ISLAMABAD: In a bid to control illegal flow of goods and currency from the country’s eastern and western borders, the government has proposed stringent penalties inclusive of imprisonment for a maximum period of 14 years for individuals involved in the smuggling of these items from the country.

These measures are being implemented through a presidential ordinance for a period of four months, which upon its expiry will become a part of the federal budget for the year 2020-21. The pace of penalties is directly linked with the value of the smuggled goods and currencies.

The government believes the stringent penalties will have a strong check on smuggling of goods and currencies to Afghanistan and Iran, the two countries with whom Pakistan shares long sprawling and porous borders.

The items that will be covered within the purview of smuggling are wheat, flour, rice, maize, pulses, cooking oil, vegetable ghee, sugar, potatoes, onions, livestock and currencies.

On Monday, the Federal Board of Revenue (FBR) released a copy of the Tax Laws (Amendment) Act, 2020, which already addressed the issue of currency smuggling and penalties as recommended by the Paris-based Financial Action Task Force (FATF).

Govt is implementing new measures through ordinance

But under the new ordinance, penalties for currency smugglers are further being increased.

Under Section 9 of the Customs Act, 1969, the government has already notified authorised routes. The export of goods on authorised routes is declared as official exports while those on non-authorised routes are termed as smuggling.

In the case of Afghanistan, the authorised routes are Torkham, Chaman, Ghulam Khan and Kharlachi.

There are four notified routes with Iran, including Taftan.

Currently, the government has relaxed the opening of the border with Afghanistan by allowing transit goods for three days in a week. From Pakistan, the only item that is being exported to Afghanistan is kinnow.

A Customs official told Dawn that export of all other items to Afghanistan was currently banned.

Special courts: To implement the penalties quickly, the government will set up special courts in consultation with the chief justice of Pakistan. Under the law, the anti-smuggling power will be delegated to Customs authorities initially.

Goods being smuggled into Pakistan or out of the country either through notified routes or irregular/non-notified routes will be confiscated and people involved in the offence will be liable to payment of penalty as well as imprisonment.

The people involved in the smuggling will pay penalty equivalent to the value of the confiscated goods. They will also be liable to imprisonment for a term of two years in case the value of the confiscated goods is between Rs500,000 and Rs3 million.

The penalty will be two times the value of the smuggled goods (Rs3m and Rs5m) and the people involved in the offence will liable to imprisonment for a period of three years. In case the value of the smuggled goods ranges between Rs5m and Rs7.5m, the penalty will be three times of the confiscated goods along with imprisonment of maximum five years.

The people involved in the smuggling will pay the penalty four times of the value of the confiscated goods worth from Rs7.5m to Rs10m along the maximum imprisonment of 10 years. In case the value of the smuggled goods exceeds Rs10m, the people involved it will pay penalty fives of the confiscated goods along with an imprisonment term not exceeding 14 years.

In the same way, the penalties and imprisonment of persons involved in the smuggling of currencies through regular or irregular/non-notified route are linked with the value.

The currency will be confiscated in the range up to $10,000 or equivalent in value (currency of other denomination). The penalty will be equivalent to the value of the confiscated currency and the people involved in the offence will be liable for imprisonment for a term not exceeding two years.

The duration of imprisonment is linked with the value of the confiscated currency. The imprisonment will be 10 years in case the value of currency is from $50,000 to $100,000. And in the case of maximum penalty, the imprisonment will be 14 years for those who smuggle currency in the range between $100,000 and $200,000.

Published in Dawn, April 21st, 2020