The discovery of the recent fraud on shoes has brought the Customs Department very much in the limelight. That 41 containers, totalising some Rs 90 millions in terms of duties, have been fraudulently cleared over the last three years, clearly indicates connivance or unbelieving gross negligence within the Department itself.

Although I am not privy to the intricacies of the fraud itself, or have any way of knowing how the enquiry is being conducted, I can imagine the method used by the conspirators.

It must essentially be based on declaring highly dutiable items as low-duty, or duty-free items, or as items exempted from duty ? in the present case as items destined for the Export Processing Zone (EPZ) sector, and therefore exempted from duty. This method of fraud has been used time and again; and nobody at the Customs can feign ignorance. The most notorious case (involving more than

Rs 30 millions in terms of duties) was, what was called, the Shanto Case, where heavy-duty electronic goods were entered as low-duty or zero rated items; and the subsequent investigation of which saw the interdiction of 13 Customs Officers, including, incidently, one of the two Officers cited in the present case. (They say modus operandi of a person never varies - maybe it is true !)

This type of fraud pre-requires :

1. A good knowledge of the Customs Tariff - to know exactly what low or zero rated or duty-exempted ?cover? to use in lieu of the actual heavy-duty goods or the actual prohibited drugs or arms & ammunitions;

2. Connivance of the shipper - to prepare and forward false documents;

3. Possible connivance of the Authorities at the Port of shipment - otherwise how to explain the clearance for export of goods other than those appearing on the ?frabricated? Bill of Lading or Airway Bill, and on the Ship?s or Aircraft?s Manifest;

4. And, above all, sine qua non connivance within our local Customs.

It is only after having ascertained himself of all these pre-requirements, that a potential defrauder would embark on such a high-risk operation. Contrary to most petty smuggling, this type of fraud demands careful planning and preparation. Nobody will gamble his millions of rupees without eliminating or, at least, reducing to a minimum all risks of seizure by the Customs.

To ascertain this ?help? from within the Customs, our defrauder has to graisse la patte or con Officers at the following chain-stages :

a) Manifest Section ? where the Bill of Entry ? with all attached documents, including Bill of Lading, is deposited, compared with the entry in the Manifest, and cleared for the next stage. Any discrepancy in the description of the goods, its weight and measurements normally means rejection of the Bill;

b) Checking Section ? where every single entry on the Bill is thoroughly scrutinized : vessel, Report Number, Importer?s Names,VAT No, description of goods, its weight & measurements, its FOB & CIF values, freight & insurance charges, Tariff classification, rates of duties, mathematical calculations, necessary Permits-Authorisations from other Ministries-Deparments, etc. It is only very rarely that a false or wrong escapes the scrutiny of the experienced Officers there;

c) Valuation Branch ? Under and over valuation is detected there. Years of comparative value-datas are there to assess properly the value of any given article;

d) EPZ Section ? All goods imported by the EPZ Sector have to get clearance from this Section. An EPZ Enterprise is allowed duty-exemption only on goods that have ministerial approval as being essential for the running of that Enterprise ? like raw materials and machineries, and other items in line with the activities of that particular Enterprise. Each and every EPZ Company has its own approved particular Sceduled List of such goods. For obvious National Economic reasons, goods consigned to the EPZ Sector are given priority-clearance considerations; and are not subjected to undue delay. We have a top-level and experienced Officer who gives a final scutiny to EPZ Bills of Entry; and he decides which could be released without physical verification of the goods entered;

e) Examining Branch ? where physical verification is carried out. Description, weight, measurements, quantity, nature of the actual item have to tally with the entries on the Bill.

Prior to this final physical verification, it can be seen, there are enough ?papers-documents? checks to detect any wrong or false entry, or any attempt to commit a fraud. It is next to impossible for any such fraud to be committed without the ferme li-zieux of, at least, some of the Customs Officers at the different check-hurdles.

To evoke the ?practice? of Clearance Without Verification to explain the Ramboro case is only a desperate attempt by some with interest to hide the ugly realities. This otherwise normal international ?practice? has simply been cunningly taken advantage of by the fraud-conspirators. Even if this fraud was master-minded by somebody not physically present at the time of the commission of its latest episode, it could not have been carried out without the complicity of some officers present throughout the processing of the Bill. Otherwise, how do we explain that :

a) no Officer at the different check-stages discovered the discrepancy in the weight of a 20 tons container and the less than 10 tons entry on the Bill of Lading ?

b) nobody at the EPZ Section saw it as strange that Cartons and Boxes was supposedly importing textile piece goods, an item totally incompatible with its line of business; and which is not found on its List of Scheduled Goods? Even the most stupid of juccal Officers at this Branch could hardly have failed to notice such a glaring fact.

c) a container could ?mysteriously? leave the port area? No container, consigned to EPZ or not, can leave this area without the compulsory gate-pass. The Port Authorities only issue the pass when the necessary clearance from Customs has been obtained.

To come and pretend surprise that such a fraud could have occurred or to pretend horror that such fraudulent methods could have been used to enter drugs and arms on our soil, is pure hypocrisy. Everybody knows that this has been going on for years and years. The lot of any Officer, honest and daring enough to evoke the existence of such frauds, has always been his near-unanimous black-listing by the whole Department (including the whole Administration), and a prompt transfer to some obscure, marginalized post from where he could do no harm. Apart from the Shanto case evoked above, I can remember a similar case dating some 15 years ago : 7 ship-consignments of partitionings falling within the description of ?Structure Parts? in the Tariff Nomenclature, and drawing 100% duty, was entered and cleared as raw Aliminium Bars and Wood Boards carrying 2.5% and 5% duties respectively. One of the tallest building in Port Louis has all its partitionings built on a more than Rs13 millions fraud. Needless to say, the Officer who discovered the fraud was immediately transferred; and a convenient fire broke out at the importer?s office reducing to ash all incriminating documentary evidence.

Nobody at the Customs has to be a genious to reconstruct the method of operation of the Ramboro fraud. Everybody knows who are the mangeurs, and who are the honest few Officers. What then is the use of any Departmental enquiry? What further could be revealed? Even if it does come out with some revelations, what would happen? Interdict a few more Officers; bring them to Court? Only to end up, after long, tedious hearings, with insufficient evidence to secure conviction ? (In the annals of our courts, no Customs Officer, charged for complicity in a fraud, has ever ended up in jail). Then what? He would get reinstated, and merrily go back to his former corrupt practices. There are dozens of such past cases to illustrate this. What is the use of enquiries and of (in exceptional cases) cosmetic punishments, if the whole set-up, the whole corrupt mentality remains the same? If we really want une douane saine et propre, this is where the changes should occur; this is where the reform should start.

But the Reform à la Canadienne seems to credit other priorities. From some of the names among his chosen elite investigators, it certainly seems that Mr Cunningham must be a staunch believer in the ?to set a thief to catch a thief? credo. Maybe, after all, his Reform Plan is an ingenious making negatives-become-positives piece of work that is beyond the comprehension of a mere mortal like me.

Jagdish Seebaruth

Contrary to most petty smuggling, this type of fraud demands careful planning. Nobody will gamble his millions of rupees without eliminating or, at least, reducing to a minimum all risks of seizure by the Customs.