Faceless, clueless, hopeless

EDITORIAL: For all the noise around digital reform and anti-corruption efforts, Pakistan’s Faceless Customs Assessment (FCA) system has delivered the worst of both worlds: more bureaucracy and less revenue. A flagship of the FBR’s so-called Transformation Plan, the FCA was launched with the promise of clean assessments and quicker clearances. Instead, it has grounded the customs system to a halt and bled the exchequer.

An internal review, now leaked to the press, doesn’t mince words: FCA is “a complete failure to achieve objectives.” There’s little to salvage from this wreck.

The review committee’s findings should be an embarrassment to any institution that claims to plan, assess, or implement. The data is damning. Post-FCA, cargo clearance times have increased, not decreased — even though documentation requirements went down. More delays, more confusion, and ironically, more human intervention. Referrals to higher officers, lab test requisitions, and frequent reviews before Principal Appraisers and Assistant Collectors have ballooned. Far from cutting red tape, FCA has doubled it.

Worse than inefficiency is the abject failure to raise revenue although the entire premise of the FCA was that removal of human discretion would close the leakages due to collusion. Instead, Customs assessments now generate less additional revenue: 13 percent post-FCA, down from 16 percent. A three-point drop may seem small, but in Pakistan’s fragile fiscal environment, it’s catastrophic. The system was meant to plug a revenue hole. It made it wider.

So what went wrong? Nearly everything; the review points out that FCA’s two core design choices — hiding trader information from assessing officers, and dismantling specialised assessment groups — had already been tried and abandoned two decades ago under PACCS, Pakistan’s first digital customs experiment. The reason they failed then is the same reason they fail now: removing information from assessors limits their ability to assess correctly. Meanwhile, specialised groups bring expertise, institutional memory, and efficiency. Scrap them, and you’re back to square one — except this time, with added confusion.

The rollout itself has been another disaster. Implementing an untested, unintegrated system in Karachi — the busiest and most complex port — without phased pilots or feedback loops was asking for failure. There was no integration with key databases like the IRS. No staged rollout in places like Lahore or Rawalpindi. And clearly, no plan for post-clearance audits to offset the blind spots of the faceless system.

The system’s defenders argue that collusion needed to be stopped. Perhaps so. But if removing human interaction doesn’t improve revenue, then either the collusion wasn’t materially hurting the state, or the new system simply failed to stop it. In both cases, the FCA’s core assumptions collapse. You can’t hide behind intent when the outcome is actively harmful.

This isn’t just a technical failure. It’s a policy failure. The FBR and Customs launched a nationwide digital overhaul without the data to justify it, the testing to support it, or the infrastructure to sustain it. The result? Lower revenues, slower trade, and even more distrust in public reform.

The review committee has wisely recommended halting FCA’s expansion. That’s not a recommendation — it’s a lifeline. If there’s any will left in the corridors of power to do the right thing, this system should be frozen in its tracks. A full audit must follow — one that doesn’t just patch the flaws but questions the very logic behind faceless assessments.

Pakistan doesn’t need faceless systems. It needs accountable ones. Until we stop mistaking cosmetic digitalisation for actual reform, failures like FCA will keep repeating — each time more costly than the last.

Copyright Business Recorder, 2025