TEXT: Globally, mandate of customs comprises of revenue collection, trade facilitation, security and protection of society. Preference of mandate changes with development goals of each country and due to operational environment. In Pakistan, the operational environment still stresses customs to vouch more for revenue collection to fulfill the unabridged revenue gap which is critical for country. We are still chasing hard to increase the tax to GDP ratio to equitable levels. Amid of this operational environment it becomes bit challenging for customs to strike a balance between trade facilitation and strict compliance. The operational policy oscillates between increasing facilitation measures to stringent compliance goals.
It goes without saying that it is the trade and industry (business) which brings prosperity to a country. The World Bank in Business Ready report 2024, states that, “Today, the private sector generates about 90 percent of jobs, 75 percent of investment, more than 70 percent of output, and more than 80 percent of government revenues in developing economies”. The report further writes that “A vibrant private sector is central to efforts to end extreme poverty and boost shared prosperity on a livable planet. When it functions well, the private sector sparks innovation and entrepreneurship. It can unlock economic opportunities for people who need them the most. It can drive more efficient and sustainable use of natural resources.”
The above economic strategy as narrated by the World Bank has impacted a large number of countries to bring their people out of poverty lines, collect more revenues for the state and create prosperity for the nation. Customs all over the world with its core mandate of revenue collection, trade facilitation, security and protection of society play a critical function in creating a business friendly operational environment by reducing the cost of doing business in country, making regulatory compliance easier and user friendly, and increasing the confidence of trade and industry for developing their business in country. This results increase in trade volumes, more tax collection, creation of additional jobs, innovation and prosperity for a nation.
To achieve the aforementioned objectives, Pakistan Customs has been continuously on the ride of reforms and automation process improving its performance by leveraging the modern technologies. The first giant step was taken in 2006 where Pakistan Automated Computerized Clearance System known as PaCCS was implemented by incorporation the international best practices and the WCO standards enshrined in the Revised Kyot Convention a bible of customs modernization. The progress did not stop there. In 2011, Pakistan Customs indigenously developed Web Based Once Customs (WeBOC) system for speedy clearance and shifting the front line checks to post clearance audit of cleared consignments.
First time, in 2018-20 with the help of the World Bank and the World Customs Organization experts the compliance management system known as Risk Management System (RMS) was augmented with the tools of Artificial Intelligence (AI) and Machine Learning (ML). The technological interventions produced significant benefits for trade and industry by reducing the dwell time of clearance of goods at ports and elimination of human interaction in clearance
of consignments. The tools simultaneously strengthened the customs administration by achieving higher level of compliance in detection of evasion of duty and taxes by identifying the non compliant traders and assisting for selective physical inspections which resulted additional revenues for state and stoppage of contraband item in country.
Pakistan Customs introduced a number of new modules in a bid for further modernization customs processes to reduce dwell time and increase facilitation. The modules of pre arrival clearance and virtual assessment were implemented where traders were facilitated for clearance of their consignments even before arrival of ships at port so as to achieve the zero inventory management practices by industry. By use of technology a module of computerized assessment system was introduced to further eliminate the human interaction and making the process efficient. By implementation of RMS based clearances, Blue channel for scanning to reduce red channel clearances, Authorized Economic Operator program, E- Commerce module, Smart examination for on sight examination reports and other technology based interventions significantly enhanced the efficiency in dwell time reducing it from 3 - 4 days to 24 hours where 74% of thorough put of import and export containers is cleared less than 24 hours. Very recently the intervention of Faceless Assessment System is an effort in the same direction to make the system more transparent and efficient.
Recently, the WCO has launched “the Smart Customs Project” by first domestic study mission on AI/ML experience in China. Mr. Lin Wei, Director General of China Customs the Department of Risk Management, highlighted the transformative role of digitalization and intelligent Customs systems in enhancing Customs performance and the security and efficiency of global trade. The project covers to identify high-risk enterprises through a visualization of relationship networks, Smart NII Image Analysis, Intelligent Document Examination, Smart Port Development and AI Applications in the Single Window Environment.
The current strategic road map of government is focused on the key components such as People, Process and Technology. This approach is going to unfold the power of technology used for revenue collection, trade facilitation and protection of society. The tangible benefits of AI integration, such as greater risk management accuracy, accelerated clearance times, and improved consistency in decision-making can be achieved for meeting the commitment of international customs day 2025 i.e. Efficiency, Security and Prosperity. This, however, requires ongoing investments in specialized expertise, advanced computational resources, robust data analytics infrastructure, well-defined policies and commitment by the leadership to transform the current operational environment to achieve the desired results.
Sanaullah Abro
Director Customs Reforms and Automation (Digitalization), Karachi
Copyright Business Recorder, 2025
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