KARACHI: A scathing report by the Directorate General of Customs Risk Management (RMS) has exposed critical shortcomings in the Faceless Customs Assessment (FCA) system, revealing worsening clearance delays, declining revenue, and systemic inefficiencies.
Director General Risk Management Ashad Jawad, the most competent and honest officer in FBR, has prepared this report.
The findings, drawn from a ten-month review (July 2024–April 2025), challenge the Federal Board of Revenue’s (FBR) claims that the FCA would modernize and expedite trade processes.
The report documents a sharp rise in customs processing times under the FCA regime. For goods declarations (GDs) that were assessed but not physically examined, the average dwell time surged by 57%, climbing from 25 hours per GD in July 2024 to 46 hours by April 2025. Meanwhile, GDs requiring examination saw a 10% increase, peaking at 87 hours in March 2025—far exceeding the pre-FCA benchmark of 73.6 hours.
Multiple factors contributed to these delays. A growing number of traders filed reviews and appeals, with cases escalated to senior officers doubling from 6% to 14% between July 2024 and April 2025. Physical inspections, initially reduced to just 3% in December 2024, rebounded sharply to 14% by April 2025, undermining FCA’s core objective of minimizing manual interventions.
Contrary to FCA’s promise of tightening revenue leaks, the report highlights a worrying decline in additional duty collections—a key indicator of effective enforcement. Additional revenue (duties collected beyond declared values) averaged 16% during July–November 2024 but dropped to 13% in the December–April 2025 period, with erratic month-to-month fluctuations.
For instance, October 2024 saw a 20% month-on-month (MoM) decline, while a brief January 2025 spike (74% MoM, attributed to one-off audits) was followed by a 40% collapse in February. By March–April 2025, additional revenues stagnated at 11–14% of declared duties, suggesting weakened assessment accuracy.
The RMS committee identified fundamental design flaws in the FCA system. A critical issue was the deliberate restriction of trader histories from assessing officers (AOs), which hampered risk-based evaluations—a repeat of failed experiments from two decades ago. Additionally, the dissolution of specialized assessment teams for sectors like chemicals and textiles eroded institutional expertise, leading to prolonged clearance times for complex imports.
The committee’s report urges immediate corrective measures. It calls for a pause on further FCA rollouts until systemic issues are resolved and recommends targeted audits of high-risk sectors such as vehicles, textiles, and chemicals to quantify revenue losses. Crucially, it advocates restoring specialized assessment units and transparency in trader data to rebuild enforcement capabilities.
Trade associations have welcomed the report, citing widespread frustration over “unpredictable delays and inconsistent assessments” under FCA. Within the FBR, officials concede to “implementation challenges” but frame FCA as a long-term modernization effort. Meanwhile, customs officers report plummeting morale, blaming rigid performance metrics tied to the flawed system.
With the FBR yet to issue a formal response, the report’s findings intensify pressure for a policy reassessment. Analysts warn that without structural reforms, Pakistan risks undermining both trade efficiency and revenue security—a balance that the FCA, in its current form, has failed to achieve.
It may be mentioned here, the Chief Collector Appraisement South has suspended all legal powers of collectors and additional collectors in the appraisement sector, raising concerns about the underlying motives. The framework of the FCA appears to favor certain interests, with the suspension of I&I and the stripping of officers’ authorities seemingly intended to serve a specific agenda.
Authorities, committed to combating corruption, have launched an audit of the FCA, aiming to streamline operations. However, Sharjeel Jamal, Convener of FPCCI, pointed out that while the FCA has the potential to be a corruption-free system, it has faltered due to the appointment of non-professional senior officers.
He emphasized that improving the system required assigning officers familiar with Karachi’s appraisement processes. Instead, officials with experience limited to dry ports were posted to the FCA, undermining its effectiveness.
Jamal further stated that meetings with Customs revealed efforts by the Chief Collector Appraisement South to delay reviews—tasking Deputy and Assistant Collectors, along with Principal Appraisers, to slow down the process. This delay discourages traders from seeking reviews, compelling them to pay additional taxes of Rs80,000 to Rs100,000, as review-related costs, including demurrage and detention, make the process financially burdensome. This approach has seemingly become a revenue-generation strategy for Appraisement South.
Moreover, the shortage of Deputy and Assistant Collectors for second reviews has led to excessive workload, while GD openings at the Principal Appraiser level face delays of up to four days. Authority remains concentrated with the Chief Collector and Appraising Officers.
The burden of demurrage and detention—paid by importers to foreign shipping lines and terminal operators—continues to drain valuable foreign exchange, exacerbating financial pressures.