Sharp rise in C&F licence suspensions, cancellations

Fatima International, a Dhaka importer, declared its import of cleaning products like detergents from Thailand, but actually brought cosmetic products to Chattogram port, which enabled it to evade a huge amount of import duty.

The Chattogram Customs House on 17 January this year revoked the licence of OSL Trade Private Limited, the clearing and forwarding (C&F) agent of Fatima International, and fined it Tk15 lakh for helping the importer to evade Tk1.5 crore.

The Chattogram Customs House has thus suspended 25 licenses till 2 September this year, 27 licences in 2020 and 23 in 2019, sources said, adding the largest customs station in the country also cancelled seven licences till August this year, five in 2020.

Instances of such suspensions and cancellations of C&F licences – over various allegations including assisting traders in importing goods with false declarations of products and importing a larger amount of goods than the declared amount, submitting fake import permit, faking the customs officials' signatures, and unloading goods using fake ID cards – have increased sharply in recent years .

Data obtained from customs sources show licences of 16 S&F agents were suspended in the five years from 2014 to 2018, while the figure climbed to 75 in the following two years and nine months. Three licences were suspended in 2018, four in 2017, seven in 2016, one in 2015 and one in 2014.

In the 2014-2018 period, only a single instance of licence cancellation took place and that was in 2016.

Clearing and forwarding agents work in unloading importers' goods and sending exporters' goods to different countries through Chattogram port, the main seaport of the country.

This correspondent could not reach Additional Commissioner Mohammed Shafi Uddin, convener of the licensing committee of Chattogram Customs House, over phone for comments regarding the matter. 

Licensing Committee Member Secretary and Deputy Commissioner (Prevention) Sultan Mahmud told The Business Standard, "The licenses of clearing and forwarding agents involved in irregularities are being suspended and revoked in the interest of the country's customs protection. This process will continue to prevent import duty evasion."

suspended the licences of 91 clearing and forwarding agents and revoked 13 licences in the last eight years on 16 charges, including fraud and deception in import and export of goods. 

Why are the cancellations, suspensions?

The Chattogram Customs Clearing and Forwarding Agents Association has 2,700 members. About 3,500 clearing and forwarding agents, including those who are not the members of the association, work with Chattogram Customs House. Among them, 500 agents are active all the time.

The Chattogram Customs House so far has suspended 27 clearing and forwarding agents' licences for assisting traders in importing goods with false declarations of products and importing a larger amount of goods than they declared.

It also suspended 17 agents' licences for submitting fake import permit, and faking the customs officials' signatures.

It also suspended seven licences for unloading goods using fake ID cards, seven licences for using a different company's username and password other than their own, five licences for importing banned products, five licences for fraudulent exports.

The customs house also suspended four licences at different customs stations, four licences for abusing bond facility.

Besides, it suspended three licences for submitting fake educational qualification certificate, three licences for evading import duty, and three for disregarding the customs authority's decision.

In addition to these, the customs house suspended two licences on the basis of action at other customs stations and agencies, one licence each for not cooperating with the importer in unloading goods, submitting false Harmonised System code, and for submitting fake chemical test certificates.

The customs house also revoked four agents' licences as they had obtained them by submitting fake educational certificates. Besides, it cancelled four licences for trying to unload more goods than declared, and two licences for trying to unload banned products, and two licences for trying to evade tax by colluding with importers and one licence for assisting traders in money laundering.

Kazi Belal Uddin, managing partner of Bipasa International, whose licence was cancelled, told TBS, "The clearing and forwarding agent is not supposed to know what product the importer is bringing in the consignment. Based on the information provided by them, we submit the bill of entry for unloading the goods. So, canceling the license in this way is unreasonable. We are victims of the situation."

Kazi Mahmud Imam Bilu, first joint general secretary of Chattogram Customs Clearing and Forwarding Agents Association, told TBS, "I think it would be appropriate if a clearing and forwarding organisation's license is revoked for its involvement in smuggling, drug import and other irregularities. However, it is necessary to ensure that the license of a clearing and forwarding agent is not suspended on false allegations."

According to the Chattogram Customs House, about 7,000 bills of entry are submitted to it every day. Of these, 5,000 are for export products and the remaining 2,000 are for imported goods. These bills of entry are submitted by C&F agents on behalf of importers and exporters. Every day around Tk130-140 crore of revenue is collected at the customs house.

Most agents involved in misconduct get away with fines

The customs house suspends or cancels agents' licences from time to time to punish them, but very often the agents who flout the regulations are punished only with a fine.

A review of Chattogram Custom House's data reveals that SN Trade, a clearing and forwarding agent, was involved in 22 cases of import duty evasions from October 2015 to June 2019. The customs house fined the agent every time but it did not suspend or cancel its licence.

Sources at the Chattogram Customs House said from 1 June 2018 to 30 June 2019, 238 clearing and forwarding agents were involved in import duty evasion. During this time, a number of clearing and forwarding agents were involved in import duty evasion 10 times.

From July 2019 to August 2020, the customs house identified 2,995 consignments on suspicion of import duty tax evasion.

The customs checked 2,622 of these consignments and found various irregularities in 55% (1,448) of them. Upon discovering these irregularities, the customs house collected import duty of Tk142.5 crore.

A report, titled "Half of goods clearing agents involved in duty dodging", was published in The Business Standard in August last year.

People concerned have blamed the manpower crisis at the customs house for the increase in the incidents of import duty evasion and fraud. They said that fraudsters dare to commit these irregularities as the customs operate with about half of the authorised manpower.

According to the Chattogram Customs House, 636 people have been working in it against 1,248 posts. There are 612 vacancies.