Gold import during last two years: Customs approaches banks for verification of 3374 Form-E

Following fake Form-E submission particularly in gold exports, the Directorate of Internal Audit of Pakistan Customs has approached banks to verify 3374 Form-E submitted against Rs 170 billion yellow metal exports during last two years; it was learnt here on Wednesday. According to sources, the Directorate of International Audit of Pakistan Customs had detected substantial quantity of fake Form-E in the export of precious metals.
They said that detection was made after scrutiny of gold records of last two years. The exporters had submitted Form-E against the gold exports worth Rs 170 billion during the period. In 2011-2013, the Entrustment scheme, which allows 80 percent of the value of jewellery set against duty-free import of gold within eight months, was misused with no benefit to the country and the Directorate observed serious irregularities in audit of the period under review.
Sources further said that Form-E at that time submitted to customs department was declared bogus by the banks as no gold exports had been made during 2011-2013. However, huge amount of gold/jewellery was imported without paying normal import tariffs and duties under Entrustment scheme during the period. Sources said that the Directorate keeping the past experience in view had finally approached banks to verify the veracity of Form-E submitted against Rs 170 billion gold exports and added that exporters had submitted 3374 Form-E issued by some 17 financial institutions during last two years.
They said that customs department in order to avoid the submission of fake Form-E had also decided to launch 'Online Form-Es Module (OFEM)' for banks from October 2015 under central bank supervision.
Furthermore sources said that the concept of OFEM was generated after significant increase in the incidents of fake Form-E submission by the exporters. The customs authorities were of the view that these incidents increased rapidly due to the absence of online co-ordination between banks and the customs department for Form-E verification.
They said that banks after the launch of OFEM would be liable to submit all export-related details to customs department through OFEM and the submission of scanned Form-Es would completely be restricted. Needless to mention, a large number of exporters in order to cash dollar-rate difference between interbank and open market are reportedly involved in the submission of fake Form-Es, which are not only to avoid realisation of foreign remittances in Pakistan but also for using the foreign exchange in money laundering abroad.