FBR for special arrangements to curb trade-based money laundering

KARACHI: The Federal Board of Revenue (FBR) on Friday asked customs authorities to make special arrangements to prevent trade-based money laundering

“Besides focusing on under invoicing of imports, also identify cases of over-invoicing of imports of low-duty or exempt items, and mis-invoicing of exports (to prevent flight of capital or trade-based money laundering) and to convey such information to concerned formations,” the FBR said in a letter to director general of customs valuation. FBR issued instructions to directorate customs valuation for inspecting over-invoicing of imported goods to prevent trade-based money laundering. The Directorate of Customs Valuation was asked for fixing customs valuation in a ‘judicious’ manner to stop under invoicing and misdeclaration.

The FBR also instructed the valuation department to make special arrangements to aware trade and industry about the latest customs valuation of import and export of goods.

The directorate also advised to develop and maintain a center for issuing advance rulings on valuation in accordance with international best practices.

The FBR asked the directorate to regularly obtain reference price data from accredited publications, official price list, websites, through market enquiries as well as findings of Post Clearance Audit and other authentic sources and to make such data available to all customs stations for smooth clearance of goods.

Further, the directorate has been advised to carry out proactive monitoring of valuation of goods imported into and exported from the country vis a vis international price trends, conduct and undertake sector wise studies of items prone to mis-invoicing and to advise the field formations regarding any abnormalities in valuation during clearance.

“To maintain effective liaison with Pakistan Mission abroad for the purpose of valuation enquiries, with relevant valuation committees of World Trade Organization and World Customs Organization, and with foreign customs administration,” the FBR said.

The FBR further advised the directorate to develop suitable training modules, in consultation with Directorate General of Training and Research, focused and providing necessary skills from basic level to advanced level to officers and officials working in all relevant functions including Model Customs Collectorates, Post Clearance Audit and Valuation Directorates.

The central bank has also issued a framework to strengthen trade related anti money laundering/combating financing of terrorism regime and restrict possible misuse of banking channel. Authorized dealers were advised to upgrade their systems and controls and bring policies and procedures in line with the requirements of the framework to ensure meticulous compliance with the provisions thereof with immediate effect except as otherwise provided in the framework.

The Financial Action Task Force has been giving Pakistan time to completely make its financial system in line with the global standards. The government was recommended to improve information-sharing of financial and trade data, and co-operation between authorities and private sector, including through public-private partnerships.