The Federal Board of Revenue (FBR) has issued SRO 1637(I)/2024, introducing significant changes to the structure and jurisdictions of Customs departments in Pakistan. According to this new notification, the Appraisement department will remain the sole collectorate, while other departments have been reclassified as Directorates. This restructuring aims to enhance efficiency and coordination within the Customs framework.
While the change in nomenclature is more historical and psychological, the reclassification carries substantial implications for the operational aspects of Customs. Below are the key points regarding the restructuring notification dated October 18, 2024:
The establishment of the Director General of Customs Enforcement in Islamabad marks a significant move. This position now oversees enforcement formations throughout Pakistan, focusing on anti-smuggling operations. This change aims to create a single chain of command, ensuring better coordination in anti-smuggling strategies and uniformity in procedures across the country.
Combining the exports function and the Import-Export Coordinating Office (IOCO) under a single Director General of Exports is another positive measure. This will foster better coordination between the two closely related functions, promoting a sense of ownership under one leadership.
Creating the Centre for Classification & Advance Ruling under the Chief Collector of Customs, Appraisement House, Karachi, is a noteworthy decision. Valuation and Classification are specialized core functions within Customs. While the valuation function has evolved into a full-fledged Directorate General, the classification function has lagged. Historically, the Classification Committee has operated as a low-priority function, headed by an Additional Collector. Over time, the Centre for Classification & Advance Ruling could develop into its own Directorate General, similar to valuation.
However, there are some gaps in the restructuring. In Table I of the notification, the Centre for Classification & Advance Ruling is listed as a separate formation reporting to the Chief Collector of Customs, Appraisement House, Karachi. Yet, the jurisdiction of the Classification Centre is missing in Table II.
For the Enforcement function, a single field command has been established for all of Pakistan under one Director General of Enforcement. The same approach has been applied to the Director General of Airports. However, for the Appraisement and export functions, Director Generals are designated at regional levels.
The Export Facilitation Scheme (EFS) is primarily an export function, but some appraisement (import) collectorates and directorates also have EFS jurisdiction while reporting to Chief Collectors of Appraisement. It might be more effective if all EFS-related work reported to one Director General, specifically the Director General of Exports, to ensure better coordination and uniformity across Pakistan.
The creation of a separate appraisement collectorate for “bulk imports” could have been beneficial for this specialized function under the Chief Collector of Customs, Appraisement House, Karachi.
Some Directors or collectors are based in one city while airports or other officers are located in different cities, posing challenges for file movements and approvals. Developing a WeBOC module for online, recordable video/audio meetings could solve these issues, making the process more efficient.
Several amendments to the Customs Act will be needed to enforce the provisions of SRO 1637(I)/2024. A presidential order is expected in the coming weeks. This SRO will be effective from November 1, 2024, so the Presidential Order should precede this date. Subsequently, there will be transfers and postings, and an SRO defining the jurisdiction and powers of Customs Intelligence will also be issued next week.
In conclusion, the restructuring introduced by SRO 1637(I)/2024 aims to modernize and streamline Pakistan’s Customs operations, with several positive changes in enforcement, coordination, and specialization. However, some areas need further refinement to fully realize the benefits of this reorganization.