Банкеръ Weekly



The almost five-year presence of British consultants from Crown Agents in the Bulgarian customs has become less noticeable now. Hearing some English words in the corridors of the customs agency headquarters in Sofia is already rarity. The reason is not the summer holiday but the gradual withdrawal of agents that started in the middle of August. The contract that was signed by the financial ministry and Crown Agents in 2001 and provoked so much excitement is expiring formally in the end of December, but a few of the consultants already packed their luggage and left Bulgaria. Among the first to quit were the managers of ten of a total of 15 mobile groups for follow-up control. Their posts (unlike the fees they were paid - approximately GBP8,000 a month) were inherited by Bulgarians. According to information provided by the Bulgarian office of the British company, the Bulgarian managers (including two women) had passed a special course. At the beginning of September the few agents who have not left will teach the refinements of road inspections to the applicants to manage the other five mobile teams. When the British project is finally completed (about the start of 2007) the teams will no longer be fixed in Sofia but will be taken on the respective regional customs directions. The scheme by which this will happen is to be prepared by the agency director Assen Assenov and his deputies.

The process of transforming the customs management from private British to totally Bulgarian is going on a bit quietly. Even though it sounds strange
considering the once massive PR campaigns
the role played by Crown Agents in the Bulgarian customs reform has been delicately saved in the one-year report on the work done by the financial minister Plamen Oresharski published last week. The agents' contribution to the record income from duties, excise duties and value-added tax was also suppressed in the analysis of the agency's activity in the first half of the year that was announced in end-July.
There are several reasons why the highly-paid consultants leave Bulgaria in a much more peaceful manner than they were accepted. The first and probably the most important one is that they had been left to the present Government and Plamen Oresharski by the cabinet of the National Movement Simeon II which paid in two instalments a total of GBP21MN (some BGN64MN) to hire them. The first payment, GBP10.320MN, was made in November 2001 and the second, GBP10.795MN - in July 2004. Therefore, Minister Oresharski who took the post in August 2005 can hardly be held responsible for the achievements of Crown Agents, most of which reached on paper.
The apathetic, to say the least, attitude of both media and parliamentary opposition to the forthcoming separation with the agents could also be explained with the fact that long time ago everybody swallowed their astronomic salaries and other extras given in return to obscurely formulated future commitments. Still, it wouldn't be useless if rulers, absorbed in arranging Bulgaria's European Union membership, made an effort to check what the country obtained in return to the money paid under the British contract. First of all, did the customs finally went out of the corruption swamp? The only representative of the executive power who has declared such intentions so far is Deputy Minister of Finance Georgi Kadiev. He threatened he would inspect all dubious deals after January 2007 (including the one with Crown Agents) signed by former financial minister Milen Velchev. However, there will hardly be a more suitable occasion than the coming termination of the agreement with the British company for the cabinet to request that
independent auditing
be made of the company's business in Bulgaria. In fact, an inspection of the kind has been negotiated last August by Plamen Oresharski during his meeting with the Crown Agents Executive Director David Philips. However, its results remained confidential.
Some people with better memory may remember that foreign consultants were attracted to the customs by the former rulers who justified the move with the glaring need of introduction of European customs legislation, increase of import revenues to the treasury, reduction of the widespread corruption and counteraction to smuggling. One doesn't need to be broadly educated on the matter to understand that the British experts only achieved the goals set in part. Among their undisputed (but also easiest) achievements are the amendments to the Customs Act prepared and voted by the 39th National Assembly. The changes introduced some of the requirements of the European Union Customs Code.
The normative amendments were evident
but in the autumn of 2005 the EU customs commissioner Laslo Kovacs had to arrive in Bulgaria to say that import follow-ups should be implemented as well as written in the act.
Things went slightly better when it came to the transfer of the rights to collect excise duties on transactions within the country. The rights were transferred from the tax authorities to the customs in early July. However, the transfer was not consulted by Crown Agents, but French experts within a project under the PHARE program.
The separation of customs investigation and intelligence in two independent units, the establishment of internal auditing departments in the customs agency, and the strengthening of the customs inspectorate capacity may be considered contribution of the agents, too. Whether or not the organisation changes that were undertaken gave the desired effect, while the staff remained the same, is another question.
Among the precious recommendations of the foreign consultants was the one for creation of a separate customs preliminary investigation to investigate cases of smuggling and import frauds. However, the service was liquidated with the voting of the new Criminal Procedure Code by the Parliament in autumn 2005.
Tons of ink have been spent to describe
the notorious customs records
in collected revenues which according to the British reports were due to the agents' precious collaboration and according to a number of financial analysts - to objective macroeconomic indicators. But it is true that the highest growth of customs revenues for the past five years has been registered in the first half of 2006 (36%). A figure that pales before the broadly commented 96% increase which Crown Agents achieved during their stay in Latvia in the late 90s.
If there are both positive and negative arguments about the consultants' contribution to the customs revenues to the budget, there is no doubt the agents failed in the fight against corruption and smuggling channels. The psychological anti-corruption effect which the arrival of foreigners had on the customs officials vanished in no more than few months. It should have been a great relief for the border customs officials to learn that the agents, although receiving ten times higher salaries, could not encroach on
their expensive cars and luxurious estates
Indeed, customs officers were forced to sign an ethical code of conduct and declare their property once a year, but they did not seem to be taken aback by the requirement. We can see it from the growing number of cases in the prosecutors' office initiated against customs officers who gave in to the temptation. There was even a paradox - Crown Agents Bulgaria Manager, John Brown, appeared in front of the media explaining there was nothing wrong in the fact that Shinka Matova, former Follow-up Control director who was killed last October, used to have a luxurious jeep (although receiving a monthly salary of about BGN500) and be driven by a criminal.
Even more unpleasant for the agents
seem to be their achievements with regard to neutralizing smuggling, custom frauds and violations of cargoes in transition. Scandals at the cross-border stations of Kulata, Kalotina, Kapitan Andreevo, etc. followed thick and fast, while Crown Agents experts threw up their hands claiming they were simply consultants. And frankly admitting they only knew heroes such as Samokovetsa, Ilienski and Pileto from the press.
Eventually, there certainly are winners from the deal signed with the British company, but the Bulgarian state does not seem to be among them.

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