The Federal Tax Ombudsman (FTO) has called on the Federal Board of Revenue (FBR) to conduct a comprehensive three-year nationwide audit of all import and export cargo sheds operated by M/s Gerry’s Dnata. This directive follows shocking revelations of an alleged large-scale cargo theft and duty-evasion network uncovered at Karachi’s Jinnah International Airport (JIAP).
In an order issued on Tuesday, the FTO instructed the Member Customs (Operations) to direct the Collector of Customs (Airports), JIAP, Karachi, to immediately initiate proceedings to suspend Gerry’s Dnata’s cargo shed license. The process must begin with a Show Cause Notice (SCN) issued to the company’s CEO, followed by an opportunity for a formal hearing. The license may ultimately be cancelled if the allegations are substantiated after the audit and investigative process.
The recommendations were issued under Sections 29 and 30 of the Federal Tax Ombudsman Ordinance, 2000. The FTO also ordered the Collector of Customs to investigate the involvement of Customs personnel who may have facilitated the operation. After a fact-finding inquiry and hearing, the case must be referred to the FBR for action under the Efficiency and Discipline (E&D) Rules, 2020.
Billions Lost in Systematic Theft
The probe was initiated suo motu under Section 9(1) of the FTO Ordinance following an October 2, 2025 news report. The story alleged that a UAE-based cargo handler at JIAP was involved in removing high-value imported electronics worth billions of rupees from Customs custody over the last 18 months.
According to the investigation, the scheme was executed in collusion with Customs officials. At least six consignments were allegedly removed from the cargo shed since March 2024 without payment of duties and taxes, using forged and recycled Goods Declarations (GDs). Fraudsters reportedly reused machine numbers from previously cleared pharmaceutical GDs processed by a different operator. Many of the importers were later found to be fake entities with fabricated business details.
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FTO: Customs Collusion “Inevitable”
While Customs authorities have made arrests and uncovered key elements of the fraud, the FTO noted that the scale and duration of the operation make it impossible for such activities to have occurred without the involvement of Customs personnel stationed at the facility.
As a licensed terminal operator under the Customs Act, 1969 and Customs Rules 548–556E, Gerry’s Dnata is legally obligated to follow all Customs protocols. The FTO stated that Customs’ repeated failure to prevent such violations constitutes serious maladministration. A similar case involving the theft of mobile phones was previously reported, yet no significant action was taken against Customs staff.
The recurring nature of these incidents, coupled with extensive revenue losses and weak institutional response, signals a systemic collapse of oversight—falling within the definition of maladministration under Section 2(3)(i) and (ii) of the FTO Ordinance.
NetMag Pakistan has contacted Gerry’s Dnata for comment and will update the story when a response is received.
