January 1, 2007 to December 31, 2010: 157,736 containers imported into Afghanistan under cover of US army

The Federal Board of Revenue (FBR) has found that 157,736 containers were imported under the cover of US Military for transit to Afghanistan through Pakistan Customs Computerised System (PaCCS) during January 1, 2007 to December 31, 2010.
Sources told Business Recorder here on Thursday that the FBR's progress report on the "ISAF Containers Scam" has held Model Customs Collectorates responsible for not reconciliation of the data of the Afghan Transit Trade containers. It is a major failure of the collectorates that no reconciliation has been made of the Afghan Transit Trade containers that entered Pakistan and safely crossed over to Afghanistan.
The FBR report further revealed that 157,736 containers were imported in the name of US Military for transit to Afghanistan as per data provided by PaCCS. For clearance of US Cargo, no GD is filed in PaCCS and a unique User ID assigned in the PaCCS to US Mission at Karachi is used for clearance of cargo by US Military.
In the PaCCS system however due to the online facility the process was that after Gate-out from Ports/ Terminals at Karachi, the information gets flashed on the screens accessible to border Collectorates. It is the responsibility of the border Collectorates to record the "Gate-in" ie due arrival of cargo at border stations and "Cross-border" events in the system by using the ID assigned to the border Collectorates.
The FBR said that the electronic acknowledgement of such cargo at the Border Collectorates known as the "Gate-in event" of 77,884 containers is missing and "Cross-border event" into Afghanistan of 95,374 containers is missing in the system. Though it is improbable that such huge numbers of containers may have gone missing, the fact that as far as the PaCCS software was concerned the system relied solely on the confirmation of cross-border to be confirmed 'on-line' by the border collectorates.
It appears that the computerised system put in place for proper reconciliation of cross-border event of US cargo was ignored by the concerned authorities, with the result that a massive exercise is required to reconcile cross-border event of each consignment through manual record.
The FBR said that the trend of steep fall in import of Transit Trade cargo as previously reported upto June 20, 2011, continued in ensuing months. Study conducted in this regard reveals that as against 63,264 commercial ATT containers imported during the period February 1, 2010 to September 20, 2010, the quantum of such imports in the corresponding period of this year has fallen to 33,414 containers, signifying a massive fall by approximately 50%. Similarly, non-commercial ATT imports have also fallen by 26 percent.
The exercise with regard to non-commercial ATT cargo (Nato/ISAF) on similar lines was undertaken. An initial list of 18,995 containers was compiled and sent to border customs collectorates of Peshawar and Quetta for further verification from the record. In the first phase, the collectorate of Quetta has forwarded a list of 3106 containers where against they have stated that their record does not show that the same have been received in the collectorate.
Similarly, the collectorate of Peshawar has also sent list of 290 containers where against they confirmed that the same have not been received in the collectorate. Thus, in the first phase, 3396 containers (3106 + 290) are being sent to the clearance collectorates for issuance of show cause notices to the defaulters. It is up to the delinquents now to prove through unimpeachable evidence that the said containers crossed over to Afghanistan as prima facie the onus has been shifted on them. Regarding the remaining containers further investigation/ scrutiny is in progress.
There has been glaring failure on the part of the collectorates that no reconciliation has been made of the Afghan Transit Trade containers that entered Pakistan and safely crossed over to Afghanistan. It is the primary duty of the collectorates to ensure timely reconciliation and manifest clearance. Draft FIRS with regard to 580 containers have already been sent to the Director General, Directorate General of Intelligence & Investigation, FBR added.
The FBR's report further said that comparison of digitised Afghan Wakil Tijjar's record for the period January 1, 2008 to June 30, 2010, showing arrival of consignments at Chaman exit station with the Chaman bound consignments leaving Karachi ports. This exercise yielded 3689 containers as have not reached Chaman and crossed the Pak-Afghan border.
The digitisation of cross border certificates (CBCs) appearing in Chaman Customs' official correspondence with Karachi Customs Collectorates and its comparison with the Afghan Transit Trade Invoices (ATTIs) originating at Karachi for Chaman. In consequence of this exercise, the Collector Model Collectorate of Customs (MCC) Quetta reported that during the period 01.01.2007 to 31.12.2010 as many as 4152 containers appearing in One-custom data as destined for Chaman had not arrived at Chaman. 1011 of these containers were common with the findings based on Wakil Tijjar's record, leaving balance 3142 containers for issuance of Show Cause Notices.
The FBR said that the third major exercise involved digitisation of CBCs available in the record of MCC Peshawar and its comparison with the One-custom record of Afghan Transit Trade (ATT) containers bound for exit at Torkhum. This exercise resulted in detection of 17052 missing containers.
A final reconciliation exercise of consolidated digitised record of CBCs (available with border stations) was run with that of consolidated ATTI record of Karachi customs to take care of any possible omissions in previous exercises. Resultantly, another 4919 containers have been identified as missing and having not crossed over to Afghanistan for which instructions have been issued to Appraisement and Port Qasim Collectorates for issuance of Show Cause Notices. Hence final figure of such commercial ATT cargo comes to 28802 containers.
Out of these 28802 containers, 6483 Show Cause Notices (SCN) against 14,109 Containers have been issued, and remaining are also being issued. So far, 108 Show Cause Notices (184 containers) have been adjudicated involving adjudged duties and taxes to the tune of Rs 424 million and penalty of Rs 210 million (Total Rs 424 million + Rs 210 million = Rs 634 million). Recovery proceedings have been initiated against the defaulters including the importer/clearing agent/ border agent and NLC, etc under the relevant provisions of the Customs Act, 1969, FBR said.
Besides adjudication, glaring cases are being identified and referred to Directorate General of Intelligence & Investigation, FBR, for criminal proceedings against the culprits. Earlier, 198 containers were referred to the Directorate General for initiation of criminal proceedings.
These included 48 containers (45 ATTs) where the Cross Border Certificates (CBCs) present in the record of MCC Appraisement were confirmed as fake/fabricated. The Directorate General has lodged Six FIRs involving 40 containers. Owing to a Constitutional Petition filed by some officers/officials nominated in the FIRS against the jurisdiction of the Directorate General of Intelligence & Investigation-FBR, registration of FIRs in remaining containers is underway, FBR said.
In addition to the 198 containers already referred for FIRs, the Probe Committee has identified another 382 containers for initiation of criminal proceedings. Duties and taxes to the tune of Rs 1,585 million, excluding the amount of penalty to be imposed, are Involved In these 382 containers, and the Directorate General of Intelligence & Investigation-FBR is processing the registration of criminal cases in this regard.
The FBR further said that in compliance of the Supreme Court's orders after successful identification of allegedly missing/pilfered commercial AT containers, a detailed review and reconciliation of non-commercial AT cargo was actively undertaken. The exercise was divided into two parts: one covering non-commercial cargo of ISAF/ Nato Forces cleared through One-Custom System and the other covering the US Cargo cleared through PaCCS software system. While ISAF/Nato cargo on import were cleared through the 'One Customs' system only the US military cargo was cleared through both 'One Customs' as well as the PaCCS automated system.
For non-commercial cargo cleared through One-Custom System, the relevant data of clearances made from Karachi was obtained from PRAL For reconciliation, MCC Peshawar and MCC Quetta were asked to provide complete record of Goods Declarations (GDs) retained by them as proof of cross-border of such non-commercial containers.
These GDs were then got digitised by the Probe Committee through PRAL team and were then compared with the data obtained from PRAL As a result, an initial list of 18995 containers, not found in the digitised GD record of border Collectorates, was compiled and sent to border Customs Collectorates of Peshawar and Quetta for further verification from the record.
Out of 18995 containers, 12788 containers pertained to Chaman. The MCC Quetta after scrutiny from its record, in the first phase, has denied having any kind of record of arrival/cross border of 3106 Nato/ ISAF containers. As for the remaining containers investigation/scrutiny is in progress. Likewise, in the first phase, MCC, Peshawar has confirmed that the record of 290 ISAF/Nato containers is missing giving credence to the fact that these containers were pilfered en-route.
Show Cause Notices In these cases (3106+290= 3396) will be issued by the clearance Collectorates under the relevant provisions of the Customs Act, 1969 to the defaulters calling upon them to explain as to why penal action should not be taken against them besides recovery of leviable duties and taxes, FBR report added.