Debates in Albania over the new Customs Code

Debates in Albania over the new Customs Code

IBNA Special Report

Tirana, June 24, 2014/Independent Balkan News Agency

By Edison Kurani

In Albania, the government has introduced a new bill with changes in the Customs Code. The new code has been drafted in collaboration with experts of the European Union and aims to increase standards of the service which will be offered by customs. This new code is considered to be necessary, because the current one is very old and doesn’t meet the criteria.

Simpler clearances and clearer provisions that aim to strengthen controls for cases of fraud are seen as the main two novelties which the implementation of this code is expected to bring.

Authorities say that businesses will have more facilities and protection based on the new customs code. The new customs code removes communication through letters between businesses and customs, as this communication will now be made online.

From the procedural point of view, the new customs code will see changes in the rules of temporary storage including the extension of the storage period up to 90 days and the possibility to move goods in temporary storage without transit procedures.

The main objective of the customs administration is for the provisions that relate to authorized economic operators and customs simplifications to enter in force and become applicable on January 1, 2015.

The bill has reached parliament and is undergoing discussions. Opposition demands for the discussions on the customs code not to be fast tracked. Meanwhile, majority MPs raise a number of question marks in relation to the code.

Experts of the domain and lawmakers say that many articles of the new code must be revised, as they’re complicated and have been copied from other states. According to them, this leaves room for corruption.

Spiropali: The Code is not an EU requirement, it helps to build a European state here

General Customs Directorate says that the new code comes following long and constructive consults with stakeholders, business associations and national and foreign chambers of commerce, etc, started in March 2014.

“The changing of the code comes as a need to harmonize it with EU practices, to simplify and further facilitate customs procedures on the business. The business has valued the new code, while their comments have been reflected on the code”.

Spiropali says that the new law aims the modernization of the customs system and to protect the country from unlawful commerce. She adds that the new code has many novelties that enable and facilitate customs relations with the business and brings Albanian customs closer to European Union standards.

“With the new code, we will save time and money. The code is not a requirement of the EU, it’s not a journey to somewhere, but it will help us to build the European state here”, says the head of Albanian customs.

Cani: Solutions and novelties are being offered

Talking about the changes that will be made on the procedures that businesses will follow in customs, minister of Finance, Shkelqim Cani says that a solution will be given to the issue of fines and complaints against them.

“Businesses will benefit more facilities and protection based on the new customs code”, says the former Governor of the Bank of Albania, Shkelqim Cani. “The Customs Code is the fundamental act of the functioning of Customs and has been long discussed with stakeholders. The new customs code is necessary as the current one is very old and doesn’t meet the criteria. The new code facilitates the work of customs and business procedures. The business sector will be more protected against fines, as it’s entitled to be heard. The new customs code will be the first step toward making digital customs”, says Cani.

Parliament returns the bill for revision

After examining the content of the bill “On the new customs code”, parliamentary law committee decided to return the bill in order for the ministries involved in its drafting to revise their drafts.

“The majority of provisions of the law is translated and in its translation, there’s been an adaption with other Albanian laws”, says Mr. Xhafaj.

Xhafaj demands from the government the simplification of the language used in the drafting of this incentive. “I’m not against the best EU directives and practices to be reflected on the bill, given that we want to be integrated in the EU. But this doesn’t mean that we must translate the EU directive in a very complicated language for Albanian operators”, says Xhafaj.

“I don’t know why the legislator should do something like this, when the Albanian language is the official language. There are several things that indicate to us that the majority of provisions are translated and the translation has not been adapted to the legislation and the language which has been used is not a simple one, given that this is a necessity in offering assurances and security to operators in the market”, says Xhafaj.

The government upholds the project, Mete: The new customs system offers facilities for the business

Deputy minister of Finance, Ervin Mete says that this code offers facilities for businesses. The incentive aims to facilitate and simplify customs procedures. The main scope is the fight against fraud, in order to address developments of international commerce and the needs of economic operators.

“The new bill aims to unify several important rules and practices. They include measures that lead to the passage into an electronic customs environment”.

Mete also comments the complaints of MPs for the “English language” of the code. He says that this bill has been drafted with the assistance of the EU. Mete says that “the complicated language used for the drafting of this bill comes from EU acts”, adding that “such version is used by all EU countries”. There are several words which have been left in English to be on the safe side”, says Mete.

Question marks by the majority

Majority MPs raise a number of questions about the code.

Former minister of Justice and MP of the Socialist Party, Fatmir Xhafaj says that many articles of this bill must be revised. According to him, they are complicated and they have been copied by other countries. Xhafaj also adds that these leave room for corruption”.

Former prime minister and socialist MP, Bashkim Fino raises his concern about the fact that the articles of the customs code do not take effect at the same time.

“One thing enters in force as of January 1, 2015 and another one in 2017, but this will cause problems in the implementation of the code by customs officials”, says Fino.

The novelties of the code

For the first time in the Customs Code is introduced the concept of Authorized Economic Operators (AEO) which brings several advantages, to this category, which are listed below:

Access to the centralized customs clearance procedure, “Centralized Clearance”, allowing them to submit customs declarations and pay the duties in their registered office in most cases.

AEO’s will have the possibility to benefit from the deferral of payments under a much lower guarantee (in comparison with other operators who are AEO, who must provide a full warranty).

AEO’s can also be allowed to move goods, while they are still in temporary storage.

(At the end you may see all the novelties and changes being done to the Customs Code of Albania)

Businesses against some of the changes in the Code

Businesses in Albania say that it’s unacceptable for businesses to freeze beforehand 40% of the amount supposedly owed to taxation authorities, based on the new bill for the Customs Code.

Konfindustria, the main organization of large businesses in Albania, says that this provision increases chances for corruption and informality. Gjergj Buxhuku, General Administrator of Konfindustria, comments the article for the freezing of the 40%: “With this article, taxation authorities continue to “de facto” have the legal advantage against businesses, increasing the possibility for corruption and subjectivism and at the same time, this doesn’t help in the improvement of relations between the state and business”.

Buxhuku warns that the prepayment of 40% of the amount supposedly owed in tax may put businesses in a difficult position in terms of the continuation of their economic activity, even in cases when its claims are later upheld by the judiciary system.

According to Konfindustria, in circumstances when it’s been a while that Administrative Court is operational in Albania and this court can fast track disputes between the state and businesses, it’s unreasonable for businesses to block or freeze 40% of the supposed tax.

Implementation of the new code, the business is skeptic

Minister of Finance, Shkelqim Cani promises that with the new changes in the customs code, customs officials will visit warehouses to inspect the stock. Such novelty of the customs code is applauded by all businesses, but their fear consists on the implementation.

In fact, if businesses are asked as to what is the part that has exhausted them the most throughout the years, almost all of them say that this part relates to the process of the clearance of the customs. An entrepreneur must spend several days to unload his products in the customs, to have them inspected and then to take it to the warehouse.

Xhavit Hysenaj, a businessman who exports medicinal plants, says that for one load, the cost of the clearance is 400 Euros.

It’s been over 22 years that Hysenaj deals in this kind of business. The biggest market for his company, occupying over 70% of his exports, is Europe.

Hysenaj says that the endless number of businesses that have to queue in customs is scary. “Inspections in the customs is a story on its own and it seriously damages businesses”.

Hysenaj says that he’s looking forward for these long procedures to end, adding that the implementation of the new code is a challenge. “If this new customs system is not implemented, it would truly be a disappointment”.

One of the main requests that foreign investors have addressed to the government in order to come and open new businesses, has consisted on reducing customs procedures.

Customs administration currently operates through the Asycuda World automated system of the processing of data, which improves not only the work of the Albanian customs administration, but it also brings facilities in customs procedures and encourages the business and private sector. The system is able to automatically process customs declarations, starting with the input of the data and direct registration in the system by the customer, continuing with the risk analysis and calculation of the owed amount, ending up with the accounting and the payment of all customs charges.

The content of the new Customs Code:
1. For the first time in the Customs Code is introduced the concept of Authorized Economic Operators (AEO) which brings several advantages, to this category, which are listed below:

Access to the centralized customs clearance procedure, “Centralized Clearance”, allowing them to submit customs declarations and pay the duties in their registered office in most cases.

AEO’s will have the possibility to benefit from the deferral of payments under a much lower guarantee  (in comparison with other operators who are AEO, who must provide a full warranty).

AEO’s can also be allowed to move goods, while they are still in temporary storage.

Other relief for AEOs has to do with the time when the goods are considered released for free circulation. Goods will be considered released for free circulation when AEO presents the customs declaration, there is no need to make the presentation of the goods at the customs. However the customs authorities still have the right to request the necessary documentation and perform inspections in the premises where the goods or documentations are kept.

The right of self-assessment of the obligations to pay as well as performing some other formalities which are attributable to customs authorities;

The authorization by the customs authorities against an economic operator to deposit the  customs declaration, including the simplified declaration in the form of a register entry of the declarant (entry in the declarant’s records, etc.).
2. Simplified procedures:
The simplified procedures aim their simplification by reducing the costs and increasing legal security for the economic operators.
As important elements of these procedures its worth mentioning:

The incomplete declaration;

Customs clearance at the premises of the economic operator;

3. Other innovations of the New Customs Code are:

Improvements that involve measures which lead to the transition to a paperless customs environment;

Defining the harmonized rules for the decision-taking process by the competent Customs Authorities and the right to be heard before making unfavorable decisions (taking into consideration that this applies only to certain types of decisions, i.e. decisions for binding tariff information etc. ).

Ensuring the quick release of goods when the economic operator provides in advance  the necessary information for conducting audits based on risk analysis. It should be taken in consideration that the Kyoto Convention, provides that the filing, registration and control of the customs declaration may be done before the arrival of goods.

The merging of the inward processing with suspension with the processing under customs control and not applying anymore the concept of the inward process with reimbursement.

Extending the storage period up to 90 days (while in the actual code it is 10 days when the goods arrive by sea and 5 days when the goods come in other ways) and the ability to move goods under temporary storage without transit procedures.

Improving the appeal procedure by removing the obligation of the economic operator to prepay 40% of the fine amount in order to appeal. Now it will be required just a form guarantee provided by the Civil Code. /ibna/