As reported in this paper, the Central Board of Revenue has, eventually, proposed replacement of Afghan Transit Trade Agreement with a bilateral convention, in accordance with the 'Revised Kyoto Convention', with a view to curbing the inflow of smuggled goods. It has also pointed out that the transit trade agreement between Pakistan and Afghanistan, which was signed in 1965, did not include any provision to prevent diversion back to Pakistan of the goods imported by Afghanistan under the ATTA, the Customs Act, 1969, and the Prevention of Smuggling Act, 1977.
These laws would have to be adequately amended, along with withdrawal of the illegal taxes, which the Political Agents in the Federally Administered Tribal Areas and the Provincially Administered Tribal Areas have been collecting, to ensure enforcement of the badly needed curbs on massive smuggling.
In regard to the definition of 'smuggling' as given in the Customs Act, 1969, the CBR is said to have pointed out that the term is defined under section 2(s) read with the provisions of Prevention of Smuggling Act, 1977. Which has been found to be not only confusing but complicated too.
The judicial forums are stated to have so interpreted it that the existing provisions of law fail to serve as effective enough deterrent to smuggling. The CBR has therefore proposed redrafting of the law and that is understandable. For one thing, it will be noted that the Prevention of Smuggling Act, 1977, provides for attachment, seizure and confiscation of property held in the name of smugglers or their relatives. However, since there is stated to have been little evidence of application of this provision, it will be seen to have become virtually redundant.
As for the Customs Act, 1969, which was extended to FATA and PATA long ago, it has been contended that the Political Agents, entrusted with customs' powers, hardly ever enforce it in their respective jurisdictions. On the contrary, political officials are said to be allowing flow of smuggled goods, against collection of a token amount of illegally imposed tax.
However, as hint has also been dropped of introduction of amendments in the laws in the forthcoming 2005-06 budget, one will have some reason to look forward to good riddance from massive smuggling that has bedevilled the national economy all this long.
Viewed in the perspective of a World Bank study, confirming that over 80 percent of the goods allowed transit to Afghanistan, are smuggled back into Pakistan, the CBR initiative, will appear to have enough to fire the imagination of all those who matter. For, the Revised Kyoto Convention provides for bilateral agreements with neighbouring countries for active co-operation in exchange of information and stoppage of smuggling across the borders.
As such, by resorting to this alternative, we would not only be making a breakthrough in dismantling the smugglers' paradise created by Afghan transit trade, but will also be paving the way for an end to the stranglehold of smuggling from other directions as well. All this, would certainly point to the need, as envisioned by the Revenue Board, of revising the transit trade agreement on the lines of enabling accord reached between Nepal and India.
However, according to an earlier BR report (May 23), quoting official sources, the total goods value of goods smuggled into Pakistan from China, Iran, UAE, India and Afghanistan is estimated between $4 to $6 billion per year. Of this, the value of smuggled goods from Afghanistan was placed between $1.5 and $2 billion, from Iran $0.5 to $1.0 billion, from UAE to $1.0-1.5 billion, and from China and India to around $1.5 billion.
While pointing to these figures as betraying a glaring failure of anti-smuggling agencies to tackle the problem, the report also said that the CBR had compiled a list of over 1000 potential smuggling, and under-invoiced and mis-declared items, with a view to incorporating needed changes in the Customs Act, 1969, and Pakistan Customs Tariff in the 2005-2006 budget.
Moreover, identifying Afghanistan as the major route of smuggling, that is, through illegal diversion of ATTA-covered imports to Pakistan, it also noted that over 25 percent of Pakistani goods exported to Afghanistan are smuggled back into the country. Of smuggling through UAE, via the sea route, it was stated to be comprising foreign goods like gold bullion, jewellery, liquor, watches, cloth, electronic appliances and cigarettes.
In case of Iran, items smuggled into Pakistan, include cars, tyres and tubes, petroleum products, arms and ammunition, plastic products, cloth, scrap, woollens, carpets, jerseys and food, catering for almost the entire demand of the Balochistan province, the balance supplied to other parts of the country.
As such, exciting, though, the prospects of the contemplated changes in Customs Act, 1969 and Pakistan Customs Tariff, appear to be, they can be seen as merely touching the tip of an enormous iceberg, thereby, leaving a great deal more to be desired, particularly, in view of the ingenious tricks, ever at the disposal of the smugglers to circumvent the best of efforts, aimed at beating them.