Azerbaijan keen to have most advanced customs services

By Aynur Karimova

Azerbaijan has set a goal to have one of the most advanced customs services in the world. The country plans to achieve this target by greatly improving the level of work of the customs agencies throughout the country.

Aydin Aliyev, the Head of the country’s State Customs Committee, made the remark at a conference devoted to the development and future prospects in the customs system on March 14.

Aliyev said that falling oil prices have set new challenges for Azerbaijan, and this has necessitated adjusting the work of many state agencies, including customs bodies, to new challenges.

A conference on “Development in customs system and future prospects” organized by the American Chamber of Commerce in Azerbaijan kicked off in Baku on March 14.

"Instability in global economy in recent years and significant decline in oil prices impacts all countries, including Azerbaijan," Aliyev said. "As a result, many state agencies, including the State Customs Committee of Azerbaijan, have to solve a number of issues, primarily having ensured transparency of our activities."

Aliyev also stressed the necessity of improving the activities of customs bodies in line with international standards.

“A number of legislative acts have been already adopted in Azerbaijan, including amendments to the country’s Customs Code,” he said. “They all comply with the latest international standards.”

Speaking at the event, Arzu Hajiyeva, the representative of Ernst & Young in Azerbaijan, said that along with the traditional functions, the customs structures in Azerbaijan should have new functions in current realities.

"Currently, the customs structures of many countries, including Azerbaijan, are facing such new tasks as the promotion of international trade, the formation of the necessary sphere for investment and business development, as well as the protection of the main property rights," she noted.

She also stressed the necessity of protecting the main intellectual property rights in Azerbaijan.

“Recently, Azerbaijan has taken very important measures to simplify customs procedures and improve transparency in the direction of improving legislative framework in customs activities, organizing a call-center, mediating restrictions in customs activity, as well as reducing the time spent on customs clearance,” Hajiyeva said. “The public and entrepreneurs positively accepted all these measures and hope that these reforms will be continued in the future as well.”

Currently, some points in this area are in the spotlight.

“For example, the maximum examination period is 20 days,” Hajiyeva said. “It's quite a long time, and that creates new risks for entrepreneurs associated with additional costs for storage of products, the possibility of failure to fulfill conditions on timing pre-specified in contracts, and so on.”

Another point is the lack of a unified concept to form customs value of the products.

“We propose to develop administrative procedures on all decisions made by the managing customs officials,” Hajiyeva stated. “It should be a clear and transparent process, and every customs employee should give proof of decision to the importer.”

At the same time, it is necessary to minimize contacts between customs officers and entrepreneurs through the use of electronic systems.

“It is also necessary to carry out customs inspection of products within the framework of risks’ management system or to take a decision on the refusal of customs inspection of goods in the shortest possible time,” she added.

Delivery period to be reduced

In his remarks, Shaig Mirzayev, a member of the Murphy Shipping and Commercial Services Ltd, said that the period of delivery of transit goods to the intended destinations through Azerbaijan’s territory will be reduced by three times in the future.

"'Currently, the period for delivery of cargoes through Azerbaijan to their destinations is 60 days," he said, adding that in the future this period can be cut down to 20 days after the negotiations continue and the agreements are reached.

Mirzayev believes that Azerbaijan’s geographical location elevates the country’s role in transit as the country is located at the intersection of the North-South and the East-West transport corridors.

"Cargoes transported from China to Iran may further continue their trip on several routes," he said, adding that one of those routes goes through Turkey to southern and western Europe, and another runs through Azerbaijan and Russia to northern and eastern Europe.

Also, there are currently six potential corridors from China to Europe, half of which may run through Azerbaijan.

“This once again demonstrates Azerbaijan’s important role in transit and can turn the country into a major transit center in the world,” Mirzayev added.

New regime wanted for importers

Deloitte, an international audit company, offered Azerbaijan to consider the establishment of free customs zones processing of products in the customs territory.

The company's senior tax manager, Emil Garayev said that duties and taxes imposed on imported products pose certain obstacles to the activities of importers. Therefore, the new regime could be one of compromise solutions.

Later, Aliyev told journalists that customs duties on a number of imported products may be reduced in Azerbaijan.

He said that this will mainly relate to customs duties on imports of raw materials and components for manufacture of products of Azerbaijani origin.

“We should give ‘green light’ to production in Azerbaijan,” he noted. “Therefore, we made a proposal to reduce import tariffs on raw materials and components needed for manufacture of products in the country. At the same time, customs duties on other imported goods may be increased. We have already made our proposals and the government will decide whether to accept them or not.”

Since 2001, Azerbaijan has been using a multi-stage differentiated tariff system with a rate of 0, 0.5, 1, 3, 5, 9 and 15 percent.

Currently, a number of imported goods are subject to the maximum rate of customs duty (15 percent) to protect domestic products from the negative impact of foreign competition.

Aliyev went on to add that Turkish goods are not exported from Azerbaijan to Russia.

"The Azerbaijani customs bodies always require presenting a certificate of origin of the products during export,” he said. “We are thoroughly conducting inspection in this direction. I can assure that Turkish goods are not exported from Azerbaijan to Russia."

While speaking of the delay in transporting Azerbaijani goods through the Russian customs, Aliyev said that the Russian side is entitled to inspect imported products.

"This is their right, namely, the Russian customs bodies and the Federal Service for Veterinarian and Vegetation Sanitary Supervision,” he said. “They are fully entitled to inspect the products imported to the country."

Touching upon the import of cigarettes to Azerbaijan, Aliyev said that it decreased by six times within two months.

"This is primarily connected with the prevention of import of tobacco products supposedly for own use, but used for commercial purposes," Aliyev added.

“As is known, in accordance with the law, one individual is allowed to import 30 packs of cigarettes for personal use into the country,” he stated. “Unfortunately, some repeatedly cross the border with Georgia, Iran and Russia during the day, import the allowed volumes of tobacco products several times and then use them for commercial purposes.”

This kind of business inflicts a lot of damage, according to Aliyev. “Such actions are detrimental not only to the country's market of tobacco products, but also Azerbaijan's economy as a whole."

In January 2016, tobacco products worth $5.44 million were imported to Azerbaijan, which is 6.1 times less than in the same period last year, according to the State Customs Committee of Azerbaijan.

Aliyev went on to add that the State Customs Committee is planning to accelerate the application of online customs declarations.

"As you know, according to President Ilham Aliyev's order, we have been instructed to create online customs declarations within two months. But we intend to implement this task before and we are working in this direction," he noted.

Aliyev said that application of online customs declarations is related not only to an increase in transparency in the activities of the State Customs Committee, but also to the establishment of e-government.

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Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova

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