Karachi, May 29, 2025 — The Institute of Chartered Accountants of Pakistan (ICAP) has presented a comprehensive set of proposals for the upcoming federal budget 2025–26 aimed at eliminating smuggling and illegal trade along the China-Pakistan Economic Corridor (CPEC).
The organization stresses that without strict customs enforcement and coordinated digital monitoring systems, the long-term strategic vision of CPEC could be seriously compromised.
ICAP has warned that while CPEC presents a monumental opportunity for economic integration between Pakistan and China — and by extension the broader region — its potential is vulnerable to exploitation by organized smuggling networks. Drawing parallels with the troubled Afghan Transit Trade, ICAP emphasized that CPEC must not be allowed to fall into the same trap of mismanagement, misdeclaration, and rampant pilferage.
CPEC, hailed as a game-changer for Pakistan’s economic future, is intended to catalyze trade, develop infrastructure, and foster bilateral cooperation. However, its success hinges on three non-negotiable pillars: comprehensive security, robust infrastructure, and efficient, digital customs operations. While visible progress has been made on the first two fronts, ICAP points out that customs oversight and digital monitoring — essential to making CPEC smuggling-free — remain critically underdeveloped.
To protect the sanctity of CPEC and ensure seamless trade, ICAP has called for immediate implementation of the following measures:
1. Installation of Scanners at Critical Points: All cargo entering or exiting through the Pak-China border, Gwadar, or Karachi must be scanned. Cross-verification of container contents using imaging technology will prevent misuse and ensure cargo integrity.
2. Customs Data Integration with China: Chinese exporters and importers should be mandated to file entries within China’s WeBOC system, with Pakistan granted real-time access. Until a container is physically verified at the Pakistani port, the customs entry should remain open, and any unexplained delay beyond seven days should trigger an alert and issuance of show-cause notices.
3. Strict Documentation Protocols: Only containers loaded from origin points in China with verified shipping documents should be allowed for export. Furthermore, the establishment of customs monitoring offices at 200 km intervals along CPEC routes is essential for vigilance.
4. E-Tagging and Vehicle Tracking: Vehicles transporting goods under CPEC should be equipped with GPS-based e-tags. As they pass designated checkpoints, real-time updates on cargo movement should be recorded and made visible to both entry and exit customs authorities.
5. Sealing of Containers by Customs: Cargo containers must be sealed at entry and de-sealed at exit by customs officials to prevent pilferage and unauthorized offloading during transit.
ICAP further recommends the establishment of a Real-Time Electronic Data Interchange (EDI) between Pakistani and Chinese customs to enable seamless data reconciliation for goods transiting through CPEC. For imports, Pakistan Customs should require proof of payment from Chinese buyers and a bank guarantee equivalent to applicable levies before releasing shipments.
The organization stressed that CPEC’s development of export processing zones, free zones, and special economic zones will remain vulnerable unless Pakistan’s customs authorities implement an airtight system. The smuggling of duty-free Chinese goods within Pakistan not only undermines the core objectives of CPEC but also poses a direct threat to local industry and revenue collection.
ICAP concluded that Pakistan cannot afford to repeat the costly mistakes of the Afghan Transit Trade, where weak monitoring systems led to systemic abuse. A strong, technology-backed enforcement framework is imperative to preserve the credibility, purpose, and promise of CPEC.