With the passage of time, the role of Customs Administrations has diversified. Not only are Customs Administrations responsible for revenue collection but also for safeguarding society from possible threats to public health and security. The effective management of borders has become a complicated task due to rapid globalization and increase in international trade.
In order to underscore the need for Customs Administrations to contribute towards the facilitation of international trade, World Customs Organization (WCO) has chosen the theme “Security of the Business Environment” with the slogan of “A Secure Business Environment for Economic Development” for this year’s International Customs Day.
Since Customs administrations around the world interact with global supply chains, best international practices need to be adopted to ensure the seamless movement of goods across borders. This is enabled primarily through automation – a good example being FBR’s WeBOC system of automated cargo clearances. WeBOC places a large amount of useful data at the disposal of the Customs administration, enabling risk management to provide for a more predictable global trade landscape.
Securing the business environment involves the streamlining of Customs procedures, enhancing integrity, facilitating the movement of goods, conveyances and people, and combatting cross-border crime to prevent the shipment of illicit goods that endanger people’s health, safety and security. Customs administrations are expected to maintain a fine balance between the smooth flow of goods and the simultaneous protection of the nation’s borders from the entry of illegal and potentially dangerous items. The ability to quickly analyze information through data mining and predictive analysis is a necessary capability that customs agencies must possess and enhance for improved targeting and better deployment of customs inspection resources.
In the end, I wish to extend my warm felicitations to the officers and officials of Pakistan Customs on this auspicious occasion and hope that Pakistan Customs shall continue to follow the path of modernization and trade facilitation in order to ensure a safe business environment that encourages economic growth and development.
As Pakistan Customs celebrates International Customs Day on 26th January, 2018 along with other Customs Administrations across the world, I congratulate all officers and officials of Customs on this special day. This year, the International Customs Day heralds the launch of World Customs Organization (WCO)’s chosen theme of “Security of the Business Environment” with the slogan “A Secure Business Environment for Economic Development”. While it is true that Customs helps connect borders, nevertheless, Customs Administrations the world over must perform a delicate balancing act between trade facilitation and the simultaneous implementation of effective and efficient controls and checks on the movement of goods and people.
It gives me great pleasure to note that the International Customs Day this year finds Pakistan Customs better equipped than ever to deal with security challenges posed to the global supply chain through the effective implementation of various measures, thereby ensuring a more stable and safe business environment.
Rapid globalization in recent years has redrawn the parameters of international trade, laying greater emphasis on constant information exchange, not only amongst different jurisdictions, but also with the business community. This exchange of data becomes possible only with increased automation of Customs processes. FBR’s automated cargo clearance system WeBOC ensures that effective analysis of the data at its disposal, allows Pakistan Customs to employ a more targeted approach towards enforcement and border security, consequently enhancing the security of the business environment without compromising trade facilitation.
With Pakistan Customs being a signatory to both the Revised Kyoto Convention and WTO’s Trade Facilitation Agreement, we recognize that a safe business environment is an important prerequisite for trade facilitation. For this purpose, various tools are at our disposal, including risk management on the basis of advance information, Non-Intrusive Inspection Technology, export controls and information exchange between the public and private sectors.
While felicitating the officers and officials of Pakistan Customs on this auspicious occasion, I expect them to continue to strive for greater professionalism in line with international best practices, to enable them to take intelligent enforcement decisions on the basis of information sharing, more targeted data analysis and greater engagement with stakeholders to ensure a secure business environment conducive to sustained economic growth.
With the rapid spread of globalization, international trade, cross border investment flows are increasingly seen as the main elements of the global marketplace. Since international trade acts as a vehicle for economic development, Customs Administrations can play an important role in enhancing economic prosperity by ensuring the security of the business environment.
Pakistan Customs has reason to celebrate the occasion of International Customs Day, marked by the Customs fraternity on 26th January every year, with regard to this year’s theme i.e. “Security of the Business Environment”, as with the successful launch of the indigenously developed WeBOC (Web Based One Customs) software for automated clearance of import, export and transit cargo, Pakistan Customs is a step closer to the use of an automated environment for the exchange of data, while taking into account both cyber safety and data security.
Although international trade is the lifeblood of the global economy, it unfortunately also attracts illicit activities. Pakistan Customs is already working to balance its objectives of trade facilitation with enforcement, through active participation in the WCO’s Security Programme, including the effective launch of the Container Control Programme in all enforcement Collectorates. Other border security challenges that are being addressed include enhanced passenger controls through the planned implementation of the Advance Passenger Information System; Strategic Trade Control Enforcement involving checks on the import of dual use precursor chemicals, and anti terrorist financing controls.
On this occasion, I would also like to thank a host of International Development Partners including the World Bank, World Customs Organization, Asian Development Bank, USAID, JICA, UNODC, DFID, IFC, etc. without whose technical and material support, it would not have been possible to achieve the difficult task of maintaining the security of the business environment without compromising trade facilitation.
In the end, I congratulate all officers and officials of Pakistan Customs on this special day with the hope that they shall continue to strive for greater professionalism in line with international best practices, to enable the facilitation of international trade and passenger traffic along with the enhancement of effective controls through a secure business environment.
On the auspicious occasion of International Customs Day which is celebrated every year on 26th January by the World Customs Community across the globe, I extend my warm felicitations to officials of the Pakistan Customs. The World Customs organization is celebrating its 66th anniversary this year. In this regard we are proud that Pakistan Custom is playing a key role in development of this progressive country through efficient targeted controls and the facilitation of lawful trade.
This year the World Customs Organization has chosen the theme “A Secure Business Environment” with a slogan “A Secure Business Environment for Economic Development” in order to strengthen the security of the business environment. The theme which has been set by WCO seems to be even more effective for countries like Pakistan which has many potential, but are having many issues at the same time keeping in view the geographical location. No doubt thing are getting better but still a lot has to be done. Secure Business Environment will definitely boost economic development and bring prosperity among the people. On behalf of Karachi Customs Agents Association I would like to assure you that this will not be an isolated project and we will play our role by all means being one of the main stake holders and contribute for making the business environment more stable and predictable by streamlining procedures, tackling corruption, enhancing integrity, and facilitating the movement of goods with the help of Pakistan Customs.
I feel that slogan of A Secure Business Environment for Economic Development has a very broad definition and I would say that secure business environments is based on the ease of doing business/ cost of doing business or more precisely one window operation.
We all appreciate that Customs Administrators who are playing a vital role in smooth flow of trade on the one hand, and specially customs at the preventive side who are in the front line in the fight against smuggling which is an economic terrorism and an organized crime. I also would like to appreciate the role of Directorate of Reforms and Automation as the modernization in the system which is made by this Directorate has certainly made it possible to increase the volume of trade which are being handled today as until recently, the role of the customs consisted primarily on collecting dues and indirect taxes at import.
The Karachi Customs Agents Association is especially grateful to Pakistan Customs for keeping us on their top agenda of training and learning. I once again wish to convey my best wishes to the Pakistan Customs on the International Customs Day.
It is a matter of great pleasure for me to extend warm felicitations to the Federal Board of Revenue and Pakistan Customs on the occasion of the 66th anniversary of International Customs Day celebrated on 26th January 2018. Pakistan joins World Customs Organization members in celebrating this important landmark as this day affords us an opportunity to reaffirm WCO’s mission of enhancing effectiveness and efficiency of Customs Administration.
The World Customs Organization sets a theme which serves as priority mission objective for all its member countries for the year ahead. The World Customs Organization (WCO) announced that 2018 is dedicated to strengthening the security of the business environment, with the slogan “A Secure Business Environment for Economic Development”. There is no doubt that Pakistan Customs is playing a vital role in the betterment of our progressive country’s economy through effective targeted controls and the facilitation of legitimate trade.
The development of international trade is not an end in itself, but rather a vehicle through which economic development can be achieved. We should therefore strive to create an environment for businesses that will foster their participation in trade, for the benefit of all business circles. It is imperative that we ask ourselves, how we can as ‘Service Provider’ contribute to better secure the business environment and, in doing so, boost economic prosperity.
Pakistan Customs is one of very few organizations who pioneered in designing and automating their clearance and audit systems in the country. It is a known fact that increase in trade volumes cannot be handled without state of the art clearance system and the department’s efforts in this regard must be appreciated. Introduction and upgrading of automated environment is indeed a remarkable achievement beneficial to all stakeholders i.e. the Government, trade and industry.
It is pertinent to mention here that Karachi Customs Agents Association is the most proactive Association in Pakistan having more than 3000 members who are playing a vital role in accumulating the budget targets fixed by FBR time to time.
In the end, I on behalf of Managing Committee of Karachi Customs Agents Association pay our gratitude and well wishes to Pakistan Custom & World Custom Organization on World Customs Day.
Written By: Mashhud Aslam
KARACHI: Pakistan along with other countries of the world is celebrating World Customs Day today with the theme “A Secure Business Environment for Economic Development” with due emphasis on “facilitation” of businesses which essentially include imports and exports.
However in our case the “facilitation” becomes synonymous to the word “corruption” as both the officials as well as businessmen attempt securing undue advantages and big money at the cost of supreme national interest.
In the name of enabling environment conducive for business, experiments like Green Channel have back fired. The abuse of such facility has resulted in considerable loss to the national coffers. The common abuse of Green channel is through mis-declaration and under invoicing as the importers try to get their consignments cleared by filing incorrect Goods Declarations. Big companies also abuse Risk Management System (RMS) as their profiles are used for saving tax payment.
Around 70 percent of consignments are cleared through Green Channel, and if this ratio is reversed it would result in choking of the port as there is an acute shortage of examiners and automated systems necessary for quick clearance.
Similarly, the businessmen attempt to take advantage of concessions allowed by the government time to time under SROs. A classic example of such concessions claimed by the importers are in respect of LED lights wherein concession was granted on ground that LED lights are not manufactured in Pakistan. Lately it came to the fore that LED’s are manufactured locally hence concession claimed by importers is not admissible. The controversy over availability or other wise of the concession led to legal wrangle resulting in huge choking of the port as dozens of containers awaited clearance from Karachi Ports got stuck up. The importers complain that China under CPEC was being given extra ordinary concessions denied to the local manufacturers.
Often clearance is delayed, particularly in cases where bureaucratic snags and other ministries for instance Ministry of Commerce and others besides FBR are involved.
The poor pay structure is also a major cause of corruption as while newly appointed officers supposed to collect more and more taxes in billions get salaries as low as Rupees 35,000 to 40,000 per month (Appraising Officers in BPS 16).
Tasked with huge responsibility of preventing smuggling running into big volumes of money, they can be encouraged by good salary package.
Similarly, the security of business is also compromised by issuance of SROs in a hurry and immediate enforcement. While the consignments are on way to port were hit by the SRO’s the controversy is usually taken to the courts of law again endangering the “ facilitation’ theory.
The recent policy enforced through a SRO making the payment of taxes levied on cars imported under Transfer of Residence Scheme for Overseas Pakistanis’ has resulted in stucking up of more than 6000 vehicles at Karachi port. The new conditions or restrictions imposed suddenly and without prior announcement also damage the concept of slogan adopted by WCO for 2018.
One of the regulators of business is the Inland Revenue which is required to monitor the business activity (Sales / Purchase/ Services) and to collect revenue as Sales Tax, tax on services etc by building a reliable database, but it has miserably failed encouraging smuggling.
The limitations of judiciary and inordinate delays because of increasing number of litigations specially pertaining to Pakistan Customs and Inland Revenue also make the business environment less friendly.
The importers, exporters, officials of FBR, Inland Revenue and consumers, all agree that while creating a “secure business environment for economic development,” there is a need to address all issues including fair use of facilities like Green Channel and One Window facility.
Moreover, stringent check and balance, automation, adequate number of examining staff satisfied with their monthly salary package, and plugging loopholes, ending abuse of concessions are required to make Pakistan prosperous and its businessmen feel secure and satisfied.
Pakistan Customs, as a member administration of the World Customs Organization (WCO), has always endeavored to adopt international best practices in discharging its duties for facilitating trade and securing the economic frontiers of the country.
International Customs Day is one such reminder of the commitments made by Pakistan to its business community. The theme of this year’s International Customs Day “Security of the Business Environment-A secure business environment for economic development” is not only relevant to the economic milieu of the country in general but also to the prevalent situation in the area assigned to Model Customs Collectorate, Quetta, in particular.
Needless to say that vast jurisdiction spreads over a vast expanse of the Baluchistan province including border areas of around 930 km with Afghanistan and 731 km with Iran, makes securing the business environment an uphill task which the Collectorate is performing diligently since its inception in 1977.
This year’s theme enshrines security of the business environment from various risks which inter-alia includes infrastructure, system, data, personnel and integrity related security. The MCC Quetta aims to achieve security of business environment through providing an enabling environment by simplifying trade procedures, tackling integrity related issues and facilitating movement of goods across international borders; providing a safe environment like a secure supply chain, protection of health and safety of people, prevention of terrorist financing and prevention of smuggling of contraband goods; and providing a fair environment which will lead to sustainable economic growth by eliminating any intellectual property rights violations, improving governance through combating smuggling and removing any innate risks through enhancing capacity of Customs personnel.
MCC Quetta has already embarked upon an ambitious road map for securing the business environment so that legitimate trade can reap the benefits of trade facilitation while stringent measures are being initiated against violators of the law, whether inside the department or outside.
The Collectorate has already built six new check-posts at Rakhni, Manikhwa, Yaro Karez, Nushki, Kholpur and Lakpas in addition to the existing ones at Nokundi, Dalbandin, Baleli and Mashkhel.
Plans to activate the Custom Houses at Badini and Ghaznali in the border areas, are also at an advanced stage and the same will be made operational by March 31, 2018, with the help of local stakeholders. Land has also been acquired at Ziarat-Cross locality of District Pishin for establishment of a Custom Station that would monitor the movement of goods passing through that location.
Pakistan Customs has also built its own examination yard spreading over 50 acres of land at Taftan and the local revenue authorities have also been approached to allocate another 100 acres of land for establishing a terminal for safe parking of goods laden vehicles. This yard gains added importance in view of the imminent launch of Transports Internationaux Routiers (TIR) system which would enhance movement of goods through Pakistan without the customary checks.
The infrastructure at Custom House, Chaman has already been improved considerably; however, the launch of the Asian Development Bank (ADB) funded Integrated Transit Trade Management System (ITTMS) in 2016 at Chaman border aims to establish a container terminal of international standards.
The terminal is slated to be commissioned in four years from the date of commencement. The security of the Custom House, Quetta has also been boosted through establishment of manned pickets and concrete barriers in order to thwart any untoward incident in view of the deteriorating law and order situation of the province.
These check-posts and Custom Houses are befittingly fortified and are being equipped with relevant equipments to make these centers of quick detection of any smuggled or contraband goods. The headquarters has already been requested to provide state of the art scanners, both fixed and mobile, for non-intrusive inspection of suspected consignments.
Such inspections would not only help MCC Quetta comply with the SAFE framework of standards of the WCO but would greatly facilitate the smooth flow of legitimate trade by reducing the cost of doing business. Non-intrusive technology based inspections would help enforce law regarding strategic controls on exports of such goods.
The launch of Customs digital platform by the name of Customs Computerized System (WeBOC) in the Collectorate and installation of digital printing machines at all the Custom Houses of Quetta has made this Collectorate compliant with the international digitization standards for Customs.
The system has enabled the trade to monitor the real time progress of the goods in clearance process and ensured round the clock payment of duties and taxes through Pre-Pact deposit system. Such measures have greatly facilitated import, export and transit of goods passing through the area falling in the jurisdiction of MCC Quetta.
The Collectorate is in the process of expanding the scope and coverage of Customs Computerized System to areas that are still outside its ambit. After necessary approval from the relevant authorities, all consignments coming from Taftan border station would be cleared in the Customs Computerized System. The impact of such coverage on trade facilitation and enhanced security would be immense.
Transparency and improvement in the integrity level of the Customs cfficers and allied bodies would eliminate any overheads involved in the cross border trade. The Collectorate has adopted a zero tolerance approach towards the issue and recent interception of mis-declared consignments and initiation of necessary legal action against the delinquent staff has acted as a deterrent against such malpractices.
A massive growth of 52 percent in revenue in the second quarter of this year is indicative of the usefulness of such steps and the trust reposed by the business community in the policies adopted by MCC Qyetta.
Trade facilitation coupled with risk based controls has resultantly played a role in achieving the revenue collection targets set by the Federal Board of Revenue (FBR).
Addressing the border security related issues has always been a priority for the border Collectorates. Coordination with the relevant law enforcement agencies ranks high on the priority list of this formation. Such coordination ranges from policy level contacts at the highest level to joint operations in inaccessible areas. Closer liaison with the law enforcement agencies has greatly addressed the issues of personnel shortages and avoided any duplication of effort. Such efforts have also ensured that any movement of illicit arms and ammunition do not take place across international frontiers.
The flagship development project of Pakistan, China Pakistan Economic Corridor (CPEC), will be passing through the area falling under the jurisdiction of MCC Quetta. The main artery of the western route of the CPEC traverses through this Collectorate commencing from Basima and going to D.I Khan via Surab, Kalat, Quetta, Qilla Saifullah and Zhob. Quetta Customs has already established en-route Customs Station at Manikhwa, Baleli, and land has been acquired at Ziarat Cross while a proposal has been sent to the Federal Board of Revenue (FBR) for replicating the same at Qilla Saifullah, Kalat, Surab and Khuzdar.
The CPEC is expected to greatly enhance the flow of goods which would greatly benefit from the secure business environment being established by Quetta Customs. In order to efficiently handle the flow of cargo through CPEC, Pakistan Custom is in the process of establishing a dedicated Directorate General for the purpose; however, Quetta Customs will continue to assist the relevant authorities till the Directorate General is set up.
Continuous engagement of the stakeholders in the process of reform and clearance practices is a hallmark of the Collectorate which has benefitted both the trade and department immensely. The local trade and customs brokers stay in close contact with all the relevant customs staff. The local chamber of commerce and trade associations are always well represented in the various functions of the Collectorate, which enables both the Customs and trade to exchange views on issues of mutual interest.
The officers of the Quetta Customs are always present in meetings of the Chamber and all out assistance is being extended to the trade for resolution of their genuine demands. The friendly relationship between trade and the department help in sorting out hurdles in the way of smooth flow of legitimate trade.
MCC Quetta is planning to expand the reach of Customs control to inaccessible areas by establishing Customs stations en route, improve the quality of the work through stricter controls, make the Customs processes transparent, expand the scope of non-intrusive inspections, use of technology for speedy clearance of goods, expanding the coverage of the Customs Computerized System (WeBOC) and data based risk management system for providing a secure business environment for sustainable economic development of the country.
Ch. Muhammad Javaid,
Collector, MCC, Exports, Karachi.
Internationally, January 26th is celebrated as the International Customs Day under the auspices of the World Customs Organization (WCO) since the Convention establishing the Customs Co-operation Council was officially inaugurated in Brussels on January 26, 1953.
Subsequently, the Customs administrations of WCO member states organize various national events to celebrate the International Customs Day. The WCO on its part dedicates an annual theme that is officially declared on the Day and the theme for 2018 is dedicated to the security of business environment under the slogan “A Secure Business Environment for Economic Development”, which underscores the importance of security in business environment not only within the country, but also amongst the business communities globally.
The rapid pace of globalization in recent years has reshaped international trade scenario reverberating the security buzzword in today’s business challenges. Customs organizations around the world are committed to follow a coordinated and paramount approach on security concerns for external trade and Pakistan Customs is equally endeared to this goal through efficient utilization of modern gadgetry, human resources and technology for ensuring the security of the trade and stakeholders for an ensuing secure business environment.
The role of Customs has undergone changes in recent times. Now it is not restricted to collecting duties and taxes on imported goods and guarding sea, land and economic frontiers of a country only, but extended sphere of activities also involves trade facilitation and breathing life into the economy by securing the supply chain and thereby making the business environment more secure and predictable.
The developed automated system employed by the Pakistan Customs enables it to keep an online check on real time basis to make the business transactions secure. At the same time, Pakistan Customs is gradually shifting its focus towards protection of national borders and promotion of national economy in configuration with modern global Customs administrations. It is heralding in a new era in border controls through automated systems.
Border controls encompasses checking of illicit trade through smuggling, intellectual property rights infringements, arms trafficking and numerous other forms of cross-border transmissions. Any leniency in these core functions has dire consequences towards the business environment, investment and optimal growth of the national economy.
Customs also play a pivotal role in making the business environment more stable and safe by aligning its internal operations and procedures with the objectives of trade facilitation. It will involve transparency, predictability and logical forecasting in relation to its operations by the stakeholders involved; minimizing any chances of misuse of authority; elimination of corruption; rationalization of the clearance related business expenses of the importers as well as exporters.
Similarly, Customs has a significant role in combating illegal trade practices such as under-invoicing, mis-declarations, illicit goods trafficking through ports and borders, commercial frauds, Intellectual Property Rights (IPR) infringements which all endanger and threaten the level playing field for genuine traders and ultimately affect the secure business environment and consequently stifle the economic development.
Modern day Customs is also facing new phenomena and techniques employed by the criminals for funding the cross border crimes and terrorism activities. Such elements secure financial gains to fund their activities by involving different malpractices within the customs domain of activities.
Identification, combating and prevention of such nefarious activities also falls within the new responsibilities of Customs for making the whole business environment more safe, secure and attractive for future investment to boost the national economy.
In this regard the international Customs community led by WCO has already embarked upon devising strategic tools and initiatives such as the WCO SAFE Framework of Standards to Secure and Facilitate Global Trade or the WCO Security Program for building a secure business environment and Pakistan Customs is also benefitting from such instruments for contributing towards an increased security and trade facilitation.
Pakistan customs has taken major strides in simplification of documents which are required at the time of import and export. Moreover, significant headway has been made in removing the archaic customs procedures, which could otherwise hamper smooth flow of trade. Realizing the fact that export promotion is an important instrument of job creation, improvements in the balance of payments position, accelerated economic growth and increase in the level of incomes and standard of living, the Pakistan Customs and the Collectorate of Customs (Exports) have always played due role in facilitating exports of Pakistan.
It is widely recognized that exports of any country lose demand in the international market because of two mains reasons. Firstly, the exported goods are not competitive because the same are not qualitative as well as cost-effective. Secondly, the goods do not reach their destinations in time due to stringent measures, undue procedural delays and security threats as well.
The security aspect of international trade has attained tremendous importance now especially in presence of world terrorism, organized crimes, smuggling of contraband/narcotics and frauds. So, there is an urgent need to make the international trade secure through the international supply chain security. It is highly desirable to dilate upon this phenomenon for a better comprehension and to critically appreciate the implications of its implementation for the exports.
This concept implies the use of customs import and export controls, identified by the WCO, to ensure supply chain integrity and security.
Since e-commerce has gained immense importance. Most of the global business houses are relying upon electronic communication channels to conduct global business. However, this phenomenon has given birth to security and trust issues, which need to be addressed for electronic payment mechanism to be accepted and established as a common medium of financial transactions.
Pakistan Customs is cognizant of this development and striding towards making the use of e-commerce for Customs purposes more secure to operate as a reliable and trusted operator in the global digital market and this is the reason that Customs has been nominated as the lead agency by the Government of Pakistan to operationalize the concept of National Single Window (NSW) for spearheading the campaign for making e-commerce a reliable factor while counting towards a secure business environment.
Raza, Director, Transit Trade, Quetta
The World Customs Organization (WCO) has dedicated 2018 to building a secure business environment for economic development by launching its annual theme on International Customs Day 2018 with the slogan “A secure business environment for economic development.”
It is a well known fact that economic development can only take place when business environment in a society is safe and secure. Providing secure environment for businesses is an essential requirement for any thriving economy.
We observe the anecdotal evidence of it every day. Academic research also supports that peace and security are essential for businesses. Neighborhoods, cities and countries that are marred by war or violence are often the poorest of the poor. In simple terms, why would anyone want to invest in an area where that investment is at risk? It is, therefore, in the interest of any country to provide safety to the business.
In the present day and age, security comes in two types; digital and physical. In an age where the goods could be crossing numerous borders en route to their final destination, and the control being enforced through the binary commands, the security of the data involved becomes ever more paramount.
Customs administration of a country can ensure safe and secure business environment by promoting legitimate trade and secure supply chain by eliminating risks and threats, such as the shipment of illicit goods that could endanger peoples’ health, safety and security.
Combating cross-border crime, including the illicit funding of international terrorism through trade activities is also responsibility of the Customs administration. Smuggling, mis-declaration and importation of illegal goods, such as goods that infringe intellectual property rights, can play havoc with a country’s economy. Such activities not only infringe upon rights of legitimate traders, but can also adversely affect national economies and security of the people in general.
An efficient Customs administration thus promotes and facilitates international trade which further triggers economic development in all societies. This can be done by streamlining Customs procedures, reducing all types of risks through use of technology, enhancing integrity and predictability of processes, reducing cost of doing business, and by facilitating the movement of goods and conveyances across national boundaries. Customs can accordingly become a catalyst for economic development of a country by way of creating enabling, safe and secure environment for businesses and by facilitating international trade in a way that society benefits from it.
Pakistan Customs has adopted international best practices, which enhance performance of Customs administration and enhances security and trade facilitation. These measures include integrated Customs control procedures, advance electronic information on cargo, use of modern technology for inspection and tracking of cargo and risk-management system to identify potentially high-risk shipments.
In recent years, Pakistan Customs has developed automated and seamless customs clearance system for imports, exports and transit of goods. The transit trade is almost exclusively being conducted through online automated system further reinforced by satellite tracking systems. The movement of goods is digitally tracked on real time basis and any diversion from the route and any attempt of tampering is quickly recorded and reported to the authorities for appropriate action. The Web-based One Customs System (WeBOC) not only facilitates customs clearance processes but also keeps record of trade and data on real time basis.
The result is an integrated system, which reduces theft and scandals to the lowest level. Previously, there were many reports of pilferage of goods, but after use of technology such occurrences have been eliminated. The safe passage of the transit goods can now be tracked right from the Karachi port up to the entry into Afghanistan through satellite tracking system.
In order to ensure integrity of transit cargo en route and to reduce risks and threats involved, Pakistan Customs has adopted ollowing measures to handle transit trade in a safe and secure manner such as electronic, automated and fully integrated clearance system; transportation of cargo through licensed bonded carriers; en-route tracking and monitoring through satellite tracking companies; electronic acknowledgment of containers by Afghan Customs through automated system; system of financial guarantees; real time monitoring of cargo; risk based physical examination at entry and exit stations; 100 percent examination of cargo on the basis of alerts generated by tracking company.
Though quite a lot of measures have been taken to ensure integrity of transit cargo, yet constant vigilance is required. More investment in cyber security and physical infrastructure is need of the hour to fend off any potential threat and further enhance the operational capacity of Customs administration in Pakistan, which will help in ensuring security of the business environment in the country resulting in sustainable economic growth.
Khaleel Yousfani, Additional Collector.
Throughout the recent years the world has become a witness to increasing incidents of the use of improvised explosive devices (IEDs) beyond the conflict zones.
IEDs are the most prevalent form of explosives employed by terrorists around the world particularly because the precursor chemicals needed to manufacture them are cheap and widely available. It is a cheap and easy way to inflict harm on infrastructures, economies, and populations.
In a unique initiative to secure global supply chains and enhance public safety, to provide “a secure business environment for economic development” the World Customs Organization (WCO) has partnered with INTERPOL and the United Nations Office on Drugs and Crime (UNODC) and launched Program Global Shield. This Programme aims at preventing smuggling and illicit diversion of precursor chemicals that could be used to build IEDs.
It is a multilateral operation to monitor the licit movements of explosive precursor chemical shipments to identify and combat the illicit cross-border diversion and trafficking of those chemicals in the international supply chain.
The program was started in November 2010 as a 6-months project, however, the achievements and importance of Program Global Shield led the WCO to endorse it as a long-term endeavor.
Customs administrations from more than 90 countries are now sharing information on 14 precursor chemicals used for manufacturing of IEDs. Through this unprecedented effort of the international community, the threat posed by these dangerous precursor chemicals is now being seriously addressed.
Along with training, technical assistance, real-time information and intelligence sharing that Program Global Shield entails, its participants and partners are now better equipped to interdict the illicit diversion of these precursor chemicals.
The overall objectives of Program Global Shield are to promote cooperation among Customs and Police administrations in combating the illicit diversion of precursor chemicals; raise global awareness of the increased threat posed by precursor chemicals; engage with private industry players to establish best practice programs to avoid illicit diversion of precursor chemicals; train Customs officers in the detection/handling of precursor chemicals; identify and seize illicit shipments of precursor chemicals and communicate these seizures to other program participants; initiate investigations and other enforcement activities regarding illicit shipments (backtracking investigations); identify and share best practices to combat the illicit diversion and trafficking of precursor chemicals used to manufacture explosives; monitor and track legitimate shipments of precursor chemicals to identify the patterns, diversity, and extent of licit international trade; and facilitate legitimate trade in precursor chemicals through risk-based targeting.
Precursor chemicals to IEDs: Precursor chemicals come in many forms and have a wide variety of uses. They are generally legal to purchase, store and use. They include any chemical compound or element that can be converted to an explosive compound through a chemical reaction or series of reactions. Many precursor chemicals are used in our everyday lives.
Following Chemicals are identified by the WCO as precursor chemicals for manufacturing the IEDs: Acetic Anhydride, Acetone, Aluminum Powder, Ammonium Nitrate, Calcium Ammonium Nitrate, Hydrogen Peroxide, Nitric Acid, Nitromethane, Potassium Chlorate, Potassium Nitrate, Potassium Perchlorate, Sodium Chlorate, Sodium Nitrate and Urea.
Based on studies by the National Academy of Sciences, National Academy of Engineers, the Institute of Medicine, and Attack the Network, these precursor chemicals were adopted as the key ingredients that were the most common threat in the use of manufactured IEDs.
IED Protection: The best protection against an IED attack is prevention. Customs officer has to be vigilant in his duties to protect citizens and its entrusted facilities. All shipments of precursor chemicals should be monitored and an effective end user verification procedure should be adopted to prevent diversion of such shipments to terrorists.
Failure to implement this monitoring mechanism may lead to terrorist attacks, which will jeopardize the international trade and put the economic development in peril. As in the words of Secretary General WCO, KUNIO Mikuriya, “Cross-border trade has to be safe and secure from threats that may hinder or damage the global trading system and innocent civilian lives should be protected from threats that may risk or imperil their lives.” The conclusion is that IEDs not only threaten lives, they threaten trade.
Globally, the role of Customs is transforming rapidly. Particularly after 9/11, Customs reoriented itself to meet the security challenges arising out of the threat of terrorism, smuggling of sensitive materials and trafficking of small arms, weapons and currency across borders.
The Customs administrations particularly in Europe where personal information is highly confidential finally resolved to retrieve and share the information of individuals with Customs in form of Advanced Passenger Information (API) and Passenger Name Record (PNR) data to profile the movement of suspected passengers crossing borders particularly at airports.
The Customs of the world progressed speedily on enforcement challenge and the World Customs Organization (WCO) came up with number of instruments and programs to meet the emerging security challenges. The prominent Customs administrations, at first, which reorganized their organizational structures prioritizing security as one of the strategic goals, were the USA, Canada, China and Australian customs. The process of realignment is going on in various other administrations too.
The WCO in addition to development of prominent tools and instruments pertaining to security of supply chain such as SAFE framework including risk management using advance electronic information and Non-Intrusive Inspection (NII) system, export controls and exchange of information, initiated specialized security program at the WCO secretariat addressing the needs of emerging security challenges to Customs.
The security programme then initiated various instruments, sub programs and continues to organize number of regional and global operations to effectively implementing the security needs of member administrations. The prominent among the instruments are the database of open source information related to customs functions known as IRIS application, the Intelligence and Information center (I2C) and monthly intelligence reports, which circulate through WCO Regional Intelligence Liaison Offices (RILOs) to member administrations. On account of sub programs the prominent were the program Global Container Control Program (GCCP) to secure supply chain from infiltration of drugs and precursors which was initiated in collaboration with the UNODC. Secondly, the program Global Shield to control the movement of dual use goods and interdiction of hazardous materials and thirdly the program of Strategic Trade Control Enforcement (STCE) to control the movement of strategic and nuclear materials were spearheaded by the WCO security program office.
Pakistan Customs never stepped back and continuously advanced for the adoption and the implementation of the best practices in customs operations and policies. It achieved number of milestones addressing the rising needs of security of supply chain. The UNODC and the WCO reports repeatedly acknowledged the contributions made by Pakistan Customs in implementation and operation of the Port Control Units (PCUs) at Karachi and Port Qasim, which produced significant outcomes by making some eventful seizure cases of illicit goods and contributed in strengthening security of supply chain. Second, to mention is the program Global Shield and program STCE which attained maturity levels where Pakistan Customs produced number of accredited experts for capacity building of other WCO member countries. Now, the accumulated experience in these areas is being transformed through establishment of the Cargo Targeting Centers (CTC) by Pakistan Customs, in next phase of development.
The security and protection of society will continue to be the major challenges for customs in 2st century. As customs is the front line agency to confront cross border flows of goods, people and transport, therefore, it has to be equipped with right tools and skills to identify and mitigate the security risks involved in the process of regulating trade. Therefore, the WCO security program focused to provide member administrations the required level of capacity and skills to deal with the stringent challenge.
The program is aimed at the policy settings goals, provision of guidance and best practices, periodical global operations, secure information exchange platform Customs Enforcement Network (CEN), Information and Intelligence Center (I2C) and the required technical assistance to customs.
Although, Pakistan Customs has been dealing with all type of security risks while performing its functions at cross border trade points, however, there is increased need for further strengthening risk management system, cooperation with cross border agencies for exchange of information essential for reduction of cost of doing business, regular communication with Customs Enforcement Network utilizing the products of the WCO Security program i.e. IRIS and I2C for better operational law enforcement coordination, efficient utilization of open source and confidential information available at the portals of international organizations for effective interdiction of contraband and illicit materials risky to supply chain so as to ensure highest level of secure trading environment, which has a multiplier effect for trade facilitation and economic development.
Muhammad Qasim Khokhar
The World Customs Organization (WCO) is dedicating 2018 to the security of the business environment, with the slogan “A secure business environment for economic development.” Accordingly, the Model Customs Collectorate of Appraisement-East has followed the spirit of such instruments and initiatives like the revised WCO International Convention on the Simplification and Harmonization of Customs Procedures and the WCO SAFE Framework of Standards to Secure and Facilitate Global Trade or the WCO Security Programme.
As the latter aims at the fight against chemicals that could be used in the manufacture of improvised explosive devices (IEDs) and the fight against the trafficking in small arms and light weapons (SALW), and terrorist financing so MCC Appraisement East has worked on Explosive Pre-Cursors especially Sodium Nitrate and Ammonium Nitrate having dual use. While the clearance has been made after a thorough checking of licenses and permissions, efforts have been made that only quantity sufficient to meet the amount of output explosives duly licensed is released . Being a developing country, the licensing authorities like the Inspector of Explosives have limited capacity to map the input/output quantities and thus their quotas are only output based and without time limitation. An effective coordination mechanism is being setup so that quotas are molded into a model easily enforceable at import stage with predictability for trade. Thus these licensing authorities are being requested to issue quota on quarterly or annual basis instead of open ended and with specific quantity of raw materials required. Similarly all consignments of small arms and light weapons (SALW) pending at the ports/terminals are being confiscated. The due process of law has been put into motion after issuing notices under section 82 of the Customs Act ,1969. Experts of Pakistan Ordnance Factory, Wah are currently examining the consignments and same will be handed over to different arms working on anti-smuggling functions like ASO of Custom House, Karachi.
Similarly to obviate any remote chance of terror financing, consignments of Frustrated Cargo are being allowed under section 138 of the Customs Act,1969 only after assurance that remittances have been paid back. Scrutiny for waiver of EIF (Electronic Import Form) has been made more stringent. Consignments of Export-cum-import of eatables whether by humans or animals etc are being allowed under Section 22 of the Customs Act, 1969 after testing from reputed labs like HEJ, University of Karachi in addition to fulfillment of condition of remaining 50% shelf life . All these tools, instruments and initiatives not only enhance Customs’ overall trade-related processes, they also contribute to an increase in both security of health, environment, life and property and trade facilitation.
Similarly for spirit of partnership and cooperation with the trade, access to their sensitive information has been made more structured and secure. The scope of digital User –ID “internal auditor” has been re-visited by limiting its assignment to only officials who are carrying out the core function of auditing. A new role “Assessment Officer –PRV (Post Release Verification)” has been introduced in which access to information is restricted only to the relevant group i.e Chapters of Harmonized Commodity Description & Coding System or Pakistan Customs Tariff (PCT). This will remove any chance of sharing of information like names of suppliers, quantum and frequency of transactions with their competitors. Further, in order to make post release verification/audit more effective, the information of clearance in Green Channels has been made readily available.
By “secure” we mean an environment that is enabling, safe, fair and sustainable, all wrapped in one. So in order to build a fair and sustainable environment, the importation of illegal goods, such as goods that infringe intellectual property rights (IPR) have got a special focus of MCC Appraisement-East. Accordingly, such consignments have been scrutinized properly. Many contraventions in cooperation with Directorate General of Intellectual Property Rights have been framed and forwarded to the Adjudication authorities. These include goods infringing Trademark of Cherry Blossom Shoe Polish ,Mortein Mosquito killer spray, Baygon Insecticide Spray and empty bottles of branded Perfumes. Those who have no such infringements have been released immediately like multi-purpose sealant of Dow Corning etc.
Ensuring safety is also critical. Legitimate businesses require a secure supply chain to prosper. So while speedy clearance is being ensured, sudden impediments are being smoothened in an effective manner. Recently, interim relief granted by the Honorable High Court of Sindh on Regulatory duty has been implemented by creating special cell in each Group with a dedicated Appraiser and Principal Appraiser. The implementation of this decision had very complex strings and was tedious but same has been implemented in a manner with least impact on supply chain of trade and industry.
Currently only National Bank of Pakistan (NBP) collects duty and taxes and trade is facing insecurities as it has to carry/transport Pay Orders/Bank Drafts first to NBP and then pay into the account of Collector of Customs. At times, it has to deposit amounts first in accounts of Clearing Agents which has its own risks. MCC Appraisement East is working with Banks and State Bank of Pakistan in active coordination with Directorate General of Reforms & Automation, Custom House to introduce module of “e-Payments” so that duty and taxes are paid directly from the Accounts of importers into the Account of Collector of Customs. This will also thin out the long queues of tax payers in different branches of NBP in addition to reducing dwell time and securing the business environment by obviating the need of depositing in accounts of Clearing Agents or transportation of Pay Orders/Bank Drafts.
These are some glimpses of an over-all trade friendly and secure architecture being built at MCC Appraisement East. Besides this, we welcome the trade and stakeholders to share their views and input to build ‘A secure business environment for economic and national development.’
Economy plays a vital role in the development of a country. A plethora of problems, which inflicted many a dent and deformity in economic growth of the nation needs to be identified and corrected. One of the panaceas to treat the ill economy is providing safe and secure business environment to the international trade.
We are supposed to review our existing scheme of things and set new roles with a view to achieving economical goals and contributing towards thriving business activities. Since business has direct relation with security, therefore, an all embracing security is prerequisite for substantial and consistent economic growth specially when a battalion of corrupt practices engulfed the ailing economy in a quagmire of terrorism viz-a-viz asymmetrical balance of trade and payment. In this grim scenario, the role of Customs authorities is of a prime importance in order to bring about positive economic boom.
Pakistan Customs also plays a pivotal role with reference to the security. The WCO has incorporated into the Framework a third pillar on cooperation between Customs and other governmental and intergovernmental bodies, the first pillar being dedicated to Customs Cooperation and the second to Customs-Business Cooperation. The third pillar recognizes the importance of Cooperation between Customs and other government bodies involved in the international supply chain. This pillar is, therefore, aimed at strengthening cooperation ties within each of these actors and between them, in order to effectively and efficiently address the challenges of supply chain security while facilitating legitimate trade. Co-operation is at three levels: Cooperation within the government, Co-operation between governments and within governments, and multinational Co-operation.
The rapid and efficient clearance of goods increases the participation of domestic firms in the global market and can have a significant impact on the economic competitiveness of nations by encouraging investment and industry development. It also allows more small and medium-sized enterprises to participate in international trade. The commitment to implement the WTO Trade Facilitation Agreement (TFA) could result in major administrative, technical and infrastructural constraints. Indeed, Customs administrations, the mainstay of the implementation of the agreement, are in a material, human and institutional situation that gives them little opportunity to perform efficiently their trade facilitation mission. Customs controls have recently been assigned a new purpose of security with the implementation of new provisions, in application of the SAFE standards recommended by the World Customs Organization to secure the flow of international trade.
In cyberspace – and more particularly in its darkest part, the “dark web” – commercial exchanges are made exclusively on the basis of depersonalized relationships, and often, anonymously. Payments are no longer made in currency guaranteed by a State. Indeed, customers pay their purchases in a multitude of new virtual currencies, of which Bitcoin is the best known. Moreover, in this illicit universe, the very concept of merchandise has changed, and it is often dematerialized goods, which cannot physically pass from hand to hand. The most dangerous traffickers buy goods based solely on algorithms, such as malware, Trojans, botnets, ransomware and spam made available by malicious sellers in both developing and developed countries. The losses associated with these intangible products today represent considerable amounts.
It is in the field of environmental crime that the illicit trade is experiencing its strongest growth. As the planet’s resources dwindle and the world’s population continues to grow, the resources needed to survive are under increasing pressure. Both illegal trade actors and corrupt officials benefit from the planet’s limited resources and exploit the market demand for endangered species, including rhinoceros horns, elephant tusks and protected tree species.
As part of its specific control tasks in the field of safety and security of air and port cargo, Customs is in charge of the prevention and it aims to secure international flows of goods. In addition, Customs is directly involved in the fight against the proliferation of weapons of mass destruction through the Container Security Initiative (CSI) program and the Proliferation Security Initiative (PSI). Pakistan Customs, like Customs of developed countries, strives hard to provide secure and safe business environment to the country by using a seamless and automated Custom clearance system for trade. Pakistan Customs has implemented a homegrown solution through WeBOC System i.e. the Web-based One Customs System (WeBOC). All the goods are tackled here with a robust Risk Management Unit which gets activated immediately on the basis of risks parameters incorporated in the system wherever and whenever system protocols are violated.
In a world where demand drives up prices and shortages often contribute to the growth of illegal markets and the black market, illicit trade results in the depletion of natural resources. To bring about such a change requires much more than a change in trade regulations, it also requires control of the world’s population and the pressure it exerts on the balance of the planet. There is a need to rethink the financial system in order to provide more transparency, restructure the corporate world to focus on accountability and put in place anti-corruption measures to combat those who promote illicit trade. We must find the means to control the harmful non-state actors that are the big winners of the globalization of trade.
Taking advantage of these opportunities will enable Pakistan Customs to protect the fiscal and financial interests of the state, protect national economies from the illicit movement of goods, support the international trading system by ensuring a level playing field for all businesses to facilitate legitimate trade and protect society. The benefits of an adaptable Customs administration, focused on strategic objectives, are immense and in particular make it possible for lawful companies to reduce the costs related to the legislation, to target in a more efficient and profitable manner high-risk goods and to establish among Customs administrations a climate of trust and mutual recognition of each other’s programs and controls.