By Najib Shah
Bengaluru, September 26 (newsin.asia): It had to happen. The surprise is that it happened so soon and in such humongous quantities. The US withdrawal from Afghanistan on 30th August and the subsequent Taliban takeover were portents of things to come. Afghanistan is in shambles. With 54% of the population below the international poverty line of US$ 1.90 per day and a GDP of just above US$ 500, Afghanistan is among the poorest countries. It always had a huge fiscal gap and was wholly dependent on foreign aid -more than 42% of the GDP and nearly three-fourths of the annual budget came from foreign aid.
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Juxtapose this with several factors at play. The IMF and the US have frozen Special Drawing Rights and funds of the Afghanistan Central Bank in the New York Federal reserves. 22 out of the 34 provinces in Afghanistan cultivate poppy, producing in excess of 6300 tonnes of opium. There is a global market of 31 million opioid users and growing. The Taliban has never been known to hesitate to use proceeds from drugs for financing their activities. You have a potent cocktail with immense potential to cause damage to societies.
Exactly 14 days after the Taliban took control, the Directorate of Revenue Intelligence (DRI) had, on 13th September, detained two containers at Mundra Port. The containers had come from Kandahar via the Iranian port of Bandar Abbas. Kandahar is the second-largest city of Afghanistan. Located in the south of the country, it is, as per the Afghanistan Opium Survey 2020 conducted by the UNODC, among the largest producers of opium with more than 6600 ha. under opium. Bandar Abbas located in the Strait of Hormuz at a distance of 1417 kms from Kandahar is Iran's busiest port. Though marginally further away from Chabahar port, it obviously is a port of choice because it handles more traffic. Bandar Abbas is at a distance of about 850 nautical miles from Mundra. A typical vessel would take about four days to complete the voyage.
The consignment detained by the DRI was declared as containing semi-processed talc stones. Talc is a hydrous magnesium silicate material. It is an important ingredient for making ceramics, paint, paper, plastics, rubber, insecticides, apart from talcum powder and soapstone.
Detailed examination of the two containers spread over several days led to the detection and seizure of 2988 kg of heroin on 17.09.21 and 19.09.21. The heroin was concealed in the lower layer of jumbo bags over which was placed talc stones.
Detection of contraband in containers is extremely challenging. India handles more than 9 million TEU's (twenty equivalent units). Mundra, the biggest container port in the country, alone handles more than 5 million TEU's. A signatory to the WTO Trade Facilitation Agreement, India has, like most countries, adopted self-assessment, meaning thereby the importer is expected to declare correctly the goods being imported.“Trust but verify” only in cases of suspicion or on the basis of risk assessment, is the mantra.
Thus, Aashi Trading Company, the importer in this case declared the consignment to be semi-processed talc stones. With the emphasis on speedy clearance, a legitimate consignment would have typically been cleared within 3 days, which is what the owner couple of the Vijayawada-based Aashi Trading Company would have hoped for.
But the DRI had obviously smelt something fishy. Based on intelligence and outstanding data analytics, the containers were detained and examined resulting in by far the biggest seizure of drugs by Indian enforcement agencies.
The DRI is India's premier customs investigative agency and has an outstanding track record of seizures of a wide range of contraband-from narcotics and psychotropic substances, to gold and diamonds, to detections of evasion of duty.
Follow up investigations into the seizure led to the recovery of 16.1 kg of heroin from a godown in Delhi;10.2 kg of cocaine and 11 kg of heroin from a residence in Noida. A total of 9 persons have been arrested thus far – four Afghan nationals, one Uzbek national, and four Indians, including the importers from Chennai. The last arrest was of a man from Coimbatore, an Indian national, said to be the person coordinating with the Iranian party.
The sheer brazenness of the attempt to smuggle this large quantity does throw disturbing questions. Is it that vigilance is lax in Mundra port? Or is it that the smugglers were seeking to take advantage of the high volume of traffic being handled in Mundra Port? The Adani Group which runs the Mundra Port, has issued a statement denying any involvement with the seizure.
Mundra port has container scanners. It is not possible to scan all containers coming to a port. Scanning is based on an assessment of risk. To physically open a twenty-foot or a forty-foot container and examine all consignments is neither possible nor advisable. It would lead to delays and corruption. Thus, the examination of containers has to be intelligence-based and selective. Smugglers try to capitalize on this fact and take their chances.
A smuggling operation of this magnitude calls for close coordination between the suppler in Kandahar, the transhipment agent in Bandar Abbas, the landing agent in Mundra, the importers based in Vijayawada and Chennai, the recipients of the contraband who could be based either in India or abroad, the wholesalers and retailers involved in pushing the drugs into the market and the conduit through which the proceeds would be sent back to Kandahar.
While India does have a problem of drugs, it is also a popular transit route for drugs. Consignments of cargo coming from India are subject to lesser checks than say from Pakistan, Afghanistan or Iran. The bigger markets are in the West. So, it is not known if the contraband was indeed meant for India or was meant to be re-exported to some other country concealed in another consignment of legitimate cargo.
The DRI press release sensibly does not mention the value of the seizure. This tends to be misleading since the value will depend on multiple factors including the destination. Suffice it to say that it obviously is of very high value.
That raises the next question as to how these proceeds were to be used. Drug proceeds finance a whole host of criminal and nefarious activities. The DRI is a professional investigative agency and will obviously seek to get to the bottom of this.
The seizure is of immense significance for multiple reasons. Firstly, it is a reflection of the nefarious designs of the Taliban and their use of the sea route. Secondly, it exposes the vulnerability of ports. Thirdly, it stresses the need for vigil. Fourthly it is a reflection of the ability of Indian agencies to detect a needle from a haystack.
Given the turmoil in Afghanistan, there are bound to be more attempts to smuggle in drugs. All agencies will have their task cut out.
(Najib Shah is a retired Chairman of the Indian Central Board of Indirect Taxes & Customs)
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Mundra port Seizures
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