Confronting customs reform
Egypt's customs authority is in dire need of reform, experts at a seminar this week concluded. Niveen Wahish listened in
A plan to overhaul the customs authority has been announced by Prime Minster Atef Ebeid in his policy statement this week to parliament.
Omnia Helmi, consultant to the Egyptian Centre for Economic Studies (ECES), listed the problems faced by the customs agency and proposed ideas to render it more efficient at a presentation this week.
The cost and effort involved in releasing goods from Egyptian customs surpasses those of any other neighbouring country, let alone developed nations, Helmi said. For example, a container is charged $185 in Egypt compared to $92 in Jordan for a similar container. The cost of release per container is not fixed, ranging between $26 and $180, compared to $19 in Jordan. Informal payments may range between $100 and $130. While the average number of days for goods to be released from customs stands at 3.5 for developing countries, Helmi said, it takes up to 10 days in Egypt. In addition, an average of 45 different procedures and 24 signatures are required to release goods from Egyptian customs.
Meanwhile, the customs collection rate is low due to smuggling and the many exceptions and exemptions allowed. Currently, the government's customs revenue stands at LE7.4 billion.
Moreover, the customs authority is faced with an increasing number of claims against it by importers. A number of factors have contributed to this, Helmi said, including the fact that Egypt has 29 tariff lists, compared to only one in Chile for example.
She said also that almost 70 per cent of Egypt's health, environmental and safety specifications do not meet international standards.
Sample inspections of goods by numerous authorities, the lack of use of technology, paperwork dependence, the lack of employee incentives and the complicated administrative structure of the customs authority all contribute to the problem. "There are 16 central departments to which 90 general departments and 735 specialised departments are affiliated," she said.
Adel Radwan, director of the customs reform project affiliated to the Ministry of Finance, said the ministry has launched a scheme to improve the work of the customs authority. The project's team began their work two months ago and are laying the groundwork for the proposed reform.
Developing a new customs law by the end of 2003 is high among the project's targets, in addition to establishing a clear and simple set of customs procedures. The project also hopes to slash the exemptions and activate customs mechanisms in favour of exports. Among the project's priorities is the automisation of all customs gateways, setting out a new tariffs structure with less tariff lists, modernising the authority's organisational structure, training staff and applying in full the seventh article of the General Agreement on Tariffs and Trade regarding customs valuation.
