TI Georgia vs. Ministry of Finance
11 April, 2013
TI Georgia vs. Ministry of Finance
Transparency International Georgia (TI Georgia) lodged a complaint in Tbilisi City Court on April 5, 2013, seeking the annulment of two orders that have led to the restriction of customs procedures for small and medium-sized carriers, allowing Georgian Post to acquire a dominant position.
The order issued by the finance minister of Georgia as an anti-smuggling remedy by end-January of 2013 made substantial changes to the procedures on importing/exporting goods to and from the customs territory of Georgia,
as well as submitting declarations that created serious problems for private carrier business in Georgia. 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. The only carrier responding to the requirements is the state-owned Georgian Post that cannot insure comprehensive customs clearance procedures of commercial cargos for unlike private 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. Nevertheless, Georgian Post is the single operating carrier at the moment while up to 15-20 private cargo carriers stopped activity since January and face losses, Zaza Jiadze, Chairperson of Association of Carriers and Trade, told Georgian Journal.
To find the truth in February some carriers including Star Group filed a lawsuit against the discriminating requirements but the litigation procedures lingered up to day and no court decision is drawn so far, Tea Machavariani, a founder of Star Group carrier company, said. Carriers believe the regulations are intended to drive out the private companies of the market and secure a monopoly for one carrier Georgian Post. Once the court did not solve the problem carriers asked TI Georgia for help. TI Georgia, having analyzed the said regulations concluded that the relevant orders of MOF and Revenue service (RS) are inconsistent with the Georgian legislation and should be abolished by all means. First and foremost the introduction of the new requirements virtually imposes the license / permit regime which violates Georgian Law on Licenses and Permits, since such requirements can only be imposed by law, TI Georgia experts explain.
Moreover, the Minister’s order that restricts competition securing an advantageous position for Georgian Post contradicts Georgian constitution which obliges government to promote the free entrepreneurship and competition. Although finance minister during his meeting with TI Georgia representatives promised to improve customs procedures companies have not been able to perform their activities since the enactment of the new regulations. This makes companies exposed to risks to be expelled from the market eventually. Finance minister disagrees that Georgian Post is a monopolist for several companies responding to the requirements do operate too. TI Georgia meantime thinks MOF did not take any concrete steps to improve the situation and appealed to court.
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3.9340