Aadarsh Jawahery, Deputy Director, Customs Intelligence, Karachi

Customs has not only historically been an essential service for trade policy-making, legislation, regulation, facilitation and control, but, in most recent times,it has become an inevitable institution to fulfill the pressing requirements of conducting and regulatinga nation’s trade.

From its very primitive role of collection of levies, duty and taxes on importation and exportation, it gradually transformed itself to offer revenue analysis and prediction, whereby the governments of time have had successfully planned, engineered and executed various budgetary goals and carried the nation forward.

Customs, in Pakistan, has played an instrumental role in enacting and implementing various national laws pertaining to goods at ports and protected the societal interests by preventing ingress of unwanted goods and egress of essentially wanted goods and services in and from the country.

Moreover, goods making their way into the country through smuggling have also been dealt with robust counter-smuggling administration by preventive Collectorates and Directorates of Pakistan Customs.

Recently, more stringent controls have been put in the place and, using appropriate legal framework, such smuggled goods are seized and met with just legal treatment.

New enactments have further increased responsibilities of Pakistan Customs to see trade offences through different angle i.e. of money laundering and violation of foreign exchange regulations in order to formalize the economy.

Nevertheless, effective deterrence is attained only by conducting intelligence based operations and snap checking of goods, incorporating element of surprise. With these extended roles, Pakistan Customs has become a pivotal organization for country’s socio-economic wellbeing and prosperity.

Traditionally, Customs had been at play since the times before Christ. It was begotten as a service of revenue collection in ancient Greece and the same continued till advent of modern era.

The logic for prescription of such duty and taxes was, firstly, revenue collection for national treasure and, secondly, levying taxes in exchange of giving access of the local markets, roads, facilities and infrastructure to foreign goods.

With the beginning of nineteenth century, countries like Germany used high rates of tariff (duty and taxes) for protecting domestic markets / products from undesired competition of foreign origin goods.

This approach was adopted by many country and is, till date, used by developing countries to protect their domestic industry.

However, with the inception and prevalence of new world order and concept of neoliberal economies, the world moved towards Free Trade Agreements, Regional Trade Agreement and Preferential Trade Agreements, which were characterized by removal of tariff and non-tariff barriers,use of technology and simplification of procedures for imports and exports.

The world is moving, inventing, producing and innovating at ever highest tempo, which in turn has beefed up speed of goods movement, trading, importation and exportation.

Manufacturing of an advanced article / device might take place in different countries at different times i.e. each country might perform a particular part in manufacturing of the product: sifting, melting and forging of the metal at one place, remelting, purifying and shaping at another, while finishing / manufacturing and assembling at yet another place.

To cater to the needs of these advanced forms of trade and business along with traditional styles of trading, advancement only in information technology is not sufficient.

These require extensive legislation, field specialization, supportive domestic authorities, appropriate trade and investment policies, infrastructure, tools and machinery.

To fulfill trade and economic needs of today’s world, Pakistan Customs has always worked diligently and brought renovation and reforms within Customs and its sistering organizations. Some instances of the said innovation and reforms are development of Pakistan Single Window (PSW) and enactment of Export Facilitation Scheme (EFS).

On one hand, PSW has facilitated all exporters and importers in claiming of goods by filing of goods declaration and getting delivery by fulfilling all requirements in the system; and on the other hand, the EFS has provided facility to genuine manufacturer / industrialists to import goods free of any duty or taxes, perform value addition / manufacturing and export the same.

Using PSW, the regulatory bodies like PSQCA, MoFA, DPP, Customs Laboratory etc., can upload the certificates, licenses, permissions, reports and observations / instructions in the system for required Customs action.

Besides, optimum use of technology and qualified human resource has also rendered Customs suitable to conduct statistical analysis of the revenue and offer complete and accurate projection of the revenue (collected duty / taxes) so that targets assigned to FBR are achieved timely.

This amalgam of HR, technology and regulation has sharpen the tools of Customs to enable Pakistan to compete with the world at large, apart from imposing full-fledge enforcement at seaports, airports, land customs stations and inland smuggling.

Legal trade and commerce has also always been under threat of disruption and failure at the hands of smuggling or, to simplify, illegal trade. Smuggling, as a menace, has never ceased to exist at global, continental, regional and national level. Goods are smuggling into or out of a country when duty and taxes or non-tariff barriers are raised.

These restrictions and prohibitions may occur due to various national reasons; however, huge demand of restricted and prohibited goods allure the smugglers / delinquent elements for smuggling the goods through formal channels i.e. ports and informal channels i.e. undeclared stations / routes.

On these fronts too, Pakistan Customs has laid down a robust enforcement and dealt with this menace with iron fist.

At the port stage, the examination and classification of goods in correct HS code, application of valuation rulings and checking of importability and exportability of the goods is performed by Customs.

All the goods that do not comply with the criteria prescribed by the national laws are dealt with stern legal action to create deterrence and preventing any further attempts of illegal trade. Moreover, Pakistan Customs seizes and reports seizures of smuggled goods having value of billions of rupees.

These contraband find their way to local markets and sales points in Pakistan through undeclared customs station and routes.

With limited human resources, Customs seizes these goods, arrests the smugglers and their accomplices and initiates criminal proceedings against them. The goods are ultimately confiscated and disposed of, while revenue collected from their auction is deposited in the government treasury.

In addition to enforcement against smuggling, Customs’ extended role in inquiring and investigating offences of money laundering, arresting the culprits and bringing them to the book, has become more important than ever.

Money generated from sell of smuggling goods is kept hidden by the smugglers and is subsequently transported out of the country. Pakistan Customs, being premier counter-smuggling department, has to stop smuggling of goods, apprehend the culprits and their money and present them before competent courts of law.

Whole of this episode culminates only when culprits are awarded appropriate legal punishments and penalties. It is noteworthy that intelligence-based operations, regularly conducted by the Customs, increase deterrence. Economy of Pakistan is protected against those ill-intensions and criminal acts.

As such, all the goods that skip primary Customs controls, through coordinated offence of smuggling, are brought back to required legal action by Customs enforcement and intelligence.

Undoubtedly, enforcement and intelligence based operations of Customs are huge need of the hour, as the smuggling, though a global threat, has, in particular, negatively affected economy of Pakistan and flagrantly violated our laws.

Coupled with empowerment of enforcement, strengthening and simplification of laws and procedures at clearance stage is needed as well. As part of economic policy, upgrading, advancing and revitalizing Pakistan Customs, a pro-reforms organization, as main player and leader in the country’s trade and commerce strategy would fetch remarkable outcomes.

Owing to Customs effective role in facilitation and regulation of trade and commerce and deterrence against illegal trade / smuggling, the Customs has been a catalyst for its sistering agencies to bring improvements and reforms to facilitate trade and step up efforts for development of national economy and safety of society.

In current era of economic crisis, Pakistan Customs has emerged as a victor at the national stage through fine accomplishment, consistent transformation, renovation and advancement as per criteria of modern times.

The fitful response of Customs towards its extended role has enabled it to fulfill national expectations and uphold national trust.

Copyright Business Recorder, 2024