ISLAMABAD:
Prime Minister Shehbaz Sharif has sought a report about large-scale tampering of Goods Declaration (GD) forms through breaches in the country’s imported goods clearance system, as the Pakistan Single Window (PSW) Company claims its officials were not involved in the scam.
In response to the massive breach, the government-owned PSW admitted the existence of the issue but said that “some importers and clearing agents took advantage of a previously unknown vulnerability in the WeBOC (Web-Based One Customs) system.” The PSW, which has been operating WeBOC since 2022, tried to distance itself from the system.
Sources said that PM Sharif has sought a report from the Prime Minister’s Inspection Commission (PMIC) about the scam, which was reported by The Express Tribune this week. The PMIC began its work on Friday.
The PM’s Office asked the Inspection Commission to provide a report for the Prime Minister’s information within three days.
The Express Tribune had reported that in a major system breach, importers tampered with over 10,000 GD forms by altering originally declared quantities and descriptions of goods in connivance with the PSW to evade billions of rupees in taxes.
The scam has shaken the belief that a GD formthe document carrying details of importing companies, agents, imported goods, and applicable duties and taxesonce filed online, cannot be altered or changed.
“The claim that the data fields in the GD were manipulated by traders and clearing agents in connivance with PSW officers is unfounded and unsubstantiated, without a clear understanding of how the system works or PSW’s role in customs clearances,” according to the government-owned company’s statement.
WeBOC is a web-based, computerised system designed to facilitate the automated customs clearance of import and export goods.
The government-owned company admitted that WeBOC has been “under PSW’s management since 2022” and said that the system has been significantly improved, aligning with the government’s Digital Pakistan vision.
However, the government-owned company did not clarify why it failed to detect the “previously unknown vulnerability” since 2022, or if WeBOC had been significantly improved, why these manipulations continued until recently.
It further added that “facts of the case are that some importers and clearing agents took advantage of a previously unknown vulnerability in the WeBOC system to alter the declared HS codes/weights in the declarations filed at the dry ports.”
“This alteration, effected through changes in the browser script, did not need any help from WeBOC, PSW, or Information Technology staff,” stated the PSW.
The PSW said that whether the importers and clearing agents “were able to bypass the hardcore customs controls applied physically at the assessment and examination level and benefit from tax evasion or fraud remains to be established by customs authorities.”
The PSW also admitted in its statement that “the phenomenon of Goods Declaration (GD) manipulation in the dry ports stretches back several years and in fact pre-dates Single Window implementation.” Its statement further added that the existence of pre-PSW manipulation “is acknowledged in the news report itself.”
“Hence, system vulnerabilities and glitches in the system developed before PSW’s existence or its subsequent takeover of the WeBOC system cannot be ascribed to PSW.”
After The Express Tribune raised the issue with the Federal Board of Revenue (FBR), the FBR chairman was ordered to fix the system. The FBR has already ordered a post-clearance audit of Transshipment (TP) GD forms, effective from the fiscal year 2022. The changes had been made to the TP GD forms meant for dry ports.
The Express Tribune reported that to remain undetected, the corrupt network did not alter the Harmonised System (HS) codea unique numerical identifier for traded goods. However, they manipulated the descriptions and quantities of goods.
The company stated that “while PSW acknowledges the gravity of the issues highlighted, it is imperative to provide a comprehensive perspective to ensure accurate public understanding and to avoid maligning an organisation that prides itself on transparency and professional integrity.”
The government-owned company stated that PSW has shared the complete data of such GDs, including those that were cleared before PSW’s takeover of the WeBOC system, with customs authorities for a post-clearance audit and determination of actual facts. A fix was also immediately deployed in the system to prevent the recurrence of such incidents in the future, it added.
The company further stated that the fact that PSW does not have any physical presence at any customs station, nor allows members of the trade to interact with its staff, has contributed to PSW’s stellar reputation as an ethical and transparent organisation.
It said that PSW is primarily a data exchange platform and has no role in customs clearance on the ground. Moreover, PSW does not receive any funding from the public exchequer, instead developing and implementing a sustainable business and operating model that is reinvested in improving the PSW platform and its allied systems.
However, it charges a handsome fee on every GD filed by importers.
The FBR spokesperson had confirmed to The Express Tribune before the story was published that “HS codes and quantities were changed in the declarations filed at dry ports.”
