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International Customs Day: Gwadar Port & Pakistan Customs

 27 Jan 2021

TEXT: Modern concept of development is that the economic interdependence among developed and under developed nations increases integration, trade promotion, and many related activities such as investment flow, transfer of technology, building of new economic infrastructure, new job opportunities and industrial development takes place. The development of Gwadar Port, flagship project of multi-billion dollars project namely China Pakistan Economic Corridor (CPEC), is the classic example of this concept. The geographical proximity and the opportunity to develop the least developed parts of China and Pakistan allow them to foster economic interdependence for mutual economic benefits with the development of sustainable supply chain from Indian ocean to landlocked western China and vice versa. This development will not only benefit the least developed areas of two countries but also benefit the whole region especially the landlocked Central Asian Republics (CARs) and Afghanistan.

Historically, Gwadar was a small fishing town with little else to offer to general public. Situated on the mouth of the Gulf of Oman, Gwadar remained part of the Omani Sultanate until September 1958. The potential of Gwadar and surrounding areas could not be realized in the past due to lack of knowledge about the benefits of the deep seaport, political will and more importantly lack of resources. Apart from various attempts to develop Gwadar as a port, the serious effort was made in 2001 when Pakistan engaged Chinese firm for the first time in development of this Port. Chinese firm completed phase-I of the port by December 2005. In 2013, Pakistan engaged another Chinese firm again and with the agreement of all parties, the government ended its contract with the PSA and handed over control of the port to the China Overseas Port Holding Company Ltd (COPHCL) on lease for 40 years. Currently, COPHCL is managing the operations of port through its subsidiary company Gwadar International Terminal Ltd (GITL) and development and management of free zone areas through another subsidiary Gwadar Free Zone Company (GFZ). The terminal has quay line of 602 meters with three (03) commercial berths and one (01) service berth. All the required equipment of international standards to handle all types of cargo is available at the port. There is an independent terminal, Al-Qasim Terminal, constructed to handle LPG cargo.

Potential benefits of Gwadar Port

There are a number of advantages of Gwadar port including strategic, geographic and economic advantages. It provides a direct and shortest route to China, Afghanistan, and Central Asia. Gwadar port has benefits not only for Pakistan but for the region at large. Gwadar port has largely developed a trade route for China’s landlocked western region. This route will allow its goods and oil transport through ships to the Persian Gulf to circumvent the ‘choke point’ at the Straits of Malacca, saving a long and expensive journey around India and Southeast Asia before reaching the eastern coast of China. Gwadar has the potential to act as a transshipment hub for Africa, the Middle East and open up access to these areas for landlocked regions in the Central Asian Republics (CARs) and East Asia. With the development of Gwadar port, all trade to and from CARs will adopt the shortest available route via Gwadar. This port has a huge potential to handle the transit trade to Afghanistan for which the most cost-effective transit route is through Pakistan.

Pakistan Customs – Milestones for Operationalization of Gwadar Port

The presence of Pakistan Customs is there in the region since long even before the idea of the port. Customs used to issue Port clearance (PC) certificates to launches fishing in the international waters. This region was manned by Quetta Collectorate till 2011. Without effective presence of workforce of Pakistan Customs, the working of the port and Free Zones was not possible. Hence, keeping in view the future prospects of Gwadar port and CPEC projects, a separate dedicated Collectorate was established in 2011. The limits of Gwadar port area and Gwadar Free Zone area were defined and regularized through a notification by FBR on 3rd May, 2018. Currently, a dedicated Directorate of Transit Trade, Gwadar has also been notified and the existing staff of the Collectorate has been given the additional duties to look after the work of transit as well to smoothen the transit functioning of the port. In September, 2019 WeBOC system was rolled-out successfully at Gwadar port by Pakistan Customs. There was a batch feeding Goods Declaration (GD) system till 2017 which was replaced by One-Customs. Following are the list of the milestones which Pakistan Customs have achieved at Gwadar Port;

• Automated Customs clearance system, WeBOC, is fully operational at port since 2019,

• An exclusive special classification provision 9917 was provided by Pakistan Customs to simplify the procedures for the imports at Gwadar under exemptions regimes,

• Four ships of Afghan Transit Trade in Bulk have been handled successfully at Gwadar port,

• In helping the Gwadar port to become a transshipment hub, FBR has notified the rules for the trade under International Transshipment (IT) regime. Pakistan Customs have handled eight (08) containers on IT destined to China on trial basis. The WeBOC module of IT is under development stages,

• To encourage the coastal trade to and from Gwadar port, the rules for coastal trade has been notified. The formation of modalities to handle such cargo are also underway,

• The Customs Administrations of Pakistan and China are in consultation under “Green Customs Initiative” for hassle-free clearance of perishable goods from Gwadar Port to Chinese Ports. All the checks required at Chinese port shall be made at Gwadar in presence of Chinese Vet. Experts, Quarantine Department etc. Those consignments shall be cleared immediately after arrival at Chinese Port. There is a huge export potential of meat after clearance from Foot & Mouth Disease under this arrangement.

COVID-19 and Gwadar Port Operations

Despite the ongoing Covid-19 and many other challenges, the Gwadar International Terminals have made significant developments during 2020. The management of the terminals (GITL) proudly mentions their remarkable achievements during this year. This includes the first international transshipment of bulk and containerized cargo, Afghan transit trade of containerized and bulk cargo, LPG imports. All remarkable achievements during Covid-19 were made possible due to active support of Pakistan Customs administrations at Gwadar Port who remained available 24/7 for speedy clearance and helping sustainable supply chain to major CPEC projects. Global Times reported that Pakistan’s Gwadar Port, a major project under the Belt and Road Initiative (BRI), is functioning well despite the COVID-19 pandemic. During the COVID pandemic Gwadar Customs along with GITL has completely followed the SOPs but kept the supply line open. Thus in to followed the slogan of WCO for this year “Customs bolstering Recovery, Renewal and Resilience for a sustainable supply chain”. A number of containerized ships carrying construction materials arrived at the port during pandemic, offloading a dozen truckloads of goods, including steel wire, needed by the airport project in the region. However, the pandemic could not hamper operations and import clearances rather the port operations were handled more effectively by GITL and Pakistan Customs for timely delivery of inputs for various projects in Gwadar. It is not only Gwadar port but supply lines were kept open for essentials through Iran borders for the local population. It is important to mention that Customs officers and officials of MCC Gwadar succumbed to death during their posting at borders in the initial phase of Corona. Despite of this, our commitment to safe, secure and active economic frontiers of the country is un-shattered.


Copyright Business Recorder, 2021


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