Criminal gangs involved in trade-based financial crime are endeavouring to thwart the re-establishment of the much-delayed and now stalled electronic Exchange of Data Information (EDI) system between the customs authorities of Pakistan and China

Efforts are also being made by Pakistani officials to persuade China to sign the Memorandum of Understanding (MoU) necessary to make the EDI fully operational again.

Under-invoicing menace

The purpose of the EDI is to control the increasing menace of under-invoicing in transactions involving imports into Pakistan from China that may amount to revenue losses of as much as US$6 billion a year according to some estimates.

Reports suggest that several organised criminal gangs involved in trade-based financial crime are seeking to influence officials involved in the negotiations with China to re-establish the EDI.

Revised framework

The much-awaited EDI between Pakistan and China did become operational in May 2018 but Pakistan subsequently called for a revised institutional framework for the exchange of data between the two countries. The two countries are yet to agree a revised framework.

There is massive difference in data related to imports from China into Pakistan in the range of $4 to $6 billion so there is need for an effective mechanism for reconciling data so it reflects the exact levels and values of trade between the two countries.

Categories: Trade Based Financial crimes News