Ministry of Finances Accused of Protectionism
04 April, 2013
Ministry of Finances Accused of Protectionism
Georgian Carriers accuse government of protectionism in favor of state-owned Georgian Post to transform it into the market monopolist. Carriers also fear Georgian Post is just a front figure to a certain Azeri carrier company striving to get a monopolist position at the regional level. Government swears Georgian Post’s privileged position is a temporary remedy to combat contraband. Around 10 Georgian carriers put their businesses on a two-month halt in result of the increased bureaucratic burden in customs clearance procedures
the Ministry of Finances of Georgia (MOF) required in its special order issued by end-January of this year as an anti-smuggling remedy. The new regulations admit carriers to implement customs clearance only if they are reputable and experienced, have own warehouse, managed to work out and install own special software system in 7 days for declaring cargos in electronic system, and organize timely payment of import duties and the service fee by the importer
However the new regulations seem redundant to both carriers and sector pundits as apparently put Georgian Post, the only carrier responding to the said criteria at the moment, in an advantageous position at expense of infringing interest of other market players. Besides, it opposes the World Trade Organization (WTO) rules focused on simplification of bureaucratic burden in customs procedures. As a consequence, to implement customs clearance of the imported goods carriers have to move their goods to warehouses of Georgian Post that increases transportation costs by around 25%. Moreover, if carriers will become customers of Georgian Post they are exempted to ensure the payment of the taxes by their clients while this function apparently is the prerogative of Revenue Service (RS) as carriers are responsible only for transportation services. Private carriers believe Georgian government lobbies Georgian Post. Transparency International Georgia having researched the case finds the claim grounded. MOF argues that implementation of customs clearance through the state-owned Georgian Post is very helpful to set a full anti-smuggling control at transportation market until it will be set in full compliance with the law that includes loopholes as of yet. It pledges to discharge the market of the monopolist gradually in several months. Tea Machavariani, founder of Star Group carrier, fears that meantime Georgian carriers will be unable to operate; this gives an opportunity to Azeri carriers take over Georgian market and control the regional transportation market completely. This deprives Georgia of its natural hub function to handle with customs clearance on the European-Asian bound cargos in the South Caucasian transit corridor that will be implemented in Azerbaijan instead.
“Representatives of companies affiliated with one big Azeri carrier are already prowling in Lilo marketplace [where big importers are concentrated] recruiting importers to use their service and giving them money in debt without interest to make necessary procurements,” Machavariani told Georgian Journal. Moreover, she finds Georgian Post includes big contraband risks rather than other carriers for unlike other carriers Georgian Post is not connected with ASYCUDA [an Automated System for Customs Data developed by the UN] that insures comprehensive registration of the import in compliance with the WTO rules.
“Therefore, Georgian Post creates a big black hole of contraband in fact as it cannot ensure full registration of imported cargos. According to one declaration of Georgian Post, which I have at hand, 10 tons of cargo took 50 places, while normally around 70 kilo takes one place. Now calculate the volume of goods that remains unregistered.”
Irakli Lekvinadze, an economic analyst, believes Georgian Post’s privileged position was created by previous powers to have a shadow financing channel and new powers should not use it as an anti-smuggling tool. “If the RS has contraband suspicions, it has a financial police for that and let them inspect the suspected carriers and not boost a new monopolist in this fight,” he said.
Other Stories
Doing business in Georgia has become easier than in America
According to the Doing Business 2019 report published by the World Bank, Georgia ranked 6th among 190 countries in terms of simplicity of doing business. This was an improvement over two ranks compared to last year.
Problems that foreigners frequently face in Georgia
The importance of Georgia as a tourism hub is growing year after year.
Tbilisi TV Broadcasting Tower – Better than the Eiffel Tower?
It is planned to renovate the Tbilisi TV Broadcasting Tower, one of the landmarks in the capital.
Georgian Fusion Menu by The Biltmore Hotel Tbilisi
5,895,914 international visitors have visited Georgia between January and August of 2018. Compared to the previous year the number has increased by 12.2 per cent.
Advertising of gambling and lucrative games may become banned in Georgia
Advertising of gambling and lucrative games may become banned in Georgia. Those who violate the new rule would be fined GEL 10 000.
Lebanese café-lounge Beirut opens in Tbilisi
What is necessary to organize an unforgettable event? – Fun, emotions, lots of surprises, good music and delicious menu.
Georgia second among the fastest growing tourist destinations in Europe
Georgia is among the fastest growing tourist destinations in Europe. The data is published by the UN World Tourism Organization.
Bitmain launches world digital mining summit in Tbilisi, Georgia
Bitmain CEO Jihan Wu and Roger Ver, CEO of Head Speaker List featuring Circle, and Genesis Mining when Digital Mining Leaders Convene In Tbilisi on September 21-23
TBC Bank and Gazelle Finance have teamed-up to support Medical City, a leading healthcare provider in the western region of Georgia to launch the Western Regional Center Of Modern Medical Technologies.
Equivalent to buried treasure – resources that are underused in Georgia
For 2018 the IMF Commission has forecast an annual economic growth for the Georgian economy of about 5,5%.
Does the quality of Georgian wine increase and how the export affects it
If we look at the data collected about modern Georgian wine, we will find out that the Georgian wines produced between 2015-2017 are much better in terms of their quality and Oenologic features rather than the wines produced between 2009-2011.
Japan simplifies the visa requirements for Georgian citizens
Diplomatic and economic relations between Georgia and Japan are now moving to a new phase. Recently Japan has decided to simplify the visa requirements for Georgian citizens.
M&S (Marks and Spencer) and H&M collections to be produced in Georgia
Garments manufacturer MGMTEX will start production of the M&S and H&M trendy collections from this September.
The World Digital Mining Summit to be held in Georgia
The summit is scheduled to take place between 21st-23rd September in the Hualing Hotel, Tbilisi, Georgia.
Galt and Taggart - Tourism Boom Continues in Georgia
Tourism has become one of the key drivers for the Georgian economy. Galt and Taggart has recently published research about the Georgian tourism sector in the first half of 2018.
"The worst dream for Putin is that Russians want to live in Georgia"
This year, visitors to the Adjara region would notice that there is a boom in construction in and around Batumi.
Underground gas storage facility to be built in Georgia
KfW, a German government-owned development bank signed a EUR 150 million promotional loan with the state-owned Georgian Oil and Gas Corporation (GOGC) for the construction of the first underground gas storage facility in Georgia.
New gambling rules for Georgia
Georgian lawmakers are preparing a new draft law relating to online-casinos and gambling that will seek to curb gambling addiction in Georgia.
How expensive is it to visit Georgia?
The Georgian Lari (GEL) is the official currency of Georgia and is the only legal means of payment in the entire territory of Georgia.
Trade with the EU and the Commonwealth of Independent States (CIS) has grown significantly
Trade with the EU and the CIS has grown by 26% and 33.5 % respectively, says GeoStat, the Georgian National Statistics Office.
The unemployment rate decreases in Georgia
The unemployment rate decreased in Georgia by 1,9% and amounted to 12.1% in the 2nd quarter of 2018 compared with the previous quarter,
Memorandum of Understanding to be signed between Georgia and Malaysia
According to the Georgian Ambassador to Malaysia Nikoloz Apkhazava, Georgia plans to sign a Memorandum of Understanding (MoU) with Malaysia.
“Blauenstein Georgia” due to expand in Georgia
“Blauenstein Georgia” is planning to open more shops in Georgia. It is an agriculture company that sells meat products, meat and convenience food.
The amount of Direct Foreign Investment rises in Georgia
According to the information of the National Statistics Office of Georgia, the amount of direct foreign investment in Georgia has risen
It’s going to get  harder for foreigners to get residence permit in Georgia
It’s going to get harder for foreigners to get permit of residence in Georgia.
Exchange Rates
GEL Exchange Rate
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
November 2018
Mon Tue Wed Thu Fri Sat Sun
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30