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Each client’s shipment should be cleared and delivered in the safest, quickest and most cost effective way by guiding clients from the day they plan the import. Clients should be kept informed every step of the way in the most user friendly way

e N E W S L E T T E R

Import Clearance Procedure

Mehran Corporation provides clearance of consignments from Old Karachi Seaport, Port Qasim and Karachi Airport using the following TWO procedures:

1) Old Manual system of clearance (expected to be completely abolished by the end of 2007)

  1. Receipt of Non Negotiable documents from clients
  2. Filing of Goods declaration at the time of arrival of vessel or if goods are urgently required file Goods declaration before the arrival of vessel under Section 79 of Customs Act
  3. Completion of Goods declaration from Customs under normal examination procedure or automated clearance procedure whichever is applicable
  4. Ask for pay orders immediately on filing of import manifest for the vessel
  5. Await Pay orders and Original Shipping Documents from the clients
  6. Upon receipt of the above, payment of Customs Duty and collection of Delivery order from the shipping company concerned
  7. Delivery of goods can be taken the very next day in case of FCL (Full Container Load) containers or instantly on de-stuffing of goods from container
2) PACCS Pakistan Customs Computerized System, new Online based system of clearance for Full Container Load (FCL) Shipments presently operational at Karachi International Container Terminal and expected to be operational in the whole of Pakistan by the year end 2007
  1. Receipt of Non Negotiable documents from clients
  2. Online filing of Goods declaration on the basis of either Non negotiable documents or Negotiable documents whether vessel has arrived or is expected to arrive shortly
  3. Ask for pay orders immediately after lodging Goods declaration Online
  4. Await Pay orders and Original Shipping Documents from the clients if not sent earlier
  5. Upon receipt of the above payment of Customs Duty and collection of Delivery order from the shipping company concerned
  6. Wait for release message in Inbox on the computer from Model Customs Collectorate
  7. Delivery of goods can be taken the same day

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Pakistan Government is moving towards an overall strategy of a corruption free society. In that regard it has developed CARE (Customs Administrative Reforms) which represents a major step forward in the way in which we deal with the increasing flow of cargo in and out of Pakistan. It would introduce expeditious clearance of cargo through:
  • simplification of Customs procedures
  • an integrated IT system to replace the current manual and personalized system
  • a shift from present regime of 100% inspection to a selectivity criteria.
  • hassle free working
  • transparent procedures
  • reduced business costs
  • one window operation
  • non interactive clearance procedure

PACCS (Pakistan Customs Computerised System) is a key component of CARE and its benefits to businesses are:

  • Reduction in time for clearance of cargo from days to hours, even pre-clearance, if declarations filed in advance resulting in lower inventory costs as just in time inventory concept becomes applicable
  • A healthy and hassle free environment for doing business due to simplified and automated procedures. System is based on self clearance and self assessment concepts
  • Lowers the business costs due to low miscellaneous expenses
  • Better organization of the ports due to online intimation of cargo status and less port congestion due to faster ship clearance times
  • Messages would be received from customs in our inboxes e.g. receive messages for goods clearance, receive messages for hearing calls for refund cases, receive messages of document required for assessment, receive messages of securities required for provisional clearance of goods etc.
  • PACCS is completely paperless. We do not have to file any documents with customs, all our declarations are electronic and online
  • PACCS is based on self assessment. We compute and discharge our liabilities ourself without any interference from customs

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Comparison of old manual system of clearance (existing) and PACCS




 Working Hours

0830 to 1630 Hrs. Sundays and national holidays are off.

24 hours a day and we are never off.

 Customs Clearance time

Average over 7 days.

Average under 6 hours.

 Geographical limits

Customs Collectorates are turf based. You are bound by your geography.

Virtual Collectorate, no turf. You are liberated of geography. You can file Goods Declarations from HQ in Islamabad, pay duties from a branch office at an online bank in Lahore and clear your goods for a factory in Karachi.

 Cargo Clearance Philosophy

Stop all traffic and then release one by one.

Cargo has to be at the port for Customs to work.

All Customs issues even those that do not require physical verification are to be resolved while the goods are at port.

Only stop the suspect.

Customs work is phased.
1. Pre-arrival work.
2. Work while the goods are at the port.
3. Work after the goods have been released.
Goods are required at the port only where physical examination is needed; all other Customs work can be completed either before arrival of goods or finalized after the goods have been released.

 Special lanes or procedures

There are special lanes or procedure for separate clients. These processes are Express Lane Facility (ELF), Automated Clearance Process (ACP), Electronic Assessment (EASY) etc. They are all manual and are variations of the typical Customs process as described below.

PACCS does not distinguish among its clients. We believe that all cargo is express, everybody should have automated facilities and the Customs process should be simple and easy for all.

 Pre-arrival Goods Declarations

Advanced filing of paper based Goods declaration on specific permission from Customs.

Advanced filing of electronic Goods declaration 10 days prior to arrival of cargo, no permissions required.

 Pre-arrival processing of cargo

No pre-arrival processes

Cargo and vessel details are acquired electronically from the carriers at least 24 hours prior to the arrival of vessel. Risk Management System screens the cargo declaration and segregates high risk from low risk cargo. Transit and transshipment consignments are identified.

Major amendments to the manifest are completed electronically by the time the vessel arrives.

Cargo declaration is electronically transmitted to the terminal operator to unload cargo according to the manifest.

 Arrival of vessel

No process except Vessel rummaging

Vessel rummaging

Non risky cargo for which GD has been filed in advance is released.

Transshipment cargo is released to bonded carriers for carriage upcountry. There is no requirement for filing of TP requests under PACCS.

High risk cargo as communicated to the terminal operator is brought straight away to the examination areas and examination commences.

 GD filing and processing

Paper based GDs, four copies required. Declarant has to furnish copies of invoice, packing list, and BL in addition to any other documents required by Customs during processing.

You bring your paper work to the Customs House. Customs prints machine number on the GD and returns the GD to you.

GDs can be filed only by agents, in case you wish to file the declaration yourself either you obtain a license from Customs and become an agent or seek special permission from Additional Collector Customs each time.

After machine numbering you present your GD to the Customs processing staff called groups.

The Customs processing staff decides whether your cargo needs to be examined first or assessed first. In case it is decided that it is to be examined first an examination order is written on the back of the GD and the GD is returned to you.

Electronic Goods Declaration. No documents are required.

Declarations are filed from your office over the web any where in the country. Customs Reference Number (machine number) is instantly allotted online. Your Declaration is processed by the Risk Management System. In case the declaration is found to be non-risky your cargo is released and both you and the terminal operator are informed online by PACCS. The process takes less than ten seconds.

You are free to file Goods Declarations either yourself or through your agent, the choice is purely your own.

In case the Declaration is deemed risky by the Risk Management System it will be allotted to a Customs official for scrutiny and you will be asked online for clarifications or asked for specific documents to support your declaration.

 Examination Process

On receipt of the examination order it is your responsibility to tie up with the terminal operator to get your container grounded and readied for examination.

After you have arranged your consignment for examination, you approach the examination staff at the port with examination order. The Customs staff completes the examination writes their report on the reverse of the declaration and return the declaration to you.

Customs already has examination reports for risky consignments. Where consignments were deemed risky they were grounded by the terminal operator and examined by Customs on arrival of the vessel and report fed into PACCS.

 Return to the group

You bring your examination report to the group and the process of assessment starts. When Customs has settled all issues your duties and taxes are computed and the declaration is returned to you.

No Process.

 To the Cash section

You take your declaration to the cash section of the Custom House where your papers are scrutinized a cash number is given and your declaration is returned to you.

There is no cash section

 To the Bank

You take your pay order and declaration to the Custom House branch of the bank and pay your duties and taxes, and your declaration is returned to you.

PACCS is self assessment you pay your taxes yourself without interference by Customs before filing a declaration to Customs. You pay your duties anywhere in the country, all you need is to remember your BL number.

 Collect your cargo

When you take your cargo out of the port you have to present your declaration for verification to the Customs Gate staff, after verification your declaration is returned to you.

No requirements, there is no Customs gate staff

 Determination of Value

Value is determined under a hybrid system of BDV and GATT code. There are numerous values, the declared value, the agreed value with the associations, the minimum value, the database value, the valuation advice etc.

PACCS proceeds by the book, the only value accepted under PACCS is transactional value ascertained as per the GATT code.

 Dispute over value

Value as determined by the group cannot be appealed to since there is no appeal mechanism.

Customs decides a value and writes it on your declaration; no formal appeal able written orders are given.

You cannot appeal to collector appeals since collector appeal has jurisdiction only over orders passed under sections 179 of the Customs Act.

You cannot appeal to the Appellate Tribunal since assessment orders by the group are not orders under sections 179, 193 and 195 of the Customs Act.

You really have no choice since your goods are held by Customs and you are incurring demurrages. You cannot clear your goods under section 81 since provisional clearance is the prerogative of Customs.

There is formal mechanism for review of values ascertained by the assessing staff. This is called the First Review. In case you are not satisfied in first review there is a second review before the Assistant Collector.

Formal written orders are given by the Assistant Collector in second review. Orders by the Assistant Collector are appealable before Collector Appeals.

Orders of Collector Appeals are appealable before the Appellate tribunal.

You have the choice to clear the goods provisionally, all request for provisional clearance are auto accepted on payment of securities. We feel that your pursuit to seek justice must not be hindered by the threat of demurrages.

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