STATED TASK: GOVERNMENT SHOWS WILL TO MAKE CUSTOMS SERVICE TRANSPARENT BODY
Sara Khojoyan

ArmeniaNow.com
04 July, 2008
Armenia

For the last two months the State Customs Committee (SCC) of Armenia
has been the focus of government efforts to fight corruption. Many
Armenian residents say they have already seen the positive changes in
structure which is believed to be one of the most corrupted in the
country, while others are still skeptical that the lawful manner of
work will continue.

The government that chose reforms of the tax and customs bodies as
the main directions of its activities is paying "centered attention"
to all this.

"Our country has no sources for solving social problems apart from
collections made by tax and customs bodies. So, we have to take the
path of self-purification," Prime Minister Tigran Sargsyan emphasized
during his first meeting with SCC.

The SCC, where according to President Serzh Sargsyan, "corruption is
thriving", embarked on the "path of self-purification" immediately. The
changes were so unexpected and swift that the business world and
ordinary people were surprised and at the same time skeptical that
all that was only a temporary measure.

Karapet Alexanyan is one of those who felt for himself the positive
changes made at the custom service. Alexanyan purchased a car from
the United States a few months ago and in early June it reached the
border of the Republic of Armenia.

"Knowing how everything is handled in Armenia, I was worried. I had
heard different prices of customs clearance from different people
and was a little worried. People said that the customs clearance of
the car I had purchased was quite expensive, 1.5 times higher than
I actually paid for it eventually," Alexanyan says.

"Still, I had absolutely no problems with customs clearance. I
had heard that the reason was that everything has been legalized
now. Perhaps that was the reason for low prices. They say now
you pay only the sum that is required from you, without bribes,"
Alexanyan adds.

Unlike Alexanyan, David Allahverdyan was not lucky, as he had imported
his car before the reform:

"In February I imported a Volkswagen model 2000 and cleared it at
the customs for $4,525. And my friend brought a car with the same
parameters in May and paid $2,800 for clearance, i.e. $1,700 less. It
means that I had given $1,700 not to the state."

To feel less deceived Allahverdyan is going to import another
car. "While there is law and order, I’ll go and bring a car at a low
price, otherwise, I don’t know how long this will last," he says.

As part of the reform, the SCC introduced several novelties. Among
them is the posting on the SCC website of a list of fixed prices
for a number of commodity types, an option of filling in customs
declarations by the importer/exporter themselves, etc.

These points were envisaged by the legislation still from 2001,
but were not applied in practice.

The changes are evaluated as positive also by representatives of the
business world, who emphasize, however, that there is still much to
be changed.

Kia Motors Armenia CJSC deputy director Ararat Mardoyan says that for
them as for large importers these changes have not proved efficient
yet.

"The reforms in reality solved only technical issues," Mardoyan
says. "For example, you can fill in the papers more quickly and things
like this, but nothing more. This all has helped more individuals."

"They still have to do a lot of work in connection with the formation
of the customs value, many subtleties are not worked out yet, for
example how they decide customs prices, who decides those prices,
etc. We are an official representative of Kia Motors in Armenia,
but even we are not allowed to make an invoice customs clearance,
that is, we and individuals pay the same price in the case when we
buy at a lower price from the plant in case of larger quantities."

Mardoyan considers a high percentage rate of customs clearance a
"nonsense": "They have high percentage rates of import in countries
where there is domestic car production in order to promote the sales
of the domestic producer."

"In this case, it hits the consumer as 30 percent is a very high
percentage. For example, an SUV of a medium category can be purchased
in Armenia for $25-27,000, and in Dubai it can be purchased for
$12-15,000, yet in Dubai residents earn three times as much. As an
importer, we still bring and sell. Eventually, it is consumers who
find themselves on the receiving end, since the higher the percentage
rate is the higher the selling price is," Mardoyan explains.

In the first half of 2008 20,000 cars were imported to Armenia,
by 4,000 more than in the same period of the last year.