NAB KP launches investigation into sugar export to Afghanistan
NAB says inquiry was launched after it received a complaint stating that export had caused loss to national exchequer
May 24, 2021
PESHAWAR: The National Accountability Bureau’s (NAB) Khyber Pakhtunkhwa chapter announced that it has launched an investigation into the export of sugar to Afghanistan.
A statement issued by the accountability watchdog said that the inquiry was launched after NAB received a complaint stating that the exports caused a loss to the national exchequer.
The statement said that the NAB has directed customs to submit details of the case by May 27. The details that they have summoned included permits of the sugar mills, declaration form, loading bills, customs receipts and all related records.
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NAB has also sought details of sugar trucks sent to Afghanistan to assess the damage caused to the national exchequer.
This is the second investigation being carried out by a government body.
Last year, the Federal Investigation Agency (FIA) had constituted an 11-member inquiry team to investigate sugar mills based on the findings of the Sugar Inquiry Commission report, days after the government gave the go-ahead to the Federal Board of Revenue (FBR), Securities and Exchange Commission of Pakistan (SECP) and FIA to launch an investigation.
The 11-member team, which was being headed by Director FIA Islamabad Zone Dr Moeen Masood and comprising Customs, FBR and State Bank of Pakistan (SBP) representatives, will investigate how sugar was being allegedly illegally exported to Afghanistan. It was conducting a probe into money laundering allegations in the report.
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The government on June 23, 2020 had directed the departments to launch an investigation. Subsequently, it had ordered that a report on the investigation be submitted within 90 days.
Sugar Inquiry Commission report
The report mentioned in depth how the amount of sugar exported to Afghanistan is routinely inflated to show as if 75 tonnes of the commodity were being exported per truck.
However, this is barely possible, given that the maximum capacity of a truck, even when overloaded, does not exceed 30 tonnes.
The scam also seemingly has another purpose: laundering money. If sugar is being exported to Afghanistan, the payment should also be coming in from the same country.
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However, it was found by the commission that many sugar mill owners were receiving telegraphic transfers for payments for sugar sold to Afghanistan from the US and Dubai, therefore seemingly whitening money and earning dollars at the same time.
Another important finding highlighted in the report was that sugar mills paid an estimated Rs22bn in taxes to the Government of Pakistan, but out of that total amount, Rs12bn was reclaimed in rebates. Hence, the net contribution was close to around Rs10bn.
