The Parliamentary Committee on Ways and Means has mandated the deployment of an Artificial Intelligence-driven application to combat customs corruption.This high-tech tool is designed to thwart the nefarious schemes of Customs officials who collude with importers and exporters to manipulate invoices, draining billions of rupees from the national coffers, parliament sources said.

The directive, issued by Committee Chairman Patali Champika Ranawaka, came during a probing session at the Parliamentary complex on Thursday.

Revelations from the investigation exposed a web of deceit, with officials clandestinely engaging in under-invoicing, over-invoicing, and ghost invoicing for hefty bribes.

Ranawaka said that in under-invoicing the exporters understate the value of their goods to evade taxes and duties. In over-invoicing the importers overstate prices to siphon US dollars abroad as official payments. Ghost invoicing also drains foreign exchange reserves, a fraudulent tactic where importers submit fabricated invoices to customs authorities. This deceitful practice includes generating invoices for non-existent goods or declaring deflated values to reduce duty payments, constituting a form of customs fraud.

Ranawaka said that mis-invoicing not only defrauds government revenues but also serves as a conduit for money laundering. The Global Financial Integrity Report unveils an annual hemorrhage of around four billion US dollars due to mis-invoicing. It is a favored tactic among money launderers.

Ranawaka said that there was an urgent need to integrate banking systems with the Customs Department’s ASYCUDA system, (Automated Systems for Customs Data) which is a computerized customs management system which handles manifest and customs declarations, accounting procedures, transit & suspense procedures and generate trade data that can be used for statistical economic analysis.

Customs officials were instructed to enlist local software developers to roll out the AI-powered application for enhanced scrutiny of imported and exported goods. Ranawaka instructed Customs officials to obtain the services of local software developers for the purposes calling for tenders, parliament sources said.State Minister Anuradha Jayaratne and SJB MP Ashok Abeysinghe were also present at the meeting.