CUSTOMS COMMITTEE GIVES GO-AHEAD

New mechanisms need to be introduced to help speed up foreign trade amid falling energy prices and a decline in trade. This year, Azerbaijan's State Customs Committee has completed another phase of reform aimed at simplifying and ensuring the efficiency and transparency of customs procedures. The measures being implemented will help speed up trade and stimulate export-oriented production.

Recent decisions to simplify and automatize foreign trade procedures are a logical continuation of a large-scale institutional reform of the State Customs Committee that has been under way for a fourth year now. In particular, during this period of time the use of information technology has significantly expanded in the process of freight being passed through the border and monitored. The use of information technology has ensured the standardization and simplification of customs procedures. Within the framework of the electronic customs - e-customs - system, all structural units of the State Customs Committee have been completely switched to automated record keeping. Within the framework of the "one-stop shop" concept, customs registration procedures for import and export operations have also been made electronic, and a single electronic record of applications received by customs agencies has been created. All customs duties for import of cars have lately been collected using POS terminals, plastic cards are now used to make payments, an "electronic queue" system has been set up, there is a network of information kiosks operating, and GPS tracking has been put in place.

About two years ago, the State Customs Committee introduced a new service - electronic monitoring of the registration of exported and imported goods. At the same time, the unified automated system of customs control (VAIS) was improved, and the VAIS-RISK system was used, which automatically carried out risk analysis to identify goods and vehicles and documents for them. Another innovation was the introduction of the VAIS - postal transport subsystem, which enables post companies to pre-declare goods delivered to the country by post. To make it easier for people to cross the border, Gomruk information kiosks have been installed at all border checkpoints. The kiosks can be used to fill out simplified customs declarations.

This year saw the start of another phase of modernization of customs mechanisms and the adoption of relevant legislation and amendments to the Customs Code that aim to promote foreign trade and investment activities.

The starting point for the development of these changes was Azerbaijani President Ilham Aliyev's March 2016 decree "On additional measures to continue reforms in the customs system".

"The Customs Committee was given two months to address issues arising from the presidential decree: for example, a month ago, the committee launched a pilot project for electronic declarations, and on 4 May 2016 Azerbaijan completely switched to electronic declaration of goods and vehicles," Customs Committee chairman Aydin Aliyev said. "In the near future, a decision will be made to create a 'green corridor' at the customs in order to support agricultural exporters. Other issues envisaged by the reform will be tackled as well."

The most important move toward the implementation of the new phase of the reform was the introduction of the electronic declaration system: the Customs Committee integrated four new types of customs services into the unified e-government portal, bringing the total number of electronic tools at www.e-gov.az to 13. In particular, these are two services to intensify e-customs declaration, admission of electronic customs declarations for registration of goods and vehicles, and the service whereby to obtain information about electronic customs declaration. The new rules of customs registration are very simple: a digital declaration, filled out on the unified portal and signed using an 'electronic signature', goes to customs agencies, and the document becomes legally valid after it is endorsed.

It is noteworthy that the electronic declaration system has become even more accessible owing to its integration with the possibilities of "Asan Imza". This process uses mobile authentication tools, and all you need to sign a declaration is any mobile device that supports the "Asan Imza" service.

The establishment of the electronic customs declaration system aims to significantly speed up and simplify the registration of goods and vehicles. It is equally important that the new electronic mechanism will ensure the transparency of customs services, minimizing red tape. The final effect of the innovation will be improvement in the business climate and an increase in the number of participants in foreign trade activities in the country.

Within the framework of the new phase of the customs reform, the 'green corridor' system will launch in the country in one or two months to facilitate freight transportation with neighbours in the region. This scheme will provide for unimpeded passage through the customs border for agricultural goods, especially perishable seasonal produce and processed foods (except for excisable goods).

"When developing mechanisms for the 'green corridor', we flexibly adapted relevant international expertize to the needs of local businesses," a deputy chairman of the State Customs Committee, Sahin Bagirov, said. "Agreements on the establishment of 'green corridors' were concluded last year with Russia and Kazakhstan, and this mechanism will be used both on the land and maritime borders of the states."

Another area for the optimization of the operation of the customs service is creation of conditions for the transportation of goods on the basis of veterinary, phytosanitary, hygienic and other certificates and documents provided in advance by an exporting country. In the future, the State Customs Committee also plans to set up laboratories to check products for GMOs at border customs checkpoints. A modern laboratory of this kind is already operating in Baku.

A significant move to expand the committee's technical capabilities was the opening on 6 May of a new administrative building of the Main Customs Department of Baku. Earlier, this site was occupied by the main terminal of the Silk Road customs post, which registered about 60 per cent of all freight coming into the country. However, the new building houses the Central Customs Laboratory, the sanitary and radiation control system, the State Customs Committee's target centre, a cargo terminal, and numerous services of the Main Customs Department. Experts believe that this kind of a localization of the customs services certainly helps speed up customs registration procedures for freight.

A new United Nations Development Programme (UNDP) project also helps expand the technical capabilities of the State Customs Committee. UNDP allocated 2.66m euros for the implementation of the project titled "Support to the Development of Red Bridge Border Crossing Point between Azerbaijan and Georgia". The implementation of the project will help speed up the passage of goods through the Azerbaijani-Georgian border and simplify sanitary and phytosanitary procedures. The resumption of the operation of several non-operational customs checkpoints on the border with Iran has been put on the agenda of customs agencies.

These initiatives are very important due to the participation of our country in the international transport routes Silk Road and North-South. The expected forthcoming opening of the Baku-Tbilisi-Kars railway corridor and the connection of the Azerbaijani and Iranian "steel railroads" will significantly increase the amount of transit goods, and this circumstance makes re-equipment of customs agencies and optimization of their operation urgent.

Modern customs service should be more efficient, effective and transparent in order to meet the requirements of trade that is to grow in the near future. From this perspective, the implementation of innovation and modern legislation is the driving force behind the development of the State Customs Committee. "Within the new phase of reforms, the Customs Committee plans to develop two key trends: a free trade model and the principle of protectionism to protect domestic production," Aliyev said. He said that the use of these principles and of electronic mechanisms that simplify and speed up goods registration procedures will help turn the model being introduced in the customs into one of the most advanced in the world.

However, the first visible results of customs reforms can be seen already today: in spite of a decline in imports to 25 per cent in the first quarter of 2016, the committee was able to do more than it committed itself to doing before the government. In particular, customs agencies transferred to the state budget more than 644m manats in the four months of this year. They fulfilled the revenue forecast 123 per cent.