Customs Intelligence catch smuggling to Afghanistan under ISAF name

[TaimiKhan]

Cool it man, unless we dont discuss, unless Rescue Ranger pointed out those things, how will we (in India) get too know???

Then discuss, rather then post sarcastic remarks.

 

[Capt.Popeye]

Such is a shame, especially when you consider the long term implications, if NATO were a company such practices would have serious long term ramifications for its corporate image aswell as cast doubt over its ablity to assess operaitonal risks.

And what's worse is the fact the APL did have a tender with the Americans and whilst they were hauling, we never witnessed such incidents... They even had their own convoy security team.

Oh well, you know what they say,

Quite enlightening to hear that the logistic operations of NATO is farmed out in such a casual/stupid manner. If their stocks of frozen french fries, beer bottles or Playboy magazines are disappearing because of this, its no big deal. But if they are losing critical spares not to mention ordnance, they don't know their ****holes from their elbows. That is one long haul by road that you described and without security cover is laughable to expect no incidents.
You have a point about 'security vetting' and 'due diligence'. And if this was done by a corporate, they'd be in deep ----!

 

[sparklingway]

‘Duty-less’ customs officials allow smuggling
​

By Irshad Ansari
June 29, 2010

ISLAMABAD: The Federal Board of Revenue has confirmed that thousands of containers have passed through the customs authorities without payment of duties and on declaration they were meant for the International Security Assistance Force (Isaf) in Afghanistan.

Earlier reports by the Directorate General of Customs Intelligence and Investigation Lutfullah Warq state the number of containers could be as high as 10,080 which FBR Chairman Sohail Ahmed claims is an exaggeration.

According to the FBR report, two companies have been working in cahoots with officials in customs to smuggle in the containers which they passed off as carrying Isaf material.

Since the scandal came forward, FIRs against almost 20 people have been registered and several arrests have been made.

Ahmed told The Express Tribune that he does not know who has been arrested but suspects that seven people have been taken into custody. The FBR has contacted Isaf which says it does not have a deal with the companies against which action has been taken.

Earlier, the All Pakistan Appraisers Association went on strike to protest an FIR calling for the investigation and arrest of 14 members of the Afghan Transit Group for allegedly allowing alcohol to cross the border, which the traders said was intended for Nato-Isaf forces.

Published in The Express Tribune, June 29th, 2010.

 

[RescueRanger]

How much a bet these lazy buggers were compensated well... Someone should post ANF alongsides these idiots.

 

[sparklingway]

Major Customs gang busted, 25 officers arrested​

Rs 230 bn taxes, duties evaded as 10,000 Nato containers go missing in two-year operation​

By Ikram Hoti
Wednesday, June 30, 2010

ISLAMABAD: An international smuggling syndicate was busted by the Customs Intelligence on Monday and over 25 Customs officials, besides members of the gang, had been arrested, officials said.

As many as 13 officials are under the police custody, 21 Customs officials have been booked in Karachi (now allowed back on their jobs after a week-long suspension), 12 arrested in Peshawar and two in Lahore.

They had ganged up to evade duties and taxes of over Rs 230 billion in the past two years but those arrested were now exerting pressure to get the top Customs Intelligence officials removed from their posts and get the cases withdrawn.

At the Customs House, Karachi, as sources privy to the entire episode revealed, the suspected gang members were not just those booked but higher officials, too, who supervised clearance of the ISAF and Afghan Transit Trade (ATT) goods on fake papers (the containers never crossed Pak-Afghan border).

“These are influential officials and the gang they operate is well entrenched in the state machinery. They are not just making efforts to get the Customs Intelligence officials at the top and middle levels removed but have also launched a campaign through the FIA and other channels to get the Directorate General Customs Intelligence (DGCI) offices in Lahore vacated by exerting pressure on the owners of the buildings.”

In order to obtain the FBR version, this correspondent called its spokesman Israr Rauf repeatedly on Monday evening, but there was no response. The following SMS message was sent on his cell number (0300-8444212): “Why were Customs men booked in Karachi let off the hook? They were suspected of abetting the ISAF-container smuggling.”

DGCI, Lutfullah Virk, flatly refused to say anything. “Please, do not make calls to me again”, he said. Sources in Karachi and Peshawar, however, pointed out that the international syndicate of smugglers that operated in connivance with the Customs officials was actually busted when three tribal boys were caught from Torkham on the Pak-Afghan border about a month ago on suspicion of stealing the Customs computer user ID that helped access to the documentation operation of the ISAF and Transit Trade shipments from overseas to Afghanistan through Pakistan.

These three boys were the sons of tribesmen killed in a Customs-smuggler shootout about four years ago and were given Customs jobs under a government-jirga agreement as compensation.

They were working as helping staff and were frequent to the Customs offices at the border check-post where the computation of ISAF-ATT shipment-clearance documentation was routinely conducted.

As these boys sang to the investigators and coughed up the names of the technical staff that gave them out the user IDs, more arrests were made, as confirmed by Directorate General Customs Intelligence (DGCI), Islamabad.

Simultaneously, the DGCI was frustrated by the Karachi Customs as it was refused the relevant files helping its investigation on how more than 10,000 imported containers slipped off the records, mostly carrying banned items like liquor, auto-parts and other heavy-duty goods.

These were (40-ft) containers, which imported ISAF shipments from Western destinations, the UAE and Monaco ports.

The ISAF-declared consignments started disappearing about two years ago, and the sources said that the efforts to abort the investigation were also going on as they were approaching FBR high officials to ensure that the entire exercise of detecting the missing containers and export of banned items was suspended so that the big and the small fish in this racket might not be touched.

The DGCI took up with higher authorities the issue of refusal by the Karachi Customs to provide records on these containers and also shared its conclusions of the investigation conducted into the missing containers so far. This activity coincided with three other important events:

a) The tribal boys revealed that most of the missing containers were ISAF-declared in Karachi, then Afghan Transit Trade shipments in Nowshera (on fake documents). These containers were shown having been transported outside Pakistan, while they were seal-opened, offloaded and the goods were sold out in the Pakistani markets.

b) An internal audit was conducted by the Peshawar Customs, which revealed that there existed a syndicate of smugglers that had penetrated into the department’s sensitive shipment-handling (duties-taxes collecting) data-monitoring-computing offices in Karachi, Peshawar, Nowshera and Torkhum, to ensure that the forged ISAF-shipment plus ATT-shipment papers of goods declaration were accepted as legal.

c) A committee of investigators was formed by the FBR.

It is pertinent to mention that the names of officials that allowed them to use their ID, have not been listed properly by the relevant authorities. They included the deputy collector level Customs officials, superintendents and more than 10 inspectors. They form part of the smuggling syndicate but investigations are yet to be completed about them.

The story does not end here. DGCI officials recorded after cross checking of the export documents over the past couple of years that 70 containers out of 10,000 were confirmed to have been cleared on fake ISAF-ATT papers. Others too were allowed clearance by succumbing to the same trick applied by the international smugglers’ syndicate, which had penetrated into the fabric of Pakistan Customs.

The officials cleared more than 70 containers — 36 confirmed with fake papers — carrying poppy-seed (khashkhash) for export to European destinations. There was no news if these shipments were intercepted on the high seas or at the ports of delivery (most of them are believed to have touched the shores of Turkey), as the exporters’ (a bogus Karachi company) records reveal.

A manager of the company has been arrested and several others booked, while the relevant Karachi Customs staffs were suspended. They went on strike and the FBR capitulated allowing them back on their jobs with a warning when the investigation was completed and indicated their involvement, they would be arrested and charged for allowing export of a dangerous banned item under the declaration papers of rice and pulses.

 

[sparklingway]

Mark my words, it will be no time before The Nation and the whole right wing fundo lot picks up on this and declares that the thousands of shipments used for smuggling were infact ISAF shipments that landed at Karachi and went missing in the country and it was Blackwater's support material and weaponry. (although The News report is stating that the whole act was caught precisely due to activities at Torkham but the reality and facts are of no concern to the right wing media and have never been).

 

[Capt.Popeye]

Mark my words, it will be no time before The Nation and the whole right wing fundo lot picks up on this and declares that the thousands of shipments used for smuggling were infact ISAF shipments that landed at Karachi and went missing in the country and it was Blackwater's support material and weaponry. (although The News report is stating that the whole act was caught precisely due to activities at Torkham but the reality and facts are of no concern to the right wing media and have never been).

A matter of some concern is the fact that those containers could have contained anything from chocolates to liquor to weapons. While this affair seems to have been born out of 'commercial fraud' it has serious security concerns as well. Though this kind of fraud is not new and it happens across the globe. A container of expensive shoes is found to contain stones and a supertanker load of oil disappears- all this has happened in the past. Usually there are two intentions; to defraud Governments of duties and taxes and defraud Insurance Companies of insurance claims (all of which is big money). The security angle adds a more serious dimension.

 

[TaimiKhan]

Mark my words, it will be no time before The Nation and the whole right wing fundo lot picks up on this and declares that the thousands of shipments used for smuggling were infact ISAF shipments that landed at Karachi and went missing in the country and it was Blackwater's support material and weaponry. (although The News report is stating that the whole act was caught precisely due to activities at Torkham but the reality and facts are of no concern to the right wing media and have never been).

Well this has already been talked about that these containers which go to Afghanistan are not screened or checked for the contents, thus anything would have been smuggled in them to Afghanistan and then could have been used against Pakistan.

Some previous reports of weapons coming through them also have been reported and that these weapons then make their way to Pakistan through Afghanistan has also been talked about.

 

[TaimiKhan]

Quite enlightening to hear that the logistic operations of NATO is farmed out in such a casual/stupid manner. If their stocks of frozen french fries, beer bottles or Playboy magazines are disappearing because of this, its no big deal. But if they are losing critical spares not to mention ordnance, they don't know their ****holes from their elbows. That is one long haul by road that you described and without security cover is laughable to expect no incidents.
You have a point about 'security vetting' and 'due diligence'. And if this was done by a corporate, they'd be in deep ----!

As said before, NATO/ISAF equipment has not been misplaced or stolen, rather it was normal good imported under the name of For ISAF/NATO to be transported to Afghanistan, thus no checking of the contents as well as no duty, thus duty free good got imported in the name of being for ISAF/NATO, thus it was not NATO equipment, rather normal goods.

And this is a normal thing which happens, especially during such war like situations, as people use loopholes and opportunities to earn money, do recall how Frank Lucas imported heroin through hiding it in the coffins of dead US military personnel.

So history is full of such incidents.

In this incident, the NATO did not loose anything, rather the govt of Pakistan has suffered huge sum of money lost in revenues, the sum is being quoted in hundred of billions of rupees, making it into a few billion $$$s.

 

[Evil Flare]

First things first.

"Bharat" is the name of the country. It's citizens are called "Bhartiya" and not "Bharti". But if you do that under the influence of Airtel - Bharti, then its OK.

You dont know that in urdu we say Bharti ..

All our News channels says bharti like bharti wazeer-azam , bharti wazeer-kharja ....


so its not our mistake ..

 

[Markus]

Self Delete

 

[sparklingway]

Missing containers​

Saturday, July 03, 2010
Economy, security, infrastructure at stake; Special Report

By Amir Mateen

ISLAMABAD: The case of missing containers, on which the Supreme Court has sought a report on July 5, is just the tip of the larger scandal that involves serious threats to Pakistan’s security.

It’s not just the case of freight companies evading taxes and smuggling contrabands with the connivance of local and foreign officials. The story involves international racketeers who, with the help of Pakistan, Afghanistan and ISAF officials, run a ring of organised smuggling of arms and goods spanned over many years. It is also about how the ISAF and the US government got away with either no or one-sided contracts partial to their interests governing the transportation of arms and goods through Pakistan.

The rules and procedures laid down for what has been one of the largest logistical exercises in the recent history raise lots of questions that need to be asked: How much is the extent of pilferage from the convoys of the ISAF, Nato and the US forces? How the pilferage of arms is impacting the security situation in Pakistan? How is the smuggling of goods and arms in the name of the ISAF and the US hurting Pakistan’s economy?

What are the systems, if any, to monitor the goods being transported through Pakistan? What are the screening procedures at the port of entry and exit, and during the convoys’ mobility from Karachi to Afghanistan? What is the nature of Pakistan’s agreements with the ISAF, Nato and the US regarding the transit facility?

Finally, it needs to be seen how much is it impacting Pakistan’s infrastructure. How the US and the ISAF compensate Pakistan for the wear and tear of its infrastructure? How much Pakistan charge the US and the ISAF for the usage of its transit facilities?

A thorough survey of the issue reveals a picture detrimental to Pakistan’s interests. Pakistan has allowed nearly 300,000 containers of the coalition forces to pass from Karachi to Afghanistan through Chamman or Torkhum since the commencement of Operation Enduring Freedom in Afghanistan eight years ago. Over 7,000 containers cross the Pakistani territory every month, not to forget an unaccountable number of containers that return to home countries by the same route. This makes it one of the biggest logistical exercises undertaken by any country in recent history. Yet there is no single authority to oversee this massive movement of the most sensitive equipment on planet earth.

It suits the coalition forces, as the arrangements for this massive transit are favourable to them. Pakistan has no ideawhat goes through its territory in thousands of the ISAF, NATO and the US containers as it is not allowed to see inside them.

Pakistan was not allowed to even scan the containers. It is only recently that scanners have been put up for random checking at Port Qasim, which deals with just 40 per cent of the cargo. The equipment is not good enough to scan specially-fabricated hard metal containers. The 60 per cent of the coalition cargo passing through Pakistan International Container Terminal (PICT), Karachi International Container Terminal (KICT) and Karachi Port Trust (KPT) goes un-scanned.

The Musharraf regime gave the coalition forces almost free entry and the passage through Pakistan with no control on their contents and monitoring. National Logistics Cell (NLC) was given the charge of coordination with the coalition forces. But the NLC deals with hardly 15 per cent of the cargo, mostly related to Afghan Transit Trade (ATT) and the cargo of humanitarian nature meant for NGOs and the foreign embassies.

The bulk of coalition forces cargo is handled by private parties hired by the ISAF, NATO and the US. The NLC simply gives them No-Objection-Certificate (NOC) after their documentation at Karachi. The problem starts once the containers leave the ports.

The ISAF containers need cross-border certificate from the Afghanistan embassy, which takes, some allege suspiciously, 15 to 20 days. Sources say this is the time when most of the containers are changed, altered or emptied. Others get altered en-route to Afghanistan.

The US military cargo carries Radio Frequency Identification Device (RFID), which only allows the US Homeland Security constant monitoring of their assets. The US does not share this facility with its coalition partners, or with any agency of Pakistan. These tags provide the US the real time positioning and indicate any kind of breach to their seal.

The interior ministry has time and again reported the breach of the existing system. The ministry reported incidents where violators changed the assets after opening containers from the middle without breaching the seal. There have been many occasions when containers have been found to be carrying items other than what had been declared. A container when recovered from miscreants was found containing US and French currencies whereas records showed it to be carrying ration items. However, Member Customs Munir Qureshi claims they were actually Afghan coins that were looted by the Taliban but later recovered. Containers have also been found carrying illegal liquor. The interior ministry complained about the involvement of one company hired by the coalition forces, Messrs Al Razziq to be involved in smuggling. All of this is happening through organised gangs who operate at local, regional and international levels.

The biggest issue is the pilferage and smuggling of arms through this cargo. Numerous media reports have reported the ambush of containers carrying arms and about the arms smuggling through false declaration or fake documents. The Central Board of Revenue and the Customs Department have tried to belittle the issue by claiming that the number of missing containers was only 40 and not 12000.

Defence experts say even one container of arms is enough for sustaining insurgents and militancy for weeks and months. “The militancy in Balochistan is thriving on arms pilferage and smuggling,” says Baloch Nationalist Rauf Khan Sasoli.

Pakistan’s security problem, one can safely say, is largely fuelled by the arms being pilfered from the convoys of the coalition forces and the ones being smuggled back from Afghanistan. But the ISAF and the US continue to insist on the existing arrangements that are partial to their interests. The Memorandum of Understanding (MoU) signed between the ISAF led by the UK stipulates that Pakistan allow them men and material by land, sea and air across the territory of Pakistan; procurement and acquisition of goods, services and building infrastructure; use of communications and road infrastructure; ensure safety and security to the men and material of the ISAF; facilitation in the movement of war equipment, material, vehicle, vessels, aircrafts and the use of other allied facilities. The ISAF is immune from personal arrest and detention to the staff including contractors. The most crucial clause is that the ISAF is exempted from taxes and duties. The MOU with the US, signed in 2002, leaves Pakistan even more high and dry. It does not mention any Pakistani concerns about threats to its security or consequences for its economy.

This leaves little room for Pakistan to manoeuvre. There is hardly any mention of the impact of this massive movement on Pakistan’s infrastructure. This may have affected the national highways, particularly because of heavier containers. The NLC is paid a paltry Rs1000 per container for coordination with various departments before issuing the NOC. This hardly compensates for the damage to highways. Pakistan is once again being squeezed, almost like the first phase of the Afghanistan war when the jihad left our infrastructure in tatters.

The impact on economy may be even more. Senator Ilyas Bilour points out quite rightly that the bazaars of Peshawar and Quetta are flooded with goods stolen or smuggled from the convoys of the coalition forces. “The money that the Americans are giving us through the Kerry Lugar and the coalition support fund is peanuts in comparison to the loss that we are suffering because of the pilferage and smuggling,” says security analyst Ziaur Rehman Rizvi. “If we could imply levy taxes of the goods that are being taken through our territory, it should be five times the amount. They could have at least purchased non-military goods from Pakistan instead of buying a bulk from our adversaries like India.

 

[sparklingway]

Q Blocks refers to the Finance Ministry. PACCS is being shelved thanks to internal struggles and also the fact that Agility (based in Qatar) has refused to update the system and has shut down most of its operations. An alternative developed by local companies was suggested but FBR seems adamant to shut down PACCS.

The mystery of the missing containers​

By Shahbaz Rana

July 05, 2010

ISLAMABAD: In 2008, a confidential report submitted to the Chief Collector Customs had revealed that 400 Afghanistan bound containers carrying goods worth billions of rupees had gone missing. Thanks to the still prevalent system of manually clearing goods, the contractors managed to dodge the tax authorities and pocketed billions of rupees in connivance with Customs officials.

Two years down the line, the then Chief Collector Customs, Munir Qureshi, now serves as member Customs, Federal Board of Revenue (FBR) yet no action has been taken on the report to date.

A year prior to the scam in 2008, the authorities also found 180 containers missing from Post Qasim. An official at the FBR headquarters laid the blame on the Pakistan Customs Computerised System (PACCS). However, later it was established that the manual clearance system had been used and reportedly the allegation was aimed at shutting down the computerised system. The Customs Intelligence report states the basis of scam was “the clearance of containers on fake documents.”

Intelligence officials managed to arrest a clearing agent who took responsibility for the missing containers, Mohammad Naeem Qureshi, who also disclosed the names of his accomplices within Customs. However, those accomplices were never arrested. Customs staff went on strike and the FBR headquarters allegedly exercised its influence to ensure the enquiry ceased.

In June 2010, media reports claimed that over 11,000 containers had disappeared enroute to Afghanistan. These reports also suggested that the containers were carrying goods for the International Security Assistance Force and Nato troops fighting in Afghanistan. Later, the FBR clarified that only 43 containers had disappeared and admitted that liquor had been smuggled by being misrepresented as regular beverages. In response to a question, Qureshi said that it was a petty matter not worth reporting. However, had he been a functionary of a real democracy, he would have been asked to resign.

The FBR has accepted that forged documents were used to clear containers through Karachi port by using the manual clearance system.

The use of fake documents, clearance of goods through the manual system and involvement of Customs officials are common characteristics in all three incidents. While two of these have been widely reported in the press, the last was brushed under the carpet by the FBR.

FBR officials have said that a few simple solutions can prevent missing containers and smuggling in the future. These include scanning of Isaf containers, amendments in Customs General Orders 2002 and restrictions on Afghanistan-bound imports.

A former chairman of the Federal Board of Revenue, Abdullah Yusuf, said that the solution to all mega scandals is a web-based clearance system for imported goods such as the PACCS. He stressed that the system should be continued rather than scrapped.

But instead of rolling the PACCS out all over the country, authorities have decided to wind up the pilot project by July 31 as the FBR has not renewed its contract with Agility International, software providers of the PACCS.

In 2004, the pilot project was awarded to a syndicate of Agility, Microsoft and Accounting Outsource Services run by Ali Arshad Hakeem who is also chairman of the National Database and Registration Authority. Out of a total cost of $200,000, only $70,000 has been paid to the group so far.

Some within the FBR are set to permanently shut down the web-based programme despite its evident advantages. An attempt was even made to draw the curtain on the pilot project before July 31 by trying to persuade the finance minister that PACCS was a security risk. Reportedly, he was told that an intelligence agency had given a negative report about the project. However, Q Block insiders said that when Dr Abdul Hafeez Shaikh contacted the top boss of the agency he was completely unaware of the said report.

The PACCS system leaves little room for fraud since its server is connected with the bank, the terminal operator, the importer as well as the exporter. After paying the applicable tax, importers are automatically provided with a machine number for container clearance. Thus, no fake entry is possible using the computerised system.

In comparison, the manual system relies on human beings and the use of physical documents, making it susceptible to fraudulent activity. Experts suggest that instead of closing down PACCS, the government should heavily rely on the automated system. They say that the case of the disappearing containers can be solved by installing electronic scanners at Torkham border and linking them with the PACCS server. The scanners have already been installed in Karachi and there is a dire need to install them in Peshawar and Torkham.

How the PACCS unearthed the unreported scam in 2008

The PACCS computer is linked with the terminal gate and any outgoing container is automatically registered in the system. PACCS operatives were alarmed in 2008 when they noticed Afghanistan-bound trucks returning within two to twenty-four hours of departure whereas Afghanistan-bound trucks typically take a minimum of eight days to return to the port.

Published in The Express Tribune, July 5th, 2010.

 

[sparklingway]

FBR removes Customs DG ‘for unearthing oil import scam’​

Wednesday, July 14, 2010
Multan traders accused of illegally importing HSD, used oil

By Umar Cheema

ISLAMABAD: In a dramatic move, the Federal Board of Revenue (FBR) has removed the Customs Intelligence DG, the man who unearthed a mega oil scam implicating the importers from Multan for illegally importing over 1,650 containers of High Speed Diesel (HSD) and used lubricating oil in just six months with the connivance of the Customs authorities, causing massive revenue loss.

The oil scam has so far been kept out of the public eye and it is a unique scandal of its nature where the revenue officials were accused of facilitating the illegal import and Arshad Saeed, the Multan collector, removed under same charges. Nevertheless, the Customs Collectorate was authorised to investigate the scam by the FBR, putting the Customs Intelligence which unearthed it at the backseat.

As the containers were seized from Multan and Karachi ports, the then Chief Collector in Karachi, Munir Qureshi, has now been appointed the Member Customs in the FBR.

On the other hand, Rai Sikandar, Customs Intelligence DG, who dug out this robbery that occurred under the close watch of the Customs Department, has not only been removed but also replaced with Lutfullah Virk, an officer from the Customs group, an appointment that is illegal according to the FBR reforms dictated by the IMF and the World Bank in 2006.

According to the reform programme, the Customs Intelligence DG must belong from a department other than the Revenue Establishment as induction from the same department to examine the performance of his workmates was considered tantamount to setting a thief to catch a thief. Unlike Virk, his predecessor, Rai Sikandar was from the Secretariat Group.

The Multan importers found involved in this illegal business were M/s Yasir Enterprises; Mian Rasheed, the owner of M/s Kamran Oil and M/s The Pioneers. Neither any strict action has been taken against the Customs staff involved in clearance of misdeclared goods nor Customs Intelligence DG, Rai Sikandar, was allowed audit inspection of sales tax and income tax returns of the accused parties.

Background discussions and reading of voluminous documents disclose how the Customs authorities first facilitated this illegal import and when caught red-handed by the Customs Intelligence, the FBR joined hands with the accused Customs officials and cold-shouldered Customs Intelligence DG. The matter is now pending with the Public Accounts Committee that has yet to take it up.

The FBR didn’t offer any comment on a list of questions sent for its version.

The Customs Intelligence seized 14 containers on Multan Dry Port in April 2009, carrying imported HSD but was misdeclared as residue of petroleum and initially had been cleared by the Customs Multan.

According to rules, HSD can only be imported by Oil Marketing Companies (OMCs) and the rest of them are unauthorised. On further information, the Customs Intelligence detained as many as 363 containers at Karachi ports under the same suspicion and it was discovered the containers belonged to the same importers.

In both cases, relevant Customs authorities were accused by the Intelligence Directorate of conniving with the importers and the FIR was also registered against some staffers.

Rai Sikandar, the then DG Customs, who was shocked to notice how colossal loss being incurred to public exchequer, wrote to the FBR chairman that ‘over 1600 containers of the same product have been cleared by the MCC (Model Custom Collectorate in Karachi) during last six months and not a single case was detected through physical examination or the lab test’.

Besides customs officials, government labs were also found involved in facilitating this racket. For example, the petroleum products discovered from containers in Multan were sent for test in Hydrocarbon Development Institute of Pakistan (HDIP) in Lahore and Multan and produced different results. Multan Lab declared the product as High Speed Diesel and Lahore lab reported otherwise: “Test result of the sample is comparable to HSD but contains water and sediment and is not suitable for use in diesel engine”.

As the issue of FIR emerged, Customs Intelligence and Customs Collectorates in Multan registered parallel FIRs. The accused importers went to court, challenging the jurisdiction of Customs Intelligence that was rejected by the Lahore High Court. Nevertheless, the FBR through a letter dated April 15, 2009, gave precedence of Customs Collectorate’s FIR, drawing protest from the Intelligence Directorate. Separately, a joint investigation team was formed for Multan episode but Dr Arsalan, an official recommended by Customs Intelligence, was not made part of the team and instead inducted another Customs officer, Mukarram Jah.

Likewise, the suspected containers in Karachi ports were also seized on the information of the Customs Intelligence DG that also discovered collusion of the customs staff. A joint examination committee was formed under the leadership of Customs Collectorate Karachi. The Customs Intelligence was first made part of investigation but later excluded from the process, said a letter written by Rai Sikandar, DG Intelligence to chairman FBR.

The questions sent to FBR for version, are being reproduced below:

1) Is it true that Directorate General Customs Intelligence seized containers in Multan and Karachi for mis-declaration of HSD/ Used Oil as Residue Oil/ Bitumen?

2) Is it true that 14 containers seized in Multan were initially cleared by the Customs Collectorate but later detained by DG I&I and found that Diesel being imported in unauthorised manner under the pretext of residue oil/bitumen?

3) Is it true that DG I&I and Customs Collectorate registered FIRs under different offences?

4) Is it true that Collectorate’s FIR was given precedence over Customs Intelligence DG’s FIR?

5) Is it true that FBR gave precedence to the Collectorate’s over Customs Intelligence DG’s FIR through a letter on April 15, 2009 when the Lahore High Court had already rejected objections on April 10, 2009 of the accused parties that had objected the Customs Intelligence DG ‘s investigation into the matter?

6) Is it true that Collector Multan was removed on the Containers’ issue?

7) If yes, it means the FBR admitted Collectorate’s involvement in clearance of such mis-declared consignments, nevertheless the investigation into the scandal was assigned to the Collectorate?

8) Is it true that Mukarram Jah, a Custom Officer serving with DG Custom Intelligence, was made member of investigation team notwithstanding the opposition of DG Rai Sikandar who had recommended Dr Arsalan’s name for the purpose?

9) What’s the status of Hafiz Anis-led inquiry into the matter and what were the findings of his report?

10) Is it true that Arshad Saeed, Collector Multan, was removed from the position after Hafiz Saeed’s inquiry report but no action has so far been taken against Arshad Saeed?

11) There were 363 containers seized in Karachi. How many have been cleared and under what pretext? How much duty tax was received from the importers? How many are still parked there, unclaimed? In how many containers, diesel was detected by HEJ, a testing lab in Karachi.

12) Is it true that DG Customs Intelligence disclosed in a letter that over 1,600 such containers have been cleared by Customs Authorities in six-year period?

13) What were the findings of the HDIP (Lahore) and HDIP (Multan) on samples sent from the containers seized in Multan?

14) I understand the importers moved the court and succeeded in securing stay. What departmental action has been taken against the accused held responsible in Karachi and Multan?

15) Is it true that Chief Collector Southern Zone, Munir Qureshi, under whose administration comes Port Qasim and PICT where containers seized, has been appointed as Member (Customs) in FBR?

16) Is it true the seizure in Karachi took place on intelligence of DG Customs Intelligence?

17) Is it true that investigation in Karachi was led by the Collectorate staff, giving DG Customs Intelligence a subordinated role?

18) Is it true that parties brought shipment in Multan, had also their stuff seized in Karachi?

19) Is it true that DG Customs Intelligence was not allowed an audit of sales tax and income tax of the accused parties?

20) Is it true that Customs Intelligence Director General Rai Sikandar was removed from his position after he unearthed this scam?

21) Is it true he has been replaced by a customs group officer?

22) Isn’t it the violation of restructuring plan of the FBR that said a customs officer cannot be DG Customs Intelligence?

 

[sparklingway]

Two FBR DGs claim to be intelligence chiefs
Thursday, July 15, 2010
By Umar Cheema

ISLAMABAD: In an interesting, yet scandalous development, the Federal Board of Revenue (FBR) has two DG Customs Intelligence — one functional and another dysfunctional who was removed after he unearthed a mega oil scam.

Both of them are drawing salaries against the same position and both surprised the Public Accounts Committee (PAC) when they appeared and claimed to be the genuine DGs.The appointment of the incumbent DG Lutfullah Virk and removal of his predecessor, Rai Sikandar Ahmad, both are illegal, said some officials, yet salary is being paid to them.

The prevailing confusion is so great that a PAC meeting was baffled when both of them appeared representing themselves as the real DG Customs Intelligence.FBR Chairman Sohail Ahmad, when contacted for his version, said that Tax Administration Reform Project (TARP) recommendations were not mandatory for the FBR. However, he admitted that they have written to the Establishment Division for relieving Rai Sikandar but it was not done by the Division.

Asked how the FBR act of removing Rai Sikandar without the Establishment Division be legal as he together with the new DG Customs intelligence are drawing salary against the same position, he refused to comment.

According to officials, Rai Sikandar was appointed as DG Customs Intelligence on the directives of the prime minister and the Establishment Division issued a notification; its copy is available with The News. As Rai was removed after he unearthed an oil scandal and indicted the Customs Department for colluding with the importers in clearance of illegal shipment, the FBR issued a notification of his replacement, usurping the power of the prime minister, as there was no directive in place from the Establishment Division.

According to services rules, the appointment/removal for the position of BS-21 is done through the PM directives and the Establishment Division issues notification to this effect.

But in case of Rai Sikandar, still DG Customs Intelligence in the official record of the Establishment Division, it is in contrast with the FBR’s decision that not only removed him but also appointed Lutfullah Virk as new DG intelligence from the Customs Department, whose oversight/vigilance is actually required.

Under TARP, the FBR was restructured in 2005 that among other changes also made it mandatory that the DG customs intelligence should be from outside the FBR so that impartial investigation could be carried out against the malpractices of the Customs authorities. Virk is the first ever DG customs intelligence appointed from within the FBR flouting the rules as this never happened in past when appointments were made from other departments. Before Rai Sikandar’s appointment, who belonged to Secretariat Group, his predecessors were retired army generals: Maj Gen Usman and Maj Gen Fahim.

As Rai was removed, the Establishment Division didn’t issue any notification to this effect and instead kept in dark as the FBR did this on its own without having any such authority. According to details, Rai was appointed for the position in August 2008. As he unearthed oil scam in April 2009 of illegally importing High Speed Diesel (HSD) under the garb of petroleum residue/bitumen and registered an FIR against the importers and Customs officials, he was sent on a course at National School of Public Policy, Lahore. Meanwhile, one of his immediate subordinate, Sarwat Tahira Habib, was given the additional charge. A day before he was to resume his office, the FBR chairman notified Lutfullah Virk, a custom officer, as DG Customs Intelligence.

The Establishment Division secretary and prime minister’s spokesman didn’t respond. Text messages were sent about the subject, but drew no response from them.

---------- Post added at 07:36 AM ---------- Previous post was at 07:36 AM ----------

FBR denies report
Thursday, July 15, 2010
ISLAMABAD: The Federal Board of Revenue (FBR) has denied the contents of a news report captioned “FBR removes Customs DG for unearthing oil import scam” and published in a section of the press.

In a statement, the FBR termed the news report “false and misleading” as there was no case of removal of the DG I&I on grounds as reported in the story. The fact of the matter is that Rai Sikander, DG Intelligence and Investigation FBR, proceeded for National Management Course at Staff College Lahore on August 10, 2009. The post being of very sensitive nature was required to be filled in immediately. Since Mr Rai was in Lahore and the post was based in Islamabad, the charge was given to the Director I&I, FBR Islamabad. During Mr Sikander’s training, the then Finance Minister Shaukat Tarin in consultation with the FBR chairman decided to change Rai Sikander for administrative reasons. A summary was moved to the Establishment Division to post him somewhere else. It was decided to post a senior officer of the Customs Group in his place. Establishment Division up till now has not conveyed any decision on that summary.

In the meantime, on the transfer of Shaukat Tarin, the new finance minister agreed to continue with the present arrangement. As such the story in The News regarding “FBR removes Customs DG” linked to some case is not true.

Umar Cheema adds: The denial itself is in a state of denial. Not a single word is there to explain the questionable role of FBR in hushing up the oil scam. The News sent queries a couple of week before writing the story but neither the FBR spokesman nor the Member Customs responded them. It has been confirmed in the press release that the FBR had requested the Establishment Division to take back Rai Sikandar but the Division didn’t respond to the FBR request. As far as the explanation regarding Rai Sikandar’s attendance of Staff College is concerned which has also been described as one of the reasons for his removal, an office memorandum of Establishment Division said: “an officer during training at NIPA/PASC etc. should not be transferred. The officer may return to the post from which he is nominated.” The News stands by its story.