BiH is now a single and uniform customs territory

The situation in customs is improving dramatically in BiH thanks, amongst other things, to the full introduction of the same tariff rates throughout the country. On 15 May this year both the Federation of BiH and the Republika Srpska finally fully complied with BiH customs tariff law adopted by the State in February 1998. This means that BiH now has a single and uniform customs territory and that the Entities have stopped giving preferential treatment to goods imported from Croatia or the Federal Republic of Yugoslavia. Goods entering BiH are now charged the same customs duty rate regardless which country the goods are imported from and regardless via which Border Crossing Point goods enter the country. This is a major step forward in the implementation of the customs aspects of the Dayton Peace agreement.

The focus in customs is now shifting to law enforcement. That is, the identification, capture and charging of persons and/or companies avoiding the payment of customs duties and taxes either by smuggling goods in to BiH, or by using fraudulent documents during import, e.g. invoices giving a false and usually low value to imported goods. The Customs and Fiscal Assistance Office (CAFAO), a European Commission-funded programme is working with the Federation Customs Service and the Republika Srpska Customs Service to establish Customs Enforcement Sections within each Service. Each Section comprises three disciplines:- Intelligence, Anti-Smuggling and Investigation Units. The Intelligence Unit comprises customs intelligence officers distributed throughout the customs regions within each Entity, who liaise with customs officers in the field in order to obtain and analyse information which may assist the Anti-Smuggling and Investigation units in enforcing the customs law and pursuing cases of customs crime.

The Anti-Smuggling Unit comprises mobile teams which, based on informed risk analysis and intelligence, can make unannounced visits to any Border Crossing Points or customs locations within the Entity to intercept vehicles and goods which have been identified as suspicious or involved in customs crime.

The Investigation Unit in each Entity Customs Service is responsible for identifying, investigating and reporting customs offences connected with the import of goods to BiH, with the aim of prosecuting those involved in any such illegal activities. These investigations are often based on information received from the Intelligence Unit or from detections made by the Anti-Smuggling teams.

All customs officers in the Customs Enforcement Sections in each Entity have participated in training provided by the CAFAO programme. CAFAO has also provided the Federation and Republika Srpska Customs Services with all equipment necessary to support law enforcement activities. This includes everything from pens and notebooks, to vehicles and satellite communication equipment, as well as equipment to search vehicles and containers. At the same time, customs officers from EU Member States are, as part of the CAFAO programme, working in teams with local customs officers within these units, and are currently actively participating in all operations. This is part of CAFAO's project to ensure the transfer of skills from experienced EU customs officers to local customs officers and is proving to be a successful on-the-job training project. This project and the presence of EU customs officers will be progressively reduced as Federation and Republika Srpska customs staff grow more experienced and confident in their enforcement work.

Although the first six months of this year have been largely taken up with selecting, training and equipping the two Enforcement Sections, they have already achieved considerable success in detecting major customs fraud in the region. In this short period of time and when not yet fully operational, revenue evasion estimated as being in excess of some 12 million KM/DM has already been identified. With the special assistance of the CAFAO programme, changes are planned in the near future to customs officers' powers, which will enable even more effective law enforcement. additional, and more appropriate, criminal customs offences and penalties are also planned. A properly trained, equipped and empowered Enforcement Section in each Entity's Customs Service which, together with more effective legislation covering offences and penalties, should provide a significant deterrent factor to would-be criminals.

Close Co-operation Against Fraud

The respective Customs Enforcement Sections in the Federation and Republika Srpska have also developed close and ongoing co-operation in their efforts to eliminate illegal customs activities in BiH. Customs officers now exchange information on a daily basis and are also meeting regularly in both Sarajevo and Banja Luka.

CAFAO is also assisting the Entities to establish formal co-operation on customs matters between the customs services in BiH and their counterparts in those countries trading with BiH. This should further minimise opportunities for smuggling and customs fraud in the region.

Customs Hotline

As part of the establishment of customs enforcement capacities, a significant step has been taken to involve the public of BiH in the fight against customs crime.

A Customs Hotline was launched simultaneously in both Entities in mid-September this year and was accompanied by an advertising campaign of billboard ads, pamphlets and television commercials. The Hotline is a dedicated and easy-to-remember telephone number which the people of BiH are being encouraged to call if they have any information they believe could assist customs to combat customs crime.

Similar customs or drug Hotlines exist in many EU countries and have proven to be a significant tool in combating drug and commercial smuggling. The CAFAO programme has worked very closely with the Customs Services in the development and introduction of Hotlines in both Entities. The information gathered through the Hotlines will form just one of the elements in the collection of intelligence information aimed at reducing the level of revenue evasion and customs crime in BiH.

As one of the main Government authorities dealing with revenue collection and enforcement of laws, it is essential the Customs Services in BiH are certain their staff and organisation are upholding the laws and regulations. That is, they need to be sure their "own backyard is clean". And in this context CAFAO is helping the customs authorities to introduce internal audit and management assurance functions. These are intended to assure the Customs Directors, as well as the Government itself that there is no misappropriation of funds or revenue due to internal corruption or fraud, while also identifying areas within the Entity Customs Services which may require improvement.

For more information:
CAFAO
Bistrik 9
71000 Sarajevo (BiH)
Tel +387 71 666 040
Fax +387 71 666 039
E-mail: cafao@octas.com