Azerbaijan Confederation of Entrepreneurs made proposals in the public debate on “Customs reforms: challenges and opportunities”

A public discussion on “Customs reforms: challenges and opportunities” was organized by the State Customs Committee, the Public Council under the patronage Small and Medium Business Development Agency (SMBDA), and the Confederation of Azerbaijani Entrepreneurs (ASK) with the support of SMBDA.

Mr. Vugar Abbasov, Vice President of the Confederation, spoke at the discussions.The vice president noted that ASK has forged close cooperation with the Customs authorities by continuously representing the interests of the entrepreneurs, and a Memorandum of Cooperation was signed between the parties on 21st June, 2018. According to the Memorandum, a Cooperation Council was established between the parties.

The Council held a number of meetings in 2019 and 2020, and in 2021 conducted a survey at the customs terminal among entrepreneurs on the status of customs clearance. It is worth noting that the most   challenging issues faced by entrepreneurs were discussed during the meetings held within the Cooperation Council.

Abbasov also noted in the event that if a businessman disagrees with the customs authority requirements, the opportunities available to such businessman, to obtain a written official refusal produced by Customs in order to lodge complaints are very limited. An entrepreneur is forced to accept Customs authorities’ requirements in order to get their goods released from the customs terminal area. A Customs officer, who has doubts in the declared value of the goods is authorised and entitled to reinvestigate, to recalculate and determine a revised corresponding customs duty amount to be payable by entrepreneurs.

However, this refusal procedure should be carried out in a formal manner, and the entrepreneur should be notified about it in writing accordingly. The right of an entrepreneur to appeal the decision of the Customs authority and to escalate to a higher authority and to court if necessary, shall be formally recognised.

The vice president emphasized the need to establish a good practice of using special customs procedures in such a way that it would positively affect the activities of entrepreneurs:

“Under the leadership of the victorious Supreme Commander-in-Chief, our heroic Army has created a new situation in the region. Undoubtedly, this affects the Customs policy as much as any other field. Nowadays, we are also aware that customs checkpoints and posts are being established in territories liberated from occupation. Our country will turn into a trade centre and logistics hub with the increase in the importance of the middle corridor linking the countries of East Asia and of Europe owing to the launch of the Zangezur Corridor. Our customs and trade policy should also align with this. We should not hesitate to take bolder steps today, such as applying VAT on imported goods after their sales in country, rather than as an advance payment during the customs clearance procedure. I invite you to discuss this issue, today pre-payment of both customs duties and VAT may lead to a decrease in the working capital of the entrepreneur, resulting in reduction of volume of the imported goods.

Abbasov also added that ASK is currently working on the proposed list of raw materials and intermediate goods to be exempted from being levied import customs duties and VAT, and cooperation in this field is expected to be efficient