Logo of Phnom Penh Post newspaper Phnom Penh Post - Pre-shipment checks to boost import duties

Pre-shipment checks to boost import duties

Pre-shipment checks to boost import duties

THE Royal Government has introduced regulations requiring inspection of goods before

they are shipped to Cambodia in a bid to crackdown on illegal imports and corruption.

The new measures come into force on July 1 and cover imports of some categories of

goods worth more than $1,000. The inspections will be carried out by the British-based

multi-national Inchcape Testing Services.

At a well-attended seminar last Friday at the Cambodiana Hotel, Finance Minister

Sam Rainsy outlined the reasons for introducing the new procedures known as Foreign

Trade Supervision (FTS).

One of the most important, he said, was maximizing revenues from the collection of

customs duties.

Indonesia, Peru, Mali and Sierra Leone had noticed a dramatic increase in the amount

of revenues recovered after introducing a similar system, the finance minister said,

with Indonesia's increasing four times.

A Finance Ministry official told the Post the new procedure could eventually double

the amount of customs duties brought in and he projected 361 billion riel would now

be collected this year as against 237 billion riel last year.

Rainsy stressed that the Customs Department are not surrenderring their powers to

Inchcape and that the contractors are merely providing a service to the government.

He said he is keen to see strict quality, quantity and pricing controls enforced

solely by the Customs Department as there are great irregularities in customs declarations

from importers seeking to avoid paying duties.

Among some of the common fradulent practices by importers are goods being deliberately

underpriced, of a poorer quality, of a lesser or greater amount than stated, Rainsy

said. Some declarations even deliberately lie about what the imports are.

Rainsy used petrol as an example saying it is subject to 45 per cent customs duties

but is often declared as diesel which has a tax of 20 per cent. It can also be bad

quality which damages engines.

The minister was confident Inchcape's supervision would succeed where previous measures

had failed as the international company would "not risk its reputation in indulging

in illegal activities in Cambodia".

Rainsy said state bodies did not have the capacity to fully control goods coming

into Cambodia. He said this was due not only to a lack of technical means but also

because of corruption and a lack of political will.

In an interview with the Post, Rainsy said he had met strong resistance to the new

procedures from the Commerce Ministry and from some Western companies.

The Commerce Ministry currently oversees the inspection of the quality of imports

and Rainsy said the two Ministries' work could be complimentary. However, he said

the Finance Ministry has ultimate authority over the Customs Department and was entitled

to inspect any imports for quality.

Rainsy said: "[There were] so many loopholes caused by the corruption of the

Ministry of Commerce. We don't have the right to prevent them doing controls on quality

but we will do another."

Many Western companies are upset by FTS and were protesting loudly, Rainsy said,

but he felt sure this would be overcome as he has the support of both premiers.

"These new procedures I am implementing threaten many powerful Western interests.

Many companies are used to cheating the State and these new procedures will ensure

transparency," he said.

Not all goods coming into Cambodia are to be inspected and there was some confusion

among seminar participants as to what exactly will be affected.

The main target for inspection is oil, petrol and petroleum products. Other categories

are pharmaceuticals, all government-linked procurements including all major projects

and all goods imported under the prevailing investment law's tax concessions.

Some goods will be subject to inspection from time to time as the Government decides.

These are some goods covered under commodity aid/budget support provided by bilateral

and multi-lateral donors and some goods for humanitarian aid.

Rainsy said in addition some other goods could be subject to inspection according

to the economic situation of the country and the needs that could be filled by foreign

trade.

Clarifying the humanitarian aid area, Rainsy told the Post :"NGOs should not

be worried, it's mostly affecting trade and they should not be much affected."

Stopping counterfeit medicines is a primary reason for this provision.

Questioned on why he was introducing categories for inspection rather than inspection

of all imports, Rainsy said: "I want to inspect the most sensitive areas. It

may expand to more areas in the future, depending on the result."

Inchcape's service will include customs analysis, price analysis, goods inspection,

documentation inspection and the issuance of either a FTS certificate or a certificate

of non-conformance. No goods will be allowed into Cambodia without a satisfactory

FTS certificate which will tell the importer the amount of duties owed.

The procedure involves the importing company notifying Inchcape's Phnom Penh office

of an intended shipment and filling in pro-forma invoices and inspection certificates,

supplied by Inchcape.

Inchcape will then contact its office nearest to the point of export and arrange

an instant inspection. An FTS certificate is issued after a satisfactory inspection.

MOST VIEWED

  • NY sisters inspired by Khmer heritage

    Growing up in Brooklyn, New York, Cambodian-American sisters Edo and Eyen Chorm have always felt a deep affinity for their Cambodian heritage and roots. When the pair launched their own EdoEyen namesake jewellery brand in June, 2020, they leaned heavily into designs inspired by ancient Khmer

  • Schools drawn into Manet degree row

    Prime Minister Hun Sen stepped into the Hun Manet-Sam Rainsy war of words over the validity of Manet’s degree from the US Military Academy at West Point, set off by Rainsy’s claims that Manet had received a “second-class degree” or “honorary degree”. Hun

  • Cambodia records first Omicron community case

    The Ministry of Health on January 9 reported 30 new Covid-19 cases, 29 of which were imported and all were confirmed to be the Omicron variant. The ministry also reported 11 recoveries and no new deaths. Earlier on January 9, the ministry also announced that it had detected the Kingdom's

  • The effects of the USD interest rate hike on Cambodian economy

    Experts weigh in on the effect of a potential interest rate expansion by the US Federal Reserve on a highly dollarised Cambodia Anticipation of the US Federal Reserve’s interest rate hike in March is putting developing economies on edge, a recent blog post by

  • PM eyes Myanmar peace troika

    Prime Minister Hun Sen has suggested that ASEAN member states establish a tripartite committee or diplomatic troika consisting of representatives from Cambodia, Brunei and Indonesia that would be tasked with mediating a ceasefire in Myanmar. The premier also requested that Nippon Foundation chairman Yohei Sasakawa

  • NagaWorld protest part of ‘conspiracy’

    The Phnom Penh Municipal Court and police held a joint-press conference on January 4 to clarify details concerning the arrest of nine former employees of the integrated resort NagaWorld and the charges brought against them, saying that the authorities had clear grounds for taking legal action.