borders which are the gateway for exports and imports. The Customs Department is facing multifarious problems in the Oight against smuggling while the ofOicers perform anti-trafOicking operations by risking their lives. It is required to put all the resources together to launch effective operations and handle the situation on difOicult borders, he added. Replying to a question, the DG I&I said, “There are two obvious affects of smuggling - direct and indirect as the goods entering into the country through unfair channels affect the revenue adversely. This must be addressed on warfootings,” adding, it is an uphill task and a single department or force cannot root out the menace of smuggling alone. The DG I&I acknowledged that the situation warranted all-out efforts to explore other ways for generating more revenue. He said that the department possessed scanners and other tools to detect and bust smuggling activities by
scanning through human bodies and goods. But we cannot rely solely on these machines as there exists always room for improvement, especially in view of the rapid development in technology. Advanced and state-of-the-art equipment and machines have made the way into the market which cannot only act as a catalyst for curbing smuggling but also provide edge to customs ofOicials,” he added. Riaz Khan averred that these modern tools/machines are not Olawless. These can be utilised for better results as these machines can sniff out drugs and radioactive explosives. However, lack of trained and skilled staff to operate these machines can undermine the capacity and efOiciency,” he added. Riaz Khan also laid emphasise on trainings and workshops for both the workers and staff after regular intervals of 6-8 months to build their capacity to overcome their shortcomings. Due to joint efforts of the staff and ofOicials of customs intelligence, goods worth Rs791.80 million were seized in 437 cases from July to December of the current Oiscal year.
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NaTiONal
FEbRUaRY 11 - FEbRUaRY 17, 2014
sharma to inaugurate India show on feb 14
LAHORE: Indian Minister for Commerce Anand Sharma is expected to visit Pakistan to inaugurate 'India Show' and meet his counterpart Khurram Dastgir Khan to discuss ways to enhance trade and investment between the two countries. "The Minister is likely to inaugurate the 'India Show' in Lahore and will hold bilateral meeting with Pakistani Commerce Minister Khan in Islamabad. He is expected to be in Pakistan from February 14-16," an official in the Indian commerce ministry said.
Collection of customs duty stands at Rs19b in January ollection of customs duty on imported items is reportedly low against the target set by FbR due to lesser imports. This has in turn affected the overall revenue collection during fiscal year 2013-14. Collection of customs duty was Rs 19 billion in January 2014 against Rs 18 billion in January 2013. in the period from July to January in the current fiscal year, collection of customs duty was recorded slightly over Rs 129 billion against Rs 126.178 billion in the same period of previous fiscal year. sources said that the potential of the customs duty collection is 2 to 3 times more as compared to the existing trend. dutiable imports have definitely decreased having negative impact on customs duty collection. However, collection of sales tax, FEd and withholding taxes might have witnessed a major increase in case valuation at the import stage has been improved. Federal board of Revenue can improve sales tax, FEd and withholding tax collection at the import stage provided there is proper valuation of imported goods during 2013-14. Tax authorities have reportedly said that less growth of dutiable imports was mainly due to high percentage of non-dutiable imports, citing that 66 percent of the imports were non-dutiable because of Free Trade agreements (FTas), Preferential Trade agreements (PTas) and zero rating. While only 34 per cent imports were being levied duties and the statistics had shown only two per cent of growth in terms of rupee. That was why the growth up to Customs target was yet to be achieved and the efforts were well underway to achieve the target within remaining five months of FY 2013-14. —CT Report
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Yazdani,Khokhar assumechargeas mCClahorecollectors ewly transferred collectors of customs appraisment and preventive have assumed charge of their posts at the model Customs Collectorate (mCC) lahore, sources said. Fazal Yazdani and Zahid Khokhar were transferred and posted as collector preventive and collector appraisement respectively replacing Junaid akram and Zeba Hai azhar. both the collectors were transferred to mCC lahore unexpectedly following FbR chairman Tariq bajwa’s visit of lahore on international Customs day. sources said that the lahore collectors were replaced due to their upcoming training of National management courses. —CT Report
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Gsp plus status
dastgir urges industrialists to opt for value-addition in all sectors mUlTaN
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bout possible import of electricity from India, Federal Minister for Commerce Engineer Khurram Dastgir Khan has said that the government would avail all resources from every corner whether east or west to overpower energy crisis. He was addressing the business community at Multan Chamber of Commerce and Industry. He further said that talks with India were focused on linking grids of the two countries. The government wishes to maintain peaceful relations with neighbouring countries and improve trade with them, he said, adding that it also desires to connect infrastructure with neighbouring countries to support trade. He said that talks with Iran were also in progress on Pak-Iran gas pipeline project adding that the previous regime laid its foundations without 'Oinancial close-up'. He said the government had vision to increase electricity generation to 25,000 megawatts in three years and then up to 40,000 megawatts. He added that conversion of all thermal power plants to coal would take over 18 months. The government also wishes to begin work on Diamir Bhasha and Dasu dams simultaneously to address water and energy requirements of the country. He said that gas shortage would also come to an end soon adding that Prime Minister Nawaz Sharif would soon lay the foundation stone of LNG terminal in Karachi. The work on Guddu and Jamshoro projects would also begin and Asian Development Bank was extending $ 900 million for the purpose. Khurram disclosed that China was providing soft term loan to Pakistan to add another 2100 megawatts of power to the national grid. He said the government wanted to build a new relationship
india will not be given mFN status but balance would be maintained in bilateral trade with the neighbouring country, says khurram Dastgir
with the people, a partnership in development and welfare initiatives so that people can themselves run projects once they are funded and installed by the government. He promised that most of the problems confronting the country now would be resolved to a greater extent by June 2015. Pakistan would be well placed to robustly launching its journey to prosperity and national development. The current and the next Oiscal year would be a bit difOicult, however, he added. Dastgir said that despite the fact that India will not be given Most Favoured Nation status balance would be maintained in bilateral trade with the neighbouring country. He said that the present regime had started the economic diplomacy which would bear its fruits in years ahead. The minister said that trade related talks with India were now focused on the basis of ‘Non Discriminatory Market Access’ instead of Most Favoured Nation status. “We want indiscriminate access to Indian markets on the principal of reciprocity to maintain the balance in bilateral trade,” Dastgir said. Federal Minister urged the industrialists to opt for value-addition in all sectors to extract maximum beneOits out of GSP plus opportunity and address unemployment problem at home. He said that value-addition consumes comparatively lower energy, provides jobs to more number of people particularly women, brings premium price from the foreign markets and comparatively less time is consumed in establishing a unit for the production value-added products. MCCI President Khawaja Usman, DG Khan Chamber of Commerce and Industry President Khawaja Anis, PCGA senior Vice President Sheikh Asim Saeed, All Pakistan Bed Sheets and Upholstery Manufacturers Association Chairman Mian Asim, South Punjab Women Chambers of Commerce and Industry President Fatima Leghari, Nishtar Medical Institutions Board of Management Chairman Khawaja Jalaluddin Roomi besides other industrialists and ofOicials were also present.
adjudication Collectorate decides 80pc of cases in 10 to 12 days KaRaCHi
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here is no backlog of cases at the Collectorate of Adjudication as the department has timely and efOiciently summoned the parties concerned (importers and exporters) and settled down their issues. A senior ofOicer of the Adjudication Collectorate told Customs Today while requesting anonymity that cases are being decided speedily and efOiciently after the introduction of Web Based One Customs (WeBOC), adding that the ofOicers in the Adjudication Collectorate have decided 80 per cent of the cases in 10 to 12 days. “With the introduction of WeBOC, the show-cause notices are being issued directly to the parties (importers and exporters) and they can see the notices on their screen, however; before the intro-
with the introduction of weBoC, show-cause notices are being issued directly to the parties
duction of WeBOC computerised system, notices were served manually, which took four to six months to decide the cases”, he pointed out. He claimed that overall impact of the Adjudication Collectorate was positive and complaints of importers and exporters were being resolved promptly. To a query, the senior ofOicer informed that the top brass of the Federal Board of Revenue (FBR) could also oversee results and outcome of the cases decided by Adjudication Collectorate through its ofOicial website. “The direct online service of show cause notice and hearing notices/orders eliminated many problems in the due process of hearing”, he informed. When contacted, different importers and exporters declared that after the online Adjudication process through WeBOC, performance of the Adjudication Collectorate is much improved. They said that complaints were being resolved by the ofOicers in stipulated timeframe as they could get show-cause notices through computerised system at the earliest.
mCC-appraisement (East) collects Rs16.387b in Jan CC appraisement (East) has collected revenue of Rs 16.387 billion in share of customs duty, sales tax, income tax and federal excise duty in the month of January. mCC-appraisement (East) has collected a sum of rupees Rs 4663.91m in share of customs duty against FbR’s set target of Rs 5057.76m.The collectorate has collected revenue of Rs 8859.04m in share of sales tax, which was Rs 3124.92m ahead of its set target i.e. Rs 5734.12m. similarly, mCC-appraisement (East) has collected revenue of Rs 2712.77m in share of incomeTax which is Rs 519.29m more against its set target of Rs 2193.48m.The collectorate also overlapped in order to collect revenue in share of federal excise duty by generating Rs 151.92m. —CT Report
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NaTiONal 03
FEbRUaRY 11 - FEbRUaRY 17, 2014
suzuki Motors favours auto parts import from India
ISLAMABAD: Pakistan Suzuki Motor Company, the largest assembler of automotive vehicles in Pakistan, has supported the opening of auto parts imports from India. Suzuki’s stance is, however, being opposed by other major assemblers i.e. Indus Motors Limited- assemblers of Toyota and M/s Atlas Honda- manufacturers of Honda cars. Suzuki is operating under a Japanese management and supporting trade with India because the company claims to be committed to expanding its vehicle production in line with market demand.
Clearance of stuck vehicles to start soon KaRaCHi
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Coordinated Border Management and pakistan Customs
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n the wake of ECC decision to grant one-time waiver, the Pakistan Customs will start process of clearance of stuckup used imported vehicles at ports once it receives the Finance ministry notification. “Customs will start collecting duty taxes and surcharge on these stuck-up vehicles after it receive the ministry’s notification allowing the clearance,” confirmed deputy/assistant Collector, model Customs Collectorate appraisement (West) UsmanTariq while talking to CustomsToday at his office. He elaborated that under import Policy-2013, the surcharge including Customs duty to be paid on imported vehicles which were old than three years and eight months (3 years and 8 months). He said that the importers could get released their vehicles after paying Cd and surcharge for clearance. it is worth mentioning here that the Economic Coordination Committee (ECC) in its recent meeting has approved one-time waiver for clearance of used vehicles stuck-up at Karachi Port. around 2,000 used imported vehicles (manufactured in the year 2009) have stuck-up at ports since November, 2013 due to the imposition of sRO 577, issued by Federal Commerce ministry. it is pertinent to mention here that the importers have already paid millions of rupees in demurrage charges on stuck-up used vehicles while the Customs duty on import of used vehicles has decreased by Rs35 billion to Rs10 billion in recent years.
sanauLLah aBRo
additional Collector of Customs
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eveloping countries face many challenges in fully utilizing the opportunities offered by participation in the global economy. Some of these are associated with traditional trade barriers: tariff and nontariff measures that impede market access (World Bank, 2011). Pakistan Customs has always envisioned the changing trends of global economy and shift in regional and international trade. In rapidly changing business environment it has afforded matching response not only by reducing tariffs and eliminating non-tariff barriers but it has vigorously adopted modernization to objectives of harmonization, simpliOications through technologies and demonstrating facilitation to trade. It has developed strategic policies to enable capitalization of regional and international trade opportunities. The recent step of Integrated Transit Trade Management System (ITTMS) is an important step in context of recently focused area of Coordinated Border Management (CBM). During International Development Partners Conference held in
Dec 2013, organized by the FBR at Islamabad, it was resolved to make Pakistan a regional transit trade hub by connecting it with soft and hard infrastructure linkages with regional countries. This vision has put forward many challenges for creating an enabling environment for an efOicient, safe and hassle free regional trading environments which is only possible through development of CBM. The challenge can be gauged from the fact that regional trade has become vital for economic development and it has gained more importance for integrating it with international trade due to changing business models in world. Recent wave of globalization and emergence of new business models such as Global Value Chains (GVC) and Supply Chain Management (SCM) companies, regional trade has grown by leaps and bounds. As per IMF trade report, inter-regional trade in emerging Asian economies (China, Korea and East Asian countries) increased by Oive times as compared to rest of worlds’ three times during 1990 and 2006. On the other hand, unfortunately, South Asia has lagged behind in development of regional trade as compared to South East Asian economies and China in tapping this potential. The regional trade in South Asia is dismally low at 4 percent as compared with the regional trade of European Union at 67 percent, NAFTA at 62 percent, the Association of Southeast Asian Nations (ASEAN) at 26%, the Common Market for Eastern and Southern Africa at 22%, Gulf Cooperation Council at 8%, Latin America and Caribbean at 22% (UNCTAD, 2007). However, trade within South Asia can be more than doubled if appropriate regional agreements on infrastructure including coordinated border management are taken enabling seamless movement of goods. As per World Bank reports, annual trade between India and Pakistan, the bulk of which is routed through Dubai, is currently estimated at US$1 billion, but could be as great as US$9 billion if barri-
pakistan Customs’ timely and strategic move towards building up integrated transit trade management system is an important and forthcoming step for creating coordinated Customs management environment
ers are lifted. Pak Afghan transit trade has moved from $0.83 billion in 2007 to $2.38 billion in FY 2013 and it is expected to be around Oive billion dollar by 2015. Through trade liberalization instead of import substitution, integration with global value chains (GVC) and by adopting coordinated border management of goods we can achieve more rapid expansion of trade between India, Pakistan, Afghanistan, Bangladesh, and Nepal. In changing business environment, South Asian regional trade is most likely to be integrated with central Asian trade block on its north and with emerging Asian economies on its east. Pakistan Customs’ timely and strategic move towards building up integrated transit trade management system is an important and forthcoming step for creating coordinated Customs management environment. In CBM bordering countries would be able to exchange electronic data and verify legitimate trading entities. It will not only ensure seamless movement of goods but same can provide the much needed safety and security of supply chain of transit trade. It will pave the way for enabling SMEs to be part of global value chains and harness the hidden potential of inter and intra regional trade in south Asia. WCO’s idea of Collaborative Customs (C to C) can effectively be achieved through coordinated border management which will bring information sharing, co location of facilities, integrated Customs check posts, close inter agency cooperation, one stop posts, Authorized Economic Operators (AEOs) and single window system. It would not only reduce the cost of doing business, control smuggling, increase revenues and create convenience for trade but it can usher a new era of regional trade integration and economic development in South Asia. (Author is currently pursuing Advance Studies at Maxwell School of Public Administration, USA)
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04 NaTiONal
FEbRUaRY 11 - FEbRUaRY 17, 2014
attempt to smuggle us dollars thwarted
LANDI KOTAL: Two persons were arrested by authorities during an attempt to smuggle $300,000 to Afghanistan via Torkham border. Security and checking has been increased at the border since it was the third failed attempt of US dollars’ smuggling to Afghanistan during the last two weeks, an official said. Khassadar and Levies personnel were ordered to closely search passengers travelling on the Pak-Afghan highway, he added. He said that the arrested were both Afghan nationals.
KPT playing vital role in strengthening economy hairman Karachi Port Trust (KPT), Rear admiral (Retired), azhar Hayat has said that the KPT is playing a vital role in strengthening country's economy. He said that efficiency of KPT has been improved due to privatization of two terminals. law enforcement agencies were cooperating in the recovery of illegally occupied lands of the port. There were some difficulties in dealing with the land grabbers but law enforcement agencies had helped and addressed the problem. Replying to a question regarding tourism, he said that some areas near the port can be promoted for tourism. azhar Hayat said that security system around KPT is very effective, adding that law enforcement agencies, maritime and customs police are cooperating to maintain foolproof security system in the area. To another question the chairman said that modernization plan of KPT is underway, adding that deep sea project would be functional in the next year. He urged all the associated institutions to provide better environment for the promotion of KPT. —CT Report
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MCCLahoregrants on-spotinspection duringIndiashow ustoms authorities in lahore have been allowed on spot inspection of the goods to be imported for india show by model Customs Collectorate of Preventive. Expo Center lahore will host the show from February 14 to 16 under the auspices of ministry of Commerce andTrade development authority of Pakistan. in this regard, a notification has been issued by the the Collector of model Customs Collectorate (Preventive), in exercise of the powers conferred upon him under section 80 (5) of the Customs act 1969. The goods upon their entry and exit from Pakistan throughWagha border or the allama iqbal international airport, lahore as the case may be, shall move under customs escort, the notification read. deputy Collector, model Customs Collectorate (Preventive) muhammad shafiqur Rehman shall be the overall in charge of all matters relating to the processing and clearance of the goods and coordination amongst various government departments, functionaries and organisers of the exhibition, as and when it is required, according to the notification. —CT Report
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JunaidUsmanassumes chargeassecretaryFbR ederal board of Revenue has issued a notification regarding charge assumption of senior officer of Pakistan Customs service. Junaid Usman akram, (bs18) has assumed charge of the post of secretary, FbR (Headquarters), islamabad with effect from 21-01-2014. —CT Report
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Raana ahmed gets additional charge of pral Ceo islamabad
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ederal Board of Revenue Member Information Technology Raana Ahmed has been given additional charge of CEO Pakistan Revenue Automation Limited (Pral) while existing Pral CEO Imtiaz Ahmad Khan has been made General Manager. The decision was made at the Board of Directors meeting of Pral chaired by FBR Chairman Tariq Bajwa at FBR House. According to details, the FBR Member IT has been given additional charge with the aim to run affairs of the Pral more effectively as compared to a full-Oledged CEO. It is to be recalled that the FBR had brought the Pral management under the control of Board Member Information Management System (IMS) in the past but it did not yield desired results. The decision has been described as a test case to see any extraordinary developments in IT by bringing CEO Pral under FBR Member IT. During the meeting, the authorities accepted the demand of the FBR Member IT with the directions to improve functioning of the Pral and ensure further improvement in the working of the organisation. Under the revised job description of FBR Member IT, will prepare plan and strategy for FBR in the Oield of Information & Communication Technology (ICT), provide support and
— Exlusive Customs Today photo
fBR had brought pral management under the control of Board Member Information Management system in the past but to no avail assistance to the Senior Management in taking informed decision in the Oield of ICT; forecast and budget procurement of Software/ Hardware/Networks, in coordination with Pral and manage all ICT projects, including contract and Vendor Management, preparation of Bid-
ding Documents/ RFPs/Bid Evaluation Reports, Consultants' TORs, etc, for award of contracts for procurement of software/hardware, networks, in co-ordination with Pral. The Member would monitor and control software development and implementation by Pral/external
vendors and grant mandatory prior approval for initiating new or modifying/enhancing/shelving existing software application; undertake periodic system audits for quality assurance, especially security of the operational software, under development or developed and deployed, and resource management for such System Audits; constitute user groups for various ICT activities; liaise with other Wings of FBR for Business Need Analysis and co-ordinate with Directorates General (T&R) for ICT Training of end-users. Member would oversee cleansing of existing data; supervise Pral's overall management, including administrative, Oinancial and technical activities; monitor and evaluate overall performance of CEO, Pral; serve as an essential interchange for all communications between Pral and FBR(HQ)/its Oield ofOices; spearhead the process of developing the audit methodology to assure audit quality; deal with all legal, administrative and Oinancial matters relating Pral, including agreement/contract and veriOication of invoices raised by Pral; deal with all matters relating to SAP, including renewal of licenses, training and implementation, etc in FBR and Oield ofOices; exercise powers and perform functions of the Board under the provisions of Sales Tax Act 1990, Income Tax Ordinance 2001, Federal Excise Act 2005, Income Tax Rules 2002, Federal Excise Rules 2005 and Sales Tax Rules 2006, as delegated by the Board and perform any other duty or task assigned by the Chairman FBR.
FbRshowsrecord26pcgrowthinJanuaryrevenuecollection he Federal board of Revenue showed a record revenue growth of 26 percent in January 2014 by collecting Rs168bn against Rs132bn collected in January 2013. The board collected Rs1,199 billion during the first seven months (July-Jan) of this fiscal year against the projected target of Rs1,268bn, recording a shortfall of Rs69bn. The revenue collection remained Rs1,020b in the same period last fiscal year. FbR official spokesperson shahid Husain asad said that January data shows that collection will further improve in remaining months of this fiscal year. He said these are provisional figures which will increase in next couple of days. Provisional data showed that direct tax collection reached to Rs439b in July-Jan 2013-14 as against Rs385.523b in the same period last year, showing an increase of 13.87pc. The sales tax collection rose 21.65pc to Rs564.68b in July-Jan 2013-14 compared to Rs464.155b in the corresponding period last year. The FEd collection increased by 14.4pc to Rs69.73b as against Rs60.918b the same period last year. a growth of 2.3pc was recorded in collection of customs duties as revenue collection stood at Rs129.088b as against Rs126.178b last year. —CT Report
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NaTiONal 05
FEbRUaRY 11 - FEbRUaRY 17, 2014
freight train remains most neglected sector in past: saad Rafique
LAHORE: Pakistan Railways Minister Khawaja Saad Rafique has said that freight trains have been the most neglected sector in the past. Present administration is now operating four to five freight trains daily while just one train was operational when the present government had taken over the charge. The Minister said that the punctuality rate of trains had been raised up to 55 per cent from 10 per cent and there was room for more improvement in it.
Low Indian duty structure
Experts seek oil, ghee inclusion in negative list xperts underlined the need for inclusion of edible oil, vegetable ghee/cooking oil in negative list to compete with low-duty indian products in the region. according to the experts, a comparison of customs duty structure on the import of palm oil between the two countries shows that indian industry has negligible duty structure advantage on edible oil as compared to Pakistani taxation structure.They pointed out that huge subsidies being offered by the india to its agriculture and manufacturing sectors had to be addressed through the imposition of anti-dumping and countervailing duties on imports from india or similar/identical subsidies be granted to local sectors to make it competitive.They argued that the indian dominance over afghanistan ghee and cooking oil market reflected the significance of subsidy offered to the sector in india.They declared that lesser/nil custom duty on palm oil imports and competitive tax structure on locally produced edible oil in india were promoting exports of the product.They feared that in the wake of grant of mFN status, Pakistan would have become dependent on india to fulfil its national consumption of this food item. They, however, pointed out that india and China being the largest importers of edible oil in the world, enjoyed concessional prices and cheaper freight rates.The international market prices are also disturbed at any given point of time besides many other factors when these two giants make purchases to build up their stocks. —CT Report
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nato/Isaf transit cargo: processing, clearance only under weBoC KaRaCHi
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he Directorate General Transit Trade, Customs House Karachi has announced that processing and clearance of US/Isaf/Nato transit cargo will only be carried out under the Web-Based Customs Computerised System (WeBOC) and all their ‘transit Goods Declarations (GDs)’ shall be filed under this system. The Directorate has also notified that the Afghan importers or their authorised customs clearing agents shall file all Afghan Transit Goods Declarations under the customs computerised system for transit of consignments under the TTA. According to the directorate, on directives of the Federal Board of Revenue, it is circulated for the information of all concerned, including the Afghan Transit Trade Importers, Customs Clearing Agents, Border Agents, Terminal Operators, Shipping Agents, Bonded Carriers/Transport Operators and other stakeholders that the processing and clearance of all types of Transit Trade Cargo (Commercial & Non-Commercial) to and from Afghanistan shall be carried out under the web-based customs computerised system (WeBOC) with effect from December 31, 2013. Moreover, all Afghan Transit Goods Declarations (AT-GDs) in respect thereof shall be filed under the customs computerised system by the Afghan importers or their authorised customs Clearing Agents through the user IDs allotted to the respective users.
all transit GDs in respect of reverse us/nato/Isaf consignments shall be filed under Customs Computerised system through user IDs allotted to respective users
The shipping line shall mention the via Port, i.e, Torkham/Chaman/Wagha in Bill of Lading and the same shall be distinctly manifested in the carriers declaration uploaded electronically in the Customs Computerised System. The Transit GDs already filed in One Customs but not cleared in the system at the time of activation of the WeBOC system shall be cleared under the one customs. Through another order, Directorate General of Transit Trade Customs House Karachi further notified that under instructions from the FBR and in pursuance of Board’s Customs General Order No 05 of 2013 dated 09.07.2013, it is circulated for the information of all concerned, including the US ODRP, Isaf/Nato LNO, concerned Customs Agents authorised by the US ODRP, Terminal Operators, Shipping Agents. Bonded Carriers/Transport Operators and other stakeholders that the processing and clearance of US/Isaf/Nato Reverse Transit cargo shall be carried out wider the Web Based Customs Computerised System (WeBOC). All ''transit Goods Declarations (GDs) in respect of all reverse US/Nato/Isaf consignments shall be filed under the Customs Computerised System through User IDs allotted to the respective users. The shipping line shill mention the via port, ie, Torkham/Chaman in Bill of Lading and the same shall be distinctly manifested in the carriers declaration uploaded electronically in the Customs Computerised System. The Transit GDs already filed in ''One-Customs'' but not cleared in the System at the time of activation of the WeBOC system shall be cleared under the One-Customs, directorate added.
EGia protests against smuggling, high customs values laHORE
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www.customstoday.com lectronic Goods importers association (EGia) President Karamat awan said that rising trend of smuggling and high customs valuations will affect the upcoming budget 2014-15, prompting general rise in the prices of goods and articles. during a press conference, he said that the customs valuation department have fixed high valuation of goods, which is 200 percent more than previous values. He said that due to high customs valuations, importers have abandoned the idea of direct import to lahore, instead they opt for importing and clearing their consignments through Karachi ports, surrendering huge revenue to the city. He said that the market has flooded with smuggled electronic goods and articles.“Representatives from our association should be made part of the valuation process. When duty is higher, it is natural that people tend to evade duty,”EGia office-bearer said, adding,“Customs department should re-determine valuation rulings of all items after taking in confidence our representatives.”
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according to World Trade Organisation (WTO), customs duty should not exceed 35 per cent of a product. However, in Pakistan importers are paying extremely high customs duty of up to 200 per cent. “We cannot pay Rs 100 duty on an item of Rs 50,” EGia’s amin mazhar butt said. He further said that
businesses have come to a grinding halt due to this reason. EGia members said that they had contacted FbR top officials but nothing has come out of these meetings. instead, they refused to consider the genuine demands of importers. They said that customs officials were of the view that if
they do not increase customs duty, the tax targets are not achieved. They said that throughout the world taxes are being reduced and tax net is being extended but in Pakistan we always go the other way. The EGia office-bearers urged Prime minister Nawaz sharif to take stock of the issue and redress it at the earliest.
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arachi Chamber of Commerce and Industry (KCCI) President Aamir Abdullah Zaki has urged the government to take on board the business community and other stakeholders to evolve a consensus for tax reforms and collection. “Look, the business community, being a key stakeholder, wants to sit down and discuss tax reforms with the government to develop a foolproof tax collection strategy as it is a common cause and any unilateral decision in this regard will not last long.” KCCI President Aamir Abdullah Zaki gave voice to his thoughts during an exclusive interview with Customs Today in his chamber. Abdullah Zaki stressed the need for long-term industrial policy. “The incumbent government should introduce an effective industrial policy which is need of the hour to steer the country out of economic quagmire,” he underlined. He averred that unilateral decisions by the government without taking the business community into conOidence would not serve any purpose and
would only complicate the economic equation further. He asserted that the situation necessitated a well thought-out economic policy. “You see resources in industrial sector have dried up while inadequate infrastructure coupled with crippling electricity outages has dealt a blow to the sector.” He regretted that the shortage of electricity and absence of water supply and sewerage system are the factors which had ruined the industrial sector, especially in Karachi. Abdullah Zaki revealed that the KCCI budget committee has started work on preparing and drafting proposals for the upcoming budget for the Oiscal year 2014-15. He was of the view that the government should contact the business community and other stakeholders at least two months prior to the new budget to facilitate inclusion of their proposals in the draft budget. “It will be a morale booster if the authorities concerned invite the business community for budget proposals as ultimately it will turn out to be an additional support for the government to Oinalize the budget for the year 2014-15, he elaborated. The KCCI chief informed that the chamber was organising a pre-budget seminar and chambers from across the country including the tribal areas and in-
terior Sindh would be invited to come to and voice their suggestions and recommendations for budget proposals, adding that the KCCI on the behalf of all chambers of the country would present the Oinal budget proposals draft to the Finance Ministry. Commenting on Customs issues, Aamir Zaki claimed that structure of the Customs duty is good enough but the capacity of the Customs ofOicials is not up to the standards to properly manage it. He alleged that the Directorate of Customs Valuation determined the values of commodities without consulting and taking the importers and business community into conOidence. The KCCI president charged that the authorities of Valuation Department with the connivance of a speciOic group of Afghan Transit Trade (ATT) had determined the Customs values of commodities to facilitate it. He urged the FBR high-ups to take notice of the unjustiOied valuation rulings issued by the Directorate of Customs Valuation and hold the authorities concerned accountable in this regard. About WeBOC, Aamir Zaki strongly criticized the group formation in the computerised system by the Customs authorities, saying that the step would open doors for corruption in FBR. Elaborating the dilemma, the KCCI president argued that the importers did not
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sPECialREPORT 07
— Exlusive Customs Today photo
FEbRUaRY 11 - FEbRUaRY 17, 2014
abdullah zaki praised the role of Chief Collector-appraisement (south) nasir Masroor ahmed, saying that he always took keen interest in resolving issues of the business community. the government should contact the business community and other stakeholders at least two months prior to the new budget to facilitate inclusion of their proposals in the draft budget know who had handled it in the past while Oiling their Goods Declaration (GDs) and making entries but now after the formation of groups, the GDs would go into the hands of speciOic Customs ofOicials. Replying to a question, he praised the role of Chief Collector-Appraisement (South) Nasir Masroor Ahmed, saying that he always took keen interest in resolving issues of the business community. Aamir Zaki said that the ofOicials of Pakistan Customs should realize their responsibility and ensure timely clearance of the consignments without delay in examination and assessment. Criticising the performance of freight forwarders and shipping companies, the KCCI president lamented that they were Oleecing the business community and causing huge losses to the national economy by charging hefty freight, demurrage and detention charges. “The government should establish
a regulatory body to Oix the charges of freight forwarders and shipping companies”, KCCI president suggested. Terming the GSP plus status a great achievement, Aamir Zaki said that the business community had geared up for getting a target of $2 billion, adding that the government should ensure provision of basic facilities and better environment to the business community to reap maximum beneOits of the GSP plus status. To another query, he claimed that the federal government was not interested in improving the law and order situation in the country, particularly in Karachi. “The extortion cases have increased from 10 to 15 percent over the past two weeks despite the fact that a targeted operation is being conducted in the city. Aamir Zaki regretted that the businessmen were now getting calls from the extortionists from international numbers, adding that the government must
settle the issue once and for all. The KCCI president opined that lack of resources and political inOluence had been undermining performance of the Law Enforcement Agencies (LEAs), causing irreparable loss to the city. He made a vehement demand, saying that the city should be handed over to Pakistan Army for lasting peace and economic growth.
Message for Customs today: Customs Today, being a weekly newspaper, is doing a wonderful job in highlighting the issues of importers, Customs agents and business community. It also covers FBR, Customs, shipping and other related sectors which deOinitely leave a far-reaching impact on improving their performance. I extended my best wishes to the entire team of Customs Today in their professional endeavours.
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08 EdiTORial
FEbRUaRY 11 - FEbRUaRY 17, 2014
Founder & Chairman zulfiqar ali Editor Rahil yasin editor@customstoday.com.pk For advertising & subscription marketing@customstoday.com.pk +92-322-3370002 www.customstoday.com Phones: 042-35781643-4, Fax: 042-35781645 address: 627, siddiq Trade Centre, Gulberg, lahore
eDItoRIaL
Moreeconomic challengesahead
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s a result of ongoing review talks between Pakistani authorities and the imF, islamabad will be able to draw third tranche worth $545 million under 36 months Extended Fund Facility (EFF) after approval of Fund’s executive board by early next month. This smooth sailing possesses many challenges for the government in months ahead as the Pml (N) led government will have to deliver promises on many fronts of the economy including pursuing vigorous privatization plan, broadening of tax base, maximizing FbR revenues, rationalizing energy tariff and approving laws to make the state bank of Pakistan (sbP) an autonomous body in months ahead. Except net borrowing from the sbP, Pakistan has fulfilled many other conditions under the EFF program which will pave the way for release of third tranche for the country’s struggling economy. The imF relaxed Net international Reserves (NiR) related target so the country achieved this performance criteria for end december 2013. it was the sbP target not to allow deletion of reserves more than $2.8 billion till end september 2013 but the central bank missed it out by more than $300 million as the reserves declined to $3.1 billion. This NiR target was revised upward to the level of $4 billion till december 2013.in order to achieve the NiR target, the government ensured exports proceeds of $500 million coming back into the country in december 2013 that also resulted into achieving current account surplus for this month. Pakistan implemented structural benchmark criteria related to make central Power Purchase agency operational by separating it from National Transmission and dispatch Company (NTdC), hire staff and issue CPPa rules and guidelines and initiate the payment and settlement system till end december 2013. another structural benchmark was partially met under which the government had committed with the imF to initiate revenue based load shedding in six remaining electricity distribution companies. The government also met structural benchmark to develop and finish launching initiative to enhance revenue administration for sales tax, excise, and customs, similar to that prepared for income tax till end december 2013. The government also implemented structural benchmark to hire a professional audit firm to conduct a technical and financial audit of the system to identify the stock and flow of payables at all levels of the energy sector till end November 2013. For the first six months (July-dec) period, the government has succeeded in curtailing the budget deficit to 2.2 percent of GdP mainly because of achieving jump-start in netting non-tax revenues at supersonic speed and controlling expenditures side. in the same period of the last financial year, the budget deficit had crossed 2.6 percent of GdP. instead of continuous much-trumpeted thumping on its performance, the government should also keep in mind that the budget deficit had risen from 2.6 percent of GdP to 8.8 percent of GdP in the second half of the previous fiscal year so it was yet to see how the government control unbridled expenditures and boost dwindling FbR revenues in effective manner in order to avoid slippages in achieving the desired target on fiscal side under the tight scrutiny of the Fund program.
Prudent fiscal policy essential for stability islamabad
sM haIDeR
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B
y tabling debt and Oiscal policy statements before the Parliament, the government has fulOilled legal requirement under Fiscal Responsibility and Debt Limitation Act 2005 prepared and approved during the era of former military ruler Gen (Retd) Pervez Musharraf. The government has accepted that the last Oiscal year ended on June 30, 2013 witnessed violation of different provisions of Fiscal Responsibility and Debt Limitation Act 2005. The FRDL Act, 2005 requires reducing the revenue deOicit to nil not later than the 13th June, 2008 and thereafter maintaining a revenue surplus. But the revenue balance remained negative since 2005 because of increasing exogenous and endogenous challenges including campaign against extremism, fragile law and order situation, continued energy shortages, narrow tax base, non-materialization of sufOicient external inOlows, unprecedented calamity of Oloods in 2010, torrential rains in Sindh in 2011 and increasing debt servicing re-
quirement. Under FRDLA2005, it binds the government to ensure “that within a period of ten Oinancial year, beginning from the Oirst July, 2003 and ending on 13th June, 2013, the total public debt at the end of the 10th Oinancial year does not exceed sixty percent of the estimated gross domestic product for that year and thereafter maintaining the total public debt below sixty percent of gross domestic product for any given year. This provision was violated as the country’s public debt to GDP was recorded at 62.7 percent as on June 30, 2013. Crossing of this threshold by 2.7 percent was mainly due to the actual deOicit being higher than projected. The public debt also includes loans from IMF amounting to US$ 4.4 billion or 1.9 percent of the GDP as on June 30, 2013. The borrowing from IMF is only utilized towards Balance of Payment support and is reOlected in the country’s foreign currency reserves. The Fiscal Policy Statement 2013-14 argues thatPakistan economy experienced another challenging year as the Oiscal deOicit was recorded at 8 percent of GDP against the budgeted target of 4.7 percent in 2012-13. The tax revenue collection remained 19 percent below the
budget target and the expenditure surpassed the target by 22 percent which led to the exacerbating Oiscal deOicit. The higher Oiscal deOicit is added to public debt and consumed a major chunk of revenue to service it. Financing mix of deOicit is also an area of concern as it is skewed towards domestic sources particularly on bank borrowing owing to lower external receipts. It is crowding out the private sector and is affecting investment, economic growth and ultimately compromising revenue generating capacity of the economy. The present government is committed to accomplish objectives outlined in the FRDL Act, 2005. Fiscal policy would continue to explore opportunities for augmenting the resource envelop. At the same time, expenditure would be rationalized and non-productive outlays would be curtailed as announced in Budget 2013-14. These include (i) Other than the obligatory expenditure of debt servicing, defense, pay and allowances of civil servants and grants, there will be a 30 percent cut on all other expenditure (ii) Government intends to replace un-targeted subsidies with targeted subsidies to reach to poor and vulnerable segment of the so-
ciety (iii) Government is determined to fully reform and restructure public sector corporations. Alongside, full Oinancial restructuring will be carried out to enable them to run on sound commercial basis and reduce their dependence on national exchequer. The economic vision is based on trade and investment, competitive advantage and market considerations, enhancing private sector involvement, limiting its role to only large scale investment and limit itself within the broader limits imposed by the available resources, broadening the base of resource mobilization for running the government. Prudent Oiscal policy together with strong implementation and accountability of principles is essential for macroeconomic stability. It will help to reduce inOlation, strengthen economic growth, and mitigate risks of falling foreign reserves and debt burden. By placing a high priority on structural reform and revenue generation, and establishing a comprehensive framework for management of Public Sector Enterprises (PSEs), the government will be able to Oinance the envisaged expenditure while containing excessive borrowing and maintaining Oiscal sustainability.
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NaTiONal
FEbRUaRY 11 - FEbRUaRY 17, 2014
09
Greek port becomes world’s fastest growing port
PIRAEUS: The total number of containers handled at the port of Piraeus in Greece exceeded all expectations, making Greece’s largest port the fastest growing port in the world for the year 2013. According to official details Piraeus container terminal last year handled 2.520 million twenty-foot equivalent units (TEU), as containers are known, compared to the 2.4 million expected. With an additional 644,000 TEU handled by the Greek Piraeus Port Authority, total container traffic amounted to 3.163 million TEU.
smuggling makes headway at cost of our livelihoods: lashari
senate body seeks report from
pQa on land allottments KaRaCHi
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ith the passage of time, smuggling is progressing which has dangerously ruined the economic health of the country and the government has failed to arrest the menace completely.This was stated by lCCi President sohail lashari while exclusively talking to CustomsToday. He said that smuggling has been gaining momentum ever since the very inception of the country but presently it has become a greater menace as the smugglers have got well-equipped. He said that smuggling is not only destroying the local industry by dumping markets with goods bought in on throw away prices by the smugglers but also discouraging the genuine importers.The government has failed to play its part in redressing the grave issue.“so many goods are being smuggled from China into Pakistan but there is no one to question the smugglers. instead genuine businessmen are being harassed,” lashari pointed out. selling of smuggled goods in the markets destroys the investment of original businessmen who properly and timely pay taxes.This is a discouraging scenario, the president highlighted.“Govt has to undertake ruthless crackdown on smugglers,” the president said. —CTReport
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anf seizes millions of worth heroin at karachi port team of anti-Narcotics Force (aNF), Karachi Region has seized millions of worth high quality heroin during a raid at Karachi sea Port. according to the details, an aNF team on a tip-off raided at Karachi sea Port and foiled a bid of smuggling high quality heroin to malaysia.The team seized 20-feet container and recovered millions of worth high quality heroin during snap checking.“The heroin was concealed in boxes of oranges.The aNF team also arrested two accused on the spot and registered a case against them”, he added. according to the assistant director, aNF Karachi Region, further investigation was underway and more arrests were expected during probe. —CTReport
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wRIte to us youR GRIeVanCes: Through CustoMs toDay platform heLp Desk, now you have chance to DIReCtLy write your problems to top govt. functionaries. if you have any grievances, queries, questions or suggestions, you can write in this section as it provides easiest access to you to approach Customs and Revenue authorities. who can write in this section? importers & Exporters, Customs agents, Chambers of Commerce, Trade associations and Customs Officers to whoM you can write? Honourable Pm, minister/secretary for Finance & Revenue, minister/secretary for Ports and shipping, FbR Chairman, member Customs and Chairperson senate/National assembly standing Committee on Finance & Revenue. send your letters at: letters@customstoday.com.pk
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enate Standing Committee on Ports and Shipping has directed the authorities at Port Qasim to submit a detailed report within three weeks regarding certain irregularities which it noted in land allotments at the industrial zones of the port. During the meeting at Port Qasim, committee was led by its Chairman Sardar Fateh Muhammad Hasni. Other members attending the meeting were senators Shahi Syed, Sardar Muhammad Yaqoob Nasir, Nawabzada Muhammad Akbar Magsi, Nuzhat Sadiq, Mir Hasil Khan Bizenjo and Saeedul Hassan Mandokhail. The committee was informed that in 2006 a large area of land at the port was allotted at low price in the name of Al-Watan and Green area schemes. No investment has been made so far. Senator Hasni directed the port authorities to get commitment from each allottees in written about how much land they need for setting up the factory or other business facility and retrieve the remaining land. The committee also stressed on expediting industrialisation at the port zones by fully developing the infrastructure and offering more incentives to investors as Port Qasim is ideally located port and can be turned into a big industrial and trade hub of the region. Port Qasim Authority (PQA)
Chairman Agha Jan Akhtar along with a team of senior ofOicials answered various queries by the senators besides giving a detailed presentation on port operations and its industrial zones. PQA chairman assured the committee that with availability of funds the Authority would carry out the remaining development work at the zones. However, PQA is facing shortage of electricity, gas and water, he informed. The committee asked the port authorities to seek permission from the federal government for establishing a power generating plant for meeting power demands of the industrial zone and its operational activities. PQA chief assured to pursue the committee’s advice. The senators were informed that total 13,700 acres of land has so far been allotted to 3604 companies. Senator Hasni directed the port authorities to reclaim the industrial land not utilized by the allottees.
PQA chairman, explaining the land availability position, said PQA was in the process of reclaiming land from the low lying areas and from the sea shore and assured that the port would have sufOicient land for further industrialization in future. The committee was also briefed about port operations and enhancement of the port facilities including deepening of channel to 14 feet, which would be widened and deepened further in near future to attract mother ships adding to the port income through increased cargo trafOicking. The Senate committee members also visited the port facilities. The committee was also briefed by the Customs ofOicials about the progress in the scam of disappearance of 31 containers and theft in NATO containers. Senate’s committee said that they would refer the case to Law and Justice Division for further guidance to take action as the case is in the court.
In2006,a largearea ofland was allotted atlow price butno investment hasbeen made sofar
shortage of advanced machinery at QICt for de-stuffing, re-stuffing To, The Manager Operations, Qasim Int’l Containers Terminal Karachi
Respected Sir, I would like to draw your kind attention towards the burning issue pertaining to the scarcity of the latest equipment being used for handling of scrap at Qasim International Containers Terminal (QICT). I would like to inform you that the importers are facing immense problems and difOiculties due to the shortage of advanced machinery in the process of de-stufOing and re-stufOing of consignments. The mishandling of the cargo by the unskilled terminal workers also causes heavy loss to the importers, as the items in the consignments are ruptured during the entire process of de-stufOing and re-stufOing.
Due to the incompetency of the terminal staff, the consignee becomes an ultimate victim of damaging the imported items. Furthermore, lack of efOiciency of the terminal staff in grounding the consignments for examination is affecting the business cost of the importers. Delay in examination also results in the payment of demurrage to the terminal operators. The consignments which have to be cleared in hours for examination are being delayed for two to three days due to apathy of terminal staff, as they are unable to ground the containers on time for examination. I hoped that the authorities concerned will take appropriate action in this regard to redress the grievances of the importers. Yours Truly, Mohammad Sajid, Karachi
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10 PiCTORial
FEbRUaRY 11 - FEbRUaRY 17, 2014
German pizza in switzerland: Customs clearance ďŹ rst
BERNE: German and Swiss food lovers were enjoying a flourishing trade in Italian food delivery, but customs officials in Switzerland finally noticed and are putting a stop to it. According to local media, ordering a Margherita pizza for delivery in some Swiss border towns near Germany cost between 13.50 and 15 Swiss francs, or between $14.94 and $16.60. But Swiss customers living close enough to the border could just order the same pizzas from restaurants in Germany and pay between $8.80 and $10.20.
fBR issues ntns to all Mps
islamabad
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I
n an attempt to make public the tax details of members of National Assembly, Senate and provincial assemblies, FBR has issued National Tax Numbers to all non-NTN holders. The Board also directed all MPs to Oile their tax re-
turns, otherwise they would be declared as non-Oilers in Tax Directory to be issued by February 15, 2014. According to sources, FBR has allocated NTNs to 39 non-National Tax Number (NTN) holder members of Punjab Assembly; 23 members of Provincial Assembly, Khyber Pakhtunkhwa; 9 Provincial Assembly members of Balochistan and 8 Members of Sindh Provincial Assembly. FBR has issued over 100 NTNs to the non-NTN holder parliamentari-
fBR issued over 100 ntns to the non-ntn holder Mps in Jan 2014
ans during January 2014. Sources said that 78 NTNs have been issued to the parliamentarians during the two days. The FBR has conveyed to the nonOiler parliamentarians to Oile the income tax returns at the earliest, as the FBR has to follow the directions of the Ministry of Finance for publication of the Tax Directory by February 15. In case the non-Oiler parliamentarians would remain unable to Oile returns, the FBR will be left with no
option but to publish their names as non-Oilers. The Tax Directory would specify the names of the parliamentarians along with their tax status as nonOiler and no-payment of taxes by February 15. Now, it depends on the NTN holders to ensure Oiling of returns by the given deadline. In the Oirst phase, tax details of parliamentarians would be made public and in the next phase tax details of all taxpayers would be published within two months.
DuBaI: Federal minister for Finance senator ishaq dar meeting with imF delegation.
sIaLkot: Group photo of ambassador of Greece to Pakistan Petros mavroidis with oďŹƒcebearers of sialkot Chamber of Commerce and industry (sCCi) during his visit.
IsLaMaBaD: Federal minister for Commerce Engineer Khurram dastgir Khan chairing a meeting to discuss trade liberalization with india.
www.customstoday.com FEbRUaRY 11 - FEbRUaRY 17, 2014
export of kinnow surges
KARACHI: Pakistan’s export of kinnow is on the rise as the season for its production is at its peak. A huge quantity of the fruit worth $88.9 million has been exported so far equal to 4000 TEUs. However in case of the fruit’s export to Russia the volume has now been restricted to 30 per cent as compared to last year. Exporters are facing huge financial losses in this regard. Availability of good quality of Moroccan’s kinnow in the Russian market which has been flooded with Pakistani kinnow is resulting in low price being offered by this market.
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Published by m. F. Riaz, Off. 91, 3rd Flr, Gul Plaza, m.a. Rd., Karachi, for Customs Today and Printed at dhoom Printing Press masheer mahal building, Off: i. i. Chundrigar Road, Karachi