Islamabad, July 9, 2024 – In a stunning revelation, Pakistan Customs has launched a comprehensive investigation into a significant case of tax and duty evasion involving AHG Flavours ( Brand,baskin Robin Pakistan ) Pvt. Ltd. and Interlink Corporation. The Director General of Post Clearance Audit (PCA) has issued a show cause notice, citing an alarming PKR 150 million in evaded duties and taxes. The case, registered under Case No. PCA/6700/2022/Audit/1090, has sent shockwaves through the business and regulatory communities.
The Investigation Unfolds
The investigation focuses on the verification of value and sales invoices issued by Dunkin Brands International to AHG Flavours ( Brand,baskin Robin Pakistan ). To corroborate these documents, PCA wrote letters to the Consul General of Pakistan in Dubai and Houston on July 10, 2023, requesting them to engage with Baskin Robbins offices for verification. Baskin Robbins, a well-known ice cream brand, is a subsidiary of Dunkin Brands, Inc., which is itself part of Inspire Brands, Inc., headquartered in Atlanta, Georgia.
Diplomatic Hurdles and Non-Cooperation
The Consul General in Dubai approached Baskin Robbins executives, Caner Gursoy and John Varughese, who unequivocally refused to cooperate with the Pakistan Embassy’s inquiry. This refusal has raised serious questions about the transparency and compliance of multinational corporations operating in multiple jurisdictions.
On the other hand, the Consul General in Houston declined to contact Baskin Robbins executives, citing jurisdictional limitations. Despite multiple reminders emphasizing that the inquiry fell within his jurisdiction since Dunkin Brands is now under Inspire Brands, he insisted on receiving a fresh request letter addressed to Inspire Brands in Atlanta.
AHG Flavours ( Brand,baskin Robin Pakistan ) and Interlink Corporation: The Modus Operandi
1. Master Licensee and Front Man:
– AHG Flavours ( Brand,baskin Robin Pakistan ) serves as the master licensee for Baskin Robbins in Pakistan.
– Interlink Corporation acts as a front for AHG Flavours ( Brand,baskin Robin Pakistan ), facilitating customs duty evasion and money laundering through intricate schemes.
2. *Interlink Trading FZE*:
– A UAE-based subsidiary of Interlink Corporation, it is allegedly used for generating fake invoices and laundering money.
– The practice involves diverting bills of lading and other documents to Interlink Trading FZE, which then creates under-valued invoices.
3. *Fake and Tampered Invoices*:
– Original invoices from Baskin Robbins show significantly higher shipment values.
– Fake invoices produced by Interlink Trading FZE depict much lower values, leading to substantial under-invoicing.
*Evidence and Financial Impact*
Detailed evidence presented includes genuine invoices from Baskin Robbins for shipments made to AHG Flavours ( Brand,baskin Robin Pakistan ), alongside tampered invoices from Interlink Trading FZE. For instance:
– Genuine invoice values:
– US $93,045.95
– US $93,154.02
– US $87,278.27
– Tampered invoice values:
– US $62,984.08
– US $64,486.90
– US $58,771.28
These discrepancies have led to the evasion of substantial customs duties and taxes. The comparative analysis of shipping documentation reveals that when Interlink Corporation became the clearing agent, the valuation of goods dropped dramatically, facilitating tax evasion.
*Illegal Financial Channels*
AHG Flavours ( Brand,baskin Robin Pakistan ) and Interlink Corporation allegedly use illegal financial channels like Hawala/Hundi and external import financing (EIFs) to transfer undeclared funds abroad. This illegal movement of money poses a significant risk to Pakistan’s economic integrity and compliance with international financial standards.
*Call for Immediate Action*
Abdul Qayyum Hafeez, the complainant, has urged PCA to take immediate actions:
1. *Engage International Authorities*:
– Request the Federal Board of Revenue (FBR) to liaise with the Federal Customs Authority of the UAE and U.S. Customs and Border Protection for document verification.
2. *Revise Request to Houston Consul General*:
– Send a revised letter with the updated contact address of Inspire Brands’ headquarters in Atlanta.
*Broader Implications*
This case not only underscores the intricate schemes used by corporations to evade taxes but also highlights the challenges faced by regulatory bodies in enforcing compliance across borders. The alleged evasion by AHG Flavours ( Brand,baskin Robin Pakistan ) and Interlink Corporation has resulted in a loss of over PKR 1 billion from 2018 to 2021. Such activities tarnish Pakistan’s reputation, particularly after its recent removal from the FATF grey list.
*Conclusion*
The investigation into AHG Flavours ( Brand,baskin Robin Pakistan ) and Interlink Corporation is a critical test for Pakistan Customs and the broader regulatory framework. As the case unfolds, stringent legal action is anticipated to safeguard national interests and uphold the integrity of Pakistan’s financial system. The international community will be closely watching how Pakistan addresses these allegations to ensure compliance and transparency in its business practices.
