BORDER IS NO OBSTACLE

According to the chairman of the State Customs Committee of Azerbaijan, Aydin Aliyev, Azerbaijani entrepreneurs have no more obstacles to the development of foreign economic relations. In support of his words, Mr. Aliyev cited several positive indicators from the past year showing the success of Azerbaijani business.

Thus, by the end of 2017, the export of Azerbaijani products increased by 51.1%, reaching $13.8b, while the imports reached $8.5b, an increase of only $250m due to the purchase of equipment required for important investment projects. As of the end of the past year, the positive balance of trade turnover was $5b. Foreign trade operations involved over 16,000 people, which is 2,000 more than in 2016.

Customs authorities exceeded the established forecast for the collection of customs duties by 16% transferring over ₼2.6b to the state budget.

On smuggling and banned commodities

In addition to fulfilling budget obligations, the State Customs Committee also conducted successful fight against smuggling. According to A. Aliyev, in 2017, his committee prevented the smuggling of $1.6m, ₽22m and €50K in currencies, as well as gold, precious stones and other valuables for ₼1.2m. Also, the customs officials prevented the import of 2.8K kilograms of drugs into the country including 2.6K kilograms of marijuana, more than 100 kilograms of heroin and various psychotropic drugs.

However, customs officials are particularly concerned about the smuggling of cigarettes and alcohol. As noted by Aydin Aliyev, the Customs Committee has suggested an initiative to amend the existing legislation on the rules for the transportation of cigarettes in order to reduce the rate of transportation across the border for individuals. This assumes the reduction of the current per capita monthly rate from 30 packs to 10 packs. The respective request has already been delivered to the Milli Majlis (parliament) for consideration.

The smuggling of cigarettes has a very negative effect on business development. For example, the closer a region to the border, the less greenhouses or croplands can be found there since the population of nearby villages is reselling the cigarettes purchased on the other side of the border. As an example of successful reform in this area, Aliyev has demonstrated the Turkish experience. Thus, Ankara requires that any individuals crossing the land border with Iraq must stay in Turkey for several days. This makes smuggling of cigarettes less profitable because of the increasing housing and food costs.

On the other hand, Aliyev recalled the experience with British customs officials, which had demonstrated their warehouses full of smuggled cigarettes and liquor. So, almost all countries face this problem, even if the criminal import of goods is difficult due to geographical location.

In fact, smuggling is a crime which customs officers struggle with as much as possible. However, from the beginning of 2018, certain problems were also observed with the delivery of allowed goods to the country. The postal services have openly accused the customs authorities of delaying the deliveries.

Commenting on the situation, A. Aliyev assured that they indeed had special cases of delays and complaints, which were quite objective. Despite repeated warnings about the ban on access to the country of electric shockers, brass knuckles, modern gadgets for carrying out covert recording, such as watches with built-in video cameras, etc., the population has persistently continued to order them for several years.

At the same time, there is a number of goods subject to import restrictions, which need a special permit. In particular, anyone can bring into the country drones (unmanned aerial vehicles) for filming but it is necessary to have a permission from the State Civil Aviation Administration of Azerbaijan.

Another reason that the parcel does not reach the addressee may be the excess of the limited amount of monthly mailed items for persons who are trying to engage in commercial activities without paying customs duties. In fact, there is a unified automated accounting system of the Customs Committee, which regulates postal shipments. In accordance with existing rules, if a monthly limit of duty-free import goods exceeds the limit, the recipient automatically falls into the group of persons who are charged customs duties.

Initially, the system worked based on passport numbers of individuals, but then they began changing their names. Therefore, the Committee has identified the individuals through linking to the pin codes of the Ministry of Justice, which has made changing of names and passport numbers useless.

Protecting business interests

Over the past two years, in accordance with the tasks set by President Ilham Aliyev, the ministries and departments assisted in the development of the non-oil sector and supported entrepreneurship.

One of the indicators of effective performance in this regard is the role of the Customs Committee in the reduction of complaints. In particular, if in 2015 the number of applications exceeded 2.5 thousand, in 2016 this indicator was 2.3 thousand, in 2017 - less than 700 complaints. At the same time, 95% of all complaints concerned border crossing activities. “Entrepreneurs and citizens can actively use modern technologies and directly apply to our virtual reception desk with a complaint, which, three minutes after its arrival, lays down on my desk and finds an appropriate solution,” said A. Aliyev.

According to Aliyev, his committee is one of the leading structures for the introduction of information technologies nationwide and beyond Azerbaijan. In particular, the Russian customs administration has praised the success of the use of information technologies, which has assisted in the implementation of several information programs so far.

In general, complaints from entrepreneurs and citizens would be much less if they used the possibilities of pre-declarations, as during the border crossing, goods prohibited for import or export are identified. To date, 14 customs services provided through the “ASAN Service” are available to entrepreneurs and the public.

Also, active steps have been taken to simplify the conduct of trade operations by entrepreneurs. In 2017, to accelerate foreign trade operations within the “green corridor”, 25 companies were granted 28 permits issued separately for the turnover of conventional products and excisable goods.

In 2017, Azerbaijan imported non-taxable goods and services for $3.9b including the imports under leasing operations, free economic zones, etc., which is a significant support for the development of national entrepreneurship.

Thus, the businesses have no obstacles for the conduct of foreign trade activities as far as the State Customs Committee is concerned. The only thing they are asked for is to use preliminary declaration of goods to secure a “green corridor” for their goods.

The customs officers are trying to make their own contribution to the reform of the economy and development of local production. At the same time, there are different versions and rumors in the media regarding the development and future performance of the customs authorities. So, some media representatives referring to informed sources claim about the possible merger of the Ministry of Taxes and the State Customs Committee.

Commenting on these assumptions, A. Aliyev noted that the customs authorities throughout the world operate differently depending on the tasks set by their respective governments. For example, in the U.S., the customs service operates in conjunction with the border, in some countries it is integrated with the tax authorities. But particularly in European countries, the customs departments function under the auspices of the ministry of finance given the limitation of their activities to financial functions only. There are even countries such Russia before and a number of African countries now, where the customs authorities operate under the ministry of economic development. In Azerbaijan, the customs committee is an independent institution. The final decision on the question of the unification or separation of ministries and departments from the efficiency viewpoint and based on the analysis may only be taken by the country's leadership. “The Customs Committee is an executive body, and its employees are soldiers of the people and government. Accordingly, we will work in accordance with the decision of country's leadership,” concluded A. Aliyev.

Either way, independently or as part of another agency, it is important that the customs officials continue minimizing the obstacles to local businesses and actively assist them in their development.