The Challenge

Fraudulent shippers often utilize their longstanding core business as an effective front to conceal the actual goods being shipped. With limited tools at hand, Customs Agencies detecting shipments that historically transfer one specific good become less likely to suspect the transfer of other alternative goods as time progresses. It’s a detection vulnerability that fraudulent shippers have long capitalized upon.

The Case:

Misdeclaration of Goods

In 2022, a Southeast Asian country embarked on a strategy focusing on preventative revenue leakage. With Publican’s AI- driven capabilities, they were able to mitigate revenue loss by preemptively identifying which shipments coming in may be fraudulent.
Publican detected that a shipment coming in from New Delhi declaring poppy seeds contained rice. This obligated further investigation, particularly since poppy seeds carry an exponentially lower tariff rate than rice.

How did Publican uncover this?

Analyzing the shipper’s scope of business

Although poppy seeds coincide with the consignee’s business history, the Indian shipper’s business scope is rice only and has no recorded history of shipping poppy seeds.

Thoroughly checking the shipper’s background

According to a judgment issued by an Indian court in October 2016, the executives of the shipping company were involved in tax evasion, including the utilization of several tax havens. Another article found by Publican’s system provides a separate tax-related misconduct charge filed by the authorities.

The shipment’s weight declaration

The price of the poppy seeds declared of 0.88 USD per KG was abnormally low compared to the average 2.49 USD per KG usually declared for poppy seeds based on HS code historical trade statistics.

Why does this matter? 
Because, in fact, 0.88 USD per KG is a price that aligns with rice according
to those same statistics.

Findings and Conclusions :

Publican’s system automatically flagged the shipment as high risk based on the shipper’s history of tax-related misconduct, inconsistencies in the shipper’s scope of business, and the shipment’s abnormal weight declaration. Authorities investigated the shipment and found consistent misdeclarations to evade the required tariffs.

For borders processing thousands of shipments every year, Publican’s solution enables customs agencies to take back control at scale and retrieve significant revenues lost through the misdeclaration of goods.