Pakistani customs authorities have unearthed a unique kind of currency scam at Pak-China border, where tax officials have busted an international gang involved in smuggling of Pak rupees through Sust customs station. Sources told Business Recorder on Tuesday that the customs officials at Sust check post intercepted a truck coming from China to Pakistan through Silk Route Dry Port.
The customs officials recovered a huge amount of Rs 8.8 million from the truck cabin and arrested the driver of the vehicle. This is a first of its kind international case detected by Model Customs Collectorate (MCC), Rawalpindi of the Federal Board of Revenue (FBR).
The customs authorities issued a seizure report against the truck driver and registered a case against him under section 16 of the Customs Act 1969 read with section 8(2) of the Foreign Exchange Regulations Act 1947.
Under section 16 of the Customs Act, customs officials are empowered to prohibit or restrict importation and exportation of goods. The federal government may, from time to time, by notification in the official Gazette, prohibit or restrict the bringing into or taking out of Pakistan of any goods of specified description by air, sea or land.
The truck driver, who was interrogated by the investigators, disclosed that the amount of Rs 8.8 million was to be handed over to a Pakistani national. In Pakistan, other members of the gang were waiting for the truck driver. However, the concerned person is now missing since arrest of the driver at the Pak-China border.
As soon as the driver was arrested, a special team of customs officials went to Pak-China border to verify the whole incident. The customs authorities have also intimated the Chinese customs officials about the Pakistani person, who is settled in China and is an active partner of the gang of currency smugglers.
Sources said that the investigation has primarily focused on one specific area i.e. why such huge amounts of Pak rupees were being smuggled from China to Pakistan ? What are the reasons behind smuggling of Pak rupee through Pak-China border area ?
The whole scam has pointed towards two possibilities. Firstly, the amount seized could be drug money. If Rs 8.8 million was the drug money, then the amount should be in foreign currency instead of Pak rupees. Secondly, there is a strong possibility that the gang was involved in the flight of capital from Pakistan. If the rate of dollar was Rs 83 at that time and its exchange rate in China would be around Rs 87 per dollar. Thus, the smugglers were earning a profit of Rs 4 per dollar through this kind of illegal currency exchange transaction.
It has been revealed that the nearby towns of Pak-China border have many Pakistanis, who might be involved in conducting such kind of foreign currency transactions and there is no shortage of Pak rupees in those border areas.
Under the Foreign Exchange Regulations Act 1947, there is a restriction on carrying Pakistani or other currency beyond a certain limit. However, the gang was violating the provisions of the foreign exchange regulations.
It is apprehended that huge quantity of dollars were being smuggled from Pakistan to China. Later, the amount was converted from dollars into Pak rupee and the same were smuggled back to Pakistan after booking profits.
There are strong chances that an organised gang has been involved in flight of foreign currency from Pakistan. There are apprehensions that some Pakistani residents in China might be involved in the scam, who helped in such currency transactions.
The scope of the investigation has been extended and efforts made by the driver to get bail have been thwarted by the customs department. When contacted, experts said that every citizen of Pakistan is legally permitted to carry $ 10,000 per person while going abroad. Even if a person is going abroad on a short trip, he can still take cash upto $10,000 with him. This amount could easily be converted into Pak rupee or other currencies abroad.
Experts opined that no regulatory body in Pakistan ever took any effective step to check smuggling of Pak rupees or foreign currency during financial crises in the country. Even in recent past, there was no regulatory mechanism to check the flight of capital from Pakistan.
The financial and economic situation in the country deteriorated, but nobody bothered to enforce effective regulatory framework to check smuggling of currency. Despite sensitivity of currency transfer through illegal means, nobody thought about introducing some new kind of "foreign currency declaration forms" toregulate the entire system, experts added.
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