Currency smuggling: Ecap urges government to ink data-sharing deal with UAE

In order to check growing menace of currency smuggling, foreign exchange companies have requested the government to sign an agreement with the United Arab Emirates for sharing of data on incoming/outgoing persons to check smuggling of foreign exchange.
Sources told Business Recorder here on Thursday that the issue was discussed during the last meeting between the Exchange Companies Association of Pakistan (ECAP) and State Bank of Pakistan (SPB) at the Ministry of Finance. The exchange companies have suggested that to curb smuggling of foreign currency by individuals the Central Bank or Customs Authorities of the UAE may be approached to have an agreement to check incoming or outgoing individuals carrying foreign currency and share the data with each other.
Responding to the proposal, the State Bank of Pakistan (SBP) opined that it is desirable from dollarisation and other economic factors, resident Pakistani''s foreign exchange needs to be limited to generate requirements such as travelling, medical and education etc. Moreover, it should be made mandatory to have the stamp of the financial institution from where the foreign exchange being carried has been obtained. This step shall help to reduce smuggling of cash foreign currency, SBP added.
When contacted, a tax official informed that the FBR had given instructions to the Model Customs Collectorates, about 1-2 months ago to strictly check currency smuggling at the airports etc. In this connection, the FBR had circulated the letter of the concerned government departments/agencies to the MCCs. It was brought to the notice of the FBR that the cases of currency smuggling have been increasing which needs to be checked by the customs authorities. Keeping in view seriousness of the situation, the FBR had immediately issued a directive to the field formations to check smuggling of foreign currency.
Under section 2(s) of the Customs Act 1969, currency smuggling has been included in the list of items covered under the definition of smuggling for out-rightly confiscation of the smuggled goods and initiation of criminal proceedings and prosecution against the smugglers. Under section 2(s) of the Customs Act, "smuggle" means to bring into or take out of Pakistan, in breach of any prohibition or restriction for the time being in force, or evading payment of customs-duties or taxes leviable thereon gold bullion, silver bullion, platinum, palladium, radium, precious stones, antiques, currency, narcotics and narcotic and psychotropic substances.
Sources added that Pakistanis residing abroad had been sending their remittances to their families through illegal channels Like Hundi etc being cheaper than sending the same through banks. To curb this trend and to promote Legal channels for home remittances, Government of Pakistan initiated paying Telegraphic Transfer (TT) charges on home remittances sent through banking channels in 1985. The banks in Pakistan enter into remittance specific arrangement with overseas entitles for mobilisation of free remittance under the scheme for TT Reimbursement charges to banks, the remitter can send tree remittance to Pakistan. The charges are paid to the banks on uniform rate of 25 Saudi Riyal per transaction of USD 100 or above, sources added.