32,344 missing containers: FBR dumps pile of cases into NAB's lap

RECORDER REPORT

ISLAMABAD: The Federal Board of Revenue (FBR) has handed over the pile of major cases pertaining to 32,344 Isaf/Nato containers scam to the National Accountability Bureau (NAB) to initiate criminal proceedings against customs officials, clearing agents, importers and others involved in missing Afghan transit containers case.

Sources told Business Recorder here on Friday that the FBR has completed the process of sending all cases of 32,344 missing containers to NAB for initiating criminal proceedings. So far, it is premature to give exact number of customs officials who would face criminal investigation by the NAB. It is a major development that all the scam record has now been made available to the NAB investigators to fix criminal responsibility on those involved in the missing containers scam. Roughly, hundreds of customs officials including staff might have been involved in missing containers scam from January 1, 2007 to December 31, 2010. Now, the NAB would independently conduct criminal investigation in the scam.

Sources said that the deputation of a senior official of NAB at the FBR Headquarters had expedited processing of cases under ISAF/NATO scam. The NAB official, who is well known for his honesty, had investigated big scams like "Double Shah" and had ample experience of investigating financial crimes and frauds. In the presence of the NAB Director at the FBR Headquarters, the committee headed by Member Taxpayers Audit, has been able to finalise cases involving 32,344 containers and complete record has been given to the NAB. This would help the Bureau to complete investigation against the customs officials, clearing agents and others involved in the scam.

When asked about the amount of penalty imposed on the National Logistic Cell (NLC), sources said that the adjudication authorities have started imposing penalty on NLC where it was found involved in containers scam. It depends on the nature of the specific case and amount of duties and taxes involved in the case. The NLC was primarily responsible for safe transportation of containers to the destination in Afghanistan. The adjudication authorities are imposing penalty on the NLC on case to case basis. However, the adjudication officers are independently issuing Orders-in-Original in these cases involving clearing agents, transporters, etc. The FBR has not interfered in the on-going adjudication procedure which is being conducted by the tax officials independently.

Under the existing adjudication procedure, it is mandatory for the adjudicating officer to complete the investigation and issue the O-i-O within a period of 120 days which is extendable for another 60 days after obtaining permission from the Board. As soon as the adjudication order is issued, the amount becomes immediately recoverable from the concerned person.

Official categorically stated that the FBR or the probe committee is not interfering in the matters of on-going adjudication of cases in the ISAF/Containers scam.

Sharing another major development, sources said that the show-cause notices to importers, clearing agents, border agents and the National Logistics Cell (NLC) with respect to 28,802 commercial containers have been issued. In these cases, tax liability of over Rs 3 billion has been raised against concerned persons and the remaining are being issued.

The FBR's investigation committee had reportedly informed the NAB that the frequent use of Hired Mechanical Transport (HMT) of private transporters to carry Afghan transit cargo and Isaf/Nato containers facilitated crime of missing containers under the 'Isaf Containers Scam.'

Based on various inquiries and confirmation made so far, as many as 28,802 commercial Afghan Transit Trade containers and 3,542 non-commercial containers (Nato/Isaf) have been identified as missing, as their crossing the Pak-Afghan border could not be established and were prima facie, pilfered/smuggled en-route during the period from January 1, 2007 to December 31, 2010.

The FBR's committee further said that actual quantum and nature of goods smuggled into Pakistan under the garb of Afghan Transit Trade may be much higher, based on declarations made to customs at the time of import. The estimated revenue loss in terms of duties and taxes on commercial containers comes to around Rs 55 billion, in addition to the loss of revenue on 3,398 containers.

The committee ha informed the NAB authorities that the crime could not have assumed the persistence and the scale had the higher management fulfilled its administrative and legal obligations with diligence, sense of responsibility and focus. It goes without saying that such massive crimes thrive in an environment of corruption and nepotism. Posting profiles of some of the officers/officials found involved in the scam indicate patronage and protection of the upper hierarchy. Besides, FIRs are also being lodged for determining criminal liability of the culprits and so far a list of containers has been forwarded to the Directorate General of Intelligence & Investigation - FBR for lodging FIRs against the culprits including customs officials. The forged ATTIs or cross border certificates (CBCs) were placed in the record of Appraisement and Port Qasim Collectorates to fraudulently prove that the consignments cleared there against had crossed the Pak-Afghan border. This was meant to cover up the crime. No manifest clearance of the Afghan Transit imports was conducted during the period January 1, 2007 to December 31, 2010 and failure on this crucial aspect kept the crime in dark. Despite the fact that the issue of pilferage of AT cargo came up for discussion during various Collectors' Conferences held in the Board, no any meaningful monitoring and reconciliation mechanism was put into place.

The failure on this account would be deliberate and criminal in nature, FBR had reportedly informed NAB authorities as per sources.