Pakistan’s government has empowered the Federal Board of Revenue (FBR) to conduct raids at the premises of those who are allegedly involved in storing undeclared goods in what appears to be a crackdown by Islamabad on trade-based financial crime.

Chairman of FBR, Shabbar Zaidi, meanwhile has charged customs officials with the task of identifying the extent of misinvoicing at Pakistan’s ports.

Gold and jewellery raids

The FBR is now authorised to conduct raids at the premises of people and companies suspected of storing undeclared gold, jewellery and foreign currencies.

The move is in line with Financial Action Task Force (FATF) recommendations and will be made part of the Finance Act 2019 after it is approved by parliament.

Customs instructions

Zaidi has told customs officials to identify the extent of misinvoicing in export declarations with the aim of identifying goods, sectors and destinations vulnerable to incorrect invoicing.

The director-general of customs valuation has been charged with submitting a report that identifies vulnerable areas and develop a risk based system to intercept misinvoiced trades without compromising export facilitation.

Re-export concerns

Pakistan is particularly concerned that under-invoiced export cargoes are shipped via a port where a new declaration with actual values is attached to the goods that are then re-shipped for a final destination.

As a consequence, Pakistan receives less foreign exchange than it is entitled to while a substantial portion of export proceeds are captured in the country through which the goods are re-exported.

Categories: Trade Based Financial crimes News