CHALLENGES IN CUSTOMS ENFORCEMENT
Smuggling is a pervasive issue that undermines both the economy and society of a country. It results in the loss of revenue for the government and has been estimated to cause an annual loss of over 400 billion rupees to the national economy of Pakistan. The smuggling of petroleum products alone, for example, is estimated to result in annual losses of 240 billion rupees to the national government according to the Report of the Inquiry Commission on the shortage of Petroleum Products in Pakistan. This highlights the significant economic impact that smuggling can have on a country. In addition to impacting the distribution of wealth and causing economic distortions, smuggling also creates a parallel economy that operates outside of government regulations and oversight. The proceeds of smuggling often make up a significant portion of the informal or black economy, which is at high risk of being misused by terror financing groups and other anti-state actors.
Smuggling across the porous international borders of Afghanistan and Iran into the province of Baluchistan, and its subsequent transportation to other provinces within Pakistan, has been a persistent problem for many years. Baluchistan, the largest province of Pakistan in terms of area, comprising about 44% of the country’s landmass, but with the smallest population at only 5% of the total, presents unique challenges for anti-smuggling efforts due to its long, porous borders with Afghanistan and Iran, measuring approximately 930 and 700 kilometers respectively. The long borders make it difficult for the government to monitor and control the illegal activities. Pakistan Customs, the premier anti-smuggling agency mandated to curb smuggling, faces a number of challenges in terms of personnel, resources, logistics, and infrastructure. With limited resources and personnel, it becomes difficult for Pakistan Customs to monitor and control the illegal activities. Pakistan Customs, therefore, relies on the assistance of other civil armed forces and law enforcement agencies (LEAs) such as the Frontier Corps, Pakistan Coast Guard, Pakistan Rangers, provincial government, Police etc in its anti-smuggling efforts.
There are several factors that contribute to the prevalence of smuggling in Baluchistan. Firstly, the economy of the province is heavily reliant on outdated agricultural practices, which results in widespread poverty and accounts for 50% of the provincial GDP. According to the World Bank, the poverty rate in Baluchistan is estimated to be around 60%, one of the highest in South Asian region. This poverty leads individuals, who are struggling to make ends meet, to engage in smuggling in order to support their families. Secondly, the lack of industries in the province results in high levels of unemployment, further incentivizing smuggling. According to Pakistan Bureau of Statistics, the unemployment rate in Baluchistan is more than 6%. The lack of job opportunities in the province leads many individuals to turn to smuggling as a means of livelihood. Thirdly, the commercial import of petroleum products, which is a basic necessity, is restricted to only oil marketing companies, which do not have outlets in many areas of the province and do not permit other businesses to import the product. This monopoly on the import of petroleum products generates a demand for smuggled goods, as individuals are forced to turn to illegal means to acquire essential products. Fourthly, there is a prevalent perception among certain segments of the population that smuggling is a legitimate trade, leading to cultural acceptance of the practice. The long-standing tradition of smuggling in the province has led to a cultural acceptance of the practice among certain segments of the population, making it difficult to combat. Lastly, the long, porous borders of the province lead to economic consequences such as trade imbalances and the influx of cheap, smuggled goods, which negatively impact local businesses. The influx of smuggled goods into the province results in a decrease in demand for locally produced goods, resulting in a loss of revenue for local businesses and a negative impact on the local economy.
The enforcement formations of Pakistan Customs in different parts of the country face numerous challenges in their efforts to combat smuggling. One of the primary issues is shortage of manpower, which prevents Pakistan Customs from effectively manning the two international borders with Iran and Afghanistan. With less than one thousand Customs personnel in Balochistan, with not more than 400 personnel deployed for anti-smuggling, it is literally impossible to guard the 1600 kms-long two international borders of Iran and Afghanistan, a task which needs at least ten to fifteen thousand personnel. As a result, Pakistan Customs is forced to focus on major road arteries within the country rather than stopping the flow of smuggled goods at the borders. In addition to lack of personnel, Pakistan Customs also suffers from a lack of logistical support. The few operational vehicles available to Pakistan Customs are old and in unsound condition, which are not suitable for chasing smugglers or conducting swift anti-smuggling operations. At least, one thousand new operational vehicles are required to guard borders and carry out anti-smuggling operations at borders and on arterial routes leading to municipal limits. Besides, there are no aerial vehicles or helicopters for surveillance. The weapons available to Pakistan Customs are also outdated and largely non-functional, while smugglers are equipped with the latest automatic weapons.
The insurgency-like situation in parts of the province of Baluchistan, particularly in its interior, including Panjgur, Turbat, and Mand, makes it difficult to carry out anti-smuggling activities in these troubled areas along Pak-Iran border. The attacks on law enforcement agencies in interior Baluchistan is evidence of this. Customs staff in these areas may also be reluctant to fully engage in anti-smuggling efforts due to fear of backlash from smugglers. This fear has been compounded by the lack of justice in the case of Deputy Collector Abdul Qadoos Sheikh, who was martyred in an encounter with smugglers. The harsh topography of Baluchistan also presents challenges for patrolling and seizing smuggled goods. Inadequate and outdated physical infrastructure, communication equipment, and other related equipment also hinder anti-smuggling efforts. There are no proper residential facilities at check-posts and even basic necessities are often unavailable. The worsening outlook is further exacerbated by the fact that there is also a lack of a formal network of informers within Customs, which makes it difficult to obtain vital information for anti-smuggling efforts. There are no funds available with Collectors Customs to cultivate informers as the current reward system for informers is time-consuming and cumbersome. Finally, smuggling is a highly lucrative activity that allows those involved to accumulate vast amounts of wealth in a short period of time. In Pakistan, smugglers have become so powerful that they hold significant political sway and often have private militias. Their armed men frequently fight with Customs staff, who are less trained and equipped. The theme of the World Customs Organization (WCO) for 2023, which emphasizes the nurturing of the next generation of Customs professionals, is particularly relevant in the context of counter-smuggling measures. This theme highlights the importance of providing training and building the capacity of customs professionals in order to effectively combat smuggling.
One solution to the challenges faced by Pakistan Customs in their anti-smuggling efforts is the establishment of a dedicated border customs force. The Border Customs Force (BCF) would be responsible for stopping smuggled goods at the borders with Afghanistan and Iran, rather than conducting anti-smuggling operations within municipal limits. This force should be fully equipped with the necessary resources to effectively combat smuggling at the borders. Currently, the Border Customs formations including Quetta Enforcement, Peshawar Enforcement and Gwadar Collectorates do not have the capacity to stop smuggling at the borders. A dedicated Customs Border force could address this issue right at the borders.
Improved coordination among law enforcement agencies (LEAs) is critical in the fight against smuggling. While Pakistan Customs is the primary anti-smuggling agency, the Frontier Corps and Coast Guards also have a role in curbing smuggling and should continue to be entrusted anti-smuggling powers under section 6 of the Customs Act, 1969 by the Federal Board of Revenue, like in the past, to discharge anti-smuggling functions. To effectively combat smuggling, it is important to prioritize it as a national issue and address it at both the policy and operational levels. For the aforesaid purpose, National Anti-smuggling Policy needs to be notified and put in place.
One way to improve the effectiveness of Pakistan Customs in anti-smuggling efforts is to formally declare it as a law enforcement agency (LEA). This would provide Customs with additional powers and incentives to combat smuggling. The commercial import of POL products needs to be allowed by amending Import Policy Order to enable residents of Coastal and Interior Balochistan to import POL products for their consumption. Alternatively, Oil Marketing Companies should open their outlets in these areas to supply POL products to the residents to offer them the alternative of using bona fide diesel/petrol. In addition, Collectors/Directors Customs should be given sufficient secret funds to reward informers instantly and effect seizures of narcotics and contrabands.
In short, the problem of smuggling can be succinctly summarized as: a financially limited resource-constrained Pakistan Customs facing off against a billion-dollar smuggling industry. Here in short are several steps that can be taken to improve Pakistan Customs’ ability to combat smuggling. By establishing a dedicated Customs border force, formulating National Anti-smuggling Policy, provision of necessary human resource, logistics and infrastructure to Customs, improving institutionalized coordination among civil armed forces/LEAs and Pakistan Customs, declaring Pakistan Customs as a law enforcement agency (LEA), Pakistan Customs can more effectively address the issue of smuggling and protect the country’s economic and national security more efficiently.
Despite the challenges encountered in the realm of enforcement, Pakistan Customs has demonstrated exceptional anti-smuggling performance. According to data from FBR, over the last five years, Pakistan Customs has made seizures of smuggled or contraband goods with a CIF value of approximately 170 billion rupees, and an estimated market value of approximately 300 billion rupees. The seizure data indicates that more than 12,000 non-custom paid vehicles have been confiscated during the last five years. It is worth noting that these figures do not take into account seizures of narcotics or drugs.
To effectively address smuggling in Baluchistan and other parts of Pakistan, it is crucial for Pakistan Customs to nurture the next generation of officers by promoting a culture of knowledge-sharing and professional pride. By investing in the training and development of their personnel, Pakistan Customs can build a highly skilled and motivated workforce capable of addressing the challenges of smuggling in a professional and effective manner. This is in line with the World Customs Organization’s theme for 2023, which emphasizes the importance of nurturing the next generation of customs officers and promoting a culture of knowledge-sharing and professional pride within the agency.
PREVENTION OF SMUGGLING ACT 1977
The Prevention of Smuggling Act 1977, serves as a legislative instrument aimed at curtailing the pernicious activity of smuggling within the territorial jurisdiction of Pakistan. The statute, by virtue of its purview, extends to the entire country and came into effect on 16th May, 1977. In order to effectively achieve its objective, the Act defines key terms such as “associate,” “prescribed,” “property,” “property acquired by smuggling,” “relative,” “smuggling,” “Special Appellate Court,” and “Special Judge” in its preliminary chapter. These definitions serve as the foundation for the implementation and enforcement of the Act.
The Prevention of Smuggling Act 1977, in its Chapter 2, enumerates the provisions regarding preventive detention, which empowers the Federal Government or a Provincial Government to detain an individual if they suspect that the person is likely to engage in smuggling activities. Preventive detention is an exceptional measure that is employed when the conventional law enforcement mechanisms are deemed insufficient to thwart the nefarious activities of smugglers that engage in smuggling. Under Chapter II, the detention order is passed in writing by the Government and directed towards a police officer or any other individual who is authorized to arrest the person mentioned in the order. Once arrested, the person is to be committed to custody as specified under the act, and the conditions of detention, including maintenance, communication with others, and discipline, are determined by the Federal Government.
Furthermore, the chapter also lays down the procedure for communicating the grounds for detention to the arrested person. The Government must communicate the grounds for detention to the person detained at the earliest possible opportunity, but not later than 15 days from the date of detention. The arrested person is also afforded the opportunity to make a representation against the detention order, which is then considered by the Government before arriving at a decision. The Government, however, has the discretion to refuse to disclose facts that it deems would be against the public interest. The chapter also provides for powers to deal with absconding persons, if the government believes that a person in respect of whom a detention order has been made is absconding or hiding, they may send a report to the Magistrate to initiate proceedings under the Code of Criminal Procedure, or they may direct the person to appear before a specified officer. If the person fails to comply with the direction, they are punishable with imprisonment up to two years or fine.
If a police officer receives credible information that a person against whom an order of arrest and detention has been made is within their jurisdiction, they may arrest the person without a warrant. The arrested person will then be committed to custody as specified under subsection (5) of section 3 or if there is any requisition from the police officer or other person to whom the detention order has been addressed for execution, he shall commit the person arrested to the custody of such police officer or other person.
When a person is arrested and detained, the government has certain procedures in place to make sure that the detention is fair and just. To do this, they have set up Review Boards. These boards are made up of a Chairman and two other people who are or have been judges, and they are chosen by the Chief Justice of Pakistan. The person being detained cannot be held for longer than three months unless the Review Board says there is a good reason for it. If the detention is continued for longer than three months, the Review Board will review the case again every three months to make sure there is still a good reason for it.
This provision of preventive detention finds its parallel in the Unlawful Activities (Prevention) Act 1967 of India, which also empowers the Central Government or the State Government to detain a person with a view to preventing him/her from committing any unlawful activity. The Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988 of India also prescribes preventive detention for the offence of smuggling. Besides, it shares similarities with the US statutes such as the USA PATRIOT Act 2001, and the National Defense Authorization Act of 2013, which provide for preventive detention of individuals deemed to be a threat to national security.
The Customs Act of 1969 and the Prevention of Smuggling Act of 1977 are required be aligned and harmonized to better address the issue of smuggling and enforce provisions of preventive detention. The latter statute is in need of a few amendments. One potential amendment would be to remove the words “but, in chapter II, relates only to the taking of goods out of Pakistan” from the definition of smuggling in Clause (f) of Section 2(1) of the Prevention of Smuggling Act. This would allow the provisions of Chapter II to apply to all forms of smuggling, whether goods are being taken out of or brought into Pakistan, and would enable Pakistan Customs to detain suspect smugglers whether engaged in bringing in or taking out smuggled goods. Another amendment that could improve Customs’ ability to combat smuggling is the delegation of preventive detention powers under Chapter II of the Prevention of Smuggling Act to the Collector Customs/Director Intelligence and Investigation-Customs within their respective jurisdiction. This would allow field officers to exercise statutory powers of preventive detention without difficulty, creating a stronger deterrent against smugglers. Currently, the powers of preventive detention are vested in Deputy Commissioners of Districts through the instrument of Maintenance of Public Order, which is problematic as a Deputy Commissioner can detain a suspect for various offenses, including smuggling, for up to three months, but a Collector Customs/Director Customs Intelligence cannot detain a suspect smuggler. This anomaly is especially noteworthy given that Pakistan Customs is the lead anti-smuggling agency in the country.
The provisions of chapter II are founded on the legal principle of proportionality, where the restriction of individual rights is justifiable if it is proportional to the objective of preventing and deterring smuggling. The chapter also adheres to the legal maxim of “innocent until proven guilty” by providing for a fair and just review process for detention orders. Additionally, the chapter also aligns with the principle of “due process” by providing for communication of grounds for detention, representation against detention order and review of detention order by an independent body.
The Prevention of Smuggling Act 1977, Chapter III, enumerates the provisions pertaining to security and other proceedings, which empowers the Special Judges to take action against individuals suspected of smuggling. The Act grants the Special Judge with a plethora of powers to combat activities of smuggling and ensure that justice is served. Section 8 of the act grants the Special Judge the power to require a person suspected of smuggling to appear before him/her if it is believed that there is sufficient ground for proceeding. This power serves as an initial step in the investigation process and enables the Special Judge to initiate proceedings against the suspect based on credible information.
In the event that there is not enough ground for proceeding under Section 8, Section 9 of the act empowers the Special Judge to direct a Magistrate or police officer to conduct a preliminary inquiry into credible information about a person indulging in smuggling. The inquiry report submitted by the Magistrate or police officer serves as the basis for the Special Judge to proceed under Section 8, in case the report finds sufficient grounds for proceeding. If not, the report may be filed, and the matter closed.
Section 10 of the act grants the Special Judge the power to proceed against a person accused of smuggling. It lays out the process of issuing an order in writing and the requirement for the accused to appear before the court. Provisions for issuing summons or warrants for arrest, if necessary, are also included in the Section. This section serves as the foundation for initiating proceedings against the accused and ensuring that justice is served. Furthermore, Section 11 of the act allows the Special Judge to report to a Magistrate in the event that a warrant of arrest has been issued and the accused is avoiding arrest. It also allows the Magistrate to take proceedings under sections 87, 88, and 89 of the Code of Criminal Procedure, 1898, in regards to the accused and their property. This section serves as a measure to ensure that the accused is brought to justice, even if they evade arrest.
The provisions of the Prevention of Smuggling Act 1977, Chapter III, find their parallels in the US statutes such as the Racketeer Influenced and Corrupt Organizations Act (RICO) 1970 and the Tariff Act of 1930, which provide for special proceedings against individuals involved in smuggling and related activities. Additionally, in India, the Unlawful Activities (Prevention) Act 1967 also lays down similar provisions for special proceedings against individuals suspected of being involved in illegal activities.
Chapter four of the Prevention of Smuggling Act 1977, lays out the rules and procedures for the forfeiture of property that has been acquired through smuggling. This provision serves as a deterrent measure against smuggling by targeting the proceeds of such illegal activities and denying the smugglers the benefits of their illicit trade. According to Section 30, it is illegal for any person to hold property that was acquired through smuggling, and any such property is subject to forfeiture to the Federal Government. This provision serves as a legal basis for the forfeiture of property acquired through smuggling, and serves as a means of denying the smuggling establishments the proceeds of their illegal activities. Section 31 of the act lays out the process by which a Special Judge may issue a notice to a person suspected of holding property acquired through smuggling, asking them to show cause why the property should not be forfeited. The notice will specify a time frame (not less than 30 days) for the person to respond and provide information about the sources of the property, the evidence they have, and other relevant details. This provision serves as an opportunity for the person to provide an explanation for the source of the property and contest the forfeiture proceedings.
Section 32 of the act describes the steps that a Special Judge may take after considering the explanation and evidence provided in response to the notice. The Special Judge may record a finding whether the property in question was acquired through smuggling, and if so, declare that it will be forfeited to the Federal Government and vest in that government free of encumbrances. This provision serves as the legal basis for the forfeiture of the property, and the transfer of ownership to the Federal Government. Section 33 of the act states that in any proceedings under this chapter, the burden of proving that a property is not property acquired by smuggling shall be on the person to whom the notice is issued, and any relatives or associates on whom a copy of the notice was served. This provision ensures that the burden of proof is on the person contesting the forfeiture proceedings. Section 34 of the act describes the option for the person to pay a fine in lieu of forfeiting the property. This provision serves as an alternative to forfeiture of the property and allows for the person to avoid losing their property if they are willing to pay a fine.
The provisions of the Prevention of Smuggling Act 1977, chapter four, find parallels in the US statutes such as the Comprehensive Crime Control Act of 1984 (CCCA) and the Anti-Drug Abuse Act of 1988, which provides for the forfeiture of property acquired through illegal activities. Additionally, in India, the Narcotic Drugs and Psychotropic Substances Act, 1988 also lays down similar provisions for forfeiture of properties acquired through illegal activities. Title 18, Section 1963 of the U.S. Code (The Racketeer Influenced and Corrupt Organizations Act (RICO) of 1970) provides for the forfeiture of property that is used in or derived from racketeering activity. This can include real estate, vehicles, bank accounts, and other assets that were used to facilitate smuggling or other illegal activities.
The forfeiture of property of smugglers engaging in smuggling activities can be justified under the principle of “crimen falsi” / the “crime of fraud.” This principle holds that any property acquired through fraudulent or illegal means is subject to forfeiture as it is deemed “ill-gotten” or “unlawfully obtained.” The forfeiture serves as a deterrent measure against such illegal activities, by denying the smugglers the benefits of their illicit trade. Additionally, the forfeiture of property can also be justified under the principle of “in rem” jurisdiction, which holds that a court can exercise jurisdiction over a thing rather than a person. In this case, the property itself is considered to be the offender and is subject to forfeiture as a punishment for the illegal activities it was associated with. Furthermore, the principle of “punitory forfeiture” also applies, which states that the forfeiture serves as a punishment for the illegal activity rather than just a means of depriving the offender of the proceeds of their crime.
Chapter V of the Prevention of Smuggling Act 1977 covers various provisions related to the appointments of Special Judges and other associated matters. Section 44 grants the Federal Government the authority to appoint as many Special Judges as required and determine the jurisdiction of each. These judges must have previously held the position of a Sessions Judge. Section 45 allows for the transfer of cases from one Special Judge to another for the sake of justice or for the convenience of parties and witnesses. Section 46 grants the Federal Government the power to establish as many Special Appellate Courts as necessary, each consisting of a Judge from a High Court. The jurisdiction and territorial limits of each court are specified. It also includes provisions for temporary replacement of judges and for the transfer of appeals or revisions from one Special Appellate court to another. Lastly, Section 47 enables the Federal Government to appoint Special Prosecutors, who must be advocates of a High Court for at least five years, and authorize them to conduct proceedings under the act on behalf of the government.
The Prevention of Smuggling Act 1977 is a thorough law that addresses the problem of smuggling within Pakistan’s territory. It establishes a strong framework for implementing and enforcing measures to stop and discourage smuggling, while also safeguarding individuals’ rights. The Act repealed the Prevention of Smuggling Ordinance 1977 and replaced it. However, it is worth noting that the Act is not often invoked by Pakistan Customs which needs to be used more often particularly with reference to forfeiture of property acquired through proceeds of smuggling and preventive detention of suspect smugglers.