Isaf container scam: all suspended Customs officials reinstated: FTO

Federal Tax Ombudsman (FTO) Dr Muhammad Shoaib Suddle said on Friday that all suspended customs officials allegedly involved in Isaf container scam have been reinstated but Federal Board of Revenue would continue to conduct internal inquiry and disciplinary action against them till the case reach its logical conclusion.
Addressing a press conference here on Friday, FTO Dr Suddle said that the government officials cannot remain suspended for an indefinite period. They have to be reinstated under the government rules. However, the disciplinary proceedings would continue against the officials under the on-going FBR inquiry. Mahmmod Alam, a top customs official and Secretary to the FTO Office added that it is not possible to suspend the government officials for an indefinite period under the Efficiency & Discipline Rules, 1973.
Under these rules, the official is initially suspended for six moths' which is further extendable for another three months period. However, if disciplinary proceedings were not finalised during a specific time, it is not possible to suspend a government official for an indefinite period, Mahmmod Alam added.
Former FBR Acting Chairman said that when he was working in the Board, tax authorities have taken a number of steps to place checks for improved clearance of the Afghan Transit Trade consignments. A dedicated Collectorate of Customs would be established to exclusively deal with the Afghan Transit Trade Consignments.
Under the new agreement, the condition of financial security equivalent to the amount of duties and taxes on the transit containers would also prevent such kind of scams in future.
Giving his viewpoint on suspension of customs officials, Dr Suddle was of the view that I was not in favour of suspension of such a large number of customs officials. As per my viewpoint huge suspension has not helped in achieving the desired results. Contrary to this, it would have been more appropriate to suspend 8-10 senior customs officials involved in the scam and give them exemplary punishments for sending clear and sound signal across the board. Referring to the Isaf container scam, the FTO elaborated that if customs duty was imposed on the missing containers, the FBR would have collected over Rs 60 billion.
If duty has been calculated on these imported items, revenue to the tune of Rs 60 billion has been deposited to the national exchequer. He said that at present the case is pending with the National Accountability Bureau (NAB). In a recent meeting between the NAB, FBR and other relevant authorities, it has been decided that the case should be expedited for its logical conclusion. "Now the ball is in NAB court to reach its logical conclusion," the FTO added.
To check mega scams like Isaf/Nato containers scam in future, the strategy of enforcement is the most important tool to prevent such kind of big scams. Presently, the deterrence level is almost zero and without deterrence such kind of fraudulent activities cannot be checked effectively.
A person who is trying to commit a financial crime involving huge money would only stop from committing the same if he knows that he will have to pay huge price of doing such acts. If he knows that he would have to face imprisonment along with recovery of the evaded amount and penalties/additional tax, this might bar him from committing the crime. The fear of catching and punishment is very important for controlling such kind of mega scams in future. Dr Suddle further said that in early 2011 the FTO submitted the 'Container Scam' investigation report to the Supreme Court. The scam turned out to be 'mother of all scams'.
The on-going follow-up investigation has led to detection of at least 28,802 commercial containers and a further 3,542 containers imported in the name of Isaf/Nato that went 'missing' during the period January 2007 to October 2010, and the numbers are still rising. While the security-related aspects of the scam are yet to be quantified, the colossal loss of revenue, assuming that these containers carried the usual smuggling-prone items, has been estimated at over Rs 60 billion.
The impact of FTO investigation on local industry, which was dying due to flood of 'duty-free' smuggled items, has been phenomenal. Not only has the transit-related 'smuggling' registered a staggering drop of 60 percent, the investigation is yielding over Rs 1 billion per month in additional revenue due to diversion of smuggling-prove items to regular import channels, the FTO added.