KARACHI: Institute of Chartered Accountants of Pakistan (ICAP) has suggested to install scanners at Pak-China borders to stop misuse customs clearance of goods transported under China – Pakistan Economic Corridor(CPEC).

The ICAP in its tax proposals for budget 2019/2020 said that CPEC is a journey towards economic regionalization in the globalized world.

This will deepen and broaden economic links between Pakistan and China and will surly leave a positive impact on other countries of the region.

The success of CPEC is directly proportional to three factors viz. (a) security arrangements, (b) infrastructural development and (c) smooth e-based Customs operations.

Whereas, a number of initiatives are being taken, and proposed to be taken, on two fronts viz. security and infrastructure, but Customs operations, have hitherto been given little thought.

The ICAP presented following recommendations:

i. “SCANNERS” be introduced / installed at Pak China Borders and at Gwadar / Karachi Port in order to check / verify each and every container with its contents

to cross verify that the same have been exported / imported without its misuse.

ii. Scanning image of exports from China border should be compared with scanning image of goods delivered from Gwadar / Karachi port and vice versa for imports until then entry should remain open for scrutiny.

iii. Chinese exporters / importers should also file the entry in the WeBOC system of China, and Pakistan should have access to the China WeBOC system to mark green the container cleared in the WeBOC.

Entry to remain open until the same is verified by actual export / import routed through Gwadar / Karachi as such showing the containers not yet cleared or in transit or if not cleared after 7 days of being released from Pakistan port then marked red for being misused.

In such cases, show cause notices be sent to exporters / importers, as the case may be, for further inquiry.

iv. In case of exports, goods should only be allowed in containers loaded in China and evidence of shipping line booking and Bill of Lading be obtained as proper evidence.

v. There should also be a set up for custom offices after every 200 km intervals along the routes of CPEC to ensure effective monitoring of transit trade flows.

vi. In order to ensure swift and smooth monitoring, e-tagging be installed on vehicles carrying cargo.

When a vehicle crosses the designated customs office at the pre-marked route, the data of cargo movement would automatically enter the system showing location and brief description of goods, etc.

vii. The online movement of the cargo should be viewed by both customs offices at port of entry and exit. The containers carrying cargo be sealed and de-sealed by customs at entry and exit points respectively. This will ensure safety of the cargo and avoiding en-route pilferage.

viii. Both Governments must agree to strengthen customs controls at the border and to establish “Electronic Data Interchange” (EDI) linkage between Pakistan and China on “Real Time Basis” to ensure reconciliation of export/ import data of cargo routed through CPEC route.

ix. In case of imports, evidence of payment of goods by Chinese importer to their suppliers and submission of bank guarantee equivalent to government levies to be collected on China imports by Pakistan Customs before release.

Transit cargo will be transported from and to China, which needs Customs facilitation as well as monitoring both en-route and entry/exit stations to avoid menace like presently being faced due to Afghan Transit Trade.

CPEC also envisages establishment of export processing zones, special economic zones and free zones. This requires door-step Customs facilitation to ensure swift clearances of goods without any pilferages.

More importantly, the duty/tax free goods will be transported across Pakistan, which needs en-route monitoring so that the same are not pilfered en-route, jeopardizing the very essence of CPEC.

Moreover, any smuggling/pilferage of Chinese goods en-route will have direct and serious repercussions on Pakistani industry and duty paid goods.

“A case in hand is Afghan Transit trade cargo. It used to suffer from different infirmities, which kept on hindering its smooth operations. These issues ranged from mis-declarations, delays, isolated and partial e-monitoring, en- route pilferages, smuggling etc.”

A number of adhoc arrangements such as verifications of cross border certificates, random examinations at port of entry and enhancement of anti-smuggling operations etc. were made, but desired results could not be fetched.