ISLAMABAD – The Federal Tax Ombudsman (FTO) has asked the Federal Board of Revenue (FBR) to initiate an extensive three-year audit of all import and export operations managed by Gerry’s Dnata, following a major cargo fraud scandal at Karachi’s Jinnah International Airport (JIAP), according to reports.
Gerry’s dnata provides an extensive array of Ground Handling and Cargo Handling services to both scheduled and non-scheduled airlines across Pakistan.
A day earlier, the FTO issued a directive calling on the Member Customs (Operations) to direct the Collector of Customs at JIAP to promptly begin legal proceedings to suspend Gerry’s Dnata’s cargo shed license.
This action comes after the company was issued a Show Cause Notice (SCN), and an opportunity for a hearing was granted to its CEO. The suspension could be followed by the permanent revocation of their license if evidence of wrongdoing is confirmed after the audit and investigation.
The decision stems from a suo motu investigation, launched after an October 2, 2025, media report uncovered allegations of a widespread cargo theft and duty evasion racket orchestrated by a UAE-based cargo operator.
According to the report, the scheme involved the illegal removal of high-value imported goods from customs custody over the course of 18 months, without the payment of necessary duties and taxes.
The FTO’s order also includes a comprehensive probe into the potential involvement of Customs officials in the scheme. The investigation is expected to identify how Customs staff at the airport may have collaborated in facilitating the fraudulent activities. The case will be referred to the FBR for disciplinary action under the relevant rules after a thorough inquiry.
Investigations suggest that at least six consignments of costly electronics, including mobile phones, were improperly removed from Gerry’s Dnata’s sheds since March 2024. These goods were cleared using fraudulent Goods Declarations (GDs) that reused machine numbers from previous clearances involving other operators, most of which were linked to fake importing entities.
While Customs authorities have arrested a number of suspects and seized goods tied to the fraud, the FTO expressed concerns that such large-scale thefts would have been impossible without the involvement of corrupt Customs personnel. The Ombudsman criticized the Customs Department for failing to prevent repeated violations, stating that the ongoing misconduct represents systemic dysfunction and maladministration.
As a licensed terminal operator under the Customs Act of 1969, Gerry’s Dnata is required to comply with all relevant customs procedures. The FTO has deemed the repeated failures to prevent such activities as a clear case of maladministration, adding that the lack of effective institutional response highlights deep flaws in the system.
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