KARACHI: The State Bank of Pakistan on Friday warned importers and banks over multiple payments being made on duplicate import documents.

The move is causing a huge loss to the country. Along with under-invoicing, fake import documents are being prepared to send millions of dollars abroad as payments for goods.

Bankers said that a number of new importers have emerged taking advantage of the lenient policy for payments against imports.

The State Bank advised all banks to properly evaluate and scrutinise requests from importers for remittance of foreign exchange against imports made on open account.

Bankers said that actual fraud was being committed in payments for bill of entry.

Also read: Annual hundi, hawala payments cross $15bn

In this case, exporters send all details about exports and importers use these documents to make payments.

The fraud begins with multiple payments on a single document. The importers use a photocopy of the document or make multiple original copies for their use in banks for payments. Banks are also involved in this kind of payments.

“The SBP will take stern legal action against importers and banks involved in remittance of foreign exchange against duplicate or fraudulent import documents prepared for imports on open account,” said the State Bank.

The country has been facing a problem of under-invoicing which promotes Hawala system to make payments, thereby saving billions through lesser payments as duty on imported goods.

Know more: SBP restores advance payment facility

“It is emphasised that the SBP is taking appropriate steps as per relevant law against importers if found in fraudulent activities,” said the SBP.

Moreover, banks which fail to properly process these cases will also be penalised for their failure to undertake normal precautions required to be taken as a banking company.

“It is advised in the interest of all stakeholders to refrain from such fraudulent remittances, using duplicate fraudulent import documents as all such cases will eventually be referred to concerned law enforcement agency,” said the SBP.

Published in Dawn, January 9th, 2016