Local match manufacturers have approached the Federal Board of Revenue to check large-scale smuggling of poplar wood to Afghanistan in violation of the Export Policy Order of the Ministry of Commerce. Sources told Business Recorder on Thursday that the illegal export of poplar wood to Afghanistan has been stopped within the jurisdiction of Model Customs Collectorate (MCC) Quetta due to timely intervention of the FBR.
However, massive smuggling of the item is still taking place through Torkham border, which needs to be checked by the Peshawar Collectorate. The FBR has successfully managed to check smuggling from one province and it is expected that strict enforcement action would also be taken in NWFP as most of the match manufactures have established their units in Peshawar and adjacent areas, industry sources added.
Local match manufacturers opined that the wood falling under description of banned HS Codes 44.01 and 44.03 of Pakistan Customs Tariff (PCT) has been smuggled under the garb of HS Code 44.18. In a recent presentation to the Ministry of Commerce and the FBR, Pakistan Match Manufactures Association (PMMA), stated that illegal transportation of Poplar wood to Afghanistan is serious threat to the local safety match industry.
The local match industry is facing an imminent danger of closing down because of non-availability of Poplar wood, the basic raw material for the match industry. This wood is being illegally crossing over to Afghanistan by the truckloads every day.
Presently, under HS Code 44.18 of the Export Policy Order, there is no restriction on export of "builders" joinery and carpentry of wood, including cellular wood panels, assembled parquet-panels, shingles and shakes, "which is loosely termed as "shuttering material."
However, under Harmonised System (HS) Codes 44.01 and 44.03 "Fuel wood, in logs, in billets, in twigs, in faggots or in similar forms; wood in chip, or parallels; sawdust and wood waste cad scrap, whether or not agglomerated in logs, briquettes, pellets or similar forms" (HS Code 44.01) and "wood in the rough whether or no stripped of bark or sap wood, or roughly squared" (MS Code 44.03) are banned for export. The prohibitive codes go to the extent that even processed logs are not allowed for export.
Keeping in view the description under the permissible HS Code 44.18 and the banned HS Codes 44.01 and 44.03, it is understandable that shuttering material to the extent and of description of 'shuddles', 2 x 2 or larger squares of wood, used in the construction industry, is allowed for export to Afghanistan under HS Code 44.18.
According to the association, the poplar wood Mafia is, however, smuggling wood that falls under description of banned HS Codes 44.01 and 44.03 under the garb of HS Code 44.18, thereby pushing the local safety match manufacturing industry to the brink of closure and threatening to deprive the national exchequer of sizeable foreign exchange that safety matches earns from export annually.
It is not insisted on discontinuation of 'shuddles' in the assembled form being exported to Afghanistan, which falls outside your preview, our genuine concern is over the misuse of facility provided under HS Code 44.18 and under its garb illegal transportation of truckloads of Poplar wood to Afghanistan.
Due to illegal transportation of Poplar wood to Afghanistan, the local industry is being deprived of its basic raw material. Unless urgent steps are taken the key industry of the NWFP will soon close, with the loss of thousands of jobs in a province where unemployment situation is already pretty miserable.
The association referred to the Ministry of Commerce letter which clearly states that item falling under HS Code 44.01 and 44.03 are banned for export and Poplar wood is also therefore not allowed to cross the borders. The association added that the HS Codes 44.01 and 44.03, which puts ban on export of wood covered by them be implemented in letter and spirit and that misdeclaration of such wood under HS Code 44.18 be disallowed.
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