It is no news that APTTA is allegedly provides means for smuggling. However, the extent of mis-reporting seems to have gone unnoticed. Mis-reporting and mis-invoicing of the commercial value of transactions include filling out invoices with fraudulent details of quantity, quality, price per unit, type of good being transported.
Comparing the data reported by Pakistan customs regarding exports of various countries to Afghanistan using the APTTA routes with the data reported by the respective countries as to what they actually exported to Afghanistan poses stark discrepancies. In 2015, out of the top 10 products imported through APTTA, 9 product’s imports through APTTA were significantly greater than reported exports by trading partners to Afghanistan at HS Code 6 digit level.
Similar discrepancies could be seen when data from Afghanistan’s trading partners were analyzed. As per the International Trade Center (ITC), in 2015, China reported exports worth $364 million to Afghanistan. Yet, as per the report published by PBC with data provided by Pakistan Customs, China exported goods worth $1.54 billion meaning 48 percent of Afghanistan’s imports came from China through APTTA.
But China is not the only one. Such discrepancies exist for the top trading partners of Afghanistan using APTTA routes where data reported by the international trade center is not consistent with the figures reported by Pakistan Customs.
In 2015, Malaysia and Indonesia reported exports to Afghanistan worth $99 million and $36 million whereas exports through APTTA reported by Pakistan customs were $487 million and $175 million respectively.
It could be argued that the countries have not finished posting their international exports (or have published incomplete records of their exports) as a way of explaining away the discrepancies. Another explanation could be the differences in dollar conversion rates. However, taking a closer look of Afghanistan’s imports through APTTA at HS Code 6-digit level further emphasizes the extent of misreporting.
The top two products that Afghanistan imported from China via APTTA in 2015 were HS Code 580190 – woven pile and chenille fabrics and HS Code 520859 – woven fabrics of cotton. Woven pile and chenille fabrics imports were worth $485 million, however China has not reported exports of this product to Afghanistan in 2015. Similarly, woven fabrics of cotton exports from China to Afghanistan via APTTA were $116 million but China had not reported exports of this product to Afghanistan at all.
Discrepancies from exports from both Indonesia and Malaysia were of vegetable fats and oils. The top export of Indonesia to Afghanistan via APTTA was HS Code 151620 – Vegetable fats and oils, and their fractions, in 2015. While Pakistan Customs reported exports of $52 million, Indonesia has not reported exports to Afghanistan of this product. Total exports to Afghanistan by Indonesia were $19.5 million of products classified HS Code 15.
Similarly, Malaysia exported $258 million worth of HS Code 151620 – vegetable fats and oils and their fractions via APTTA as per the data provided by Pakistan Customs. However, Malaysia reported exports of $154,000 of this product to Afghanistan in 2015.
These discrepancies are of a grave concern because it begs the question as to what is actually being transported through our borders. Given the data sets available, it seems clear that under the guise of APTTA huge shipments of unreported goods are being transported. Without further details, we cannot ascertain whether the purpose is under invoicing, smuggling or some other nefarious purpose.