LAHORE: The Institute of Chartered Accountants of Pakistan (ICAP) has called on the federal government to implement a stringent and technology-driven customs regime in the upcoming budget 2025–26, warning that weak enforcement could compromise the integrity of the China-Pakistan Economic Corridor (CPEC).
In its latest policy proposal, ICAP outlined a series of reforms to protect CPEC from organized smuggling networks, emphasizing the need for digital customs integration, container monitoring, and intergovernmental data sharing with China.
While acknowledging the transformative potential of CPEC for trade, infrastructure, and bilateral relations, ICAP cautioned that its benefits could be undermined by unregulated cargo movement and customs evasion. The institute drew a parallel to the Afghan Transit Trade, which has historically suffered from mismanagement and smuggling, warning that CPEC could face a similar fate without robust safeguards.
“CPEC must not become a repeat of the Afghan Transit Trade,” ICAP said in its statement, adding that poor oversight could derail strategic goals and economic development.
Key proposals for Customs Overhaul
ICAP’s proposal revolves around five core enforcement mechanisms:
Scanning at Entry Points: Mandatory scanning of all CPEC-bound cargo at major ports and border crossings to ensure transparency and prevent concealment.
Bilateral Customs Data Sharing: Full integration of Chinese trade data with Pakistan’s Web-Based One Customs (WeBOC) system, enabling real-time access to shipping records and transactional monitoring.
Verified Origin and Routing Controls: Only goods with certified Chinese origin and complete documentation would be allowed for import. Surveillance offices spaced every 200 km on trade routes would ensure compliance.
Digital Vehicle Tracking: Mandatory GPS-based e-tagging of cargo vehicles to provide live updates on transit status, allowing customs officials to detect anomalies instantly.
Sealed Container Protocol: All containers should be sealed by customs at the point of entry and de-sealed only at the exit point to prevent mid-route tampering or offloading.
ICAP also recommends establishing a Real-Time Electronic Data Interchange (EDI) system between Pakistani and Chinese customs departments to streamline cross-border shipment validation. Additionally, to tighten controls on imports, ICAP suggests that Pakistani authorities demand verifiable payment evidence and impose bank guarantees equivalent to expected taxes before clearing any CPEC cargo.
ICAP warned that without effective customs enforcement, local industries may suffer from an influx of untaxed Chinese goods. The potential abuse of free and special economic zones, ICAP noted, could jeopardize industrial competitiveness and shrink government revenues.
With CPEC positioned as a cornerstone of Pakistan’s economic strategy, ICAP stressed the urgent need for ironclad enforcement mechanisms to ensure the project’s integrity and credibility. The institute concluded that Pakistan cannot afford lax oversight, and that only a modern, digital customs infrastructure can shield CPEC from the risks of systemic abuse.
