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DP World exposed, PM action on Customs Today report: After Rs4tr IPP grab, IK now face off with Rs400b catch of mighty Sultan Sulayem

DP World exposed, PM action on Customs Today report: After Rs4tr IPP grab, IK now face off with Rs400b catch of mighty Sultan Sulayem

KARACHI: Despite orders from the FBR, maritime affairs minister and the ECC of the Cabinet, in the backdrop of Covid-19, to allow 15 days of free storage to importers of all cargo, the terminal operators are adamant to provide relief for only five days. In line with section 14 A of the Customs Act 1969, the Ministry of Maritime Affairs decided to waive port demurrages and extend free time at ports but the companies like DP World / QICT are not implementing the decisions to waive demurrage and give extra free time, instead they are using this crisis time as an opportunity to mint illegal money for themselves. Prime Minister Imran Khan has taken notice of the issue after comprehensive coverage of the issue by Customs Today about DP World chairman Sultan Bin Sulayem who is facing criminal cases worth Rs 400 billion in NAB.
After so much coverage by Customs Today about alleged mega criminal scams of DP World / QICT with Chairman Sultan bin Sulayem, CEO Junaid Zameer, GM Cyrus Khursigara and benaami owner Habibullah including illegally taking scanning fees, demanding extra demurrage and detention charges and misusing green and yellow channels, NAB has taken up the criminal case against DP World / QICT. Experts say it has become a great challenge for Prime Minister Imran Khan, who has recently taken up big scams of IPPs and sugar & wheat worth more than Rs 4 trillion, to implement writ of the state at private terminals like DP World / QICT to provide relief to importers to enhance trade activities in the country as per his own vision during the Coronavirus disaster. Imran Khan will have another uphill task to catch the mighty Sultan Sulayem of the DP World. Minister for Maritimes Affairs Ali Zaidi recently held a meeting to brief the PM about ECC decision on waiver of demurrage and detention charges and giving 15 days extra free time till end of May but DP World / QICT are not implementing these orders.
The Federal Board of Revenue (FBR) asked port authorities on 31 March to waive demurrage and detention charges for 15 days but QICT and Maersk Pakistan did not adhere to it. Then Customs Enforcement South Karachi, Customs Appraisement and Facilitation (East) Karachi and MCC Jinnah International Airport Karachi wrote letters to these shipping lines and terminal operators to implement the directives of the FBR but these companies did not comply with the orders.
Collectorate of Customs Enforcement and Compliance, led by the then Chief Collector Wasif Ali Memon, directed shipping companies and shipping agents to extend waiver of delay and detention charges during lockdown to contain coronavirus but no one yet followed his directives. Collectorate of Customs Enforcement & Compliance also issued instructions to chairman All Pakistan Shipping Association and chairman Pakistan Ship Agents Association to allow free time to importers. A letter in this regard was issued by Additional Collector Omar Shafique on 3 April, 2020.
Meanwhile, Dr Muhammad Nadeem Memon, Collector Customs Appraisement and Facilitation (East) Karachi, issued a letter on 2 April 2020 to Chairman KPT and CEOs of M/s PICT Karachi, M/s South Asia Pakistan Terminal (SAPT) Karachi, Pak Shaheen Container Services Karachi and NLCCT Karachi, seeking relief measures to extend the free period at terminals. Referring vide Board’s instruction issued vide letter C.No.3(I)E&C (2017) dated 31.03.2020 whereby 15 days free period in charging detention and demurrage has been granted in addition to the free time already allowed by the port authorities. A number of importers have approached the field formations of the FBR aggrieved that FBR directions are not being followed by terminal operators. Board’s letter clearly mentions the challenges being faced by supply chain operations in face of Covid-19. Therefore, it is directed to comply with the above referred directives that demurrage and detention charges may not be charged from the importers for a period of 15 days in addition to free time already allowed by the port authorities.
Lahore Collectorate of Customs Appraisement & Facilitation Collector Amjadur Rehman also directed terminal operators to extend free period of 15 days. The collector instructed the Chief Traffic Manager (CTM), Pakistan Railways, Mughalpura Dry Port, Senior Manager NLC Dry port, Thokar Niaz Baig. Manager Operations, Lahore Terminal Manager, MICT, Prem Nagar Dry Port to extend the free period of 15 days as announced by the government. He referred Board’s instructions issued vide letter C.No. 3(1)E&C/2017 dated 31.03.2020 whereby 15 days free period in charging demurrage and detention has been granted in addition to free time already allowed to the ground handling agents port authorities. The Collector said it is directed to comply with the above referred directives that demurrage and detention charges may not be charged from the importers for a period of 15 days in addition to free time already allowed by the ground handling agents/ port authorities.

Habibullah Khan

FBR sent a letter on 31 March to all collectors at ports and terminals to implement its orders under section 14A and section 203 of the Customs Act, 1969. Section 203 of the Customs Act gives all the required powers to Collectors of Customs to extend free time at terminals. Section 203 reads as, ‘Wharfage or storage fees.- The Collector of Customs may from time to time fix the period after the expiration of which goods left in any custom-house, custom area, wharf or other authorised landing place or part of the custom-house premises, shall be subject to payment of fees, and the amount of such fees [as provided under the rules prescribed by the Board]’. Still, terminals are demanding hefty demurrage charges from the importers even in the presence of Collectors before the delivery of cargo. These companies are not listening to ECC, FBR, Ministry of Maritime Affairs, Port Authorities, Collectors and Chambers including FPCCI, LCCI and KCCI. Customs Today also reported immensely on miseries of importers due to highhandedness of these private terminals (QICT).
The Economic Coordination Committee (ECC) of the Cabinet on 6 May approved free period from five working days to 15 working days for cargo and containers landing up to May 31, 2020. The ECC considered and approved a proposal by the Ministry of Maritime Affairs for extension due to corona pandemic of free period from five working days to 15 working days for cargo and containers landing for period up to May 31, 2020.
After Maritime Minister’s meeting with the PM, FPCCI Vice President Khurram Ijaz differed with the Minister (Maritime Affairs), saying ‘this relief package is basically for those importers who are importing their cargo in break bulk and only such type of cargo arriving at KPT area. The small traders and importers importing LC (less than container load) or FCL (containers) arrived at private terminals. The total cargo arrived at KPT is merely less than 10% and rest is coming at either at Port Qasim or at private terminals (on dock and off dock) and no relief for traders is available there. We expect the Minister should at least present true picture to Honorable Prime Minister’.
Sources said that some concerned officials in Ministry of Maritime Affairs is working hand in gloves with these private terminals and presenting the wrong facts to the Prime Minister. PM Imran Khan who is striving hard to give relief to importers has been kept in the dark by such officials of the Ministry. It is the duty of the Ministry to implement its orders on private terminals in letter and spirit. It is surprising to note that same large terminals of DP World and shipping companies are giving relief to Indian importers but they are reluctant to do so in Pakistan. Directorate General of Shipping Mumbai issued DGS Order no 11 of 2020 dated 22 April regarding waiver of 100% detention charges by terminals on all import and export consignments. As per the order, it is now decided, that for the second lockdown period, the shipping companies or carriers (and their agents by whatever name called) shall not charge, levy or recover any penal charges, demurrage, ground rent, storage charges in the port, detention charges, dwell time charges, additional anchorage charges, penal berth hire charges, vessel demurrage or any performance related penalties on cargo owners/consignees of non-containerized cargo (i.e. bulk, brake bulk & liquid cargo) whether LCL or not for the period from 156 Apil,2020 to 03d May, 2020 (both days inclusive), due to delay in berthing, loading/unloading operations or evacuation/arrival of cargo. As per Business Line of the Hindu newspaper, one shipping line has announced waiver of container detention charges on all its import shipments to India.

Junaid Zamir

Similarly, Punjab Revenue Authority, through its notification no PTA/Order/2019/1538 issued on 2nd April, exempted import of all goods from the payment of whole amount of cess till 30 May 2020. Govt departments are giving such relief to the importers and exporters but companies like DP World / QICT are not implementing govt orders in Pakistan and not giving any relief to importers in these difficult times. FBR being a govt department has complete authority over these terminals and, chief collectors and collector deployed at Karachi ports have full powers to implement their directives. In defiance of directives to allow 15-day free storage to importers for all cargoes imported between March 25 and April 30, 2020, the terminal operators have not allowed additional 10 days of free storage over and above the regular free time of five days, said the KCCI. Thousands of containers and Less-than-Container Load (LCL) cargo have piled up at the terminals as the importers are unable to bear the heavy demurrage and detention charges on delay in the clearance of consignments due to lockdowns and shortage of goods transport, according to a statement issued by the Karachi Chamber of Commerce and Industry (KCCI). Karachi Chamber said the shutdown of industries and suspension of trading activities have affected the entire supply chain and the importers have not been able to supply goods to factories and wholesale markets, resulting in a liquidity crunch. Importers have not been able to get their import documents cleared from banks due to shortage of funds.
Considering the urgency of the issue, the KPT board of trustees passed Resolution 340, to allow waiver from demurrage and extension of free time for import cargo between March 25 and April 30 at all terminals in its jurisdiction. The resolution was submitted to the federal cabinet for approval through the Ministry of Maritime Affairs, which was endorsed on April 14, with the directives that the free time should be extended from five days to 15 days for all import cargo at Karachi Port.
The Ministry of Maritime Affairs notified the approval of Resolution 340, through its letter dated April 20, and gave directives for taking necessary action to extend the free period to 15 days and waive demurrage on all import containers and LCL cargo landing at Karachi Port, including all private terminals. The KPT also issued a letter on April 22 for the extension of free time to 15 days for all cargo landing from March 25 to April 30, which will be extended further till May 31. However, the private terminal operators have refused to allow free time and waive demurrage for 15 days.
Many importers had not been able to take delivery of containers and LCL cargo within the stipulated time up to April 30, 2020 and the demurrage and detention charges have continued to accumulate.
Meanwhile, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) also reacted to the claims of terminal operators that they would suffer loss if charges are waived, and dubbed their claims as untrue. FPCCI president Mian Anjum Nisar urged the private terminal operators to be sensible and act upon the government advice of extending free demurrages and detention period amid the Covid-19 crisis. Answering a question about importers complaints against terminal operators, Nisar said that this is a fact that private terminal operators are defying the government’s orders. “This is not the right time to think of profits only but to face the calamity collectively,” he stated.
FPCCI Vice President Khurran Aijaz said international trade had almost shut down and there were no export shipments from Pakistan. He said that thousands of import containers were lying at ports, and the importers could not get these released, as there was no transportation, while the markets and warehouses had been locked down. “The importers are already suffering due to closure of markets, declining value of rupee, and these additional charges by terminal operators and shipping lines,” the FPCCI vice president said.
Similarly, Karachi Customs Agents Association (KCAA) General Secretary Muhammad Aamir in a letter dated 30th March requested to waive port demurrage/storage charges for the sake of national economy in the wake of ongoing lockdown situation in the country due to outbreak of Novel Coronavirus (Covid-19). “In the best interest of trade and to support our dear motherland’s economy in these critical times, the competent authorities of Ports/Terminal Operators are requested to please grant maximum waiver of port demurrage on Humanitarian Grounds for the period of lockdown,” the letter issued by KCAA said. But importers who are facing severe financial crunch due to closure of markets, they are demanding total waiver of demurrage and detention charges and further extension in free time at ports till complete normalcy returns to Pakistan.
The Friends of Business & Economic Reforms has also blasted the terminal authorities at Karachi Seaport for rejecting the recommendations of the FBR to extend the free period of 15 days at terminals for charging demurrage, in line with the lockdown extension in the country, appealing to the prime minister to intervene and pass directives in this regard. FEBR President Kashif Anwar stated that at a time when federal as well as the provincial governments are endeavoring to facilitate the business community on account of the lockdown the terminal authorities at ports have flatly refused the proposals of Revenue Division, Government of Pakistan (FBR) which is sheer violation of the PM’s directives to facilitate the businesses. He said the authorities’ target is just profit and revenue generation even in the time of worldwide pandemic and grave financial crisis. Each and every department all around the country are struggling to provide maximum facilities to the industry but the terminal authorities is not ready to cooperate in this regard and this matter should be brought to the notice of Prime Minister of Pakistan.

Rizwan Soomar

Meanwhile, in Pakistan, DP World / QICT is allegedly involved in multi-billion dollars demurrage scam case where they blackmailed and harassed genuine importers to pay illegal charges for clearance of their consignments. The port terminals like DP World / QICT are not allowed to collect any demurrage and detention amounts from the importers when the importers provide “delay and detention certificate” under section 14-A of the Customs Act, 1969. Despite this the port terminal blackmails the importers to collect hundreds of thousands of rupees per single consignment in connivance with the concerned Government officials, Port Qasim Authority (PQA), Karachi Port Trust (KPT), Ministry of Maritime and others.

Cyrus R Khursigara

It is pertinent to mention that the NAB received a complaint with subject: save Pakistan from nefarious designs of Indians to blacklist our nation in FATF using their front men and holding company in DP World / QICT Pakistan Limited while also necessary legal action, recoveries of amounts looted and arresting the accused to set an example, recovering losses of millions/billions of dollars of foreign exchange per year while also stopping such further losses in the biggest mega scam of foreign remittances, recovering losses of more than Rs 400 billion from officials of port terminals like DP World / Qasim International Container Terminal (QICT) in terms of looting the nation under the garb of demurrage and detention, non-payment of hundreds of billions of sales tax to Sindh Revenue Board (SRB) and also looting foreign exchange of Pakistan to the tune of millions of dollars annually and Khalid Mehmood & others of Sindh Revenue Board (SRB), Sultan Ahmed Bin Sulayem, Yuvraj Narayan, Deepak Parekh, Robert Woods, Abdulla Ghobash, Mark Russell, Mohammed Saif Al Suwaidi, Nadya Abdulla Kamali, Mohammed Al Muallem, Suhail Al Banna, Rizwan Soomar, Matthew Leech, Abdulla Bin Damithan, Devang Mankodi, Rashid Abdulla, Mohammad Al Hashimy, Habibullah Khan, Nusrat Khan, Aly Khan, Junaid Zamir, Changaz Hassan Niazi, Farhan Mithani, Masoud Noori, Mohammed Al Mannaei, Omar Al Muhairi, Cyrus R Khursigara, Shahid Iqbal, Uzair Qureshi, Fasih Haider, Faraz Aziz, Abdul Aleem Mirza, Saad Zulfiqar, others of QICT Pakistan Limited & DP World Group (holding 75% shares of QICT Pakistan Limited).

Yuvraj Narayan

As per the complaint received by the NAB, the accused persons of QICT Pakistan Ltd. in connivance with the staff of Port Qasim Authority (PQA) have done qabza (illegal encroachment) of land adjacent to the land allowed to QICT Pakistan Ltd. vide the Implementation Agreement signed by Port Qasim Authority (PQA) with QICT Pakistan Ltd. This illegal encroachment also includes additional berth length that was not allowed under the Implementation Agreement (IA). Besides, even till date, major stakes of QICT Pakistan Limited (75%) is held by foreign company DP World which was handed through back door illegal means without any approval of Ministry of Interior (MoI). SECP and other agencies of Pakistan have failed to stop QICT Pakistan Limited from operations despite the above gross illegalities and irregularities putting the national interests at serious threat due to their operations at a very strategic location of Pakistan.
The complaint further said the QICT accused persons are illegally remitting abroad millions or even Billions of US Dollars of foreign exchange through bank channels by hoodwinking the regulatory bodies such as State Bank of Pakistan or its agency for the matter the Financial Monitoring Unit (FMU) or the other Agencies of Pakistan like FIA, NAB, etc. who have jurisdiction for the matter. The income of the subject accused persons is local in nature generated by companies of Pakistan while such companies are held illegally by foreign companies without approval and also local income is misdeclared as foreign income to pay some nominal taxes and subsequently such locally generated income be illegally remitted abroad. Thus, they are draining out our National economy of the much needed foreign exchange on one hand and on the other hand they are working on the nefarious designs to get Pakistan into blacklist of FATF by displaying that the foreign exchange regulations of Pakistan are vulnerable in nature.
After successfully taking up the issue of Rs 4 Trillion IPP scam, now Prime Minister Imran Khan has taken up the issue of demurrage and detention and importers hope the PM as per his own repute will not succumb to any pressure even though these big companies and its mighty chairman Sultan Sulayem will try to undermine his orders. Strict action against these DP World / QICT companies is required on urgent basis to enhance the trade activities in the country and recovery of Rs 400 Billion looted by these companies need to be expedited in the best interest of Pakistan.