Банкеръ Weekly

Briefs

EUROPEAN UNION POURS EUR15MN IN CUSTOMS REFORM

When it comes to consulting assistance in the customs field, the name of the British Crown Agents company cannot be missed. However, the British are not the only high-qualified experts who share their experience with Assen Assenov and his subordinates. Most active in that aspect is the European Union which will practically pay the whole account of the customs reform in Bulgaria by financing projects with PHARE program funds. The effort is easy to explain as Bulgaria is about to become one of the Union's foreign borders. In 2007 the Bulgarian customs will be protecting the interests of 26 other member states, Michel Danet, General Secretary of the World Customs Organisation, said last week. In order to be sure that the protection will be effective until the country joins the EU, the Union will pour some EUR10MN PHARE funds in the Bulgarian customs.Currently, the Customs Agency runs directly or along with other departments five European projects worth EUR5.4MN. Should prior-year payments and expected funds of the program for the period 2004-2007 be added, the amount grows to almost EUR15MN. This is about the same amount the republican budget paid to Crown Agents when the agreement was signed in 2001.Being a part of the Ministry of Finance which coordinates the EU assistance, the customs rank among those who utilise the assistance in the best way. Statistical figures reveal that the money provided by the national PHARE 2001 program has been almost entirely paid. It is typical for PHARE that when Brussels approves the Bulgarian proposals, there is a two-year grace period in which the administration has to sign contracts with subcontractors and another one-year term in which the payments have to be made. Therefore, the actual results from the utilisation of the money come to light three years later.Recently, the Customs Agency reported the conclusion of a project aimed at increasing the administrative capacityof the department. The financial framework stipulated by the European Commission was worth EUR935,341. The project was implemented together with the German customs within the so called twinning programs. The realisation began in the spring of 2003, even though the assistance was negotiated much earlier. The delay was provoked by the sharp reaction of the federal government in Berlin against the agreement signed by the Bulgarian Ministry of Finance and Crown Agents. The Germans left the program temporarily and only permitted it to start when they were sure it did not repeat the agreement with the British company.Milena Doncheva, head of the Institutional Construction and PHARE Program Department at the Customs Agency, told the BANKER weekly that the Bulgarian-German plan had been fulfilled completely. Among the most important results is the prepared strategy for human resources organisation and management and personnel training and qualification. Money from the program was also used for the establishment of the Post Control Service at the agency. The German experts also helped for preparing the instructions to the officers of the internal audit directorate which is about to start operations.According to Mrs. Doncheva, another PHARE-2001 project is about to finish in September. Its budget amounts to EUR249,996 and it is directed towards harmonisation of the Bulgarian legislation with the EU laws in the field of transit and other customs regimes. Part of the assistance has been spent on development of the Bulgarian Integrated Customs Infromation System (BICIS). Only when the last payments are made will it be exactly clear how the funds have been utilized.The Customs Agency has signed five contracts with Bulgarian companies for delivery of equipment worth EUR2,589,728. By next autumn, the cross-border stations in Novo Selo, Ilinden, and Kulata will be delivered computers, X-rays apparatuses, drug detectors, etc., labelled Donation from the EU. Moreover, machinery worth EUR2,296,000 has been supplied to the customs and the Border Police, again under the PHARE program and the project for facilitating border transition along the Danube. Another three customs projects are part of the PHARE 2002 activities list which deadline expires next year.One of them is worth EUR2,700,000 and aims at providingconsistency between the information systemsof the Customs Agency and the Taxes and Duties General Directorate (TAXUD) at the European Commission. According to the plans, the millions from Brussels must be utilized in four tranches. The first of them amounted to EUR350,000 and had to support the establishment of norms regulating the administration of measures that will be imposed in Bulgaria after 2007 in relation with the EU general agricultural and trade policy. For that purpose Bulgaria signed an EUR191,040 contract with the Eurocustoms organisation. The Ministry of Finance asked the European Commission to redirect the saved EUR158,960 to other activities aimed at reforming the customs.Much bigger is the second tranche (EUR1,250,000) launched for improvement of the BIMIS module. When work on it is over, the module will meet all requirements of the New Computerized Transit System of the EU. Probably by end-July the EU Delegation to Bulgaria will have announced officially the name of the company winner in the recently held tender for modernisation of the module.In September, a company will be chosen to sign a technical support agreement for the preparation of measures which will make the import of goods easier for traders and custom officers. PHARE has provided EUR300,000 for that initiative. The subcontractor will have to build a system for distribution of customs data through the INTERNET as well as software through which traders will fill in and submit customs manifests to BICIS.The remaining EUR800,000 of the money for the project will be invested in management, coordination and assessment of the activities in the first three items. The second initiative in the 2002 schedule stipulatestightening the customs controlalong Bulgaria's borders. It will cost EUR1.4MN. Initially, Bulgaria requested financial assistance not only for the border but also for the internal import control. Besides, the country was about to receive free of charge seven cars for the newly-created mobile groups from the member states. However, while things were being coordinated, the responsibility was assigned to Crown Agents. The duplication was avoided as the budget of the PHARE project was cut almost twice. Nevertheless, EUR400,000 had already been paid to Eurocustoms as its experts consulted the Customs Agency managers for 17 months.The PHARE program is also going to provide EUR800,000 for construction of a national information exchange network that will protectthe intellectual and industrial property rightsApart from the customs, the activity also involves Bulgaria's Ministry of Interior, the Ministry of Culture, and the Patent Department. Partners in the implementation are the London-based Queen Mary Institute of Intellectual and Industrial Property and the Danish Patent Bureau.According to the 2003 memorandum signed by Bulgaria and the European Commission, the Customs Agency will receive PHARE assistance for the construction of a national net of laboratories and the computerisation of the agency's headquarters and regional directorates. The European Commission is still to approve projects that will be implemented from 2004 to 2006. One of the Bulgarian proposals is that the EU finances the pending transfer of the rights to collect excise duties in internal country transactions from the tax administration to the customs. According to unofficial information, the implementation of this hard task will be included in the responsibilities of Crown Agents which will be described in the currently prepared extension of the company's agreement with the financial ministry.

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