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Azerbaijani official: New customs code to create favorable conditions for enhancing customs system’s role

Business Materials 27 January 2011 17:52 (UTC +04:00)
Trend interviews Azerbaijani State Customs Committee Chairman, Customs Service Lieutenant-General Aydin Aliyev on the occasion of the upcoming professional holiday for customs officials on Jan. 30.
Azerbaijani official: New customs code to create favorable conditions for enhancing customs system’s role

Azerbaijan, Baku, Jan. 27 / Trend  /

Trend interviews Azerbaijani State Customs Committee Chairman, Customs Service Lieutenant-General Aydin Aliyev on the occasion of the upcoming professional holiday for customs officials on Jan. 30.

Q.: How much revenue did the State Customs Committee transfer to the state budget? At what level have tasks assigned to the customs authorities been implemented?

Aliyev: I would like to note that during the report period, the State Customs Committee and its local bodies, showing activity in accordance with the Law on Budget for 2010, fulfilled the forecast for 100.16 percent, transferring a 101.73 million manat to the state budget compared to the forecasted 1.1 billion manat.

Q.: How did the world processes reflect the implementation of the fiscal functions of the State Customs Committee in 2010? How much is the consideration of issue to reduce the list of goods imported into the country exempted from customs duties and taxes relevant?

A.: Azerbaijan, ranking among the most dynamically developing countries, turned into a strong state, thanks to ongoing successful policy. Azerbaijan, which overcame the global financial crisis with minimal losses, observes an economic growth and acceleration of the implementation of global projects over the past two years. Azerbaijan became a leader in the region on the economic development dynamics. In 2010, as a result of increasing foreign trade, the export operations exceeded imports, and a black ink amounted to $14.7 billion. Over the past period, governmental and non-governmental organizations in the country and individuals from 147 countries had trade operations totaling $27.9 billion, of which imported goods amounted to $6.6 billion, while exports to $21.3 billion.

Azerbaijan President Ilham Aliyev signed a decree "On strengthening the anti-inflation measures in Azerbaijan" on May 31, 2005, and approved the State Programme on poverty reduction and sustainable development in 2008-15 on Sept. 15, 2008, in an attempt to increase budgetary revenues and eliminate abuses of exemption from customs duties and, in general, increase transparency in this field. The Cabinet of Ministers and the State Customs Committee have been asked to reduce the number of exemptions from customs duties.

As a result, a series of activities have been carried out in this direction, the most important of which is the Azerbaijani Cabinet of Ministers' decision "On Amendments to the Cabinet's decision, dated Jan. 31, 2005, to Nom. 11 "On the list of goods exempted from VAT on imports into the territory of Azerbaijan."

However, in 2008-2010 there were cases of the introduction of exemptions from VAT and customs duties in connection with the necessity to develop specific industries.

In addition, new exceptions have been applied to promote health, energy, tourism, science and other branches of national importance and the formation of serial banks in recent years, including 2010.

Reducing or enlarging the list of exemptions from customs taxes and duties remains a flexible process which is carried out in accordance with the requirements of the day, and it is possible to implement any activity on each of these areas in 2011.

Q: What measures does the State Customs committee plan to take to create the "Electronic Customs" project, and when it is scheduled to conclude this project?

A: Electronic customs project is a constituent part of the Electronic Azerbaijan program. This new mechanism is based on timely informing and electronic declaration through realizing principles on support to trade and ensuring security. Electronic customs project will enable the participants of foreign economic relations to declare their goods out of any place (office, house, any other place). The following stages can be outlined in creating Electronic Customs: 

- upgrade of information and communication network. This stage is almost complete. Corporate network of the customs system functioning on the base of optic channels and connecting the entire customs system has been put into exploitation. Modern servers providing for high-speed information service have been installed and securities were realized;

- the State Customs Service's Internet resources meeting the up-to-date standards. This stage has been realized. The Service has a website in line with modern standards and [is] offering different electronic services to users;

- improving a mechanism of electronic declaration. A software has been developed in this field to enable participants in the foreign economic relations to declare their goods through [the Internet. However, only brokers may benefit this right for the time being. Access to the program will be expanded after broad application of electronic signature in the country, i.e., delay is linked with security issues; 

- holding online information exchange with information systems of other state agencies participating in the registration. Data exchange is being carried out with information systems of the Taxes Ministry, phytosanitary service at the Agriculture Ministry, sanitary-quarantine service, veterinary service and interdepartmental automated information and search system (İAMAS). It is also planned to create relations information systems of treasury department at the finance ministry banks functioning in the country;

- realization of work for applying electronic signature. Electronic signature will be applied in the nearest years;

- application of electronic document turnover in the customs system. Work will take a year to complete.

Q: What is your estimation of the "single window" principle, applied in customs control places, and what actions are taken to improve work under this principle?

A: First of all, it is necessary to note that introduction of "single window" principle at state border checkpoints itself testifies for use of modern and perfect system. In general, using "single window" is a new order in the international experience at modern stage, making positive influence on intensifying goods turnover among countries and developing international trade.

Developing international trade and creating favorable conditions for goods turnover were always on focus in the country. This process provides supports by applying modern mechanisms and rules of rational procedures.

"Single window" principle has been applied in the customs system since 2009. Since that time this sector has passed considerable stages of development. Serious work was done; actions were taken to solve legal and organization issues; awareness actions and establishment of partner relations in line with relevant state agency bodies were improved; large-scale information technologies were used in the process of applying new rules.

By using "single window" principle, we could boost efficiency of control methods. It made [it] possible to essentially improve [the] use of technical control means, which enables to save time spent on relevant check-ups and expectations linked with it.

Using the new system, economic operators, transport companies and other interested people achieve trade and economic efficiency by saving time for registration and waiting while international cargo deliveries, of course, obtain favorable terms to act.

The State Customs Committee does extensive work to apply the "single window" system. Further, it is planned to continue developing this system and fully integrate into the "electronic customs" system.

Q: When is the new model of customs tariffs expected to apply, envisaging transition to the three-level differentiated tariff system?

A: Transition to the three-level differentiated tariff system requires considers several tiny milestones. For that reason, the bill which the committee prepared after discussing with all relevant state agencies has been improved, while the final version of the bill was submitted to the Cabinet of Ministers. We hope the three-level differentiation tariff system to be approved in 2011.

Q: At what stage is the adoption of a new version of the Customs Code? What innovations have been included in the document in terms of global processes?

A: I would like to recall that at the moment, the draft of the Customs Code is under preparation to be considered at the spring session of the Azerbaijani Parliament.

According to the international practice, the new edition of the Code reflects such issues as customs offices, the authorized economic operator, customs goods classification, obligatory decisions in connection with the evaluation methodology and the country of origin, information exchange, data protection, electronic information system of customs bodies, import and export of goods into the territory of customs, preparation and review of the customs declaration, a short declaration of import and simplified declarations, and amendments or elimination of the declaration, the customs status, and procedures.

The domestic and foreign transit, storage, special customs procedures, reloading of products, cabotage goods, additional goods, secure export scheme of goods approved by the customs authorities, customs tariff, tariff classification, preferential and non-preferential origin of goods, the customs debts and the rules of debt elimination, and the articles on the use of guarantees are also indicated here.

The determination of the amount of customs payments and notification of the debtor, the return of customs fees, customs valuation, free zones, their establishment and liquidation, international mail, the peculiarities of the transportation of goods through pipelines and power lines after the passage of the customs control, assessment and risk management, customs audits, export control, information systems and technologies in customs, electronic model of customs procedures, preliminary submitting the information about products to the customs authorities in electronic form, entry and exit of individuals and vehicles from the customs and other new rules were also indicated there.

The already existing rules and regulations relating to customs brokers, customs payments, control, customs regime, registration, research, investigative and operative search activity of customs officers, complaints about the actions and inactions, and decisions of customs bodies of Azerbaijan and others will be also brought into compliance with current legislation and international norms.

Adopting the new Customs Code will create favorable conditions for strengthening material and technical basis of the customs system, creating the customs infrastructure in accordance with modern requirements, increasing the state budget revenues, widespread using the measures for tariff and non-tariff regulation of export-import operations, accelerating Azerbaijan's membership in the WTO, full use of automatic management in the customs system, increasing the efficiency of customs control, improving and developing the customs tariff policy, increasing the role of customs in ensuring the economic security of the country, strengthening the fight against offences in the area of customs, increasing the role of customs in the socio-economic life, bringing the tools of customs regulations into conformity with the international means, simplifying the rules of registration of export-import operations in the trade and economic relations, and other measures.

Q: What activities are planned in the area of improvement and strengthening of customs control in 2011?

A: As it is known, we face such important tasks as the improvement and strengthening of customs control, realizing it in a perfect form. As in previous years, the necessary measures will be determined in this area this year to implement these fundamental problems in our work. They will be implemented in sequential order.

First and foremost, I must say that the country has prepared a draft of the new Customs Code that can meet all current challenges. This project is under consideration in the parliament.

I think that the new code will create opportunities to use progressive forms in the field of customs activity and determine its legal basis. It is important in the improvement and strengthening of customs control in accordance with modern requirements.

Besides developing the legal basis in the issue of improvement, a component of our daily activity is to use technical means of control of high technological opportunities in the process of customs control. The work is underway to provide all customs administrations with the means used during the inspection of goods and vehicles. Their use facilitates customs control, saves time, and improves the quality indicators of control.

The work in this area will continue. The appropriate measures will be taken to reveal contraband concealed from customs control, thanks to the comprehensive use of technical means of control; serious measures will be taken on the revealed facts.

Another important issue is to simplify the rules of customs control over goods which are in international turnover. The work will be conducted to improve the existing rules in this area in 2011.

The rules of the international trade are being determined depending on the characteristics of goods [and] commodities. They are mainly regulated by international conventions and documents. The international rules are taken into account in the methods of customs control of the relevant goods.

The work will be continued in this area.

Q: At what stage is the construction of the European Regional Office of the World Customs Organization to strengthen the potential in Baku?

A: As it is known, the initiative of opening this office in Baku was made in 2009 at the conference of heads of customs service in the European Region of the World Customs Organization in the Norwegian city of Bergen. The Azerbaijani delegation gave a presentation on this issue. The initiative of opening a single regional office in Azerbaijan was supported on June 25-27, 2009, during the 113-114 session of the WCO Customs Cooperation Council held in Brussels. A decision was made to establish an office in Baku. Finally, a Memorandum of Understanding was signed between the Azerbaijani State Customs Committee and the World Customs Organization in November 2009 due to the opening of its regional office in Baku. At the moment, construction work is under completion. I hope that solemn opening of the regional office will be held in the coming months.

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