The costs of customs compliance in Croatia in 2001

The purpose of the paper is to show the size and the basic characteristics of customs compliance costs of importers (legal entities and small business) in the Republic of Croatia in 2001. The customs compliance costs comprise those costs that the customs payers incur in order to meet the provisions of the customs laws and the requests of the customs administration. Only the amount of the customs duty paid and any distortion costs arising from paying customs duty are not customs compliance costs. The research was carried out by the face-to-face interview method, in the period from June to October 2002. It was concluded that the Croatian customs compliance costs in 2001 were regressive. It was also concluded that costs were large in comparison with the total customs revenue and GDP. It is estimated that customs compliance costs for importers (legal entities and small businesses) in RC in 2001 were around 1,006 million HRK. That is 0.6% GNP and around 31% of total Croatian customs revenues in 2001. There is not, unfortunately, a single foreign research of the costs of customs compliance that could be used as a comparison. What is more the research faced many problems (e,g. non-representative and small samples) so one should be cautious when using its results. For this reason we would conclude that the primary purpose of this research is to pose relevant questions related to the conceptual and methodological problems of customs compliance cost research. Furthermore it should indicate possible size and characteristics of the customs compliance costs in the RC

Modern Approaches to Risk Management and Their Use in Customs

In the article the analysis of experience and best practices of Europe and the world regarding the methods and tools of risk management in customs affairs. In accordance with the requirements of the Kyoto Convention the risk management is the main basic principle of modern customs control methods, which allows optimal use of resources of customs bodies, without reducing the effectiveness of customs controls, and exempt the majority of foreign trade operators from unnecessary bureaucratic control. Procedures based on risk management, concentrate customs control on areas, where there is the greatest risk, allowing the bulk of goods and individuals relatively free to pass the checkpoint at the customs border Special attention is paid to the principles and methods of risk management and their impact on the simplification of customs procedures through the use of risk-based thinking. The paper discusses the problems concerning the application and implementation of modern risk management techniques in customs procedures subject to the requirements of international standards ISO for the quality management system and risk management based on risk-based thinking

Free Trade Agreements versus Customs Unions

Until NAFTA, analyses of preferential trading arrangements began by assuming a customs union with a common external tariff, and the differences between customs unions and free trade agreements (FTAs) have been little analyzed. This paper points to some of the differences between FTAs and customs unions, and shows that on welfare grounds a customs union is always Pareto-superior to an FTA. Moreover, the political economy of FTAs will lead to more opposition to further multilateral trade liberalization than will customs unions.

Regional Trade Integration in East Africa: Trade and Revenue Impacts of the Planned East African Community Customs Union

The paper provides empirical estimates for import and revenue implications that would follow implementation of the planned customs union between the East African Community member states Kenya, Tanzania, and Uganda. We use 2002 trade and trade policy data for the three countries to simulate the effect of the common external tariff and other trade policy changes that will follow the customs union implementation on import flows and customs revenue. We also discuss customs exemptions and the effect of the customs union implementation on balance of payments.International Trade, Regional Integration, Africa, East African Community (EAC), Fiscal Impacts, Balance of Payments Effects of Trade Integration

Mutual Supervision in Preshipment Inspection Programs

Preshipment inspection programs are implemented in many developing countries to fight customs corruption. They consist in delegating the inspection of imports to a private firm that operates in the exporting country. To study those PSI programs, we develop a hierarchical agency model where the government authority can rely on two supervisors, namely the private inspection firm and the customs administration, to control importers' declarations. The government's optimal program is fully characterized. We devote some attention to the optimal inspection policy and its comparative statics properties. In particular, we identify the situations in which PSI programs are optimal. Our results highlight the fact that implementing PSI programs both to fight corruption and to modernize customs is inconsistent. We also discuss the optimal reconciliation policy, i.e. what to do in case of conflicting inspection reports by the private firm and the customs administration. In the optimal mechanism, mutual supervision between the private firm and the customs administration is used to provide adequate incentives to all parties.Preshipment inspection, Mutual supervision, corruption, Customs administration.

Customs Valuation in India: Identifying Trade Facilitation related Concerns

India has introduced several trade facilitation related measures in the last couple of years. The pro-active strategy adopted by the Central Board of Excise and Customs (CBEC) has helped in introducing several policy measures which have not only streamlined the role of the customs department but has also helped industry in a major way without compromising collection of revenue.Trade Facilitation, Customs Valuation, India

A political - economy analysis of free trade areas and customs unions

The authors analyze the welfare effects of regional integration in a model of endogenous protection. They show that introducing preferential trading leads to an increase in protection against countries outside the preferential trading area. Moreover, the important Meade result of preferential trading breaks down in the presence of endogenous protection. According to the Meade result, if excess demands exhibit net substitutability, the introduction of preferential trading is welfare-improving. In the presence of endogenous protection, because preferential trading is accompanied by increased protection against nonpartners, its effect on welfare is ambiguous. The authors also compare free trade areas and customs unions. They provide the first formal treatment of the argument that a customs union is a more effective instrument for diluting the power of interest groups than is a free trade area. Under a customs union, the tariff available to one country becomes available to all countries in the union. This introduces a free-rider problem in lobbying and all lobbying takes place in one country. The lobby chooses a lower (common) external tariff under a customs unions than under a free trade area. This means that welfare in the country where lobbying takes place is higher under a customs union than under a free trade area, although the same may not hold true for the other country. The level of the common external tariff declines as the number of members in the union increases. Therefore, the larger the number of partners in a customs union, the more likely it will improve the welfare of member countries. But, because of the free-rider problem, lobbies are likely to resist the enlargement of the customs union.TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Trade and Regional Integration,Environmental Economics&Policies,Economic Theory&Research,Trade Policy

The Impact of Customs Procedures on Business Performance: Evidence from Kosovo

This paper aims to identify formal and informal institutional factors in customs procedures and their impact on the performance of small and medium-sized enterprises (SMEs) involved in international trade in Kosovo based on a questionnaire conducted in 2009. The econometric findings show that one of the most important obstacles encountered by SMEs are regular appeals against customs decisions that are assumed to be inter alia a consequence of frequent changes in over-complicated laws and regulations. However, there is a positive and significant effect of the formal customs institutions that facilitate the trade of imported goods, namely of so-called customs procedures with economic impact.customs, firm performance, formal and informal institutions, small and medium-sized enterprises, Kosovo

Taxes in Europe Database

The Taxes in Europe database is the European Commission's on-line information tool covering the main taxes in force in the EU Member States. Access is free for all users. The system contains information on around 650 taxes, as provided to the European Commission by the national authorities. The "Taxes in Europe" database contains, for each individual tax, information on its legal basis, assessment base, main exemptions, applicable rate(s), economic and statistical classification, as well as the revenue generated by it. The information is listed in the form of a downloadable file. The "Taxes in Europe" database is not meant to constitute a reference for legal purposes. The "Taxes in Europe" database covers the following types of taxes: All main taxes in revenue terms. These include notably personal income taxes, corporate income taxes, value added taxes, excise duties; The main social security contributions. A list of minor taxes yielding less than 0.1% of GDP (not covered by the database) can be found here. The database does NOT cover information on Customs duties and tariffs. This type of information can be found in the customs tariff database TARIC.European Union, taxation, database