CBR to review Customs rules

Karachi: Hundreds of containers are stuck up due to overdue cargo auction for several years for various reasons causing congestion in the port. This brings bad name to the country as these containers belong to foreign principals.

This is one of the problems highlighted by the Pakistan Ship's Agents Association (PSAA) in its suggestions forwarded to the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) for onward transmission to the committee constituted by the Central Board of Revenue (CBR).

The committee would review the existing customs procedures for further simplification and improvement of controls. The shipping lines/agents are not at fault, PSAA said. The cargo inside these containers should be de-stuffed for regular auction by customs and containers should be returned to the shipping agents in time.

The committee is headed by CBR Director General of Training Muhammad Aslam and comprises the following. Munir Qureshi, Collector of Customs (Appraisement), Karachi; Khawaja Tanveer Ahmed, Project Director, Pakistan Customs Computerised System (PACCS), Karachi; Hafiz Muhammad Jamil Awaisi, Collector of Customs, Multan; Muhammad Yahya, Collector of Customs (Preventive), Karachi and Nasir Masroor Ahmed, Chief (Traffic and Trade), CBR, Islamabad.

Another point raised by PSAA relates to penalties on shippers load stows and counts containers. The Finance Act of 1993 had amended clause 24 (ii) of section 156 (1) of the Custom Act, 1969 by adding the words 'container or any other package.' The result of this was that ship-owners became liable for customs penalties on 'shippers load stow and count' containers.

These are cargo containers, which are stuffed by the shippers, sealed with their own seals and handed over to the ship-owners for transportation to the port of destination. As such, and in conformity with the international shipping practice, the ship-owner is not responsible for the contents of the container. This liability on the ship-owner caused by the insertion of the aforementioned words in the clause of Customs Act, 1969 led the customs authorities to impose penalties upon ship-owners (both Pakistani and foreign) quite contrary to the principles of justice and to prevailing international practice.

The working of the Customs Act, 1969 clause 24 (I) of section 156 has made customs treat the local agent as the ship-owner, and consequently the agent is being made liable for both shortages or excesses based on outturn report. The law needs amendments so the ship-owner or ship is liable through their P&I club. Furthermore shortage/excess should be based on contractual obligations between ship-owner and consignee and tolerances to be in accordance with international practice for both 'wet' and 'dry' cargo.

In case of shortages beyond permissible tolerance limit (ie 0.25 percent on non-POL cargo, 0.5 percent on POL cargo and none on dry bulk cargo) Customs penalises ship's agents on the full amount of shortage, rather than on the differential/incremental amount beyond the permissible limit. Also the tolerance limits should be increased to 0.50 percent for all bulk cargoes in accordance with international practice.

PSAA has also made suggestions relating to: renewal of shipping agents licenses, bonded warehouses and off dock terminals, unfair penalty imposed by care system, and shifting of transshipment containers from Karachi International Terminal to Pakistan International Terminal to Karachi Port Trust area.