Georgia: Making Trade Faster and Easier

September 10, 2009 – In the old days, it was much harder to trade goods in Georgia . Across the country, underpaid customs officials had palms that needed greasing at checkpoints and the customs laws were complicated. Crossing Georgia 's 400 kilometers could be a three day ordeal. But these days, things are different.

Simpler customs procedures have made it faster and easier to move goods in and out of Georgia . Fewer and smaller import tariffs are making the country a better place to do business.

Trucks get a once over as they pass through Georgian customs, and Drivers' paperwork is processed on the spot. “ The Customs people treat us well . There is only a problem if drivers' papers are not in order ,” said Andriy Naumnik, Ukrainian truck driver.

Georgia is continuing to push forward with reforms to further simplify its customs procedures. The time and cost required to import and export will be gradually and significantly reduced, as a result of the reforms supported by the World Bank's Development Policy Operation (DPO) and Georgia will continue to improve customs management infrastructure and streamline customs procedures. A new Risk Management System at customs will streamline customs procedures further, and provide different degrees of customs inspections for those with different records of compliance.

In fact, Georgia's ranking for the ‘Trading Across Borders' component of the World Bank's Doing Business Report 2010 has improved significantly to 30 th place in 2010 from 85 th place last year. The report finds that in Georgia t he documentation requirements for import and export were simplified, and there was a significant decrease in the cost of trade.

Deputy Finance Minister, Dimitri Gvindadze: “We are planning to continue streamlining the administrative practices, we are planning to continue improving the processes which underpin the functioning of the Ministry of Finance and we are nowhere close to reform fatigue.”

Georgia links Black Sea ports with countries inland, and Europe with the Near East . The streamlining of customs formalities—implemented by the government with help in part from the World Bank-- make Georgia a more attractive transit country.

As part of earlier customs and tax reform, tariffs on most imports have been abolished. Reduced tariffs make it cheaper to import trucks that meet European Union emissions requirements, making Georgian truckers more competitive outside their country. “Really, we have no import taxes now. It is our path to change,” said Gia Tsipuria

Secretary General of the Georgian International Road Carriers Association.

Reduced tariffs also allow businesses to charge less for goods they import. As the majority of goods sold in Georgia are imported, that translates into better prices for Georgians. But more reforms are needed to upgrade all of the customs posts and procedures, and to ease the tax burden on taxpayers and businesses alike.