Islamabad – A government audit has exposed a massive breach in Pakistan’s much-hyped Faceless Customs Assessment (FCA) system — a digital platform designed to eliminate corruption in import processing. Instead of preventing fraud, the system ended up clearing banned and restricted goods worth over Rs10.5 billion, and may have contributed to revenue losses nearing Rs38 billion, according to audit findings.
System Meant to Fight Corruption Ends Up Enabling It
The FCA system was launched with the promise of making customs operations more transparent and less vulnerable to manipulation. But an audit by the Directorate General of Post Clearance Audit (PCA) — covering just three months, from December 2024 to March 2025 — suggests it has become a backdoor for large-scale violations.
More than 1,000 Goods Declarations (GDs) processed through the FCA involved the import of items that are either banned or restricted under the Import Policy Order. These were cleared without proper scrutiny, completely undermining the system’s core purpose.
Billions Lost to Duty Evasion and Regulatory Gaps
In total, the audit flagged 1,524 GDs linked to Rs5.007 billion in evaded duties and taxes. On average, each declaration cost the exchequer over Rs3.3 million.
To make matters worse, officials reportedly failed to initiate contravention proceedings — a standard response to such violations — causing an additional Rs2.43 billion in statutory fines to be lost.
That brings the total revenue loss from just this small sample of clearances to Rs7.44 billion. However, the audit only covered 8.8% of all customs clearances, suggesting the real damage could be significantly higher.
Ignored Violations Costing the Country Even More
A separate and far larger issue identified in the audit involves the lack of enforcement under SRO 499(I)/2009, a regulation governing customs violations. The PCA noted Rs30.36 billion in potential losses from unframed contravention cases, pointing to a chronic failure in regulatory follow-through.
Shockingly, less than 2% of high-value tax evasion cases were formally pursued.
Suspicious Solar Panel Imports Raise Red Flags
The audit also uncovered suspicious imports of solar panels using fake or unauthorized National Tax Numbers (NTNs) and Customs User IDs. These irregularities, worth Rs643 million, hint at possible trade-based money laundering.
In another instance, GDs that had already been finalized were later cancelled — a move that allowed importers to evade an additional Rs60 million in taxes.
The Bigger Picture: Systemic Failure or Design Flaw?
The FCA system was introduced as a digital reform to eliminate human discretion — and by extension, corruption — in customs processing. But the audit paints a different picture: one where the system’s lack of oversight and accountability has created new vulnerabilities, rather than eliminating old ones.
According to audit officials, the total losses tied to these failures — including duty evasion, regulatory lapses, and flawed implementation — could exceed Rs38 billion.
What Happens Next?
So far, there’s little indication that those responsible for these lapses — whether importers, customs officers, or system administrators — will be held accountable. Without urgent reforms and stricter enforcement, the FCA system risks becoming yet another failed experiment in Pakistan’s long and troubled history of bureaucratic digitization.
