New EU Norms To East Customs Logjam in Eastern Europe
by Peter Davies

DHL recently commissioned a report that looked into customs delays in Central and Eastern Europe. It revealed that major investors in the region were being stifled by a "red tape curtain" of excessive bureaucracy and a lack of understanding of their needs (Transition, December 1997, p. 14). The company, being well aware that customs delays hurt not only its clients— international businesses—but also the countries themselves, commissioned the report to open a debate involving governments, international organizations and businesses, and to jointly find a solution to these problems.

Recently, the European Commission completed its proposals about reforms that customs authorities in 10 Central and Eastern European countries—identified for eventual European Union (EU) membership—should adopt before accession. The recommendations go a long way toward addressing many concerns about customs in the region. If implemented by customs authorities, businesses will notice a real change for the better at border crossings and airports. In May the Commission passed a copy of their blueprints on to DHL. It is worth highlighting a number of the recommendations, even if customs rules change fairly frequently in Central and Eastern Europe, where the economies are still in a state of transition.

The blueprints deal extensively with communication. Customs authorities in the accession countries are asked to provide as much information as possible about customs procedures and legislation through brochures, seminars, free telephone lines, or internet sites. (To keep business clients up-to-date, DHL—besides dealing with its customers directly —will open up communication channels with other air express carriers as well as national chambers of commerce).

The blueprints stress the need for customs authorities to develop an efficient information technology system that ensures that shipments are cleared to the highest level of efficiency. Only systems that meet the needs of governments and businesses and that are compatible with EU standards should be installed. Obviously, with only a year and half to go before the next millennium, these systems should be "year 2000 compliant."

The EU suggestion that customs regulations should reflect the concept of proportionality is highly welcome. A lot of customs difficulties are caused by overzealous application of the rules. Not that customs officials in Central and Eastern Europe should stop being vigilant—far from it. However, in some cases shipments worth a few dollars are levied duties of 30 or 40 times that amount.

Another EU suggestion is also directly applicable: Governments should develop a stable, comprehensive, and modern legal framework to ensure EU customs legislation.

Emphasizing partnerships between customs authorities and businesses is perhaps the most encouraging aspect of the European Commission’s blueprints. The issue of "trade facilitation" warranted a section of its own. Throughout the document one major leitmotif is how customs authorities can meet the needs of businesses, trade bodies, and air express operators. In particular, customs authorities are asked to:

· Sign "memorandums of understanding" with major trade and transport bodies, provide electronic data interchange (EDI) links to the trade, and consult regularly with organizations such as chambers of commerce. (DHL has signed such agreements with customs authorities around the world.)

· Set up a Customs Consultative Committee "comprising representatives of national trade organizations and representative groups" that should meet on a regular basis.

· Keep the needs of businesses in mind when new legislation is introduced.

· Establish good relations with businesses as an integral part of the management plan, and to make sure it is communicated to all customs officials.

· Establish clear roles and responsibilities for customs officials, and ensure that businesses know about them.

· Commit to clearing shipments with the minimum of delay, and regularly monitor and reduce waiting times.

The blueprints do not specify time limits and would not say what will happen if countries do not conform. It is, however, understood that in each country a gap analysis will be made of the situation by the end of 1998. This will then form the basis of future EU support for improving the situation.

A brief glance at the World Economic Forum’s latest Global Competitiveness Report should be enough to instill a sense of urgency. Even the three most successful Central European transition economies were laggards: the Czech Republic was 35th, Hungary, 43rd, and Poland, 49th—out of the 53 countries included. Meanwhile Russia and Ukraine ranked last and next to last. (The competitive index is built on the average of eight factors: openness, government, finance, infrastructure, technology, management, labor, and institutions.)

What goes on at customs points is of key importance to DHL and the businesses it serves, being the largest company handling the largest number of imports into Central and Eastern Europe and a major employer in the region. The European Commission’s blueprints should be broadly welcomed. It could be an important step in the right direction, reducing some of the bureaucratic gridlock that is slowing down trade into and out of the region.

The author is DHL’s regional director for Central, Eastern, and Southern Europe.

DHL would like to hear other organizations’ views on customs in Central and Eastern Europe. Please contact Dirk Singer or Richard Kanareck. Tel. 44-171-465-7700; email: dirks@redconsultancy. com.