ISLAMABAD — The Federal Board of Revenue (FBR) has suspended further implementation of its much-touted Faceless Customs Assessment (FCA) system after an internal review revealed a 57% increase in container clearance time and a significant drop in revenue collection since its launch.
The system, designed to eliminate direct contact between customs officers and importers in a bid to curb corruption and expedite container processing, is now under scrutiny following the findings of a three-member review committee, which found both performance and design shortcomings in the FCA model.
According to the committee’s final report, clearance times for goods declarations ballooned from an average of 25.6 hours in November 2024 to 40.2 hours by April 2025, with a peak of 46 hours in the same month. Moreover, the percentage of declarations cleared within 48 hours dropped from 84% to 70%, indicating a marked deterioration in efficiency.
In terms of revenue, the FCA system appeared to underperform significantly. Between February and April 2025, the system registered a 2% to 23% decline in customs revenue, as compared to the months prior. The report attributed this shortfall to the reduced ability of assessing officers to add value to declarations — a process that had previously increased duty collections beyond declared values by 13% to 17%.
“The contribution of assessing officers fell from 16% in the July–November period to 13% after FCA was rolled out,” the report stated, adding that the new model has not met its key objective of reducing collusion or enhancing revenue.
The FCA system — launched with high expectations and inaugurated by Prime Minister Shehbaz Sharif in January — was to be gradually implemented nationwide, with the second phase due by June 2025 and the third phase by September. However, the committee has now advised the FBR to suspend further rollout until major structural and performance issues are addressed.
FBR Chairman Rashid Langrial, while speaking before the National Assembly’s Standing Committee on Finance, acknowledged the shortcomings in implementation, including unexpected spikes in review filings and senior-level referrals. He stated that virtual hearings will be introduced from July to address delays caused by appeals.
The report also criticised FCA’s core design concepts — specifically, concealing trader identities from assessing officers and disbanding specialised assessment groups. These measures were previously tested and scrapped nearly two decades ago, and the same concerns still persist.
“Specialised groups build sector-specific knowledge, which strengthens customs control and shortens processing time,” the committee argued, recommending a reassessment of the system’s entire architecture.
In addition to increased dwell times and revenue shortfalls, the review flagged a rise in appeals, lab tests, and referrals to senior officers. Under FCA, reviews rose from 6% to 14%, senior officer referrals increased from 6% to 11%, and lab test referrals doubled. Meanwhile, the proportion of documents called for examination declined from 37% to 21%, suggesting reduced scrutiny but offset by a higher number of subsequent checks.
The committee also pointed out that the overall quality of assessments had deteriorated, as indicated by the growing number of review applications by traders.
Despite early optimism — when clearance time initially dropped from 108 hours to 66 in the first weeks — long-term data now paints a different picture. The report concluded that the FCA’s intended benefits have been neutralised by its operational inefficiencies and design flaws.
The performance review was commissioned by Langrial himself and submitted to FBR management last month. While he maintains that the system wasn’t primarily intended to boost revenue, the evidence suggests otherwise.
FBR officials directly involved in the review — including the Director General of Risk Management System and Member Customs Operations — did not respond to requests for comment.
The committee has strongly recommended that the expansion of the FCA system be paused, pending either a redesign or validation of its effectiveness using more robust datasets.
