Probe into benami transactions, money laundering: FBR transfers spark controversy

Business Recorder

3 days ago

KARACHI: Two senior Federal Board of Revenue (FBR) officials have been transferred from their posts in Karachi to Islamabad, sparking controversy over the future of ongoing investigations into alleged benami transactions and money laundering worth trillions of rupees in the vehicle imports.
Although FBR officials termed the transfers/postings as routine administrative measures, this time, the transfers have raised questions about potential interference in high-stakes investigations, following the public allegation by one of the transferred officials that his posting was retaliation for taking action against powerful lobbies involved in vehicle imports.
Abdul Hameed Abro, who was serving as Commissioner (Ops) Inland Revenue, Benami Zone-III in Karachi, was transferred after launching what he described as a comprehensive crackdown against benami transactions in vehicle imports.
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In a social media post on his verified account, Hameed suggested his transfer was connected to his enforcement actions.
'When I took action against benami transactions and the misuse of baggage and gift schemes in the vehicle imports, it caused trouble to the powerful lobbies,' Hameed wrote. 'My only 'fault' was that I enforced the law and protected the national treasury. As a result, I was transferred from Karachi to Islamabad.'
The commissioner defended his actions, saying that they were in the national interest and aimed at preventing billions in losses to the treasury through fake documentation and scheme misuse. 'I can be removed, but I cannot be defeated! I simply did my duty — and wherever I may be, this journey will continue,' he added.
Under Hameed's leadership, the Benami Zone-III had launched an extensive investigation targeting the systematic abuse of the Vehicle Baggage and Gifts Scheme (VB&GS). The scheme, originally designed for legitimate personal imports, has allegedly been exploited by commercial importers working through clearing agents with suspected support from customs officials.
The investigation covers vehicle clearances conducted between February 2018 and May 2025, with authorities demanding detailed explanations for thousands of vehicle imports processed under the personal baggage scheme.
The Benami Zone has requested comprehensive documentation from suspected parties, including complete import records, customs declarations, details of end users and true owners with full identification, information on all transaction parties, copies of agreements and contracts, and bank statements covering the entire seven-year investigation period. In a parallel development, Sheeraz Ahmad, who was serving as Director of Post Clearance Audit (PCA), South, was also transferred to Islamabad.
Ahmad had been actively involved in auditing Pakistan's most touted corruption-free clearance system - 'Faceless Customs Assessment (FCA)'.
The PCA audit report under Sheeraz's supervision revealed significant irregularities, including widespread under-invoicing of high-value luxury vehicles. The audit found that importers consistently failed to provide documentation showing legitimate foreign currency payments, strongly suggesting the use of illegal hawala and hundi money transfer networks.
'Importers consistently failed to provide proof of payments substantiating that purchases of imported vehicles were made through legitimate remittances originating from foreign countries,' the audit report said.
The investigation has uncovered what appears to be an organized scheme where importers systematically used illegal money transfer channels to pay actual purchase prices abroad while declaring minimal amounts to Pakistan customs to avoid duties and taxes.
The PCA audit also detected approximately Rs 38 billion in revenue leakage following the implementation of the FCA system, attributed to several technical flaws identified in the audit report.
While the FBR official sources termed the transfers are routine administrative measures, the timing and circumstances have raised concerns about the continuity of ongoing investigations.
Both transferred officials are expected to continue their duties in their new postings in Islamabad, though questions remain about who will lead the ongoing investigations and whether the enforcement momentum will be maintained or, like other investigations, it will be shelved.
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