Customs: Highest level corruption with overwhelming evidence exposed


(January 09, Colombo, Sri Lanka Guardian) 1. The government and people of this country are well aware of the deterioration of the law and order within the Customs Administration, particularly at the highest levels, causing tremendous losses of revenue to the government.

2. In this background, we, Sri Lanka Independent Government Trade Union Organization – Sri Lanka Customs, consider it is proper to bring to your notice the following, which require appropriate action to bring the wrongdoers at all levels to book, restoring the confidence of committed officers in the Department. We are extremely concerned about the lack of vision and lawlessness prevailing in the Customs that have been the root cause for generating a bad image in the eyes of the government and the general public. It is apparent that the public confidence can only be restored and the government revenue going down the drain could only be saved by addressing these issues decisively.

3. To cut short a lengthy discussion we refer below to, two Customs cases that demonstrate widespread corruption from top to bottom, lawlessness and lack of vision within the department in a nutshell.

Unwarranted interference of ZAM Jazeel, the Duputy DGC and the Legal Advisor in the foreign exchange fraud concerning the Habib Bank

4. This case was detected by a team of officers attached to the ADP Division on 30th December 2010 and the Manager, Habib bank was taken into custody. This is one of the massive foreign exchange frauds ever detected and runs into over billions of rupees where money has been sent out of the country on account of non-existing imports by the bank.

5. When the suspect bank manager was arrested and due to be produced before the Court, ZAM Jazeel interfered and misguided the DGC to release the suspect on the basis that there was no violation concerning the Customs Law. When the investigating officers urged the DGC to give the release order in writing the DGC, who is clearly with no law enforcement experience, declined to do so, claiming that it was a decision made by Jazeel, the Legal Advisor. When the officers insisted that Jazeel’s order should be made in writing Jazeel was summoned to the DGC’s office and was asked to give the release order in writing. Jazeel at this moment went back on his original advice to the DGC and informed the DGC that he needed at least 4 hours to study the matter further and to give his ruling in writing.

6. By this time the suspect had been in the custody for over 20 hours and it was apparent that Jazeel knew the fact that on completion of 24 hours the suspect had to be automatically released, in the absence of a remand order from the Magistrate’s Court. We are of the firm view that it was a deliberate act of betrayal on the part of Jazeel [probably the only legal advisor in the Govt service with no legal qualifications at all] who is under duty to protect the interests of the Customs.

7. This appalling state of affairs cornered the inexperienced DGC who was forced to seek AG’s advice on the matter. Immediately a meeting was arranged on the same day with the AG with the participation of the DGC, Jazeel, and the investigating officers. The AG totally refuted with Jazeel’s stand and advised the suspect to be produced before the Magistrate and put him in the remand custody. This was affected just before the expiry of the mandatory 24 - hour period by the investigating officers.

8. The committed officers of the Customs are flabbergasted as to how this so-called ‘legal advisor’ was allowed to occupy this prestigious, all important post causing tremendous losses in govt revenue running into billions. It is a known fact that Jazeel has no legal qualifications whatsoever yet he is allowed to carry on with no interruption at all. We have managed to trace an important confidential document [copy attached] submitted to DGC by Deputy DGC Dr Neville Goonawardana on 19th May 2010 complaining about the improper conduct of Jazeel and Tharaka Seneviratne, Director of Customs. This document alleges that both these officers are in the act of taking bribes from the fraudster elements.

Jazeel’s interference in the case of Lucky Asia Pvt Ltd [Case No: D/INV/2009/256] & D/INV/2009/286]

9. This case too vividly illustrates Jazeel’s unbecoming conduct as a senior Customs Official who is paid by public funds but serves the interests of revenue fraudsters.

10. The shipments referred to, in this case were seized on 03rd Sep 2009 further to credible information received by the DC [CCED], Dr Neville Gunawardhana on 24th Aug 2009. The confidential report dated 19th May 2010 [copy attached] submitted to the DGC by Dr Goonawardana, alleges that ZAM Jazeel and Tharaka Senevirathna are involved in this organised revenue fraud committed by an influential importer, namely Lucky Asia [Pvt] Ltd. The informant in this case had precisely provided the details of the fraud, even before the arrival of the contraband at the port of Colombo.

Modus Operandi of the fraud

11. The modus operandi adopted in this well executed fraud is, as follows;

12. As per the information provided [copy enclosed] the suspect company and several other companies are given safe passage through Customs by the officers namely ZAM Jazeel Jazeel, Tharaka Senevirathna, SKSH Wijesiri [ASC] and 6 others] to import goods that attract heavy duties, and also duties at unit rate. These officers are alleged to use their office to detain the goods related to the organised fraud, at the time of arrival. This is done to ensure that no other enforcement arm of the Customs would interfere with the shipments imported by these companies. After detaining the goods the importers declare the goods that apply normal duties only and clear the heavy dutiable goods undeclared with the help of Jazeel and other officers.

13. A large number of such shipments had been ‘facilitated’ by these officers over a considerable period of time. The two cases referred to herein are classic examples for the magnitude of the fraud which has been draining the govt revenue in an unprecedented scale. After receiving the information Dr Goonawardana kept the DGC, SACSW Jayathilake, informed of the modus aparandi of the fraud and the alleged connivance of Jazeel and Tharaka Seneviratna with the importers involved. And the further action concerning the fraud was initiated with the approval of the DGC.

14. Seizure notice for the detention of the containers [copy attached] was issued to Ports Authority on the initiative of Dr Goonawardna on 03rd Sep 2009. The ship carrying the containers arrived at the port of Colombo on 09th Sep 2009. Herein it is observed that the importer was making an application on 07th Sep 2009 [even before the arrival of the goods] seeking permission to re-export the goods that draw higher rates of Customs duties. It is apparent that he had made this application direct to Jazeel most likely under Jazeel’s own advice. The importer should have addressed the letter to the DGC who is vested with power to allow re-shipments under the Ordinance. But in this instance Jazeel had acted usurping the powers of the DGC and had allowed the shipment application .

15. After the seizure of the goods, the contents were examined on 28th Sep 2009 and the Customs duty on the heavy duty articles found in the containers was ascertained as follows.

Duty on shoes [at unit rate] Rs 13,500,000.00
Duty on gas lighters [at unit rate] Rs. 5,700,000.00

16. This case also brings to light the improper conduct of DGC, SACSW Jayathilake who was well aware of the serious allegations of wrongdoing against Jazeel, Tharaka Seneviratne and Wijesiri [ASC] and yet allowed all three men to actively engage in the investigation formalities as follows.

17. The examination of the seized goods was carried out by SKSH Wijesiri [ASC] and the examination report was submitted to Tharaka Senewirathna [DDC]. He in turn reported to Jazeel with his recommendations allowing the importer to abandon the goods that attracted heavy duties running into over 19 million rupees and to clear the rest of the consignment. By the time Tharaka Senewirathna made his recommendation on 30th Sep 2009, Jazeel had already given permission to reship the goods referred to in paragraph 15 above. It is quite clear that if not for the detection initiated by Dr Goonawardana, there would not have been any issue of reshipment and the entire shipment would have entered the market defrauding customs duty of over 19 million rupees.

18. It is observed that actions by Jazeel, Tharaka Senewirathna and Wijesiri were quite irregular and unlawful for the following reasons.

1. The decision to allow the importer to abandon the goods that attracted higher rate of duty taken by Tharaka Senewirathna was approved by ZAM Jazeel and the decision to re-export the same was also taken by him on his own with no approval from the DGC.

2. Both these officers had been accused and reported to the DGC by Dr Goonewardana [presently the Director General - Trade and Tariff, Treasury] for their connivance in the very same fraud.

3. Total duty payable on the goods re-shipped was Rs 19,200,000.00 and under the law no such reshipment is permitted unless 1/10 of the total duty is paid [i.e. Rs. 1,920.000.00]. And in this case the re-shipment had been allowed by Jazeel in contravention of the Section 22[2] of the Customs Ordinance.

Adverse effects of the inaction by the DGC SACSW Jayathilake

1. Despite the fact that Dr Goonawardana had urged the DGC SACSW Jayathilake to cause investigations into the matter and to take appropriate action against those officers involved in the fraud the DGC [ref his report to DGC], the DGC SACSW Jayathilake had failed in his duty resulting in the following.

o No proper investigation was carried out to ascertain the total number of shipments imported by the same importer adopting the same process, prior to the intervention by the deputy DGC Dr Goonewardana

o Identification of the goods which were actually imported in the previous occasions

o Identification of the officers involved in the examinations and release of the previous shipments

o Failure to recover at least the 1/10 of the duty on the goods re-shipped under pretext of Section 22 [2] of the Customs Ordinance by ZAM Jazeel

o Failure to establish the total revenue loss incurred due to this mass scale smuggling operation

o Setting up of a bad precedence of not taking any disciplinary action against the officers in authority who were involved in high profile frauds

o Sending a wrong message encouraging wrongdoing

We demand integrity in the Customs Service

We, as a Trade Union, a body devoted to regain the lost image and integrity of the Customs, demand stern action against all the officers involved in the above two cases. We urge them to be subjected to due process under the law setting an example to the entire Customs service.

W.M. R.P Widekoon

Hon General Secretary

Sri Lanka Independent Government Trade Union Organization – Sri Lanka Customs
Copies to: 1. The Secretary to HE the President
2. Commissioner General – Bribery and Corruption Commission
3. The Director – Presidential Task Force
4. Peoples’ watchdog – The Print and Electronic media

Tell a Friend