Latest news with #FCA
Time of India
an hour ago
- Business
- Time of India
Importers in US beware: DOJ escalates customs fraud enforcement under FCA - the false claims act
In the 8-minute Audio Interview , Ms. Beidel discusses these questions: Can you give our listeners a brief background on the False Claims Act and how it has been used in the past?What makes you predict a trend in FCA use in the customs and tariff space?What can companies do to be prepared for that increased use of the False Claims Act?
Business Recorder
2 hours ago
- Business
- Business Recorder
Internal review describes FCA system as ‘a complete failure'
KARACHI: Pakistan's much-touted Faceless Customs Assessment (FCA) system has been branded 'a complete failure to achieve objectives' by an internal review committee, revealing the anti-corruption initiative has worsened clearance efficiency and reduced revenue collection. The final report of the review committee on FCA, obtained exclusively by the Business Recorder, revealed how the FBR's flagship digital transformation project has increased cargo clearance times and failed to deliver the promised revenue gains since its launch in December at Karachi port. The committee has prepared this report based on Customs data from July 2024 to April 2025, comparing the FCA performance with the period of five and a half months before its implementation. Faceless customs system: Rs84bn collected in duties during Feb Contrary to expectations, the FCA system has increased clearance times despite reducing documentation requirements. The committee found that while document calling decreased significantly since launch and continued through April 2025, overall dwell times increased due to more examinations, referrals to higher officers, lab test calls, and most importantly, increased reviews before Principal Appraisers and Assistant Collectors. 'This reduction could have resulted in overall dwell time reduction in FCA Collectorates but other factors like increase examinations, referrals to next level officers, calling Lab tests and, more importantly, increased Reviews before PA/AC, has not only negated the impact of decreased document calling but has increased the overall dwell time under FCA clearances,' the report said. The report highlighted that 'a significant increase in the filing of first and second reviews also indicates that the quality of assessments at AO level has deteriorated' under the faceless system, showing officers are making substantially more errors. The system has catastrophically failed its primary test of boosting government revenues. Additional revenue from Customs assessments dropped from 16% to 13% after FCA implementation, dealing a severe blow to Pakistan's cash-strapped treasury, struggling to meet IMF targets. 'The present data does not support any positive impact of FCA in terms of improved assessments, which is primarily indicated through the quantum of additional revenues generated through assessments,' the report said. While acknowledging that multiple factors affect revenue collection including import volumes and values, variation in composition of dutiable and revenue-free values, seasonal effects, and composition of imported commodities such as vehicles and edible oil, the review committee found 'no exceptional behavior in aggregate terms for revenue collection against the corresponding import value under FCA,' the report said. The report also disclosed that FCA's two fundamental design concepts - hiding trader information from Assessing Officers and discontinuing specialized assessment groups - were already 'tried, tested and then discontinued 20 years ago' when Pakistan Customs first introduced its automated Customs clearance system, PACCS. 'In the context of FCA's present design, it may be pointed out that two its basic design concepts i.e. hiding of trader information from AOs and discontinuation of specialized assessment groups had been tried, tested and then discontinued 20 years ago when Pakistan Customs' first automated Customs clearance system 'PACCS' was introduced,' the report said. 'The reasons for such discontinuation, which were true 20 years ago, are also true today, i.e., limiting the maximum available information to the assessing officer limits his ability to correctly examine and assess the declaration with a 360-degree view of that declaration. Similarly, the existence of specialised assessment groups not only creates a sector-based institutional memory and consequent strong Customs controls, but also reduces dwell times due to repetitive handling of similar, and a limited group of products.' Based on these findings, the review committee took the extraordinary step of recommending against further FCA expansion. 'In light of the above analysis, findings, and conclusion, this Committee does not recommend implementation of further phases/rollout of FCA unless its efficacy is confirmed through any other means or additional/bigger data set(s), and/or its basic design constituents are reviewed.' The committee specifically called for detailed audits by the Pakistan Customs Authority of sample cases from revenue-loss prone sectors, including vehicles, miscellaneous goods declarations, commercial fabric imports, and commercial imports of chemicals to verify any negative revenue impacts that may have been overlooked. The FCA was introduced as part of the broader FBR Transformation Plan with the primary objective of addressing collusion between importers and Customs assessing officers. 'Apparent implication of this collusion is assumed to be the consequent revenue loss, which implies that the objective of the FCA concept was to stop such loss,' the report said. However, it has been revealed that two probable reasons for failure: 'either the FCA in its present design is unable to stop the said collusion OR the impact of said collusion on revenues is otherwise so miniscule that FCA, despite being effective in sanitizing the assessment halls and almost restricting any contact (collusion) between importers and assessing officers, failed to reflect any corresponding growth in the revenues collected through these formations.' Senior Customs sources, on condition of anonymity, slammed the 'haphazard' implementation and expressed strong criticism of the rushed rollout. 'FCA, which was implemented haphazardly, could deliver the results if it were enforced wisely,' sources close to the matter said. 'It was not humanly possible that an appraiser or principal appraiser has that expertise to process every single goods declaration from any sector in a stipulated time,' sources explained. 'The system has no integration with the IRS and other important databases, but it was rolled out in Karachi, which was not a wise decision. It should have been implemented in Lahore or Rawalpindi first to remove all bugs and then rolled out to Karachi.' The sources revealed that 'FCA has weakened pre-clearance control that made this system ineffective to achieve its desired objectives' and emphasized to follow best international practice, saying that the 'system must be integrated with advanced IT solutions along with fresh trained staff to eliminate bad-reputed staff and allow maximum clearance through green channels and strengthen post clearance audit.' Copyright Business Recorder, 2025
Straits Times
3 hours ago
- Business
- Straits Times
Shein switching to Hong Kong listing after London IPO stalls, sources say
Shein's proposed listing in London failed to secure the green light from Chinese regulators, sources say. PHOTO: REUTERS HONG KONG - Shein is working towards a listing in Hong Kong after the online fast-fashion retailer's proposed initial public offering (IPO) in London failed to secure the green light from Chinese regulators, said three sources with knowledge of the matter. The Singapore-based company aims to file a draft prospectus with Hong Kong's stock exchange in the coming weeks, one of the sources said. Shein plans to go public in the Asian financial hub within the year, two of the sources said. Shein plans to change the listing venue as it had not yet received approval for its London IPO from Chinese regulators, notably the China Securities Regulatory Commission (CSRC), the two sources said. The company in March secured approval from Britain's Financial Conduct Authority (FCA) for its IPO in London, and soon informed the CSRC, one of the sources said. The company initially expected the green light from Chinese regulators to follow swiftly after the FCA but has since experienced an unexpected delay and limited communication from the CSRC, said the source. Before its attempt to list in London, Shein had pursued a listing in New York, as part of its efforts to gain legitimacy as a global, rather than a Chinese company, and access to a wide pool of large Western investors. A listing in Hong Kong would go against that strategy and could hurt its global credentials. Allegations that Shein's products contain cotton from China's Xinjiang region and a planned legal challenge to the London IPO by a non-governmental organisation campaigning against forced labour in China have complicated the London listing and risk embarrassment for the Chinese government, a separate source with direct knowledge of the matter said. Tensions with the United States over trade only exacerbate the wariness of Beijing and the CSRC, the source said. The US and NGOs accuse China of human rights abuses in the Xinjiang Uyghur Autonomous Region, where they say Uyghur people are forced to work producing cotton and other goods. Beijing has denied any abuses. Shein says it has a zero tolerance policy for forced labour and child labour in its supply chain. IPO valuation In 2022, the company moved its headquarters from China to Singapore for regulatory, international expansion, and financial reasons – while keeping its supply chains and warehouses in China. Shein does not own or operate any factories, and instead sources its products from 7,000 third-party suppliers in China as well as some factories in other countries like Brazil and Turkey. But its business model of sending products straight from factories to shoppers around the world has been disrupted by the Trump administration ending duty-free access and slapping steep tariffs on e-commerce packages from China. The 'de minimis' exemption allowed e-commerce packages from China worth less than US$800 to enter the US duty-free and helped Shein, Temu, and Amazon Haul sell clothes, gadgets and accessories extremely cheaply. Now, those parcels are subject to a minimum tariff of 30 per cent. Regardless of where Shein lists, its eventual IPO valuation will hinge on the impact of the removal of the de minimis exemption, the sources have said. The US exemption is still in place for goods that are not from China or Hong Kong. The European Union has also proposed changes to its duty exemption on parcels under 150 euros, adding to pressure on the business model. Reuters reported in February that Shein was set to cut its valuation in a potential London listing to around US$50 billion (S$64.5 billion), nearly a quarter less than the US$66 billion valuation it achieved in a US$2 billion private fundraising in 2023. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Bloomberg
4 hours ago
- Business
- Bloomberg
May Global Regulatory Brief: Risk, capital and financial stability
FCA proposes further changes to UK retail investor disclosure framework The Financial Conduct Authority (FCA) has published further proposed changes to the UK's retail investment disclosure regime under a new framework known as the Consumer Composite Investments (CCIs). Context: The FCA has already consulted on certain aspects of the CCI regime as it looks to replace the current PRIIPs and UCITS regimes with a more tailored, UK-specific disclosure model. This second consultation covers draft transitional provisions and amendments to the transaction costs methodology. Key Changes: The proposals set out specific details on several components of the CCI framework, including: Alignment with MiFID Org Regulation: Updates to cost disclosure requirements to ensure consistency across regimes. Revised Transaction Cost Calculations: Removal of 'implicit' costs from the methodology, with a focus on retaining only 'explicit' costs to reduce complexity and improve clarity. Transitional Arrangements: Rules to support firms transitioning from existing requirements to the new CCI regime. Handbook Amendments: Consequential updates across relevant areas of the FCA Handbook to reflect the introduction of the CCI framework. Complaints Handling: Basic requirements introduced for certain unauthorised CCI manufacturers to ensure consumer protections remain in place. Transaction costs in focus: The FCA proposes to retain transaction cost disclosures but simplify their calculation by: Removing implicit transaction costs, which are complex and often misunderstood, Focusing solely on explicit costs, which are more transparent and easier for consumers to understand. Looking ahead: The FCA is consulting on these changes until 28 May 2025 and a Policy Statement consolidating this and earlier consultations is expected in late-2025. Regulatory framework for Digital Insurers in Taiwan Taiwan's Financial Supervisory Commission (FSC) has proposed new rules to lower entry barriers and encourage innovation in the digital insurance industry. Key changes include reduced capital requirements and a broader approach to business models. In more detail: FSC aims to accelerate the digital insurance industry's growth with proposed amendments to seven key insurance regulations. The changes are designed to attract a more diverse range of market participants, including foreign insurers. The term 'pure internet insurance company' will be replaced by 'digital insurer,' allowing for more flexible business models. Capital requirements will be reduced to TWD 500 million for non-life insurers and TWD 1 billion for life insurers. The minimum shareholding requirement for shareholders to report their source of funds will be reduced from 15% to 10%, and the existing requirement that founding shareholders must include financial institutions or fintech professionals will be removed. Additionally, digital insurers will be allowed to operate through both online and physical service locations. What's next: The FSC will establish regular 'Supervisory Clinics' to assist with the establishment of digital insurers. Following public comment on the draft amendments, digital insurers developing innovative products will receive temporary exclusivity to encourage innovation. Foreign insurers will have new provisions to establish digital branches in Taiwan, with specific qualifications and documentation required. The draft amendments are open for public comment for 60 days. SEC Chair sets out plans to improve retail access to private funds The US Securities and Exchange Commission (SEC) Chair Paul Atkins set out his ambition to improve retail investor access to private funds assets through changes to the rules for closed-end funds. In more detail: Atkins is looking to reconsider the current requirements that closed-end funds investing over 15% of their assets in private funds should impose a minimum initial investment requirement of $25,000 and restrict sales to investors that satisfy the accredited investor standard. In its place, Atkins is looking to achieve a 'common sense approach' that gives all investors the ability to gain exposure to private assets while maintaining the necessary investor protections, such as conflicts of interest, illiquidity, and fees. Atkins states that this initiative comes against the backdrop of significant growth in private fund assets and enhanced reporting by both private fund advisers and registered funds.
Forbes
10 hours ago
- Business
- Forbes
U.K. Fintech Starling Bank Says ‘Historic Weaknesses' Caused Profit Drop
Starling Bank's CEO Raman Bhatia speaks at the Fintech Summit in Lisbon, Portugal. (Photo By Ramsey ... More Cardy/Sportsfile for Web Summit via Getty Images) Starling Bank managed to report its fourth consecutive year of profitability and revenue growth on Wednesday, although the fintech's 'legacy matters' weighed heavily on its bottom line. The bank said its pretax profit for the financial year fell to £223 million ($300 million), an almost 26% drop from a year earlier that was largely attributed to a regulatory fine for inadequate financial crime controls and a provision to cover issues with Covid-era loans. Starling was fined £29 million by the Financial Conduct Authority (FCA) in October after it had repeatedly breached an agreed requirement not to open accounts for high-risk customers. The watchdog said at the time that the bank's anti-money laundering controls and sanctions screening systems left the financial system "wide open to criminals." Starling also said it recognized a £28 million provision during the financial year after it voluntarily removed the government guarantee on some of the loans it had issued under the Bounce Back Loan Scheme (BBLS). The BBLS was a government-backed program launched in May 2020 that was aimed at helping small businesses exposed to the economic shock caused by the pandemic. The scheme allowed banks to quickly lend businesses up to £50,000 at low interest rates and with a 100% state guarantee. More than £46 billion in loans had been disbursed by various lenders through the scheme, according to the Department for Business and Trade, but the agency also admitted there had been more than 100,000 cases of loss due to fraud and error. The government's decision to streamline the loan process meant that it had "limited verification and no credit checks on borrowers, which made it vulnerable to fraud and losses," according to the National Audit Office. Starling's revenue growth slowed considerably last year. The bank's turnover rose 4.7% to £714 million, compared to a 51% jump in revenue that Starling posted in its 2024 fiscal year. Starling's Chairman David Sproud characterized the bank's latest results as 'a resilient financial performance amid challenging markets and as we resolved some important legacy matters." Founded in 2014 by veteran banker Anne Boden, Starling has grown rapidly as it aims to take on traditional banks with a mobile-only offering. Starling is one of a pack of digital banks, often described as neobanks or challenger banks, that emerged over the past decade and grabbed market share from legacy lenders. The likes of Starling, Monzo and Revolut have been attracting millions of customers with user-friendly apps and low fees. Starling was granted a banking license by the Bank of England in 2016. Boden stepped down as CEO in 2023, saying at the time she wanted to avoid any potential conflicts of interest with her stake in the fintech. Starling was approached by Shawbrook, another challenger bank, about a possible £5 billion merger earlier this year, Sky News reported in April. The approach was described as "highly preliminary," and did not involve any details about the proposed deal. Starling didn't comment on the prospects of a merger on Wednesday, but it did point to its Engine unit, which sells software to other companies, as a source of future growth for the bank. 'Our ambition is global, and with Engine we are now poised to bring our proprietary technology to a global addressable market of some £100 billon,' Starling CEO Raman Bhatia said. 'In the coming year we will expand Engine's unique Software-as-a Service (SaaS) proposition to new markets in North America and the Middle East.'
