ISLAMABAD: Pakistan’s precious capital worth millions of dollars is flying out of the country under the garb of exports, but the watchdogs the State Bank and the Customs Department seem to have failed to stem the trend.
Fake E-forms have emerged as the principal document for the slippage of the foreign exchange by unscrupulous exporters who are taking advantage of loopholes in the regulatory mechanism of Pakistan for foreign exchange.
A senior Customs Intelligence official told Dawn on Saturday that $20 million value of goods were exported in 290 containers in the past couple of months December and January while using the fake E-forms.
These shipments were made by two exporters detected so far, the official said, adding the Intelligence Wing of the Customs suspects the quantum could be further large.
Ironically, the Customs Exports Department or the State Bank has miserably failed to detect the unabated menace of exports on fake documents causing harm to the vulnerable economy.
The menace was surfaced by the intelligence wing of the customs department, which ceased only seven consignments at ports so far, the official said, adding the detail scrutiny of the seized containers were under investigation.
Under the initial investigation, it has been found that 27 E-forms valuing Rs160 million were declared fake by the concerned banks against which shipments had already been effected by Lahore and Karachi-based exporters.
The filing of E-form ensures repatriation of sale proceeds of exports in the shape of foreign exchange to the country. This also gives leverage to the central bank to monitor the repatriation of foreign exchange into the country.
Normally, Hawala and hundi were used as a major source to slip out of Pakistan foreign exchange.
Since 9/11, the crack down against informal currency transfer has forced people to adopt some other ways for capital outflows from the country.
Pakistan’s total exports value in 2010-11 stood at $24.8 billion.
In fake and flying invoices, unscrupulous people withdrew money from government exchequer, while exports on fake E-forms causing harm to the economy in three ways no repatriation of foreign exchange, evasion of local taxes in case products were sold in domestic market and export proceeds did not become part of the GDP calculation as well.
Former Economic Adviser Dr Hassan Khan told Dawn that this was another way of taking out foreign exchange out of the country not in shape of currency but in terms of goods.
“It distorts our national accounts in terms GDP calculations. It also under estimate per capita income”, Mr Khan said. This menace, he said was causing loss in export earnings, tax evasion and under reporting of GDP and per capita income.
“All these things are happening under the eyes of ministry of finance and State Bank”, he remarked.
The FBI has estimated $100 billion assets of Pakistani in foreign countries. National Accountability Bureau estimated this amount at $500bn.
Experts say these assets were believed to have been built through illegal transfer of money from the country.
A racket is involved in the issuance of fake E-forms, which enjoys connection with power corridor.
A senior customs official told Dawn that a rice dealer was arrested few years back for exporting a huge quantity of rice on fake E-forms to Iran. He was released after three months and was still involved in the businesses.
The Customs and the central bank were responsible for not initiating inquiry against the banks whose stamps were used on the E-forms. “The Customs department ought to verify the genuineness of the E-form”, the official suggested.
In the absence of any recorded remittances against exports in question, the official said the Customs Intelligence was also examining the issue under provision of the anti-money laundering law of the country.
“We will lodge FIR very soon against the identified exporters”, the official said. However, he did not disclose the names of exporters.