KARACHI: Traders, Importers and Customs Agents said FBR and Customs Department miserably failed to implement the existing laws regarding demurrage and detention charges as companies like DP World / Qasim International Containers Terminal (QICT) and Maersk Pakistan (Pvt) Ltd have become a ‘shipping mafia’, only working to take benefit of these difficult times and looting the nation on Covid-19 disaster. CEOs and high-ups of DP World / QICT and Maersk including Junaid Zamir, Aruna Hussain and the accused benaami owner Habibullah Khan are reportedly not listening to the directives of the FBR and Customs Department. They said these companies are not giving appropriate relief to the traders and importers regarding demurrage and detention charges and extra free time on ports during countrywide lockdown period so now they may approach the NAB to intervene in this case to safeguard the economic system.
According to details, the Federal Board of Revenue (FBR) asked port authorities to waive demurrage and detention charges for 15 days but DP World / 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. There is feeling among importers, traders and customs agents that Customs Department can only write letters to these strong companies but cannot enforce their orders, adding that Customs officials seem helpless before ‘shipping mafia’ of DP World / Qasim International Containers Terminal (QICT) and Maersk Pakistan (Pvt) Ltd. They said Customs Enforcement should have canceled their licenses or stop filing their IGMs for not following the directives of the FBR and Customs higher authorities. QICT controlled by DPWorld announced additional 5 storage free days in addition to normal free days as per tariff which would be applicable on cargoes arrived from 20th March 2020 till vessel arriving on 5th of April, 2020 and deliveries up to 15th April 2020, after that will be charged as per actual invoice. But traders and importers demand 100% waiver of demurrage and detention charges as entitled under the law and extension in free time till complete normalcy returns in one or two months. Because in current situation, due to different reasons it is difficult for them to clear their containers in the said period.
Collectorate of Customs Enforcement and Compliance, led by 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. Chief Collector Wasif Ali Memon is a seasoned and most experienced official in Karachi Customs who can easily handle these situations. With vast experience of dealing with such unprecedented circumstance, he is the best person to properly understand the condition of traders and importers. In these difficult times of Covid-19 tragedy, he is expected to come forward to facilitate the trade and business activities through Karachi ports. 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.
Collectorate of Customs Enforcement & Compliance, headed by Wasif Ali Memon, directed officials to ensure an uninterrupted clearance of foreign trade consignments after the government decided to keep ports operational amid coronavirus lockdown. Customs agents proposed to exercise the powers under Section 224 of the Customs Act 1969 for extension of time limit to support and facilitate the trade. Customs agents also proposed the tax officials to let them submit scanned copy of free trade agreement (FTA) certificate and online verification while filing the goods declarations on WeBoc (web-based one customs) to minimise physical visit to the Customs House. Earlier, submission of hard copy of FTA certificate is mandatory.
The customs authorities said that Pakistan is currently facing a great challenge to address the issue of spread of coronavirus outbreak. As a result of lockdown and restriction of movement of people / vehicle, the time duration of lifting the cargo from ports is exceeding the free-time as allowed to the importers under normal course of business. The FBR had already issued similar instructions to container terminal operators on March 31, 2020 to waive demurrage and detention charges in order to facilitate importers and trade community in difficult times.
The collectorate said that considering the challenging scenario for importers and trade community the shipping lines and their agents should extend free-days in respect of container detention and not charge container detention charges and other charges in connection of late delivery of goods for the period from March 25, 2020 to April 16, 2020 in addition to free days already allowed by shipping lines and their agents.
“This would be near impossible for traders/customs agents to submit duty/taxes on time,” the KCAA said. The association also requested the member customs (policy) of the Federal Board of Revenue and higher authorities of Pakistan Customs to issue necessary directions to the ports/terminals and shipping companies for the waiver of port demurrage and container rents for at least a month.
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 director 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.
Feroze Alam Junejo, Collector Model Customs Collectorate Jinnah International Airport Karachi, also issued a similar letter on 6 April 2020 seeking relief measures to extend the free period at terminals.
PALIMA (Pakistan Artificial Leather Importers & Merchants Association) chairman Faheem Ur Rehman Saighol while talking to Customs Today said it is very unfortunate that repeated requests have been made to the government to waive off detention and demurrage charges in wake of unprecedented natural calamity COVID-19 that brought the economy to a grinding halt but there is no positive response from the government, shipping lines and terminal operators. He said that it seemed just a lip service is being done by the government that if any measures are taken they are being implemented half-heartedly to increase free days for demurrages and detention. The FBR requested the shipping lines and terminal operators to waive detention & demurrage charges but they did not follow the directives which raises question that how come the shipping lines & terminal operators can reject the FBR directives when the latter is an authority that issues licenses to these companies.
Awais Piracha, former Central Vice Chairman Pakistan Auto Spare Parts importers and Dealers Association, Pakistan while talking to Customs Today urged the Ministry of Maritime Affairs to strictly order shipping lines and terminal operators to give more free time for port storage and waive demurrage and detention charges keeping in view the COVID-19 calamity. He said that almost all the services including banks, couriers and other systems have chocked and it is next to impossible to pay off duty and taxes due to which demurrage and detention charges have become additional burden on importers and traders. He suggested that the Ministry should mention the names of the shipping lines, Maersk Shipping Line, Mediterranean Shipping Company, CMA-CGM Group, Ever Green Marine Line, China Ocean Shipping Group, COSCO Company, Diamond Shipping Line, Green Pak Shipping Company, Ocean Network Express Pakistan Pvt Ltd and many other foreign shipping lines operative in Pakistan. Under special circumstances Pakistani government should also consider free demurrages and detention period till the end of the coronavirus.
Earlier, the FBR letter issued on 31 March by its Secretary (Enforcement and Coord) Syed Mahmood Hassan said Pakistan is currently facing a great challenge to address the issue of the spread of COVID-19. “As a result of lock down and restriction of movement of people/vehicles, the time duration for lifting the cargo from the ports is exceeding the free time as allowed to the importers under normal course of business,” the letter read. “It is requested that demurrage and detention charges may not be charged from the importers for a period of 15 days in addition to the free time already allowed by the port authorities,” the letter said.
Similarly, Karachi Customs Agents Association (KCAA) General Secretary Muhammad Aamir in a letter dated 30th March requested to waive port demurrage/storage charges on the humanitarian grounds 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 this 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.
All Pakistan Customs Agents Association (APCAA) President Arshad Jamal in a press conference criticized the government for not taking strict administrative measures to safeguard the economy. He also lambasted the ‘shipping mafia’ for not cooperating with importers and government in this regard.
Chairman of All Pakistan Timber Traders Association (APTTA), Muhammad Sharjeel Goplani in a press conference said, due to the lockdown, the entire commercial chain had been disrupted. Due to this reason there was a severe liquidity crunch in the markets, adding, ‘We have no sources to pay demurrage and detention charges to ports to clear our containers’. He said, “We are not getting international posts so we cannot get original documents to present to the ports. Even if we pay the charges, the Sindh govt will not allow us to take our containers to the warehouses. Due to the lockdown, we cannot sell our products and get out of this financial crunch so the govt should issue us soft loans so we can pay to the ports and release our containers.”
“The documents cannot be released by the importers as people are advised to stay at home. All the means of commuting and transportation are lying suspended because of which no one can reach the bank to retrieve their import documents.” “Only when the documents are retrieved can one move forward towards the clearance of the cargo. There is almost no staff in the banks, in the customs offices and in the transporters offices due to which the documents cannot be processed,” said Goplani. “There is no possibility to have the cargo lifted from the port and transported to the warehouses because of the very limited number of the staff. Due to this reason the cargo is incurring heavy detention and demurrage charges,” said the APTTA chief. He urged the prime minister to deal with this matter on a priority basis so that the unrest among the importers could come to an end, and the people of Pakistan could look forward to the continuation of healthy and fruitful business activities.
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. The 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.
Kashif Anwar stated that in order to cope with the challenges of prevailing worldwide pandemic COVID-19 it is very encouraging that different ministries are continuously announcing various relief packages for export sectors and other local industries in the form of reduction in interest rate, concession, rebates, subsidies, suspension of taxes and extensions in the date of filing of Tax Returns etc. He said, “We request you, on behalf of the whole business community, to intervene and direct the concerned federal ministries to ask shipping lines not to charge detention, forcing terminal authorities not to charge demurrage from the importers for a period of 15 days in addition to the free time allowed by the shipping lines and port authorities.”
In a statement, chairman Pakistan Chemicals & Dyes Merchants Association (PCDMA) has requested to waive all notices including income tax, sales tax, WHT and all proceeding in this regard for 2 months due to the worst economic crisis, as due to coronavirus pandemic, all the business activities have stopped and commercial importers are already facing huge financial crises.
The coronavirus-led lockdown has led to a piling up of import containers at the ports as importers have been unable to furnish essential documents to get their consignments cleared because of transportation difficulties. The port usually handles around 10,000 containers every day. However, the number has decreased by 30%. Despite the drop, more than 6,000 containers are still landing at the ports each day, and not all of them are being cleared. Government has extended the timeline for filing of goods declarations (GDs) to 25 days, which earlier was 10 days from the date of cargo arrival.
In line with section 14 A of the Customs Act 1969, the Ministry of Maritime Affairs has reportedly decided to waive port demurrages and extend free time at ports in a meeting with the FPCCI but the companies like DP World / QICT and Maersk are not implementing the decisions to waive detention and demurrage and give extra free time, instead they are using this crisis time as an opportunity to mint illegal money for themselves.
According to details, DP World / QICT and Maersk are not implementing the decision of Ports and Shipping Minister Ali Zaidi, giving an excuse that the Ministry had not issued any notification in this regard to waive detention and demurrage and give extra free time at ports. DP World / QICT and Maersk are reportedly used to adopt similar tactics to make billions of rupees by blackmailing and taking additional illegal detention and demurrage charges. Even Sindh High Court had disposed of a case CP No D-4867 of 2013 by these companies challenging constitutionality of Section 14A of the Customs Act 1969. These companies are not willing to play any role for the society and the country at large in this situation. They are only playing their games to multiply their profits in the crisis time.
It is pertinent to mention here that terminal operators, shipping lines and their agents cannot demand additional demurrage and detention charges under SRO 1220(I)/2015 and Section 14A of the Customs Act, 1969. Maersk Pakistan Private Limited and DP World / QICT must comply to their obligation under the law in these difficult times to give 100% waiver for the charges including demurrage and detention because importers are facing unbearable losses due to CoronaVirus lockdowns. Maersk Pakistan and DP World / QICT violated SRO 1220 and section 14A of Customs Acts 1969 by taking extra demurrage and detention charges other than collecting applied duty and taxes. Law under SRO 1220(I)/ 2015 explains that shipping companies Maersk Pakistan & terminal operator DP World / QICT cannot charge any demurrage and detention where specifically it is not agreed and also specifically not mentioned on the B/L (Bill of Lading) but this law is grossly being violated by shipping lines especially Maersk Pakistan and their agents. As per Customs Act, 1969, the port cannot charge any demurrage or detention charges if Customs gives a certificate to importer titled ‘Delay and Detention Certificate’. Under rules 603 (Q), 603 (R), 604 (Q) and 607 (E), others of SRO 1220 (I)/2015, the shipping lines cannot charge any demurrage or detention charges where it is not specifically written on the B/L. But despite this certificate, importers goods are held illegally at the terminal and they are charged with heavy demurrage. On the other hand, in these difficult times, when importers find it difficult to sell their goods due to countrywide lockdown, PICT itself came forward and announced to waive all its charges on import of hand sanitizers, surgical masks, protective gloves and COVID-19 testing kits.
FPCCI Vice President Khurram Aijaz in his letter on 24 March 2020 to Minister Maritimes Affairs Ali Zaidi said, as there are serious restrictions imposed by the government to stop the spread of CoronaVirus so there is a shortage of customs staff and banking facilities for importers and exporters. In this situation it is impossible for them to get clearance of their goods and pay customs duty in time at Karachi Port and Port Qasim, so they have to bear heavy demurrage charges in case of delay in the clearance. The FPCCI requested the Minister to instruct PQA/KPT and private terminal operators to waive demurrage charge till 31st May, 2020.
FPCCI Vice President Khurram Aijaz said Ministry of Maritime Affairs has decided to waive port demurrages and extend free time at ports. It was reported that Minister Ali Zaidi announced that port demurrage charges would be waived by the ports till April 15, 2020. An official said that even after the issuance of official notification, port operators could go to court and obtain stay as it happened in past. To meet the challenge of the COVID – 19 challenge and to ensure that Port Operations continue unheeded and the supply service chain is not hindered, Ministry of Maritime Affairs has taken the following measures: Essential supplies of Medical Equipment/ Medical Supplies and Protective Gear, Perishable items, Food stuffs including Grains and Lentils, Pulses and Petroleum products is cleared expeditiously and freight is despatched. To facilitate importers and exporters, Port Authorities were advised to reduce/waive terminal, linear, demurrage charges and to extend free time at ports but DP World / QICT and Maersk Pakistan are still charging demurrage and detention.
President All Pakistan Customs Agents Association (APCAA) Arshad Jamal reportedly said port terminals were reluctant to waive demurrage and shipping lines had not waived container detention charges. Other clearing and forwarding agents Naeem and Zargham Shah were also showing dissatisfaction with the terminal management as they were not providing any relief to importers regarding demurrage even in these crisis times. “Ports are not releasing containers even after payment of demurrage and detention charges,” said Zargham Shah.
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) had demanded relief from the government for port charges in view of the emergency situation and lockdown imposed on account of the coronavirus pandemic. Shabbir Mansha Churra, chairman, FPCCI’s Standing Committee on Customs and founder chairman of Pakistan Artificial Leather Imports and Merchants Association (PALIMA) has appealed to Prime Minister Imran Khan to prevent the destruction of trade and industry. He requested to defer port charges and late duty payments and fines till the country was in lockdown. “The goods arriving at the ports have to pay duty within 10 days, but due to the lockdown, the importers are unable to pay the duty on time, so they have to pay a daily fine which may go up to 100,000,” he added. The FPCCI official said the government had taken stringent steps to prevent the spread of the coronavirus, which has badly affected lives as well as economic activities. “Business activities are frozen and the business community is facing severe financial losses,” he added. He requested to defer late duty fines and waive off charges in term of demurrage and detention charges at ports for at least one month. Churra also requested an extension of 90 days in sales tax filing and withholding tax. He said that due to the coronavirus, the emergency was implemented under Force Majeure Clause worldwide. According to international law, after the implementation of this clause, all agreements and taxes were deferred to provide relief in difficult conditions. “The prime minister should waive off all port charges and fines for a month to save trade and industry from this economic crisis.” He also requested the give relief from banks. He assured to support the government’s efforts to curb coronavirus pandemic.
On the other hand, Pakistan International Container Terminal Limited (PICT) announced to waive its charges on import consignments of necessary materials to combat COVD-19. “PICT continues to operate 24 hours with all possible precautionary measures and essential staff only to ensure the sustainability of Pakistan trade and its duty towards the society,” said PICT in its filing to the Pakistan Stock Exchange (PSX). “Apart from various other initiatives taken by PICT within its premises, PICT has decided to waive its charges on import consignments of necessary materials to combat COVD-19 which include hand sanitizers, protective masks, surgical gloves and COVID testing kits. Through this initiative of PICT, importers will have the opportunity to reduce prices of such items for the general public and hospitals to fight this pandemic,” added PICT.
In a notification to Lahore and Karachi Customs Appraisement And Enforcement Departments, FBR has decided to extend the time for filing of goods declaration in exercise of powers under section 224 of the Customs Act 1969, from the existing 10 days of arrival of goods, under section 79 (1) of Customs Act 1969, to further 15 days (total 25 days) for all IGMs filed between 17th March to 7th April 2020. In order to facilitate the trade, FBR gave this extension on request of FPCCI and KCCI for extension in time limit of filing of GDs.
Sources said that DP World / QICT and Maersk are allegedly involved in multi-billion dollars demurrage and detention charges scam case where they blackmailed and harassed genuine importers to pay illegal charges for clearance of their consignments. Even, NAB has authorised such cases against DP World / QICT and Maersk. Now traders and importers sought NAB to intervene in the issue of DP World / QICT and Maersk for looting the nation and not giving any relief in demurrage and detention and free time at ports.
A complaint received by the NAB demanded legal action for recoveries of amounts looted and recovering losses of Rs. 610 billion to the national exchequer per year while also stopping such further losses from the accused persons of these companies including Habibullah Khan, 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, Rashid Abdulla, Mohammad Al Hashimy, Junaid Zamir and others of DP World/ QICT Ltd. The accused persons of DP World/ QICT Ltd. are facing charges of more than 20 mega scam allegations against them.
Another complaint received by the NAB demanded legal action for recoveries of amounts looted and recovering losses of Rs. 610 billion to the national exchequer per year while also stopping such further losses from the accused persons of these companies including Søren Skou, Claus V. Hemmingsen, Søren Toft, Vincent Clercp, Morten H. Engelstoft, others of Maersk Line; Arslan Khan, Gazanfar Khan, Raheel Salim, Maqsood Ul Hasan Khan, Fuad Khan, Hasan Faraz, Shakeel Masih, Omer Khan, Ali Jawad Alvi, Zafar Iqbal, Ayesha Chowdhry, Zahid Hussain, Salman Ahmad, Aamir Ali, Umais Aziz Khan, Mohammed Naeem, Farheen Mahmud, Mubasshar Iqbal, Affaq Syed, Syed Mohammad Abbas Jafri, Muhammad Tanveer Sharif, Salman Ateeq, Hamza Haq, Ziad Mahboob, Aamir Ibrahim, Yasir Saeed Khan, Amal Sadiq Dawood, Effat Mehmood, Maria Urooj, Zain Warsi, Mehreen Zulfiqar, Awais Saleem, Zafar Iqbal, Syed Osman Iqbal Zaidi, Anum Yaqub, Fahad Ali, Obaid Iqbal, Zahid Hussain, Muhammad Ali Qureshi, Danish Siddiqui, Amir Arif, Arshad Ayub, Syed Mudassir Ali, Syed Hammad Hussain, Ayesha Qadri, Sheikh Samiullah, others of M/S Maersk Pakistan Private Limited.
Sources said Maersk shipping line and its subsidiary in Pakistan, M/s Maersk Pakistan (Pvt) Ltd are blackmailing importers through illegal holding & blocking of their imported goods for the sake of demanding additional demurrage and detention charges.