ISLAMABAD: The government conceded before the Supreme Court on Thursday that it had suffered a loss of Rs2.5 billion when FBR’s Directorate General of Intelligence and Investigations (DG-I&I) detected 265 containers removed clandestinely from Karachi’s Port Qasim between Oct 2006 and June 2007.

A report submitted to the court by Deputy Attorney General Sohail Mehmood on behalf of the FBR, however, said that a paltry amount of Rs62 million had been recovered by the authorities out of the total amount, leaving a balance of Rs2.4bn.

The report was submitted in compliance with the court’s Feb 18 order asking the government to explain how a large number of containers had been removed covertly from the port and what items were in the containers. The court had regretted that crucial aspects of the case, both on departmental and criminal sides, were suppressed from it suggesting that all were hell-bent on creating impediments in the way of the court to lay hand on the real culprits in the matter.

In its report, the FBR said the scam was unearthed when the Range Office I&I seized 11 containers in Faisalabad and recovered non-duty paid goods from godowns in Lahore, which turned out to be those removed from Port Qasim in the garb of transshipment consignments meant for upcountry dry ports.

Subsequent investigations led to the detection of 265 containers containing electronic goods and miscellaneous items, which were destined for Lahore, Rawa­lpindi, Faisalabad, Peshawar, Karachi and Afghanistan via Torkham, but disappeared en route, the report said.

FIRs were lodged in Faisalabad, Lahore, Peshawar and Karachi relying upon data of the missing containers. The FBR later formed a high-level inquiry commission to fix responsibility on the delinquent officers.

Explaining the modus operandi of the fraud, the report said that all these containers had been delivered by DP World (Pvt) Ltd, the terminal operator at Qasim International Container Terminal (QICT), against fake manual GDs (goods delivery).

The culprits used to prepare fake authority letter of the National Logistic Cell (NLC), a customs-licensed bonded carrier, for importer and managed unauthorised delivery order of shipping line by using fake signatures, stamp and file number, the report alleged. By submitting these fabricated documents to the DP World staff at pre-gate of QICT, it said, gate passes and equipment in-charge receipt (EIR) were got generated and the containerised cargo was removed from the port premises due to negligence/collusion of staff posted at the gates.

The report said criminal proceedings had been initiated against the people working for the DP World as well as the importers and those responsible were arrested and prosecuted in the courts of customs judge in Karachi, Peshawar and Lahore. Disciplinary proceedings were also initiated by the department against the government employees found involved in the scam.

The report recalled that in 2009, the finance ministry had authorised a committee to conduct a review of PaCCs (Pakistan Customs Computerised System). After conducting the system audit, the committee reported that the PaCCs in its current state was prone to misuse.

Published in Dawn, May 6th, 2016