KARACHI, March 17: The Federal Tax Ombudsman (FTO) has directed the chief collector of Customs to formulate rules for freight forwarders to make it incumbent upon them to work under a customs licence. It should also lay down a procedure to maintain an effective check on malpractices in issuing bill of lading (B/L)

The FTO Justice (retd) Munir A Sheikh in an order directed the chief collector to constitute a task force to examine the problems of exporters and also examine the procedure for filing of manifest for imports and exports for each arriving and departing vessel.

The FTO also directed that the customs authorities should check entries in the export manifests with the documents (including bill of lading) received in the customs and identify deviation or non-compliance of the prescribed procedure.

The FTO directed the chief collector to complete these procedures within two months and report their compliance to him within three months.

The exporters in their complaint filed with the FTO last year stated that the shipping agencies in collaboration with the freight forwarders or consolidators issue Master Bill of Lading (BL) in the name of consolidators, declaring them as shippers (instead of the original shippers (exporters).

The consignees and shippers exchange the bills of lading through the shipping lines under the garb of “surrender.” The delivery of B/L is accordingly changed in the name of their agents at the destination port violating the foreign exchange rule 11 chapter XII and Bill of Lading Act 1856.

It was further stated that the exporters and their banks were deprived of their legitimate ownership of goods and a fake third party document called “House Bill of Lading” is handed over to the exporter. The cargo at the foreign destination is released to forwarders or consolidators’ counterparts without getting export proceeds by the exporters through the bank.

As a result of this the forwarders or consolidators receive the payment of export cargo and the exporter gets delayed payment with undue discount or suffers from a total default.

Consequently, foreign buyers take advantage of avoiding the C&F value and purchase the goods through consolidators or forwarders on cheaper freight. The benefit of the malpractice goes to the shipping company as well as to the consolidators or forwarders.

The exporters also submitted to the FTO that the House B/L and Master B/L indicate the fraudulent payments in league with the shipping company and the consolidator or forwarder.