Where art thou, containers?

Over 95,374 containers of the US military en route from Karachi Port to Afghanistan went missing during January 2007 to December 2010, causing over Rs 55 billion in losses to the already deteriorated economy of Pakistan. Like other financial scams worth billions of rupees, this harsh fact also came to the surface after the Supreme Court took suo motu notice of news’ reports and directed the Federal Board of Revenue (FBR) to probe the matter. A FBR report recently submitted to the Supreme Court revealed that from January 2007 to December 2010, cross-border electronic acknowledgement of 95,374 out of a total 157,736 containers imported in the name of the US military for transit to Afghanistan is missing in the system – some 60 percent of the total cargo traffic – raising apprehensions that the bulk of these missing containers might not have reached their destination.
According to FBR, it unearthed duties and tax evasion of over Rs 55 billion as 28,802 containers carrying International Security Assistance Force (ISAF) commercial cargo under the Afghan Transit Trade (ATT) went missing en route from Karachi to Afghanistan. The report stated that the available data revealed that the electronic acknowledgement at the border collectorates, known as the “Gate-In event” of 77,884 containers, was missing and “Cross-Border event” into Afghanistan of 95,374 containers was also missing from the system.
The figure is over and above the 28,808 missing commercial containers under the ATT as well as 18,995 NATO and ISAF non-commercial containers. The FBR is currently determining the fate of ‘suspicious’ NATO/ISAF transactions and has so far found 3,396 containers belonging to these organisations to be missing.
“It appears that the computerised system put in place for proper reconciliation of cross-border transfer of US cargo was ignored by the authorities concerned,” the report states.
Unlike commercial cargo, where goods declaration is filed with the Customs authorities, the US military is assigned a unique identification number for cargo clearance. After ‘gating out’ from Karachi port, the information is flashed on screens accessible to border collectorates. The report states that it is the responsibility of the border collectorates to record the ‘gate in’ time at border stations and then cross-border events in the system using the ID assigned to them.
According to legal experts, there is a need to review the entire cargo handling process. The FBR authorities also believed that such a huge number of containers being missing from the system also exposed the failure of the command and control system put in place by the Customs authorities in the last few years. But top bosses of the FBR do not agree with the report, saying there might be procedural loopholes that would be identified and rectified accordingly.
However, according to another report submitted in the apex court by the FBR probe committee on the ATT, the data provided by Pakistan Automated Customs Computerised System (PaCCS) showed that 157,736 containers were imported in the name of the US military for transit to Afghanistan. For clearance of US cargo, no Goods Declaration (GD) is filed in PaCCS, and a specific user ID, assigned to the US mission at Karachi, is used for clearance of cargo by the US military.
In the PaCCS system, however, after ‘gate out’ from ports/terminals in Karachi, the information gets flashed on the screens accessible to border collectorates. It is the responsibility of the border collectorates to record the ‘gate-in’, ie due arrival of cargo at the border, and ‘Cross-border events’ in the system by using the ID assigned to them.
According to FBR, though it is improbable that such a huge number of containers could have gone missing, the fact is that as far as the PaCCS software was concerned the system relied solely on the confirmation of cross-border events to be confirmed online by the border collectorates. It appears that the computerised system put in place for proper reconciliation of cross-border events of US cargo was ignored by the authorities concerned and now a massive exercise is required to reconcile cross-border events of each consignment through manual records.
The FBR has informed the Supreme Court that the initial list of 18,995 containers was compiled and sent to border collectorates of Peshawar and Quetta for further verification of records, whereas further investigation for the remaining containers was in progress. ‘Electronic acknowledgement’ establishing whether 95,374 US military containers crossed into Afghanistan is missing from the system, reveals an official report, heightening the need to review the entire cargo handling process.
The FBR probe committee has admitted that collectorates had failed dismally and no reconciliation was made of the containers that entered Pakistan and safely crossed over into Afghanistan. It is the primary duty of the collectorates to ensure timely reconciliation and manifest clearance.
The FBR has informed the apex court that draft FIRs with regard to 580 containers had already been sent to the FBR Directorate General of Intelligence and Investigation director general to initiate criminal proceedings against the culprits. Out of them, 6 FIRs have been lodged by the directorate so far. The FBR has alleged that former president Pervez Musharraf’s nephew and the former Karachi corps commander’s son played a major role in the scam. The Supreme Court has directed the National Accountability Bureau (NAB) chairman to cooperate with FBR chairman to initiate proceedings against criminals involved in the scam.