DO YOU HAVE ANY WEAPONS OR ILLEGAL DRUGS IN YOUR POSSESSION?

Each one of us in one way or another sooner or later confronts the necessity of crossing the border of a foreign country. We do this as individuals on family vacations or as economic agents when existing economic conditions make it efficient to transport goods across country borders.Exclusively for the readers of WELCOME magazine we decided to find out what has been achieved by the Moldovan Customs Office under the influence of international organizations and the experience of other regions. What has changed? What still requires working on? How can trade and tourism be stimulated on the nearest frontiers?
These and other questions regarding the most important economic development paths are answered by Doctor in Economics and Deputy-Head of the Customs Department of the Republic of Moldova Vitali Slipenki.

Welcome: Please, tell me about how you became a Customs Officer?

Answer: It happened on July 6, 1998, by chance. After I had worked as Deputy Minister of Economy I was offered the position of Head of Economics and Finance Department for the Customs Office. This change in my life was primarily connected to the new government that was being assembled on the principle of political affiliation. I did not belong to any political party, and they offered me another job. On September 4, 2000 according to the government decree I was promoted to Deputy-Head of the Customs Office. The work involved is very interesting and brings tangible results. We resolve national and international related to external relationship issues. Since Moldova became a member of the World Trade Organization (WTO) the work became even more motivating.

W: In the context of current economic reform what do you believe requires more focus in order to improve the level of work in the customs office and stimulate trade?

Considering the complicated economic situation we must concentrate our attention on eliminating all causes of corruption and smuggling on the Moldovan border. It is important to maintain internal custom duty legislation to achieve complete and precise declaration principles. This process does not only involve correct appreciation of goods, codification and transparency in terms of quantity but also in what concerns the assortment of goods. National customs legislation must be consistent with international laws and international trade rules should be observed. Every employee in his or her work place must do everything possible to make economic agents dealing with trade comfortable and to eradicate all psychological pressure, unless related to compliance with the law. As a matter of fact most of our efforts are directed toward monitoring that all customs officers carry out their duties conscientiously and with due integrity. It must be taken into account that it is not only the economic agents that cross national borders. Individuals from foreign countries that could be in Moldova for the first time are compelled to meet customs officers first of all. The opinion that these people will form about the Moldovan nation and the Republic on the whole in many cases depends solely on the impression customs officers will make. Their ability to be civil and professionally correct influences the level of future capital investments. This has major impact on how we select our employees as well as on the means we utilize to create an adequate material and technical base. While a Customs Officer is at work travelers should have the opportunity to buy a cup of coffee, medication, and get some rest, not speaking of finding the toilettes in an appropriate state.

W: How does the role of the Customs Officer change with internationalization and a tendency for economic integration of various regions? How do the legislative and the executive branches interact to secure a positive outcome of these processes?

If ordinary customs employees that are in control of registering the import and export of goods without exceeding the authority given to them and without terrorizing economic agents, aim to help them, contained by what is stipulated by the law, trade interest increases. If there is cruelty and bribery on the way, people switch to other types of economic activity in order to avoid crossing the border either way. That is why the laws adopted by Parliament and bills brought forth for discussion and approval by the legislators should be directed towards lowering the tax burden, eliminating non-tariff regulatory methods and the simplification of the procedure of customs control overall. With the condition that these goals are achieved interest in trade can be encouraged. This also has to do with the level of stability and reliability of existing laws. There can be no doubts as to whether the product will be exported according to one law while the money will be transferred conform a totally different law. Thus is it possible to conclude that trade volume depends as much on the legislation factor, as on the man factor.

W: What is the relation between the increase in trade turnover and the amelioration of Customs administration in Moldova? How can the principles suggested by the World Customs Organization be applied here?

Moldova is a young state with a relatively new Customs Office that is based completely on the experience of other offices that had existed before in time. All of our paperwork is carried out conform the Harmonization System. Positive European and American reports on the application of international standards have been brought forth to testify that our work is aimed at keeping within international guidelines. We are currently working on improving information systems and after all preliminaries we hope to implement new electronic methods that would significantly minimize the need for human resources. A computer is programmed for particular tasks and it cannot accept bribes. Until that time though the human factor brings its own consequences that are not always positive in what characterizes the level of work.

W: A lot is being said about corruption in Moldovan government bodies. What are the chief ways of preventing corruption recommended by the Customs Department? What has already been accomplished on practice?

Two years ago a department specializing on corruption cases was formed. Its employees monitor the work of customs officers, creating an invisible defense front. Besides that there is a Smuggling Prevention Department that also deals with solving officer crime cases. An investigation agency working as part of this department presumes crime cases, arrests, and trials. Support also comes from the Department of Information and Security and the Ministry of Internal Affairs. Every case of neglect or corruption is being reviewed with all necessary attention.

W: What indices would you mention to assess trade flow volume across the Moldovan border? How positive is the fact that customs duties constitute the larger part of national revenues?

In 2002 we over fulfilled the task provided for in the state budget by 313 million lei or 14.5% Growth in comparison to 2001 constituted more than 600 million lei or roughly 34%. The share of customs duties in the state budget increased to 74%, in the consolidated – to 49.4%, and in the national budget – to 35.4%.
As opposed to 2001 in the US dollar equivalent import increased by 19%. Official data shows a 4.4% inflation rate in 2002. Overall this constitutes 23.4% and if we ignore the fact that customs offices have impact on the level of import, we grew by 33.4% or 10 points irrespective of inflation or import rates.
Do we have impact on the level import? Import is calculated when it is statistically registered or as the declared customs value. Many economic agents nowadays have two sets of paperwork: the correct one and the falsified one. The latter considerably cuts quantities and prices of products. At the customs office we try to estimate the correct value of goods and this is the number that we see in statistics spreadsheets, this is the number that determines import. This proves that customs duties have indirect influence on import but exclusively in respect with what is provisioned for in WTO codes.
There are cases when bribed customs officers declare a car, but do no declare the trailer with the goods. Goods have physically been transported over the border, but if they are not registered anywhere, they do no exist. By preventing situations like that we influence the level of import. The determined value of a good in its turn determines national revenue. But the fact that customs duties constitute the primary source of national revenue is not an encouraging one. It only means that customs give a lot while other sectors of the economy are not efficient enough to contribute to economic stability and improvement in the standard of living.

W: What do you think to be the primary course of development for Moldova to attain economic prosperity, social stability and successful cooperation with other countries?

Primarily we have to work on reviving the production sectors of the economy, including agriculture and industrial sectors. Moldova is an agricultural country and it is important to develop this sector as well as the processing and other sectors, based on imported raw materials. A lot remains to be done in the service and tourism industry. Moldova has many picturesque places that can become the source of state budget payments. It is vital to reduce turnover in the black market by creating a corresponding number of jobs. Political stability and peace are also very important because they stimulate foreign investments. We need order and discipline that would be complied with at all levels of management.

W: How long in you opinion would it take for Moldova to achieve considerable economic results?

I am not a prophet. Today the economic is accelerating and if the current pace persists in 15 years it would be possible to get near the consumer basket but of course it is not enough to secure a happy retirement and the future of your children. This however must also include the growth of the consumer basket itself due to inflation.

W: How do you envisage the Customs Office 15 years from now? How will the implementation of modern information technologies and the establishment of an adequate working environment contribute to forming a brighter picture?

In 15 years Customs Officers will be professionals with specialized degrees, perfect knowledge of computer technology and foreign languages. I believe, that the new generation of Moldovan Customs Officers in a new upgraded environment will be able to carry out their professional duties to the highest of standards.

By Natalia Corobco

World Customs Organization
Customs is recognized as a critical institution to good governance, prosperity and the protection of society. The World Customs Organization (WCO) aids the national economic wealth and social protection of its Members by promoting and honest, transparent and predictable Customs Environment. This permits legitimate international trade to flourish and effective action to be taken against illegal activity. Established in 1952 as the Customs Cooperation Council, the WCO is an independent intergovernmental body whose mission is to enhance the effectiveness and efficiency of customs administration. With 159 member governments it is the only worldwide organization competent in customs matters. In 1994 the Council adopted the working name World Customs Organization to more clearly reflect its transition to a truly global intergovernmental institution. Today, WCO members are responsible for processing more than 95% of all international trade.

Customs modernization
Although significant progress has been made, efficient and effective performance is not spread evenly among all customs administrations or in all regions of the world. In fact, many customs administrations are still suffering the ill effects of inefficiency and corruption. To address this issue the WCO provides extensive technical assistance to members and has developed a Customs Reform and Modernization Program (CRM). CRM is designed to help achieve better use of resources, strengthening of management capabilities, and appropriate customs processes and procedures.

Language of international trade
The Harmonized System (HS) of tariff nomenclature is used as a basis for the collection of customs duties and international trade statistics by almost all countries. Many studies have shown the heavy cost involved for both the public and private sectors in maintaining different product classification systems in different countries. The HS was designed to be an international standard system to avoid such duplication and therefore has become one of the most important instruments in world trade.
Approximately 80% of the 159 members of the WCO could be categorized as developing or in transition to a market economy. A large percentage of these countries depend and will continue to be reliant to a large extent on customs duties for their national revenues. In the US customs duties amount to $18 billion per year while in the European community they represent 15% of the total revenues.

The General Agreement on Tariffs and Trade (GATT) was first signed in 1947. The agreement was designed to provide an international forum that encouraged free trade between member states by regulating and reducing tariffs on traded goods and by providing a common mechanism for resolving trade disputes. GATT membership now includes more than 110 countries.