KARACHI: World Customs Organisation (WCO) has updated ‘Commercial Fraud Typologies Summary’ to provide the member countries, including Pakistan, better ideas of common methods particularly to the respective nature of commercial fraud offences linking both together.The WCO said that the revenue implication of commercial fraud for members around the world is huge. Information from different sources indicates that countries lose hundreds of million dollars in revenue as a result of commercial fraud. Customs commercial fraud prepetratros are taking advantage of every opportunity presented in the multi-mode transportation system and trade patterns to execute a variety of schemes.
It further said that the customs commercial fraud is not only to subject to the developing countries, but also has implications to the developed countries.
Further, it is suspected that more aspects of customs commercial fraud, in particular over valuation, have been linked to the money laundering scheme. “Such disguised illegal capital outflows could provide criminal groups with funds for other criminal acts such as arms and drug smuggling.
The WCO said that member administrations may be aware of various kinds of ‘Typology Reports’ produced by a number of international organisation in respective crimes. Annual typology reports on money laundering, which are being produced by Financial Action Task Force (FATF) and some FATF-style regional bodies, are good examples. These reports are prepared, based on the information provided by their members and relevent stakeholders, to develop better understanding of the money laundering methods, techniques and trends. These practises are welcomed by the members of the respective organisations.
The WCO said that the fraudsters target various customs procedures and tariff regimes, which may bring them considerable amount of profits. Such procedures and regimes vary from one administration to another, but there are some what similarities as well. In light with the definition of the commercial fraud, the typology summary sorts out the provided fraud cases primary by the nature, namely:
Evasion and of the duty tax payment; Evasion of prohibition, restriction or requirement for import and / or export; Unauthorised receipt of repayment, subsidy another disbursement; gaining illicit commercial advantage; and transfer of proceeds of crime using import or export of goods (trade based money laundering).