ISLAMABAD    -     Shabbar Zaidi, chairman Federal Board of Revenue (FBR), has directed to identify the extent of mis-invoicing in export declarations in order to ascertain the suspected items or sectors and destinations for such mis-declaration. He also directed to categorize exporters on the basis of risk profiling by segregating compliant exporters from those engaged in mis-invoicing. Accordingly the Customs Operations wing has tasked the Director General Customs Valuation to submit a report in this regard. It has been further directed to develop a risk based system to intercept this trend without compromising export facilitation. Punitive action shall be taken against unscrupulous exporters under the proposed Section 32 C of the Customs Act. 1969 and the allied laws.

This initiative has arisen in the backdrop of reports indicating mis-invoicing in exports, which includes under-invoicing resulting in loss of remittance of forex and over-invoicing used to transfer excessive funds abroad. Mis-invoicing could be used also possibly as a mechanism for trade-based money laundering. One of the suspected methods used in under-invoicing in exports is through the medium of via port cargo. Export cargoes are mis-declared by under-invoicing the values of export commodities, and shipped to a via port wherein new declaration with actual values are re-shipped for a final destination.