Risk management system for import cargoes

The Federal Board of Revenue (FBR) has decided to implement 'Risk Management System' (RMS) at Collectorate of Customs (Appraisement), Karachi, to scan 50 percent of total Goods Declarations (GDs) filed for detecting evasion of duties/taxes on the import of goods under the Customs Administrative Reforms Project (CARE).
Sources told Business Recorder on Wednesday that the FBR has decided to establish a 'Risk Management Unit' (RMU) to verify the authenticity of GDs selected for processing under 'Red', 'Yellow' and 'Green' channels.
A standing order would also be issued for implementation of the system, and feedback would be analysed for fine-tuning risk parameters. The new system would be implemented with the help of Project Director, 'One Customs' System, Karachi, Chief Executive Pakistan Revenue Automation Limited (PRAL), and concerned Model Customs Collectorate.
Sources said that the risk parameters to check imported consignments include lists of trusted importers, Harmonised Commodity (HS) codes of 'very high', 'medium' and 'low' risk imported goods. The risk parameters have been chalked on the basis of data analysis received from the Appraisement Collectorate.
It has been estimated that initially Risk Management System would be applied on approximately 50 percent of total GDs filed at the Appraisement Collectorate. The PRAL has already given a briefing to Appraisement Collectorate/RMU for developing in-depth understanding of RMS, and Chief Collector, Customs, South, would issue instructions to the Appraisement Collectorate to take necessary measures for implementation of risk management regime.
It is important to mention that the board wanted a system to electronically detect high-risk consignments through parameters. The RMS is a computerised system to detect the selected suspected consignments referring to the appraisers and examiners for physical checking.
Sources said that the importer's risk profile would consider important characteristics of importer. The system may cover overall volume of imports made by the importer in a year, whether the importer is an old, established firm or a newcomer and whether the importer is a limited company, proprietorship or partnership.
The proposed system has specified sketchy systems of 'red', 'yellow' and 'green' channels for clearance and checking of suspected consignments. The risk management system of CARE should categorise GD either 'system clear'; 'refer to assessor' and/or 'refer to examiner'. The reasons for sending to assessor/examiner would be given by the RMS system so that the concerned customs officer should know about the basic reason for checking consignments.
Sources said that the system only talks about the risk checking of Goods Declarations (GDs). However, the system does not consider risk assessment of Carrier Declarations. The RMS would be a highly automated function with built-in intelligence, and dynamic risk processing engine, sources added.