KARACHI: Collectorate of Customs Enforcement has uncovered a sophisticated attempt to smuggle high-value air conditioners and dehumidifiers into the country by misusing the Export Facilitation Scheme, with the seizure valued at over Rs. 63 million and duty evasion estimated at Rs. 47.94 million.
The case originated on June 19, 2026, when four consignments declared as scrap materials including compressor scrap and aluminum condenser scrap were flagged at the Al-Hamd International Container Terminal in Karachi.
The importer, M/s Shareef Enterprises, in connivance with clearing agent M/s Express Freight Links, had declared the goods under the EFS scheme to evade duties and taxes.
However, a physical examination conducted on July 14, 2026, revealed that instead of scrap, the containers were packed with 897 units of new Window and Portable Air Conditioners and 113 Dehumidifiers of the Midea brand originating from Thailand and China.
The consignments had already been cleared by the Collectorate of Customs Appraisement West through the Yellow Channel and were at the gate-out stage when Enforcement intercepted them.
The investigation has expanded to include senior customs officials, with an inquiry launched against an Additional Collector, a Deputy Collector, and several appraisal and scanning officers of the Appraisement-West collectorate for their alleged role in facilitating the fraud. According to internal documents, the system had flagged the consignments, and scan images available to the officers clearly indicated discrepancies, with assessment officers requesting physical inspections in two cases.
However, those requests were rejected by senior officials who cited the importer’s clean history of 587 previous GDs and directed staff to rely on scans and documents unless proper reasons were provided, with sources indicating that the rejection of examinations was done on the telephonic directions of senior officers.
The case has also highlighted a deeper crisis within the Federal Board of Revenue, as sources revealed that the Enforcement Collectorate was prevented from lodging an FIR for over 15 days after the seizure, with senior officers in Islamabad allegedly instructing the enforcement team to file only an incident report while the FBR decided which department would register the case.
Chief Collector Enforcement Basit Abbasi has taken a stand against organized smuggling, and Collector Enforcement Karachi Umar Shafique is leading the campaign.
This inaction is part of a broader policy paralysis, as a Facilitation Mechanism formed after the deactivation of Customs Intelligence had received similar instructions to avoid lodging FIRs and instead defer decisions to the Board, effectively crippling the detecting agency’s ability to investigate.
It was only after the intervention of two sensitive agencies that the FBR was forced to allow the Enforcement Collectorate to finally register the FIR on July 14, 2026.
This incident is not isolated, as sources describe widespread problems within Pakistan Customs centered on the Faceless Customs Assessment system, which was launched to curb corruption but has instead been labeled a costly failure.
Sources claim that over 70% of shipments are cleared through the Green Channel with no inspection to make the system appear efficient, allowing containers to be trucked away immediately after unloading and leaving no time for customs to act on intelligence regarding smuggling or tax evasion.
An internal Pakistan Customs audit covering just three months from December 2024 to March 2025 revealed a revenue loss of nearly Rs. 100 billion due to weaknesses in the faceless system and systemic evasion.
Sources allege a small group including a senior FBR officer and two other high-ranking officials has effectively controlled the department, running the faceless system to benefit a small group of traders, with experienced officers reportedly reassigned to inactive pools and Customs Intelligence deactivated, leaving less experienced staff to run the system.
Given the repeated misuse of the EFS scheme, including a previous Rs. 1.4 billion fraud by a textile unit, sources have demanded an audit of the EFS system, specifically questioning how many licenses were issued to traders lacking manufacturing facilities, while also highlighting the need for FBR to implement proposed stringent steps to prevent EFS misuse that have been under consideration since early 2025.