Банкеръ Weekly

Briefs

CROWN AGENTS IN THE MIDDLE OF NOWHERE

The Finance Ministry is no more so certain about the unique abilities of the customs consultants from Crown Agents. This is the main conclusion that can be drawn from the data about the Customs Agency's financial plan for 2003, made public during the week. In the words of its Director Assen Assenov, the Agency's proceeds into the budget should exceed BGN2.8BN in 2003. Most of this money should come from VAT on imports (BGN2.55MN), and a total of BGN180MN is expecetd from customs duties. Proceed from excise duties is preestimated at BGN103MN. The fact that in drafting the customs' plan for 2003 the Finance Ministry has projected only BGN100MN up from 2002, seems quite strange. In the previous years the projected increase of proceeds was much higher.In 2002 for example, proceeds of BGN2.716BN (almost BGN600MN up from 2001) were expected from the Customs Agency. However, the increase was only about 10 per cent. An excuse for that partial failure was then sought in the falling exchange rate of the US dollar, the still initial phase of Crown Agents' project, the fierce opposition of parties, media, etc. However, the passions regarding the contract signed with the British consultants on October 29, 2001, are history already. The main opponents of the contract no longer take pains to make public texts of secret shorthand records or confidential clauses. Even the international situation works to the advantage of Crown Agents. The crisis in Iraq resulted in a considerable increase of the prices of fuels, which are a major import commodity. Despite all that, the consultants' advice will result in a symbolic growth of customs proceeds. Disappointment in the corridors of power from the performance of Crown Agents should have been considerable in order to decrease the criteria so significantly. It would be correct to recall that in the arguable agreement from the autumn of 2001 there are no provisions binding the British consultants with the achievement of certain financial results during their 3-year operation in Bulgaria. Whatever the motives, the projected less than 5% annual growth is way down from the 96% increase, achieved by Crown Agents during their operation in Latvia. The pessimistic forecasts that Bulgaria does not have adequate and efficient means to control and evaluate the work of the British consultants may come true. Even a cursory glance at the fulfillment of the contract (which cost Bulgaria BGN33MN) will show that it is slap-dash. Although the contract entered into force after 10% of the agreed amount was deposited in advance into the British consultants' accounts, it took Crown Agents six months to form their team. Judging from the clauses of the agreement, 17 foreign experts had to work at the Customs Agency, heading departments of proceeds, legislation, internal audit, combat with corruption, etc. They were to set up a Council of Reform, which would be something like a brains trust in the struggle with contraband. But no such structures have been established so far. Nevertheless, the employed British consultants get GBP8,000-16,000/month, depending on their rank. Crown Agents' efforts in the Customs Agency are assited by the so-called Business Consultative Council, set up by a special decree of the Cabinet. It includes representatives of the Bulgarian Industrial Association, the Chamber of Commerce and Industry, and foreign investors in Bulgaria. The only visible effect of the council's existence is the hot connection with the customs, through which those whose interests have been injured by illegal imports could signal about violations. The start of the operation of the so-called mobile groups was also delayed. The first five teams began their work in September, 2002. According to recent information there are already eight such groups, but Bulgaria has paid for the operation of ten mobile teams, which were supposed to work for 35 months as of the beginning of 2002.According to sources of the BANKER weekly, from the 11 Bulgarians who attended a special training course last summer and were included in the first five mobile groups, only three remained. The tension between the mobile groups and the customs officers at the border check-points is said to be the main reason for the reluctance to work in the mobile teams. An additional factor is said to be the low remuneration of Bulgarians in these groups - about BGN250/month. At the same time a Crown Agents' official who heads a mobile team gets some GBP7,500/month.The situation is similar concerning Crown Agents' much advertised software TIMS. Its had to be installed to the Bulgarian customs computer system BIMIS. Now it turns out that only a module of the product will be used to provide information about inspections of companies which import goods. This is practically one more compromise with the clauses of the contract, signed by the Finance Minister Milen Velchev and Crown Agents' Executive Direcor David Philips. So, the project which was promising wonders at the customs is presently in the middle of nowhere. The Bulgarian producers who are still suffering losses due to illegal imports, are those whose interests have been injured most of all and protests of various branch organisations are becoming more frequent. Let's hope that Crown Agents have time enough to work out their miracles.

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