Importers would save 17.5 million lei with deferred custom payments

15 December 2015

17 milpeopleDeferred custom payments would allow authorized economic operators (AEOs) to save 17.5 million lei annually, simply by allowing them to pay Customs duties post-factum — a common practice in the rest of the world, including the European Union.

A proposal to adopt deferred payments of Customs duties has been developed by the Moldovan Customs Service and the USAID Business Regulatory, Investment, and Trade Environment (BRITE) is currently being promoted in the framework of the "Update Moldova" communication campaign.

Currently in the Republic of Moldova, custom duties for goods must be paid by economic operators before clearance procedures begin. The practice of requiring payment of Customs duties in advance conflicts with international practices — including those that Moldova has committed to adopting under the Deep and Comprehensive Free Trade Agreement (DCFTA). Under the envisioned reform, economic operators will perform all the custom payments in a consolidated manner once a month. As a first step, the Moldovan Customs Service developed and proposed a transitional solution to Ministry of Finance – that custom duties for import shall be paid by businesses holding AEO status within 10 days of clearance. A similar solution, addressed to the Ministry of Environment, applies to consolidated payment of environmental charges once a month.

"Moldova has to change its mindset on when customs duties should be paid. The country should see deferred payment of customs duties as a long term investment that will bring revenue increases over time, as businesses will use the facility to develop their imports", says Nigel Moore, an international trade facilitation expert who has worked in Moldova extensively.

The reform will help to reduce costs incurred by importers during the goods customs clearance procedure in several ways, including the elimination of storage fees at customs terminals for goods that cannot be cleared automatically and avoidance of penalties for delayed payment. Economic operators also will not have to incur interest on bank guarantees necessary to ensure advanced payments under the current system. In addition, economic operators will be able to have their imported goods immediately and to use their working capital in a more effective way. Additionally, they will save more time, due to a more efficient custom clearance procedure.

Under the new regime, payments to the state budget will be performed in the same amounts, and, on long term, the budget revenues will increase due to accelerated economic growth. In effect, the state will be investing in sustainable development of business sector at zero cost. In this way, the reform will contribute to the implementation of DCFTA provisions, and support increased business predictability and efficiency, thereby making the Republic of Moldova a more attractive as a state for investors.

The campaign Update Moldova is organized with the financial support of the U.S. Agency for International Development's Business Regulatory, Investment, and Trade Environment project (USAID BRITE). The campaign targets both the private sector and government stakeholders and encourage working in partnership and work together to identify mutually beneficial solutions that will increase economic growth in the country. Media partners of the communication campaign are the TV channels TV7, Realitatea TV and MBC, news portals Agora and Newsmaker, and the news agency Infotag. The website, www.updatemoldova.md, will provide more information about each reform and its status of implementation.

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