Afghan, Pakistan customs decision: uncleared cargo may be disposed of by auction

Pakistan''s customs officials and their Afghan counterpart have agreed for disposal of uncleared/stuck up Afghan cargo through public auction in cases where such unclaimed containers have not been cleared for a long time. Sources told Business Recorder here on Friday that the Afghanistan-Pakistan Transit Trade Rules 2011 allow disposal of uncleared/stuck up Afghan cargo through public auction.
However, no such provision is available for the transit cargo imported under the erstwhile Transit Agreement of 1965. As a result, a large number of un-cleared cargo is still lying at the ports and there is urgent need for the precious space at the ports. The customs department requested the representatives of the Afghan Consulate General to grant NOC for auction of the long stuck up cargo. The Consulate General''s proposals will be forwarded to Board within 15 days'' time. In this regard, the Collectors of Appraisement/Port Qasim/Afghan Consulate General Karachi are co-ordinating.
According to sources, Pakistan''s customs officials resolved a number of issues raised by the Afghan traders during clearance of their consignments under the new transit trade agreement and Transit Trade Rules 2011. Afghan traders apprised the Pakistan customs officials that private terminal operators (KICT, PICT, QICT) and Karachi Port Trust (KPT) provided different number of demurrage-free days to Afghan traders for clearance of cargo.
The difference in practice casts an adverse impact on the business cycle and leads to various trade distortions. In this regard KICT provides the least number of demurrage-free days (5) while KPT provides the maximum (14, excluding holidays). It has been decided that since the majority of transit cargo is imported through private terminals, there is a need to bring uniformity in the number of demurrage-free days provided by them to Afghan traders and the minimum benchmark in this regard would be KPT''s standard of 14 days (excluding holidays) for all terminals.
Sources said that Article 2 of the Afghanistan Pakistan Transit Trade Agreement (APTTA) 2010 calls for examination of 5 percent of transit goods by customs, whereas rule 603 (5) of Transit Rules 2011 envisages examination of 5 percent consignments. There is a need to align the Customs Rules with the provision of the Agreement and to mark only 5 percent of the commercial goods/containers to examination by customs. The FBR has informed the Afghan traders that the issue has already been resolved by MCC Appraisement and instructions in this regard have been communicated to Pakistan Revenue Automation Limited (PRAL).
Sources said that importers of vehicles were facing great difficulty in examination as Transit Rules 2011 stipulate 100 percent examination in case the container is selected by the system. For this purpose, customs requires de-stuffing of all vehicles from the containers, which are specially packed with elaborate lashing in a two-tier arrangement. The entire process of de-stuffing and then re-stuffing the vehicles in the container entail huge extra cost. Besides, the special arrangement for re-stuffing of vehicles is not readily available in Pakistan.
It was decided that in future containers comprising vehicles shall be scanned and, unless there is a specific complaint which cannot be substantiated through scanning, vehicles will not be de-stuffed from container for examination. Moreover, all containers of vehicles which have been stuck at the ports for de-stuffing shall be entitled to waiver of port charges by the terminals on voluntary basis.
Sources said that the Transit Rules 2011 allow all types of amendments in the IGM vide rule 646. It has been further pointed out that amendments entail cumbersome procedure whereby matters are referred from MCC PaCCS to Appraisement/Port Qasim Collectorates for NOC before correction of data. The FBR has decided that all amendments shall be made by the relevant transit section of One-Customs Collectorate as per Rules and for this purpose the Index will be transferred to PRAL by PaCCS for decision on merit on case to case basis and without delay.
Sources said that the representatives of the bonded carriers apprised the FBR that due to delayed and/or non-feeding of de-sealing information in the PRAL system at the exit/en route Collectorates, close to 1000 vehicles of various bonded carriers are stuck up at Karachi Port/Port Qasim and are unable to undertake further trips because of blocking of vehicles in the system. The Director (Automation) of PRAL confirmed this aspect and stated that the blocking of vehicles whose containers are not de-sealed in the system is a fail-safe measure to ensure that transit cargo reaches the destination Collectorate.
The FBR took serious note of the delayed de-sealing and entrusted Collector (Preventive) to write to Collectors of the exit stations for expeditious feeding of de-sealing information. For this purpose PRAL was directed to ensure quick feeding of acknowledgement and de-sealing information in future as containers not de-sealed in the software shall be treated as missing for all practical purposes. However, as a matter of relief, Collectors Preventive and Port Qasim were directed to release the containers which have already entered the Karachi Port/Port Qasim area by October 15, 2011. The FBR also directed that partial shipments shall also be allowed to ease the congestion at ports due to standing of cargo on this account.
Currently, movement of transit cargo is being allowed only in original/shipper''s containers by the clearance Collectorates, which is greatly increasing the cost of business for the Afghan importers. The representatives of Afghan Consulate General and Afghan traders requested that the condition may not be applied on essential food items whose import into Pakistan even otherwise is duty-free. The Transit Rules 2011 allow movement of transit cargo in loose condition in sealable trucks and for food items, this option may be preferred. The FBR has allowed loose delivery of essential food items in sealable trucks in principle and directed Collector (Appraisement) to submit detailed recommendations to Board for across the board implementation of the instructions.
The representatives of Afghan transit clearing agents association apprised the FBR that reefer containers are also being subjected to 100 percent examination in light of Transit Rules 2011 in case system selects such containers for examination. The practice runs the risk of rendering the temperature-controlled-sensitive cargo stored therein unusable. It was proposed that in case reefer containers are selected by the system for examination, the container may be scanned and only suspicious containers, if any, may be referred for 100 percent examination. It has been agreed with the aforesaid contention in principle. However, it was directed that clearance Collectorates should devise a mechanism whereby 10-15 percent of reefer cargo may be scanned before delivery, instead of only the containers which are marked by the system. In cases of inconsistency in scanned images or prior information, the reefer containers will be examined by customs, expeditiously.
Sources said that the Afghanistan Pakistan Transit Trade Agreement 2010 and the Ministry of Communication have notified the laden weight of vehicles up to four-axle for plying on the road. Apparently, this has been notified in view of the Afghan transport market as vehicles of even 5 and 6 axle are available in Pakistan but their laden weight is not mentioned in the above instructions. It has also been decided that the laden weight of 5 and 6 axle vehicles shall be derived on pro rata basis and the notified laden weight of up to 4 axle vehicles shall be taken as the basis for such calculation. Furthermore, the meeting noted that the Ministry of Communication/NHA had in-house enforcement mechanism to ensure compliance of the laden weight instructions.
Sources said that the Rule 564 (2) of Customs Rules 2001 notified vide SRO 450(I)/2001 stipulates that Transshipment Permit (TP) for Afghanistan shall be valid for 15 days which could be further extended for a period of 15 days. The Afghan Traders/Bonded Carriers representatives requested that instead of the clearance Collector, the authority to issue 15 days extension may be transferred to the destination Collectors in view of the fact that the vehicles by then have already reached or are nearing the destination Collectorates and travelled beyond the territorial jurisdiction of the clearance Collectorate.
It was noted that the requisite change requires amendment in the Rules and decided that on arrival of the vehicle at the destination, the relevant Collector shall intimate the same in writing to the clearance Collector, who shall then issue the requisite extension.
At present, transmigration of transit cargo from sea to air and consolidation of loose transit cargo arriving by air and sea for onward journey to Afghanistan either by air or road is not being allowed because of various issues relating to sealing/de-sealing, reconciliation of data, sanctity and security of goods, etc. The representatives of Afghan importers and clearing agents requested that such migration/consolidation may be allowed as sometimes goods arriving by sea are required to be airlifted due to time constraints. The FBR decided that clearance Collectorates shall take action on such request on case to case basis.