giurgiulesti international free port...

Giurgiulesti International Free Port Study

EUROPEAN UNIONEUROPEAN UNIONBORDER ASSISTANCE MISSIONBORDER ASSISTANCE MISSIONTO MOLDOVA AND UKRAINETO MOLDOVA AND UKRAINE

CUSTOMS SERVICE CUSTOMS SERVICE OF THE REPUBLIC OF THE REPUBLIC

OF MOLDOVAOF MOLDOVA


Table of ContentsGlossary of Acronyms 3Acknowledgements 5

Executive Summary 6Introduction 6Background and Aims 7Method 8Summary of Conclusions and the Recommendations 9Legal & Regulatory Framework 10Institutional Framework, Human Resource Management (HRM) Development 11Procedures 12Communications and Information Exchange 15Infrastructure & Equipment 18Way Forward 20Scope of the Study 22Description of the assignment 22Proposed Methodology 23Outputs & Outcomes 23Activities 23Overall Objective 24Overview of State BCSs 24Customs 25Veterinary & Phyto-sanitary (ANSA) 26MDBP 26General Characteristics - Giurgiulesti International Free Port (GIFP) 26

Component ‘1’ 30Process Mapping Exercise 30Process Maps of GIFP 30Moldova Border Police (MDBP) actions in the Port 32Moldova Customs Service (MDCS) actions in the port 33Treatment of Cargo on Entry to Giurgiulesti Port MDCS & ANSA actions in the port 33Import Procedures 34MDCS & ANSA actions in the port 34Transit Procedures 36Treatment of Export Cargo from Giurgiulesti Port 36MDCS & ANSA actions in the port 36Exit of Cargo vessels from Giurgiulesti Port for Foreign - Regular 37MDBP & MDCS actions in the port 37Exit of Cargo Vessel from Giurgiulesti Port - Livestock 38MDBP, MDCS & ANSA actions in the port 38Trade Facilitation 38

Component ‘2’: Gap & Needs Analysis 39Legal & Regulatory Framework 39Introduction GIFP 39Veterinary & Phyto-sanitary Services 43Introduction 43Customs 45Intra-service 45

1

Veterinary & Phyto-sanitary Services 52Intra-service 52Customs, Veterinary & Phyto-sanitary Services 54Inter-agency 54

Institutional Framework, Human Resource Management (HRM) Development 57Introduction 57Customs 57Veterinary and Phyto-sanitary (National Food Safety Agency {ANSA}) 57Customs 57Intra-service 57Veterinary & Phyto-sanitary Services 63Intra-service 63

Procedures 65Introduction 65Customs 65Veterinary & Phyto-sanitary Services 66Customs, Veterinary & Phyto-sanitary Services 67Customs 67Intra-service 67Veterinary & Phyto-sanitary Services 75Intra-service 75MDBP, Customs, Veterinary & Phyto-sanitary Services 77Inter-agency 77

Communication & Information Exchange 80Introduction 80Customs 80Intra-service 80Customs, Veterinary & Phyto-sanitary Services 84Inter-agency 84Veterinary & Phyto-sanitary Services 91International 91

Infrastructure and Equipment 94Introduction 94Customs 94Intra-service 94Border Police, Customs, Veterinary & Phyto-sanitary 95Inter-agency 95Veterinary & Phyto-sanitary 97Intra-service 97

Conclusions 99

Annex I: Law on Giurgiulesti Port 100

Annex II: Gaps Matrix 108

Annex III: Technological Scheme GIFP 109

Annex IV: List of reports and research materials 120


2

Annex V: Role of Giurgiulesti International Free Port in the Development of Economy of Moldova 121

Annex VI: Regional Trade Agreements in force 2015 125

Annex VII: Temporary Storage 129

Annex VIII: Free Economic Zones Comparative Review 132

Annex IX: Export Processing Zones (EPZ) 147

Annex X: Main Trade Related Legislation in Force in Moldova 2015 149

Annex XI: Questionnaire Veterinary & Phyto-sanitary Services at GIFP 153

Annex XII: ISPS & Single Window 157

Annex XIII: Types of Corruption in Customs 163

Annex XIV: Veterinary & Phyto-sanitary control clearance 165

Annex XV: Development of ports ‘WB Port Reform Toolkit Module 3 Refers’ 168

Annex XVI: EU Border Police Four Tier Access Model 173

Figures:Fig 1: Geographical location of Giurgiulesti International Free Port 29Fig 2: Process Map 1 GIFP Import / Transit Clearance Processes 31Fig 3: Process Map 2 GIFP Export Clearance Processes 36Fig 4: ‘Four pillars of Trade facilitation’ 38Fig 5: Customs Processes & ICT Building Blocks 82Fig 6: Port User Information System – Types of processes and documents that Port Community Systems can facilitate and manage. 89Fig 7: UNDP Funded ANSA Laboratory and Storage Facilities at the Giurgiulesti – Galati BCP adjacent to GIFP. Pictures taken in May 2016 97Fig 8: Single Window 159Fig 9: Roadmap of Single Window 161

TablesTable 1: World Bank Logistics Performance Index 7Table 2: Activity Plan 24Table 3: Example of roles of border control services typically found at BCPs & Ports 25Table 4: Summary of Legal & Regulatory Framework Gaps. 56Table 5: Summary of Institutional Framework & HRM Development Gaps. 64Table 6: Summary of Procedural Gaps. 79Table 7: Single Window Benefi ts. 89Table 8: Summary Communications & Information Exchange Gaps. 93Table 9: Summary of Infrastructure & Equipment Gaps. 98

3

Glossary of Acronyms

AA Association AgreementADNS Animal Disease Notifi cation System AEO Authorized Economic OperatorAEO - F AEO “customs simplifi cations/security and safety” certifi cateAEO - S AEO “security and safety” certifi cateANPR Automatic Number Plate RecognitionANSA National Agency for Food SafetyAPEC Asia-Pacifi c Economic CooperationASYCUDA Automated System for Customs Data (processing)BCP Border Crossing PointBCS Border Control ServiceBRITE Business, Regulatory Investment and Trade Environment (project)CBRNE Chemical, Biological, Radiation, Nuclear and Explosives agentsCC Customs Code of MoldovaCCC Community Customs Code (EU)CCIP Implementing provisions of the Community CodeCCTV Closed-Circuit TelevisionCDPS Customs declaration processing system CEFTA Central European Free Trade AgreementCIS Commonwealth of Independent StatesCSI Container Security Initiative C-TPAT Customs-Trade Partnership against TerrorismCVED Common Veterinary Entry Document DCFTA Deep and Comprehensive Free Trade Agreement DTI Direct Trader Input EC European CommissionEEC European Economic CommunityEBRD European Bank for Reconstruction and Development ENP European Neighbourhood Policy ENPI European Neighbourhood and Partnership InstrumentEPZ Export Processing Zone EU European UnionEUBAM European Union Border Assistance Mission to Moldova and UkraineEUD Delegation of the European Union to MoldovaEX ExportFAL Facilitation of International Maritime Traffi cFAO Food & Agricultural Organisation of the UNFEZ Free Economic ZoneFO Field Offi ce (EUBAM)

FRONTEXEuropean Agency for the Management of Operational Co-operation at the External Borders of the Member States of the European Union

FYRoM Former Yugoslav Republic of Macedonia


4

GATT General Agreement on Tariff s and TradeGD Government DecisionGIFP Giurgiulesti International Free PortHQ HeadquartersHR Human ResourceHRM Human Resource ManagementIBM Integrated Border ManagementICP Inland Customs PostICT Information and Communications TechnologiesIM ImportIMO International Maritime OrganisationIPR Intellectual Property RightsICC International Chamber of CommerceIDP Incomplete Declaration Procedures ISPMs International Standards for Phyto-Sanitary MeasuresIT Information TechnologyLCP Local Clearance Procedure MDBP Moldova Border PoliceMDCS Moldova Customs ServiceMOU Memorandum of UnderstandingMRAs Mutual Recognition Agreements MoTRI Ministry of Transport and Roads Infrastructure NCTS New Computerized Transit SystemOECD Organisation for Economic Co-operation and Development OIE World Organization for Animal Health OSCE Organisation for Security and Co-operation in Europe PCCA Post Clearance Control & AuditPPP Plant Protection Products RA Risk Analysis RASFF Rapid Alert System for Food and Feed RKC Revised Kyoto ConventionSAD Single Administrative DocumentSECI Southeastern European Cooperation Initiative SDP Simplifi ed Declarations Procedures SES Secure Export Scheme SFCC Strategic Framework for Customs Cooperation SOLAS International Convention for the Safety of Life at SeaSOP Standard Operating ProceduresSP Simplifi ed ProceduresSTP Secure Trade Partnership SW Single WindowTAIEX Technical Assistance Information Exchange TBT Technical Barriers to Trade TEN-T Trans-European Transport Network

5

TEU Twenty-Foot Equivalent Unit – standard measurement for shipping containerTRACES Trade Control and Expert System TTSFE Trade and Transport Facilitation in South-eastern Europe Project UN United NationsUN/CEFACT United Nations Centre for Trade Facilitation and Electronic BusinessUNCTAD United Nations Conference on Trade and DevelopmentUNDP United Nations Development ProgrammeUNECE United Nations Economic Commission for EuropeUNODC United Nations Offi ce on Drugs and CrimeUASFS State Fiscal Service of UkraineUSAID United Sates Agency for International DevelopmentWB World BankWCO World Customs OrganizationWCO FoS WCO Framework of Standards WCO-FoS/SAFE WCO-Framework of Standards to Secure and Facilitate Global TradeWMD Weapons of mass destruction WTO World Trade Organisation

Acknowledgements:

EUBAM wishes to thank all those who have assisted in enabling the completion of the Giurgiulesti International Free Port Study, including, MDCS Management & Offi cials, ANSA (Food Safety Agency), Veterinary & Phyto-sanitary Services at Giurgiulesti Port, Danube Logistics Port Operator, representatives of private companies with business interests at the port, EUBAM Field Offi ce Giurgiulesti and those who gave freely of their time to answer questions and assist in the preparation of the report. All data and Information collected is current up until May 2016.

Author – Colin Gazeley, Head of Border Management Department EUBAM


6

Executive SummaryIntroduction

Following a Port Study conducted in 2014 in Ukraine at the ports of Odessa and Illichivsk (now referred to by its new name of Chornomorsk) by EUBAM and the State Fiscal Service of Ukraine (UASFS), the Moldovan Customs Service (MDCS) requested that a similar exercise be carried out at the port of Giurgiulesti during 2015. As a result and following consultations it was agreed that EUBAM, MDCS and the USAID/BRITE1 project would collaborate together on the assignment.

Although the Giurgiulesti International Free Port (GIFP) is relatively small in comparison to other European ports, it is Moldova’s only access to the sea and enjoys a strategic location bordering Ukraine and the EU with Romania. In recent years it has seen a signifi cant increase in cargo throughput which in turn has infl uenced improvements to infrastructure in the south of the country, thereby further increasing the port’s importance as a regional logistics hub with access to road, rail, river and sea.

Focused on container traffi c, the study reviews the work of several of the border control services (BCS) charged with the clearance of cargo at the port and also identifi es areas where through simplifying and modernising procedures commercial enterprise could be expanded and international trade further developed.

The legislative framework governing the GIFP’s activities is set out in the Investment Agreement “On the Giurgiulesti International Free Port”, approved by Law No. 7-XV of 17 February 2005, the Law on International Free Port Giurgiulesti No.8-XV February 17, 2005 and the Agreement between the Government of Moldova and ICS “Danube Logistics” SRL of 21 April 20052 - the general Investor and port operator. The investment agreement signed with the Ministry of Economy in December 2004 leases the land for a period of 25 years and confers the status of a ‘free economic zone’ to the entire territory of the port until 2030. In addition, GIFP is exempted from the provisions of Moldovan legislation on competition and natural monopolies, and benefi ts from preferential income tax treatment (25% of the national rate for the fi rst 10 years and 50%, like other Moldovan Free Economic Zones (FEZs), therea� er)3.

Because of the port’s strategic importance, it has understandably been the subject of considerable scrutiny over the short time of its existence. Reports have focused on identifying defi ciencies in port operations and proposing corrective measures. This study has taken into account previous fi ndings, consulted with the trade - as far as was possible, and made analysis of the border controls and procedures of customs and other border control services actively engaged at the GIFP. It delivers a number of recommendations that should not only benefi t the border services but also impact positively on the potential for investment and commercial growth at the port. It should however be noted, that despite repeated requests to residents and shipping companies at the port for information in the form of a questionnaire, a low level of interest and response was experienced by EUBAM.

The potential for improvement by Moldova is refl ected in the World Bank ‘Logistics Performance Index4’ (LPI), which in 2014 ranked Moldova at number 94 out of a total of 160 countries and Customs operations at 98 as seen from the comparison table below set against a background of previous rankings.

1 BRITE: Business Regulatory Investment and Trade Environment.2 Annex I refers.3 WTO WT/TPR/S/323 Republic of Moldova 2015 Report p68 refers.4 World Bank Logis cs Performance Indicator Index 2014 refers.

7

Table 1: World Bank Logistics Performance Index

Country Year LPI Rank Customs Timeliness

Moldova 2014 94 98 109Moldova 2010 104 124 97Moldova 2012 132 129 126Moldova 2007 106 110 111

Background and Aims

Seaports are the representation of border crossing points (BCPs) in a maritime environment. They are crucial to the growth and development of business and international trade, providing vitally important gateways which allow the expansion of the economy by the creation and establishment of corridors for the transportation of goods. Consequently restrictions placed on the clearance and fl ow of goods can have a signifi cant impact on a country’s trading performance. GIFP has experienced substantial development and growth over the last 8 years which has incorporated the construction of a new container terminal during 2010 and additional facilities that have considerably increased the handling capacity of the port and improved its regional logistical connections with other ports on the Black Sea and via the River Danube Corridor VII5.

Today, when the combined transport techniques have progressed so much, inland waterways can be used in the most effi cient way. Their low external cost of transport, including the environmental benefi ts, can provide the critical factor to make an inland waterway route attractive. In this respect, Corridor VII, the Danube, can be seen as a very important transport route, effi ciently incorporated in the logistics chains of many alternative origins/ destinations, from the Black Sea to the heart of Europe and the Atlantic, and vice-versa. Although there seem to be many problems still existing, the free and effi cient navigation of the Danube currently is rather more a political issue than a technical one. The eff orts therefore should focus on a political decision to re-establish all the necessary conditions for free and effi cient navigation on the Danube, a� er which technical solutions can be implemented. ‘The Impact Of European Union’s Port Policies On Maritime Transport’ Guler & Sag Report refers.

Port procedures and practices have a signifi cant infl uence on logistic operations in terms of aff ecting the cost and speed of delivery. Business is constantly searching for measures to reduce or eliminate time and operational ‘bottlenecks’, maintain competitiveness and ensure high levels of predictability. Governments too are looking for ways in which to increase investment and develop existing strategic facilities to the maximum. When port operations and clearance procedures are found to be ineffi cient, time consuming, non-transparent or corrupt, lengthy and overly complicated they quickly become a major source of additional expense, delay and uncertainty and a disincentive to commerce.

“Enterprises operating in an environment that is not transparent need to spend more resources to obtain regulatory information. Furthermore, they will frequently have to add expenses for bribes, penalties and administrative or judicial appeals. As these additional expenses do not usually vary according to the value of the goods or the volume of sales, they serve to increase the operational costs per unit and put fi rms in developing countries in a weaker position than larger fi rms’ 6.

5 Corridor VII, the Danube, passes through 11 countries and the synergy effects of using its route together with upgraded transport via Black Sea ports can be significant.‘The Impact Of European Union’s Port Policies On Mari me Transport’, Guler & Sag Report refers.

6 h p://www1.uneca.org/Portals/era/2004/chap5.pdf refers.


8

Time taken to process commercial cargo during clearance control end-to-end procedures inevitably has a substantial impact on logistical costs for business. Governments through the Customs service in particular, but also including other border controls services, have a responsibility whenever possible to simplify and streamline procedures and processes in order to facilitate trade. Indeed, as a result of obligations and commitments under the Association Agreement and Deep and Comprehensive Free Trade Area (DCFTA) all the border control services are required to actively implement positive reforms to procedures and processes – conforming to EU legislation.

In addition, the MDCS are following and applying advice and guidance provided by the new revised EU Customs Blueprints 2015, World Customs Organisation (Revised Kyoto Convention (RKC), Framework of Standards to facilitate and secure global trade SAFE & Authorised Economic Operator (AEO) concepts) as well as World Trade Organisation (Trade Facilitation Agreement) which provide the technical tools and benchmarks for improving the overall eff ectiveness and effi ciency of the Customs clearance process at GIFP.

“The Revised Kyoto Convention is the blueprint for modern and effi cient Customs procedures and it supports the international trading system by creating predictability, effi ciency and a level playing fi eld... Trade facilitation is one of the key factors for economic development of nations……in international trade Customs plays a critical role not only in providing expedited clearing processes but also in implementing eff ective controls that secure revenue, ensure compliance with national laws, and ensure security and protection of society. Trade facilitation …. means the avoidance of unnecessary trade restrictiveness. This can be achieved by applying modern techniques and technologies, while improving the quality of controls in an internationally harmonized manner.“7

“Trade facilitation has emerged as a key factor for international trade effi ciency and the economic development of countries. This is due to its impact on competitiveness and market integration and its increasing importance in attracting direct foreign investments”. “Effi cient clearance processes are a sales argument and an effi cient Customs administration is a competitive advantage” 8

Method

In order to undertake and complete the GIFP Study, EUBAM and the MDCS agreed on specifi c terms of reference, which incorporated the following components:

• Mapping of Customs and other Border Control Services clearance processes and procedures; • A ‘Gap Analysis’ based on five strategic areas - Legislation and Regulatory Framework, Institu-

tional Framework and Human Resource Management Development, Procedures, Communica-tions and Information Exchange, Infrastructure and Equipment.

While the MDCS is the major benefi ciary of the study, other stakeholders including the veterinary and phyto-sanitary services, and business users at the ports, are included in order to assess the impact of change on all control procedures from a wider perspective in the cargo clearance end–to-end process.

Under each strategic area, gaps have been identifi ed and conclusions drawn, which support thirty9 recommendations that relate to the responsibilities of the MDCS and the Veterinary and Phyto-sanitary services. The importance of implementing the recommendations is heightened by the

7 h p://www.wcoomd.org/en/topics/facilita on/overview.aspx refers.8 OSCE ‘Handbook of Best Prac ces at Border Crossings - A Trade and Transports Facilita on Perspec ve’ 6, Sec on 4.5 Customs Clearance Proce-

dures refers.9 Annex II ‘Gap Matrix’ refers.

9

application of the EU – Moldova Association Agreement and DCFTA10, which requires approximation of legislation and procedural changes facilitating improvements to trade facilitation.

In addition to procedural changes, the MDCS and other border control services are also required to develop the necessary administrative capacity to ensure high levels of integrity throughout their services.

Summary of Conclusions and the Recommendations

Clearance procedures performed by the Moldovan Customs Service and the other border control services at GIFP are receiving closer attention because of port’s strategic importance. The GIFP study was able to determine that positive progress has been achieved and is on-going. Assistance and support provided by EUBAM to partners is contributing to these improvements.

The MDCS has increased its use of information technology through the introduction and implementation of electronic declaration submission and registration which is increasingly being adopted by more declarants and their agents at import as well as export and is a core component and a major step towards the creation of a more transparent and less corrupt clearance environment. Consultation between the MDCS and business representatives at the port regarding proposed improvements to control procedures and processes is an area where the business community would welcome further progress.

Nevertheless, despite these advances, overall the GIFP study concludes that across a range of strategic areas improvements, detailed in Component 2 ‘Gap and Needs Analysis’, are still needed. Of particular importance since the ratifi cation of the EU-Moldova Association Agreement and the DCFTA, is the need for all BCSs to align legislation, implement the appropriate use of risk analysis and to fully apply streamlined and simplifi ed control procedures. The development and implementation of these core elements will help to lower the incidence and rates of inspection, examination and sampling through the enhanced use of intelligence-led targeted selection of consignments and contribute to the overall reduction in costs for business at the port.

In relation to the Veterinary and Phyto-sanitary services, specifi c priorities include the need to review functional workloads and allocation of staff at the port to synchronise their services with Customs and to procure the appropriate levels of basic equipment in order for inspectors to more eff ectively and professionally complete their tasks.

The detailed review of control procedures undertaken during the study identifi ed a number of recommendations based on comparison with EU and International ‘best practice’ standards and norms11 which it is anticipated will help to ensure compliance with Moldova’s international commitments and obligations. It is expected that implementation of the recommendations, in a systematic and structured manner will assist in encouraging and stimulating further economic growth and business investment at the port by making operations more competitive within the region. The World Bank12 recognises that if Customs “initiatives focus on policy reform, technical assistance, and modernization of infrastructure,’ then there is substantial potential to reduce the time shipments spend under Customs control.

Each recommendation has been assigned an identifying letter to denote a level of priority: High (H), Medium (M) and Low (L). Conclusions summarised below are elaborated in Component 2 ‘Gaps and Needs Analysis’ and are separately identifi ed by footnotes that refer to each specifi c ‘Gap’.10 Associa on Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the

Republic of Moldova, of the other part (Art. 193 (4)); available at: h p://eeas.europa.eu/moldova/pdf/eu-md_aa-dc a_en.pdf. 11 ‘Best prac ce’ norms and standards established and contained in the EU Customs Blueprints, EU IBM Guidelines and other compendiums, guidelines and

manuals issued by the World Customs Organisa on (WCO), World Bank (WB), Organisa on for Security and Co-opera on in Europe (OSCE) and United Na ons Economic Commission for Europe (UNECE) 11refer.

12 World Bank Modernisa on Handbook p11 refers.


10

In order for GIFP to fully realise its potential and compete more eff ectively as a regional transport hub, it will be necessary for the BCSs to place continued emphasis on aligning legislation, streamlining procedures and fundamentally reducing the opportunities for corruption by border control offi cials.

Legal & Regulatory Framework

Conclusion 1. - Procedures in line with those of the EU, will require further rationalisation, adjustment and alignment with legislation. This is especially the case for the Veterinary and Phyto-sanitary services.

• Recommendation - In accordance with the requirements under the AA/ DCFTA it is recom-mended that the MDCS where appropriate, undertakes systematic reviews and regular periodic assessments of EU Customs legislation and guidelines which incorporate the EU Union Customs Code, the EU ‘Acquis communautaire’ and new revised EU Customs Blueprints as well as EC di-rectives and new implementing regulations13. (H)

• Recommendation - In accordance with the requirements under the AA / DCFTA, Moldova’s Veterinary Service need where appropriate to continue to assess and review national legislation and regulations against EU legislation including EC directives14 and the authorisation of new implementing regulations. Veterinary controls should comply with the requirements of the legis-lative basis for veterinary border inspection and the cooperation procedures formed by Council directives and Commission Decisions. (H)

There is a need to develop harmonized veterinary and phyto-sanitary procedures aligned to EU ‘Acquis communautaire’ requirements, and International Standards on Phytosanitary Measures (ISPMs), including the use of standardized EU and international forms (e.g. CVED & Passport Plant) and manuals15. (H)

Conclusion 2. – Moldova has recently taken steps towards reducing the number of legal acts, secondary legislation and orders issued on an ‘ad-hoc’ basis, however, experience gathered from other countries indicates that the existence of too many redundant regulations has the potential to create confusion and uncertainty in the application of legal powers. This uncertainty and unclear regulatory environment makes it more challenging and diffi cult to conduct business and opens up opportunities for corrupt practice.

• Recommendation - Customs and Veterinary & Phyto-sanitary services are advised to under-take regular systematic reviews of current legislation within their own area of competence. Reviews would have the objective of periodically rationalising the number and volume of orders and decrees and where appropriate cancelling or revoking redundant regulations, proposing amendments to primary legislation16. (H)

Conclusion 3. – Legislation related to the port and a major part of its operations are currently centred around it’s Free Economic Zone (FEZ) status. A recent review of legislative proposals by EUBAM provided the MDCS and port operator with an objective assessment of the port’s temporary storage procedures in relation to the former EU Customs Code and Implementing Provisions and those introduced in the new Union Customs Code from 01.05.2016 under which future development is being considered. Based on a comparison between former and newly introduced EU legislation and amendments proposed by Danube Logistics to Law No. 8 (2005) on Free International Port Giurgiulesti, a number of non-compliant areas where identifi ed.13 Legal & Regulatory Framework, Customs, Intra-service Gap 1: Legisla ve Alignment with EU’s Acquis Communautaire’ & Interna onal Standards refers.14 h p://ec.europa.eu/food/animals/vet-border-control/legisla on/index_en.htm refers.15 Legal & Regulatory Framework, Veterinary & Phyto-sanitary Service, Intra-service Gap 1: Alignment of SPS legisla on with EU Acquis Communautaire &

Interna onal Standards refers.16 Legal & Regulatory Framework, Customs, Veterinary & Phyto-sanitary Service, Inter-Agency Gap 1: Too Many Legal Acts Regula ng Border Management

refers.

11

• Recommendation - The MDCS needs to ensure that there is a clear connection/link between the provisions contained in the MDCS Customs Code, the GIFP Law No. 8 and compliance with the EU legislation that state and fully describe requirements related to the authorisation of the FEZ at Giurgiulesti Port17. (H)

Institutional Framework, Human Resource Management (HRM) Development

Conclusion 4. - All border control services need to adjust to the modern trading environment and as a result also need to reform institutional and organisational capacity. Reforms, including the development of HRM, are essential to strengthen the administration, making it adaptive to change as well as toughened against corruption. This need is clearly recognised by the senior management of the MDCS and has been actively promoted by EUBAM through dra� ing of a Customs Service Law, Personnel Appraisal System and Code of Conduct guidance manual – all of which are awaiting adoption by Parliament. Customs personnel need to be suffi ciently skilled, motivated and capable of performing eff ectively at the highest level in order to meet all future challenges.

All MDCS personnel have undergone a process of assessment designed to re-evaluate their knowledge, competencies, and levels of integrity. Inevitably the process of change will impact upon the institutional framework of the organisation and the development of human resources, but the aim should always be to create a more professional administration in keeping with the 3 relevant chapters of the EU Customs Blueprints, which provide clear objectives and performance indicators to realise these goals.

Other aspects of institutional reform requiring further attention by Customs and the Veterinary and Phyto-sanitary services include: policies for the rotation of staff ; the introduction of more fl exible working hours to address the needs of business; and the continuance of the monitoring process for rationalisation of the services engaged in border controls. As an example: ANSA inspectors currently only cover GIFP from the adjacent Giurgiulesti Road BCP and are not based permanently at the port or systematically rotated to other locations in Moldova.

• Recommendation - In order to continue to effectively implement HRM improvements already set in motion the MDCS needs to rigorously apply strategies, policies and systems that fully comply and are in line with the EU Customs Blueprints three (3) individual chapters related to organisational and HR topics, World Customs Organisation HRM Guidelines and the Interna-tional Chamber of Commerce (ICC) revised Customs Guidelines which mirror the strategic areas described in the Integrity Plan of the Customs Service for 2016 – 2017 Annex to Order No.513 –O 30/12/2015. Measures must be sufficient and appropriate to attract, retain and develop staff at all levels, recognise and reward performance and innovation, identify and grow leaders and deliver an ethical culture that combats corruption amongst its employees in line with its stated objectives. In addition, the organisation through its senior managers and personnel should com-mit to a culture of professionalism, discipline, integrity and ethical behaviour. (H)

The MDCS including its operations at the GIFP could benefi t from becoming even more open and transparent and identifying opportunities to engage directly and positively with the private sector and society in general. This would serve to enhance its public image / standing, demonstrating fairness, integrity and honesty in its relations with business and the public and a positive behavioural attitude from its offi cials18. (M)

17 Legal & Regulatory Framework, Customs, Intra-service Gap 2: Free Economic Zones (FEZ) 17& Temporary Storage at GIFP refers.18 Ins tu onal Framework, Human Resource Management (HRM) Development, Customs, Intra-service Gap 1: Organisa onal and HRM Reform refers.


12

• Recommendation – the MDCS needs to pro-actively take charge and monitor the declaration pro-cess fully implementing the amendment to Government Decision No. 1140 of 2 November 2005 reducing the number of supporting documents to be submitted with customs declaration19. (H)

• Recommendation - The systematic rotation of ANSA inspectors (Veterinary and Phyto-sani-tary) at GIFP needs to be positively considered within a developed implementation policy that seeks not only to ensure integrity but also the effectiveness and efficiency of the organisation and as a crucial element in personal career development. There is a need for experienced In-spectors from both organisations to be regularly rotated within a structured programme work-ing and / or visiting other BCPs throughout Moldova in order to give support to the training of existing and newly appointed personnel20. (H)

• Recommendation - Functional workloads for all the border control services at the port would ben-efit from a comprehensive review and where appropriate, should be re-adjusted to take account of more flexible working hours/increased attendance particularly in the case of ANSA inspectors, based around a 24/7, 3 x 8-hour shi� pattern in order to accommodate port traffic and business demand. In addition ANSA specifically, should re-evaluate and calculate their staffing requirements at the port in line with new competencies and practices laid down by the EU and where necessary seek to further coordinate their working times and attendance with the other BCSs21. (H)

Procedures

Conclusion 5. - In the area of simplifi ed procedures, the concept of Authorised Economic Operator (AEO) has been introduced and implemented by the MDCS with security being established along the entire supply chain. Despite undoubted progress and having the legal framework in place for all Customs Simplifi ed Procedures, only Local Clearance Procedures (LCP)are being moderately utilised by Economic Operators and at GIFP no system of customs guarantees is in place. As a result the customs debt must be paid immediately prior to clearance of the goods.

• Recommendation - The MDCS needs to continue with their Customs-to-Business partnership initiative taking into consideration the full implementation of Simplified Procedures and future mutual recognition of AEOs from Ukraine in order to support the development of container and security best practices at GIFP. (H)

Both the MDCS and the Ukraine State Fiscal Service (UASFS) should when circumstances allow, intensify their eff orts to engage in measures that:

» recognise AEO authorisations issued in respective partner countries; » agree to provide substantial, comparable and, where possible, reciprocal benefits / facilitations to mutually recognised AEO’s, in line with those described in the EUBAM Special Report22.

» ensure that both countries agree on the specific benefits in their Mutual Recognition Agree-ment (MRA), but in general consider the advantages of fewer physical and documented based controls23. (M)

• Recommendation - The MDCS needs to urgently move forward and apply the measures neces-sary for the implementation of a system including the use of Information Communication Tech-nology (ICT) that allows for the introduction of deferred payments of duty and the utilisation

19 Ins tu onal Framework, Human Resource Management (HRM) Development, Customs, Intra-service Gap 2: Suppor ng documents required to perform Customs Clearance refers.

20 Ins tu onal Framework, Human Resource Management (HRM) Development, Veterinary & Phyto-sanitary Services, Intra-service Gap 1: Staff Rota on Systems refers.

21 Ins tu onal Framework, Human Resource Management (HRM) Development, Veterinary & Phyto-sanitary Services, Intra-service Gap 2: More Flexible Working Hours refers.

22 ‘Business study on mutual trade between the Republic of Moldova and Ukraine and possible benefits from introduc on of AEO mutual recogni on agree-ment for private and public sectors in both countries” specifically related to this issue disseminated to partners in September 2014’ refers.

23 Procedures Customs, Intra-service Implementa on of Simplified Procedures (SP) & Authorised Economic Operators (AEO) 23Concept refers.

13

of multiple-use bank guarantees for authorised persons in connection with the application of simplified procedures as recommended by the RKC, the ICC revised Customs Guidelines No 15, as described in the revised EU Customs Blueprints under Chapter 7 and additionally proposed by EUBAM in 2010 in its report on procedures at Giurgiulesti Port and repeated again in 2015 in its report ‘Implementation and Application of Simplified Procedures in Moldova.’ 24 (H)

Conclusion 6. - Modern customs practices and operations should fully refl ect the principles of risk management. Prior to 9/11 Customs risk management was focused mainly on areas related to the detection of violations in valuation, origin and classifi cation. However the events of 2001 have caused security to become the major challenge facing customs administrations around the world due to the enormous global volumes of container traffi c. The need to assess risk at the earliest possible opportunity based on real-time information and intelligence has become of vital importance in managing and mitigating security risks. Customs administrations that are able to update and eff ectively analyse information adopting a fl exible approach to the deployment of resources are at a strong advantage over those that seek to circumvent controls.

• Recommendation – Although Customs at GIFP have elaborated a number of risk profiles there is still a need to ensure that they are systematically and regularly reviewed, updated and remain rele-vant not only for national but also regional and local risks. This is particularly important in the case of the port both for goods in transit and possibly in the future for non-excise goods declared for Home Use25, since the volumes of trade have the potential to increase significantly and goods are shipped directly from countries that pose the highest risk. The application of accurate and targeted risk pro-files is advantageous for trade facilitation and increases the speed of overall clearance times26. (H)

Conclusion 7. - Legislation that safeguards customs valuation in accordance with WTO Guidelines has been introduced. However, reports indicate that Customs in particular encounter and continue to face problems with obtaining and determining accurate values and defi nitive tariff classifi cations for consignments originating from high-risk countries, despite the application of WTO valuation rules. Delays can result from the non-acceptance of the declared value and the need to produce additional supporting documents.

• Recommendation – The EU-Moldova Association Agreement highlighted the need for further de-velopment of customs valuation procedures and consequently the MDCS should seek to ensure that they are kept under constant review and meet the indicative recommendations of the revised EU Customs Blueprints, Chapter 7: Customs Liabilities. The latest valuation regulations elaborated by the MDCS need to be correctly administered and the provisions appropriately applied when assess-ing / determining the customs value of imported goods with officers following the stipulated meth-odology in strict order i.e. Method 1 moving progressively and in sequence through to Method 6. (H)

Due consideration should be also given to the establishment of management assurance programmes that monitor offi cers actions during valuation procedures and include valuation assessments based on the use of risk, utilising a national valuation database27. (H)

The introduction of a 3 month moratorium (from 01 April 2016) on ‘state control of physical and juridical persons with enterprise activity’ extended for a further three month period until September 2016, has severely impeded work in the area of Post Clearance Control and Audit (Customs Blueprint 14) and as a requirement and obligation of the AA/DCFTA it is imperative that Customs apply and lawfully carry out their post clearance controls and audit functions as permitted by the Moldovan Customs Code28. (H)

24 Procedures, Custom, Intra-service Gap 2: Duty Deferment & Guarantees refers.25 Currently only Excise goods are cleared at the port. Fuel, cigare es are cleared for home use at GIFP. All other goods are covered by Transit Procedures.26 Procedures, Customs, Intra-service Gap 3: Risk Analysis refers.27 Procedures, Customs, Intra-service Gap 4: Valua on, Classifica on, Origin and Post Clearance Control & Audit refers.28 Ibid.


14

Conclusion 8 - The port of Giurgiulesti is Moldova’s international gateway for a number of transit corridors earmarked for gradual implementation by the European Union linked also with maritime transportation systems in Europe, These routes together with upgraded transport via the Black Sea will be an important factor for economic development of the involved countries.

• Recommendation – The MDCS is taking steps to accelerate the process of accession to the Convention on a Common Transit and will in the future develop preparations for the introduction of NCTS. Introduction of the NCTS nationally will need new regulations, major adjustments of the Customs and traders’ IT systems and a transitional period to ensure that new procedures are accepted and secure. It is suggested that the MDCS review current plans particularly for the future implementation of NCTS at GIFP taking all necessary measures in advance of arrival of the planned Twinning project in order to be as prepared as possible29. (M)

Conclusion 9. - The availability of advance pre-arrival information and its use by the Veterinary and Phyto-sanitary service inspectors (ANSA) at GIFP appears to be limited and only received in advance for consignments when participating in an ‘‘on-board Commission’’. Clearance procedures, particularly important for perishable cargoes and live animals, could be further enhanced by the application of risk analysis in advance to licences and commercial documents.

• Recommendation – The application and use of pre-arrival information by the Veterinary and Phyto-sanitary service inspectors for the purposes of applying risk analysis at GIFP needs to be implemented as part of normal working practice, and also in the context of early warnings is-sued in line with the EU Integrated Border Management Guidelines. Regular systematic reviews and updating of existing risk criteria and risk profiles needs to be routine practice30. (H)

• Recommendation – ANSA Inspectors operating at GIFP need to ensure that procedures are aligned with Directive 2000/29/EC, European Union regulations and the rules of the European and Mediter-ranean Plant Protection Organization as an obligation and requirement of the AA/DCFTA31. (H)

Conclusion 10. - All vessels arriving from or departing for ‘foreign’ at GIFP currently require approval granted by an’ on-board (the vessel) Commission’ made up from representatives of the following BCSs of Moldova: MDBP, MDCS, Port Authority (Harbour Master), Veterinary & Phyto-sanitary (based on needs), Sanitary Epidemiological and shipping agent, according to the existing ‘Technological Norms’ 32. The ‘‘on-board Commission’’ performs a range of statutory and mandatory controls, and in-depth search/rummage of vessels in order to detect smuggled goods, however all ‘on-board’ procedures must be completed before the vessel is allowed to discharge or at export, load cargo. Assembly of the ‘on-board Commission’ and procedures takes place regardless of the regularity with which vessels or crew visit the GIFP.

• Recommendation – The European Union has long recognised the need to simplify border con-trol procedures for the maritime sector using the application of risk based selectivity as a tool to be used by the BCSs (led by the MDBP or MDCS in this case). All the BCSs should therefore consider ending the practice of the ‘‘on-board Commission’’ as a routine and mandatory instru-ment with which to perform and maintain the control of vessels arriving and departing from/for foreign at GIFP and instead utilise risk based controls, replacing it with the internationally accepted system of ‘Free Practice“33. (H)

‘Technological Norms’ which outline the mode of control and supply of services are in need of review and up-grade, particularly for the inclusion of Veterinary and Phyto-sanitary controls mentioned within the text for the import, export and transit of goods by passenger vessels but not for other consignments on cargo vessels including the export of livestock which are processed on a regular 29 Procedures, Customs, Intra-service Gap 5: Transit and New Computerised Transit System (NCTS) refers.30 Procedures, Veterinary & Phyto-sanitary, Intra-service Gap 1: Advance Informa on refers.31 Procedures, Veterinary & Phyto-sanitary, Intra-service Gap 2: Phyto-sanitary procedures refer.32 Annex III Technological Scheme GIFP (dd 2013) refers.33 Procedures, Customs, Veterinary & Phyto-sanitary, Intra-service Gap 1: Reforms to ’on-board’ Commission refer.

15

basis at the port. It is therefore recommended that, if not already in process, new ‘Technological Norms’ should be produced in line with EU best practice and need to be ratifi ed by all relevant services in respect of the controls for both the passenger port and GIFP. The MDCS should reinvigorate the cooperation established in 2015 through the working group between all the border control services at GIFP in order to amend and update the existing ‘Technological Norms’. (H)

Conclusion 11. - Time release exercises which measure the time needed to complete clearance procedures at the port are currently absent. Although not part of this study it is recommended that the template of a similar exercise completed for the Ukrainian Ports of Odessa and Illichiv’sk is used at GIFP for future time measurements to assist in gauging the effi ciency of clearance procedures recommended as part of BCS regular activities.

• Recommendation – Time release exercises need to be regularly conducted by the BCSs and the resulting statistics published in order to increase efficiency, transparency and boost trade facili-tation dialogue between the authorities and businesses engaged in the clearance of cargo34. (L)

Communications and Information Exchange

Conclusion 12. - One of the key strategies for the development of Customs Administrations worldwide and especially in the European Union is the movement from paper to electronic documents, signatures and overall processing of all customs functions. This reform is also a key enabler to a number of other strategic initiatives, such as the implementation of pre-arrival cargo information, simplifi ed procedures including the AEO concept and the Single Window. The expansion and steady upward trend in the use of electronic customs declarations by business, encouraged by Customs, is supported by statistical data for the submission of export declarations and has been further enhanced since March 2015 allowing all economic agents to declare imports electronically too.

• Recommendation – The MDCS should ensure that compliance with the EU e-Customs legisla-tion, in particular with the Decision 70/2008/EC on the paperless environment for customs

and trade, also referred to as the “Electronic Customs Decision” (OJ L 23 of 26 January

2008) and the Electronic Signature Directive – Directive 1999/93/EC of the European

Parliament and of the Council of 13 December 1999 on a Community framework for

electronic signatures (OJ L 13 of 19 January 2000) is maintained as part of their national ICT programme35. (M)

Conclusion 13. - Interaction between Customs and other agencies which enhance co-operation and coordination is acknowledged as being fully in-line with ‘best practice’ as indicated by the EU revised Customs Blueprints36. However, Inter-agency agreements that set the conditions for successful implementation of the regulations governing the interaction between the BCSs at the port signed at both central and local appear to be in need of further development.

• Recommendation – There is a need to elaborate, further develop, introduce and/or implement Inter-agency (service level) agreements between all the BCSs at GIFP in order to formalise at the central and local levels procedures necessary for the efficient exchange of information, joint inspections, examinations and the taking of samples as well as other operations and activities where co-operation, coordination and inter-action between the BCSs is required. (M)

34 Procedures, Customs, Veterinary & Phyto-sanitary, Intra-service Gap 2: Time-release exercises refer.35 Communica on and Informa on Exchange, Customs, Intra-service – Gap 1: E-Customs Implementa on & Fully Automated Processes refers.36 EU Customs Blueprints Chapter 8, Trade Facilita on: Sec on 8.15, Chapter 11, Border and Inland Control: Sec on 11.20, Chapter 12 Inves ga on and

Enforcement: Sec on12.5 & 12.13, Chapter 13, Customs Transit: Sec on 13.12, Chapter 15 Intellectual Property Rights: Sec ons 15.17 & 15.18 refer.


16

In addition, the business community including shipping lines at the port should have a recognised mechanism for meeting regularly with Customs or other Border Control Services / Port Authority at the central, regional and / or local levels in order to discuss national transport and logistic problems related to clearance of consignments at the port. Furthermore, as far as could be ascertained, a local GIFP working group or committee which includes regular operators or users of the port and the Border Control Services where common issues could be raised and discussed, should to be established37. (H)

Conclusion 14. - Strengthening cooperation between Customs administrations and the private sector by enhancing the exchange of information and developing a broader awareness of the role of the Customs including; threats posed by cross-border crime through the establishment of mechanisms that facilitate regular meetings and signing Memorandum of Understanding (MoUs) with Moldova’s trade associations and manufacturers, are measures proposed and advised by the ICC revised Customs Guidelines (2012) and revised EU Customs Blueprints (2015).

• Recommendation – As the major BCS with responsibility for the clearance of cargo at the port, the MDCS needs to implement a systematic process of developing and signing MoUs with the major trade and transport bodies in the private sector in order to develop and enhance the concept of trade facilitation and compliance aligned with the international co-operation guide-lines. Other important aspects of co-operation need to include the involvement of private sector companies in the Customs regulatory process, on a permanent and institutionalised basis as required by Standard 1.3 of the Revised Kyoto Convention. (M)

The establishment of an independent regional ombudsman as a medium for approaching the administration to deal with queries from the trading community specifi cally responsible for the GIFP, specialised in customs matters, should also be considered as another ‘best practice’ initiative38. (M)

Conclusion 15. - The MDCS is legally obliged to provide information concerning customs legislation to the public. Customs and the Veterinary & Phyto-sanitary services, have each introduced free-phone / ‘open-lines’ services as a means of receiving information on illegal activities and corruption. In addition, all border controls services operate and maintain Internet portals where information and news concerning their organisations are posted. A service-oriented methodology is considered by the EU and many other countries as the modern approach for Customs and other BCSs to follow in regard to the implementation of trade facilitation. This strategy not only benefi ts and facilitates trade, but at the same time helps to protect society and create safe and secure borders. Changes in procedures due to amendments in legislation and policy made by Customs and the other BCSs directly aff ect business and the trading community in their day-to-day operations and costs.

• Recommendation – All the BCSs need to take measures to improve the publicising, broadcast-ing, display and dissemination of public information. They must therefore ensure that the provi-sion of information to the trade and public is a priority and is regularly updated. In addition, all BCSs need to consider initiating and participating in campaigns that assist in obtaining public support and awareness of the work they perform and how it contributes to the overall benefit of society, whether in terms of general food health and safety, the generation of revenue, the protection of society from the harmful effects of drug smuggling, Intellectual Property Rights (IPR) goods or terrorism in the detection of arms, ammunition and Weapons of Mass Destruction (WMD). (M)

All Border Control Services need also to consider reviewing and where appropriate applying examples of the type of campaigns organised in other countries, which have proved positive in delivery of information, enhancing public reputation and increasing levels of transparency39. (M)

37 Communica on and Informa on Exchange, Customs, Veterinary & Phyto-sanitary Inter-agency – Gap 1: Development of Inter-agency Agreements refers. 38 Communica on and Informa on Exchange, Customs, Intra-service Gap 2: Memoranda of Understanding (MoU) 38with the Private Sector refers.39 Communica on and Informa on Exchange, Customs, Veterinary & Phyto-sanitary Inter-agency – Gap 2: Improved Public Informa on refers.

17

• Recommendation – Business at GIFP expressed their dissatisfaction that they were not always sufficiently informed, consulted or provided with information by Customs in advance of any proposed changes to legislation, policy or procedures and were le� with no alternative but to search for infor-mation on the Customs website or via custom broker companies in order to access relevant trade information published by the Customs administration. Accordingly, the Port Authority, Port Opera-tor and BCSs need to actively consider business opinions, concerns and considerations and become even more focused on the development and implementation of trade facilitation at GIFP. Regular and systematic consultation with the business community at GIFP needs to be conducted in order to obtain their assessment of proposed new regulations and procedures, or amendments to existing requirements, providing timely notice of any changes in the areas of; trade compliance, security and effective interdiction of customs fraud, drug trafficking, infringements of intellectual property rights and threats to endangered species. The publication of a regular newsletter as an appropriate means of communication by Customs would also meet with business approval. In addition, an annual port user satisfaction survey, which provides an opportunity for comment and analysis of procedures and processes, needs to be introduced and would be welcomed by port users to encourage and develop a deeper sense of co-operation and coordination between all parties and stakeholders at the port40. (M)

Conclusion 16. - ICT systems that electronically link port administration, terminal operators, transport companies, freight forwarders, carriers, ship agents, together with customs and the BCSs

and other members of the port community are o� en referred to as ‘Port Community Systems’ and are the fore-runners of Single Window systems. When systems are connected together in a ‘Port Community System’, it becomes possible for all legitimate businesses which move and clear goods within a port to track their cargo from arrival to departure and vice versa. Because of its central role, Customs is frequently considered to be the most appropriate border authority to receive and coordinate the fl ow of information through a single entry point, particularly concerning the regulatory requirements of other BCSs.

Furthermore there is a need given the legislative and operational requirements for interaction between the BCSs at the port to develop a strategy for sharing and exchange of confi dential information based on the results of risk analysis and/or intelligence.

One reason put forward by business for not taking full advantage of Incomplete Declaration Procedures (IDPs) and Simplifi ed Declarations Procedures (SDPs) is that the IT solution currently used by the Moldovan Customs Service - ASYCUDA World - does not include the necessary functionality to process these declarations.

• Recommendation – Following the example of other ports in the region the establishment of a local information network or ‘Port Community System’ by the port administration, specifi-cally designed for the exclusive use of the BCSs and port operators would serve to establish a standardized secure communication platform between the authorities, stakeholders, potential customers and local trade organisations allowing for the exchange of information and would increase the competitive position of GIFP by eliminating opportunities for the formation of bottlenecks and delays in cargo handling. Electronic real-time data exchange via a port commu-nity system could potentially improve efficiency at all stages of the process from manifesting, through to vessel discharge and loading. (M)

To implement and make Customs Simplifi ed Procedures fully available to all economic operators there is an urgent need to begin the development and/or upgrade of ICT solutions currently used by the Moldovan Customs Service. ICT systems need to incorporate the functionality to process the incomplete declaration procedure (IDP) and simplifi ed declaration procedure (SDP) further facilitating trade and commercial expansion at the port of Giurgiulesti. (H)

40 Communica on and Informa on Exchange, Customs, Veterinary & Phyto-sanitary Inter-agency – Gap 3: Port & Border Control Service User Sa sfac on Surveys refers.


18

So� ware that allows connection between the ICT systems of the MDCS and the line operators (Danube logistics and MSC, China Shipping etc.) for the provision of on-line information in regard to containers that remain in the port is also considered an area that should be up for discussion and development between the relevant parties at the port41. (M)

Conclusion 17. - In the EU four database systems are used to monitor and exchange information between member states and approved third countries with regard to the control of veterinary and phyto-sanitary goods and products at import, export and transit. At the central level ANSA is in the process of establishing connections to a number of these databases in line with their commitments within the Association Agreement and DCFTA. Expansion in trade between Moldova and the EU has the potential to signifi cantly increase the volume in transport of live animals, animal food products, plants and plant material, fruits and vegetables through GIFP, requiring the need for further detailed veterinary and phyto-sanitary checks and controls.

• Recommendation – ANSA needs to acquire full access to EU and/or other international da-tabases related to their activities - not just at the central level but also at important strategic locations for the import and export of veterinary and phyto-sanitary goods and products such as GIFP – in particular those that are either currently not connected such as the Sanitary & Phy-to-sanitary (SPS) Export Database or are awaiting implementation e.g. TRACES. Full access to all 4 EU veterinary and SPS databases will dramatically assist in the clearance of consignments and goods within their areas of responsibility and competence across the border. (H)

With specifi c regard to the Phyto-sanitary service, EUBAM continues to recommend the benefi ts of a national database with full access in particular for ANSA inspectors at the port of GIFP42. (H)

Infrastructure & Equipment

Conclusion 18. - To assist in improving the level of cooperation between the BCSs at BCPs the concept of sharing and/or joint use of border infrastructure and facilities is a key component of integrated border management and considered ‘best practice’. At GIFP the physical examination of containers is diffi cult and represents a key security and revenue risk. The ability of the BCSs to perform this task effi ciently and eff ectively is an important factor that will for business help determine the future expansion of the port.

• Recommendation – An integrated reference database of all images obtained from Customs mobile X-ray scanners needs to be created and made available to officers engaged on scanning duties at GIFP and other BCPs linking all mobile X-ray scanning equipment, and with the capabil-ity to electronically transfer images to a central Customs HQ database, with specific importance paid to the requirements of the container examination targeting teams present at the port. Cre-ation of an on-line archive would assist officers in making informed intelligence-led risk based selections avoiding the need for unnecessary intrusive physical examinations43. (M)

Conclusion 19. - The levels of security required to prevent risks associated with illegal migration, humans traffi cking, smuggling, terrorism and other illegal activities at GIFP or adjacent Giurgiulesti Rail BCP and the surrounding areas could be enhanced by the installation and operation of a Closed Circuit Television Video surveillance systems (CCTV).

• Recommendation – Currently there is no CCTV system available for use by the BCSs at the GIFP or adjacent Giurgiulesti Rail BCP. BCSs at the GIFP and its immediate surrounding areas including also

41 Communica on and Informa on Exchange, Customs, Veterinary & Phyto-sanitary, Inter-agency – Gap 4: Inter-agency Exchange of Informa on including links between State BCSs Databases refers.

42 Communica on and Informa on Exchange Veterinary & Phyto-sanitary, Interna onal Gap 1: Informa on Technology refers.43 Infrastructure and Equipment, Customs, Intra-service Gap 1: Na onal Inter-Ac ve Database for Scanned Vehicle Images refers.

19

the adjacent rail BCP need to be technically monitored and lighting needs to be provided for border checks, surveillance and to assist and support risk analysis, selectivity and targeting. As a general rule, all BCPs need to be fenced off and perimeters monitored by cameras and sensors with Camera/Video Surveillance Systems (CCTV systems) to cover the BCP area subject to associated risk. Special provi-sion should be made for the storage of video images collected via video surveillance CCTV systems on BCPs in accordance with the national data protection laws. Wherever CCTV is installed, appropriate signage should be posted warning travellers that they are under video surveillance. (H)

Furthermore, unoccupied buildings within the vicinity of the port or rail BCP have the potential to create a high risk of illegal activity. Such buildings need to be either occupied or demolished in order to prevent them from becoming hiding places for illegal migrants and/or storage for smuggled goods44. (L)

Conclusion 20. - The adjacent Giurgiulesti Rail BCP lacks suitable control and inspection capacities, in terms of infrastructure and equipment, to undertake the eff ective checking of both passengers and freight and, as a result, conditions for the transport of illegal immigrants and all types of smuggling, including narcotics, and other illicit trade is possible.

• Recommendation – The Giurgiulesti Rail BCP needs substantial investment and redesign, in or-der to bring it into line with EU standards. Rail BCPs with neighbouring countries represent one of the greatest vulnerabilities to the EU’s borders, both in terms of security, as well as cross-bor-der criminality; presenting this BCP with the same problems. Consequently, it is recommended that a comprehensive set of measures is considered and prioritised not only for the Giurgiulesti Rail BCP but also for all other Moldovan Rail BCPs45. (M)

Conclusion 21. - GIFP lacks suitable facilities that enable primarily the MDCS but also other border control services to eff ectively perform physical examination of cargo under weatherproof cover. For the phytosanitary services there are no storage facilities for perishable goods, and for veterinary no areas for the safe keeping or humane treatment of animals.

• Recommendation - The port operator, Danube Logistics needs to ensure that sufficient clean and dry warehousing capacity is planned and constructed that will allow for the unloading and in-depth physical examination and inspection of all types of cargo and transport, including from containers, by Customs and the other BCSs under weatherproof cover within the port. (H)

Furthermore, for the clearance of veterinary and phyto-sanitary goods and products there is a need for the port operator to provide temperature controlled storage facilities with appropriate equipment, as well as adequate areas for the safe keeping, quarantine and humane treatment of animals, while in transit through the port. (H)

The provision of secure and safe ramps / gantries for the tallying of live animals in 2-3 tier trucks together with suffi cient space and facilities for the parking of commercial vehicles should be part of an overall package of measures incorporated within infrastructural and equipment improvements that need to be urgently considered to bring the port’s handling of live animals into line with EU standards and in accordance with Moldova Government General Decree 797 regarding the well being of animals46. (H)

Conclusion 22. - Ordinarily in the case of veterinary and phyto-sanitary controls and inspections a lack of suffi cient and appropriate infrastructure can lead to delays in the release of goods which are dependent upon the results of laboratory tests. While veterinary and phyto-sanitary services are available on a 24/7 basis at the adjacent road BCP, the port currently lacks laboratory testing and analysis facilities.

44 Infrastructure and Equipment Customs, Border Police, Veterinary & Phyto-sanitary, Inter-agency Gap 1: BCP and Surrounding Area Surveillance / Close Circuit Television (CCTV) 44and Image Capture refers.

45 Infrastructure and Equipment Customs, Border Police, Veterinary & Phyto-sanitary, Inter-agency Gap 2: Development of Giurgiules Rail BCP refers. 46 Infrastructure and Equipment Customs, Border Police, Veterinary & Phyto-sanitary, Inter-agency Gap 3: Covered areas for the examina on of Cargo refers.


20

• Recommendation - A project funded by the World Bank is constructing premises for laboratory analysis and storage at the adjacent Giurgiulesti Road BCP, but at present the site is still un-der construction. Although entirely necessary it is not certain at this time if one facility will be sufficient to service the traffic of two expanding separated locations. ANSA therefore needs to consider for the future the allocation of sufficient resources, infrastructure and equipment inde-pendently at a ‘stand alone’ facility located at the port, taking cognisance of GIFP’s importance as an international gateway and major corridor for the import and export of cargo by sea for Moldova and the surrounding hinterland47. (M)

Conclusion 23. - The use of protective clothing (e.g. laboratory coats, rubber aprons, heavy rubber gloves, and dedicated footwear) that prevents sample contamination and protects inspectors from harmful veterinary and phyto-sanitary risks is essential and when used appropriately can enhance the speed with which inspections, examinations and sampling can be completed. At GIFP offi cials from the Veterinary and Phyto-sanitary services appear to be lacking in such protective clothing and equipment.

• Recommendation – Suitable clothing and equipment, which meet international safety stand-ards for undertaking the duties of the Veterinary and Phyto-sanitary services, should be provid-ed. Other items of basic equipment in accordance with European Union standards should also be made available to ANSA inspectors48. (H)

Way Forward

The challenges to be overcome by the MDCS and other Border Control Services in the coming years in terms of the amount of change required by the EU Association Agreement and the DCFTA are considerable. Although this has already created considerable pressure, all the border control services have demonstrated their willingness and capacity to adapt and move systematically away from rigid and infl exible controls and procedures. Such fl exibility benefi ts trade facilitation and improves the investment climate at locations such as GIFP.

Whilst, there are many recommendations with diff erent levels of priority and sometimes inter-dependence, it is important that the changes are seen fi rst from a strategic viewpoint and that the strategy is directed into a time-lined action plan that refl ects those determining factors.

The MDCS and the other BCSs, in cooperation with business at the port, should consider developing a joint action plan that contains realistic but nevertheless achievable timelines, in order to implement the recommendations contained in the GIFP study. EUBAM remains ready to assist in the process of helping the MDCS and other border control services to deliver high quality, modern, transparent and effi cient services that meet EU standards and international best practice.The study confi rms that considerable progress has been made by Customs particularly, in the promotion of the facilitation of trade through for example, the introduction of electronic export and import declarations, and legislative changes which allow for the reduction in the number of supporting documents accompanying customs declarations but there remain other areas where further substantial improvements particularly at the port could potentially be achieved.

Innovation, modifi cation and other aspects of change management in relation to the activities of the border control services are important as respected such as the Organisation for Economic Cooperation and Development (OECD) foresee that over the longer term, world Gross Domestic Product is expected to grow strongly and possibly double over the next 15 years. Moldova needs to be ready to take advantage of this growth as the OECD also forecasts that ‘port handing of maritime containers worldwide could quadruple by 2030’. As a result, trade volumes can be expected to rise signifi cantly and rapidly, including with developing countries along trade and transport corridors 47 Infrastructure and Equipment Veterinary & Phyto-sanitary, Intra-service Gap 1: Veterinary & Phyto-sanitary control facili es at GIFP refers. 48 Infrastructure and Equipment Veterinary & Phyto-sanitary, Intra-service Gap 2: Protec ve clothing and equipment refers.

21

particularly between the largest regions, i.e. Asia (China, India), Europe and North America. GIFP is already well placed to take advantage of this expansion in trade with its links to the Mediterranean and China. It is anticipated that maritime services will carry most of this long distance traffi c, with ground handling likely to remain heavily concentrated at major international gateway ports.

Added to the legislative and procedural changes necessary is the requirement to modernise and update equipment and infrastructure within and adjacent to the port. The OECD views the quality of infrastructure as a key pillar of international competitiveness, enhancing trade – especially for exports – having a positive impact on overall economic growth. ‘Major international gateway and corridor infrastructures are crucially important to the exports and imports of all the products and resources that the economies of all countries need. In the future, they will become even more important’ 49.

Key Messages OECD Strategic Transfer Infrastructure Need to 2030

• There needs to be a new “strategic” infrastructure category that includes the major international gateways and their key inland connections.

• Current gateway and inland transport infrastructure capacity will not be adequate to meet 2030 demand.

• Most of the current gateway and corridor infrastructure could not handle a 50% increase, let alone a doubling of passengers in 15 years or a tripling of freight in 20 years.

• Despite the recent fi nancial crisis and recession, which has increased defi cits, debt and unemployment:

• Countries with good planning processes and strategic infrastructure plans linked to assured funding are continuing to successfully build the strategic infrastructure they need.

• In the future, since funding of gateway and inland transport infrastructure from traditional sources will “dry up”:

• Improved funding is needed in many countries to ensure funding security and levels consistent with the development of the strategic infrastructure required to meet future needs.

• Countries without good funding arrangements may not see their strategic infrastructure built. • In many countries, there needs to be greater project certainty and funding assurance, because • plans without assured funding can create a credibility gap, weaken stakeholder interest, and

damage future gateway performance.• Given the risks to future infrastructure funding in countries with an over-reliance on budget sources:

Infrastructure funds like the ones being used successfully in a number of countries could be central to the more secure government funding of strategic infrastructure needed in other countries in future. In many countries, private sector fi nancing has been important in helping deliver the equity and debt fi nancing needed to make infrastructure projects operational.

• Private involvement can also help manage the transition to user-pays/self-fi nancing investments.• Part and full privatizations may increase effi ciency as well as reduce public funding requirements.

Private funds invested directly in listed and unlisted infrastructure assets are already active in many infrastructure markets.

• Pension funds are well-resourced and potentially larger investors in transport infrastructure. However:

• Access is needed to better-quality projects that have risk-reward balances consistent with fund contributors interests. Strategic transport infrastructure could be attractive in this regard.

• In the future, given expected limitations on public funds: • Increased private sector investment in strategic transport infrastructure will be essential. • There is increasing support for green growth and a “greening” of transport. Important contributions

can be made during infrastructure planning and development stages. Once developed, good management and use of innovative and energy-effi cient technologies can signifi cantly increase those contributions.

49 OECD Interna onal Futures Programme: Strategic Transfer Infrastructure Needs to 2030 refers.


22

The European Commission considers to fully integrate ports into the trans-European transport network (TEN-T) as part of a network of multimodal transportation, incorporating links to associated and adjoining areas also encouraging short-sea- shipping.

‘Ports have a role to play in the TEN-T as follows:• increasing the efficiency of the European transport system;• encouraging growth of EU trade with third countries,• overcoming congestion of the main land-corridors;• enhancing maritime links with island and peripheral regions• strengthening the multimodal aspect of the TEN-T’.

To connect the TEN-T with the networks of Central and Eastern Europe and the Mediterranean, the Commission proposes to promote standards within in these ports that are comparable to those found in Community ports.

Changing Distribution Patterns

Containerization in ocean shipping has resulted in a network of a ‘hub and spoke’ facilities. Ocean carriers are increasingly using regional hubs for transhipment of containers.

“The hub and spoke concept is intended to maximize use of large containerships while providing market coverage to a maximum number of ports”. This is accomplished via a network of regional and sub-regional hubs with onward service to outlying locations. Giurgiulesti Port is part of a ‘spoke’ network relying on feeder services from the larger port of Constanta in Romania. Large ships provide a service between the regional hubs while smaller vessels distribute containers throughout the region50.

Scope of the Study

The aim of the Giurgiulesti Port study is to enhance the eff ectiveness and effi ciency of clearance procedures, identify ‘bottlenecks’ / delays and where possible provide examples of European Union / international best practice, elaborate recommendations / solutions that improve processes, while at the same time ensuring integrity of the border, reduce business costs and further facilitate business / trade through the port.

In collaboration with the USAID/Business Regulatory Investment and Trade Environment Programme (BRITE) and supported by the Moldovan Customs Service and other border control services, EUBAM conducted a review of GIFP during the period May 2015 – May 2016 which included the following activities:

Description of the assignment.

The assignment consisted of 2 major components;

1. To defi ne, and ‘map’ the clearance control procedures, processes and identify functional workfl ows at GIFP within the Customs and other BCSs activities of importation, exportation & transit of commercial goods, (Component 1)

2. To produce a comprehensive ‘Gap & Needs Analysis’ (Component 2) making comparison between EU ‘best practices’ and existing MDCS / BCS system of control procedures / processes at the port, including the operation of/and controls applicable to the Free Economic Zone (FEZ) within the Port.

50 WB Port Reform Toolkit Module 2, p52-53 refers.

23

Proposed Methodology

The ‘mapping’ and review of clearance control procedures was conducted using a variety of diff erent methods which included; desk review, submission and completion of survey / questionnaires51, fi rst-hand & on-the-spot observation of the clearance procedures at the port, interviews with relevant staff in order to monitor their practical application.

1. Clearance control procedures and processes including where appropriate those external procedures that impact on the clearance / release times of commercial cargo at the Port were identifi ed, defi ned and subsequently ‘mapped’ - in the form of a fl ow chart or diagram.

2. A ‘Gap & Needs Analysis’ incorporating a comprehensive review of fi ve specifi c indicators with the potential to aff ect the border controls services ability to eff ectively and effi ciently process cargo, was completed using the following intra-service, inter-agency and international integrated border management criteria;

• Legal and Regulatory Framework; • Institutional Framework & Human Resource Management Development; • Procedures; • Communication and Information Exchange; • Infrastructure and Equipment.

3. Customs procedures in Moldova are continuously being aligned with EU Customs legislation, the EU Customs Blueprints and WCO standards, however control and clearance procedures should also include EU ‘best practice’ in relation to the concept of Integrated Border Management (IBM) in-line with the ‘IBM Guidelines for EC External Co-operation’ and current national IBM strategies. The ‘Gap & Needs Analysis’ considered these aspects as well as, those concerning other stakeholders including: veterinary and phyto-sanitary services and business users at the port.

Outputs & Outcomes

1. Production of a clear and precise ‘map’ of procedures that incorporates; Customs, Veterinary and Phyto-sanitary and other external processes with impact.

2. A ‘Gap & Needs Analysis’ report containing recommendations that further simplify or enhance the clearance process including an assessment of operations undertaken within the Free Economic Zone.

3. Identifi cation of improvements to functional workfl ows and control procedures or other areas of impact where defi ciencies are detected in the infrastructure & equipment.

Activities1. Design, plan, organise and complete - following consultation with MDCS, Giurgiulesti Ports

authority, Port Operator and other agencies and business at the port - a procedure/process ‘mapping’ exercise.

2. Review clearance control procedures, measured against fi ve specifi c indicators (See Proposed Methodology) and preparation of detailed ‘Gap & Needs Analysis’ report, together with resulting recommendations.

3. Identify and capture information; prepare, deliver, collect, collate and analyse surveys / questionnaires; analyse data and produce a fi nal report, including recommendations that aim to reduce and enhance clearance control procedures.

4. Identifi cation of areas where EU IBM ‘best practice’ could be better implemented in respect of border control service procedures / processes at GIFP.

51 Despite repeated requests for comments / informa on in the form of a survey, the Giurgiules Port study team received no wri en responses from any of the economic operators at the port.


24

5. Identifi cation of additional areas where improvements could be implemented with regard to; amendments or adjustments to functional workfl ows, communication and information exchange mechanisms and defi ciencies detected in infrastructure or equipment.

Table 2: Activity Plan

Clearance Control Procedures & end-to-end processes

Component Activities Output Outcome Time

1. Procedure & Process Mapping

To defi ne and ‘map’ - in the form of a fl ow chart or diagram - clearance control procedures and processes including those external procedures that impact on the clearance of commercial cargo within Giurgiulesti Port.

Clearly illustrated ‘map’ of all processes and procedures undertaken by Customs and other border control services, commercial entities /agencies aff ecting clearance at Giurgiulesti Port.

Identifi cation of gaps and needs in the clearance control procedures and processes

May 2015 – May 2016

2. ‘Gap & Needs Analysis’

To make comparison between EU ‘best practices’ and existing MDCS and other border control services’ system of clearance control procedures, processes and functional workfl ows including the Fee Economic Zone based on 5 specifi c indicators;

1.Legal & Regulatory Framework; 2.Institutional Framework & Human Resource Management Development; 3. Procedures; 4. Communication & Information Exchange; 5. Infrastructure & Equipment.

Completed Gap & Needs Analysis report + recommendations for simplifying and streamlining the clearance control end-to-end processes.

To positively enhance the eff ectiveness and effi ciency of clearance control procedures at Giurgiulesti Port, additionally taking into account EU ‘best practice’ in relation to IBM.

May 2015 – May 2016

Overall Objective:

Within the framework of a process of continuing review, the overall objective of the ‘GIFP Study’ is to provide the MDCS, other border control services and businesses connected to the port with sound proposals and recommendations that further assist procedural reform, improve overall eff ectiveness and effi ciency leading to the faster clearance of goods - whether import, export or transit - and identify measures that will help to enhance and increase trade facilitation and develop the port’s business investment climate taking in the immediate vicinity and its hinterland.

Previous Reports - A full list of the reports and research material used to compile the GIFP study is contained in Annex IV.

Overview of State BCSs

The list below identifi es the major BCSs with responsibility for control at the State Border of Moldova considered by this study. Customs and the Border Police maintain a presence at the port, while ANSA participates in controls based on information or request from other services.

Moldova Customs Service (MDCS) (http://www.customs.gov.md);Moldova Border Police (MDBP) (http://www.border.gov.md);Veterinary & Phyto-sanitary Service (National Agency for Food Safety ANSA) (http://www.ansa.gov.md)

The titles, roles and functions of the Moldovan BCSs closely mirror those of generic examples described in the table below.

25

Table 352: Example of roles of border control services typically found at BCPs & Ports

Agency Roles of Border Law Enforcement & BCS at the Port

CustomsCustoms offi cials collect or secure duties. Though the traditional role of customs of collecting duties has waned in high-and middle-income countries, it remains important in low-income countries, which rely heavily on customs revenue.

Immigration / Border Guard / Police

Immigration authorities verify the identities of people entering or exiting the country, largely by passport and visa checks. In some countries, customs also handles immigration functions. In some countries, immigration checks are handled by a special department or by police (border police/border guards).

QuarantineQuarantine offi cials ensure the health of people, animals, and plants by preventing infectious diseases and alien pests from entering the country. They disinfect vehicles, monitor health regulations, and check health carnets.

Public health & agriculture

Public health agencies enforce sanitary and phyto-sanitary requirements by obtaining documentary evidence (certifi cates) or testing and physically inspecting cargo

Standards / Ecological

Industrial products may be subject to verifi cation of their conformity with international, regional, and national standards for health, safety, security, and fairness.

Security / Radiological

Security considerations worldwide were strengthened in the wake of the September 11, 2001 terrorist attacks. These considerations created the need for detectors to prevent the entry or exit of radioactive material. Atomic energy control bodies intervene when a suspicious consignment is detected.

Environment Environmental agencies control hazardous waste, enforce recycling regulations, and regulate trade in endangered species items and protected products, such as timber.

Transport Transport authorities weigh trucks, collect road taxes, and enforce transport permits and licensing requirements

Customs

The duties and powers of the Customs are regulated in the Customs Code (CC) of Moldova. The Customs’ structure in 2015-16 has recently undergone further re-organisation. All necessary service units are capable of performing their assigned functions, including fulfi lment of Moldova’s international commitments. The total staff compliment at present (Aug 2016) is approximately 1500 employees but subject to further reduction below this fi gure.

Management of Customs’ national and international activities is performed through a central Headquarters (HQ) in Chisinau. Competence at the port BCP includes controls and checks on the entry and exit of goods, passengers and all types of vehicles and vessels, the prevention of infringements of Intellectual Property Rights (IPR); the protection of cultural heritage and assisting other law enforcement bodies in the prevention of smuggling and terrorism.

Customs has strengthened its administrative and operational capacity through the implementation of ICT systems including the development of an electronic declaration clearance system – ASYCUDA World53 computerised registration and risk management programme accessible to all Customs units, controlled, monitored, maintained and updated by HQ in Chisinau.

52 Trade & Transport Corridor Management Toolkit Charles Kunaka, & Robin Carruthers p167, refers.53 ASYCUDA World - The ASYCUDA World System (ASYCUDA - Automated System for Customs Data), was designed and developed by the United Na ons Confer-

ence for Trade and Development (UNCTAD). ASYCUDA World is a computerised Customs Declara on Processing and Management system. The ASYCUDA World system can process customs declara ons, accoun ng details, manifests, transit and suspense procedures, such as Goods into Warehouse, Goods out of Ware-house, etc. ASYCUDA World also generates Trade Sta s cal data that can be used for economic analysis. ASYCUDA World also takes into account the interna onal codes and standards developed by ISO (Interna onal Organisa on for Standardisa on), WCO (World Customs Organiza on) 53and the United Na ons (UN). The current ASYCUDA World pla orm is a mix between versions 4.2.0 and 4.2.1; OS Red Hat Linux; RDBMS: Oracle 10gR2; Oracle Java; SO Class 2.2.17.


26

Risk Analysis and selection criteria are applied by ASYCUDA at the national, local and regional levels to declarations at import, export and transit determining consignments for additional checks and physical examination. Legislation is already in place - CC Articles 142, 143 and 144 - setting out the need for submission of advance customs declaration specifying its use in the risk analysis process.

Furthermore, in the area of simplifi ed procedures the concept of ‘Authorized Economic Operator’ (AEO) has been formally introduced into the MD Customs Code (Act No 1149/2000), Section 281, Article 1951 - 1953 54. Progress towards assimilation to the EU New Computerised Transit System (NCTS) and the Convention on a Common Transit, together with further development and implementation of Post Clearance Audit (PCA) facilities and other simplifi ed procedures for compliant traders is being realized with the assistance of EUBAM.

Veterinary & Phyto-sanitary (ANSA)

The National Food Safety Agency (ANSA) was created by merging the Sanitary-Veterinary and Food Safety Agency with the Phyto-sanitary and Seeds Control Inspectorate. Within the regulatory framework of veterinary and phyto-sanitary legislation related to food and plant health, safety and security ANSA has a full and clear mandate to undertake controls at the border based on risk-analysis. Application of controls by ANSA at GIFP are implemented according to Law № 50 dated 28.03.2013 on special checks setting out procedures of documentary and physical control, identifi cation of the product and sampling, and Government Decision No. 1073 dd 19.09.2008 “On optimization of border crossing procedures by cargo and passenger means of transport, on amendments and termination of specifi c regulations”.

The new agency will work to apply risk based controls and amongst other developments will incorporate unifi ed control and monitoring systems for imported/exported animals, plants and food, and the application of an early-warning system in the area of food-safety.

MDBP

According to the EU Integrated Border Security Strategy, a four-tier access control model (Annex XVI) for Border Police which the MDBP is committed to implement, contains the following elements; a) inland activities, b) activities at the border, c) cooperation across the border and d) activities in third countries, consisting of border control, constituted by border checks, border surveillance and risk analysis, migration management, fi ght against crime and facilitation of cross-border traffi c. The legal document on border guard issues within the EU is the Schengen Convention (Convention implementing the Schengen Agreement of 14 June 1985). Since GIFP is an international border crossing point for both cargo and passengers the MDBP are present at the port and are mentioned during the course of this study, however as their work does not precisely impact upon the clearance of containerised cargo the focus of attention is directed more towards the MDCS and ANSA.

General Characteristics - Giurgiulesti International Free Port (GIFP)55

An agreement reached between the Republic of Moldova and Ukraine in 1998 following the breakup of the Soviet Union gave Moldova access to the Black Sea. This was achieved by Ukraine giving up a strip of land near the village of Giurgiulesti and Basarabeasca railway station, and Moldova in return handing Ukraine control over a road connecting Izmail to Reni56. 54 Other related legisla on:Government Decision no. 647 of 07.08.2014 on the implementa on of the provisions of the Customs code; Customs Service

Order no. 483-o of 13.11.2014 on approval of the Methodological Norms on pre-audit procedure; Customs Order no. 50-O of 16.02.2015 for Implement-ing customs simplifica ons and benefits for Authorized Economic Operators refer.

55 h p://www.gifp.md/ refers.56 Following a land swap agreement with Ukraine, reached in 1998, the Republic of Moldova gained direct access to the Danube river, which fostered the develop-

ment of the port of Giurgiules . The port complex consists of: a passenger terminal and cargo berth on the river Prut, operated by the State- owned enterprise River Port Ungheni; and the privately built and operated Giurgiules Interna onal Free Port (GIFP), comprising five terminals on the inter-sec on of the Danube and Prut rivers, as well as a business park. The port complex is capable of receiving small mari me vessels, thus providing indirect access to interna onal seaborne trade. Goods weighing some 1,083,506 tons were handled at the port of Giurgiules in 2014, up from 67,953 tons in 2009. With a view to s mula ng investment in a facility deemed essen al for the Republic of Moldova’s energy and transport security, as well as for the expansion of interna onal trade, GIFP has been granted a status similar to that of a FEZ un l 2030. The general investor in GIFP has signed a land lease agreement with the Moldovan Government for a period of 99 years.

27

As mentioned before, GIFP is the Republic of Moldova’s only access to the River Danube and Black Sea. It is a privately owned and operated enterprise established in Moldova by Danube Logistics SRL. The port has experienced substantial development and growth during the previous 8 years. This development has incorporated the construction of a new container terminal during 2010 and additional facilities which have signifi cantly increased the handling capacity of the port.

The port also functions as a strategic reserve for the transhipment of oil and coal and gives the Republic of Moldova independence from its neighbours, competing for business with other Danube ports.

The port operator and the Government of the Republic of Moldova have aspirations to further expand the role and facilities of the port particularly in the area of the transhipment of cargos and containers and to improve its logistical connections within the region and with other ports on the Black Sea as well as more eff ectively utilisiing trade via the River Danube corridor. The Free Economic Zone status of the port is a feature of the developmental capacity and trade facilitation measures adopted by the port operator and Moldovan Government to boost economic activity at the port and in the region.

GIFP is located at the Southern border of Moldova, km 133.8 / mile 72.2 of the river Danube, able to receive both river and maritime vessels with a water depth of up to 7 metres. The port enjoys a strategic position adjacent to Ukraine and to the EU with Romania and has access to transport corridors that include; road, rail and river. These transport connections link the port with international trade and transportation routes such as the Rhine-Main-Danube Canal, the Black Sea, 14 European countries as well as the North Sea; European and Russian railway networks and international road systems.

Since its inception the port has seen progressive development and expansion to a position where now the port incorporates a business park and 5 commercial terminals57:

• Refined petroleum terminal (2007)

“The Oil Product Terminal is owned and operated by Danube Logistics. The terminal consists of one jetty on the river Danube, a tank farm consisting of eight tanks, truck-loading facilities and, from mid 2012 mixed-gauge rail loading/unloading facilities. The water depth at the oil terminal jetty is at least 7metres and therefore can be accessed by both maritime vessels and river barges. Up to three diff erent types of oil products can be simultaneously loaded or discharged from vessels. The total storage capacity of 63,600 cubic meters is divided between 8 tanks with capacities ranging from 4,200 to 12,600 cubic meters. Four of the eight tanks have been equipped with fl oating roofs for the storage of gasoline and other light products. The mixed gauge rail terminal for oil products that is currently under construction will enable companies to transship oil products directly to/from the CIS and European Union markets by railway. The annual transshipment capacity of the oil terminal exceeds 1 million tons” 58.

• Vegetable oils terminal (2011)

“The vegetable oil terminal of Giurgiulesti International Free Port started its operations in November 2011. SC “Trans Bulk Logistics” SRL, a subsidiary company of Trans Oil Group of Companies, constructed and operates the grain vegetable oil terminal in collaboration with Danube Logistics. The terminal has a storage capacity of 6,000 mt and can load vessels of a size of up to 10,000 dwt” 59.

57 Throughout the period of ac vity GIFP, as of 01.01.2015 the port benefited from a total volume of investment that cons tuted 62.4 mil. USD, including $3.5 million during 2014 - “Mircea cel Batran” Naval Academy Scien fic Bulle n, Volume XVIII – 2015 – Issue 1 Published by “Mircea cel Batran” Naval Academy Press, Constanta, Romania // The journal is indexed in: PROQUEST SciTech Journals, PROQUEST Engineering Journals, PROQUEST Illustrata: Technology, PROQUEST Technology Journals, PROQUEST Military Collec on PROQUEST Advanced Technologies & Aerospace THE ROLE OF GIURGIULESTI INTERNATIONAL FREE PORT IN THE DEVELOPMENT OF ECONOMY OF MOLDOVA Vyacheslav BARDAN Technical University of Moldova Annex V refers.

58 Ibid 59 Ibid


28

• Cereal products terminal (2009)

“The grain terminal of Giurgiulesti International Free Port started its operations in July 2009. SC “Trans Cargo Terminal” SRL, a subsidiary company of Trans Oil Group of Companies, constructed and operates the grain terminal in collaboration with Danube Logistics. The terminal has a storage capacity of 50,000 mt and can receive up to 3,000 metric tons of grain per day by railway or road transportation. At the same time vessels with a size of up to 7,000 mt can be loaded with a loading speed of up to 300 metric tons per hour” 60.

• Dry bulk terminal (2011)

“The Bulk Cargo Terminal owned and operated by Danube Logistics is located on the river Pruth on a territory of about 4 ha. In 2016 the terminal will mostly transship aggregates, pet-coke and slag from river barges to railway wagons and trucks. Barges are either discharged by fl oating crane or a mobile harbor crane” 61.

• Containers and general cargo terminal (2012)

“On 11 January 2012, the company “Danube Logistics” has put into operation its new Terminal General Cargo and Containers (TMGC). The terminal’s open storage area of about 2 ha is directly connected to the railway and has a total of 48 plug-in points for reefer containers. The equipment of the terminal consists of a 70 ton Sennebogen mobile harbor crane, a Kalmar reach-stacker and two fork li� s. In 2014 the volume of containerized cargo transshipped increased over 2013 by 69% to 7786 containers. Total number of containers imported into GIFP increased by 58% compared to the previous year. Approximately 57% of container imports originated from China, 10% in Spain, 6% of India, 5% and 3% of Israel Turkey. In total Moldovan importers receive goods in containers from 49 diff erent countries during 2014. Cereal products in containers were delivered in Giurgiuleşti in Asian countries such as Indonesia, Malaysia, Taiwan, India and the Philippines. Shipping container has been used to export other products such as wine and spirits, nuts, dried fruit, apples, apple juice concentrate and sugar. In total containerized cargo exports increased by 85% and Moldovan goods reached the markets of 43 countries” 62.

• Ro-Ro Terminal (Under construction)

“Adjacent to the General Cargo and Container Terminal, Danube Logistics is in the process of constructing a RORO ramp which is approximately 80% complete.”

• Mixed Gauge Railway Terminal (2014)

Of particular note is the inauguration of the Mixed Gauge Railway Terminal for oil products on 4th of September 2014 at the port. This is Moldova’s fi rst privately held mixed-gauge rail terminal, which allows transhipment of liquid as well as dry cargo, including containerized cargo by railway directly from/to Moldova, CIS and EU countries.

60 Ibid61 Ibid62 “Mircea cel Batran” Naval Academy Scien fic Bulle n, Volume XVIII – 2015 – Issue 1 Published by “Mircea cel Batran” Naval Academy Press, Constanta,

Romania // The journal is indexed in: PROQUEST SciTech Journals, PROQUEST Engineering Journals, PROQUEST Illustrata: Technology, PROQUEST Tech-nology Journals, PROQUEST Military Collec on PROQUEST Advanced Technologies & Aerospace THE ROLE OF GIURGIULESTI INTERNATIONAL FREE PORT IN THE DEVELOPMENT OF ECONOMY OF MOLDOVA Vyacheslav BARDAN Technical University of Moldova refers.

29

Fig 1: Geographical location of Giurgiulesti International Free Port

Source: www.gifp.md

Notwithstanding its strategic location and tri-modal transport infrastructure, the port also has an excellent potential for stimulating and encouraging the development of business since it operates in a low cost environment and benefi ts from a preferential customs and tax regime. The state passenger and cargo terminal is operated by the state enterprise Fluvial Port Ungheni under the responsibility of the Ministry of Transport and Roads Infrastructure (MoTRI).

China Shipping Container Lines

In June 2015 an agreement was signed between Danube Logistics and the China Shipping Container Lines enabling the company to expand its global services into Moldova. China Shipping Container Lines is the second international container shipping line63 off ering a direct service to GIFP64. The introduction of this service provides the opportunity for exporters to ship regular or refrigerated goods using containers from Moldova to the world market, and particularly Moldovan companies which export agricultural goods – wine, cereals, fruit and livestock - to the markets in the Mediterranean, North Africa, Asia and the Arabian Gulf, totaling 43 countries.

The addition of this type of business activity will assist GIFP to establish itself as a regional trade hub and encourage the development /construction of new logistics centres and business parks along the revitalised New Silk Road including for the 21st century, a Maritime Silk Road, broadening the Moldovan economy which has recently suff ered from diffi culties as a result of the imposition of Russian trade sanctions against Moldovan goods65.

Collaboration between the port and China Shipping Container Lines is part of a longer term strategy designed to enable the port to develop an investment climate for Chinese companies that wish to gain access to the Moldovan, European Union and CIS markets. This strategy appears to be bringing success as according to information66 in 2015 from Danube Logistics; ‘the total number of containers transhipped via Giurgiulesti International Free Port and delivered to or collected from the Port of Constanta by Danube Logistics SRL increased by 3% to 7,986 containers (9,912 TEU). While the number of import containers decreased due to the challenging economic environment, the number of sea containers used for the export of Moldovan goods increased by 42%’ 67.

63 h p://www.marinelink.com/news/shipping-service-moldova393699.aspx64 In 2014 the transshipment of containers via Giurgiules Interna onal Free Port increased by 68% to more than 11,000 TEU. Last year 57% of import containers

originated from China and 76% of the export containers were shipped from Giurgiules Interna onal Free Port to Asian markets. h p://www.gifp.md/ refers.65 h p://www.euronews.com/2015/04/17/the-danube-provides-new-trade-route-for-moldova/ refers.66 In total, in 2015 the Giurgiules port increased the volumes of cargo transhipments by 13% - to 868.7 thousand tons. More than 330 different ships

benefited from its services over a year. Investments in port grew US$1.1 million and reached US$63.7 million. Their main share accounted for Danube Logis cs - US$49.4 million, Trans Cargo Terminal - US$7.9 million and Trans Bulk Logis cs - US$4.1 million. Info tag April 18th 2016 report refers.

67 According to the port administra on, the largest volumes of exported items were: grain, oilseed, wine, alcohol beverages, food products and wood. Major des na ons for export included; Indonesia (41%), Malaysia (20%), USA (8%), Myanmar (7%) and Thailand (5%) 67through a variety of major sea container lines, via the Romanian port of Constanta, h p://www.infotag.md/press_release_en/222416/ refers.


30

Component ‘1’ Process Mapping Exercise:

Process Maps of GIFP:

A summary of the processes, procedures and sequence of events fi nalised during the import, export and transit clearance of containers at the port is illustrated in the following two ‘Process Maps’.

Import

Imported goods are cleared for free circulation on the customs territory only a� er the importer meets all payment requirements and measures of economic policy. Within this clearance procedure are a number of regimes which may allow the goods to undergo various processes or periods without the payment of duties.

Transit In a transit regime, goods are transported under customs supervision from one customs point to another, without payment of any duties and/or taxes, unless otherwise provided by law.

Export

Export implies that goods are permanently taken out of Moldova’s customs territory. Goods may be placed in this regime if all applicable taxes and fees have been settled, measures of economic policy are respected and other requirements set out by the law are met 68.

Each ‘Process Map’ in the form of a fl ow diagram illustrates the route taken by documentation that enables various means of transport and the goods they convey to pass through the territory of the port from the point of arrival of the vessel to the place of fi nal clearance and release.

The maps illustrate key points in the clearance process at the port where specifi c border control procedures including those performed by the MDBP, MDCS69, Sanitary-Epidemiological Service, Veterinary and Phyto-sanitary service take place. Each ‘Process Map’ is supplemented by a summarised textual description of the necessary procedures.

The ’Process Maps’ are based on the ‘Technological Norms of Giurgiulesti Free Port’ 70 which stipulate the customs and border control process of the state services for cargo/passenger vessels at the border; sea/river, at the entry/exit to/from the Republic of Moldova through Giurgiulesti Port through the BCP “Giurgiulesti Maritime” (GD Nr. 1027 from 03.10.2005) of cargo and passengers which are transported and cross the customs border (state) of the Republic of Moldova through Giurgiulesti Port, control and service bodies’. Norms are elaborated based on Law on state border of the Republic of Moldova Nr. 215-XIII 04.11.2011, GD Nr. 434 from 19.06.2012 on Border Police, GD Nr. 808 from 09.08.2000 on amendments and modifi cations imposed by the GD of RM Nr. 1070 from 14.08.2002, GD 926 from 12.12.12 on State Border and other treaties to which the Republic of Moldova (RM) is part of, Navy Code of RM, the Moldovan Customs Code 1149-XIV of 20 July 2000, Law Nr. 283 of 28 December 2011 on the Border Police, Law Nr. 1150 of 20 July 2000 on customs service and other normative documents on implementation of informational system ASYCUDA World.

In accordance with the legislation in force, the management control activities at the BCP are performed jointly by the Head of the BCP and Head of the Customs post, who authorise, within their competence, decisions approving or refusing crossing of the state border by persons, maritime/river vessels, cargo and other goods.

68 h p://photos.state.gov/libraries/moldova/106281/PDF/Customs_Clearance.pdf refers.69 MDCS Order No. 157 dd 20.04 2012 describes a detailed step-by-step customs clearance procedure for the goods introduced/exited via Giurgiules Port.

This order is based on Government’s Decision No. 1027 (2005), which established the interna onal border crossing point Giurgiules -Port.70 Annex III Technological Scheme, GIFP (dd 2013) 70refers.

31

In this regard, GIFP creates border and customs control zones implemented by the Harbour Master in a mutual agreement between the customs post of ‘Giurgiulesti Maritime’ and the Border Police, where a special regime is implemented to be respected by all natural persons and legal entities as well as the transport of cargo and other goods that cross the state border. The current ‘Technological Norms’ regulate the actions and inter-action of the BCSs, which work at the BCP and include:

1. Border Police;2. Customs Service;3. Harbour Master of Giurgiulesti Port;4. ANSA (if required);5. Sanitary- Epidemiological Service;6. Shipping agent.

Border control of the sea/river, cargo/passenger Moldova & foreign registered vessels at entry/exit to/from the territory of Moldova through GIFP is performed by an ‘‘on-board Commission’’ made up of the following representatives:

1. Border Police;2. Customs Service;3. Harbour Master of Giurgiulesti Port;4. ANSA representative (if required);5. Sanitary-Epidemiological Service;6. Shipping agent.

The sequence of formalities for authorizing the crossing of the state border by persons, maritime/river vessels and goods are as follows:

Entry into and Exit from the Republic of Moldovaa) Border control (Border Police);b) Customs control (Customs Service);c) Sanitary-Epidemiological control (if required).

Fig 2: Process Map 1 GIFP Import / Transit Clearance Processes71 (see separate map

enclosed)

Pre-arrival of Cargo Vessel to Giurgiulesti Port (General):

i. Advance cargo information is necessary and since 1st January 2011 also mandatory in the European Union as part of “Customs Security rules”. For maritime cargo, the deadline to submit such information is 24 hours before loading. In Moldova pre-arrival information72 is submitted not less than 2 hrs in advance73 of the arrival of the vessel from foreign by the ship’s Captain or agent. In other countries the provision of pre-arrival information allows application to the Port Authority and BCSs for a procedure known as ‘Free Practice’.

71 Full size process maps are contained in a pocket in the rear cover of the document.72 Pre-arrival informa on submi ed in advance should include; documents related to the owner, registra on, safety, security and health of the vessel crew and

passengers, type of cargo, recently visited ports etc. in accordance with Art. 17 (use of informa on) 72- 171 (exchange of informa on); Chapter 23, Art.144-145 of the MD CC & Interna onal Mari me Organisa on FAL Conven on & the Interna onal Conven on for the Safety of Life at Sea (SOLAS), an interna onal mar-i me safety treaty that ensures ships flagged by signatory States comply with minimum safety standards in construc on, equipment and opera on. The SOLAS Conven on in its a successive form is generally regarded as the most important of all interna onal trea es concerning the safety of merchant ships refers.

73 In some cases in the area of the Bal c Sea and Black Sea where the distance between the ports can be covered in less than 24 hours the rule is that pre- arrival data has to be sent at least one hour before the es mated me of vessel’s arrival. The situa on in the port of Giurgiles is much be er from this point of view because first of all the container traffic is not that high in terms of turnover and the customs gets the data separately from 2 independent channels. The informa on is being sent from the local DL broker in Constanta to the DL port operator who immediately forwards it to the Giurgiules cus-toms. On the other hand there is a mutual agreement between Romanian and Moldovan customs according to which the same data has been sent from the RA unit in Constanta South Container terminal to the Moldovan customs in Giurgiules with some risk assessments and indica ons about possible risks. Depending on the weather condi ons it takes at least a day for the vessel to arrive from the port of Constanta to Giurgiules .


32

ii. Granting of ‘Free Practice’ increasingly via electronic approval and accompanying e-signature allows for the immediate discharge of cargo on arrival at the port, dispensing with the controls of the ‘‘on-board Commission’’. Advance application for ‘Free Practice’ in addition, provides the opportunity for the BCSs and in particular Customs to begin a process of pre-arrival risk analysis - a key enabler for improving trade facilitation and better use of resources. Currently there is no provision within the ‘Technological Norms’ of the BCSs for ‘Free Practice’ at GIFP, and consequently the procedures of the ‘‘on-board Commission’’ remain.

iii. According to the GIFP ‘Technological Norms’, once per week via e-mail, the MDBP receive from the Harbour Authority a full list of anticipated arrivals / departures to / from the GIFP (this allows the Head of MDBP at the port to conduct tactical risk analysis and assign the necessary resources for the respective shi� ) 74;

iv. Not less than 2hrs prior to the arrival of the vessel the agent will contact MDBP by phone and confi rm the exact arrival time of the vessel as well as information that may aff ect the schedule of the BCSs. The Master separately must also inform the name and the address of the agent who will represent the vessel’s interest in GIFP. The agent will obtain approval to enter the port from the Port Administration and allocation of a berth. At this point in the process, MDBP is provided with the hard copy of the crew list.

v. Master or agent prepares in duplicate a crew list and, if applicable, list of passengers on board the vessel and prior to arrival sends all these documents to the MDBP and MDCS 75.

vi. In advance of the vessel’s arrival, the Master also submits via the agent a health declaration indicating the presence of any illness or disease amongst the crew/passengers76. This notifi cation contains:• estimated time of arrival of vessel including present position;• the vessel’s name and maximum dra�; • crew and/or passenger list;• planned activity: import(port of loading)/export (port of destination);• cargo manifest (loading / unloading); • quantity of cargo;• the flag of the vessel;• berth where the vessel will dock77.

Moldova Border Police (MDBP) actions in the Port:

i. The GIFP ‘Technological Norms’ state that on arrival of the vessel in the Port (control zone) the agent or other representative of the owner or the consignee of the goods obtains permission from the Harbour Master to approach the ship. A� er the vessel docks, the agent will assemble the ‘‘on-board Commission’’.

ii. The ‘on-board Commission’ will board the vessel on arrival and perform a range of statutory and mandatory controls, including: preliminary documentary checks in order to determine that the vessel, crew and cargo comply with sanitary and epidemiological standards and that ship’s papers and travel documentation of crew and passengers are in order, inputting data as appropriate into the Automatic Information System (AIS) “Traversarea Frontierei” (Border Crossing) database 78.

74 New vessels are rare the majority of vessels are regular visitors.75 If as a result of force majeure lists cannot be sent to the MDBP and MDCS, a copy is sent to the nearest crossing point or to the Harbour Master who will

send it to the MDBP and MDCS at GIFP.76 If heath declara on indicates disease amongst the crew/ passengers, then a Doctor should also be a member of the ‘on-board Commission’, boarding the vessel first.77 Vessels arriving in the port for the first me will be requested by the MDBP to provide a structural plan in order to iden fy possible places of concealment.

Crew lists and structural plans are stored by MDBP for further use in tac cal risk analysis.78 MDBP use portable off-line registra on devices. Matching with system alerts is made only when the registra on device is connected to the network

a er leaving the vessel. Following registra on procedures and server synchronisa on MDBP allows the vessel permission to enter / exit (or takes other necessary measures).

33

iii. MDBP returns a signed copy of the crew and/or passenger list to the Master for presentation on demand within the port. The Master or the agent will inform MDBP, the MDCS of any changes in the crew or number of passengers. The Master is also obliged to inform MDBP and MDCS, before arriving in GIFP, if possible, of the presence of ‘stowaways’ 79 on board. At the same time, ‘stowaways’ will remain under the supervision of the master of the ship.

iv. If any of the ship’s crew intend to leave the vessel the agent must inform MDBP who will register entry to MD territory and stamp the crew list.

v. If crew intend to exit MD (through another BCP) a� er having been allowed to enter through the port, MDBP will request the international passport for the border control procedures at the entry point and stamp accordingly. Ship’s crew in these circumstances need to comply with enforced entry conditions (visa – if required, etc.)

Moldova Customs Service (MDCS) actions in the port:

i. Preliminary information concerning the arrival of containers is received from Danube Logistics a� er loading of the vessel in Constanta. Information received includes the container number, short description of the cargo, gross / net weight, exporter/importer, port of departure and seal number.

ii. Receipt of this information allows Customs a period of approximately 24hrs to perform risk analysis in advance of the arrival of the vessel.

iii. Around 2 hrs in advance of the vessel’s arrival, a preliminary cargo manifest is also sent electronically by the agent to MDCS at the port and to the Risk Analysis Unit (RAU) at Cahul Custom House and Risk Analysis Dept. in Chisinau.

iv. Cargo manifest and ship’s documents submitted by the Master are stamped by Customs on-board, the yellow fl ag lowered80 (if appropriate).

v. Based on risk analysis MDCS undertake joint control of the vessel including ship rummage together with MDBP.

vi. Check seals (Ship’s bond);vii. Documents are completed concerning the vessel’s arrival and details recorded in the register of

“Entrance/Exit of Ships”.viii. Following satisfactory performance of the ‘‘on-board Commission’s’” activities, the Master is

granted permission to discharge the cargo.

Treatment of Cargo on Entry to Giurgiulesti Port MDCS & ANSA actions in the port:i. Goods falling within the fi rst 24 Chapters of the Customs tariff (live animals, animal products, plants

and plant materials) are subject to veterinary and phyto-sanitary control. If ANSA related shipments require clearance (including for internal transit or export), Veterinary or Phyto-sanitary Inspectors are requested to attend the ‘‘on-board Commission’’ by the agent. Containers and other means of transport conveying such goods begin the clearance process by fi rst undergoing a preliminary documentary examination of necessary and accompanying licences and/or health certifi cates. If physical inspection, examination or sampling is not required, documents are approved.

ii. When goods arrive at the GIFP a cargo manifest is submitted electronically to the MDCS for each container. By the end of the second working day following physical arrival of the goods they must be placed under one of the legally stipulated customs procedures (Art. 176 MD CC).

79 A ‘stowaway’ is a person who secretly boards a means of transport, such as a ship, an aircra , a train, cargo truck or bus, in order to travel without paying and without being detected. h ps://en.wikipedia.org/wiki/Stowaway refers.

80 Tradi onally vessels arriving from ‘Foreign’ display a raised yellow Quebec” or ‘Q’ flag that indicates that a vessel declares itself free of quaran nable dis-ease, and requests boarding and inspec on by Port State Control to allow the gran ng of “free pra que”. h ps://en.wikipedia.org/wiki/Yellow_flag_%-28contagion%29 refers.


34

iii. On discharge from the vessel, containers can be weighed at the request of the transporters (for calculation of transportation fees).

iv. Gross weight information is passed to MDCS (not considered as a Customs control) who verify details against the declared weight on the bill of lading81.

v. Discharged cargo/containers not for import clearance (IM) or transit are transported to the FEZ area where they may remain for an unlimited period in the port. Consignees pay only warehousing fees82 &83.

vi. Mandatory registration for free circulation goods (home use) at the port is applied to cigarette and fuel consignments84.

vii. Customs procedures (declaration and clearance) of the cargo under import / transit regimes are performed on the basis general rules set by Customs Code of Republic of Moldova; Order No 276-O from 24.10.2002 and other acts in force.

viii. Additional controls of containers are undertaken by MDCS if seals are broken or details diff er from those recorded in transport documents85.

ix. For movement of containers within the port no additional declaration is required.

Import Procedures:

MDCS & ANSA actions in the port:

I. The declarant or his agent submits a customs import declaration - Single Administrative Document (SAD) either electronically by a process known as direct trader input (DTI) from remote terminals into the computerised decalaration processing system ASYCUDA or in hard (paper) copy. However, irrespective of the method of submission, validation and processing of the declaration at the Inland Customs Post (ICP) follows a similar sequence of actions.

II. Initially each SAD is assigned to an individual offi cer by the shi� leader as an anti-corruption measure designed to avoid the potential of pre-arranged collusion between the declarant or his agent and MDCS and receives, in the case of hard copy declarations, a local reference identifying number prior to offi cial registration.

III. For hard copy declarations, offi cers must manually record their actions by offi cial stamps and signature throughout the process including noting the time of acceptance, registration, examination, payment and clearance on an Information Notice that is attached to the hard copy declaration.

IV. In order to begin processing of the declaration, all accompanying documents are manually compared and checked against the customs declaration - electronically submitted or hard copy - to ensure their accurate completion and to determine if all required licences, certifi cates, commercial documents etc. have been presented and, where necessary, certifi ed by the appropriate authority or BCS.

V. ASYCUDA performs a similar additional automated check of electronically submitted declarations, which ensures that all the required boxes in the SAD have been correctly completed. Declarations are not registered until these requirements have been satisfactorily completed.

VI. During the customs clearance procedure, customs offi cials may request to weigh goods or perform other operations to determine the volume/quantity of conveyed goods; to load/unload; to pack/unpack; open containers or other spaces where declared goods and vehicles may be located, take samples and specimens of goods for examination in the presence of the owner of the goods.

81 Should a significant discrepancy be observed then the consignment will be scanned and/or, physically examined and a fraud suspicion report submi ed to the internal clearance post.

82 MDCS at the port work 24-hour shi s. It is understood that the clearances of Excise and Transit goods as well as physical examina ons are only undertak-en during day shi s.

83 Green Channel – goods released without any customs controls; Yellow Channel – goods released following addi onal documentary checks84 Other excisable goods like spirits, personal automobiles may be transited to internal CU unit.85 Appropriate Customs control measures are ini ated for clarifica on of eventual transhipment abroad, x-ray scanning, physical examina on etc. Risk

analysis and control measures are applied either based on ASYCUDA risk indicators or manually (through an established procedure) following a review of the submi ed documents. A er the clearance for internal transit every container is sealed by MDCS although the ini ally snapped seal remains intact.

35

VII. If satisfi ed, an automated process registers the declaration in the system, and unique reference number is issued. According to the MDCS Order No. 480 from 18.12.2006 related to the “Approval of Methodology on detailed customs declaration processing”, Chapter III, Art. 14 para A letter g), the period for the customs declaration and accompanying documents to be presented to the named customs post is 1 hr, otherwise it will be considered invalid or cancelled.

VIII. At registration the risk analysis module within ASYCUDA is activated and a detailed risk assessment of the declaration is automatically carried out against centrally maintained and updated national and local/regional risk criteria and profi les86.

IX. Following the automatic risk assessment a colour coded icon is displayed on-screen;a) Customs examination or other types of physical control are needed — Redb) Further detailed documentary examination — Yellowc) Low risk — Greend) Post Clearance Audit — Blue

X. Offi cers are able to over-ride the risk assessment indicated by the system in an upward direction i.e. Green to Red, based on their own local knowledge and experience87.

XI. Other checks are then performed to validate and confi rm that the goods are accurately classifi ed according to the MD Customs Tariff for the purposes of calculating the correct rate of duty.

XII. Values of the declared goods are assessed in line with the WTO Valuation Guidelines88 and in accordance with the provisions of Moldovan Customs Code: Chapter VII, Customs Value Of Goods. Determination Of The Country Of Origin Of Goods; Section 33 - Customs Value of Goods; Article 214, Procedure for Determining the Customs Value of Goods ‘’The customs value of goods shall be determined in accordance with the Law on Customs Tariff ‘’.

XIII. Where, following documentary checks, suspicion or doubt exists, declarations which the system indicates as High Risk (Red) are selected for physical examination according to pre-determined scales of inspection. Other reasons for selection include: specifi c information or alerts from the MDCS or another law enforcement agency. Containers and their contents may also be subject to non-intrusive examination by MDCS operated mobile X-ray scanning equipment.

XIV. Declarations that a� er physical examinations are found to be in error i.e. goods are misdescribed, undervalued, overweight or undeclared are dealt with in accordance with Articles 181- 1813 of the CC.

XV. If permissible and in the case of undervaluation the diff erence is less that 6% the declaration is amended to refl ect the results of the physical examination and where appropriate the additional duty is calculated, according to Article 127, para (6) and 12713 of the CC under which a decision for regulation is issued by customs for the additional customs debt.

XVI. If amendment is not permissible then goods are detained pending further investigation and consideration is given to the possible initiation of off ence and liability proceedings under Chapter X of the MD CC.

XVII. If on the other hand, the declaration is found satisfactory, following all the relevant documentary checks and physical examination, then the duties and taxes are brought to account electronically via the customs broker’s authorised account. Where instances of insuffi cient funds occur monies already deposited are topped up by means of cash payments directly to Customs at designated locations.

XVIII. Following acceptance and receipt of the payment by Customs, electronic confi rmation is issued to the trader thus permitting offi cial release of the goods, which may proceed to the exit of the Port no longer under customs supervision.

86 Risk profiles created at the local and regional levels predominantly concerning the tariff classifica on of goods are added to the system and monitored in Chisinau to ensure effec veness and efficiency.

87 Customs Officers may redirect declara ons from one channel to another (e.g. Green to Red). They must inform verbally the Head of Customs Post ex-plaining the reasons and the supervisor will decide whether to authorise the change of channel. If the supervisor has any doubts, he can refer the request upwards. At the end of the procedure, a wri en report is dra ed (where results are described).

88 The WTO agreements basic principles s pulate ‘that Customs valua on shall, except in specified circumstances, be based on the actual price of the goods to be valued which is generally shown on the invoice. This price, plus adjustments for certain elements equals the transac on value, which cons tutes the first and most important method of valua on referred to in the Agreement’ The Agreement lays down 6 methods to be applied in strict hierarchical order if the first method (1) Transac on Value is found to be not acceptable. The five remaining Methods are as follows: (2) Transac on Value of iden cal goods, (3) Transac on Value of similar goods, (4) Deduc ve Method, (5) Computed Value & (6) 88Fall back method or determined against reasonable means consistent with the principles and general provisions of the Agreement.


36

XIX. If authorised by the MDCS, customs clearance may take place at other locations (e.g. at the company’s premises).

Transit Procedures

i. Shipments arriving by sea at GIFP and transiting the port, require completion and submission to the MDCS of a transit declaration as normal practice required by Government decision № 1140/2005 –Section 3, art.96, point 4 supported by an invoice, packing list, other transportation documents related to the goods or documents in connection to the nature of the goods. In addition to this, permits or licenses might to be required for the transit of goods which are restricted in Moldova. Copies of documents are accepted by customs which can be scanned, e-mailed and stamped by brokers to confi rm validity.

ii. The transit declaration permits and authorises crossing of the state border and facilitating transport from the territory of the port to the offi ce of destination in accordance with Section 7 of the MD CC. Duties and taxes are normally guaranteed or deposited with Customs in advance to cover any irregularities that may occur during the transit operation.

iii. For transit between GIFP and the Offi ce of Destination shipments are placed under an additional MDCS transit seal.

iv. At GIFP consignments / containers may be subject to weight controls using the offi cially certifi ed and approved weighbridge.

v. At the exit gate to GIFP the driver or other representative of the transport company signs receipt required by MDCS confi rming that the container leaving the port will be returned to the territory of the port within a period of 8 days as containers are considered to be temporary admitted to Moldova and incur customs liability.

Fig 3: Process Map 2 GIFP Export Clearance Processes89 (see separate map enclosed)

Treatment of Export Cargo from Giurgiulesti Port

MDCS & ANSA actions in the port:

i. A� er obtaining the sales order, the Moldovan exporter enters into an agreement with the shipping agents to carry cargo from Moldova to the port of destination and makes arrangements with the shipping agent to export the goods90.

ii. Shipping agent request Danube Logistics to release empty container(s) to the exporter, usually by e-mail which provides details of the outbound vessel and identifi es the exporter.

iii. Exporter or his representative nominates a haulier. This nomination will be valid for both collecting the empty container(s) from Danube Logistics and returning the export container (s). Should the exporter decide to use their own vehicle, Danube Logistics must be informed in advance to arrange an appropriate date and time to pick up the empty container(s).

iv. In compliance with all necessary regulations – ‘Technological Norms’ of GIFP - the empty container(s) is loaded on to the haulier’s vehicle and delivered to the exporter’s warehouse.

v. Exporter arranges for ‘stuffi ng’ of the container(s) and informs the haulier.vi. Haulier collects export container(s) from exporter’s warehouse and delivers to Danube Logistics

– GIFP. vii. In compliance with all necessary regulations export container(s) is off -loaded from the vehicle

within GIFP for later loading on to vessel.viii. In parallel, exporter or a customs broker submits export declaration online through the ASYCUDA

system, detailing the cargo and invoice information, packing lists and other necessary documents.

89 Full size process maps are contained in a pocket in the rear cover of the document.90 Currently only 2 shipping agents are represented in Moldova – China Shipping and MSC with a branch ‘MSC Moldova’. Danube Logis cs has a contract

with another 159 worldwide shipping lines.

37

ix. MDCS verifi es the information received and if all requirements are met the shipment is redirected to the ‘Green Channel’ granting approval for export. If additional verifi cation or missing documents are required, then ‘Yellow Channel’ is selected. Should additional documentary checks and physical inspection of the cargo be required then the declaration is directed to the ‘Red Channel’ until it passes all prescribed checks.

x. Exporter completes all the required examination formalities.xi. In parallel the exporter may approach MDCS to obtain certifi cates of origin, which based on

Governmental Decree 1599/13.12.2002 on Rules of Origin is the certifi ed authority to issue certifi cates of preferential origin type “A”, “CT-1” and EUR 191. Furthermore, the exporter is required to obtain additional permits conditioned to type of goods.

xii. Upon completion of export formalities Danube Logistics ensures that the container(s) is ready to be loaded on to the vessel in due time. In the case of failure to do so they should inform the shipping agent accordingly.

Exit of Cargo vessels from Giurgiulesti Port for Foreign - Regular

MDBP & MDCS actions in the port

i. According to the GIFP ‘Technological Norms’ two hours in advance of the vessel’s intended departure time, the Master, agent, or other representative of the owner or consignor of the goods informs MDBP and MDCS.

ii. If the Master is unable to inform MDBP / MDCS, the Harbour Master is informed.iii. For regular non-ANSA shipments, a joint ‘on-board Commission’ consisting of MDBP and MDCS

undertakes export controls which include, according to the ‘Technological Norms’, the following procedures;

• questioning of natural persons, • review and processing of documentation in relation to export cargo,• checking of seals.

iv. Customs procedures (declaration and clearance) of the cargo under export/transit regimes are performed on the basis of general rules set by Customs Code of Republic of Moldova, Order No 276-O from 24.10.2002 and other acts in force.

v. A second copy of the crew and/or passenger list, completed and signed, is returned to the Border Police and Custom Service or to the Harbour Master.

vi. All documents are processed allowing the vessel to depart and details are recorded in the register “Entrance/Exit of Ships” by MDCS.

vii. A� er departure the shipping agent issues bill of lading to the exporter. viii. Exporter sends original Bill of Lading together with invoice, packing list, certifi cate of origin etc.

to the importer to enable clearance of documentation with the Customs of importing country.ix. MDCS collects on export and re-export a processing fee as it is stipulated in Law Nr. 1380 /

20.11.1997, Annex 2 of the Customs Tariff of Moldova, Art. 492.

91 Preferen al cer ficates on export type CT-1 are issued by MDCS since 01 January 2008. The Moldovan Chamber of Industry and Commerce is the other state body which issues non-preferen al cer ficates of origin type “C”.

92 The figures differ according to the regime and value of the goods, e.g.: Import: goods of value up to 1000 euro – 4 euro; above 1000 value 0,4%, not more than 1800 euro; Export: the men oned (0,1% not more than 500 is for goods above 1000 euro, exported or re-exported, excluding the ones previously imported for processing, for which there are other figures).


38

Exit of Cargo Vessel from Giurgiulesti Port - Livestock

MDBP, MDCS & ANSA actions in the port

i. For shipments that require the presence of ANSA, in particular when livestock is exported from GIFP, the shipping agent informs inspectors from the Veterinary Service at the port or adjacent Giurgiulesti road BCP regarding the arrival / departure of the vessel;

ii. An ‘on-board Commission’ composed of the Veterinary Inspector, MDCS, MDBP, and agent is convened. Together with the Master of the vessel or his authorised representative the vessel and containers for the transport of livestock are inspected for cleanliness, hygiene and lighting along with related documents (permits, disinfection certifi ca tes etc).

iii. If everything is in order the ‘on-board Commission’ issues the “Act Of Receiving The Vessel To The Port”.iv. Ramps for transferring the livestock from the transporting vehicles93 on to the vessel are

installed and checked for safety by the Veterinary Inspector.v. Fresh hay is loaded on to the vessel.vi. Transporting vehicles approach the vessel and documents related to livestock for shipment

are presented to the Veterinary Inspector (authorization for transport of animals, veterinary certifi cate, passport of animals).

vii. Once loading of cargo/livestock is completed, all documents are processed allowing the vessel to depart and details are recorded in the register “Entrance/Exit of Ships” by MDCS.

Trade Facilitation

Irrespective of the role that the other Border Control Services perform in the clearance process, Customs is the principle organisation required by Moldovan Law to control and process commercial cargo. It has an obligation to facilitate trade through the implementation of national legislation (Customs Code of Moldova), international agreements & conventions94 and latterly of increasing importance, to apply internationally accepted ‘best practice’ and standards95 as a practical demonstration of this commitment.

Although not yet signed by Moldova, the Revised Kyoto Convention (RKC) is the international blueprint for the implementation of modern and effi cient customs procedures. The Convention helps to establish a customs environment that is predictable and supports equality of treatment: “The RKC supports the international trading system by creating predictability, effi ciency and a level playing fi eld. Trade facilitation is one of the key factors for economic development of nations and in international trade Customs plays a critical role not only in providing expedited clearing processes but also in implementing eff ective controls that secure revenue, ensure compliance with national laws, and ensure security and protection of society”.

Fig 4: ‘Four pillars of Trade facilitation’

93 Vehicles specifically designed for the safe and humane transport of animals (2-3 er) 93are difficult to find in Moldova and expensive to purchase. It is therefore customary for livestock to arrive for shipment at GIFP in standard vehicles which would not meet EU animal safety and hygiene requirements.

94 Annex VI Regional Trade Agreements 2015 refers.95 As referred to in the Revised Kyoto Conven on, EU Customs Blueprints, World Customs Organisa on and various World Bank Guidelines.

39

Veterinary & Phyto-sanitary controls performed during the clearance process while important in assuring the protection of human/animal health and safety can further support the eff ort towards greater trade facilitation by also implementing more eff ective and effi cient inspection, physical examination and sampling of imported products avoiding repeated or unnecessary controls that add to unexpected delay and to direct costs for importers. EU & International ‘best practice’ in the area of risk management and risk assessment has been widely implemented by Customs in many countries and forms the cornerstone of trade facilitation activities. The increased use of risk management tools by Moldova’s Veterinary and Phyto-sanitary services to assist in the determination, identifi cation and mitigation of hazards during controls is an essential element of this combined and evolving process.

Component ‘2’: Gap & Needs AnalysisLegal & Regulatory Framework

Introduction GIFP

To recap a little, GIFP operates in accordance with the Investment Agreement “On the Giurgiulesti International Free Port”, approved by Law No. 7-XV of 17 February 2005, Law on International Free Port Giurgiulesti No.8-XV February 17, 2005 and the Agreement between the Government of Moldova and ICS “Danube Logistics” SRL of 21 April 2005 based on a period of 25 years until 2030. The land located within the boundaries of the territory of the International Port is state property. The Port territorial boundaries, design and shape are determined in cadastral plans in accordance with cadastral legislation96.

Trading Background

Moldova is a member of the following international trading organisations:• The World Customs Organization (October 1994);• The World Trade Organization (July 2001)97;• Member of the CEFTA and CIS FTA (multilateral Free Trade Agreement with CIS countries).• The European Neighbourhood and Partnership Instrument (ENPI) between Moldova and the EU

defines the following aim in the area of customs: “to harmonize Moldova’s legislation and proce-dures with the relevant Acquis, and to develop the operational capacity of the customs administra-tion to facilitate legitimate trade” 98;

As previously mentioned, Moldova has yet to sign the International Convention on the Simplifi cation and Harmonization of Customs procedures (Revised Kyoto Convention) although it is on the Governmental and Customs agenda to do so since the EU-Moldova Association Agreement obliges the Government “to take the necessary measures to refl ect and implement the provisions of the Revised Kyoto Convention on the Simplifi cation and Harmonisation of Customs Procedures of 1973” (Art. 193 (1)(i))99.

Nevertheless, the Government of Moldova actively promotes free trade with its immediate neighbours and main trading partners and was among the fi rst CIS countries to join the World Trade Organization on July 26, 2001 signing free trade agreements with many of the CIS states, as noted above. In addition, within the Stability Pact for South Eastern Europe since 2001 Moldova is signature to a number of bilateral free trade agreements which now fall under the umbrella of the

96 GIFP Role in the development of the economy of Moldova refers.97 WTO Agreement on Implementa on of the General Agreement on Tariffs and Trade; World Trade Organisa on – Trade Facilita on Agreement (WTO- TFA);

UN Customs Conven on on the Interna onal Transport of Goods under cover of TIR Carnets and the Conven on on the Contract for the Interna onal Car-riage of Goods by Road (CMR); UNECE Interna onal Conven on on the Harmoniza on of Fron er Control of Goods. The Republic of Moldova has acceded to various WCO Conven ons, such as: Istanbul Conven on on Temporary Admission, the Interna onal Conven on on the Harmonized Commodity Descrip on and Coding System, and the Interna onal Conven on on Mutual Administra ve Assistance for the Preven on, Inves ga on and Repression of Customs Offences. It has also expressed its inten on to implement the WCO Framework of Standards to Secure and Facilitate Global Trade (SAFE).

98 European Neighbourhood and Partnership Instrument – Moldova Na onal Indica ve Programme 2011-2013, p. 24; available at: h p://eeas.europa.eu/enp/pdf/pdf/country/2011_enp_nip_moldova_en.pdf .

99 Associa on Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Moldova, of the other part; available at: h p://eeas.europa.eu/moldova/pdf/eu-md_aa-dc a_en.pdf .


40

Central European Free Trade Agreement (CEFTA100) signed in December 2006. In September 2014 Moldova completed negotiations on a free trade agreement with Turkey, li� ing mutual Customs duties. Furthermore, the Republic of Moldova is a Contracting Party to numerous international treaties and conventions that promote trade facilitation101.

Along with other countries participating in the Southeastern European Cooperation Initiative (SECI), Moldova joined the Trade and Transport Facilitation in Southeastern Europe Project (TTFSE). The project aimed to strengthen and modernize the customs administration and other border control services in all member countries and to reduce non-tariff costs to trade and transport, preventing smuggling and corruption at border crossings.

In order to achieve theses aims the MDCS adopted annual Activity Plans directed towards further improvement of customs legislation and its practical implementation. To enhance cooperation on customs matters, a Strategic Framework for Customs Cooperation (SFCC) was signed between the EU and Moldova (October 2011). Its implementation is supported by a Working Group and a ‘Road Map’ that defi ned specifi c measures to be undertaken and set priorities of cooperation, namely: Safe and fl uid trade lanes; Risk management and fi ght against fraud; Investment in customs modernization, and outlined the specifi c objectives to be achieved within each priority. A new platform for cooperation on customs matters and evaluation of the progress in approximation of legislation and practices was set by the Customs Sub-committee within the EU-Moldova Association Agreement. EUBAM participates in both fora.

Within the Strategy for Business Regulatory Framework Reform (2013-2020) and the associated Action Plan (2013-2015), specifi c actions were elaborated in the customs fi eld that seek to also improve the legislation and streamline administrative procedures.

Customs legislation and regulatory environment in Moldova

For Customs to be able to operate effi ciently and eff ectively a strong legal framework is necessary which is transparent, predictable and in addition, allows for swi� clearance procedures. Without this framework in place business can fi nd it diffi cult to compete and opportunities for further investment can be severely reduced. It is vital therefore, that Customs ensure that their operations continually meet internationally accepted standards and are able to respond quickly to changes in trade fl ows and the global security threat.

According to the World Bank Customs Modernisation Handbook “Outdated customs laws constrain social and economic progress by acting as signifi cant non-tariff trade barriers. They prevent eff ective revenue collection, discourage foreign trade and investment, and potentially threaten social and national security. A solid and modern legal framework is the foundation of eff ective customs operations. Such a framework should provide for customs-related legislation to accomplish the following102:• establish the competency of customs authorities to administer and enforce customs laws,

develop administrative regulations, adjudicate or settle cases, and make decisions on customs administrative matters

• promote transparency and predictability (for example, timely dissemination of information, advance rulings, independent audit, appeals processes)

• provides for modern customs systems and procedures (risk management, audit-based control, and adequate automation)

• simplify customs procedures (simplifi ed declaration, advance lodgement, and so forth)• encourage cooperation with other customs administrations and with other governmental

organizations• provide for partnership with the private sector (formal consultations, for example)• promotes customs integrity (clear rules that do not allow excessive discretion, unambiguous

100 CEFTA countries comprise: Albania, Bosnia and Herzegovina, Croa a, Kosovo, Macedonia, Montenegro and Serbia.101 Annex VI Regional Trade Agreements (2015) 101refers. 102 World Bank Customs Modernisa on Handbook p53 refers.

41

specifi cations of customs’ offi cers authority and obligations, and so forth)• provide for penalties proportional to the gravity of the off ence (that is, penalties should be

suffi ciently strong to deter customs violations and promote compliance but should not be unjustly severe, especially when violations are minor—from the revenue and enforcement perspectives— and nondeliberate)

• accessible to the public• meet international standard’s.

The EU ‘Progress on Implementation of the EU-MD Association Agreement 2014-2015’ report, highlighted that Customs’ roles and responsibilities are well defi ned within the present Customs Code103 although continuing delays in relation to the approval of the Customs Service Law and adoption of a new Code of Conduct have meant that although the legislative and regulatory framework is in place important institutional and human resource management (HRM) gaps still need to be more fully addressed.

Nevertheless, implementation of the Association Agreement and DCFTA has contributed to positive changes and amendments to Customs legislation and regulations, with the MDCS since 2012 being engaged in a programme of strategic development (Strategic Development Programme SDP). The initial SDP covered the period 2012-2014, and at the time of dra� ing of this study a new programme plan is under development for completion in the 3rd quarter of 2016. For the operational planning of Customs activity, annual plans are also developed that include specifi c measures and activities intended to support implementation of the SDP.

In the area post-clearance audit (PCA) Customs trade facilitation has been enhanced through the introduction of amendments to the Customs Code104 in December 2011 and in addition, measures including; electronic customs clearance procedures (e-customs) were implemented in November 2013 for imports and exports105. This simplifi cation has been further enhanced from the beginning of March 2015 so that all economic agents are now able to declare electronically both, exports and imports of goods106.

In December 2013, Moldova regulated the introduction of Authorized Economic Operator (AEO) from the Community Customs Code - now also a key component of requirements of the AA/DCFTA - which further reduces barriers to trade and off ers approved operators the benefi ts of simplifi ed clearance procedures, reduced physical and documentary controls, and submission of summary declarations107. Currently, there are approximately 99 economic operators holding AEO certifi cation in Moldova.

On 28 May 2015 the MDCS adopted the Law on Moldova’s accession to the Regional Convention on the Pan-Euro Mediterranean preferential rules of origin and the further simplifi cation of trade regulations by the introduction of Law no. 71 of 12 April 2014, amending and completing certain legislative acts regarding the fi scal, customs and budgetary policy for 2015, and for the improvement of the fi scal, customs and budgetary legislation the concept of Approved Exporter, the certifi cate/declaration of the origin of goods along with the declaration of the manufacturer.

103 The elabora on of a dra Customs Code is in line with EU customs legisla on and World Customs Organisa on’s (WCO) 103standards. Revised Kyoto Conven on refers.

104 Law No. 267 of 23.12.2011 on Amending and comple ng some legisla ve acts (Tax and Customs Policy for 2012); Published in Official Gaze e No. 13- 14 of 13.01.2012; available at: h p://lex.jus ce.md/md/341886/

105 Government Regula on No 904 of 13.11.2013 on electronic customs clearance of goods, published in Official Gaze e Nr. 258-261 of 15 November 2013 ‘allows to perform import declara ons by using the electronic procedure star ng from September 1, 2014 at Customs House Chisinau Customs Ungheni - customs post, Sculeni-Sculeni Customs House Bender - customs post Tudora-Starokazacie, and as of March 1, 2015 - to all customs posts’’: h p://lex.jus ce.md/index.php?ac on=view&view=doc&lang=1&id=350292 refers.

106 In order to simplify the customs procedures related to electronic import the norms on electronic customs clearance procedure at the import of goods were approved by the Customs Service Order no. 75-A of 26 February 2015.

107 GD no. 647 of 07 August 2014 on “Implementa on of the provisions of Sec on 271 and 281 of the Customs Code of the Republic of Moldova” and the Customs Order no 483 of 13 November 2014 on the “Approval of the methodological norms regarding the confirma on of the AEO Cer ficate claimants and owners and the Authoriza on for simplified procedures. Also Customs Orders no.116/105 of 13 March 2013 was approved gran ng “Priority access to the border crossing points of state for some categories of economic operators” and no. 50 of 16 February 2015 on “Implementa on of simplifica ons and facili es for the authorized economic operators (AEO). The Guideline for the issuance procedure for the authorized exporter cer ficate, was ap-proved by a GD on 16 May 2015.


42

Furthermore, in 2015108 a new dra� law on nomenclature to introduce the new Harmonised System for classifi cation of goods (HS 2012) aligning Moldova’s classifi cation system with the EU was completed and adopted, in compliance with the latest and World Customs Organisation rules for the application of tariff s109.

Association Agreement & Deep and Comprehensive Free Trade Area (AA/DCFTA)

The Government of Moldova in 2014 adopted the National Action Plan for implementation of the Association Agreement within the period 2014-2016. Decision nr. 808 of 07.10.2014 includes specifi c measures to be adopted for fulfi lling the customs related commitments under the DCFTA.

In July 2014 Moldova ratifi ed, as part of the Association Agreement with the EU, the Deep and Comprehensive Free Trade Area which commits both parties to an expansion in trade and to develop and enhance trade facilitation including the further alignment of legislative and regulatory frameworks in Customs, Veterinary, Sanitary and Phyto-sanitary controls. As part of these processes, the MDCS has undertaken signifi cant legislative an administrative transformation, making strenuous eff orts to further align customs legislation and practices with international standards and to meet its respective commitments within the framework of association with the EU.

The implementation of Moldova’s AA/DCFTA with the EU requires a commitment to approximate legislation and procedures within an agreed time frame. The Revised EU Customs Blueprints - Pathways to modern customs (2015) are used by the MDCS to achieve this objective in conjunction with other EU directives and regulations identifi ed below;

• Community Customs Code: Council Regulation (EEC) No. 2913/92 (valid until 1May 2016);• Commission Regulation (EEC) No. 2454/93 of 2 July 1993 laying down provisions for the imple-

mentation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code;• Modernised Customs Code: Regulation (EC) No 450/2008 of the European Parliament and of the

Council of 23 April 2008 laying down the Community Customs Code;• Union Customs Code; Regulation (EU) No 952/2013 of the European Parliament and of the Coun-

cil of 9 October 2013 laying down the Union Customs Code and related Acts - Commission Del-egated Regulation (EU) 2015/2446 and Commission Implementing Regulation (EU) 2015/2447;

• Council Directive 92/12/EEC, general arrangements for subjects to excise duty;• Commission Regulation (EEC) No. 2719/92 on the accompanying administrative document (AAD)

for the movement under duty-suspension arrangements of products subject to excise duty;• Commission Regulation (EEC) No. 3649/92 on the simplified accompanying document (SAD);• Decision No. 70/2008/EC of the European Parliament and of the Council of 15 January 2008 on

a paperless environment for customs and trade; • Electronic Customs Multi-Annual Strategic Plan.

A number of priority areas within Customs for focused attention have been identifi ed

which include:

• Promotion and recognition of the Authorized Economic Operator (AEO);• Promotion of the single window concept and the implementation of the New Computerized

Transit System (NCTS);• Implementation by Customs of pre-arrival information exchange with the EU;• Approval of the new Customs Service Law and the new Code of Conduct for officials;• Finalisation of dra� of a new Customs Code and Tax Code.

108 Law on the Combined Nomenclature of Moldova No 172/2014 (in force from 01/01/2015) adopts WCO Harmonised System Version 2012 (currently applicable) 108and aligns with EU Combined Nomenclature.

109 EU / ENP Moldova Progress Report 2014 refers.

43

Veterinary & Phyto-sanitary Services

Introduction

Within the regulatory framework of Veterinary and Phyto-sanitary legislation related to food and plant health, safety and security the recently created National Food Safety Agency (ANSA) has a full and clear mandate to undertake controls at the border. Although customs reforms are critical for improving border effi ciency, controls undertaken by the Veterinary and Phyto-sanitary services also play an important role especially supporting the facilitation of trade between Moldova and the EU. However, should the application of veterinary and phyto-sanitary controls at the GIFP become excessive and result in the over sampling and/or laboratory testing and analysis of goods there is a potential for delays and higher costs for trade. Law No. 50 dated 28.03.2013 on special checks, sets out procedures of documentary check, physical control, identifi cation of the product and sampling and Regulation approved by Government Decision No. 1073 from 19.09.2008110 “Optimization of border crossing” sets out rules for joint working, including the exchange of information between the BCSs, in order to avoid duplication.

Nevertheless, against this background, legislation in Moldova relevant to the clearance processes for food, agricultural goods and animal welfare is not suffi ciently aligned with the EU and international standards. Following Government commitments made in the AA/DCFTA, ANSA is undertaking an extensive programme to align regulations with those of the EU within a clearly established framework and to strict deadlines.

In October 2011, the Government of Moldova approved a Strategy on Food Safety, in preparation for implementation of the DCFTA, dra� ing a detailed Action Plan for 2011-2015111. merging the Sanitary-Veterinary and Food Safety Agency with the Phyto-sanitary and Seeds Control Inspectorate into a National Food Safety Agency. Other targeted areas included establishing a risk-analysis based control system, creation of a unifi ed control and monitoring system, creation of a border monitoring and control system for imported/exported animals, plants and food, and the creation of an early-warning system in the area of food-safety.

In July 2012, Moldova enacted the Law on general principles and requirements regarding food safety legislation with the view to harmonize to the EC Regulation No 178/2002 laying down the general principles and requirements of food law (General Food Law Regulation). ANSA was created and empowered with the unifi ed function of coordinating supervision and control across the entire food-chain “from pitchfork to fork”112. Thus ANSA is responsible for implementation of State policy on the regulation and control in the fi eld of food safety, sanitary veterinary, zoo technics, plant protection and Phyto-sanitary quarantine, seed control, safety of primary products, foodstuff s and animal feeding113.

In November 2014, the Moldovan Government approved the Regulation on creation and functioning of the ‘one-stop-shop’ for issuance of export/import Phyto-sanitary certifi cates114, which reduced from 7 to 3 the number of documents required for obtaining the phyto-sanitary certifi cate. In addition, invoices and the sales (export) contract need be presented only once at any subdivision of ANSA115.

110 Regula on approved by GD No. 1073, 19/09/2008 modified subsequently by: GD 787 of 25.10.2011, MO182-186/28.10.11, art.864 refers.111 Government Decision No. 747 of 03.10.2011 on approving the Food Safety Strategy and Ac on Plan 2011-2015, published in Official Gaze e No. 170- 175

of 14.10.2011 , available at: h p://lex.jus ce.md/viewdoc.php?ac on=view&view=doc&id=340498&lang=1 refers.112 Press-release of the Ministry of Agriculture and Food Industry, available at: h p://maia.gov.md/ro/guvernul-adoptat-strategia-sigurantei-alimen-

telor-pentru-anii-2011-2015 refers.113 Government Regula on No. 51 of 16.01.2013 on Organiza on and Func oning of the Na onal Food Safety Agency (para 5-7); published in Official Ga-

ze e No. 15-17 of 22.01.2013; available at: h p://lex.jus ce.md/index.php?ac on=view&view=doc&lang=1&id=346423 refers.114 Government Regula on No. 970 of 17.11.2014 on crea on and func oning of the ‘one-stop-shop’ for issuance of export/import Phyto-sanitary cer ficates;

Published in Official Gaze e No. 358-363 of 04.12.2014, available at: h p://lex.jus ce.md/index.php?ac on=view&view=doc&lang=1&id=355681 refers.115 Eastern Neighborhood Policy: 2005-2014, Report of Expert-Group & ADEPT, June 2015, pp. 31-32 refers.


44

The ENP Moldova Progress Report for 2014 indicated “progress on food safety reforms and regulatory approximation of sanitary and Phyto-sanitary legislation to EU law. Moldova continued to approximate product specifi c rules with the EU acquis and worked on strengthening its administrative capacity to deal with food safety risks…...Furthermore, Moldova submitted in November the list of those EU laws to which it intends to approximate its legislation in the food safety area, in line with the Association Agreement.” 116

The fi nal version of the plan for the approximation of legislation in the veterinary /phyto-sanitary fi eld was delivered to the EU in June 2015 with the plan for harmonization of the agrifood legislation for 2015 being approved by the Ministry of Agriculture and Food Industry; Order no. 39 of 19 March 2015, based on the GD no. 16 of 26 February 2015. On March 12, 2015, the fi rst meeting of the Sanitary and Phyto-sanitary (SPS) Sub-Committee was organized in Chisinau, during which the president and contacts on SPS were appointed, and the preliminary list of the SPS legislation was examined117.

Relevant Priorities:

• Finalization according to the issued opinions and approval of the action plan on implement-ing the National Strategy for Agricultural and Rural Development for the years 2014-2020 for measures to help operators in the sector to comply with the requirements arising from the im-plementation of the SPS chapter of the agreement.

• Expansion of the list of animal products eligible for export to the EU market, with the

attainment of the right to export eggs and poultry therea�er;

• Continuation of the approximation of the SPS legislation in accordance with the calen-

dar established in the Agreement;

• Progress in the implementation of the Rapid Alert System for Food and Feed and trace-

ability system for animal identification (TRACES);

Measures to improve food safety controls continue to be implemented by the Government of the Republic of Moldova with the construction of new facilities forming part of an extended programme at four locations being undertaken and executed by the United Nations Development Programme (UNDP). Facilities will incorporate laboratories, storage and refrigerated units - all fully equipped with modern apparatus - designed to guarantee food product safety at the borders and include premises at the Giurgiulesti - Galati BCP between Moldova and Romania allowing additionally the examination, sampling and laboratory testing of plant and animal products imported, exported and transiting the adjacent Giurgiulesti port providing opportunities for more rapid clearance and alleviating the need for samples to be sent to remote laboratories distant from the port118.

Association Agreement & Deep and Comprehensive Free Trade Area (AA/DCFTA)119

“Whilst the EU legislation constituting the approximation requirements of the DCFTA are fewer than required for full membership, it still represents a large and extremely challenging regulatory task. In accordance with Article 181 of the Association Agreement (AA) entitled Gradual Approximation, “The Republic of Moldova shall gradually approximate its sanitary and Phyto-sanitary and animal welfare law to that of the Union as set out in Annex XXIV to this Agreement.” Annex XXIV was not completed at the time of signing of the agreement but it was agreed that “No later than three months a� er the entry into force of this Agreement, the Republic of Moldova shall submit a list of the EU sanitary and Phyto-sanitary, animal welfare and other legislative measures which the Republic of Moldova will approximate. The approximation list and the principles for the

116 Implementa on of the European Neighbourhood Policy in the Republic of Moldova Progress in 2014, p. 12, available at: h p://eur-lex.europa.eu/le-gal-content/EN/TXT/PDF/?uri=CELEX:52015SC0069&from=en refers.

117 Progress Report on the implementa on of EU-Moldova Associa on Agreement 01.09.2014-01.09.2015’ Sanitary and Phyto-sanitary Measures (SPS) 117refers.

118 In order to ensure the endowment of some official laboratories for food safety system with the necessary equipment to perform laboratory tes ng, in accordance with the requirements of EU export and import in Moldova, external assistance was a racted for the implementa on of the Project regarding the crea on and opera on of the Laboratory for determina on of pes cide residue in plants, soil and produc on of non animal origin (Romania - 300,0 thousand Euros, 200.0 thousand dol. USA, Norway - 150.0 Euros, Israel - 300.0 Euros) 118Ibid

119 Analysis of sanitary, Phyto-sanitary and veterinary legisla ve framework and implemen ng systems of the republic of Moldova and Transnistria in the light of the DCFTA and WTO agreements with priority legisla ve and technical measures to address iden fied gaps’ - EUBAM Report Jan 2016, refers.

45

evaluation of the progress in the approximation process will be added to Annex XXIV to this Agreement and will be based on the technical and fi nancial resources of the Republic of Moldova.” The currently proposed list includes all the legal acts required to create the free trade area with its deep and comprehensive approximation elements and excludes those, which are irrelevant or non-applicable for the above-mentioned reasons.

The list is divided into sections, which follow the format of the titles of the Acquis accession negotiation chapters. The number of acts is accordingly much considerably smaller, consistent with the type of agreement but still constitutes a large body of regulatory norms (240 in total120). This body of legislation essentially sets out the requirements and systems for production, processing, distribution and marketing of food and feed as well as the for offi cial control institutions (Competent Authorities – CA) to ensure compliance on both the domestic EU market as well as in trade with third countries”.

Section 1 – General (10) Section 2 – Veterinary (80)Section 3 – Placing on the market of food, feed and animal by-products (30)Section 4 – Food Safety Rules (50) Section 5 – Specifi c Rules for Feed (10) Section 6 – Phyto-sanitary (50)Section 7 – Genetically Modifi ed Organisms (10) “121

Customs

Intra-service

Gap 1: Legislative Alignment with EU’s Acquis Communautaire’ & international standards

Customs needs to operate within a framework that is transparent comprehensive, eff ective and complies with relevant national and international obligations and standards. The legislation should provide the administration with adequate powers and sanctions while ensuring accountability. Activities should be risk based in order to facilitate legitimate trade safeguarding commercial and personal data.

Amongst areas of planned modernization and harmonization, as core components of the AA/DCFTA it is anticipated that in the future Customs will accede to the Convention on a Common Transit and implement the EU’s New Computerised Transit System (NCTS), further implement and more rigorously apply the AEO scheme including adopting mutual recognition with the EU and also Ukraine, advance the development of the application of simplifi ed procedures for customs clearance at trader’s premises, and continue to realise and expand the use and application of the electronic customs environment, including the electronic processing of declarations and e-payments. All these components have relevance to GIFP activities and a potential impact for growth.

The ENP-Moldova Progress Report of 2015 concluded that Moldova has taken measures to simplify custom procedures making them more effi cient, including by introducing and implementing an electronic declaration procedure for imports and exports. Moldova has also developed the concept of Authorised Economic Operator (AEO) in August 2014 and has granted this status to approximately 99 applicants. Green lanes for AEOs are in place at all border crossing points. These reforms, together with improved risk assessment processes, are designed to decrease clearance times and the number of physical checks.

120 Breakdown of number of acts per sec on are shown in brackets.121 ‘Analysis of sanitary, Phyto-sanitary and veterinary legisla ve framework and implemen ng systems of the republic of Moldova and Transnistria in the

light of the DCFTA and WTO agreements with priority legisla ve and technical measures to address iden fied gaps’ - EUBAM Report Jan 2016, refers.


46

‘On 1 July 2015 at the BCP Leuseni-Albita, the pilot-project on the unilateral recognition of AEO from EU was launched. In order to fulfi l the commitments assumed by Moldova in compliance with art. 201 of the Moldova-EU Association Agreement, the Finance Ministry has initiated the process of harmonization of the Customs Code of the Republic Moldova according to the provisions of the Council Regulation (EEC) 2913/92 of 12 October 1992 establishing the Community Customs Code, by dra� ing a new Customs Code.’ 122

In addition, as previously mentioned further alignment of Moldova’s classifi cation system with EU legislation was achieved through the adoption of the law in 2014 approving the combined nomenclature of goods and introducing the latest version of the harmonised system for classifi cation as of 1 January 2015.

Need 1:

In the broader context therefore, despite the steady and continuous progress made by the MDCS

in alignment of its legal and regulatory framework to that of the EU there is a constant need to undertake regular reviews in order to ensure that laws remain up-to-date and are harmonised with the frequently changing EU legislative environment, strengthening administrative and operational capacity. The MDCS has set a number of clear priority areas for development, some of which were mentioned above but also include:

• Authorised consignor and authorised consignee;• Promotion of the single window concept123;• Further development of one-stop-shop controls;• Enhancement of Post Clearance Control and Audit; • Maximisation of transparency, setting clear rules;• Enhanced streamlining of Customs clearance procedures to further reduce and limit the time

needed for clearance including; implementation of the reduction in the number of documents required to release goods from Customs as adopted by Government Decision no. 279 of 20 May 2015, amendments in the Government Decision no. 1140;

• Elimination of the export procedures fees124;• Implementation of equivalence systems in line with WTO Technical Barriers to Trade (TBT) to

recognize conformity certificates and testing protocols issued by other neighbouring and WTO member states.

In order to achieve full EU compliance and also to ensure that future obligations are met in terms of upholding international agreements and conventions, it is clear that further adjustments and alignments to legislation will be required. The implementation of the AA/DCFTA and an emphasis on trade expansion and facilitation will create further opportunities for amendment to the legal framework in these areas helping to create the right conditions for the development and growth in business and traffi c at GIFP, reducing costs and increasing the Ports’ competitiveness.

It is therefore recommended that the MDCS undertakes systematic reviews and regular periodic assessments of EU Customs legislation and guidelines which incorporate the EU Union Customs Code, the EU ‘Acquis communautaire’ and new revised EU Customs Blueprints as well as EC directives and new implementing regulations, where appropriate, in relation to the following important areas:

• Amendments regarding simplified procedures in line with Council Regulation (EEC) 2913/92, Commission Regulations (EC) 1192/2008, (EC) 215/2006, (EC) 1875/2006, (EEC) 2454/1993, (EC) 444/2002 and Articles 76 (1) a, 76 (4) and 97 of the EU CC;

122 Progress on Implementa on of the EU MD Associa on Agreement 2014-2015 refers.123 Economic Commission for Europe - United Na ons Centre for Trade Facilita on and Electronic Business (UN/CEFACT) 123– Recommenda ons and Guide-

lines on establishing a Single Window – to enhance the efficient exchange of informa on between trade and government recommenda on refers.124 The export procedures fees are not eliminated. Annex No. 2 from Law on Customs Tariff No. 1380 of 20/11/1997- export procedures fees refers.

47

• Rules on Authorised Economic Operators (AEO) in line with Council Regulations (EC) 648/2005, (EEC) 2913/92 and Commission Regulations (EU) 197/2010 and (EEC) 2454/93;

• Legal provisions for the introduction of NCTS in line with Council Decisions 87/415/EEC and 477/2009, and accession to the Convention on Common Transit;

• Amended provisions on free zones and duty-free shops in line with Council Directives 91/680/EEC, 92/12/EEC, Council Regulation (EEC) 2913/92 and Commission Regulation (EEC) 2454/93;

• Laws and practices in the field of Intellectual Property Rights (IPR) in line with Council Directive 2004/48/EC, Regulation (EU) No. 608/2013 of the European Parliament and of the Council of 12 June 2013 concerning customs enforcement of intellectual property rights and repealing Council Regulation (EC) No. 1383/2003 and Commission Regulation (EC) 1891/2004;

• Amendments to the Customs Law on cultural heritage in line with Council Regulation (EC) 116/2009;

• Amendments to improve enforcement of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), in line with Council Regulation (EC) 338/1997, Commis-sion Regulation (EU) 709/2010 and Commission Recommendation 2007/425/EC;

• Rules concerning the Dual-use with Council Regulations (EEC) 2603/69 and (EC) 428/2009.

Furthermore, the Customs Service Law needs to be enacted as soon as possible in order to be able to introduce a new staff appraisal system and Code of Conduct, systems that together will help safeguard administrative capacity and the structures needed to implement the DCFTA.

Free Economic Zones (FEZ)125 & Temporary Storage126

Background Information

FEZ regimes have become increasingly popular “with many countries attempting to promote exports of non-traditional manufactured goods, strengthen the competitiveness of exporters, attract investors, diversify the economy, create employment, transfer technology, expand trade and transport linkages to the country as a whole, promote tourism, encourage foreign direct investment (FDI), and achieve development and growth” 127 . Diff erent operations may be undertaken inside the zone from simply breaking-bulk and transferring goods between containers, sorting/repackaging/re-labeling, further assembly or manufacturing etc.

To achieve what was intended for FEZs, a balance must be established that provides an incentive for economic growth whilst maintaining suffi cient border controls that prevent dishonest and harmful practices.

‘Over regulation stifl es business development, growth and profi tability and proper regulation promotes it by creating a predictable environment and by discouraging unfair and predatory acts. Today, in the share Customs-to-Customs community, now known as global Customs, authorities have the power and responsibility to both punish bad actors and recognize and reward compliant actors in international trade supply chains’ 128.

Legislative Framework

Law No. 8 on Giurgiulesti International Free Port entered into force on 4 March 2005 and incorporates many of the key aspects and provisions contained in the Investment Agreement “On the Giurgiulesti International Free Port”, approved by Law No. 7-XV of 17 February 2005, which include:

125 Some mes referred to as Free Trade Zones, Duty Free Zones, Tax Free Zones, Free Export Zones, Special Economic Zones, Export Processing Zones, by whatever name, such zones are considered legally outside the Customs territory of the country and thereby subject to an en rely different Customs tariff and income tax regime. They are also eligible for various other tax and investment incen ves not found in the Customs territory to a ract and encourage growth and investment. That being said, such zones are physically located within the na onal boundaries and are part of the na onal economy. Free Zones can encompass an en re area of a country or en re city, all or part of an air/port, all or part of an industrial park, or be even limited to an individual factory. Free zones however normally have a secure perimeter that is under Customs control.

126 Annex VII Temporary Storage refers.127 IFC Reforming the Regulatory Procedures for Import and Export Guide for Prac oners refers.128 Interna onal Chamber of Commerce ‘Controlling the Zone’ p8 refers.


48

• Time: the Port is being established for 25 years (until 2030).• Main Actors:

» Residents - any legal or natural person from Moldova or another State, registered as entre-preneur, which leases land or goods on Port’s territory and is registered with the Government Representative.

» Government Representative - a person designated by Government to ensure the implemen-tation of the Moldovan legislation and Investment Agreement, register and withdraw reg-istration to residents, provide assistance to residents, keeping the database of residents, collecting activity reports from residents, etc.

» General Investor - one of the parties to the Investment Agreement as designated by the Gov-ernment and which manages the Port, leases from the Government its whole territory, and then sub-leases it to other residents.

» Customs Service – ensures the Customs Regime on the Port’s territory.• Territory: the Port’s territory is no more than 120 hectares, and is State’s property which is

leased to the General Investor according to the Investment Agreement and Lease Contract. The territory includes Oil & Refinery terminal, Goods terminal, Passengers terminal, and Port’s Development Territory.

• Applicable law: the Port is part of Moldovan Customs territory where Moldovan legislation applies with the exceptions provided for in this Law (special provisions on Tax, Customs and Competition). Apart from Moldovan legislation, residents are also subject to the rules and regu-lations issued by the General Investor.

• Legislative Guarantees: if a new law or sub-legal act worsens the condition of residents, those registered before may apply this law by 17 February 2030.

• Tax and Customs Regime: there are special provisions/privileges, such as zero rate for VAT or exemption from excise and/or customs fee for certain goods/services, etc.

• Control procedures: the State’s control agencies will carry out one single complex control of the resident per year. This does not apply to operation controls carried out by the Customs Ser-vice, as well as to criminal investigations or those related to industrial accident. The National Bank of Moldova will carry out control according to its own rules.

• Dispute Resolution: Disputes are solved in Moldovan Law Courts or in International Arbitra-tion, depending on the residents’ nationalities.

Government’s Decisions on activity of Giurgiulesti International Free Port

On 18 July 2005, the Moldovan Government approved Governmental Decision No.721 enacting a series of Regulations pertaining to functioning of the Port, including:

• Regulation on authorised entry system;• Regulation on registration of residents of the Port;• Regulation on issuing authorisations for activities in the Port;• Regulation on Government’s Representative.

Government’s Decision on opening the International BCP Giurgiulesti-Port

On 3 October 2005, the Moldovan Government approved its Decision No.1027 through which it established the international border crossing point (BCP) Giurgiulesti-Port, and delegated to the MDCS and MDBP, a requirement to issue all necessary instructions and to take the appropriate actions in close cooperation with the Governmental Representative, to organize the activity of the Port. Customs Service’s Order on clearing containers/goods introduced/exited via BCP Giurgiulesti-Port Based on Government’s Decision No. 1027 from 03.10.2005, the Customs Service issued on Order No.157 20 April 2012129 (Technological Norm) describing a detailed step-by-step customs clearance procedure for goods introduced/exited via Giurgiulesti Port.

129 Annex III Technological Scheme, GIFP refers.

49

General Investor’s Rules and Regulations

It should be also mentioned that the legal framework of the Giurgiulesti International Free Port is defi ned by rules and regulations issue by the General Investor (as empowered by Law No.8).

Investment Agreement

An Investment Agreement regarding the Giurgiulesti International Free Port, was signed on 29 December 2004 by Moldovan Government, with “Azpetrol”, “Azertrans”, and “Azpetrol Refi nery”.

FEZ Operations:

“The national Customs service normally should only operate at the perimeter to the FEZ. Its role is to control goods entering the zone from the Customs territory or from a third country; being imported from the zone into the Customs territory for home consumption; or being entered into another duty deferral regime. This can involve controlling the transit movement of goods to and from the zone. If goods are entered into home consumption, an import goods declaration must be presented to Customs and applicable duty/taxes paid as would apply to goods from any third country.

In many free zones, quantitative restrictions apply on how much of an operator’s production can be allowed into the domestic market (e.g., 20%) and it is Customs responsibility to ensure that this limit is not exceeded.

Customs is required to monitor all activities undertaken inside the zone through audits of the zone operators’ books, records, and systems. Customs must ensure that no illegal trade is occurring inside the zone. Normally, the zone authority and zone operators are legally obligated to create and maintain an inventory of all goods entering, exiting, and the balance remaining inside the zone. Reports regarding all operations are to be submitted to Customs for auditing purposes.

In many zones, Customs is provided with online access to inventories. Licensed operators in the zone are required to submit a simplifi ed Customs declaration for approval to admit or remove goods from the zone. Normally no duty/tax is payable on goods entering or being exported from the zone to third countries. However, certain administrative fees may be collected to fi nance the zone authority’s administrative operations, and to maintain or improve the zone’s infrastructure facilities that it rents or leases to operators”130.

Gap 2. Free Economic Zones (FEZ) & Temporary Storage at GIFP

In parallel with compilation of the GIFP Study, EUBAM was requested by MDCS to undertake a review of amendments proposed by the port operator Danube Logistics to Law No.8 (2005) which were specifi cally related to the operation of the Free Economic Zone and also to cover questions related to the operation of Temporary Storage and compliance with EU Customs standards across the whole Customs Territory of Moldova.

Legislation related to the port and a major part of its operations are currently centred around its FEZ status. A recent review of legislative proposals by EUBAM provided MDCS and the port operator with an objective assessment of the port’s temporary storage procedures in relation to the former EU Customs Code and Implementing Provisions and those introduced in the new Union Customs Code from 01.05.2016 under which future development is being considered.

EUBAM understands that the port operator would like to retain many of the advantages contained in the Investment Agreement Law No.7 but is of the opinion that over-emphasis on the Free Economic Zone component has the potential to impede the further expansion and growth of the port. Business

130 IFC Reforming the Regulatory Procedures for Import and Export Guide for Prac oners refers.


50

operators should be encouraged to consider that GIFP is not simply a one-dimensional free economic area as the port’s name implies, but that it also has the potential to be a ‘fully functioning’ port off ering trade in addition, the advantages of a free economic zone and accompanying facilities.

Based on a comparison between the newly introduced EU legislation and amendments to Law No.8 (2005), proposed by Danube Logistics, a number of areas were identifi ed as being non-compliant and in major confl ict with those that govern EU FEZ articles, namely;

• the implication of 2 different time periods (20 & 90 days limit) are in conflict with the Union Customs Code (UCC), which does not specify any time limit for the storage of goods within a FEZ131.

• the need to submit a customs declaration for placing goods under a FEZ procedure are in con-flict with the UCC which specify; that all goods intended to be placed under a customs proce-dure, except for the free zone procedure, shall be covered by a customs declaration appropriate for the particular procedure132.

• proposed amendments that suggest allowing the final consumption of either foreign or domes-tic goods within the FEZ are generally in conflict with the UCC, which states that; only Union (domestic) goods may be consumed within the FEZ133. Should consumption of the goods occur then a customs declaration for free circulation procedure is required134;

• the proposed amendments which do not require submission of a customs declaration for waste that remains a�er destruction of the goods and that such waste is not subject to customs duty is in conflict with the UCC, which states that unsatisfactory explanations for the disappearance of goods (waste remaining) is considered as consumption and will be charged accordingly135.

A more complete explanation of EUBAM’s fi ndings and recommendations resulting from the comparative analysis of the Moldovan and EU Customs legislation is contained in Annex VIII.

Need 2.

In respect of the discrepancies mentioned above, the MDCS should ensure that appropriate measures are taken that bring existing Moldovan legislation into line with that of the EU. This is particularly important when considering the imposition of time limits for goods under a FEZ procedure, (in the EU there are no time limits) or setting requirements for the submission of a customs declaration.

“No import declaration has to be lodged as long as the goods are stored in the free zone. Import and export declarations have only to be lodged when the goods leave the free zone”136.

In addition, the MDCS needs to ensure a clear connection/link between the provisions in the MDCS

Customs Code, the FEZ Law No. 8 and compliance with the EU legislation that state and fully describe requirements related to the authorisation of the FEZ at Giurgiulesti Port in terms of the following non-exhaustive list:

• security & safety, • construction,• record keeping/stock taking, • Customs surveillance, • prior notification,• customs declaration,

131 UCC/Ar cle 238/Storage/ Dura on of storage procedure refers.132 UCC /Ar cle 158/ Placing goods under customs procedure /Customs declara on of goods supervision of Union goods, refers.133 The general rule is that unless proven otherwise, non-Union goods (foreign) 133at the me of their entry into a free zone are regarded as being placed

under a customs procedure. In the case of the free zone the procedure shall be discharged under condi ons lying within the UCC, relevant to discharge of a special procedure, which generally prohibits consump on.

134 UCC Art.246/Free Zones / Union goods in free zone; Art.245/Free Zones / Presenta on of goods and their placing under procedure; Ar cle 215/Special procedure / Discharge of special procedure; Art.247/Free Zones / Non-Union goods in free zone refer.

135 Art. 215/Special procedure / Discharge of special procedure; Art. 79 /Customs debt on import/ Customs debt incurred through non – compliance refer.136 h p://ec.europa.eu/taxa on_customs/customs/procedural_aspects/imports/free_zones/index_en.htm refers.

51

• storage, • allowable processes and handling,• transhipment, • Customs value including storage charges to be included at import, • Customs debt / Guarantees• consumption,• destruction,• wastage, • re-exportation, • other restrictions and limitations.

It should be noted that additional legislation administering FEZs outside the confi nes of an existing Customs Code is not standard practice in the EU. As operated in regard to the GIFP there is a potential for confusion, a lack of transparency and concern regarding equitability. The MDCS is advised to consider consolidation of all existing FEZ legislation and placing it within the framework of the existing/new Customs Code creating one unifi ed instrument that regulates all Moldova’s FEZs.

When considering expansion of the port beyond the existing FEZ activities the Port Management and the MDCS jointly might wish to examine the establishment of an Export Processing Zone (EPZ)137 based on economic justifi cation. EPZs are geographical enclaves established outside the country’s customs territory to encourage manufacturing for export and to provide services to foreign enterprises normally exempt from tax and duties and o� en also outside of national labour regulations, foreign exchange and the provision of infrastructure. The objectives for establishing EPZs in general are to promote exports of non-traditional manufactured goods, strengthen the competitiveness of exporters, attract investors, diversify the economy, create employment, transfer technology, and achieve development and growth138.

Investment Incentives: (World Bank Customs Modernisation Handbook p 234 refers.)

Many countries off er tax incentives, including import duty and indirect import tax concessions, to attract new business investments and encourage economic development. The question of whether tax incentives are a factor in business investment decisions has been researched and debated extensively in economic literature, and there is a virtually unanimous consensus that these fi scal benefi ts are not crucial, because other considerations commonly weigh more heavily in investors’ decision making. (See Zee, Stotsky, and Ley [2002] for a more complete discussion of these issues.)

Exemptions are vulnerable to abuse through leakage of the exempt goods to the private sector ‘gray’ market, rather than being used in the most useful investments. Exemptions also give rise to unfair competition relative to businesses that do not benefi t from such incentives. From an administrative point of view, these exemptions require customs to devote a substantial amount of its scarce resources to exemption monitoring and control activities, resources that could otherwise be assigned to more productive uses. Developing countries, therefore, would be well advised to abolish these exemptions in combination with a rationalization of import tariff s. A simple and transparent import tariff with zero or low rates on investment and capital goods is likely to be a more powerful tool for attracting investors than the prevalence of exemptions.

137 ‘For applica on of customs law, EPZs are located outside the customs territory, although they are physically located within the na onal boundaries and are part of the na onal economy the EPZ has to be dealt with like a foreign country. Customs posts need to be established on the roads from the zone to the rest of the country to ensure that the relevant customs laws are properly enforced. EPZs, therefore, require customs to arrange for two types of customs control. Imports from the EPZ into the local market, if allowed, need to be dealt with like imports from abroad. Deliveries of goods from the domes c market to the EPZ need to be dealt with like exports’ Free Zones: World Customs Modernisa on Handbook p228 refers.

138 Annex IX Export Processing Zones refers.


52


Intra-service

Gap 1: Alignment of veterinary & phyto-sanitary legislation with EU Acquis Communautaire

& international standards

A Sub-committee has been established within the provisions of the DCFTA to monitor progress, provide recommendations, develop procedures, and provide a forum for addressing veterinary and phyto-sanitary problems arising from the harmonisation and approximation of relevant EC directives, standards, regulations of the World Organization for Animal Health (OIE) as Moldova’s veterinary & phyto-sanitary legislation are yet to be fully aligned with the EU ‘Acquis communautaire’ and international standards139.

Chapter 4, Article 176 ‘Objective’ of the Association Agreement, which forms part of the DCFTA underlines the requirement for continued and further alignment to the EU ‘Acquis communautaire’ to ensure full transparency, recognition of equivalence and conformity and the establishment of mechanisms for trade facilitation. In addition, the Republic of Moldova undertakes to improve communication and cooperation on measures listed in Annex XVII to the Agreement and to reach a common understanding concerning animal welfare standards.

In the area of phyto-sanitary EU rules address the enforcement of standards related to the quality of seed, plant protection material, harmful organisms and animal nutrition. Inspectors from both services were not observed to be using SOPs or updated Inspection Manuals (Vademecums).

In addition, internationally recognised documents used in the transportation of plants and animals e.g. Passport Plant and Common Veterinary Entry Document (CVED140) are currently according to information received, still not in use141.

Need 1.

There is a need to develop harmonized veterinary and phyto-sanitary procedures aligned to EU ‘Acquis communautaire’ requirements, and International Standards on Phyto-sanitary Measures (ISPMs), including the use of standardised EU and international forms (e.g. CVED & Passport Plant) and manuals.

Moldova’s Veterinary Service need to continue to assess and review national legislation and regulations against EU legislation including EC directives and the authorisation of new implementing regulations, where appropriate142. Veterinary controls should comply with the requirements of the legislative basis of veterinary border inspection and the cooperation procedures formed by the following Council Directives and Commission Decisions, according to the EU IBM Guidelines:

Commission Decision 2007/275/EC of 17 April 2007 concerning lists of animals and products to be subject to controls at border inspection posts under Council Directives 91/496/EEC and 97/78/EC;139 Chapter 12 of the ‘EU Programme for the Acquis communautaire’ refers to detailed regula ons in the areas of food safety, veterinary and phyto- sanitary

measures. In the veterinary field the ‘Acquis Communautaire’ establishes procedures, which are essen al for safeguarding animal health, animal welfare and safety of food of animal origin.

140 In the European Union following veterinary border inspec on, border veterinarians normally issue a Common Veterinary Entry Document (CVED) in ac-cordance with Commission Regula on (EC) No. 136/2004 (for products) and Commission Regula on (EC) No. 282/2004 for live animals (as amended by Commission Regula on 585/2004). Linked to the customs declara on by the addi on of a reference number the original CVED is passed on to customs by the border veterinarian, the importer or the shipping agency as confirming evidence that the veterinary clearance of the consignment has been com-pleted. Customs will only allow clearance of the consignment in accordance with the border veterinary decision stated in the document and confirma-

on that veterinary fees to cover the costs of the veterinary border inspec on have been or will be paid. It is understood that the Moldovan equivalent document Common Sanitary Veterinary Entry Document (CSVED) 140is not being issued by the veterinary services contrary to Government Decision No 1408/2008.

141 Without the implementa on of the two GDs No. 1099 of 29.09.2008 and No.1408 of 10.12.2008, ANSA is not opera ng in line with the EU best prac ce. The TRACES system is described in those Decisions, which EU Countries are already using. It can not be used in MD by ANSA, as Importer and Exporter Agencies are not yet registered in the system.

142 h p://ec.europa.eu/food/animal/bips/legis_en.htm refers.

53

• EC Regulation 136/2004 on the Common Veterinary Entry Document (CVED);• Trade Control and Expert System introduced by Commission Decision 2004/292/EC;• Commission Regulation (EC) No 745/2004 of 16 April 2004 laying down measures with regard

to imports of products of animal origin for personal consumption;• Regulation (EC) No 454/2008 of the European Parliament and of the Council amending Regu-

lation (EC) No 998/2003 on the animal health requirements applicable to the non-commercial movements of pet animals, as regards the extension of the transitional period;

• Regulation (EC) No 882/2004 of the European Parliament and of the Council of 29 April 2004 on official controls performed to ensure the verification of compliance with feed and food law, animal health and animal welfare rules;

• Commission Decision (2000/208/EC) of 24 February 2000 establishing detailed rules for the application of Council Directive 97/78/EC concerning the transit of products of animal origin from one third country to another third country by road only across the European Community;

• Commission Decision (2000/571/EC) of 8 September 2000 laying down the methods of vet-erinary checks for products from third countries destined for introduction into free zones, free warehouses, customs warehouses or operators supplying cross-border means of sea transport;

• Directive 98/22 EC143, the revised European Convention for the Protection of Animals during In-ternational Transport (OJ L 241 of 13 July 2004) and the EU standards for veterinary control, es-pecially in respect of pets and other live animals including the Commission Decision 2001/812/EC, Directive 91/496/EEC laying down the principles of veterinary checks on animals;

• Commission Decision 2008/946/EC and Article 12 of the Directive 97/78/EC144 laying down the principles of veterinary checks on products.

For the Phyto-sanitary service similar corrective measures are recommended against EU phyto-sanitary directives to ensure that Moldova’s regulations are fully in line with the Plant Health Directive and directives on Plant Protection Products (PPP145), pesticide residues and biocides, and especially with all 12 directives on Seeds and Plant Propagation Materials. Any assessment and review should consider the following EC Phyto-sanitary directives and include the authorisation of new implementing regulations where appropriate:

• Council Directive 2000/29/EC of 8 May 2000 on protective measures against the introduction into the Community of organisms harmful to plants or plant products and against their spread within the Community (OJ L 169 of 10 July 2000);

• Phyto-sanitary certification from 3rd countries in line with Council Directive 2000/29/EC, Com-mission Directive 2004/105/EC and Commission Regulation (EC) 1756/2004;

• Maximum levels of pesticide residues in line with Council Directive 91/414/EEC and Council Regulation (EC) 396/2005;

• Plant protection products in line with Council Directives 79/117/EEC, 91/414/EEC and Council Regulation (EC) 1107/2009;

• Seeds and propagating materials in line Council Directives 66/401/EEC, 66/402/EEC, 2002/53/EC, 2002/54/EC, 2002/55/EC, 2002/56/EC, 2002/57/EC, 68/193/EC, 1998/56/EC, 92/33/EEC and 92/34/EEC;

• Forest reproductive material in line with Council Directive 1999/105/EC;• Council Directive 93/85/EEC of 4 October 1993 on the control of potato ring rot, as last amend-

ed by Council Directive 2006/56/EC of 12 June 2006;• Council Directive 74/647/EEC of 9 December 1974 on control of carnation leaf-rollers;• Council Directive 2006/91/EC of 7 November 2006 on control of San José Scale;• Council Directive 98/57/EC of 20 July 1998 on the control of Ralstonia solanacearum (Smith)

Yabuuchi et al, as last amended by Directive 2006/63/CE of 14 July 2006;143 Direc ve 98/22 EC sets out the minimum condi ons for carrying out checks at BIPs in the Community, other than those at the place of des na on, on

plants, plant products or other objects being carried from third countries.144 TA1 Field Survey and Needs Assessment Report: 3.6.1 – Infrastructure – Need 8: Phyto-sanitary & Veterinary Control Facili es at BCPs refers.145 Regula on (EC) of the European Parliament and of the Council of 21 October 2009 concerning the placing of plant protec on products on the market and

repealing Council Direc ves 79/117/EEC and 91/414/EEC 1107/2009 (OJ L 309 of 24 November 2009) 145refers.


54

• Council Directive 2007/33/EC of 11 June 2007 on the control of potato cyst nematodes and repealing Directive 69/465/EEC;

• Council Directive of 15 July 1991 concerning the placing of plant protection products on the market, as last amended by Council Implementing Directive 2011/60/EU;

• Commission Directive 92/90/EC establishing obligations to producers and importers of plants, plant products or other objects, and procedures for their registration;

• Commission Directive 93/50 EEC specifying certain plants not listed in Annex V, Part A of Coun-cil Directive 77/93/EC producers of which, or the warehouses, dispatching centers in the produc-tion zones of such plants, shall be listed in an official register;

• Commission Directive 1992/105 establishing a degree of standardization for plant passports to be used for the movement of certain plants, plant products or other objects within the Commu-nity, and establishing the detailed procedures related to the issuing of such plant passports and the conditions and detailed procedures for their replacement.

• Commission Directive 2005/17 amending certain provisions of Directive 92/105/EEC concern-ing plant passports;

• Commission Directive 2004/103/EC on identity and plant health checks of plants, plant products or other objects, listed in Part B of Annex V to Council Directive 2000/29/EC, which may be car-ried out at a place other than the point of entry into the Community or at a place close by and specifying the conditions related to these checks;

• Commission Directive 98/22/EC laying down the minimum conditions for carrying out plant health checks in the Community, at inspection posts other than those at the place of destination, of plants, plant products or other objects coming from third countries;

• Commission Directive 94/3 establishing a procedure for the notification of interception of a consignment or a harmful organism from third countries and presenting an imminent Phy-to-sanitary danger;

• International Standard for Phyto-sanitary Measures-ISPM 5: Dictionary of Phyto-sanitary terms;• International Standard for Phyto-sanitary Measures ISPM-7: Export certification system;• International Standard for Phyto-sanitary Measures ISPM-12: Guidelines for Phyto-sanitary cer-

tificates;• International Standard for Phyto-sanitary Measures ISPM-20: Guidelines for Phyto-sanitary im-

port regulation; • Regulation 882/2004 of the European Parliament and of the Council on official controls per-

formed to ensure the verification of compliance with feed and food law, animal health and ani-mal welfare rules.

In addition, the Veterinary and Phyto-sanitary Services of Moldova need to take appropriate measures to comply with World Organisation for Animal Health (OIE) normative documents 146 relating to rules that Member States can use to protect themselves from the introduction of diseases and pathogens.

Customs, Veterinary & Phyto-sanitary Services

Inter-agency

Gap 1: Too Many Legal Acts Regulating Border Management

Border control services at the borders are now required to ensure that travellers, businesses, and international air, sea, and land carriers receive uniform, predictable, easy to use, procedures that are consistent with international standards and conventions. The WCO, the WTO, UN Economic Commission for Europe (UNECE), UN Centre for Trade Facilitation and Electronic Business (CEFACT), and United Nations Conference on Trade and Development (UNCTAD) have set such standards for customs functions:

146 OIE standards are recognized by the World Trade Organisa on as interna onal reference rules for live animals.

55

• The Revised Kyoto Convention (International Convention on the Simplification and Harmonization of Customs Procedures) provides the framework for processing goods in international commerce (chapter 3);

• The International Convention on the Harmonized Commodity Description and Coding System (re-ferred to as the Harmonized System or HS), which was developed and maintained by the WCO, pro-vides the framework for classifying all merchandise in international trade;

• The Agreement on Customs Valuation (ACV), developed by the WTO, provides the framework for determining the customs value of goods in international trade (chapter 8);

• The Agreement on Rules of Origin is the WTO initiative to develop a system for standardizing the rules of origin of internationally traded goods (chapter 9)147.

Moldova’s border control services at GIFP operate against a substantial background of national primary legislation148, particularly in relation to clearance processes. This is supplemented also by decrees, complementary regulations, and locally issued orders. Due to the number and volume of orders and decrees issued there is potential for their cancellation to go unnoticed and continued application by mistake. It is plausible in these circumstances that not only do the BCSs fi nd diffi culty in correctly administering the legislative framework but that also business is challenged in its eff orts to comply.

Although business stakeholders contacted at the GIFP generally appeared satisfi ed with access to information and their relations with Customs nevertheless, the move towards BCS operations based on the concept of ‘informed compliance’ which requires that business is adequately and regularly informed of its obligations through for example formal centralised publication of legislation via the internet also places a responsibility on the BCSs to avoid complacency and not provide stakeholders with the opportunity to level criticism in terms of a lack of transparency, consultation or diffi culties in gaining access to updated information.

Need 1:

Assimilation and approximation to the constantly evolving EU legislative environment presents all the BCSs with signifi cant challenges. Experience gathered from other countries indicates that the existence of too many legal acts, secondary legislation and orders issued on an ‘ad-hoc’ basis has the potential to create confusion and uncertainty in the application of legal powers. Following a process of assessment and evaluation the Government of Moldova has taken measures to address this matter by issuing Decree No. 512 06/05/2016 which abolished many extant normative acts and orders and reconsidered the validity going forward of others including those in the Customs area of competence.

Nevertheless, Customs, Veterinary & Phyto-sanitary Services are advised to undertake regular systematic reviews of current legislation within their own area of responsibility with the objective of periodically rationalising the number and volume of orders/ decrees and where appropriate cancelling or revoking redundant regulations, proposing amendments to primary legislation.

In response to questions concerning access to information about legislative amendments business stakeholders gave a mixed message which positively assessed that transparency from the BCSs (specifi cally Customs) had improved in the preceding 2 years, however, despite access to current or updated web based material others forms of information including in printed format e.g. regular news letters - were identifi ed as also being valuable.

147 World Bank Customs Modernisa on Handbook p8 refers.148 List of extant legal acts for each of the State BCSs Annex X Trade Related Legisla on refers.


56

Table 4: Summary of Legal & Regulatory Framework Gaps.

Intra-service Border Agency Gap


Customs

Gap 1: Legislative Alignment with EU’s Acquis Communautaire’ & International StandardsGap 2: Free Economic Zones (FEZ) & Temporary Storage at GIFP

Veterinary & Phyto-sanitary

Gap 1: Alignment of veterinary & phyto-sanitary legislation with the EU ‘Acquis communautaire’ & International Standards

Inter-Agency Border Agency Gap


Customs, Veterinary & Phyto-sanitary

Gap 1: Too many legal acts regulating border management

57

Institutional Framework, Human Resource Management (HRM) Development

Introduction

Customs

A� er a period of relative calm and stability in 2016 the MDCS has undergone signifi cant process of reorganisation and rationalisation. Personnel are being reassessed following the issue of Order No. 748 from 13 May 2016 on ‘The Approval of Schedule for Attestation Procedure’ for all MDCS offi cers designed to evaluate their knowledge, competencies, and integrity. Inevitably the process of change will have an impact on the institutional framework of the organisation and the development of human resources.

Results from the attestation exercise so far in June 2016 identifi ed that approximately 15% of the 184 offi cers of the Moldovan Customs Service in HQs did not satisfactorily meet requirements and were likely to lose their jobs. The exercise is continuing at the regional and local offi ce level. Overall reductions in the number of staff at the central level are forecast to shrink from 388 to 260 and the number of Customs Houses signifi cantly cut from 7 to 3. Customs Offi cers permanent based at GIFP currently number 29 including the head of the Customs Post.

Veterinary and Phyto-sanitary (National Food Safety Agency {ANSA})

ANSA Inspectors from the adjacent Giurgiulesti Road BCP are deployed at GIFP when required. Current staffi ng at the road BCP consists of 14 Inspectors: 7 x veterinary and 7 x phyto-sanitary, although in June 2015 only 4 x veterinary Inspector positions were fi lled leaving 3 x positions vacant. Inspectors cover 4 BCPs: Giurgiulesti-Galati, Giurgiulesti-Reni, GIFP and Giurgiulesti FEZ working a 24/7 shi� system allowing staff the opportunity to have a period of 72hrs off duty once the full period of 24hrs has been worked. This shi� working arrangement helps to save travelling time and expenses. Inspectors receive training both internally from within the organisation and at the BCP and also via the use of external operational trainers including those from the European Union.

At least once every year Inspectors undergo a staff assessment and testing exercise to ensure that their levels of knowledge and skills are up-to date, important because of the large volume of legislation and regulations particularly that emanate from the European Union and which is required to be approximated by the Veterinary and Phyto-sanitary services as a requirement of the AA/DCFTA.

Customs

Intra-service

Gap 1: Organisational & HRM reform

The requirement to deliver on all its objectives, commitments and obligations in order to continue to implement the EU AA/ DCFTA and other international agreements and conventions requires the MDCS to constantly adjust and adapt to the new and challenging customs and trade environment. Customs aim is to develop a modern, service oriented, administration that matches international standards and meets national strategic objectives and at the same time responds positively to the needs of business. The organisation also needs to develop policies and strategies that ensure ‘that all staff observe the rule of law and perform their duties in a fair and impartial, honest, trustworthy,


58

polite, assertive and professional manner’ 149. For GIFP as a ‘strategic gateway’ the optimisation of organisational and HRM reforms in Customs are key components in ensuring that port operations are both effi cient and competitive.

Staff are considered by most forward thinking organisations as their most valuable asset and crucial to continued development and progression. As identifi ed by the attestation process, offi cers should be suffi ciently skilled, motivated and capable of performing eff ectively at the highest level in order to meet all future challenges. In addition, the organisation through its senior managers and personnel should commit to a culture of professionalism, discipline, integrity and ethical behaviour.

Reforms currently being undertaken by Customs in order to improve administrative capacity, including the use of strategic planning, rationalisation, management assurance systems, change management, HRM development and also attestation are all measures designed to address institutional reform issues considered important for the future.

In support of the development of good governance and institutional capacity building the MDCS

together with the assistance of EUBAM dra� ed a ‘Customs Service Law’ however, its introduction has unfortunately been subject to a lengthy delay due to changes in Government and repeated phases of inter-ministerial consultation. In support and anticipation of its enactment, the Customs Service Personnel Management Department developed a ‘Personal Performance Appraisal System’ for customs staff - also with the assistance of EUBAM - which due to the lack of progress of the Customs Service Law has also not yet been introduced or implemented. In addition, the MDCS are developing a new Code of Conduct and guidance manual for interpretation by staff to be introduced by Government Decree as part of a revision to the general working culture that is adaptive to change and toughened against corruption.

The MDCS Integrity Plan 2016-2017, which further supports MDCS internal reforms is mirrored by the International Chamber of Commerce (ICC) Customs Guidelines Policy Statement Document No. 103-6/12 – (June 2012), which refers to a number of strategic areas:

“Workforce and structure • Employs a highly professional workforce, which is recruited competitively, well-trained, adequately

paid and screened for enforcement risks, with written, standardised job descriptions and objectives, supporting transparent career development and promotion policies;

• Establishes an independent internal security unit, or is subject to an equivalent external body, to deal with issues of employee integrity. These arrangements should be known to the trade community, which should be given information enabling them to contact the appropriate security agency as and when necessary;

• Trains officers in customs conventions, laws and process and to investigate complex frauds, and recommend appropriate action.

Transparency of Administration and Regulation • Publishes all customs regulations and makes them available to the public through the most modern

and practical media, while ensuring that existing and new regulations and legislation are simple in form, content and presentation;

• Consults the trade community systematically, to obtain views on proposed new regulations and proce-dures, or amendments to existing requirements, and gives them timely notice of any changes;

• Adopts a Memorandum of Understanding programme, to improve and promote co-operation with the trade community in the areas of trade compliance, security, and effective interdiction of customs fraud, drug trafficking, infringements of intellectual property rights and threats to endangered spe-cies;

149 EU revised Customs Blueprints, Chapter 4: Customs Ethics refers.

59

• Establishes an ombudsman, specialised in customs matters, as a medium for approaching the ad-ministration and a general information or office or section to deal with queries from the trading community.

Corruption • Criminalizes the disclosure of proprietary trader information; • Publishes and enforces internal anti-bribery policies.”

Reinforced and fully recognised by the EU & WCO, the application and implementation of an HRM Integrity Plan that contributes to the overall organisation’s Strategic Management or Business Plan (Strategy), is regarded as an essential element for the development of a modern customs administration and an integral part of the organisational change management process.

Furthermore, the recently revised EU Customs Blueprints assign three (3) individual chapters to organisational and HR topics: Organisation and Management, Human Resource Management and Customs Ethics. These blueprint chapters set out a series of strategic objectives and key indicators that can be used to assist customs administrations engaged in undertaking reform, reorganisation or regional integration i.e. EU candidate countries or customs unions.

Need 1:

Customs administrations need to undertake comprehensive reviews of existing HRM policies, in order to improve their relationship with the trading community and general public through enhancing their performance in a number of key areas, including: training, professionalism, service-focus and embedding a framework of core values and behaviours, built on the foundation of integrity and zero-tolerance for corrupt practices150.

Whilst it is recognised that the MDCS has been pro-active in developing the Customs Service law, Personal Appraisal System, Code of Conduct and guidance manual and also that progression of these instruments are not necessarily within their own hands, nevertheless, enactment of the Customs Service Law in particular as the key to the implementation of other measures is vital for establishing the legal basis for the development of modern HRM systems within the Customs administration. The implementation of these systems will provide the necessary tools to improve the administrative capacity of the service so that it is able to implement its responsibilities under the AA/DCFTA while at the same time achieving much higher standards of integrity and good governance.

In order to continue to eff ectively implement HRM improvements already set in motion the MDCS

needs to rigorously apply strategies, policies and systems that fully comply and are in line with the EU Customs Blueprints three (3) individual chapters related to organisational and HR topics, World Customs Organisation HRM Guidelines and the ICC revised Customs Guidelines which mirror the strategic areas described in the Integrity Plan of the Customs Service for 2016 – 2017 Annex to Order No.513 –O 30/12/2015. Measures must be suffi cient and appropriate to attract, retain and develop staff at all levels, recognise and reward performance and innovation, identify and grow leaders and deliver an ethical culture that combats corruption amongst its employees in line with its stated objectives;

• Enhancing the legislative framework and mechanisms for financial and non-financial motivation of the customs officers,

• Strengthening the institutional capacities of examination and analysis of integrity incidents;• Reinforcing the human resources management system;• Improving relations of the institution with the private sector;

150 Core Values are described by the WCO include the following; Professionalism, Integrity, Transparency, Reliability, Accountability, Opera onal Effec ve-ness and Efficiency, Client Orienta on, Partnership with state authori es, business community, other customs administra ons and organsia ons and Innova on.


60

• Building capacity in the field of professional training and education in the spirit of professional integrity;

• Increasing the efficiency of the organizational-legal system of the customs control process; • Further developing and enhancing institutional integrity;• Consolidating and promoting of the role of the manager.

The plan aims to:• Establish an effective staff management system; • Provide high quality services to the public and trade; • Improve internal and external communications;• Enhance the process of staff recruiting, deployment, rotation, promotion, training, reporting and

motivation and the introduction of internal audit procedures.

There is a need consequently for the MDCS to apply constant exerted pressure and to lobby as strongly as possible for the Customs Service Law to be adopted and ratifi ed by Parliament without further delay. Furthermore, continued implementation of the HRM Integrity Plan - an essential element for the development of the MDCS - is also highly commended.

The MDCS including its operations at the GIFP could benefi t from becoming even more open and transparent and identifying opportunities to engage directly and positively with the private sector and society in general, in order to enhance its public image and standing. The image that BCSs convey is important and has a signifi cant impact on Moldova’s investment climate.

There is a strong and current need for all the BCSs to improve their public image /standing by demonstrating fairness, integrity and honesty in their relations with business and public. MDCS

institutional and HRM reform development should therefore be focused on improvements, which not only address the image and ethical culture of the organisation but also the positive behavioural attitudes of offi cials. Institutional development should also include reforms, structures and procedures which if currently missing should be established and incorporate:

• pay that is consistent with a professional position of honour and trust and that will attract high quality personnel,

• career structures that provide stability, • the creation of internal controls and audit systems to prevent breaches of integrity and to iden-

tify and uncover violations, strengthening the capacity to investigate and prosecute breaches of integrity,

• publishing time release and quality standards for cargo clearance, • the implementation of a new code of conduct, core values and tough disciplinary measures that

address integrity at all levels of the organization.

Consequences of Corruption in Customs

Source: (World Bank Customs Modernisation Handbook)

Customs plays a central role in every international trade transaction and is o� en the fi rst window through which the world views a country. The implications of corruption in customs on a nation’s capacity to benefi t from the expansion of the global economy are obvious. Data obtained from the World Bank’s Investment Climate Surveys indicate that 40 percent of fi rms included in the 80-country survey rate Customs/Trade regulation as a major or moderate constraint to business investment (World Bank 2003). As business and investment decisions by multinational companies are increasingly subjected to international competition, the presence of widespread corruption in customs can act as a major disincentive to foreign investment. In addition, corruption in customs takes on new signifi cance in the current environment of heightened concern about the security of international trade. Sophisticated systems and procedures designed to detect weapons of mass

61

destruction will off er little protection if they can be circumvented simply by bribing customs offi cials.In many developing countries, customs’ collections continue to represent a large portion of government revenue. Figures provided by the WCO suggest that in many countries customs collects over 50 per cent of all government revenue (WCO 2003a), and delays in the processing of imports and exports can cause signifi cant losses, increase the cost of doing business, aff ect the competitiveness of a country’s fi rms, and scare away foreign investment.The presence of widespread corruption can, therefore, destroy the legitimacy of a customs administration and severely limit its capacity to contribute to government objectives. The adverse eff ects of corruption within a customs administration include the following:• a reduction in public trust and confi dence in government institutions• signifi cant revenue leakage• a reduction in the level of trust and cooperation between customs and other government agencies and between customs and relevant counterparts in other countries• low staff morale and esprit de corps (although this is both an eff ect and a cause)• a reduction in the level of voluntary compliance with customs laws and regulations by the business sector• a reduction in national security and community protection• the maintenance of unnecessary barriers to international trade and economic growth• increased costs, which are o� en borne by the poorest sectors of the community.

Best Practice Example151

Case studies of Customs administrations in other countries demonstrate that personnel policies of customs were a major factor in enhancing quality and integrity of staff . Personnel reform contributed to successful customs modernization programs, particularly in countries that proceeded with a large-scale changeover of personnel and where existing staff had to go through the same recruitment process as new applicants and were also off ered incentives to leave. Salary upgrades were designed to attract and maintain qualifi ed personnel, as well as to strengthen integrity and fi nancial autonomy. A major element of these new policies was also the introduction of WTO-compatible declaration processing fees, which enabled customs to earmark suffi cient resources to maintain their new, modernized systems.

‘It is highly unlikely that offi cials will wholeheartedly support any major reforms that remove opportunities for ‘rent-seeking’ and improve transparency unless they are combined with meaningful improvements in their conditions of employment’ 152.

Gap 2: Supporting documents required to perform Customs clearance153

In May 2015 an important step was taken by Moldova towards implementation of its AA/DCFTA agenda when the MDCS announced an amendment to the law154 implemented by Order 206-0 22.05.2015 reducing the number of documents155 that must be presented at customs clearance to just three156 i.e. Customs Import Declaration, Commercial invoice & Convention on the Contract for the International Carriage of Goods by Road (CMR) / waybill.

This measure was expected to apply to the majority of import/export transactions cleared through the ASYCUDA Green Channel (90% of customs declarations at export and more than 60% of customs declarations at import) facilitating international trade made in line with EUBAM’s advice and assistance. 151 World Bank Customs Modernisa on Handbook p125 refers.152 Corrup on in Customs Gerard McLinden and Amer Zafar Durrani WCO Journal Vol. 7 No 2 2011 refers.153 Suppor ng documents are those trade, transport and official documents that either support specific statements made in the goods declara on, such as

the commercial invoice (e.g. for the invoice amount, seller and buyer), the transport document (e.g. for the consignor, consignee, means and mode of transport) or the cer ficate of origin, or that have to be submi ed as proof of specific import/export condi ons being met (e.g. import/export permits, health cer ficates and cer ficates of conformity with technical standards) 153- h p:// ig.unece.org/contents/suppor ng-documents.htm- refers.

154 Government Decision No. 1140 of 2 November 2005 refers.155 As s pulated by Standard 3.16 and Transi onal Standard 3.18 of the Revised Kyoto Conven on (RKC), Customs shall limit the documents required to that

necessary for Customs control and compliance purposes, and shall allow the lodgment of these documents by electronic means. Standard 3.19 of the RKC requires that transla ons shall not be required, unless necessary for processing the goods declara on – h p:// ig.unece.org/contents/suppor ng-doc-uments.htm refers.

156 Previously, up to 11 documents could be required.


62

Additional documents were only to be required, based on risk, when a need to confi rm the data on the customs declaration was necessary. It is anticipated that the new documentary requirements would over time help to drive down the costs for business and boost confi dence and trade and additionally, help to raise Moldova’s ranking in the ‘World Bank’s Ease of Doing Business Report’ 157 and allow favourable comparison with the average number of documents requested by more progressive OECD countries158. Indeed, feedback received in response to the ‘Trade Questionnaire’ at GIFP nevertheless clearly indicated that Improvements had been observed to the clearance of goods since the law had been introduced.

However, although the reductions in documents was heralded and well received by business, in fact, the results of an EUBAM monitoring exercise - made available in October 2015 - showed that in reality the numbers of supporting documents routinely submitted with customs declarations regularly exceeded the number required by the Decision.

Need 2.

While it is recognised that in specifi c non-routine cases it can be necessary to provide additional documentation such as licences, proof of origin, veterinary or phyto-sanitary certifi cates etc., nevertheless, the EUBAM monitoring exercise identifi ed that a signifi cant majority of declarations were accompanied by between 8 - 17 diff erent supporting documents, duplicating and even triplicating data already accepted by Customs, making this apparently a common and regular occurrence.

Trade surveys confi rm that delays to import clearance can o� en be attributed to the time needed to collect and submit supporting documents rather than the physical processing of declarations. For sea freight in particular, this can frequently mean requests to obtain commercial documents a� er the goods and vessel have already begun their journey and where there is little economic incentive for the shipper to provide new or additional documentation. For business the need to provide additional documents at short notice resembles negotiating an unpredictable and constantly changing procedural ‘obstacle course’. Furthermore, the unpredictable nature of these requirements represents an unnecessary additional technical and physical barrier to trade, which cultivates frustration, delays and additional costs. For port operator’s uncertainty in the clearance process can have other cumulative eff ects such as; lowering competitiveness, discouraging traffi c and stifl ing growth in investment and news routes. When speed of delivery is essential, non-transparent and complex procedures may also serve to conceal corrupt practices.

Clearance procedures including those at ports provide state offi cials from all the Border Law Enforcement and Control Services but particularly Customs - who have the most direct involvement with the goods – a potential for abundant ‘rent-seeking’ 159 opportunities that come from applying time pressures to the process o� en based on the need to provide additional supporting documents.

“The key facilitation problem is not the danger to eff ective controls posed by practices in which irregular payments can move goods through the strictest regulatory systems, or the extra unoffi cial charges levied on innocent as well as fraudulent traders, but rather the logical obligation to maintain unnecessary complexities and foster endemic delays for consignments so as to justify bribes for “exceptional simplifi cations” 160.

To ensure therefore, that in the vast majority of cases the maximum number of supporting documents submitted for the completion of the Customs clearance process is in line with the stated

157 This year’s report saw Moldova at No.52 (out of 189 countries ranked) in the “trading across borders” category and on the Logis c Performance Index (LPI) 157taking posi on No. 93.

158 OECD – Organisa on for Economic Coopera on and Development. List of member countries can be found by accessing the following website: h p://www.oecd.org/about/membersandpartners/list-oecd-member-countries.htm refers.

159 Rent-seeking’ - is literally, rent sought to recover the cost of acquiring or retaining a lucra ve posi on. It includes pe y or rou ne corrup on (also called tea or facil-ita on money), whereby a trader pays a bribe at various stages to get goods cleared. The most common form is „speed‟ payments, such as those paid to expedite processing of documents and signatures to achieve a faster clearance. However, it may also include the issuing on non- essen al cer ficates, avoiding examina on and inspec on rou nes or fees collected for using the examina on facili es when no examina on takes place. Generally, these tend to be rela vely small payments paid in cash to individuals and are o en perceived an acceptable part of the clearance process. WB Customs Modernisa on Handbook Chapter 20 refers.

160 h p://www.ukessays.com/essays/economics/policy-and-natural-barriers-to-trade-economics-essay.php refers.

63

requirements of the law, the MDCS needs to pro-actively monitor the declaration process, fully implementing the amendment to Government Decision No. 1140 of 2 November 2005, reversing the fi ndings of the EUBAM exercise and bringing greater predictability and transparency for business. The trend in the number of submitted documents should be downward and declarations with more than 3 supporting documents need to be and remain an exception rather than the rule.

One clear reason identifi ed by EUBAM for the submission of extra supporting documents, was that Customs offi cers continued to apply several extant internal Orders: No. 276-O and No. 270-O both from 24.10.2002 which contradict the intention and indeed the spirit of the Government Decision. In order to overcome this issue, the MDCS as mentioned previously under Legal & Regulatory Framework: Need 1: Legislative Alignment with EU’s Acquis Communautaire’ & International Standards - in addition, needs to consider undertaking a review of legislation and in particular extant regulations in order to ensure that they remain up-to-date and do not contradict amendments to existing national legislation, weakening administrative and operational capacity161.


Intra-service

Gap 1: Staff rotation systems

Policies for the systematic rotation of staff are an important element in personnel career development and are also an integral part of an eff ective anti-corruption strategy – the practice of ‘rent-seeking’ is not solely confi ned to Customs.

‘Where public funding for inspection services and laboratories is low, the focus for offi cials in these services can o� en turn to regulatory inspections rather than food safety risks. Unoffi cial policies encourage agencies to undertake more inspections, sampling and laboratory testing than are necessary. Inspections are predisposed toward selecting business operators, from which a ‘fee’ can be collected and not toward selecting high-risk producers. Some countries require health certifi cates for all exports (even if the importing countries do not require such certifi cates) and collect samples to test food safety. Some countries also test imports extensively. Even when such problems are absent and administrative processing is effi cient, inspectors prefer to deal with goods owners or their agents in person to allow for the collection of informal payments. In sum, existing incentives in many countries tend to drive inspectors away from risk-based inspection and toward practices that increase transaction costs—both contrary to the SPS and TBT principles of the WTO”162.

As far as could be ascertained from interviews with inspectors at the adjacent Giurgiulesti road BCP, ANSA do not operate a systematic staff rotation system between the central HQ level and other BCPs within Moldova. Inspectors from the Veterinary & Phyto-sanitary Services should be regularly rotated with Inspectors from other locations to increase the potential benefi ts of sharing experience and expertise with others in the service. However, it is important that any rotation system is balanced, with Inspectors remaining in post for long-enough to enable assimilation, and eff ectively execute their duties in a fully committed manner.

Need 1:

The systematic rotation of ANSA Inspectors (Veterinary and Phytosanitary) at GIFP needs to be positively considered within a developed implementation policy that seeks not only to ensure integrity but also, the eff ectiveness and effi ciency of the organisation and as an eff ective element in personal career development.

161 GD 512 06/05/2016 refers.162 World Bank Border Modernisa on Handbook Chapter 16 refers.


64

There is a need for experienced Inspectors from both organisations to be regularly rotated within a structured programme working and / or visiting other BCPs throughout Moldova, in order to give support to the training of existing and newly appointed personnel.

Gap 2: More fl exible working hours

Container traffi c and perishable goods traffi c at ports are particularly sensitive to time. GIFP has serious ambitions to expand and increase capacity, improving its reputation and competitiveness compared with other regional ports.

Projected increases in capacity however, will be diffi cult to accommodate by ANSA due to infl exibilities in their organisation of functional workfl ows and working hours. Delays experienced at GIFP result from issues related to the attendance patterns of ANSA inspectors, especially for the clearance of containers / consignments outside the hours of 09:00 am until 05:00pm. According to information received, delivery of consignments requiring ANSA’s clearance approval from the GIFP during the evening, night time or early morning is not possible because of a lack of available ANSA personnel.

Need 2:

While particular issues regarding the attendance patterns of ANSA inspectors at the GIFP have been identifi ed, the functional workloads of all the BCSs at the port would benefi t from a comprehensive review and where appropriate re-adjustment to take account of increased attendance based around a 24/7, 3 x 8-hour shi� pattern - or other variations – in order to accommodate port traffi c and business demand. This would improve and enhance the ports international and regional standing when looking to generate new business investment particularly in the movement of produce and live animals.

ANSA specifi cally, should agree to re-evaluate and calculate their staffi ng requirements at the port in line with new competencies and practices laid down by the EU and where necessary seek to further coordinate their working times and attendance with the other BCSs163 - if weekend and night working were to be synchronised. At the very least, extension of the working hours for the clearance of consignments at the port within their competence before 09:00am and beyond 05:00pm should be considered due to the strategic importance of GIFP to the Moldovan economy and business community. Night and weekend work needs to include supplementary compensation, in line with the EU and International Labour Organisation (ILO) standards regarding work hours.

Table 5: Summary of Institutional Framework & HRM Development Gaps.


Institutional FrameworkCustoms

Gap 1: Organisational and HRM reformGap 2: Supporting documents required to perform Customs Clearance

Veterinary & Phyto-sanitaryGap 1: Staff rotation systemsGap 2: More fl exible working hours

163 MDCS at the port work 24- hour shi s. It is understood that the clearances of Excise and Transit goods as well as physical examina ons are only under-taken during day shi s.

65

ProceduresIntroduction

Unlike the other BCSs, Customs administrations are frequently expected to not only raise substantial revenues but also provide domestic producers with protection, deliver assistance to supply chain security, prevent the importation of prohibited, unsafe or counterfeit goods e.g. illegal weapons, out-of-date medicines and fake branded clothing as well as combatting the trade of narcotics etc. Customs administrations are expected to accomplish these objectives both eff ectively and effi ciently without compromising trade facilitation.

Customs

To understand Customs’ role in assisting the facilitation of trade, it is important to recognise that the service occupies the primary position because of its dual responsibility to not only provide accelerated clearance but also to ensure that eff ective border controls are in place. Ultimately for trade facilitation to be eff ective Customs need to make procedures and processes easier and less costly successfully balancing effi ciency with security and control. Customs administrations can assist trade facilitation in the following ways:

• Introducing simplified procedures; • Automating processes using information technology solutions to electronically process decla-

rations and accept payment; • Harmonising and standardising procedures both at the national and international level; • Initiating and implementing transparent measures that include the regular review of clearance

procedures and processes;• Joint performance of physical examinations and inspections to avoid duplication.

While there are areas where improvements are still necessary; the MDCS is continuing to demonstrate a clear commitment to approximate practices with EU and international norms and standards. Clearance procedures built around modern automated and electronic techniques with the application of risk-analysis and selectivity are at the core of its controls.

This is confi rmed for example by the dra� ing of a new Customs Code to Moldova, co-operation and coordination with other BCSs and business to enhance trade facilitation in compliance with EU Customs Blueprints and EU IBM Guidelines. For the future, new approaches to organisational development and HRM will also assist in strengthening the roots of the administration.

International terrorism also places cargo security at the forefront of Governmental concern and Customs administrations are o� en the main instrument used to apply national security objectives. The dependence on the analysis of pre-arrival information and risk assessment undertaken in the country of destination is now common practice through the implementation of agreed international conventions. A number of countries including member states of the EU have enacted regulations and promoted customs-business agreements to improve security based on the submission of pre-arrival information and AEO standards164.

“Customs’ skill in assessing the information through analytical processes, deployment of resources, eff ective communication and decision making, therefore, has become even more important than in the past. Protecting society involves protection of the entire international trade supply chain from the moment the cargo leaves the export country to the moment of arrival at the destination country” 165.

164 WCO Framework of Standards refers.165 World Bank Customs Modernisa on Handbook p125 refers.


66

An important aspect of the MDCS modernization project has been the implementation of the ‘ASYCUDA World’ so� ware for automated declaration of goods. ‘ASYCUDA World’ developed by the UN Conference on Trade and Development (UNCTAD), became the core of the Moldovan Integrated Customs Information System. ‘ASYCUDA’ connects all customs offi ces together in a single declaration processing system saving time in completion of the declarations and allowing authorized customs brokers and importers online access (direct trader input) to the system.

From 1st September 2014 a schedule of tariff concessions were incorporated within the ‘Asycuda World’ system and applied to customs declarations for goods imported from the EU. In 2016 access to the system was also granted to ANSA (Law 221/19.10.2007, amended on 27.12.2012 art. 33) enabling receipt of information in relation to controlled goods (Ch.1-24 of the Customs tariff ) in real time for the veterinary and phyto-sanitary services.

As a result the MDCS issued Order No: 63-O/40 from 01.03.2016 on optimization of the exports of goods controlled by ANSA. The respective order signed by MDCS and ANSA establishes a new Informatics System (IS) (module), namely ‘MULTI AGENCY’ inside the ‘ASYCUDA World’ platform. This module will be used by MDCS and ANSA inspectors during the export procedures of goods requiring veterinary/phyto-sanitary control. The aim of the new module is to eff ectively implement the “Single Window” concept and improve procedures and times for crossing the Moldova border by means of transport with goods subject to veterinary/phyto-sanitary controls. MDCS and ANSA agree to respect the necessary time for clearance of goods for export. The ‘module’ is available at GIFP and Giurgiulesti – Reni BCP.


The Veterinary and Phyto-sanitary services are directed by recommendations and standards established by the Codex Alimentarius Commission, the International Plant Protection Convention and the Organization for Animal Health – (OIE) and international agencies such as the Food & Agricultural Organisation of the UN (FAO), World Health Organization and the World Trade Organization. For the control of goods within the competence of these services the process usually begins with submission of an application for the granting of import licenses and permits. For many products, certifi cates are necessary to be obtained from the country of origin which can be time consuming (lodging applications in advance, waiting for approvals) and sometimes costly (fees and unoffi cial payments).

At the border, Inspectors check documents and their conformity with the goods presented and collect statistical information. Based on risk, consignments may be either partially or fully examined, and samples may be taken and sent to the laboratory for analysis. Finally inspectors make decisions to destroy, quarantine, treat, release or reject goods166.

Fresh products and live animals normally need to be processed at the border. Other goods requiring quarantine may be sent to secure warehouses, where detailed inspections can be more properly carried out. At GIFP the Veterinary and Phyto-sanitary services coordinate their activities with the other BCSs to avoid duplication.

166 Controls should depend on the risks associated with goods. Even if no formal risk management is in place, controls will differ by goods, shippers, and perhaps informal payments. Import permits and health cer ficates need not result in faster clearance at the border.

67


The World Bank in its Guidelines167 for the modernisation of border controls sets out conditions and pre-requisites for long-term change in border services if they are to adapt to the modern environment and become more effi cient and eff ective. These include: ‘the introduction of a paperless trading environment, a clear, concise, transparent legal framework, single window system, comprehensive risk management and compliance improvement approach, close cooperation and partnership between government agencies and the private sector, A single, World Trade Organization–compliant service fee, Organizational structures and human resource management approaches that rationalize and streamline operations’.

Clearly within Customs and the other BCSs modernisation and adaptations are taking place including also at GIFP where particularly the MDCS is well advanced in the implementation of a paperless environment. All services within their obligations to the AA/DCFTA are increasingly aligning their legislative and regulatory framework with that of the EU. Pre-arrival information is available and as previously mentioned risk management systems are in place with Customs and ANSA sharing information and lately utilising the risk module component of ASYCUDA, although further improvements in the application of risk could be made168. As stated, co-operation that avoids duplication of controls exists between the BCSs and relations with the private sector are generally good but in some areas there is room for improvement. HRM measures to reform and improve integrity are also high on the agenda. On the other hand the implementation by Customs of some specifi c simplifi ed customs procedures including; the introduction of deferred payment and guarantees, though long considered, have yet to be fully realised.

Customs

Intra-se rvice

Gap 1: Implementation of Simplifi ed Procedures (SP) & Authorised Economic Operators

(AEO) Concept

Since the events of 9/11 the threat to the security posed by goods carried in containers has been a major concern throughout the world and unfortunately has not diminished. One of the main elements in relation to security is amendment of the Community CC (Regulation (EC) 648/2005) and the creation of the AEO concept.

An AEO is defi ned as: “a party involved in the international movement of goods in whatever function that has been approved by or on behalf of a national Customs Administration, as complying with WCO or equivalent ‘supply chain security standards’. AEOs include inter-alia manufacturers, importers, exporters, brokers, carriers, consolidators, intermediaries, ports, airports, terminal operators, integrated operators, warehouses and distributors”. An AEO Certifi cate (F169) or (S170) is issued to any economic operator established in the EU that meets the criteria of customs compliance, appropriate record-keeping standards and fi nancial solvency. The AEO concept is also one of the main building blocks within the WCO SAFE Framework of Standards (SAFE171).

167 The World Bank, Border Management Modernisa on refers.168 MDCS in July 2016 are considering with EU assistance the development of a Na onal Risk Management Strategy.169 An AEO status in the form of AEO-F is envisaged for economic operators established in the Community who would like to benefit from the various sim-

plifica ons specifically provided for under the customs legisla on and from par cular facilita ons related to customs controls on security and safety.170 An AEO status in the form of AEO-S is envisaged for economic operators established in the Community who would like to benefit from par cular facilita-

ons related to customs controls rela ng to security and safety when the goods enter or leave the customs territory of the Community.171 SAFE is part of the interna onal Customs model set out to support secure trade. SAFE sets out a range of standards to guide interna onal Customs Ad-

ministra ons towards a harmonised approach based on Customs to Customs coopera on and Customs to Business partnership.


68

The essence of the AEO concept can be found in Customs-to-Business partnerships. Operators are accredited by Customs as AEOs when they prove to have high quality internal processes that prevent goods during international transport being tampered with and when they can:

1. ensure the integrity and accuracy of the information, i.e. what is said to be in a container, really is in the container and nothing else, more, or less;

2. ensure the integrity of its employees, that they will not put goods in the container that should not be there;

3. secure access to premises, to prevent unauthorised persons placing goods in the container.

As a result, Customs are able to trust operators and perform fewer or in some instances no physical examinations on imported or exported goods by or via those accredited to the scheme. Other benefi ts can include; releasing goods on the provision of minimum information, clearance of goods at the declarant’s premises, acceptance of periodic declarations, and allowing trader self-assessment. Advantages for the transporters include: quicker availability and lower transport costs. Customs administrations also profi t as scarce resources can be better targeted at higher risk and potentially less secure operators172.

Operators at GIFP with clients accredited to the Moldova Customs AEO scheme considered that they enjoyed lower costs when completing and submitting customs transit/import declaration, avoided expenses related to entrance / parking fees in customs terminals and furthermore, admitted that time could be saved in the process for consignees, as goods could be delivered directly from the port to the warehouse for fi nal clearance.

AEO or similar programmes have been introduced in:• The United States, under the name of C-TPAT (Customs-Trade Partnership against Terrorism);• Member states of the European Union173;• APEC174;• New Zealand, under the name of Secure Export Scheme (SES);• Singapore, under the name of Secure Trade Partnership (STP).

Government Decision No 647/07.08.2014 on implementation of the provisions concerning AEOs for the declaration of goods regulates the operation of trade facilitation measures by setting the procedures, conditions, forms of certifi cates and other necessary practical details to achieve effi cient control and enhance cooperation between customs and compliant economic operators. Green lanes for AEOs are currently in place at all border crossing points. These reforms, together with improved risk assessment processes, aim to decrease clearance times and the number of physical checks at the borders.

The work on AEOs in Moldova is an important step towards achieving alignment with the legislation and best practice of the EU and fulfi lment of the conditions for further consideration of mutual recognition. The end result being that security is established along the entire supply chain from origin (place of ‘stuffi ng’ or packing of the container) to destination (place of unpacking of the container), albeit under diff erent AEO programmes.

Expansion in the trade in containers through GIFP is an objective of the port’s management evident by the signing of contracts with MSC and China Shipping Container Lines. An increase in cross-border business between Moldova and Ukraine was also originally foreseen as providing impetus for a process of mutual recognition between the two neighbours. Nevertheless, ratifi cation of the DCFTA has brought closer trading links between Moldova and the EU, making the potential to 172 WCO SAFE Framework En 2007 refers.173 The European AEO programme incorporates customs simplified procedures.174 h p://www.apec.org/ refers.

69

enhance trading capacity through the application of an EU compatible AEO scheme, even greater. On the other hand, Ukraine has experienced delays to the legislative process and implementation of AEO despite strong assistance from the EU and pressure from the business community. It is anticipated that substantial progress can be made during the latter part of 2016.

In accordance with EU Custom’s legislation, Customs Simplifi ed Procedures (SP)175 are governed by the Customs Code of Moldova nr. 1149-XIV 20.7.2000 section 271 and 281 of the Code. In addition to the Customs Code, Governmental Decision nr. 647 from 7.8.2014 on application of sections 271 and 281 of the Code together with its three Annexes contains in Annex 1 Regulation on AEO issuance, suspension and withdrawal; Annex 2, a regulation on conditions for use of SP and Annex 3, a regulation on organization and functioning of one-stop-shop for issuance of AEO certifi cates and SP authorisations. One other important legal regulation for SPs is Order of the Director General of the Moldovan Customs Administration nr. 483, 13.11.2014 which in Annex 1 approves guidelines for checking AEO and SP holders, and in Annex 2, approves the self-assessment questionnaire.

Despite undoubted progress across a wide spectrum of reforms on Customs procedures and having the legal framework in place for all Customs Simplifi ed Procedures, only Local Clearance Procedures (LCP) are being moderately utilised by economic operators. Incomplete Declaration Procedures (IDP) and Simplifi ed Declaration Procedures (SDP) are currently not being used at all.

From the list of main benefi ts to be derived from LCPs i.e.: delivery of the goods directly to the premises of the economic operator; deferred payment of the customs debt and initial presentation of reduced data sets (or even waiver of presentation) with presentation of full supplementary declaration at a later date, only delivery of goods direct to the premises of economic operators is currently applied in Moldova.

Simplifi ed procedures at GIFP are only available during the working hours of the respective customs offi ce (usually 8:00 – 17:00), and at the latest 30 minutes before the close of business, potentially causing obstacles and delays to economic operators. As the port has the capacity to operate and clear cargo fully around the clock any restriction to trade is disadvantageous when the aim is to stimulate investment and promote commercial growth.

Need 1:

The MDCS needs to continue its customs-to-business partnership initiative (taking into consideration the full implementation of Simplifi ed Procedures and future mutual recognition of AEOs from Ukraine), in order to support the development of container security best practices at GIFP.

AEO status is a key element needed to reinforce the security of the supply chain and to increase benefi ts for traders, as well as advance and expedite cooperation between respective Customs authorities, particularly between the Republic of Moldova and its regional neighbours; Romania and Ukraine. With an objective to substantially increase container traffi c through GIFP, adherence to these principals is especially important.

Both the MDCS and the Ukraine State Fiscal Service (UASFS) should when circumstances allow, intensify their eff orts to engage in measures that recognise AEO authorisations issued in respective partner countries and agree also to provide substantial, comparable and, where possible, reciprocal 175 Customs Simplified Procedures (SP): According to EU customs legisla on there are three simplified procedures for import and export of the goods used:

incomplete declara on procedure (IDP), simplified declara on procedure (SDP) and local clearance procedure (LCP). Incomplete declara on procedure (IDP) - A declara on is incomplete if not all the required details have been filled in, or not all the required documents have been enclosed. Simplified declara on procedure (SDP) 175- The difference between a simplified declara on and an incomplete declara on is that even more details can be le out in a simplified declara on. Simplified declara ons for which commercial or administra ve documents may be used instead of SADs and which may also be incomplete. Local clearance procedure (LCP)- In LCP, the goods are entered for the customs procedure at the premises of the declarant or any other place designated or approved by the customs authori es. The ini al entry may at the same me be incomplete or simplified and moreover the declarant may be authorised not to present the goods to customs.


70

benefi ts / facilitations to mutually recognised AEOs in line with those described in the EUBAM Special Report “Business study on mutual trade between the Republic of Moldova and Ukraine and possible benefi ts from introduction of AEO mutual recognition agreement for private and public sectors in both countries” specifi cally related to this issue disseminated to partners in September 2014. Both countries should agree on the specifi c benefi ts in their MRA, but in general consider the advantages of fewer physical and documented based controls for compliant traders.

Additionally, recommendations described in EUBAM ‘Implementation and Application of Customs Simplifi ed Procedures in Moldova September – November 2015’ report need to be applied in full in order to eff ectively enhance freight facilitation and the clearance of goods at GIFP and throughout the customs territory of the Republic of Moldova as follows;

• Upgrade of the existing processes for local clearance procedures (LCPs), in order that payment of the customs debt may be deferred and to allow the initial presentation of reduced data and submission of the full supplementary declaration at a later date.

• Upgrade to the current MDCS IT system functionality (to be discussed in more detail later) to include solutions which incorporate the introduction of deferred payments and guarantees.

• Establish mechanisms that allows for the processing of SPs outside of respective customs of-fices working hours. Indeed Customs should also consider changing the working hours at some strategically designated offices including at GIFP) - where a need can be identified that reflects the genuine requirements of business – and to even contemplate in specific cases simplified clearance operations on a 24/7 basis.

Notwithstanding measures already taken, the MDCS should make greater eff orts to implement and apply all forms of intelligence led risk-based control in order to ensure that the scale and number of physical examinations is suffi cient to maintain a secure border and trader compliance but on the other hand enhance facilitation of legitimate trade.

Gap 2: Duty Deferment & Guarantees

At GIFP a system of multiple–use bank guarantees or deferred payments covering the customs debt is not available or in place. This means that duties must be paid immediately before the goods are released for free circulation and applies even if the declarant is a holder of an SP or AEO certifi cate. The lack of a legal framework and in addition, appropriate IT solution from Customs inhibits both practices from being implemented.

Need 2:

The implementation of a system of deferred payments and bank guarantees is recommended by the Revised Kyoto Convention, the revised Customs Guidelines No. 15 (ICC) and is described also in the revised EU Customs Blueprints:

• Chapter 7: Customs Liabilities - with a view to ensuring that customs liabilities are ‘efficiently assessed and collected by means of appropriate processes, procedures and instruments for calcu-lating, collecting, accounting and management’ and includes as an indication of ‘best practice’ in Section 7.9, legislation for the payment of liabilities with appropriate guarantees to be in place incorporating financial guarantees for deferred payment.

• Chapter 16: Information and Communication Technology (ICT) which also specifies in Section 16.22 (Custom’s ICT Systems) that indicatively pre-payment and duty deferment procedures are good mechanisms and tools to be employed by modern reforming Customs administrations.

71

The deferment of duty / tax payment allows businesses with substantial volumes of import declarations per month, in particular authorised operators and Customs brokers, to improve payment handling effi ciency and reduce trading costs.

Together with the implementation of SPs, EU and international standards applied to customs debt guarantees, the MDCS should urgently apply the measures necessary for the implementation of a system - including the use of ICT, that allows for the introduction of deferred payments of duty and the utilisation of multiple-use bank guarantees for authorised persons as proposed by EUBAM in 2010 on procedures at Giurgiulesti Port176 and repeated again in 2015 in the report ‘Implementation and Application of Simplifi ed Procedures in Moldova’.

Example:

‘Compliant traders expect to pay duties and taxes and factor these costs into their budget structures accordingly. As Customs usually aim for predictability and transparency, various means and terms of payment are provided. The various means include cheque, bank transfer, credit card or bank dra� , while the available terms may be payment upon clearance of the goods, or on account. Payment upon clearance allows the goods to be released to the trader once duty and taxes have been paid. However, for regular importers this can be cumbersome. For instance, a large manufacturer may receive several shipments coming from various suppliers on a single day. This might be the result of a “just in time” management technique. To simplify the collection of duties and taxes, both for Customs and traders, some Customs authorities off er the possibility of paying due amounts periodically, rather than on the basis of each transaction. In this case, the trader has an account with Customs, and duties and charges are deferred for an agreed period of time. At the end of this period, the trader receives an account transaction statement and notifi cation of the amount due. Such accounts should have a credit limit and be secured by a guarantee, such as a bank security. When traders import goods that incur more duties and taxes than the maximum allowed on the account, the usual agreement is to have the diff erence paid at the time of the transaction, which is a condition for the release of the goods’.Source: OSCE Handbook of Best Practices at Border Crossings- A Trade and Transport Facilitation Perspective

Gap 3: Risk Analysis at GIFP

Modern customs practices and operations should fully refl ect the principles of risk management. Prior to 9/11 Customs, risk management was focused mainly on areas related to the detection of violations in valuation, origin and classifi cation. However the events of 2001 have caused security to become the major challenge facing customs administrations around the world due to the global volumes of container traffi c. The need to assess risk at the earliest possible opportunity based on real-time information and intelligence177 has become of vital importance in managing and mitigating security risks. Customs administrations that are able to update and eff ectively analyse information adopting a fl exible approach to the deployment of resources are at a strong advantage over those that seek to circumvent controls. World trade is highly dependent on maritime shipping and major steps have been taken to make this form of transport as free and smooth as possible in order to encourage economic growth.

‘However, the factors that have allowed this type of transport to contribute to economic prosperity also potentially increase its security risks. The risks range from the possibility of physical breaches in the integrity of shipments and vessels to documentary fraud and illicit money-raising activities by terrorist groups’ 178.

176 AOSU AC G P Customs Procedures at Giurgiules Port 2010 p8: ‘In order to facilitate customs procedures in the GIFP, MDCS should consider to introduce a simplified declara on procedure and a system of guarantees for a poten al or exis ng customs debt’ refers.

177 In advance of departure - at the me of loading of the container or before export and before arrival of the vessel in order that the BCSs can make In-formed decisions concerning selec vity.

178 OECD Directorate For Science, Technology And Industry Security In Mari me Transport: Risk Factors And Economic Impact Mari me Transport Commit-tee 2003 refers.


72

The MDCS has benefi tted from being a member of the United Nations Offi ce on Drugs and Crime (UNODC)-WCO Container Control Programme with customs offi cers at GIFP receiving training in the identifi cation of high-risk containers using a combination of high-tech profi ling techniques, human intelligence and traditional hands-on methods. A Joint Control Unit focused on container control was established by Order No. 778/149 from 15.03.2016 coordinated by the Head of MDCS Customs Post from GIFP.

Nevertheless, until recently - unless changes have been made - it is understood that only ‘open source’ information is used to identify the route and to track containers and no written station risk profi les are available. Given the diversity of the traffi c and potential for growth at GIFP these defi ciencies are considered to be a signifi cant shortcoming. Selectivity based on risk-assessment and profi ling systems, which target suspect consignments minimising the level and incidence of physical examinations is an international standard and a recommendation contained in the ICC revised Customs Guidelines (No.14).

Need 3:

Although the Customs at GIFP have elaborated a number of risk profi les there is still a need to ensure that they are systematically and regularly reviewed, updated and remain relevant not only for national but also regional and local risks. This is particularly important in the case of GIFP both for goods in transit and possibly in the future for non –excise goods declared for Home Use179 since the volumes of trade have the potential to increase signifi cantly and goods are shipped directly from countries with the highest risk. The application of accurate and targeted risk profi les is advantageous for trade facilitation and increases the speed of overall clearance times.

Designated local offi cials need to be positively encouraged and authorised as part of their functional responsibilities to pro-actively use their knowledge and experience to additionally risk assess declarations and consignments where existing risk profi les indicate that examinations are not necessary or required. They should also be able to view feedback either positive or negative concerning the results of examinations previously performed at the port. In addition, offi cials need to be further motivated to fully contribute in the updating and compiling of new risk profi les that may be relevant to colleagues at other BCPs. The current practice that limits authorisation to adjust or vary the criteria or profi les to only offi cials at the central level, while understandable, nevertheless restricts local initiative and fl exibility.

In the same context, implementation of pro-active local information/intelligence gathering also needs to be enthusiastically supported in order to supplement and enhance centrally directed targeting and selectivity. Local station risk profi les, traffi c pattern studies and structured risk testing need to be further developed and incorporated into the centrally managed overall schemes of control and include prohibited / restricted goods e.g. drugs, arms and ammunition, CITIES, dual-use goods, weapons of mass destruction (CBRNe180).

In line with the recommendations made above in 2016 the MDCS sought to tackle improvements required in the dra� ing of risk profi les and the enhanced use of pre-arrival information through issue of Order No. 258-0 based on the provisions of Art. 17 and 17(1) of the Customs Code of the Republic of Moldova No 1149-XIV of 20.07.2000, pt.2 of the Government Decision ’’On approving the risk management system within the Customs Service’’ No 1144 of 03.11.2005, and bilateral agreements, the operators ICS ’’Danube Logistic’’ SRL and ’’MSC MLD’’ SRL to present preliminary (pre-arrival) data of goods transported in containers through GIFP to the customs authorities of the Republic of Moldova in electronic format with European norms and standards. EUBAM was asked to comment on the dra� amendment and provided a number of proposals designed to improve the use of risk management at the port which included:

179 Currently only Excise goods are cleared at the port Fuel, cigare es are cleared for home use IM4 at GIFP, all other goods are covered by transit Procedures.180 CBRNe = Chemical, Biological, Radioac ve, Nuclear and explosive materials.

73

• risk analysis should be undertaken and assessed at the first port of entry to inform the level and scale of any subsequent control measures taken in-land;

• a limited number of officers should be responsible for the process of analysis in order to avoid errors with data;

• a culture of ‘need-to-know’ should be applied in order to keep information secure and that in-structions for the types of control measures to be performed are precisely described;

• all high risk container shipments through the port of Giurgiulesti, irrespective of their final des-tination, should be controlled at the port in order to decrease opportunities for corruption and increase the probability of customs violation detections.

To enhance the development and use, application and implementation of the risk management system at GIFP continued support and assistance is needed in dra� ing more comprehensive lists of risk indicators and local risk profi les which are regularly reviewed and updated together with a focus on upgrading the skills of offi cers in selectivity and targeting of high risk containers/consignments, including through the use of open source databases, where security concerns in relation to terrorism, narcotics and other prohibited or restricted goods are heightened and the more traditional areas of customs interest including; valuation, origin and classifi cation of goods are of a high risk. Risk profi le documents should be fl exible to take account of the changing traffi c and external infl uences and consequently changing threats as recommended by the revised EU Customs Blueprints Chapter 10 Risk Management Section: 10.4, 10.5 and 10.10 and Chapter 11 Border and Inland Controls: Section 11.3.

Improvements in risk management and risk assessment knowledge and skills at the GIFP will assist offi cers in making better informed decisions when selecting freight consignments for examination. Therefore, In line with the EU revised Customs Blueprints reference Chapter 10: Risk Management Section 10.17, Chapter 11: Border and Inland Controls and Chapter 8: Trade Facilitation, formal training in risk analysis using a ‘train the trainer’ programme should be delivered on a regular basis by the MDCS to selected personnel and ‘cascaded’ by local trainers to take account of staff rotations.

Gap 4: Valuation, Classifi cation, Origin & Post Clearance Control & Audit

The correct determination of value for goods at GIFP is a concern for both Customs and trade. Goods originating in particular from China and the Far East as well as the Indian sub-continent and Turkey pose the greatest challenge in terms of ensuring accuracy and reliability of value. Suspicions of undervaluation can also prove extremely diffi cult to confi rm at source. While legislation that safeguards customs valuation in accordance with WTO Guidelines has been introduced in the CC Article 214181 Customs offi cials still face challenges when processing declarations at face value for consignments originating from these high-risk countries. Reports indicate that Customs in particular encounter and continue to face problems with obtaining and determining accurate values and defi nitive tariff classifi cations, despite the application of WTO valuation rules. Delays can result from the non-acceptance of the declared value and the need to produce additional supporting documents e.g. export declaration from the authorities of the country of departure, bank SWIFTs, corroboration of disbursement, letters of confi rmation from the manufacturer or trader etc.

The EU-Moldova Association Agreement highlighted the need for further development of customs valuation procedures in order to make them more transparent and effi cient, including through the exchange of best practices on the implementation of WTO standards (the Agreement on the Implementation of the Article VII of the GATT 1994), in particular with regard to the application of reference prices for the determination of customs value.

181 MD CC: Chapter VII, Customs Value of Goods. Determina on of the Country of Origin of Goods; Sec on 33 - Customs Value of Goods; Ar cle 214, Proce-dure for Determining the Customs Value of Goods ‘The customs value of goods shall be determined in accordance with the Law on Customs Tariff. ’


74

In response the MDCS dra� ed a new Government regulation182 concerning customs valuation aimed at approximating Moldovan legislation to that of the European Community and WTO Valuation guidelines and reconfi rmed the procedure for determining the customs value of imported goods. The MDCS will also develop a national database to be used as a tool for assessing risk with regard to the validity of the declared customs value.

The new regulation provides the possibility for economic operators to obtain release of their goods on deposit183 presenting any additional supporting / confi rming documents in relation to the customs value of imported goods within a defi ned time period. At the same time, the lower limit for which submission of Customs Value Declaration is mandatory has been increased from 300 EUR to 5,000 EUR. These amendments additionally, pave the way for the greater use of the recently introduced ASYCUDA ‘Blue Channel’ and performance of Post Clearance Control and Audit (PCCA) by the MDCS

in conjunction with the other customs channels utilised by the customs declaration processing system allowing them increasingly to move customs controls that more accurately determine value, classifi cation and origin, away from the border.

Need 4:

The MDCS should seek to ensure that customs valuation procedures are kept under constant review and meet the indicative recommendations of the revised EU Customs Blueprints Chapter 7: Customs Liabilities. In eff ect this means that the latest valuation regulations elaborated by the MDCS need to be correctly administered and the provisions appropraitely applied when assessing / determining the customs value of imported goods with offi cers following the stipulated methodology in strict order i.e. Method 1 moving progressively and in sequence through to Method 6. Due consideration should also be given to the establishment of management assurance programmes that monitor offi cers actions during valuation procedures and include valuation assessments based on the use of risk utilising a national valuation database.

In the area of tariff classifi cation and origin, Customs need to continue to expand the issue of binding tariff information advance rulings. Advance binding rulings aff ord importers a legal ‘guarantee’ regarding the treatment of their goods and the amount of duty and tax payable at the time of importation. The system provides predictability, avoids disputes and reduces costs. At the same time, by quickly processing already pre-assessed transactions, customs can pay more attention to consignments with higher risk.

With the introduction of the ASYCUDA ‘Blue Channel’ the MDCS had the opportunity to expand its use of post PCCA however, this fundamental and vitally important aspect of customs trade facilitation has unfortunately been severely curtailed and impeded by the introduction of a 3 month moratorium (since 01 April 2016) on ‘state control of physical and juridical persons with enterprise activity’ extended for a further three month period until September 2016. During this time only the Ministry of Economy is able to make decisions on the initiation of state controls184. As a result all post clearance controls and customs audits are suspended, with some organizational measures having been taken within the MDCS

as a result to reduce the number of customs offi cers in the Post Audit Control Unit - from 60 to 20. While the moaratorium lasts, expertise is being lost and the verifi cation and assessment of business compliance in terms of valuation, classifi cation and origin is being hampered and diminished. In February 2016 prior to the start of the moratorium EUBAM provided its opinion that customs control procedures, including post clearance control and audit are primarily considered within the realm of the Customs Code. In this respect, the Customs Code should be regarded as “lex specialis” in relation to any other control-related rules contained in other legislation of equal level such as Law no. 131 “on state control 182 Governmental Decree 600/2002 elaborates further procedural details on declaring the customs value. it will be soon replaced by a recently adopted new

Decree, which has not yet entered into force. There are also internal MDCS orders for customs control on valua on of goods (such as No 55-O/2014 with subsequent amendments, No 6-O/2016 on implementa on of “Customs Value” Module in IS ASYCUDA World) 182

183 The deposit of du es will cover the difference between the import du es deriving from the declared customs value and the value set provisionally by the customs administra on.

184 In the first moratorium, between 01 April and 29 June, 62 demands for checks recorded, from which 42 were rejected, 10 accepted and 10 cases rejected for lack of competence. The majority of demands came from the Fiscal Inspectorate, the Financial Inspec on, Ecologic Inspectorate, the Inspectorate for Alcohol Monitoring, the Energe c Inspectorate and the State Inspec on for Construc ons.

75

of entrepreneurship activity” - on which the moratorium is predicated - and therefore it should prevail should there be a confl ict of norms.

EUBAM has worked closely with the MDCS to ensure that the Customs Code is aligned and approximates to the current European Union Code and that in addition, the Molovan Customs Code’s implementing provisions and regulations comply with international standards and norms such as those set out in the EU Customs Blueprints, the World Customs Organisation and Revised Kyoto Convention. Therefore in the area of trade facilitation, which includes Post Clearance Control and Audit (Blueprint 14) and as a requirement and obligation of the AA/DCFTA it is imperative that Customs apply and be permitted to lawfully carry out its post clearance controls and audit functions as permitted by the Moldovan Customs Code which include;

• inspecting and controlling records, books, documents and other commercial records (including electronic data);

• entering, visiting, inspecting and controlling places which are subject to customs supervision;• examining goods and taking necessary samples;• keeping all information and documents of economic operators confidential.

Gap 5: Transit and the New Computerised Transit System (NCTS)

GIFP is Moldova’s international gateway for a number of transit corridors earmarked for gradual implementation by European Union linked also with maritime transportation systems in Europe, for example: Pan-European Transport Corridors and renovation of the ancient Silk Way, within Traceca. These routes together with upgraded transport via the Black Sea will be an important factor for economic development of the involved countries.

Moldova has the potential to become a signifi cant transit country and is already a user of the ‘Transports Internationaux Routiers’ (TIR) Convention185, which in the EU is replaced by NCTS simplifying transit procedures and transferring to a fully electronic and paperless environment.

Need 5:

The MDCS is taking steps to accelerate the process of accession to the ‘Convention on a Common Transit’ and will in the future develop preparations for the introduction of NCTS. An EU Twinning project to progress this objective aimed at preparing for the introduction of the EU transit system (NCTS) is eagerly anticipated.

The application of NCTS will have a signifi cant impact on facilitation of trade at GIFP, as the majority of containers are in transit. Introduction of the NCTS will need new regulations, major adjustments of the Customs and traders’ IT systems and a transitional period to ensure that new procedures are accepted and secure. It is suggested that the MDCS review current plans particularly for the future implementation of NCTS at GIFP taking all necessary measures in advance of the Twinning project arrival to be as prepared as possible


Intra-service

Gap 1: Advance Information

The availability of advance pre-arrival information and its use by the ANSA Inspectors at GIFP appears to be limited, received in advance for consignments only when participating in an ‘on-board Commission’. Clearance procedures, particularly important for perishable cargoes and live animals, could be further enhanced by the application of risk analysis in advance to licences and commercial documents.

185 TIR carnets opened by MDCS; 28,825 (2014); 23,684 (2015); 9,993 (01.06.2016).


76

Need 1:

The application and use of pre-arrival information by the Veterinary and Phyto-sanitary services for the purposes of applying risk analysis needs to be fully implemented as part of normal working practices in order to determine documentary checks, physical controls and sampling. At GIFP where repeat consignments are regularly received from countries/consignors/producers and where risks are established as being low, the enhanced application of advance information would be a signifi cant step in reducing any duplications of control at the port and inland. This applies also in the context of responses to the receipt of ‘early warnings’ described in the EU Integrated Border Management Guidelines. As with Customs, regular systematic reviews and updating of existing risk criteria and risk profi les needs to become routine practice.

Having been granted access to view historical data for import/export and transit through connection to the MDCS computerised declaration processing system ‘ASYCUDA’ for goods classifi ed within the fi rst 24 Chapters of the Harmonized Tariff System, it is essential that full use is made of the ability to make checks in order to maximise the benefi ts for business and that the module functions properly at the GIFP as well as at the Giurgiulesti - Reni and Giurgiulesti - Galati BCP.

Although live animal imports do not take place currently at GIFP, should circumstances change in the future the Veterinary Service should take care to ensure pre-arrival notifi cation is compliant with EC regulation on the Advance Notifi cation of Cargo for livestock and veterinary controls (282/2004/EC) and Veterinary I nspection (136/2004/EC).

Gap 2: Phyto-sanitary procedures

In 2015 following an extensive review of phyto-sanitary procedures and the performance of plant health checks in Moldova, EUBAM identifi ed a number defi ciencies which required remedial actions to be performed.

ANSA Inspectors operating at GIFP – an important location for the import, export and transit of goods subject to phyto-sanitary checks and controls - need to ensure that procedures are aligned with Directive 2000/29/EC, European Union regulations and the rules of the European and Mediterranean Plant Protection Organization as an obligation and requirement of the AA/DCFTA.

Need 2:

A comprehensive analysis and further details of the procedural gaps identifi ed can be found in EUBAM Report: ‘Analysis Of Sanitary, Phytosanitary And Veterinary Legislative Framework And Implementing Systems Of The Republic Of Moldova And Transnistria In The Light Of The DCFTA And WTO Agreements With Priority Legislative And Technical Measures To Address Identifi ed Gaps’, however, a summary of the most essential procedural checks requiring to be updated are described below:

• plant health checks at border crossing points and for the movement within the Republic of Mol-dova, need to be conducted in line with EU requirements and procedures;

• inspections (documentary checks, identity and phytosanitary checks) for import/export, transit and re-export of goods subject to phytosanitary regulations, need to be conducted in accord-ance with the regulations of the European Union and the European and Mediterranean Plant Protection Organization;

• low frequency phytosanitary checks need to be conducted according to EU legislation (Directive 2000/29/EC and Regulation 1756/2004/EC;

• checks aimed at certification of products on the domestic market should be conducted in ac-cordance with EU laws, namely goods subject to phytosanitary control should move through the territory of MD accompanied by a plant passport;

• when results of a control are unsatisfactory, measures need to be taken in accordance with Di-rective 2000/29/EC;

77

• annual control plans and monitoring programs for harmful/quarantine organisms, providing is-sues related to official control, sampling, laboratory tests, control measures and management of outbreaks need to be developed;

• phytosanitary inspectors need to receive training in the implementation of work instructions (standard operating instructions) on controls in accordance with EU law;

• procedure for transport of samples taken for official control to an accredited laboratory for di-agnostics / expertise need to be developed and elaborated;

• The application process for phytosanitary certificate for plants, plant products or other objects needs to be governed by phytosanitary regulations which are in line with and accord to Annex V of Directive 2000/29/EC;

• import export/re-export and transit phytosanitary permits for goods subject to plant health con-trol and related procedures need to be eliminated.

In general for both Veterinary and Phyto-sanitary Services other priority areas for the modernisation of procedures which would assist in diminishing barriers to trade should include; minimising processing time by lowering or eliminating fees for issues of authorizations and certifi cations; implementing e-services - eliminating the current heavy reliance on paper-based documents;full realisation of ANSA in a manner that enhances trade facilitation i.e. testing, certifi cation, authorisation, inspections and tarriff s; working with international trade partners to increase recognition of sanitary and veterinary certifi cates, phyto-sanitary certifi cates, certifi cates of conformity, other acts relevant to imports and exports and simplifi cation of certifi cation of origin186.

MDBP, Customs, Veterinary & Phyto-sanitary Services

Inter-agency

Gap 1: Reform of the ‘on-board Commission’ procedures

All vessels arriving from or departing for ‘foreign’ at GIFP currently require approval granted by an on-board (the vessel) Commission made up from representatives of the following BCSs of Moldova: MDBP, MDCS, Port Authority (Harbour Master), Veterinary & Phyto-sanitary (based on needs), Sanitary Epidemiological187 and shipping agent, according to the existing Technological Norms188.

The ‘on-board Commission’ perform a range of statutory and mandatory controls, including: preliminary documentary checks in order to determine that the vessel, crew and cargo comply with all necessary state controls for import and export procedures and that ship’s papers including; crew list, crew personal eff ects list, passenger list, general declaration, cargo declaration, report of restricted goods (if any) and travel documentation of crew and passengers are in satisfactory order. Personal data from the crew and passengers (if any) are input to the AIS “Traversarea Frontierei” (Border Crossing). On occasion an in-depth search/rummage of the vessel may take place in order to detect smuggled goods, however all ‘on-board’ procedures must be completed before the vessel is allowed to discharge or at export, load cargo.

Assembly of the ‘on-board Commission’ and procedure takes place regardless of the regularity with which vessels or crew visit the GIFP. It should be noted that because of the nature of the services connected with the port and also restrictions concerning the size and draught of vessels able to dock and discharge/load at the port, new fi rst –time vessels are an extremely rare occurrence.

186 Analysis of sanitary, phyto-sanitary and veterinary legisla ve framework and implemen ng systems of the republic of Moldova and Transnistria in the light of the DCFTA and WTO agreements with priority legisla ve and technical measures to address iden fied gaps’ - EUBAM Report Jan 2016 refers.

187 GIFP provides office accommoda on for epidemiological authori es but there is no 24/7 presence of its representa ves nor do they take part regularly in the ‘on-board Commission’ based on present epidemiological risk although it was recommended by EUBAM that should there be an increase in pas-senger vessels a plan should be developed in case of increased risk or emergencies. Radiological Service is also not present at the port.

188 Annex III Technological Scheme, GIFP refers.


78

The European Union has long recognised the need to simplify BCS procedures for the maritime sector and the application of risk based selectivity as a tool that should be used by the BCSs not only to select passengers, vehicles and cargo for further examination but also to assist informed decisions when considering what, why, when and how to apply state controls to vessels entering or leaving port. Risk analysis, in this case, could also contribute to the better allocation of scarce human resources and should in addition, be a primary consideration not least because assembly and completion of the ‘on-board Commission’ procedures are time consuming, lasting on average 1 hour, detect little in the way of irregularities or violations and result in delays to the discharge or loading of cargo increasing costs.

Moreover, pre-arrival information is available to all the BCS at least 2hrs before arrival of the vessel and in most cases preliminary information concerning the containers loaded on board the vessel in Constanta, is available to the port operator and Customs 24hrs in advance.

‘A further simplifi cation for the application procedure of the ‘regular shipping service’, a customs facilitation scheme for vessels, carrying mainly EU goods, sailing to the same European ports on a regular basis, is a fi rst part of the package’ 189.

Need 1:

As the ‘on-board Commission’ procedure takes place regardless of the regularity with which vessels or crew visit the GIFP and new fi rst –time vessels are a rare occurrence the use of risk analysis in these circumstances would be better employed to reduce the time needed to complete offi cial procedures, bring down costs and help to improve the detection of irregularities and violations.

To assist in achieving these objectives all the BCS (led probably by the MDBP or MDCS) should consider ending the use of the ‘on-board Commission’ as a routine and mandatory instrument with which to perform and maintain the control of vessels arriving and departing from/for foreign at GIFP including those that export livestock and instead utilise risk based controls to replace the current practice with the internationally accepted system of ‘Free Practice“ which would further allow for the more effi cient and eff ective use of human resources..

In the opinion of the Head of Giurgiulesti 2 Border Police Station, there are insuffi cient personnel with which to to conduct satisfactory border control surveillance activities. According to information provided there are on average only 2 MDBP offi cers deployed as cover for the port and rail BCP combined. When engaged in ‘on-board Commision’ duties this has the potential to leave both BCPs without an immediate MDBP presence and no eff ective capacity to undertake activities such as ship rummage. Furthermore, offi cers engaged to work at GIFP have not received any specilaised training for maritime or river border controls, which should be addressed by the MDBP. Similarly ANSA inspectors are required to cover the port as well as other locations, in this case the adjacent Giurgiulesti rail BCP and road BCP at Giurgiulesti- Galati leaving the agency equally stretched in terms of available resources for the port.

Granting of ‘Free Practice’ - increasingly via electronic approval and e-signature - allows for the immediate discharge of cargo on arrival at the port, allowing the possibility to dispense with the controls performed by the ‘on-board Commission’. Advance application for ‘Free Practice’ in addition, provides the opportunity for the BCSs and in particular Customs to begin a process of pre-arrival risk analysis - a key enabler for improving trade facilitation. Currently there is no provision within the Technological Norms of the BCSs for ‘Free Practice’ at GIFP and consequently the procedures that involve the creation of an ‘on-board Commission’ continue.

189 European Commission, MEMO. 8 July 2013 Blue Belt refers.

79

Moreover, the ‘Technological Norms’ which outline the mode of control and supply of services are - it is understood - only eff ective at Giurgiulesti Passenger Port with the most recent documents signed in 2013 singularly by the MDCS. Veterinary and Phyto-sanitary controls mentioned within the text for the import, export and transit of goods are only described in more detail in Section ‘B2’ for the exit of passenger vessels while other consignments including the export of livestock are processed on a regular basis at the port. It is therefore recommended that, if not already in process, new ‘Technological Norms’ should be elaborated in line with EU best practice and should be ratifi ed by all relevant services in respect of the controls for both the passenger port and GIFP. The MDCS should revive the cooperation established in 2015 through the working group of all the border control services at GIFP in order to amend and update the existing ‘Technological Norms’.

Gap 2: Time release exercises

Time release exercises which measure the time needed to complete clearance procedures at the port are currently absent. According to information available there are no records that provide any basis for a benchmark. Furthermore it is understood that the 4hr time limit stipulated in the Customs Code within which Customs clearance should normally be aff ected does not apply at GIFP190. Although not part of this study it is recommended that the template of a similar exercise completed for the Ukrainian Ports of Odessa and Illichiv’sk is used at GIFP for future time measurements to assist in guaging the effi ciency of clearance procedures as part of BCS regular activities.

Need 2:

Time release exercises need to be regularly conducted by the BCSs and the resulting statistics published in order to increase effi ciency, transparency and boost trade facilitation dialogue between the authorities and businesses engaged in the clearance of cargo.

Table 6: Summary of Procedural Gaps.


ProceduresCustoms

Gap 1: Implementation of Simplifi ed Procedures & Authorised Economic Operators (AEO) ConceptGap 2: Duty Deferment & GuaranteesGap 3: Risk Analysis at GIFPGap 4: Valuation, Classifi cation, Origin and Post Clearance Control & AuditGap 5:Transit and New Computerised Transit System (NCTS)


Gap 1: Advance InformationGap 2: Phyto-sanitary procedures

Inter-agency Border Agency Gap

ProceduresBorder Police, Customs, Veterinary & Phytosanitary

Gap 1: Reforms to ’on-board Commission’ proceduresGap 2: Time release exercises

190 No me release exercises were performed in order to measure the clearance procedures at the port. According to art.199 of Moldovan Customs code the maximum clearance me per declara on is up to 5 days, in case of highly perishable goods – up to 3 days. In addi on to that Order 303 s pulates that if the declara on is released via Green Channel the maximum me is set to 20 minutes. If these 20 minutes are exceeded the customs officer dealing with the declara on must complete a report explaining the reasons which caused the delay. If the declara on is released via Yellow Channel the maximum

me is set to 90 minutes. Every week the sta s cal data about the declara ons’ me of release is being reviewed at Cahul CH.


80

Communication & Information ExchangeIntroduction

The need to establish good co-operation and coordination when considering working relationships between BCSs at the Inter-agency and International levels lies at the heart of trade facilitation and the EU IBM concept. The development of a comprehensive, sustainable framework of agreements and Memorandums of Understanding (MOUs), including also with business at the GIFP still requires further development. The Customs Blueprints Chapter 8 Trade Facilitation; encourages the ‘close partnership between Customs (and other relevant governmental authorites, where appropriate) and the trading community through transparent, effi cient and eff ective procedures’ to ensure that that the needs of legitimate trade are taken into account.

Additionally, inter-connected Information Communication Technology (ICT) systems that allow information to be shared and exchanged, particularly for the Veterinary and Phyto-sanitary services, need to be implemented.

European Union best practice in the area of communications is able to demonstrate a number of positive measures which can help to remove rivalry and/or suspicion and build trust if adopted by the BCSs of Moldova. Functional workfl ows and clearance control procedures should be harmonised, streamlined and coordinated between the BCSs whenever possible with an emphasis on the application and implementation of joint controls, to avoid duplication, and the best use of resources. At GIFP no delays were reported by business in relation to duplication of processes between the BCSs. Nevertheless, through the elaboration and implementation of Memorandums of Understanding (MoUs) and Inter-agency cooperation agreements more eff ective areas for collaboration, which positively assist trade facilitation can be established.

A comprehensive approach to communication, information and data exchange should be taken and agreed upon by all border agencies In order to institutionalize communication and information exchange.

Customs

Intra-service

Gap 1: E-Customs implementation & fully automated processes

One of the key strategies for the development of the Customs Administrations worldwide and especially in the European Union is the movement from paper to electronic documents, e-signatures and overall automated processing of all customs functions. This reform is also a key enabler to a number of other strategic initiatives, such as the implementation of pre-arrival cargo information, simplifi ed procedures including the AEO concept and the Single Window.

The widespread introduction of Information Communication and Technology (ICT) systems is assisting the simplifi cation and harmonisation of border procedures allowing the border services to become more consistent in their application of controls and making business compliance more easy to achieve.

81

Nationally the MDCS has implemented ‘ASYCUDA’ and electronic customs clearance procedures (e-customs) were implemented in November 2013 for imports and exports191 - recognised by the World Bank and international trading community as positive developments. The expansion and steady upward trend in the use of electronic customs declarations by business, encouraged by Customs is supported by statistical data that showed that at the end of 2015, 64.99% of all exports were processed by electronic export declaration. This simplifi cation has been further enhanced since March 2015 enabling all economic agents to declare imports electronically as well192. The use of automation in customs clearance procedures has undoubtedly had a positive impact both in terms of the speed in which declarations are processed and also in reducing opportunities for corruption.

In addition as stated in response to the EUBAM questionnaire, there have been no delays at the port in relation to the methods employed for the payment of duties and fees and that in the view of business there was no need to introduce changes to the current method of paying Customs duties or other port / border control service fees in order to speed up the clearance process.

The implementation of e-customs can undoubtedly have positive eff ects by reducing administrative barriers to trade and decreasing the opportunities for ‘rent-seeking’ behaviour a� er registration. In addition, it can assist in increasing the fl ow and volume of information exchanged with foreign customs administrations and law enforcement agencies. The advantages of submitting e-declarations - well understood by the trade - include:

• Decrease in time of customs declaration processing;• Reductions to the congestion of forwarding agents at customs registration desks;• A shi� away from paper document turnover;• Introduction of new technologies in the customs clearance process;• Possibility of electronic submission of declarations 24 hours a day; • Distant informing of declarants about different forms of required customs control or about re-

lease of goods for free circulation.

Need 1:

The MDCS should take encouragement from the level of the take-up of submission of electronic declarations for import / export as well as the positive reaction from the business at GIFP. This should provide continued motivation for the administration to ensure that compliance with the EU e-Customs legislation, in particular with the Decision 70/2008/EC on the paperless environment for customs and trade, also referred to as the “Electronic Customs Decision” (OJ L 23 of 26 January 2008) and the Electronic Signature Directive – Directive 1999/93/EC of the European Parliament and of the Council of 13 December 1999 on a Community framework for electronic signatures (OJ L 13 of 19 January 2000) is maintained as part of their national ICT programme .

191 Government Regula on No 904 of 13.11.2013 on electronic customs clearance of goods, published in Official Gaze e Nr. 258-261 of 15 November 2013 ‘allows to perform import declara ons by using the electronic procedure star ng from September 1, 2014 at Customs House Chisinau Customs Ungheni - customs post, Sculeni-Sculeni Customs House Bender - customs post Tudora-Starokazacie, and as of March 1, 2015 - to all customs posts’’: h p://lex.jus ce.md/index.php?ac on=view&view=doc&lang=1&id=350292 refers.

192 In order to simplify the customs procedures related to electronic import the norms on electronic customs clearance procedure at the import of goods were approved by the Customs Service Order no. 75-A of 26 February 2015. At the end of 2015 4.45% of imports were processed electronically and by 01.06.2016 this had risen to 16.03% with export declara ons reaching 97.86%.


82

Fig 5: Customs Processes & ICT Building Blocks

Entry and Exit

Points

Entities

Controlled or

Aff ected

Controls

RequiredStrategies IT Elements

—Seaport—Airport—Border or free zone—Inland controlled area—Post offi ce

—Shipping and airline companies and agents—Post offi ce—Transport companies and agents—Port managers—Airport managers—Free zone managers—Importers—Exporters—Customs brokers—Freight forwarders—Warehouses—Other regulatoryagencies (Immigration;Agriculture; Health; CulturalHeritage; Police; Central Bank)—Banks—Ship or airline crew—Drivers—Passengers—Entity employees

Physical—Secure entry and exit—Secure movement—Secure storage—Inspection—Seizure

Information—Summary data (manifest)—Clearance data (bill of entry)—Verifi cation data(inspection, additional info., audit)

Authorities to deal with goods—To land (goods and mode)—To move—To store or unpack or break bulk—To treat or transform—To dispose

Information—Planned and targeteddistribution of information on legal requirements, policies, procedures, incentives, facilities, andsanctions

Facilitation tools—Gathering and mobilizingknowledge —Single regulatory window clearance for transport mode, goods, and passengers—Prerelease of cargo andpassengers—Client accreditation—Periodic declarations—Advanced customs declarations—Electronic processing, payment, and clearance

Control tools—Advanced cargo and passenger information—International customscooperation—Eff ective threat assessment (intelligenceservice)—Risk management and profi ling—Post-clearance audit—Mobile inspection and audit teams

Conveyance registers—Ships—Aircra� —Land transport Report (inward and outward)—Ship’s manifest—Aircra� manifest—Load list—Consolidations (including couriers)—Passenger manifest—Crew list—Stores list

Licenses and permissionsBy customs—Store—Move—Pack and unpack—Consolidate and deconsolidate—Dispose

By other parties—Reference data—Licenses—PermitsDeclaration regimes—Importation for home use—Exportation—Warehousing—Transit—Transshipment—Carriage of goods coastwise—Inward processing—Outward processing—Drawback—Processing of goods for home use—Temporary admission

Goods declaration data—In accordance with WCO Data Model and including data fi elds necessary for all agency regulatory requirements

Results of physical (by inspection) and documentary (audit) verifi cations—Automated, online, real-time input of results in standardized formats—Categories—Variations—Treatment (consequences)

Intelligence profi les—Information that has beenanalyzed, classifi ed, and converted into profi les for targeting

Source WB: Customs Modernisation Handbook Page 291 refers

83

Gap 2: Memoranda of Understanding (MoU) with the private sector

Strengthening cooperation between Customs administrations and the private sector by enhancing the exchange of information and developing a broader awareness of the role of the Customs as well as the threats posed by cross-border crime through the establishment of mechanisms that facilitate regular meetings and signing MoUs with Moldova’s trade associations and manufacturers, are measures proposed and advised by the ICC revised Customs Guidelines (2012) and EU revised Customs Blueprints (2015) Chapters 8,11,12,13 & 15 refer.

Customs, should seek to actively enhance their engagement with local businesses at the port and conclude agreements and MoUs with trade representatives, economic operators, shipping companies, container lines, freight forwarding companies and other related organisations as well as other BCSs particularly with regard to the purpose of exchanging information that enhances trade facilitation and the development of risk analysis to accelerate and enhance selectivity during controls. Mechanisms e.g. working groups which allow for consultation and discussion amongst the BCSs and port users concerning clearance, transport and logistical issues should be encouraged, established and maintained.

‘Without formal consultations with the trade, Customs may not be able to dra� laws and regulations that take into account the needs of the business community. Consequently, such laws and regulations could lack the vitally important balance between trade facilitation and control, giving a negative impact on the economic and social development of the country’ 193.

Need 2:

As the major BCS with responsibility for the clearance of cargo at the port the MDCS needs to implement a systematic process of developing and signing MoUs with the major trade and transport bodies in the private sector in order to develop and enhance the concept of trade facilitation and compliance aligned with the international co-operation guidelines e.g. as specifi ed for Customs in the ICC Customs GuidelinesNo.31 where MoUs are recommended ‘to improve and promote co-operation with the trade community in the areas of trade compliance, security, and eff ective interdiction of customs fraud, drug traffi cking, infringements of intellectual property rights and threats to endangered species’.

Other important aspects of co-operation need to include involvement of private sector companies in the Customs regulatory process, on a permanent and institutionalised basis. Formal trade consultation is becoming more and more important on a regional and international level due to increasing globalization. Formal consultative relationships with the trade are required by Standard 1.3 of the Revised Kyoto Convention.

Analysis of the EUBAM survey questionnaire gave a confusing picture and a lack of awareness as to the regularity of consultative meetings that take place at the port between the border control services, port operator, port authorities and members of the trading community or the establishment of port working groups where common issues might be discussed. However, as described in the ICC Customs Guidelines, in particular Guideline 29;

‘the most practical solution is to establish a formal consultative committee representing all major trade partners, including exporters/importers, agents, banks, carriers and insurers. Provided that Customs has specifi cally trained staff , such formal committee structures should be complemented by client-managers who maintain regular contact with compliant traders. This committee should also arrange for ad hoc seminars, workshops and conferences on subjects of special interest. The consultative committee should be managed by Customs, but it is possible to have co-chairs, one from Customs and one from the business side. Where possible, export development agencies, port authorities or Chambers of Commerce should play a vital role and, in some cases, may operate the Customs consultative committee, usually with full support of the Customs administration’ 194.193 h p:// ig.unece.org/contents/formal-trade-consulta on.htm refers.194 h p:// ig.unece.org/contents/formal-trade-consulta on.htm


84

The establishment of an independent regional ombudsman as a medium for approaching the administration to deal with queries from the trading community specifi cally responsibility for the GIFP, specialised in customs matters, could also be considered as another ‘best practice’ initiative195. In addition, to secure all available information on passengers, crew and freight - both loose and containerized - as recommended by the EU revised Customs Blueprints Chapter 12: Investigation and Enforcement, Section; 12.13 the MDCS should conclude agreements with the appropriate shipping and ferry lines.

EU Best Practice: Finland, Lithuania & Croatia.

Lithuania regulates co-operation, both Inter-Agency and with the private sector using an extensive network of bilateral and multilateral MoUs. It has well developed international co-operation on bilateral and multilateral levels.

Croatia bases its Inter-Agency co-operation on the MoU signed between the Ministries of the Internal Aff airs, Finance, Agriculture and Health and the State Inspectorate. In addition, the law196 regulates that Customs can perform complete border control at certain BCPs.


Inter-agency

Gap 1: Development of inter-agency agreements

CC Art. 185/4 describes the required interaction between Customs and other agencies including; public authorities that perform controls at the time the goods cross the customs border of Moldova. Inter-action between border controls services which enhance co-operation and coordination is acknowledged as being fully in-line with ‘best practice’ as indicated by the EU revised Customs Blueprints.

However, Inter-Agency agreements that set the conditions for successful implementation of the regulations governing the inter-action between the BCSs at the port signed at both the central and local levels appear to be in need of further development. to take account of business and traveller expectations e.g. as already mentioned in Procedures Customs, Veterinary & Phyto-sanitary, Inter-agency Gap 1: Reform of the ‘on-board Commission’ in respect of technological norms at GIFP.

Need 1:

There is a need to elaborate, further develop, introduce and implement Inter-Agency (service level) agreements between all the BCSs at GIFP in order to formalise at the central and local levels procedures necessary for the effi cient exchange of information, joint inspections, examinations and the taking of samples as well as other operations and activities where co-operation, coordination and inter-action between the BCSs is required. Inter-Agency agreements need to also include provisions for harmonising working practices and working hours and the need to establish regular meetings that enhance collaboration between diff erent governmental authorities involved in international trade.

In addition, the business community including shipping lines at the port should have a recognised mechanism for meeting regularly with Customs or other Border Control Services / Port Authority at the Central, Regional and /or Local levels in order to discuss national transport and logistic problems related to clearance of consignments. Furthermore, a GIFP working group or committee should be established which includes regular operators or users of the Port and the Border Control Services where common issues could be raised and discussed.

195 The ICC Customs Guidelines Policy Statement Document No. 103-6/12 – (June 2012) 195refers.196 Law on Border Control (Official Gaze e 173/03), Ar cle 4 (3) 196refers.

85

Gap 2: Improved public information

The MDCS has a legal obligation under MDCC Art. 2023 to provide information concerning customs legislation to the public. Customs and the Veterinary & Phyto-sanitary services have each introduced free-phone / ‘open-lines’ services as a means of receiving information on illegal activities and corruption. In addition, all border controls services operate and maintain Internet portals where information and news concerning their organisations are posted. However, despite good progress BCS websites are not always regularly updated and contain in varying degrees, longstanding potentially outdated information. In addition, not all webpages are in English or another neighbouring country foreign language. High profi le public information strategies have been successfully adopted by EU member state BCSs that off er information to the general public on their activities and additionally provide contact details allowing for questions to be posted.

Need 2:

All the BCSs need to take measures to improve the publicising, broadcasting, display and dissemination of information for the public. Business, in response to the EUBAM survey expressed an opinion that there is need for the BCSs to make the publication of information via all media outlets, but particularly through governmental websites and internet portals, more easily accessible, timely and current, less confusing and less overloaded with instructions, regulations and orders which were considered diffi cult to understand. BCSs therefore should try to ensure that the provision of information to business and the public is a priority and regularly updated.

In addition, the BCSs need to consider initiating and participating in campaigns that assist in obtaining public support and awareness of the work they perform and how it contributes to the overall benefi t of society, whether in terms of the generation of revenue, general food health and safety or the protection of society from the harmful eff ects of drug smuggling, IPR goods or terrorism in the detection of arms, ammunition and WMD.

All Border Controls Services need also to consider reviewing and where appropriate applying of the type of campaigns organised in other countries, which have proved positive in delivery of information, enhancing their public reputation and increasing levels of transparency, for example:

• Launch ‘Stop’ e.g. Human Trafficking, Drug Smuggling, Counterfeiting, Piracy and Intellectual Property Crime, and other similar campaigns, including Anti-corruption;

• Publish all customs regulations and make them available to the public through the most modern and practical media, while ensuring that existing and new regulations and legislation are simple in form, content and presentation;

• Consult systematically with the business community in order to obtain their views on proposed new regulations and procedures, or amendments to existing requirements, giving them timely notice of any changes;

• Ensure timely distribution and availability of Customs regulations and public notices, including their English and regional language translations. Examples, in relation to international border related issues, include: notices on prohibited goods, instructions on the import and export of goods, as well as valuation, tariff classification and origin197 etc. in simple form, content and presentation;

• Further develop websites with the provision for allowing questions to be posted on-line to the competent authority.

197 h p://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ShowContent&id=HMCE_CL_ 000191&propertyType=document Examples of the type and range of subject covered by public no ces issued by HMRC in the UK refers.


86

Best Practice: UK, fYRoM198 & US

The UK Border Agency has a comprehensive website which provides extensive information concerning the management and functioning of the Agency. In addition to providing details of powers and procedures, it allows the general public and the trade an inter-active e-portal199.

The Customs Administration in fYRoM has developed a user-friendly website which includes: recent detections, the submission of questions and comments, free-phone line information, procedures, documentation, passengers’ allowances, training, anti-corruption measures, etc. The website is also in Albanian and English200.

In the US the Customs and Border Protection Offi ce of Public Aff airs provides practical and relevant information at its website201. &202

Gap 3: Port & Border Control Service user satisfaction surveys

A service-oriented methodology is considered by the EU and many other countries as the modern approach for Customs and other State BCSs to follow in regard to the implementation of trade facilitation. This strategy moves the BCSs and business community to a position where co-operation, collaboration and the exchange of information not only benefi ts and facilitates trade, but at the same time helps to protect society and create safe and secure borders. Changes in procedures due to amendments in legislation and policy made by Customs and the other BCSs directly aff ect business and the trading community in their day-day operations and costs.

Businesses at GIFT expressed their dissatisfaction that they were not always suffi ciently informed, consulted or provided with information by Customs in advance of any proposed changes to legislation, policy or procedures and were le� with no alternative but to search for information on the Customs website or via custom broker companies in order to access relevant trade information published by Customs.

Within a framework of professionalism and partnership the BCSs should try, where and whenever possible, to meet regularly and consult with the business at the port - preferably in advance to communicate any signifi cant proposed legislative amendments. It is extremely pleasing to be able to report that positive changes in organisational attitudes and behaviour were noticed and detected at grass-root and senior management level by businesses as expressed in the survey conducted by EUBAM.

Nevertheless the Border Controls Services, Port Authority or Port Operator have not - as far as is known - undertaken user satisfaction surveys in order to fi ne-tune their operations based on constructive feedback and the end-user opinions from their clients. The BCSs are advised to seek out such views and opinions and to take them seriously.

Need 3:

The Port Authority, Port Operator and BCSs need to actively consider business opinions, concerns and considerations and become even more focused on the development and implementation of trade facilitation at GIFP. Regular and systematic consultation with the business community at GIFP needs to be conducted in order to obtain their assessments of proposed new regulations and procedures, or amendments to existing requirements, providing timely notice of any changes in the areas of; trade compliance, security and eff ective interdiction of customs fraud, drug traffi cking, 198 Former Yugoslav Republic of Macedonia (fYRoM).199 h p://www.ukba.homeoffice.gov.uk/policyandlaw/guidance/ refers.200 h p://www.customs.gov.mk/en/DesktopDefault.aspx?tabindex=0&tabid=1 refers.201 Examples of such informa on include: border wai ng mes, travel advisories (e.g. what can be brought into country, which travel documents are accept-

able or not), informa on concerning how to pose a ques on, sugges on, complaint or provide informa on on suspected ac vi es/persons (mul ple channels are provided, including free-phones with easily recognizable numbers – 1 800-BE-ALERT – e-mail addresses, etc.), informa on on Trusted Traveller Programme and the link to apply; and informa on for the media (press releases, speeches, news items, magazine and many other mul media products).

202 www.cbp.gov refers.

87

infringements of intellectual property rights and threats to endangered species. The publication of a regular newsletter as an appropriate means of communication by Customs would also meet with business approval. In addition, an annual port user satisfaction survey, which provides an opportunity for comment and analysis of procedures and processes, should be introduced and would be welcomed by port users to encourage and develop a deeper sense of co-operation and coordination between all parties and stakeholders at the port.

Gap 4: Inter-agency exchange of information including links between BCSs databases

The ICC revised Customs Guidelines fully supported by the EU revised Customs Blueprints, Chapter 16 recommend that when introducing and implementing computer applications, customs administrations should endeavour to;

• use relevant internationally accepted standards adapting wherever possible widely used technologies; • implement information technology in consultation with all relevant directly affected parties; • provide automated systems for the payment of duties, taxes and other fees by electronic means; • operate a nationwide automated system to provide electronic filing facilities for the trade com-

munity in respect of declaration data to be submitted at import and export and for bank and corporate sureties in respect of duty and tax guarantees and surety bonds;

• possess an ability to transmit and receive data nationally and internationally, using appropriate international standards including especially, the WCO Data Model;

• make tariff and related information data available worldwide to the trading community from an automated system;

• establish and operate an automated enforcement information system, using risk- assessment and other modern control techniques;

• actively support the use of national single window whether or not it is within the purview of the customs authorities.

One reason put forward by business for not taking full advantage of Incomplete Declaration Procedures (IDPs) and Simplifi ed Declarations Procedures (SDPs) is that the ICT solution currently used by the Moldovan Customs Service – ‘ASYCUDA World’ - does not include the necessary functionality to process these declarations. Information provided by MDCS indicates that a new upgraded version of ‘ASYCUDA World’ is being considered, which should also enable the full functionality for IDPs and SDPs, but this is still some time away from being fully implemented.

Of equal importance to the future growth and commercial success of GIFP is the need to expand the use of ICT systems that support port user requirements, particularly related to the handling of inter-modal containerized traffi c.

ICT systems that electronically link port administration, terminal operators, transport companies, freight forwarders, carriers, ship agents, together with customs and the BCSs and other members of the port community are o� en referred to as ‘Port Community Systems’ and are the fore-runners of Single Window systems.

The ports of Odessa and Chornomorsk introduced a Single Window – Local Solution port community system203 similar to that implemented in other port environments in order to allow the sharing of information and to facilitate trade. Such systems normally operate in two functional work areas: shipping services and cargo movement.

• Shipping services - a port community system handling vessel arrival & departure operations in-cluding pilotage, berth allocation, arrival/voyage booking and billing, and the various certificates and ship papers relating to the vessel and crew;

203 Annex XII ISPS Single Window refers.


88

• Cargo movement- refers to bulk, general cargo and container handling, labour (stevedores), con-tainer storage, physical inspection facilities of BCSs and where necessary, gate management, transport booking and road/rail onward transport.

When these systems are connected together in a Port Community System, it becomes possible for all legitimate businesses which move and clear goods within the port to track their cargo from arrival to departure and vice versa. Because of its central role, Customs is frequently considered to be the most appropriate border authority to receive and coordinate the fl ow of information through a single entry point particularly concerning the regulatory requirements of other BCSs.

Port Community System204

Most major ports have systems for the exchange of information between clients and national Customs and other authorities. Port Community Systems are a form of Single Windows for Trade. The European Port Community Systems Association (EPCSA) defi nes a Port Community System as; ‘a neutral and open electronic platform enabling intelligent and secure information exchange between public and private stakeholders in order to improve the competitive position of the seaport communities. A Port Community System optimizes, manages and automates logistics-effi cient processes through a single submission of data, connecting transport and logistics chains’. Port Community Systems handle electronic communication in ports between the private transport operators (shipping lines, agents, freight forwarders, stevedores, terminals, depots), the private hinterland (pre- and on-carriage by road, rail and inland waterways), the importers and exporters, the port authorities, Customs and other authorities.Typical services of a Port Community System are:• information exchange between transport operators in the port and for hinterland connections,

the port users, Customs, port and other authorities,• electronic exchange of Customs declarations and Customs responses, and cargo releases

between private parties and Customs,• electronic handling of all information regarding import and export of containerized, general and

bulk cargo for the port community, status information and control, tracking and tracing goods through the whole logistics chain,

• processing declarations of dangerous goods with the responsible authorities.One of the most useful functions of a Port Community System is to automatically derive, from information exchanges between the private port operators, that information needed by Customs, such as the Customs manifest. This information can then be sent to Customs without further manual intervention. Most Port Community Systems have their own internal standards but communicate with other Port Community Systems or Trade Communities using international standards, in particular those developed by UNECE-UN/CEFACT. The European Port Community Systems Association (EPCSA) has also published a white paper EPCSA White Paper - Issue Date 15th June 2011-2, on national maritime Single Windows, which need to be established in the EU, and which follow the IMO recommendations on maritime Single Windows.‘The technology provides port users with real time data on the status of cargo, paperwork, and availability of port facilities, and enables ships and terminals to be part of an integrated offi ce infrastructure. IT reduces time for delivering cargo; provides more accurate transfer and recording of information; reduces manpower for port operation paperwork; off ers advance information on ship, barge, truck, wagon, container, and cargo movements; and improves planning and coordination of berths, handling equipment, and storage facilities. Ports unable or unwilling to keep pace with information technology will be le� behind in the competitive ocean transport market.’ 205

204 h p:// ig.unece.org/contents/port-community-systems.htm refers.205 World Bank Port Reform Tool Kit Module 2, p28 refers.

89

Fig 6: Port User Information System – Types of processes and documents that Port

Community Systems can facilitate and manage.

Source: World Bank Port Reform Toolkit Module 2 refers.

Table 7: Single Window Benefi ts.

• Manifests and associated amendments• Customs release notes• Bonded removal documents• Ships out-turn and discharge reports and amendments• Local transshipment documentation• Lines’ commercial release• Acceptance of rent and storage charges• Delivery instructions to transport operators (road and rail)• Export delivery advice• Export load list• Loading lists• Loading reports• Export Customs declarations• Customs examination and sealing requirements


90

• Port Health Customs preventive and other government department requirements• Shed and warehouse out-turn reports and amendment• Customs declarations for export• Ships planning notifications and amendments• Hazardous goods reporting• Benefits for Port Operator• Information and preplanning for physical operations• Single gateway via FCPS to Port users system• Automatic writing off of manifests and customs entries• Paperless releasing of import cargo• Paperless notification of Customs status• Paperless transshipment notification and approval• Paperless export load lists• Enhanced facilities for late runners• EDI dangerous goods notification• EDI status messages for customers• Local messaging facility• Full audit facilities

Source: World Bank Port Reform Toolkit, Module 2 refers.

Furthermore, there is a need given the legislative and operational requirements for inter-action between the BCSs at the port to develop a strategy for sharing and exchange of confi dential information based on the results of risk analysis and/or intelligence. This lack of inter-connectivity between Customs ICT systems and the databases of other BCSs has been identifi ed by the MDCS and measures to address these issues are in progress. Equally, direct connection to the external systems and databases operated by shipping agents and container lines to gather increased pre-arrival information for the purposes of augmenting risk analysis is considered to be another developmental priority area by the BCSs particularly for Customs.

Need 4:

In order to implement and make Customs Simplifi ed Procedures fully available to all economic operators there is an urgent need to begin the development and/or upgrade of the ICT solutions currently used by the Moldovan Customs Service. ICT systems need to incorporate the functionality to process the legally implemented incomplete declaration procedure (IDP) and simplifi ed declaration procedure (SDP)206 further facilitating trade and commercial expansion at the port of Giurgiulesti. So� ware that allows connection between the ICT systems of the MDCS and the line operators (Danube logistics and MSC, China Shipping etc.) for the provision of on-line information in regard to containers that remain in the port is also considered an area that should be for discussion and development between the relevant parties at the port - although a reluctance to allow direct albeit restricted access to commercial databases was communicated in the EUBAM survey.

On a positive note amongst the BCSs, already since June 2016 following a period of trials, ICT links have been established which allow connection between the MDCS ASYCUDA system and the information systems of the Veterinary or Phyto-sanitary Services (ANSA) for the assessment of shipments within the fi rst 24 Chapters of Harmonized Tariff System which enhance methods of risk analysis in-line with EU ‘best practice’ as highlighted in the EU Customs Blueprints and EU IBM Guidelines.

206 Republic Of Moldova Customs Service Informa on Technology Strategy Plan 2016 – 2020 refers.

91

Following the example of other ports in the region the establishment of a local information network or Port Community System by the port administration specifi cally designed for the exclusive use of the BCSs and port operators would also serve to establish a standardized secure communication platform between the authorities, stakeholders, potential customers and local trade organizations allowing for the exchange of information and increase the competitive position of GIFP by eliminating opportunities for the formation of bottlenecks and delays in cargo handling. Electronic real-time data exchange, via a port community system could potentially improve effi ciency at all stages of the process from the completion of manifests through to vessel discharge and loading.

Best Practice: United Kingdom

The Port of Felixstowe introduced a sophisticated information technology system to electronically link members of the port community. The system, managed by Maritime Cargo Processing covered more than 70% of containers passing through British ports, supporting 630 corporate organisations with more than 2500 users in 18 geographical locations within the UK. It handled then 32.5m transactions and 22.5m electronic data interchange messages.

V eterinary & Phyto-sanitary Services

International

Gap 1: Information Technology

In the EU four database systems are used to monitor and exchange information between Members States and approved third countries with regard to the control of veterinary and phyto-sanitary goods and products at import, export and transit, as follows:

• The Sanitary and Phyto-sanitary (SPS) Export Database207 - provides a fast exchange of infor-mation between Member States, and a coordinated response to sanitary and phyto-sanitary threats across the EU;

• Rapid Alert System for Food and Feed (RASFF) & RAPEX for dangerous non-food products – provide a fast exchange of information between Member States, and a coordinated response to food or feed safety and other n on-food product threats across the EU; The systems are aimed at promptly identifying and informing the population about potential risks for health, which may come from the food, non-food products and feeds for cattle.

• Trade Control and Expert System (TRACES) - an integrated web-based veterinary system for facilitating traceability of live animals;

• Animal Disease Notification System (ADNS) – ensures rapid exchange of information between the national authorities responsible for animal health and the Commission on outbreaks of in-fectious animal diseases, including registration and documentation of those diseases208.

At the central level ANSA is in the process of establishing connections to these databases in line with their commitments within the Association Agreement and DCFTA. Expansion in trade between Moldova and the EU has the potential to signifi cantly increase the volume of live animals transports, animal food products, plants and plant material, fruits and vegetables through GIFP requiring the need for further detailed veterinary and phyto-sanitary checks and controls.

In February 2016 the Government of Moldova approved amendments to the legislation, which established the legal framework for implementing and developing the Rapid Alert System for Food and Feed (RASFF). A communication centre will be created consisting of representatives of agriculture, health, the interior ministries, MDCS, the Consumer Protection Agency, as well as ANSA, which will administer the centre and be the national contact for RASFF. When risks are identifi ed applicable to public health, animals or the environment, ANSA will be able to suspend the importation, storage and use of certain food products or feeds in the domestic market, or discuss the creation of 207 www.madb.europa.eu/madb/indexPubli.htm refers.208 h p://www.eprac ce.eu e-Government in the European Commission December 2010 refers.


92

special conditions for handling and processing these products. Members of the RASFF network, are required to immediately transmit information to the EU Commission connected to the identifi cation of products that are found to exhibit risk or poor-quality, with the data being re-directed to all other network members so that the relevant competent bodies can take note and identify the presence - or not - of such products on their own markets.

In relation to the operation of the TRACES system by ANSA, as of June 2016 it is understood that training has been provided to food safety agency inspectors but importing and exporting companies handling goods subject to veterinary & phyto-sanitary control are not yet registered in the system. ANSA inspectors are waiting further instructions. ADNS is also accessible at the central level but not available to inspectors at the port. ANSA is not connected with the SPS Export Database.

Need 1:

As Moldova is in an AA/DCFTA with the EU, ANSA needs to acquire full access to EU and/or other international databases related to their activities - not just at the central level but also at important strategic locations for the import and export of veterinary and phyto-sanitary goods and products such as GIFP – in particular those that are either currently not connected such as the SPS Export Database or are awaiting implementation e.g. TRACES. Full access to all 4 EU veterinary and SPS databases will dramatically assist in the clearance of consignments and goods within their areas of responsibility and competence across the border.

With specifi c regard to the Phyto-sanitary service, EUBAM continues to recommend the benefi ts of a national database with full access in particular for ANSA inspectors at the port of GIFP to;

• record phytosanitary importers; • make available to operators sample certificates and legislation; • create an ICT system/database for the management of plant health activities (registration,

import, export, re-export, transit, movement through the territory of MD, monitoring of harmful organisms etc.).

• create or use an electronic system for the notification of interceptions - similar to the EURO-PHYT209 database.

Lessons Learned – factors that infl uence or help to ensure the success of Customs reforms210.Coordination with other agencies is essential to reap the full benefi ts of the reforms. In no case was it possible to document that trade facilitation was able to extend eff ectively beyond customs, but some reform initiatives explicitly include such objectives in medium- to long-term work programs. Such coordination with other agencies is essential so that ineffi ciencies in obtaining import authorizations related to health, safety, and other purposes—which can signifi cantly delay the processing of trade operations—can be rooted out.

Cooperation between customs and private sector operators was a signifi cant factor in the success of the reform programs. The change in the orientation of customs from a nearly exclusive emphasis on its role as enforcer and collector to one of provider of services, incorporating eff ective service delivery with its revenue mobilization responsibilities, requires strong support from the trade

209 EUROPHYT is a web-based network and database. It connects Plant Health Authori es of the EU Member States and Switzerland, the European Food Safety Authority and the Directorate General for Health and Food Safety of the European Commission. The main features of the EUROPHYT Network are: No fica on of intercep ons: Plant health authori es of the EU Member States and Switzerland enter data about intercep ons they have made of non-compliant consignments into EUROPHYT electronically, via a direct web-link. A Rapid Alert System: EUROPHYT immediately no fies the plant health authori es of Member States and Switzerland of each intercep on. In the case of intercep ons of imports from non-EU countries, the plant health authority of the expor ng country also receives immediate no fica on in the form of an e-mail. Database and informa on system: All no fica ons are stored in a structured database. Members of the EUROPHYT network have full access to the data, making it possible to analyse trends and produce sta-

s cs. Reports: Standard weekly, monthly and annual reports are produced for different users. Reports for the general public are available here. h p://ec.europa.eu/food/plant/plant_health_biosecurity/europhyt/network/index_en.htm refers.

210 World Bank Customs Modernisa on Handbook refers.

93

community. A deliberate outreach program to the private sector, including periodic high-level consultative meetings, can sustain such support. However, the full transparency of regulations, performance indicators, and statistics, will be most important in convincing the trade community. Using clear performance indicators to monitor the progress of reform is essential not only to evaluate progress, but also to adjust the reform measures to changing circumstances without losing sight of the big picture. Customs clearance time was reduced in all the case study countries reviewed.

Table 8: Summary Communications & Information Exchange Gaps.


Communications & Information Exchange Customs

Gap 1: E-Customs implementation & fully automated processesGap 2: Memoranda of Understanding (MoU) with the private sector


Communications & Information Exchange

Customs, Veterinary & Phyto-sanitary

Gap 1: Development of Inter-Agency AgreementsGap 2: Improved Public InformationGap 3: Port & Border Control Service User Satisfaction SurveysGap 4: Inter-agency exchange of information including Links between BCSs databases

International Border Agency Gap



Gap 1: Information Technology


94

Infrastructure and Equipment Introduction

In the European Union the levels of cooperation and coordination between Customs and Border Guard services at BCPs are improved through application of the concept of sharing and/or joint use of border infrastructure, facilities and equipment which is considered to be a key component of integrated border management and recommended ‘best practice’. This practice is demonstrated by for example; Customs and the Veterinary and Phyto-Sanitary services combining their use of designated areas and infrastructure and the use of specialised equipment for the detailed inspection of vehicles and cargo.

Furthermore, the sharing of amenities or specialised resources including service rooms; such as kitchens or common rooms, is also highly recommended taking into account any restrictions that may apply in relation to hygiene and the risk of contamination.

‘Agreements should also be established with reference to joint use of equipment / resources, addressing questions of ownership and priority, maintenance, accountability/ documentation, responsibilities and the limitation of use of specialised equipment by respective specialists. Finally, sharing of resources and joint acquisition/ tendering could also be taken into consideration for reasons of cost-eff ectiveness.’ 211

According to the EU revised Customs Blueprints, Chapter 17: ‘Customs administrations should aim also to develop, maintain and allocate infrastructure and up-to-date equipment that supports the business strategy and enhances business performance through the application of technology’.

Customs

Intra-service

Gap 1: National inter-active database for scanned vehicle images

At GIFP the physical examination of containers is diffi cult and represents a key security and revenue risk. The ability of the BCSs to perform this task efi ciently and eff ectively is an important factor that will help determine for business the future expansion of the port. Currently there is no nationally integrated inter-active reference database of images obtained by Customs mobile X-ray scanners. Need 1:

An integrated reference database of all images obtained from Customs mobile X-ray scanners needs to be created and made available to offi cers engaged on scanning duties at GIFP and other BCPs linking all mobile X-ray scanning equipment, and with the capability to electronically transfer images to a central Customs HQ database with specifi c importance paid to the requirements of the container examination targeting teams present at the port.

Creation of an on-line archive would assist offi cers in making informed intelligence-led risk based selections avoiding the need for unnecessary intrusive physical examinations. Best Practice –Italy

Customs have created MATRIX212, a grid within their IT network at the national level, which receives and stores X-ray scanner results and images from 28 separate Customs locations. The system allows scanner operators across Italy to share information and make visual online comparisons with other compatible images from diff erent Customs districts, and assists risk analysis and the targeting of container traffi c. Other EU member states have already introduced similar systems e.g. Poland and Latvia.

211 ACROSSE Report: Implementa on Plan for Improvement of Procedures and Standardisa on p27 refers.212 MATRIX - Monitoring Ac vi es Targe ng Risk Intelligence X-ray

95

Border Police, Customs, Veterinary & Phyto-sanitary

Inter-agency

Gap 1: BCP and surrounding area surveillance / close circuit television (CCTV) and image capture

The levels of security required to prevent risks associated with illegal migration, humans traffi cking, smuggling, terrorism and other illegal activities at GIFP and the surrounding areas could be enhanced by the installation and operation of a Closed Circuit Television Video surveillance systems (CCTV) which is not currently available for BCSs at the port and adjacent Rail BCP. In addition, images and video obtained from CCTV systems should also be used to enhance the risk analysis, selectivity and targeting process.

Need 1:

BCSs at the GIFP and its immediate surrounding areas including also the adjacent Giurgiulesti Rail BCP need to be technically monitored and lighting needs to be provided for border checks, surveillance and to assist and support risk analysis, selectivity and targeting. As a general rule, all BCPs need to be fenced off and perimeters monitored by cameras and sensors with Camera/Video Surveillance Systems (CCTV systems) to cover the BCP area subject to associated risk.

Articles 63 and 64 – Protection of Personal and Other Data – reference: EU Directive 95/46/EC and the equivalent Moldovan law should be referenced to ensure: the rights of persons to access and correct information, supervised by the relevant data supervisory authority; limits on the use of data and transfer to third persons/organizations. Special provision should be made for the storage of video images collected via video surveillance CCTV systems on BCPs in accordance with the national data protection laws. Wherever CCTV is installed, appropriate signage should be posted warning travellers that they are under video surveillance. Use of pictograms and foreign languages is recommended.

Furthermore, unoccupied buildings within the vicinity of the port or rail BCP have the potential to create a high risk of illegal activity. Such buildings need to be either occupied or demolished, in order to prevent them from becoming hiding places for illegal migrants and/or storage for smuggled goods.

Gap 2: Development of Giurgiulesti rail BCP

Though not part of the study the adjacent Giurgiulesti Rail BCP will in the future be relevant to GIFPs growth and development and requires for its eff ective operation to be subject to systematic planning and structured design. The Rail BCP lacks suitable control and inspection capacities, in terms of infrastructure, equipment and personnel, to undertake the eff ective checking of both passengers and freight and, as a result, conditions for the transport of illegal immigrants and all types of smuggling, including narcotics, and other illicit trade is possible.

Need 2:

The Giurgiulesti Rail BCP needs substantial investment and redesign, in order to bring it into line with EU standards. Rail BCPs with neighbouring countries represent one of the greatest vulnerabilities to the EU’s borders, both in terms of security, as well as cross-border criminality; presenting this BCP with the same problems. Consequently, it is recommended that the following steps should be considered and prioritised not only for the Giurgiulesti Rail BCP but also for all other Moldovan Rail BCPs and include:

• Existing legislation should be fully implemented requiring the provision of advanced passenger and freight train information;

• Joint Border Police and Customs controls should be conducted on-board the passenger trains;• The layout of tracks at rail BCPs should be redesigned to accommodate a clear separation of

passenger trains / freight traffic / hazardous materials, as well as providing dedicated sidings to allow for detailed search/examination;

• A dedicated secure siding and warehouse facility should be provided for any goods seized or held pending clearance by other control agencies (Veterinary and Phytosanitary);


96

• Suitable examination facilities for passengers and appropriate equipment to effectively carry out search controls should be provided;

• Specialist equipment should be made available to Border Police and Customs (e.g. Rail-based X-ray Scanners, Buster and Contraband Detection Kits, Heartbeat Detectors, CO2 Probes, In-fra-red Heat Detecting CCTV and Hand-held Trace Detectors);

• Border Police and Customs should have easy access to detector dogs (e.g. narcotics, explosive and money) including the sharing of service dogs where resources are scarce;

• All Rail BCPs should have secure interview and detention rooms;• All border agency staff working at the Rail BCPs should receive specialist search training in all

types of rail carriages and rolling stock;• Improved telecommunications for Border Police and Customs should be put into place;• Radiation Portal Monitors should be installed at this and all other rail BCPs;• Floodlighting of the control zones should be installed;• All Rail BCPs should have appropriate safety equipment and infrastructure, for dealing with

hazardous / toxic material;• At Rail BCPs where controls cannot be undertaken on-board the trains, appropriate facilities

such as Passenger Control Terminals should be constructed. These facilities will enable the Border Police and Customs to effectively and efficiently process passengers and their baggage;

• In the long-term, all new Rail BCP constructions should be relocated at the physical borderline or a ‘One-Stop’ control for freight trains at an agreed joint manned station in one country (either Moldova or the neighbouring country) should be negotiated.

Gap 3: Covered areas for the examination of cargo & safe keeping of livestock

GIFP lacks suitable facilities that enable primarily the MDCS but also other border control services to eff ectively perform physical examination of cargo on ‘hard’ surfaces and under weatherproof cover, thereby avoiding unnecessary damage to goods.

For the phytosanitary services there are no storage facilities for perishable goods, and for veterinary no areas for the safe keeping (lairage213) or humane treatment of animals subject to sampling, examination, quarantine or secure and safe ramps / gantries to enable the tallying of live animals in 2-3 tier trucks.

Need 3:

As the expansion and long-term growth and development of GIFP is a major objective of the port operator, Danube Logistics needs to ensure that suffi cient clean and dry warehousing capacity is planned and constructed that will allow for the unloading and in-depth physical examination and inspection of all types of cargo and transport, including from containers, by Customs and the other BCSs under weatherproof cover within the port.

In addition, steps should be taken to provide areas of ‘hardstanding’ 214 and suffi cient supplementary / back-up operative equipment (e.g. mobile harbour cranes, straddle carriers, reach-stackers, forkli� s and weigh-bridge facilities etc.) to allow the BCSs to eff ectively perform physical examinations or inspections. Furthermore, for the clearance of veterinary and phyto-sanitary goods and products there is a need for the port operator to consider the provision of adequate temperature controlled storage facilities with appropriate equipment, as well as suitable areas for the safe keeping, quarantine and humane treatment of livestock, while in transit through the port.

The provision of secure and safe ramps / gantries for the tallying of livestock in 2-3 tier trucks together with suffi cient space and facilities for the parking of commercial vehicles should be part of an overall package of measures incorporated within infrastructural and equipment improvements that need to

213 Lairage - A place where livestock may be rested during transit to a market or aba oir or as in this case before loading on to a vessel with watering and feeding capacity.

214 ‘Hardstanding’ - Ground surfaced with a hard (solid normally tarmac or concrete) material suitable for parking vehicles on h p://www.oxforddic onaries.com/defini on/english/hardstanding refers.

97

be urgently considered to bring the port’s handling of live animals into line with EU standards and in accordance with Moldova Government General Decree No. 797 regarding the well being of live animals.

Inter-agency cooperation agreements to include the sharing of infrastructure and all types of equipment at the GIFP should become standard common practice.

Best Practice: Slovenia

The Veterinary Inspection Service work at six Border Inspection Posts (BIPs) built and equipped in accordance with EU requirements. Slovenia’s BIPs have facilities and equipment to house, feed, water, treat and, slaughter animals, approved quarantine facilities for imported birds other than poultry and approved quarantine facilities for live aquaculture animals.


Intra-service

Gap 1: Veterinary & Phytosanitary control facilities at GIFP

Ordinarily in the case of veterinary and phyto-sanitary controls and inspections a lack of suffi cient and appropriate infrastructure can lead to delays in the release of goods which are dependent upon the results of laboratory tests. While veterinary and phyto-sanitary services are available on a 24/7 basis at the adjacent road BCP, apart from the facilities already mentioned the port currently lacks laboratory testing and analysis facilities 215.

ANSA have no special premises for laboratory analysis at GIFP and operate mainly by documentary control and partial check (verifi cation of labels on the fi rst row of cartons). Local representatives of ANSA perform more thorough examinations at the fi nal clearance unit. A project funded by the World Bank has constructed a 2-storey building with premises for laboratory analysis and storage.

Fig 7: UNDP Funded ANSA Laboratory and Storage Facilities at the Giurgiulesti –Galati

BCP adjacent to GIFP.

Need 1:

The ANSA laboratory and storage facilities at the adjacent Giurgiulesti Road BCP are entirely necessary but despite their proximity to the port consignments requiring veterinary or phytosanitary analysis will still have to travel outside of GIFP for sampling and testing. It is not certain at this time if one facility will be suffi cient to service the traffi c of two expanding, separate locations. ANSA therefore needs to consider the allocation of suffi cient resources, infrastructure and equipment independently at a ‘stand-alone’ facility located within the port, taking cognisance of GIFP’s importance as an international gateway and major corridor for the import and export of cargo by sea for Moldova and the surrounding hinterland.

215 UNDP will construct and implement new facili es.


98

Best Practice: Slovenia

In Slovenia the Phytosanitary Inspection Units at all BCPs have closed sanitary premises of suffi cient size, which are equipped as required under EU legislation216. There are platforms for visual inspection and also facilities and equipment for unloading, storage, quarantine and destruction of non-compliant plant cargos. The inspection premises have telephones and a computer network, and standard offi ce equipment (such as copiers, printers etc.).

Gap 2: Protective clothing and other equipment

The use of protective clothing (e.g. laboratory coats, rubber aprons, heavy rubber gloves, and dedicated footwear) that can prevent sample contamination and protect persons from harmful Phyto-sanitary risks is essential and when used appropriately can enhance the speed with which inspections, examinations and sampling can be completed. At GIFP offi cials from the Veterinary and Phyto-Sanitary Services appear to be lacking in such protective clothing and equipment.

Need 2:

Suitable and appropriate protective clothing, which meets international safety standards for undertaking veterinary and phyto-sanitary duties should be provided to inspectors engaged at the port. Currently it is understood that the only equipment provided by the Service is the uniform.

Other items of basic equipment in accordance with European Union standards are needed, for example; fl ashlights, infra-red thermometers, bar-code readers, items of protective clothing including; gloves, boots, masks and glasses etc. which are it is understood, currently obtained using inspectors’ own resources. It is envisaged that when the laboratory at the adjacent Road BCP will be built and is operational, the situation will change and the Service will provide the necessary equipment.

In consideration of GIFP’s strategic importance and in order for ANSA Inspectors to be able to carry out their duties eff ectively in the best public interest the Agency should take immediate steps to procure and distribute to their staff engaged at the port, the appropriate, necessary and suitable protective clothing and equipment necessary to perform inspections, sampling and testing of consignments including elaboration and dissemination of the appropriate protocols for the sanitising of equipment.

Table 9: Summary of Infrastructure & Equipment Gaps.



Customs Gap 1: National inter-active database for scanned vehicle images




Gap 1: BCP and surrounding area surveillance / close circuit television (CCTV) and image captureGap2: Development of Giurgiulesti Rail BCPGap 3: Covered areas for the examination of cargo & safe keeping of livestock


Gap 1: Veterinary & Phyto-sanitary control facilities at GIFPGap 2: Protective clothing and other equipment

216 Equipment includes; Microscopes, stereo microscopes, laboratory tables, sieves, sealing pliers, and probes for taking samples.

99

ConclusionsGiurgiulesti Port is the only maritime gateway for Moldova’s world trade. The volume of cargo through the port is continuing to expand. The border control services act as ‘Caretakers of Moldova’s Borders’, responsible for collecting duties and taxes; preventing illegal migration, human traffi cking, smuggling of revenue goods, narcotics, arms, weapons of mass destruction (WMD) and other illegal and/or prohibited goods. In addition, they have a duty and responsibility to safeguard public, plant and animal health, the environment and cultural heritage and with increased signifi cance to assist at the front-line the fi ght against organised and cross-border crime, protecting the country against international terrorism.

The challenge for all the BCSs is to eff ectively manage border security while facilitating legitimate trade and transport and indirectly to stimulate and encourage the growth of commerce and employment, a subject of major concern for all those connected to activities at GIFP. The realisation of these goals requires a modern, fl exible approach and the ability of the BCSs to adapt and adjust rapidly to changes in the business environment as well as new and developing risks. Equally the port operator needs to ensure that through the adequate provision of equipment and infrastructure the BCSs are able to eff ectively and effi ciently perform their responsibilities within the shortest possible time.

In order to comply with requirements of the DCTFTA, Moldova’s BCSs are committed to review, develop and simplify their clearance procedures and processes within their own border management systems, taking into account EU and International best comparative practices. Sub-Component ‘2’ of the study has identifi ed 30 separate ‘Gaps and Needs’ across six (6) strategic areas, which if implemented would have a substanstial impact on BCS clearance procedures at GIFP.

Customs and the other border control services at GIFP must continue with their reforms. By doing so they will help to further decrease costs for business, facilitate trade and improve the general investment climate of the port. In more general terms this can only be of benefi t to the economy of the Republic of Moldova. Positive changes will also assist in improving and enhancing the business-friendly, customer-service oriented image of the BCSs, bringing more transparency in their activities at GIFP and importantly reducing the opportunities for corruption.


100

Annex I: Law on Giurgiulesti Port

PARLIAMENT OF THE REPUBLIC OF MOLDOVA

LAW

On International Free Port ‘Giurgiulesti’

# 8-XV from 17.02.2005

(Entered into force on 04.03.2005)

Monitorul Ofi cial of the Republic of Moldova #36-38 art.116 from 04.03.2005 * * *

TABLE OF CONTENTS

Article 1. General provisionsArticle 2. Applicable legislationArticle 3. General Investor and other residents Article 4. Exemption from fees and charges for the exploitation and use of port and port facilitiesArticle 5. Administration of the International Port Article 6. Government representative Article 7. Customs regimeArticle 8. Fiscal regimeArticle 9. Other regimesArticle 10. The employment and social protectionArticle 11. Settlement of disputesArticle 12. State guaranteesArticle 13. Cessation of the International Port activity Article 14. Final provisions In order to ensure execution of provisions of the Investment Agreement ‘On the International Free Port ‘Giurgiulesti’, the Parliament adopts this organic law. Article 1. General provisions(1) International Free Port ‘Giurgiulesti’ hereina� er referred to as International Port is established

in order to accelerate economic development of the south area of the Republic of Moldova, to ensure energy and transport security of the country as well as to develop international trade.

(2) International Port is a part of the customs territory of the Republic of Moldova, separated from the economic point of view, where legislation of the Republic of Moldova is applied taking in consideration exceptions and provisions set forth in this law.

(3) International Port is established for a term of 25 years.(4) The land within the limits of the International Port’s territory is state-owned. The limits and

confi guration of the International Port territory are established in the cadastral plans according to cadastral legislation.

101

(5) The surface of the International Port’s territory doesn’t exceed 120 hectares and includes:a) the territory of oil terminal and refi nery; b) the territory of the cargo terminal;c) the territory of the passengers terminal;d) the territory of International Port development.

(6) The territory of the International Port is a priority development territory of the Republic of Moldova. For the complex development of this territory, the Government lease out the territory of the International Port to the General Investor under conditions set forth in the Investment Agreement and the Lease Contract.

(7) The General Investor shall pay legal taxes for changing category of land from agriculture into industrial, annually in equal instalments within 10 years starting from the sixth year of the validity of the Investment Agreement.

(8) The State is responsible for protection of borders of the International Port, and General Investor – for ensuring security within the limits of the International Port’s territory.

(9) Access on the territory of the International Port is regulated by the Regulation approved by the Government.

(10) International Port is a demilitarized zone. It is prohibited production, transit and keeping weapons, as well as dislocation of military units on the territory of the International Port.

(11) The General Investor is responsible for creation and maintenance of infrastructure within the limits of the International Port territory.

(12) The measures set forth in the competition law and the legislation regulating the activity of natural monopolies are not applicable to the activity of the General Investor on the territory of the International Port, except his actions that causes harm to competition on commodity markets of the Republic of Moldova.

(13) The state is not liable for the obligations of the residents of the International Port and the residents of the International Port are not liable for obligations of the state.

Article 2. Applicable law(1) The following legislation is acting on the territory of the International Port:

a) International Treaties, to which the Republic of Moldova is a party;b) This law, as well as other legislative acts of the Republic of Moldova, taking in consideration

exceptions and provisions set forth in this law; c) Normative acts of the Government and public authorities and institutions;d) Normative acts of the Government Representative, adopted within the limits of his/her

competences that do not contradict this law; e) Rules and regulations approved by the General Investor.

(2) Dra� s of the normative acts elaborated by the public administration authorities, as well as by the Government Representative related to the activity in the International Port shall be coordinated with the Ministry of Economy.

(3) Investments made within the International Port are under the legal protection of the state. Investment and entrepreneurial activity regime established in the International Port cannot be less favourable than the regime established for the economic agents that operate on the rest of the customs territory of the Republic of Moldova.

Article 3. The General Investor and other residents (1) The resident of the International Port, hereina� er referred to as resident, is any natural or legal person

from the Republic of Moldova or from any other state, who is being registered in the Republic of Moldova as the subject of entrepreneurial activity, that is renting goods or lands on the territory of the International Port and that is registered by the Government Representative in the International Port.

(2) In order to ensure complex development of the International Port, the Government shall appoint the General Investor that is a party to the Investment Agreement and with whom the Lease Contract for whole territory of the International Port is concluded.


102

(3) The General Investor has the following rights in order to perform his/her activities: a) to arrange, to manage and to use the territory of the International Port, including the oil terminal,

cargo terminal and passenger terminal, relevant auxiliary facilities, as well as to create, to own and to operate infrastructure within the International Port in accordance with the terms of the Investment Agreement;b) to create, to own and to exploit all installations and aquatic facilities and of other nature

that may be required for use of facilities on the territory of the International Port; c) to transmit to the residents in sublease a part of the territory of the International Port.

(4) The residents have the right to perform the following on the territory of the International Port: a) port and transport services; b) industrial production, including production of oil products; c) transport-transit activity, processing, packaging and fi nishing of goods;d) wholesale trade;e) providing charged services;f) other types of activities that are not prohibited by legislation of the Republic of Moldova.

(5) Performance of the entrepreneurial activity on the territory of the International Port without registration as a resident is prohibited.

(6) Residents may invite natural and legal non-residents for providing some specialized services only by mutual agreement with the Government Representative.

(7) The decision on annulling registration of a resident, suspension or withdrawal of authorization for performing his/her activity in the International Port is taken by the Government Representative:a) by resident’s request;b) upon termination of the Lease Contract between a resident and the General Investor; c) on own-initiative, on condition of informing the Government and with prior consent of the

Ministry of Economy, in case of serious violation of the legislation or of the Investment Agreement by resident, providing by resident of relevant information that does not correspond to reality or failing to fulfi l relevant requirements of the Government Representative that have been given strictly within his competence and failing to remove such violations within 180 days from the date of receipt of written notifi cation of the Government Representative concerning this case.

(8) Residents shall keep separately accounting and statistics on their activity within and outside of the territory of the International Port.

(9) State control bodies shall perform maximum one complex control of the resident’s activity per year. This restriction is not applied in case of operative checks performed by the customs bodies on the territory of the International Port and controls performed within the criminal prosecution in the cases started by the relevant state bodies of the Republic of Moldova or by the prosecution authorities, as well as in case of investigation of industrial accidents. All controls and investigations shall be done in the presence of the Government Representative.

(10) The National Bank of Moldova performs controls over the residents’ activity according to the Law on the National Bank of Moldova.

[Art.3 modifi ed by the Law no.109 from 04.06.2010, entered in force on 30.07.2010] Article 4. Exemption from fees and charges for the exploitation and use of port and port facilitiesDuring the entire validity period of this law, the General Investor and clients are exempted from payments and fees stipulated by the legislation of the Republic of Moldova for the operation and use of port and port facilities, except the payments for naval services that are calculated and paid based on US $ 0.0062 for 1 m3 of vessel volume.

103

Article 5. Administration of the International Port Administration of the International Port and coordination of activity on development of its territory are performed by the General Investor. Article 6. Government Representative (1) In order to ensure successful development of the International Port, to observe provisions of

this law and of the Investment Agreement, the Government shall appoint a person that will represent it in the International Port, hereina� er referred to as Government Representative.

(2) The Government Representative is a civil servant, who forms and leads the apparatus of the Government Representative.

(3) The Government Representative has the following competences: a) to ensure enforcement of this law and of the Investment Agreement, including providing

assistance to investors in making investments; b) to register subjects of entrepreneurial activity as residents, to issue registration certifi cates

and authorizations for performing entrepreneurial activity, set forth in this law;c) to cancel residents’ registration, to suspend or withdraw the authorization for any kind of

entrepreneurial activity set forth in this law;d) to issue various certifi cates and copies of registration documents and authorizations for

the General Investor and other residents, as well as to present information on registration and cancellation of residents’ registration to the authorities of the central and local public administrations;

e) to support residents in obtaining licences, certifi cates and other documents set forth in the legislation of the Republic of Moldova in order to perform activity in accordance with this law;

f) in cooperation with the General Investor to perform control over ensuring system operation of the authorized crossing on the territory of the International Port;

g) to assist residents in protection of their rights, set forth in this law and in other normative acts, as well as to support in observing legislation on customs regulation, environment protection, social sphere, healthcare and other normative acts of the Republic of Moldova;

h) to participate in the examination of complaints, claims, demands, as well as to participate in solving of confl icts appeared between residents and the authorities of the central and local public administration during the activity on the territory of the International Port;

i) to maintain accounting records of his/her activity;j) to maintain database on the activity performed within the International Port, as well as to

collect residents’ reports on their activity on the territory of the International Port;k) to submit to the Government reports on the International Port activity, on fulfi lment of this

law and the Investment Agreement, as well as information on his/her activity and measures undertaken within his/her competences.

(4) The residents have the right to appeal actions and decision of the Government Representative, as well as of the public administration authorities, in accordance with the procedure set forth in the legislation of the Republic of Moldova.

(5) The volume and nature of information that must be contained in the reports of residents gathered by the Government Representative shall be defi ned before the registration of a resident by mutual agreement with the Ministry of Economy.

(6) The Government Representative doesn’t have the right to interfere in the entrepreneurial activity of the General Investor or other resident.

(7) The Government Representative doesn’t have the right to perform entrepreneurial activities on the territory of the International Port, to possess directly or indirectly actions or shares in the social capital of the resident.

(8) Labour remunerations of the Government Representative and the employees of his/her apparatus are performed in accordance with the legislation of the Republic of Moldova.


104

Article 7. Customs regime(1) Customs regime on the territory of the International Port is ensured by the customs bodies.

The Customs Service activity in the International Port concerning organization issues shall be coordinated with the Government Representative and the General Investor.

(2) The regime of mandatory customs declaration of goods (services) introduced or removed from the territory is established on the territory of the International Port.

(3) The quota restriction regime and licensing at the import and export of goods (services) are not applied on the territory of the International Port. The residents’ external commercial activity, as well as their activity within the International Port, is not subjected to foreign trade limitation, including prohibition or limitation of export or import of goods (services), except restrictions adopted by the Republic of Moldova based on decisions or resolutions of the United Nations or the World Trade Organization.

(4) The following goods are exempted from the payment of customs duties, except fees for customs procedures:a) the goods that were introduced on the territory of the International Port from the rest of

the customs territory of the Republic of Moldova;b) the goods that were introduced on the territory of the International Port from outside of

the customs territory of the Republic of Moldova, as well as from the free economic zones of the Republic of Moldova;

[Lit.c) is excluded by the Law no.267 from 23.12.2011, entered into force on 13.01.2012]

d) the goods, including those originating from the International Port, which were removed from the customs territory of the Republic of Moldova, as well as on the territory of the free economic zones of the Republic of Moldova.

(5) The goods are considered originating from the International Port, if they are entirely produced or suffi ciently processed on its territory as provided by the Law on Customs Tariff .

[Par.6 excluded by the Law no.267 from 23.12.2011, entered into force on 13.01.2012] (7) It is prohibited introduction of goods and other objects on the territory of the International Port,

when their marketing is prohibited by the legislation of the Republic of Moldova or if the goods or other objects: a) are dangerous for other goods and objects placed on the territory of the International Port; b) endanger the public moral and security;c) do not meet the environmental norms and sanitary-hygienic rules provided by the legislation.

(8) Delivery of goods (services) on the territory of the International Port from the rest of the customs territory of the Republic of Moldova is treated as export and delivery of goods (services) from the territory of the International Port on the rest of the customs territory of the Republic of Moldova is treated as import and is regulated by legislation.

(9) Up to the moment of International Port’s borders crossing the goods placed on its territory fall under the free circulation regime and can be transmitted from one resident to another without drawing up the customs declaration.

[Art.7 modifi ed by the Law no.267 from 23.12.2011, entered into force from 13.01.2012] [Art.7 modifi ed by the Law no.109 from 04.06.2010, entered into force from 30.07.2010]

105

Article 8. Tax regime(1) The control over observance of fi scal legislation on the territory of the International Port is

performed by the fi scal administration bodies of the Republic of Moldova. (2) Income tax of residents from their activities performed on the territory of the International Port

is charged as follows:a) for the period of the fi rst 10 years, starting with the fi rst fi scal period following fi scal

period, during the which the taxable income have been registered, - in the amount of 25% of the established rate of income tax;

b) Therea� er and until the expiration term of this law – in the amount of 50% of the established rate of income tax.

(3) The revenue obtained by the resident from selling originating from the International Port goods (services) on the rest of the customs territory of the Republic of Moldova shall be taxed in accordance with the legislation.

(4) The goods (services) introduced on the territory of the International Port from outside of the customs territory of the Republic of Moldova, as well as goods (services) removed from the territory of the International Port to outside of the customs territory of the Republic of Moldova are taxed with the value added tax at the zero rate.

(5) Delivery of goods (services) within the territory of the International Port, as well as delivery of goods (services) performed between the residents of the International Port and residents of the free economic zones of the Republic of Moldova shall be exempted from the value added tax and excises.

[Par.(6),(7) art.8 abrogated by the Law no.71 from 12.04.2015, entered into force from 01.05.2015] (8) Acquisition by the General Investor from the JSC “Terminal of the unfi nished oil terminal assets

on the territory of the International Port, as well as land lease by the General Investor from the Government and further sublease of lands from the General Investor by other parties to the Investment Agreement are exempted from VAT.

(9) The excise is not applied to the subjected to excise goods that were introduced on the territory of the International Port from outside of the customs territory of the Republic of Moldova, from the free economic zones of the Republic of Moldova, as well as to the goods originating from the International Port and removed outside the customs territory of the Republic of Moldova.

(10) The excise is applied in accordance with the legislation to the subjected to excise goods that were removed from the territory of the International Port to the rest of the customs territory of the Republic of Moldova.

[Art.8 modifi ed by the Law no.324 from 23.12.2013, entered into force on 04.03.2005] Article 9. Other regimes(1) Payments and transfers, including those performed within the foreign currency operations shall

be carried out by the residents of the International Port and in their favour in accordance with the legislation of the Republic of Moldova.

(2) Financial settlements between residents for supplies of goods and services within the International Port can be made both in national currency and in foreign currency.

[Par.(2) added by the Law no.324 from 23.12.2013, entered into force on 01.01.2014][Par.(2) excluded by the Law no.33 from 06.03.2012, entered into force on 25.05.2012] (2) The legal requirements regarding the repatriation of funds, goods and services are not extended

over the operations performed between residents and economic operators of the Republic of Moldova.

(4) The legal requirements regarding the repatriation of funds, goods and services are extended over the export-import operations performed between residents and foreign subjects.

(5) Labour remuneration of persons carrying out activity on the territory of the International Port shall be made in the national currency of the Republic of Moldova.


106

(6) Residents have the right: a) to transfer abroad according to the legislation of the Republic of Moldova fi nancial means

received in the result of investments, including revenue, fi nancial means received from the liquidation or sale of investments;

b) to open in accordance with the procedures set forth in the legislation of the Republic of Moldova bank accounts in the national and foreign currency in any commercial bank from the Republic of Moldova and abroad. The opening accounts abroad shall be done in accordance with requirements of the Moldovan legislation;

c) to make payments and transfers within capital foreign currency operations without any restrictions, except existing restrictions at the date of their registration as residents;

d) to make payments and transfers within current foreign currency operations, including payments to foreign contractors and payments of salaries to foreign employees, without any restrictions that exist or may arise in future;

e) to buy, sell or convert foreign currency into another foreign currency and / or into the national currency of the Republic of Moldova at the market rate applied at the transaction date, without paying other taxes except bank charges;

f) not to meet the requirements of mandatory sale of foreign currency received from exports in case of introduction of such a measure in the Republic of Moldova.

(7) Consular fees for service visas (business visa) are not charged from foreign investors and residents’ employees, as well as from the persons invited by the Government Representative.

(8) The request of the Government Representative constitutes the ground for issuing residence and work permit to the foreign investor or resident’s employee.

[Art.9 modifi ed by the Law no.33 from 06.03.2012, entered into force on 25.05.2012]

Article 10. Employment relationships and social protection (1) The employment relationships and issues related to the social protection of residents are

regulated by the legislation of the Republic of Moldova.(2) The resident’s employees - foreign citizens and stateless persons are not obliged to pay social

insurance contributions for compulsory state social insurance budget and compulsory insurance premiums for healthcare.

(3) The residents are not obliged to pay social insurance contributions for compulsory state social insurance budget and compulsory insurance premiums for healthcare for their employees, if they are foreign citizens and stateless persons.

Article 11. Settlement of disputes(1) Disputes between residents, between residents and other legal persons of the Republic of

Moldova, residents and the Government Representative shall be settled by courts of the Republic of Moldova under the Moldovan law.

(2) Disputes between the residents and foreign natural or legal persons, as well as, by derogation from provisions set forth in the par.(1), between resident enterprises with foreign investments and other legal persons of the Republic of Moldova can be settled by means of international arbitration.

Article 12. State guaranteesIn case of a new legislation, including acts on amendment or supplement of this law, will be adopted, worsening the conditions of residents activity, including those regarding the customs and tax regime, the residents registered before the entry into force of the new legislative act have the right to apply the provisions of this law until the 17 February 2030 that is acting until the date of the entry into force of the new legislative act.

107

Article 13. Cessation of the International Port activity (1) The International Port activity is ceased:

a) at the expiration of the validity of the present law; or b) before the deadline, at the written request of all registered residents.

(2) A� er cessation of the International Port activity, former residents can continue entrepreneurial activity on the basis of general principles provided by the legislation of the Republic of Moldova.

Article 14. Final provisions(1) The Government shall approve within 3 months:Regulation on the system of authorized crossing on the territory of the International Free Port ‘Giurgiulesti’; Regulation on registration of residents of the International Free Port ‘Giurgiulesti’; Regulation on issuing authorizations for performing activity in the International Free Port ‘Giurgiulesti’; Regulation of Government Representative in the International Free Port ‘Giurgiulesti’; (2) The Customs Department shall approve within 3 months the Regulation on the customs service

of the International Free Port ‘Giurgiulesti’; (3) The Government within a period of up to 6 months: shall bring its normative acts in accordance with this Law; shall submit to the Parliament proposals on bringing legislation in accordance with this Law;shall adopt normative acts necessary for execution of this Law. CHAIRMAN OF THE PARLIAMENT

Eugenia OSTAPCIUC

Chisinau, 17 February 2005.

Nr.8-XV.


108

Annex II: Gaps Matrix

Intraservice Border Agency Gap


CustomsGap 1: Legislative alignment with the EU ‘Acquis Communautaire’ & international standards (H)

Gap 2: Fee Economic Zones (FEZ) (H)

Customs Veterinary & Phyto-sanitary Gap1: Too many legal acts regulating border management (H)


Gap 1: Alignment of veterinary & phyto-sanitary legislation with the EU ‘Acquis communautaire’ & International Standards (H)

Institutional Framework

CustomsGap 1: Organisational and HRM reform (H)

Gap 2: Supporting documents required to perform Customs clearance (M)


Gap 1: Staff rotation systems (H)

Gap 2: More Flexible Working Hours (H)

Procedures

Customs

Gap 1: Implementation of Simplifi ed Procedures & the Authorised Economic Operators (AEO) Concept (H)

Gap 2: Duty Deferment & Guarantees (H)

Gap 3: Risk Analysis at GIFP (H)

Gap 4: Valuation, Classifi cation, Origin and Post Clearance Control & Audit (H)

Gap 5: Transit and the New Computerised Transit System (NCTS) (M)


Gap 1: Advance information (H)

Gap 2: Phyto-sanitary procedures (H)

Communication & Information Exchange Customs

Gap 1: E-Customs Implementation & fully automated processes (M)

Gap 2: Memoranda of Understanding (MoU) with the private sector (M)

Infrastructure & Equipment Customs Gap 2: National inter-active database for scanned vehicle images

(M)



Gap 1: Reforms to ’on-board Commission’ procedures (H)

Gap 2: Time release exercises (L)


Customs, Veterinary & Phytosanitary

Gap 1: Development of inter-agency agreements (H)

Gap 2: Improved public information (M)

Gap 3: Port & Border Control Service user satisfaction surveys (H)

Gap 4: Inter-agency exchange of information including links between BCSs databases (M)

Veterinary & Phyo-sanitary Gap 1: Information Technology (H)



Gap 1: BCP and surrounding area surveillance / close circuit television (CCTV) and image capture (H)

Gap2: Development of Giurgiulesti rail BCP (M)

Gap 3: Covered areas for the examination of cargo & safe keeping of livestock (H)


Gap 1: Veterinary & Phyto-sanitary contol facilities (M)

Gap 2: Protective clothing and other equipment (H)

109

Annex III: Technological Scheme GIFPApproved by the Head of Cahul CH Approved by the Head of “South” RDMr. V. Stadler on 25.02.2013 Mr. A. Radu on 25.02.2013

Technical Norms

Of Giurgiulesti International Free Port

Chapter I. General dispositions

Present technical norms are elaborated on the type of control and services provided when crossing the state border of the Republic of Moldova of persons, sea/river vessels and cargo through the state border crossing point “Giurgiulesti Maritime” (further on Norms) stipulates the optimization and regulation of the customs and border control process and control of other state services at the border of sea/river, cargo/passenger vessels, at the entry/exit to/from the Republic of Moldova through Giurgiulesti Port (further on Port) through the BCP “Giurgiulesti Maritime” (GD Nr. 1027 from 03.10.2005) of cargo and passengers which are transported and cross the customs border (state) of the Republic of Moldova through Giurgiulesti Port, control and service bodies’ interaction in the Port. Norms were elaborated based on the Law on state border of the Republic of Moldova Nr. 215-XIII 04.11.2011, GD Nr. 434 from 19.06.2012 on Border Police, GD Nr. 808 from 09.08.2000 on amendments and modifi cations imposed by the GD of RM Nr. 1070 from 14.08.2002, GD 926 from 12.12.12 on State Border and other treaties to which RM is part of, Navy Code of RM, Customs Code of RM, normative documents on implementation of informational system ASYCUDA World.

In this regard, in the Port will be created border and customs control zones by the Harbour Master of Giurgiulesti Port in a mutual agreement with the customs body of the customs post Giurgiulesti maritime (2526) and the Border Police, where a special regime will be implemented which has to be respected by all the natural persons and legal entities who cross the state border, transport cargo and other goods across the state border.

Present Norms regulates the actions and interaction of the service bodies which work at the BCP:

1. Border Police;2. Customs Service;3. Harbour Master of Giurgiulesti Port;4. Phyto-sanitary Service (on service need);5. State veterinary Service (on service need);6. Sanitary- epidemiological Service;7. Shipping agent.

Border control of the sea/river, cargo/passenger vessels of RM and the foreign ones at the entry/exit to/from the territory of RM through the Giurgiulesti Port is performed by the commission made of the following representatives:

1. Border Police;2. Customs Service;3. Harbour Master of Giurgiulesti Port;4. Phyto-sanitaryService (on service need);5. State veterinary Service (on service need);6. Sanitary- epidemiological Service;7. Shipping agent.


110

At the customs control of sea/river and passenger vessels, when necessary, the representative of the touristic company which organizes the tour can be invited on the vessel as a member of the commission.

The Commission is convened by the shipping agent or other representative of the owner, or as the case by the recipient of the goods, which provide commission members movement on ship in order to exercise their direct duties and their return back to offi ce.

The place for stationing vessels while staying under customs surveillance, unloading and loading goods, embarkation and disembarkation of passengers is set by the Harbour Master or his representative. Change of vessels’ berthed site is made jointly with border police and customs authorities, except in cases of damage or major force.

Approaching a vessel under customs supervision to other ships or fl oating means (Navigator) without border police and customs authority authorization is prohibited. This action may be qualifi ed as violation of border regime and customs rules and may be sanctioned administratively.

Vessels’ entry/exit time in/from port communicated to Border Police and Customs Authority by the Harbor Master or port agent with at least 2 (two) hours before ships arriving or leaving the port.

The interests of the Republic of Moldova at the state border are represented by the Border Police, Customs Service and other bodies with control functions at the state border.

Implementation and compliance of the nominated norms have the aim to optimize border and customs control, effi ciently performed state border control and ensuring economic security, facilitation of goods and passenger traffi c, reducing sea/river vessels’ stationing time, respecting the BCP regime.

BCP’s activity is performed under the control and responsibility of Heads of Border Control Section of Border Police and the head of customs post. They ensure coordination of all control services and within the limits of their competencies, take fi nal decisions on the authorization or refusal of crossing the state border (customs) of persons, maritime/river vessels, cargo and other goods, including resolving all confl ict situations arising at the state border crossing point.

Provisions of these rules are mandatory for execution and respect by all services activating at the border crossing point.

BCP’s characteristic:

1.1. BCP Giurgiulesti maritime is situated in the S-W part of RM being:

a) Type – maritime (river);b) Category – international;c) Functioning regime – “non-stop”;d) Control premises – joint.

1.2. The territory and infrastructure of the mentioned BCP is under the balance of the Giurgiulesti Port, which manages the patrimony as a legal entity.

111

Chapter II. Basic principles

Technical norms are based on Law Nr. 215 of 4 November 2011 on the state border of the Republic of Moldova, the Moldovan Customs Code 1149-XIV of 20 July 2000, Law Nr. 283 of 28 December 2011 on the Border Police, Law Nr. 1150 of 20 July 2000 on customs service and other acts of reference.

These Technical Norms establish the procedures for placing control authorities and are expected to optimize the conditions of performing the control at border crossing, respecting the BCP’s regime, interaction between control bodies, to facilitate the crossing of persons, maritime/river vessels, traffi c of goods, and reducing the time of verifi cation as well.

In accordance with the legislation in force, the management control activities at the BCP are being performed jointly by the head of the BCP and head of the customs post, who approves, within its competence, decisions on approving or refusing the crossing of state border by persons, maritime/river vessels, cargo and other goods.

Succession formalities for authorizing the crossing of state border of persons, maritime/river vessels and goods are to be as follows:

1) at the entry into Moldova:a) border control (Border Police);b) customs control (Customs Service);c) sanitary-epidemiological control (if necessary).

2) at the exit from the Republic of Moldova:d) border control (Border Police);e) customs control (Customs Service);f) sanitary-epidemiological control (if necessary).

All control activities from the BCP must not negatively aff ect the effi ciency of border control and customs control.

These norms have included in the Annex the plan of the crossing point, which schematically are listed:a) drawing the state border;b) distance from the state border line until the crossing point;c) limits (restricting) the territory of the crossing point;d) the points of exit / entry to / from the crossing point;e) places of special control;h) administrative buildings.

Chapter III. General notions

The notions used in the present Technical Type Norms mean the following:

1. Border crossing control - inspection at the state border crossing points to ensure that persons, including their means of transport and their belongings, may be authorized to enter or leave the territory of Moldova;

2. customs control - actions carried out by the Customs Service, including operations of verifi cation of goods and means of transport, inspecting the hand luggage, people who cross the state border and other similar actions to ensure compliance with customs regulations and other rules established by legislation in force;


112

3. state border of the Republic of Moldova - is the natural or conventional line that marks the external limits of the territory over which the Republic of Moldova on which it has an exclusive sovereignty on land, on water sectors, underground, air and passing in a straight line, from a border sign to another or, where the state border is not marked in the fi eld with border signs, from one coordinate point to another. On the rivers and other streams the state border is established by the treaties signed by Moldova with neighbouring countries being respected the principle of international law according to which the state border passes in the middle of the main navigable channel, and on navigable fl owing waters on the middle of the water surface;

4. state border crossing point (BCP) - any place organized and authorized by the Government of RM for crossing the state border;

5. border crossing point’s regime - rules for entry, stay and exit of persons and/or vehicles, as well as rules of performing economic activities and other nature at the border crossing points;

6. crossing the state border - crossing overland and river sectors, where are landscaped walkways established for people and means of transport, which is performed on international traffi c routes by rail, road or other places, set in treaties (agreements) signed by the Republic of Moldova with neighbouring states and national legislation;

7. customs control zone - a specially designated part of the customs territory of the Republic of Moldova, created in order to perform customs control in compliance with the customs legislation of Moldova.

Chapter IV. State border crossing point and customs control zone regime

BCP’s regime consists of all rules and measures established by law, which include the following components:

1) The rules for entry, stay and exit in/from the BCP of persons and maritime/river vessels;2) Rules for undertaking activities for border and customs control, economic and otherwise.

Entry/exit authorization into/from BCP of persons, maritime/river vessels, as well as the introduction/removal of cargo and other goods is carried out by the border police offi cer in coordination with the customs offi cer.

At BCPs, service information and any other public information must be registered manually or electronically. Public information is exposed on billboards.

In the limits of BCP the customs control zone regime is applied, under Chapter V of the Customs Code. The BCP perimeter coincides with the perimeter of customs control zone.

Authorization for crossing the state border of offi cial delegations, parliamentary and governmental offi cials, owners of diplomatic passports, is done as apriority and in accordance with the law.BCP’s perimeter security is provided by the Harbour Master. The way of surveillance is ocular and using monitoring video devices.

113

Chapter V. Shares of collaboration services in BCPs

In accordance with the legislation of the Republic of Moldova in the BCP Giurgiulesti maritime are accomplished following types of control:

a) border control;b) customs control;c) water control;d) veterinary control (if necessary);e) Phyto-sanitary control (if necessary).

All control activities that can be accomplished at the BCP by border police offi cers, customs, Harbor Master and other control services. Illegal migration and violation of customs rules and regime of BCP, shall not cause negative impacts on the quality of customs control, border control and other hazards in the fi ght against smuggling, in the limits of these rules. In the premises of Giurgiulesti Port are created:

• Customs control zone, which constitutes the customs control room of the personal luggage of persons crossing the state border;

• Border control area, which is border control room on persons crossing the state border.• When performing border control, there can be applied technical means of control which poses

no danger to the health and life of humans, animals and plants and do not cause harm to cargo and maritime/river vessels.

• Based on the results of joint control, Border Police and customs officers take the decision about the movement of maritime/river vessels, goods

• and objects on the territory of the BCP.

Regime at BCP is under Law Nr. 215 of 04.11.2011, GD 926 of 12.12.2012 on “the state border of the Republic of Moldova”, which includes the rules of entry, exit, temporary stay and access onto the territory of the BCP for people and means of transport (maritime/river vessels), of importing, staying and exporting of cargo and other goods, rules established in order to create necessary conditions for carrying out border control. Entrance of persons and means of transport (maritime/river vessels) in the BCP and the introduction of goods as well is done with the permission of the Border Police offi cers jointly with the Customs and Harbour Master. It is not allowed to enter the BCP territory for people and maritime/river vessels that do not intend to cross the state border, except offi cers of public authorities in the exercise of functions. The access may be granted only by the Heads of the BCP of Border Police and customs post under access ID. Parking the means of transport at BCP, which belong to bodies and control services, as well as their collaborators must be carried out in special parking places. Access to foreign persons in the territory of BCP is prohibited. Exit of persons and maritime/river vessels, as well as removal of goods is done through places expressly reserved by permission of the Border Police, Customs Authority and Harbour Master. Staying of individuals and vessels on the territory of BCP, for which a full control has been conducted, is not allowed.

Persons, maritime/river vessels and goods which entered the BCP with the intention to move across the state border shall be subject to border control, customs and other controls as required under the legislation in force.

Representatives and owners of enterprises, owners of maritime/river vessels are obliged to provide access to those resources, and the spaces for loading (unloading) goods or other objects, if there are suffi cient grounds to assume that these means are suspected of persons breaking the rules for crossing the state border or cargo and prohibited goods or limited to enter or leave the country. Persons are obliged, under current legislation, to present to border control, customs and other kind of


114

services, truthful information regarding identity documents, maritime/river vessels, goods, objects and other values and purpose of crossing the state border.

Holders of rights on the goods and maritime/river vessels and their representatives have the right to be present during border and customs control.

Place and duration of stay at the BCP of maritime/river vessels, boarding and disembarking passengers, as well as downloading (loading) cargo, luggage and other goods is carried out with the authorization and under the supervision of Border Police and Customs Authority. Maritime/river vessels can start manoeuvres of leaving the territory of the BCP; as well they can change their stationing place in it, only with the permission of the border police and customs authorities.

In cases of unauthorized crossing of the state border of persons and maritime/river vessels, as a result of border verifi cation, or otherwise, the decision to be returned back is up to the Heads of the Border control and Border Surveillance Section of the Border Police and customs post, in the limits of their competence, by registering all data in the special register. In case of refusal to cross the State border of the persons who arrived in the BCP, the decision is taken in those orders only a� er the border and customs control of the maritime/river vessels and its goods has been completed.

Risk analysis and risk assessment when crossing the state border by persons, maritime/river vessels and goods is performed by the Shi� Leaders of Border Police and Customs Service based on operative information, examination of the controlled person’s identity documents and accompanying documents of the merchandise and maritime/river vessels, as a result of the behaviour and specifi c psychophysical aspect of the person, constructive peculiarities of the maritime/river vessels, compliance of quantitative and quality indices of goods, information indicated in the documents submitted to border control. In the BCP, the Harbour Master makes the control on carrying out and observance of national and international legislation in the sphere of cargo and passengers sea/fl uvial vessels according to the Naval Code of Republic of Moldova and other normative acts that include:

• The control of observance of the conditions related to the transport of passengers and goods by legal entities that participate in international naval traffic;

• The control of observance of legality of foreign sea/fluvial vessels’ movement on the territory of Republic of Moldova;

• The control and issuance of permits and authorisations for transport and transit in the cases provided by the legislation in force;

• The control of the physical parameters and technical condition of the sea/fluvial vessels that cross the state border in order to ensure the traffic safety;

• Registration of sea/fluvial vessels in special registers by introducing the information in the da-tabase of the information system.

The manoeuvres made by the sea/fl uvial vessels of the Harbour Master will be coordinated in advance with the Heads of Customs Post and of the Border Control Section of Border Police. The information must contain the following data:

• the sea/fluvial vessel’s unit• the route of the manoeuvres • the timeframe of the manoeuvres• the peculiarity of the manoeuvres• the number of people involved in the activity

115

During the activities in the Port, the staff of the Harbour Master will have their service ID cards that will be presented to Border Police and Customs offi cers if necessary.

In BCP the sanitary-veterinary agency performs preventive disinfection of the sea/fl uvial vessels to enter the country, checks the documents accompanying the goods of animal origin (import/export sanitary notice, documents of quality and compliance of the products, veterinary and disinfection certifi cates) and a� er they perform the sanitary-veterinary control of the goods, of the package, the sanitary and transport conditions of the sea/fl uvial vessels, the list with the individual numbers of the animals, they proceed with the thermometry. In case all the requirements are met, the border veterinary inspector records all the information in special registers by introducing in the database of the information system, issues an international certifi cate in exchange for the national veterinary certifi cate and collects the payment according to the existing tariff s. Also, the inspector performs the sanitary-epidemiological control on the persons that enter the territory of the Republic of Moldova and in case infection symptoms are detected, isolates those persons.

In the BCP, the Phyto-sanitary control post performs the Phyto-sanitary control on import, export and transit of goods of vegetal origin, checks the accompanying documents, takes samples for laboratory analysis, issues Phyto-sanitary notice and performs the fumigation of goods in case of detection of quarantine objects.

The staff s of the control bodies and of the institutions which provide services in the BCP are obliged:• To follow the provisions of these NORMS in their activity of control and service supply;• To perform the check of the sea/fluvial vessels in the presence of their holders;• To follow the rules of labour and fire safety;• To keep and use cautiously the entrusted assets at the working place;• To follow the rules from the code of conduct and to follow the rule on uniform wearing.

Chapter VII. The control on entering/exiting Republic of Moldova

A.I. Cargo vessels on entry

Before the arrival of a vessel in the port, regardless of fl ag, the master of the vessel is obliged to send messages via naval radio station to the public authorities indicating in advance: the hour of arrival, important data concerning the vessel and its cargo as well as information on all modifi cations of the timetable that can aff ect the control conduction. The master must also announce the name and the address of the naval agent that represents ship’s interest in the Port. Before the arrival of the vessel, the agent will get the approval from Port Administration to arrive in the Port and the allocation of berth/berths.

The master or the shipping agent makes in duplicate the list of the crew and, if applicable, the list of passengers on board and, before the arrival in Port, sends it to Border Police and Customs offi cers. If from force majeure reasons these lists cannot be sent to Border Police and Customs offi cers, a copy is sent to the nearest crossing point or to the sea transport authority that will send it to Border Police and Customs.

A copy of the crew list or the passenger list signed by the border police offi cer is handed to the master, who will show it in the Port on demand. The master or the agent will immediately inform Border Police, the Customs Service on any changes in the crew or regarding the number of the passengers. As well, the master is obliged to immediately inform Border Police and Customs Service, before arriving in Port, if it is possible, about the presence of stowaways on board. In the same time, the stowaways will remain under the supervision of the master of the ship.


116

At the entering the Port (control zone) of the sea/fl uvial cargo vessels, the naval agent or another representative of the owner or the receiver of the goods gets the permission from Harbour Master to accost the ship and informs in advance (2 hours) the Customs body and Border Police and State control services that perform their duties as follows:

A.1.1. Border Control:• performs border control• performs border control concerning the border crossing with documents valid for this and the

necessary activities of data input in the AIS “Traversarea Frontierei” (Border Crossing).A.1.2. Customs Control:

• performs customs control• joint control of the sea/fluvial cargo ships with Border Police representatives• informs the persons on customs legislation in force; • questions verbally the natural persons with the purpose of carrying out the customs control• checks the applied seals• completing the document of the ship arrival and recording it in the register “Entrance/Exit of Ships”• performs customs control of the goods (scanning the luggage or the parcels using X-rays and

the available technical means of control), body control as an exceptional form of customs control• assesses and collects the customs taxes (issue of dockets and payment checks) and other pay-

ments according to the one stop shop principle• keeps the record of the payment checks• customs procedures (declaration and clearance) of the goods in import/transit regime are per-

formed on the basis of general rules set by Customs Code of Republic of Moldova, Norms related to filling in, circulation and use of the customs declaration, the Order No 276-O from 25.10.2002 and other acts in force.

• performs the control of the goods in order to correspond to the accompanying documents and detecting objects that are prohibited for border crossing, with the involvement of the Phy-to-sanitary and veterinary services;

• informs the border police officers on completing the customs control and authorize the leaving of the BCP territory via the information system (sending data in real time) or other forms of cooperation.

A.1.3. Performing the control and issuance of veterinary, Phyto-sanitary and hygiene certifi cates by the respective bodies, if necessary.

A.1.4. If necessary there could be organized investigations, samples taking, samples examination, laboratory analysis.

B.1. Cargo vessels exiting the country

The master of the vessel informs in advance Border Police and Custom Service about the vessel’s leaving at the established time, according to the rules in force in this port. If the master cannot inform Border Police and Custom Service, he informs the naval authority. The second copy of the crew and passenger list, completed and signed, is given back to Border Police and Custom Service or to naval authorities. When the sea/fl uvial vessels is to exit the Port, the naval agent, or another representative of the owner or of the sender of goods inform in advance (2 hours) Border Police Custom Service and State Control Services that perform their functions in the following order:

B.1.1. Border Control:• performs border control• performs border control concerning the border crossing with documents valid for this and the

necessary activities of data input in the AIS “Traversarea Frontierei” (Border Crossing).

117

B.1.2. Customs Control:• performs customs control• joint control of the sea/fluvial cargo ships with Border Police representatives• informs the persons on customs legislation in force; • questions verbally the natural persons with the purpose of carrying out the customs control• checks the applied seals• completing the document of the ship departure and recording it in the register “Entrance/Exit of Ships”• performs customs control of the goods (scanning the luggage or the parcels using X-rays and


ments according to the one stop shop principle• keeps the record of the payment checks• customs procedures (declaration and clearance) of the goods in export/transit regime are per-


• informs the border police officers on completing the customs control and authorize the leaving of the BCP territory via the information system (sending data in real time) or other forms of cooperation. The customs body representative of the control team allows the exit of the vessel and its cargo by applying the personal seal on the accompanying documents.

B.1.3. The Harbour Master Offi ce permits the departure of the vessel from the Port and the border crossing only a� er fi nishing all types of control. The sea/fl uvial vessel’s border crossing is done under the surveillance of the Border Police and Customs Service representatives.

A.2. Entering the country of passenger ships

Before entering the Port of any vessel, regardless of the fl ag, the master is obliged to send messages via radio station to public authorities. The message must indicate the time of the ship’s arrival, important data about the ship and its cargo and also information with all the modifi cations produced in the schedule, in case this information can aff ect the control performance. The master must also announce the name and the address of the naval agent that represents ship’s interest in the Port. Before the arrival of the vessel, the agent will get the approval from Port Administration to arrive in the Port and the allocation of berth/berths.

The master or the shipping agent makes in duplicate the list of the crew and, if applicable, the list of passengers on board and, before the arrival in Port, sends it to Border Police and Customs offi cers. If from force majeure reasons these lists cannot be sent to Border Police and Customs offi cers, a copy is sent to the nearest crossing point or to the sea transport authority that will send it to Border Police and Customs.

A copy of the crew list or the passenger list signed by the border police offi cer is handed to the master, who will show it in the Port on demand. The master or the agent will immediately inform Border Police, the Customs Service on any changes in the crew or regarding the number of the passengers. As well, the master is obliged to immediately inform Border Police and Customs Service, before arriving in Port, if it is possible, about the presence of stowaways on board. In the same time, the stowaways will remain under the supervision of the master of the ship.At the entering the Port (control zone) of the sea/fl uvial cargo vessels, the naval agent or another representative of the owner or the receiver of the goods gets the permission from Harbour Master to accost the ship and informs in advance (2 hours) the Customs body and Border Police and State control services that perform their duties as follows:


118

A.2.1. The border and customs control of the sea/fl uvial passenger ships starts only a� er the sanitary and epidemiologic control;

A.2.2. Border control:• perform the border control on the basis of the crew and passengers’ documents that allow it;• performs border control concerning the border crossing with documents valid for this and the

necessary activities of data input in the AIS “Traversarea Frontierei” (Border Crossing).• Customs control is performed as follows:• performs customs control• joint control of the sea/fluvial passenger ships with Border Police representatives• informs the persons on customs legislation in force; • questions verbally the natural persons with the purpose of carrying out the customs control• checks the applied seals• completing the document of the ship arrival and recording it in the register “Entrance/Exit of

Ships”• performs customs control of the goods (scanning the luggage or the parcels using X-rays and


ments according to the one stop shop principle• keeps the record of the payment checks• customs procedures (declaration and clearance) of the goods in import/transit regime are per-



• informs the border police officers on completing the customs control and authorize the leaving of the BCP territory via the information system (sending data in real time) or other forms of cooperation.

B.2. Passengers Vessel’s exiting the country

The master of the vessel informs in advance Border Police and Custom Service about the vessel’s leaving at the established time, according to the rules in force in this port. If the master cannot inform Border Police and Custom Service, he informs the naval authority. The second copy of the crew and passenger list, completed and signed, is given back to Border Police and Custom Service or to naval authorities. When the sea/fl uvial vessels is to exit the Port, the naval agent, or another representative of the owner or of the sender of goods inform in advance (2 hours) Border Police Custom Service and State Control Services that perform their functions in the following order:

B.2.1. Border Control• performs border control• performs border control concerning the border crossing with documents valid for this and the

necessary activities of data input in the AIS “Traversarea Frontierei” (Border Crossing). The sea/fluvial vessel’s border crossing is done under the surveillance of the Border Police and Customs Service representatives.

B.2.2. Customs Control• joint control of the sea/fluvial cargo ships with Border Police representatives• informs the persons on customs legislation in force; • questions verbally the natural persons with the purpose of carrying out the customs control• checks the applied seals

119

• completing the document of the ship departure and recording it in the register “Entrance/Exit of Ships”• performs customs control of the goods (scanning the luggage or the parcels using X-rays and


ments according to the one stop shop principle• keeps the record of the payment checks• customs procedures (declaration and clearance) of the goods in export/transit regime are per-



• informs the border police officers on completing the customs control and authorize the leaving of the BCP territory via the information system (sending data in real time) or other forms of cooperation. The customs body representative of the control team allows the exit of the vessel and its cargo by applying the personal seal on the accompanying documents.

B.2.3. The Harbour Master Offi ce permits the departure of the vessel from the Port and the border crossing only a� er fi nishing all types of control.

Chapter VIII. Final dispositions

1. Any modifi cation to the present Technical Norms of control can be made only by mutual notifi cation of the control services.

2. The arrest of persons or of sea/fl uvial vessels is done jointly by Border Police and Customs body.3. In cases of establishing constructive elements of possible off enses, the shi� leader of the

Customs Service and that of Border Police will report to the Head of Customs post and to Border Control Section respectively, who, in turn will inform their supervisors for determining the investigation procedure.

4. In special cases (when there is operative information or there are suspicions) at the customs control of persons or of sea/fl uvial vessels the shi� leaders of Customs Service and of Border Police must jointly participate. In such cases they are obliged to inform the leading staff of the Customs House and of Border Police about the results of the control.

5. In case of some possible dissensions between the services during the control, the inspectors inform their supervisors, who will jointly take the fi nal decision on the case.

Head of Border Control Section “Giurgiulesti”Master T. Hanganu

Head of Customs PostFree International Port Giurgiulesti, Giurgiulesti Railways, Giurgiulesti Passenger PortMajor V. Novitchii

Coordinated by:Harbour MasterSanitary-Veterinary ServicePhyto-sanitary Control Service


120

Annex IV: List of reports and research materials

Constanta Port Annual Report 2014

Department of Transport Systems, Faculty of Navigation, Gdynia Maritime University, Karolina Krośnicka Poland

The Impact of Sea-River Ports on Spatial Development of Cities

DG Internal Polices – Policy Department Structural and Cohesion Policies B

Modal Share of Freight Transport to and from EU Ports Study

Dimitru Aliaba Gov. of Modova Removing Regulatory and Procedural Barriers to Trade EU Commission Revised Customs Blueprints 2015EU ENPI Moldova Progress Report 2013 & 2014EUBAM Analysis Of Sanitary, Phyto-sanitary And Veterinary

Legislative Framework And Implementing Systems Of The Republic Of Moldova And Transnistria In The Light Of The DCFTA And WTO Agreements With Priority Legislative And Technical Measures To Address Identifi ed Gaps - 2015

EUBAM Special Report Customs Procedures at Giurgiulesti Port September 2010EUBAM Information Technology Strategic Plan 2015-2020 (2015)EUBAM Implementation and application of Customs Simplifi ed

Procedures in Moldova & UkraineEUBAM AOSU – Analysis Cell MISSION REPORT on visit to Giurgiulesti Port 2010European Short Sea Network Short Sea Leafl etErasmus University Rotterdam - Nicolae Potorac

The Economic Impact of Port of Giurgiulesti development on the Republic of Moldova

“Mircea cel Batran” Naval Academy Scientifi c Bulletin, Volume XVIII – 2015 – Issue 1

The Role Of Giurgiulesti International Free Port In The Development Of Economy Of Moldova

Nil Guler and Osman Kamil Sag Istanbul Technical University Maritime Faculty, 81716 Tuzla Istanbul Turkey

The Impact Of European Union’s Port Policies On Maritime Transport

OECD Strategic Transport Infrastructure Needs to 2030 Main Findings

OSCE Handbook of Best Practices at Border Crossings-A Trade and Transport Facilitation Perspective 2012

UNCTAD Review of Maritime Traffi c 2014 & 2015USAID /BRITE Moldova Customs Clearance Process in Moldova 2007USAID /BRITE Import And Export Of Plants, Plant Products And Other

Objects Subject To Phyto-sanitary Control In The European Union Recommendations For The Republic Of Moldova Oct 2015

UNCTAD –Jan Hoff mann Review of Maritime Transport 2015World Bank Border Management ModernisationWorld Bank Customs Modernisation HandbookWorld Bank Port Reform Toolkit Second Edition Modules 1-8World Bank & Government of Moldova Technical Report Giurgiulesti Port 2012World Bank Group Flagship Report Doing Business 2016 Measuring Regulatory Quality and

Effi ciency

121

Annex V: Role of Giurgiulesti International Free Port in the Development of Economy of Moldova

“Mircea cel Batran” Naval Academy Scientifi c Bulletin, Volume XVIII – 2015 – Issue 1

Published by “Mircea cel Batran” Naval Academy Press, Constanta, Romania // The journal

is indexed in: PROQUEST SciTech Journals, PROQUEST Engineering Journals, PROQUEST

Illustrata: Technology, PROQUEST Technology Journals, PROQUEST Military Collection

PROQUEST Advanced Technologies & Aerospace

THE ROLE OF GIURGIULESTI INTERNATIONAL FREE PORT IN THE DEVELOPMENT OF

ECONOMY OF MOLDOVA

Vyacheslav BARDAN1

Moldova is one of the youngest maritime states in the world thanks to the 430 meters access to the Danube via Giurgiulesti International Free Port, commissioned in 2006. The port activity, lately, has fared ascending becoming a competitor to the ports states in the region, and on the other hand, the Republic of Moldova reached shortly, with a large number of ships registered under the national fl ag, which bring some income even if the state budget and bring great harm to legal, social, image etc. These and other issues are examined in this article.

GIFP benefi ts from its location on international trade and transportation routes such as the waterway Rhine-Main-Danube Canal, which connects the Black Sea, 14 European countries and the North Sea; railway systems of European standard and Russian and international road network.International Port activity is carried out in accordance with the Investment Agreement “On the Giurgiulesti International Free Port”, approved by Law No. 7-XV of 17 February 2005, the Law on International Free Port Giurgiulesti No.8-XV February 17, 2005 and the Agreement between the Government of Moldova ICS “Danube Logistics” SRL of 21 April 2005. GIFP is based on a period of 25 years. The land located within the boundaries of the territory of the International Port is state property. Port territory boundaries and confi guration are determined in cadastral plans in accordance with cadastral legislation

Given available water depths of up to 7 m, the port can receive both river vessels and maritime and strategic importance lies in the following: 1) GIFP is the only river-sea port transshipment and distribution direct to / from the Republic of

Moldova; 2) GIFP is a regional logistics hub at the EU border with access to communication routesand sea;

, rail, river 3) GIFP is an excellent location for business development, because of its strategic locationtri-

modal transport infrastructurelow cost environment and unique customs and tax regime.

Throughout the period of activity GIFP, as of 01.01. 2015 benefi ted from a total volume of investment that constituted 62.4 mil. USD, including 3.5 million. Dollars during 2014 [4].

General investor, ICS “Danube Logistics” SRL, invested 49.1 mil. USD and SC “Trans Cargo Terminal” SRL, which carried out the construction and operation of the grain terminal has invested 7.4 million. Dollars. In addition, mention is made that new investment projects of ICS “TRANS BULK LOGISTICS” LLC (investment volume about 3.8 mil. USD), “Arbomax” SRL (0.9 mil. USD), “Iunasistem” Ltd. (0.7 mil. USD) and “Dunav-TIR” SRL (0.4 mil. USD) etc.

1 Technical University of Moldova


122

Moldova has met the requirements of the Espoo Convention also been respected international norms and standards, and measures were taken to prevent emergencies from GIFP. The port is able to receive ships with a capacity of 10 thousand tons. Giurgiulesti International Free Port comprises an area of 120 ha (leased for 99 years). The whole territory has the status of free economic zone by 2030. Danube Logistics currently occupies an area of 55 ha which is divided into six functional areas:

1. Refi ned petroleum terminal 2. Vegetable oils terminal 3. Cereal products terminal 4. Dry bulk terminal 5. Containers and general cargo terminal

For most businesses, speed of delivery of goods, predictability and transparency throughout the process, as well as security in the supply chain, are of paramount importance.The construction of the railroad of 49.7 km Cahul - Giurgiulesti, Moldova has joined its port on the Danube with the national railway network and direct output in the EU provided by Galati (Romania), which increased the strategic importance of the object [1, p. 367-373].

The oil terminal is connected through a piping system with a tank farm and power station. It is possible to simultaneously recharge the three types of petroleum products. The terminal includes a berth to receive tankers, eight storage tanks for petroleum products with a total storage capacity of 63,600 m3 (each capacity ranging between 4200 and 12600 m3) and a machine loading tankers, a complex pumping system oil products tanks and naval vessels tanks in car tanks and a loading ramp of car tanks. The annual capacity of the oil terminal transhipment exceeds 1 million tons.

On 12 September 2007 ICS “Danube Logistics” SRL, the owner and operator GIFP received the fi rst marine tank fi lled with oil, its oil terminal. Petroleum products are imported into Moldova by ICS BEMOL TRADING SRL, which chartered the oil tanker shipping twin-shell art, under the fl ag of Barbados for the delivery of 3 750 tonnes of petroleum products. Gasoline and diesel originated in Romania, from Petromidia, and meet the standards EURO 4.

In August 2008 tank “Alfa Karadeniz” GIFP transported in the fi rst batch of petroleum products imported from Greece. Towards the end of the total number of oil tankers reached four. Oil products are only needs petrol stations. In 2014 through the territory of the International Port Oil Terminal were imported 156,800 tons of oil production and 17.1% less than the previous year. Also, through the oil terminal were exported 6800 tons oil production (in 2013-8300 tons). At the end of the reporting period still about 10 thousand tons of oil products were stored. Most petroleum products imported and shipped domestically (66%) were made at fuel stations of ICS “Bemol Retail” LLC. The other side of oil products has been designed for ICS “Petrom-Moldova” and “Rompetrol Moldova”General investor is willing to provide terminal services for other companies, importers of petroleum products. .

In 2009 was made the fi rst cruise line Giurgiuleşti- Istanbul- Giurgiuleşti with the ship “Princess Elena”, which can take on board 145 passengers. A cruise last 5 days (by sea - 32 hours), including 2 days of parking in Istanbul port. The cost of the cruise range from 185 to 600 euros per person depending on comfort. The vessel was equipped with cabins for 2, 3 and 4 beds, luxury and class cabins. Cost includes transportation roundtrip ticket, three meals a day and accommodation on board whilst in Istanbul and free transportation of 60 kg of hand luggage. In 2011, the race was canceled due to lack of passengers.

123

Grain terminal was opened on 24 July 2009, being the third object in the project put into operation GIFP a� er oil terminal and passenger terminal (put into operation on 17 March 2009 a� er an investment of 10 million. Dollars). Investments in grain terminal were US $ 17 million. The fi rst grain ship from Moldova le� the terminal Giurgiuleşti 15 August and had a cargo of 12,000 tons of wheat. This terminal has a capacity of 3000 tons of receipt of grain per day via railway and road transportation, and a load capacity of maritime transport units up to 7000 tons, with a loading rate of 300 tonnes per hour.

In the period of 2014 through grain terminal were exported 354,500 tons to 245,700 tons in 2013 and 255,400 tons of imported grain production. At the end of the grain terminal in the territory of 27,200 tons were stored grain production also made by local companies. The total grain storage services for the reporting period amounted to 53.5 mil. lei. Grain terminal has a capacity of export processing up to 500 thousand tons of grain. It features Swiss laboratory technique for determining the quality of the stored commodity.

During 2014 cargo terminal has signifi cantly increased its activity. Overall, through the terminal were transhipped 131,300 tons of goods, of which 77,200 tons of goods were imported into port outside the country and 54,100 tonnes were exported. The import / transit can be highlighted various building materials, metals, container, packaged etc. Terminal that is capable of handling typical bulk goods, occupies about 300 meters of river water with a minimum depth of fi ve meters. Already available an area of 4 ha for outdoor storage and a fl oating crane with li� ing capacity of 16 tons. Currently “Dabune Logistics” negotiating with “Lafarge” transhipment and storage agreement.

On 11 January 2012, the company “Danube Logistics” has put into operation its new Terminal General Cargo and Containers (TMGC). The terminal has an open storage space with an area of 2 hectares, the direct conexinue track and has 48 outlets for refrigerated containers. Terminal equipment consists of a mobile harbor crane “Sennebogen” with a maximum li� ing capacity of 70 tons, a telescopic boom crane extensive “Kalmar” and two front loader. Minimum water depth at the terminal is 5 meters. In 2014 the volume of containerized cargo transshipped increased over 2013 by 69% to 7786 containers. Total number of containers imported into GIFP increased by 58% compared to the previous year. Approximately 57% of container imports originated from China, 10% in Spain, 6% of India, 5% and 3% of Israel Turkey. In total Moldovan importers receive goods in containers from 49 diff erent countries during 2014. Cereal products in containers were delivered in Giurgiuleşti in Asian countries such as Indonesia, Malaysia, Taiwan, India and the Philippines. Shipping container has been used to export other products such as wine and spirits, nuts, dried fruit, apples, apple juice concentrate and sugar. In total containerized cargo exports increased by 85% and Moldovan goods reached the markets of 43 countries

Vegetable oil terminal in the GIFP works from November 2011. “Trans Bulk Logistics” SRL, a subsidiary company Trans Oil Group of Companies has built and manages terminal vegetable oils with Danube Logistics company. The terminal has a storage capacity of 6000 metric tons and can receive ships with a deadweight of up to 10000 tons.

Trans-Oil Group of Companies is exclusively oilseed processor with a total capacity of processing about 300 000 metric tonnes of sunfl ower oil per year. For 10 years this company was the fi rst exporter of grain harvested in Moldova, with a share of about 70%. “Trans Oil Group of Companies” has 14 industrial facilities grain storage and port terminal through which they hold, enable export of Moldovan goods on the international market. Total grain storage capacity is 750 000 metric tons. If the Port 2013 were exported 35,300 tons of vegetable oil, then in 2014 this index increased 2.3 times and amounted to 79,800 tons. Thus in 2014 through river terminals were transhipped 729,100 tons of various commodities or 1.6 times more than the previous year [4].


124

In 2011, the company “Danube Logistics” started construction of a gauge railway terminal combination of narrow and wide standard. As the fi rst gauge railway terminal combined plant / machine will allow the transport of goods by rail directly to / from Moldova, CIS and EU countries. Work on the railroad Cahul - Giurgiulesti of 49.7 km began in 2007. Completion of construction of the new railway terminal was planned for the end of the third quarter of 2012, will allow the transportation of liquid goods, dry goods and those containerized. On June 20, 2012, railway traffi c was temporarily suspended on the grounds that endangered the movement of passengers and trains, caused by heavy rains in the year 2012 CFM needing 350 million for the repair of the railroad (the at kilometer 93) and from 3 September 2013 traffi c Giurgiulesti - Cahul was resumed.

Currently, the International Port has registered 47 residents. During the reporting period there were registered 18 residents and excluded 12. 80 valid permit on 1 January 2015, 31 were issued in wholesale trade, 21 - provision of services, 15 - transport activity, 4 - Building, 9 - other types of activity.

A big advantage that would stimulate economic activity to operate through GIFP is that GIFP imported goods or services exported outside the Republic of Moldova in GIFP or supplied / provided within GIFP are exempt. In 2014 wholesale trade volume achieved international port amounted to 4 022.1 mil. Lei or 47.1% more than in 2013.

Also during the reporting period, the general investor, continued to provide port services, the value of which was 48.4 mil. Lei or 59.9% more than the same period in 2013. In addition, investor General off ered by other residents of the International Port of lease services in the amount of 15.5 mil. lei and utilities in the amount of 0.2 mil. lei. The volume of other types of activities in the reporting period amounted to 109.5 mil. Lei, including construction - 11.1 mil. Lei, fi nancial leasing - 8.6 mil. Lei, storage activity - 4.9 mil. Lei , Brokerage - 2.7 mil. lei.The volume of services in transport activity in the current year amounted to 128.5 mil. Lei. The volume of other types of activity in 2014 was 41.4 mil. Lei, including construction - 7.2 mil. Lei, fi nancial leasing - 7.1 mil. Lei, storage activity - 11.9 mil. Lei, Brokerage - 3.4 mil. lei.

In 2014 residents of various taxes paid in the amount of 296 mil. Lei to 258.5 mil. Lei, or 15.9% more than in 2013, including 171.1 mil. Lei excise, 98, 9 mil. lei VAT, 6.1 mil. lei income tax, 9.0 mil. lei for customs procedures and 6.9 mil. lei breakdown in the social security fund. Residents debts to the budget at the end of the reporting period amounted to 490,000 lei.

On 1 January 2015 the total number of employees was 432 persons, who had an average salary of 5900 lei. Most people were employed by ICS “Danube Logistics” SRL (156), “Trans Cargo Terminal” SRL (84) and ICS “Trans Bulk Logistics” LLC (49). The volume calculated salary for 2014.

125

Annex VI: Regional Trade Agreements in force 2015

Armenia-Republic of Moldova

Free Trade Agreement between Armenia and the Republic of MoldovaParties Armenia and the Republic of MoldovaDate of signature/entry into force: December 1993/December 1995End of implementation period 1995Selected features Agreement applies to goods only; accession; balance of payments; competition; customs-related procedures; dispute settlement; exceptions, general or for security; export restrictions; rules of origin; safeguardMeasures WTO consideration status Factual presentation completedRepublic of Moldova’s merchandise trade with Armenia (2014) 0.01% of total imports; 0.09% of total exportsWTO document series WT/REG173

CEFTA

Title Central European Free Trade Agreement (CEFTA) 2006Parties (current) Albania; Bosnia and Herzegovina; the Republic of Moldova; Montenegro; Serbia; The former Yugoslav Republic of Macedonia; UNMIK/KosovoDate of signature/entry into force: December 2006/May 2007End of implementation period 2015Selected features Agreement applies to goods only; customs-related procedures; investment; dispute settlement; intellectual property rights WTO consideration status Factual presentation not distributedRepublic ofMoldova's merchandise trade with CEFTA members (2014): Albania: 0.13% of total imports; 0.01% of total exports; Bosnia and Herzegovina: 0.04% of total imports; 0.04% of total exports; Montenegro: 0.00% of total imports; 0.01% of total exports; Serbia: 0.40% of total imports; 0.10% of total exports; FYR of Macedonia: 0.04% of total imports; 0.05% of total exports; UNMIK/Kosovo: 0.00% of total imports; 0.01% of total exportsWTO document series WT/REG233

CISa

Title Treaty on a Free Trade Area between members of the Commonwealth of Independent States (CIS)Parties Armenia; Belarus; Kazakhstan; Kyrgyz Republic; the Republic of Moldova;Russian Federation; Tajikistan; UkraineDate of signature/entry into force: October 2011/September-December 2012End of implementation period Not specifi edSelected features Agreement applies to goods only; accession; balance of payments; competition; customs-related procedures; dispute settlement; exceptions, general or for security; export restrictions; rules of origin; safeguardMeasures WTO consideration status Factual presentation completedRepublic of Moldova's merchandise trade with CISmembers (2014) Armenia: 0.01% of total imports and 0.09% of total exports; Belarus: 2.67% of total imports and 5.76% of total exports; Kazakhstan: 0.51% of total imports and 1.94% of total exports; Kyrgyz Republic: 0.01% of total imports and 0.14% of total exports; Russian Federation: 13.49% of total imports and 18.11% of total exports; Tajikistan: 0.00% of total imports and 0.08% of total exports; Ukraine: 10.28% of total imports and 4.67% of total exports WTO document series WT/REG173


126

European Union-Republic of Moldova

Title Deep and Comprehensive Free Trade Area between the EU and the Republicof MoldovaParties Austria; Belgium; Bulgaria; Croatia; Cyprus; Czech Republic; Denmark; Estonia; Finland; France; Germany; Greece; Hungary; Ireland; Italy; Latvia; Lithuania; Luxembourg; Malta; the Republic of Moldova; Netherlands; Poland; Portugal; Romania; Slovak Republic; Slovenia; Spain; Sweden; United KingdomDate of signature/entry into force 27 June 2014/ September 2014End of implementation period September 2014Selected features Agreement applies to goods and services; national treatment and market access for goods; trade remedies; TBT, standardization, metrology, accreditation and conformity assessment; SPS measures; customs and trade facilitation; establishment, trade in services and electronic commerce current payments and movement of capital; public procurement; IPR; competition; trade-related energy; transparency; trade and sustainabledevelopment; dispute settlement WTO consideration status Factual presentation completedRepublic of Moldova's merchandise trade with EU members (2014): Austria: 2.08% of total imports and 1.02% of total exports; Belgium: 0.76% of total imports and 0.48% of total exports; Bulgaria: 1.53% of total imports and 1.62% of total exports; Croatia: 0.03% of total imports and 0.01% of total exports; Cyprus: 0.02% of total imports and 0.30% of total exports; Czech Republic: 1.25% of total imports and 1.28% of total exports; Denmark: 0.32% of total imports and 0.07% of total exports; Estonia: 0.11% of total imports and 0.19% of total exports; Finland: 0.30% of total imports and 0.02% of total exports; France: 1.76% of total imports and 1.61% of total exports; Germany: 8.03% of total imports and 5.88% of total exports; Greece: 0.69% of total imports and 1.14% of total exports;Hungary: 1.61% of total imports and 0.24% of total exports; Ireland: 0.16% of total imports and 0.00% oftotal exports; Italy 6.61% of total imports and 10.40% of total exports; Latvia: 0.14% of total imports and 0.48% of total exports; Lithuania: 0.23% of total imports and 0.72% of total exports; Luxembourg: 0.07% of total imports and 0.00% of total exports; Malta: 0.00% of total imports and 0.00% of total exports; Netherlands: 1.06% of total imports and 0.88% of total exports; Poland: 2.93% of total imports and 2.75% of total exports; Portugal: 0.14% of totalimports and 0.02% of total exports; Romania: 15.10% of total imports and 18.55% of total exports; Slovak Republic: 0.40% of total imports and 0.35% of total exports; Slovenia: 0.38% of total imports and 0.03% of total exports; Spain: 0.89% of total imports and 0.50% of total exports; Sweden: 0.37% of total imports and 0.10% of total exports; and United Kingdom: 1.30% of total imports and 4.62% of total exports WTO document series WT/REG352.

Kyrgyz Republic-Republic of Moldova

Title Free Trade Agreement between the Kyrgyz Republic and the Republicof MoldovaParties Kyrgyz Republic and the Republic of MoldovaDate of signature/entry intoforceMay 1995/November 1996End of implementation period 1996Selected features Agreement applies to goods only; accession; balance of payments;competition; countervailing measures; customs-related procedures; disputesettlement; exceptions, general or for security; export restrictions;intellectual property rights; rules of origin; safeguard measures; SPS; TBTWTO consideration status Factual abstract distributedRepublic of Moldova'smerchandise trade with

127

Kyrgyz Republic (2014)0.01% of total imports; 0.14% of total exportsWTO document series WT/REG144

Russian Federation-Republic of Moldova

Title Agreement between the Cabinet of Ministers – the Russian Federation andthe Republic of Moldova on Free TradeParties Russian Federation and the Republic of MoldovaDate of signature/entry into force: February 1993/March 1993End of implementation period 1993Selected features Agreement applies to goods only; customs-related proceduresWTO consideration status Factual presentation not distributed Republic of Moldova’s merchandise trade with Russian Federation (2014) 13.49% of total imports; 18.11% of total exportsWTO document series WT/REG320

Ukraine-Republic of Moldova

Title Free Trade Agreement between the Cabinet of Ministers of Ukraine and the Government of the Republic of MoldovaParties Ukraine and the Republic of MoldovaDate of signature/entry into force:November 2003/May 2005End of implementation period 2008Selected features Agreement applies to goods only; competition; customs-related procedures; dispute settlement; exceptions, general or for security; export restrictions; government procurement; intellectual property rights; rules of origin; safeguard measures; SPS; subsidies; TBT WTO consideration status Factual presentation completedRepublic of Moldova's merchandise trade withUkraine (2014) 10.28% of total imports; 4.67% of total exportsWTO document series WT/REG249

Azerbaijan-Republic of Moldova

Title Free Trade Agreement between the Government of the Republic of Moldova and the Government of the Republic of AzerbaijanParties The Republic of Moldova and AzerbaijanDate of signature/entry into force: May 1995/April 1996End of implementation period 1996Selected features Agreement applies to goods and services WTO consideration status Not yet notifi edRepublic of Moldova's merchandise trade withAzerbaijan (2014) 0.00% of total imports; 0.25% of total exports

Belarus-Republic of Moldova

Title Free Trade Agreement between the Government of the Republic of Moldovaand the Government of the Republic of BelarusParties (current) The Republic of Moldova and BelarusDate of signature/entry into force :June 1993/December 1994End of implementation period Selected features 1994Agreement applies to goods only WTO consideration status Not yet notifi edRepublic of Moldova’s merchandise trade with Belarus (2014) 2.67% of total imports; 5.76% of total exports


128

Kazakhstan-Republic of Moldova

Title Free Trade Agreement between the Government of the Republic of Moldova and the Government of the Republic of Kazakhstan Parties The Republic of Moldova and KazakhstanDate of signature/entry into force: May 1995/February 1996End of implementation period 1996Selected features Agreement applies to goods only WTO consideration status Not yet notifi edRepublic of Moldova's merchandise trade with Kazakhstan (2014)0.51% of total imports; 1.94% of total exports

Georgia-Republic of Moldova

Title Free Trade Agreement between the Government of the Republic of Moldova and the Government of GeorgiaParties The Republic of Moldova and GeorgiaDate of signature/entry into force: November 1997/April 2007End of implementation period 2007Selected features Agreement applies to goods only WTO consideration status Not yet notifi edRepublic of Moldova's merchandise trade with Georgia (2014)0.04% of total imports; 1.05% of total exports

Turkmenistan-Republic of Moldova

Title Free Trade Agreement between the Government of the Republic of Moldova and the Government of TurkmenistanParties The Republic of Moldova and TurkemenistanDate of signature/entry into force: December 1993/March 1996End of implementation period 1996Selected features Agreement applies to goods onlyWTO consideration status Not yet notifi edRepublic of Moldova's merchandise trade with Turkmenistan (2014)0.00% of total imports; 0.05% of total exports

Source: WTO Secretariat on the basis of information provided by the Moldova

129

Annex VII: Temporary Storage

http://ec.europa.eu/taxation_customs/customs/procedural_aspects/general/temporary_

storage/index_en.htm refers

Temporary storage

What is temporary storage & why is a temporary system necessary? – ‘Temporary storage2 is:“an especially important facilitation measure because it may take hours or even days a� er arrival of the goods for the importer/broker to be notifi ed by the carrier. Delays in notifi cation of the arrival of the goods may subsequently delay the importer/broker in preparing and submitting the import goods declaration to Customs to start the clearance formalities. Goods arriving in the Customs territory should be unloaded as soon as possible and stored temporarily in Customs-approved buildings, Customs warehouses or free zones, pending the completion of Customs formalities.

• Temporary storage allows the ship, truck, aircra�, or container that has been used to convey the goods to the country to be emptied and released for other commercial activity. Since such tem-porary storage areas are under Customs control, they must meet physical security requirements and be approved by Customs.

• Normally, authorized persons operating such temporarily storage facilities are required to post financial security with Customs to cover any losses in duty/tax that may result if goods are lost or stolen. Temporary storage should be allowed for all goods irrespective of quantity, country of origin, or country from which they arrived. Hazardous goods, however, should be only admitted into those temporary stores specifically equipped with special installations to properly handle or store such goods.

• Customs should not require any special document for putting goods into temporary storage, i.e., only the manifest or any other commercial document submitted by the carrier to report the goods arrival to Customs should be sufficient. While the goods are in temporary storage, the importer should be allowed access to the goods to check whether they conform to contract conditions.

• Customs may allow goods entered into temporary storage to undergo certain authorized oper-ations necessary to preserve the goods in their unaltered state, e.g., cleaning, beating, removal of dust, sorting, or repair or change of faulty packaging, or to undergo normal operations nec-essary to facilitate their removal from the temporary store in order to continue their transport (e.g., sorting, piling, weighing, marking, labeling, consolidation of different consignments). Nor-mally, Customs should not allow repackaging of goods in a manner that may alter the essential character of the goods or conceal their origin.

• If the goods are not removed from the temporary store within the prescribed period (normally within 45 days), Customs can either grant an extension, allow the goods to be placed in a cus-toms warehouse or transferred to a free zone, or be exported. If goods are not removed, Cus-toms should be legally authorized to auction or otherwise dispose of the goods’.

In the European Union non-Community goods brought into the customs territory of the Community cannot be released from the customs offi ce or other approved place (Article 38 Community Customs Code - CCC) at which they are presented until they are assigned to a customs-approved treatment or use. In the meantime, the goods must remain under customs supervision and are held in ‘temporary storage’ (Articles 50 - 53 CC), either at the customs offi ce of presentation or at any other place designated, approved and controlled by that offi ce.

2 IFC Reforming the Regularory Procedures for Import and Export Guide for Prac cioners refers.


130

How does the temporary storage procedure work in the EU? - The goods are normally placed in an approved temporary storage facility (Article 185 Customs Code Implementing Provisions - CCIP) operated either by the importer or by a storage-keeper; the person holding the goods may be required to provide a guarantee to cover any customs debt that may arise (Article 51 (2) in conjunction with Article 189 CC). Where customs authorities themselves maintain a warehouse, they can require storage of the goods at this place (Articles 51 (1) and 53 CC). A customs warehouse may also be used for temporary storage (Article 530 (2) CCIP).

If goods are to be removed from the customs offi ce of presentation for storage elsewhere, i.e. at a storage facility designated and controlled by another customs offi ce, then the transit procedure must be used. The goods are then under temporary storage again when the transit procedure has ended. During the temporary storage the goods may only be handled or treated in order to ensure their preservation, e.g. by cooling (Article 52 CC) but, with the permission of the customs authorities, the importer may examine the goods or take samples (Article 42 CC, Article 182 CCIP).

How long may temporary storage last in the EU? - The goods must (in accordance with Article 49 CC) be assigned a customs-approved treatment or use within:

• 45 days from the date on which the summary declaration is lodged in the case of goods carried by sea;

• 20 days from the date on which the summary declaration is lodged in the case of goods carried otherwise than by sea.

What are the consequences if the temporary storage’s time-limits are exceeded in the EU? - If the goods have not been assigned a customs-approved treatment or use within the prescribed period, the customs authorities may, at the expense of the importer or the holder of the goods;

• remove the goods to a place under their supervision and /or • sell the goods (Article 53 CC), or • destroy them (Article 56 CC).

What are the generic weaknesses of a temporary storage system for arriving goods? - When assessing the eff ectiveness of Customs temporary storage facilities, the need for reform can be determined by an evaluation of any identifi ed weakenesses. Ineffi cient temporary storage facilities can be characterized by:

• A lack of storage facilities, resulting in the conveyance being held up for days and not being released for other commercial activities;

• Insecure storage facilities, resulting in pilferage and damage claims;• Customs requiring a separate form to be filled and security posted to enter goods into tempo-

rary store resulting in unnecessary administrative costs and delays;• A lack of equipment or personnel to unload the goods from the conveyance into the temporary

store, leading to delays, breakage, and the�;• Customs not allowing goods to remain in store for a sufficient period of time to allow release

formalities to be completed, leading to demurrage charges, and;• Customs not allowing the trader to have access to his goods in temporary storage, resulting in

the importer/broker clearing the goods, possibly having to face a Customs offense if the goods declared are not the same as those arrived, then having the cost and delay associated with submitting amending customs declaration if the goods ultimately received do not match the contract of sale.

131

What is the procedure established at GIFP for the granting of temporary storage?

When comparing procedures for the granting of temporary storage in the GIFP with those of the EU diff erences are encountered. In EU countries the period of time allowed for temporary storage of goods introduced by containers is 45 days, however, in Moldova the prescribed time is only 20 days although this can be extended to a maximum period of 60 days. / Art 158, MD CC /.

In addition, currently a customs declaration is needed in order to place goods under temporary storage. This is a simplifi ed summary declaration submitted electronically to ASYCUDA supported only by an invoice or pro-forma invoice or any other document related to the value of the goods in order to calculate the sum of the guarantee3. When goods are released from the temporary stoarge procedure into other Customs regimes it is not necessary to submit any additional decalaration other than that required to bring the goods to Home Use or to place them under transit supervision.

When released from temporary storage it is however necessary to provide a diff erent set of supporting documents as would be the case if the goods had not been placed in temporary storage at the beginning and for Import or transit it is not possible to submit copies- only original supporting documents are acceptable.

What is the procedure established at GIFP for import of goods from the Free Economic Zone?

A� er the container is physically discharged the customs broker, owner of the goods or his representative must select the appropriate customs procedure to be applied. The selection of Customs procedure is mandatory and must be indicated by the end of the second working day a� er the arrival of the goods at the port. (/ art. 176 MD CC /) The declarant however, does not face pressure to place the goods into a free economic zone procedure and it is not necessary to submit more than one customs declaration.

What is the procedure established at GIFP for the transit of goods from the Free Economic Zone?

As part of the study EUBAM sought to undertsand the transit procedures carried out within the GIFP FEZ and the type of supporting documents necessary to obtain the release of goods into the procedure. Supporting documents required for transit procedures included: invoice, packing list, any other transportation documents related to the goods or documents in connection to the nature of the goods as it is required by Government decision № 1140/2005 –Section 3, art. 96, point 4. In addition to this, permits or licenses might to be required for the transit of goods which are restricted or are subject of prohibition in Moldova. The release of goods into transit is free of charge. There is no extra cost for the broker excepet for the seal placed on the means of transport - truck / container. Nevertheless it is mandatory for excise goods in particular cigarettes and petrol products to be cleared / released into free circulation at GI

3 Customs accept copies of original documents provided they have been stamped by the customs broker. The usual prac ce is to receive scanned copies of these documents by e-mail and then a stamp of the broker is required on them to confirm the validity of the papers.


132

Annex VIII: Free Economic Zones Comparative ReviewSummary of fi ndings from comparative analysis of

Moldovan and EU Legislation in relation to Free Zones

General Observation

Law No. 8 (2005) on Free International Port Giurgiulesti raises a number of issues and concerns which are summarised below.Of major concern is the elaboration and application of additional legislation for the control of Free Zones in Moldova (Customs Code of Republic of Moldova, Section 13), administered through the Law on International Free Port Giurgiulesti envisaged under the umbrella of the Ministry of Economy.

Exclusion of the port from the general customs law provisions and application of a special supplementary law which ensures the customs regime on the territory of the International Free Port Giurgiulesti is not considered in accordance with the strategic objectives of the EU Customs Blueprints, which state that: ‘administrations should seek to developa legal basis which gives the customs administration the authority to take the decisions on customs administrative matters’.

Specifi c Legislative Amendments.

1.

It is proposed to introduce a new para. 1/1 in Art. 1 (General Provisions) with the view to declare the

Port as BCP with special status, as well as to envisage the possibility to (1) introduce/station/exit goods to/from the Port, (2) to process goods, and (3) introduce goods for fi nal consuption – all elaborated in separate proposed arts. 7/1, 7/2 and 7/3, respectively.

EU customs law contains no corresponding provisions in this area related to the special status of ports as Border Crossing Points (BCPs). In addition, within the new Moldovan legislative proposals and unlike the current EU Customs law there is no reference to the existence of effi cient ‘customs supervision and customs control-related’ provisions. According to the Union Customs Code(UCC), as a rule, the goods under free zone procedure shall be subject to customs supervision and may be subject to customs control. Because of a lack of such regulations within the proposed law, it is not possible to treat a Port BCP with special status as a free zone.

Union Customs Code/ Preamble

(49) In view of increased security-related measures, the placing of goods into free zones should become a customs procedure and the goods should be subject to customs controls at entry and with regard to records.

Article 3/UCC/Scope of the customs legislation, mission of customs and defi nitions /Mission

of customs authorities

Customs authorities shall be primarily responsible for the supervision of the Union’s international trade, thereby contributing to fair and open trade, to the implementation of the external aspects of the internal market, of the common trade policy and of the other common Union policies having a bearing on trade, and to overall supply chain security.

Article 5/UCC/Defi nitions

• “customs supervision” means action taken in general by the customs authorities with a view to ensuring that customs legislation and, where appropriate, other provisions applicable to goods subject to such action are observed;

• “customs controls” means specific acts performed by the customs authorities in order to ensure compliance with the customs legislation and other legislation governing the entry, exit, transit, movement, storage and end-use of goods moved between the customs territory of the Union

133

and countries or territories outside that territory, and the presence and movement within the customs territory of the Union of non-Union goods and goods placed under the end-use proce-dure;

Article 134/UCC/Entry of goods in to the customs territory of the Union/Customs supervision

Goods brought into the customs territory of the Union shall, from the time of their entry, be subject to customs supervision and may be subject to customs controls.

They shall remain under such supervision for as long as is necessary to determine their customs status and shall not be removed therefrom without the permission of the customs authorities.Non-Union goods shall remain under customs supervision until their customs status is changed, or they are taken out of the customs territory of the Union or destroyed.

Article 267/UCC/Formalities on exit of goods/Customs supervision and formalities on exit

Goods to be taken out of the customs territory of the Union shall be subject to customs supervision and may be subject to customs controls.

Article 139/UCC/ Presentation of goods to customs

1. Goods brought into the customs territory of the Union shall be presented to customs immediately upon their arrival at the designated customs offi ce or any other place designated or approved by the customs authorities or in the free zone by one of the following persons: a) the person who brought the goods into the customs territory of the Union; b) the person in whose name or on whose behalf the person who brought the goods into that

territory acts; c) the person who assumed responsibility for carriage of the goods a� er they were brought

into the customs territory of the Union (…).3. Notwithstanding the obligations of the person described in paragraph 1, presentation of the

goods may be eff ected instead by one of the following persons: (…)a) any person who immediately places the goods under a customs procedure;b) the holder of an authorisation for the operation of storage facilities or any person who

carries out an activity in a free zone. (…)7. Goods presented to customs shall not be removed from the place where they have been

presented without the permission of the customs authorities.

The amendment seeks to grant the port a “special status” without fully defi ning the terminology.

2.

It is proposed that the territory of the Port include also the Aquatorium (in addition to the Oil and Refi nery Terminal, Cargo Terminal, Passengers Terminal, and the territory of the Port’s development).

According to EU regulation Member States (Art. 243 UCC) shall determine the area covered by each zone, but the Free Zone shall be an enclosed area, physically protected by a fence or wall.

Article 243/UCC /Special procedures/Storage/Free zones/Designation of free zones

1. Member States may designate parts of the customs territory of the Union as free zones. For each free zone the Member State shall determine the area covered and defi ne the entry and exit

points. 2. Member States shall communicate to the Commission information on their free zones which are

in operation.3. Free zones shall be enclosed.


134

The perimeter and the entry and exit points of the area of free zones shall be subject to customs supervision.

4. Persons, goods and means of transport entering or leaving free zones may be subject to customs controls.

Moreover, goods brought into free zone are deemed to be placed under free zone procedure and are under customs supervision performed by the customs authorities upon entry and exit.

The fence enclosing Free Zones shall be such as to facilitate supervision by the customs authorities outside the Free Zone and prevent any goods being removed irregularly from it. It is a requirement for all economic operators (such as businesses) involved in international trade to be registered and to have an EORI number (Economic Operator Registration Number). The activities carried out by the holder of the free zone procedure shall be subject to the prior approval by the customs authorities of the stock records4

Article 214/UCC/Union Customs Code/Special procedures/Records

Except for the transit procedure, or where otherwise provided, the holder of the authorisation, the holder of the procedure, and all persons carrying on an activity involving the storage, working or processing of goods, or the sale or purchase of goods in free zones, shall keep appropriate records in a form approved by the customs authorities.

The records shall contain the information and the particulars which enable the customs authorities to supervise the procedure concerned, in particular with regard to identifi cation of the goods placed under that procedure, their customs status and their movements.

Article 237/UCC/Storage/Scope

1. Under a storage procedure, non-Union goods may be stored in the customs territory of the Union without being subject to any of the following: a) import duty; b) other charges as provided for under other relevant provisions in force; c) commercial policy measures, insofar as they do not prohibit the entry or exit of goods into

or from the customs territory of the Union. 2. Union goods may be placed under the customs warehousing or free zone procedure in accordance

with Union legislation governing specifi c fi elds, or in order to benefi t from a decision granting repayment or remission of import duty.

Article 245 /UCC /Presentation of goods and their placing under the procedure

1. Goods brought into a free zone shall be presented to customs and undergo the prescribed customs formalities in any of the following cases: a) where they are brought into the free zone directly from outside the customs territory of the Union; b) where they have been placed under a customs procedure which is ended or discharged

when they are placed under the free zone procedure; c) where they are placed under the free zone procedure in order to benefi t from a decision

granting repayment or remission of import duty;d) where legislation other than the customs legislation provides for such formalities.

2. Goods brought into a free zone in circumstances other than those covered by paragraph 1 shall not be presented to customs.

3. Without prejudice to Article 246, goods brought into a free zone are deemed to be placed under the free zone procedure: a) at the moment of their entry into a free zone, unless they have already been placed under

another customs procedure; or 4 Goods brought into a free zone are deemed to be placed under free zone procedure (245 par. 3, without prejudice to 246 UCC).

135

(b) at the moment when a transit procedure is ended, unless they are immediately placed under a subsequent customs procedure.

The amendment seeks to include additional areas within the territory of the Port without satisfactorily defi ning the necessary security and customs supervision measures.

3.

It is proposed that title of Art. 7 is changed from “Customs regime” to “Customs procedures”. The term ‘Customs regime’ as described in Law on International Free Port Giurgiulesti is defi ned as;‘an action system ensured by the customs body’. The Customs Code of Moldova,on the other hand defi nes ‘Customs regime’ as similar to the meaning of ‘customs procedure’within the EU provisions. The purpose of the amendment is described as ‘one may deem the newly proposed title as in line with the Community Customs Code language’when in fact this is not the case.

Terminology changes as proposed are not in compliance with current EU provisions related to ‘customs procedures’, defi ned by Union Custom Code.

Article 5/ UCC /Defi nitions

(16) “customs procedure” means any of the following procedures under which goods may be placed in accordance with the Code: a) release for free circulation; b) special procedures; c) export;

Article 210/ UCC /Special procedures/ Scope

Goods may be placed under any of the following categories of special procedures: a) transit, which shall comprise external and internal transit; b) storage, which shall comprise customs warehousing and free zones; c) specifi c use, which shall comprise temporary admission and end-use; d) processing, which shall comprise inward and outward processing.

4.

It is planned in addition, that reference is made to the newly proposed Art. 7/1, 7/2, and 7/3 which defi ne the applicable regime to various goods depending on their fi nal destination (to

replace the generally-worded duty of customs declaration). Most importantly, a series of provisions are being re-introduced in Art. 7, a� er having been previously deleted in 2012. Finally, a paragraph dealing with some aspects of customs regime is deleted (those aspects being proposed to be dealt with in the newly proposed Art. 7/1, 7/2, and 7/3). Some additional minor fi ne-tuning of the wording here and there is proposed.

According to the EU provisions5, at importation Free Zones are mainly for storage of non-Union goods until they are released for free circulation. No import declaration has to be lodged as long as the goods are stored in the free zone6. Import and export declarations have only to be lodged when the goods leave the Free Zone.

Free Zone procedure applies also to Union goods, stored in free zones, which can be considered as already exported. In principle Union goods that can benefi t from export refunds are treated as not being on the EU customs territory upon entry into a free zone7.

5 Art. 237 UCC par. 1; & refers.6 Art/ 237, 158 indirectly refers.7 Art. 237 par. 2 refers.


136

The rules stated by EU customs law provisions8 related to resignation of lodging the customs declaration while entering the free zone are consisted on mandatory keeping stock records in a form approved by customs authorities, treated as a basic tool for customs control and customs supervision. All persons carrying out an activity involving the storage, working or processing, or sale or purchase, of goods in a Free Zone shall keep stock records in a form approved by the customs authorities. Goods shall be entered in the stock records as soon as they are brought into the premises of such person. The stock records must enable the customs authorities to identify the goods, and must record their movements. All goods under free zone procedure (non-Union and Union) are entered in the stock-records kept by the holder of the procedure and all persons carrying on an activity involving the storage, working, processing of goods, or the sale or purchase of goods in free zone

Article 158 / UCC/Placing goods under a customs procedure /Customs declaration of goods

and customs supervision of Union goods

1. All goods intended to be placed under a customs procedure, except for the free zone procedure, shall be covered by a customs declaration appropriate for the particular procedure.(…)

3. Union goods declared for export, internal Union transit or outward processing shall be subject to customs supervision from the time of acceptance of the declaration referred to in paragraph 1 until such time as they are taken out of the customs territory of the Union or are abandoned to the State or destroyed or the customs declaration is invalidated.

The amendment seeks to replace previously deleted articles from 2012 without specifying the required Customs control and supervision measures contained within EU Customs legislation (current & proposed)

5.

It is proposed to introduce a new Article 7/1regulating the entering, stationing and exiting of goods through the Port. It introduces the duty to notify the Customs by Bill of Lading (or by other transport document) electronically and 6 hours in advance. Goods may stay in Port up to 90 days (with possibility for extension) without import duties or guarantee, a� er which shall be placed under a Customs regime or exited. The goods may be handled with the view to ensure their integrity

or prepare for sale/transportation (such as sorting, packing, marking, etc.) without changing their tariff classifi cation. Such handling does not require Customs authorization (only informing). The article would allow temporary entry of goods and vehicles from the rest of Customs

territory to the Port’s territory for up to 20 days, not for consumption, by only informing Customs, according to a procedure to be approved by Government.

As noted it is assumed that in the amended Moldovan legislation goods are not required to be presented to the Customs, and only the Bill of Lading in advance or other transport documents need be lodged

Union legislation requires, as a general principle, that all goods brought into the customs territory of the Union , regardless of their fi nal destination, shall be covered by an Entry Summary Declaration which should be lodged electronicaly at the customs offi ce of fi rst entry, before the goods are brought into the customs territory of the Union . The time limits for the lodging of the declaration vary according to the mean of transport and duration of transportation carrying the goods in to the customs territory of the Union.

8 Art, 158 UCC refers.

137

The general rules of the entering, stationing and exiting of goods in free zone are based on keeping the stock records which must enable the customs authority to identify the goods, must record their movements, shall include information enabling the goods to be monitored at any time, in particular:

• particulars of marks, identifying numbers, number and kind of packages, the quantity and usual commercial description of the goods and, where relevant, the identification marks of the con-tainer;

• information enabling the goods to be monitored at any time, in particular their location, the customs-approved treatment or use assigned to them a�er storage in the free zone or free warehouse or their re-entry into another part of the customs territory of the Community;

• reference particulars of the transport document used on entry and removal of the goods; • indication of customs status • particulars of usual forms of handling; • particulars concerning goods which would not be subject upon release for free circulation or

temporary importation to import duties or commercial policy measures, the use or destination of which must be checked;

There shall be no limit to the length of time goods may remain in the Free Zone and any limitations of operation of the free zone shall be deemed not in line with the EU customs law provisions.The goods may undergo the usual forms of handling intended to preserve them, improve their appearance or marketable quality or prepare them for distribution or resale.

Article 220/ UCC /Special procedures /Usual forms of handling

Goods placed under customs warehousing or a processing procedure or in a free zone may undergo usual forms of handling intended to preserve them, improve their appearance or marketable quality or prepare them for distribution or resale.

Article 238 / UCC /Storage/ Duration of a storage procedure

There shall be no limit to the length of time goods may remain under a storage procedure.

6.

It is proposed to introduce a new Article 7/2 which would allow for entering goods for purpose of processing, including with the view to change their tariff classifi cation. The entering/exiting of goods is proposed to be carried out according to the inward processing procedure prescribed by the Moldovan Customs Code.

This proposal is considered a positive development since it isreferenced to the Customs Code of Moldova and therefore ensurescorrect application of the procedure and that the activity requires specifi c authorization of the customs authorities.

The procedure of inward processing stated in Customs Code of Moldova is mostly in line with EU provisions in this area. Note: according to to the EU provisions9, a fi nancial guarantee is mandatory requirement of granting of authorization to operate inward processing. Where records have to be kept for the purposes of a customs procedure (in this case inward processing) the information contained in those records need not appear in the stock records10.

Article 211/UCC/Special procedures/Authorisation

1. An authorisation from the customs authorities shall be required for the following: a) the use of the inward or outward processing procedure, the temporary admission procedure

or the end-use procedure(…)

9 Art. 211 par.1, 3 UCC refers.10 Art, 245 para 3(a) & Art 247 UCC refer


138

3. Except where otherwise provided, the authorisation referred to in paragraph 1 shall be granted only to persons who satisfy all of the following conditions: (…)c) where a customs debt or other charges may be incurred for goods placed under a special

procedure, they provide a guarantee in accordance with Article 89;

Article 247/UCC/Non-Union goods in free zones

1. Non-Union goods may, while they remain in a free zone, be released for free circulation or be placed under the inward processing, temporary admission or end-use procedure, under the conditions laid down for those procedures.

In such cases the goods shall not be regarded as being under the free zone procedure (...)

7.

It is proposed to introduce a new Article 7/3 which would allow for entering both foreign and

domestic goods for purpose of fi nal consumption. Such foreign goods would be placed under import procedure, while domestic ones – under export, and be subject to customs duties and economic policy measures, except for facilities provided for the Port’s residents (in Art. 7 (3) & (4)). The daily non-commercial entries of domestic goods not exceeding 500 Euros shall not be declared. Exited waist for destruction shall not be declared under Customs supervision. For frequent entries, “periodic declarations” may be submitted (exception: excised goods). Customs may require a guarantee (a Bank letter or money transfer) to secure payment of potential customs duty.

According to the EU provisions11, free zone procedure applies to both non-Union and Union goods. Non-Union goods stored in the Free Zone are considered as not yet imported to the Customs territory of the Union whereas certain Union goods stored in Free Zones can be considered as already exported.

As a rule entering free zone goods shall be entered in the stock records as soon as they are brought into premises of persons carrying on activity the storage, working and processing or sale or purchase of goods in a free zone.

There is no compliance with EU provisions related to destruction and consumption of Non-Union goods in Free Zone related to the proposals of changes, named as the exceptions from customs fees, port originating goods, insuffi ciently processed goods, and other matters.

The holder of Free zone procedure is obliged to keep the records of machines, equipment and goods entering the free zone and the transparency of expenditures and incomes which are necessary for its operation.

Providing a fi nancial guarantee as a mandatory requirement of authorization of Free Zone treatment is not in line with EU provisions Art12.

Article 246 / UCC/Union goods in free zone

Union goods may be entered, stored, moved, used, processed or consumed in a free zone. In such cases the goods shall not be regarded as being under the free zone procedure.

11 Art. 237 UCC refers.12 Art 89 UCC & Art 211 par. 3 (indirectly) refers

139

Article 244/ UCC /Special procedures/Storage/Free zones/Buildings and activities in free zones

1. The construction of any building in a free zone shall require the prior approval of the customs authorities.

2. Subject to the customs legislation, any industrial, commercial or service activity shall be permitted in a free zone. The carrying on of such activities shall be subject to notifi cation, in advance, to the customs authorities.

3. The customs authorities may impose prohibitions or restrictions on the activities referred to in paragraph 2, having regard to the nature of the goods in question, or the requirements of customs supervision, or security and safety requirements.

4. The customs authorities may prohibit persons who do not provide the necessary assurance of compliance with the customs provisions from carrying on an activity in a free zone.

Article 247/ UCC/Non-Union goods in free zones

(...)2. Without prejudice to the provisions applicable to supplies or to victualling storage, where the procedure concerned so provides, paragraph 1 shall not preclude the use or consumption of goods of which the release for free circulation or temporary admission would not entail application of import duty or measures laid down under the common agricultural or commercial policies. In the case of such use or consumption, no customs declaration for the release for free circulation or temporary admission procedure shall be required. Such declaration shall, however, be required if such goods are subject to a tariff quota or ceiling.

8.

Some additions are proposed to the Moldova Customs Code with the view to exclude the transports operating through the Port from application of Art.144 (obligation to notify) and Art.175 (obligation to declare).

Proposals for additions to the Customs Code in art 144 par.3 (obligation to notify) in the area of customs clearance and in art. 173 par. 2 (obligation to declare) in the area of customs carrier place of declaration related to international free ports do not meet EU legal requirements and are not considered in accordance with the strategic objectives of the EU Customs Blueprints to have a stable and comprehensive legal system and set out the obligations and rights of customs offi cers, economic operators and the public in a transparent way.

These provisions set out the rights for the operations of economic operators which are not regulated by customs law and as such it is considered that customs supervision could be jeopardized.

Moreover, the institution of free international portdoes not correspond to articles of Customs Code of Moldova, providing defi nitions and terms of customs activity, especially to the Free Zones

9.

It is also proposed a minor fi ne-tuning of the wording in Art. 175 (place of declaration).The reason behind the proposed amendment to Art. 175 par 2 is not clear and needs further clarifi cation.

Summary Table of Concerns and Inconsistencies with EU Free Zone Legislation1. Exclusion of the port from the general customs law provisions and application of a special

supplementary law which ensures the customs regime on the territory of the International Free Port Giurgiulesti is not considered in accordance with the strategic objectives of the EU Customs Blueprints, which state that: ‘administrations should seek to developa legal basis which gives the customs administration the authority to take the decisions on customs administrative matters’.

2. The amendment seeks to grant the port a “special status” without fully defi ning the terminology.


140

3. The amendment seeks to include additional areas within the territory of the Port without satisfactorily defi ning the necessary security and customs supervision measures.

4. The amendment seeks to replace previously deleted articles from 2012 without specifying the required Customs control and supervision measures contained within EU Customs legislation (current & proposed)

5. There shall be no limit to the length of time goods may remain in the Free Zone and any limitations of operation of the free zone shall be deemed not in line with the EU customs law provisions.The goods may undergo the usual forms of handling intended to preserve them, improve their appearance or marketable quality or prepare them for distribution or resale.

6. The procedure of inward processing stated in Customs Code of Moldova is mostly in line with EU provisions in this area. Note: according to to the EU provisions13, a fi nancial guarantee is mandatory requirement of granting of authorization to operate inward processing. Where records have to be kept for the purposes of a customs procedure (in this case inward processing) the information contained in those records need not appear in the stock records14.

7. There is no compliance with EU provisions related to destruction and consumption of Non-Union goods in Free Zone related to the proposals of changes, named as the exceptions from customs fees, port originating goods, insuffi ciently processed goods, and other matters.

Providing a fi nancial guarantee as a mandatory requirement of authorization of Free Zone treatment is not in line with EU provisions Art15.

8. Proposals for additions to the Customs Code in art 144 par.3 (obligation to notify) in the area of customs clearance and in art. 173 par. 2 (obligation to declare) in the area of customs carrier place of declaration related to international free ports do not meet EU legal requirements and are not considered in accordance with the strategic objectives of the EU Customs Blueprints to have a stable and comprehensive legal system and set out the obligations and rights of customs offi cers, economic operators and the public in transparent way.

9. The reason behind the proposed amendment to Art. 175 par 2 is not clear and needs further clarifi cation.

13 Art. 211 par.1, 3 UCC refers.14 Art, 237 UCC refers15 89 UCC and 211 par. 3 (indirectly) refers.

141

Issue Community Customs CodeCommunity Customs

Implementing CodeUnion Customs Code

Summary of

Amendments

Port as BCP with special status

No BCP-related provisions identifi ed. Provisions related to entering/stationing/exiting goods to/from Free Zones, as well as their processing and fi nal consuption are provided below. Article 37

Customs supervision 1. Goods brought into the customs territory of the Community shall, from the time of their entry, be subject to customs supervision. They may be subject to control by the customs authority in accordance with the provisions in force.2. They shall remain under such supervision for as long as necessary to determine their customs status, if appropriate, and in the case of non-Community goods and without prejudice to Article 82 (1), until their customs status is changed, they enter a free zone or free warehouse or they are re-exported or destroyed in accordance with Article 182.Article 38

1. Goods brought into the customs territory of the Community shall be conveyed by the person bringing them into the Community without delay, by the route specifi ed by the customs authorities and in accordance with their instructions(...)(b) to a free zone, if the goods are to be brought into that free zone direct:- by sea or air, or- by land without passing through another part of the customs territory of the Community, where the free zone adjoins the land frontier between a Member State and a third country.

Article 799

Defi nitionFor the purposes of this Chapter: (a) ‘control type I’ means controls principally based on the existence of a fence;Article 803

Approval of stock records 1. The carrying on of activities by an operator shall be subject to the approval by the customs authorities of the stock records referred to: — in Article 176 of the Code in the case of a free zone of control type I or a free warehouse

Preamble(49) In view of increased security-related measures, the placing of goods into free zones should become a customs procedure and the goods should be subject to customs controls at entry and with regard to records.Article 3

Mission of customs authorities Customs authorities shall be primarily responsible for the supervision of the Union's international trade, thereby contributing to fair and open trade, to the implementation of the external aspects of the internal market, of the common trade policy and of the other common Union policies having a bearing on trade, and to overall supply chain security.Article 5

"customs supervision" means action taken in general by the customs authorities with a view to ensuring that customs legislation and, where appropriate, other provisions applicable to goods subject to such action are observed;"customs controls" means specifi c acts performed by the customs authorities in order to ensure compliance with the customs legislation and other legislation governing the entry, exit, transit, movement, storage and end-use of goods moved between the customs territory of the Union and countries or territories outside that territory, and the presence and movement within the customs territory of the Union of non-Union goods and goods placed under the end-use procedure;Article 134

Customs supervisionGoods brought into the customs territory of the Union shall, from the time of their entry, be subject to customs supervision and may be subject to customs controls.They shall remain under such supervision for as long as is necessary to determine their customs status and shall not be removed therefrom without the permission of the customs authorities.Non-Union goods shall remain under customs supervision until their customs status is changed, or they are taken out of the customs territory of the Union or destroyed.Article 267

Customs supervision and formalities on exit Goods to be taken out of the customs territory of the Union shall be subject to customs supervision and may be subject to customs controls.

It is proposed to introduce a new para. 1/1 in Art. 1 (General Provisions) with the view to declare the Port as BCP with special status , as well as to envisage the possibility to (1) introduce/station/exit goods to/from the Port, (2) to process goods, and (3) introduce goods for fi nal consuption – all elaborated in separate proposed arts. 7/1, 7/2 and 7/3, respectively .


142

Aquatorium Art. 167Free zone / General2. Member States shall determine the area covered by each zone.3. Free zones (...) shall be enclosed. The Member States shall defi ne theentry and exit points of each free zone or free warehouse.4. The construction of any building in a free zone shall require the prior approval of the customs authorities.Article 168

1. The perimeter and the entry and exit points of free zones, (...)shall be subject to supervision by the customs authorities.Article 176

Operation in free zone 1. All persons carrying on an activity involving the storage, working or processing, or sale or purchase, of goods in a free zone or free warehouse shall keep stock records in a form approved by the customs authorities. Goods shall be entered in the stock records as soon as they are brought into the premises of such person. The stock records must enable the customs authorities to identify the goods, and must record their movements.

Article 805

ControlsThe fence enclosing free zones shall be such as to facilitate supervision by the customs authorities outside the free zone and prevent any goods being removed irregularly from the free zone.

Article 237

Storage/Scope1.Under a storage procedure, non-Union goods may be stored in the customs territory of the Union without being subject to any of the following: (a) import duty; (b) other charges as provided for under other relevant provisions in force; (c) commercial policy measures, insofar as they do not prohibit the entry or exit of goods into or from the customs territory of the Union. 2. Union goods may be placed under the customs warehousing or free zone procedure in accordance with Union legislation governing specifi c fi elds, or in order to benefi t from a decision granting repayment or remission of import duty. Article 243 Designation of free zones 1. Member States may designate parts of the customs territory of the Union as free zones. For each free zone the Member State shall determine the area covered and defi ne the entry and exit points.(...)3. Free zones shall be enclosed. The perimeter and the entry and exit points of the area of free zones shall be subject to customs supervision. 4. Persons, goods and means of transport entering or leaving free zones may be subject to customs controls.Article 244

Buildings and activities in free zones 1. The construction of any building in a free zone shall require the prior approval of the customs authorities. 2. Subject to the customs legislation, any industrial, commercial or service activity shall be permitted in a free zone. The carrying on of such activities shall be subject to notifi cation, in advance, to the customs authorities. 3. The customs authorities may impose prohibitions or restrictions on the activities referred to in paragraph 2, having regard to the nature of the goods in question, or the requirements of customs supervision, or security and safety requirements. 4. The customs authorities may prohibit persons who do not provide the necessary assurance of compliance with the customs provisions from carrying on an activity in a free zone.

It is proposed that the territory of the Port include also the Aquatorium (in addition to the Oil and Refi nery Terminal, Cargo Terminal, Passengers Terminal, and the territory of the Port’s development).

143

Reinsertion of earlier deleted provisions

Art. 170 Placing of goods in free zones1. (…) goods entering a free zone or free warehouse need not be presented to the customs authorities, norneed a customs declaration be lodged (with some exceptions).Article 4 Defi nitions(15) 'Customs-approved treatment or use of goods' means:(a) the placing of goods under a customs procedure;(b) their entry into a free zone or free warehouse;(c) their re-exportation from the customs territory of theCommunity;(d) their destruction;(e) their abandonment to the Exchequer. (16)'Customs procedure' means:(a) release for free circulation;(b) transit;(c) customs warehousing;(d) inward processing;(e) processing under customs control;(f) temporary admission;(g) outward processing;(h) exportation.(17) 'Customs declaration' means the act whereby a person indicates in the prescribed form and manner a wish to place goods under a given customs procedure.

Article 804

Approval of stock records1. The application for approval of the stock records shall be submitted in writing to the customs authorities designated by the Member State where the free zone or free warehouse is located. 2. The application referred to in paragraph 1 shall specify which activities are envisaged, this information being considered as the notifi cation referred to in Article 172(1) of the Code. It shall include the following: (a) a detailed description of the stock records kept or to be kept; (b) the nature and customs status of the goods to which these activities relate; (c) where applicable, the customs procedure under which the activities are to be carried out; (d) any other information needed by the customs authorities in order to ensure the proper application of the provisions.

Article 158 Customs declaration of goods and customs supervision of Union goods 1. All goods intended to be placed under a customs procedure, except for the free zone procedure, shall be covered by a customs declaration appropriate for the particular procedure.

Article 5

Defi nitions(16) "customs procedure" means any of the following procedures under which goods may be placed in accordance with the Code: (a) release for free circulation; (b) special procedures; (c) export;Article 210 Special proceduresGoods may be placed under any of the following categories of special procedures: (a) transit, which shall comprise external and internal transit; (b) storage, which shall comprise customs warehousing and free zones; (c) specifi c use, which shall comprise temporary admission and end-use; (d) processing, which shall comprise inward and outward processing.Article 214 Records 1. Except for the transit procedure, or where otherwise provided, the holder of the authorisation, the holder of the procedure, and all persons carrying on an activity involving the storage, working or processing of goods, or the sale or purchase of goods in free zones, shall keep appropriate records in a form approved by the customs authorities. The records shall contain the information and the particulars which enable the customs authorities to supervise the procedure concerned, in particular with regard to identifi cation of the goods placed under that procedure, their customs status and their movements (...).

It is proposed that title of Art. 7 is changed from “Customs regime” to “Customs procedures”. In addition, a reference is made to the newly proposed Art. 7/1, 7/2, and 7/3 which defi ne the applicable regime to various goods depending on their fi nal destination (to replace the generally-worded duty of customs declaration). Most importantly, a series of provisions are being re-introduced in Art. 7 a� er having been previously deleted in 2012. Finally, a paragraph dealing with some aspects of customs regime is deleted (those aspects being proposed to be dealt with in the newly proposed Art. 7/1, 7/2, and 7/3). Some additional minor fi ne-tuning of the wording here and there is proposed.


144

Entry/stay/exit of goods through the Port

Article 169

Placing of goods in free zonesBoth Community and non-Community goods may be placed in a free zone or free warehouse.Art. 1701.(…) goods entering a free zone or free warehouse need not be presented to the customs authorities, nor need a customs declaration be lodged. Operation of free zones Art. 1711. There shall be no limit to the length of time goods may remain in the free zones (…). Art. 1721. Any industrial, commercial or service activity shall (…) be authorized in a free zone. The carrying on of such activities shall be notifi ed in advance to the customs authorities. 2. The customs authorities may impose certain prohibitions or restrictions on the activities referred to in paragraph 1, having regard to the nature of the goods concerned or the requirements of customs supervision.Article 173

Non-Community goods placed in a free zone or free warehouse may,while they remain in a free zone (…) undergo the usual forms of handling referred to in Article 109 (1) without authorization;(...)Art. 109Import goods may undergo the usual forms of handling intended to preserve them, improve their appearance or marketable quality or prepare them for distribution or resale.

Article 806 ControlsThe stock records to be kept for the free zone or free warehouse shall include in particular: (a) particulars of marks, identifying numbers, number and kind of packages, the quantity and usual commercial description of the goods and, where relevant, the identifi cation marks of the container;

(b) information enabling the goods to be monitored at any time, in particular their location, the customs-approved treatment or use assigned to them a� er storage in the free zone or free warehouse or their re-entry into another part of the customs territory of the Community;

(c) reference particulars of the transport document used on entry and removal of the goods;

(d) indication of customs status and, where relevant, reference particulars of the certifi cate certifying this status referred to in Article

812;

(e) particulars of usual forms of handling;

(f) as the case may be, one of the indications referred to in Articles 549, 550 or 583;

(g) particulars concerning goods which would not be subject upon release for free circulation or temporary importation to import duties or commercial policy measures, the use or destination of which must be checked;

(h) any additional particulars required for an exit summary declaration, set out in Annex 30A, when required under Article

182c of the Code.

The customs authorities may waive the requirement for some of this information where supervision or control of the free zone or the free warehouse is not aff ected.

Where records have to be kept for the purposes of a customs procedure, the information contained in those records need not appear in the stock records.

Article 127 Lodging of an entry summary declaration 1. Goods brought into the customs territory of the Union shall be covered by an entry summary declaration.(...)3. The entry summary declaration shall be lodged at the customs offi ce of fi rst entry within a specifi c time-limit, before the goods are brought into the customs territory of the Union. (…)The entry summary declaration shall be lodged by the carrier.(...)7. Customs authorities may accept that commercial, port or transport information systems are used for the lodging of an entry summary declaration provided such systems contain the necessary particulars for such declaration and those particulars are available within a specifi c time-limit, before the goods are brought into the customs territory of the Union. 8. Customs authorities may accept, instead of the lodging of the entry summary declaration, the lodging of a notifi cation and access to the particulars of an entry summary declaration in the economic operator's computer system. Article 220 Usual forms of handlingGoods placed under customs warehousing or a processing procedure or in a free zone may undergo usual forms of handling intended to preserve them, improve their appearance or marketable quality or prepare them for distribution or resale.Article 238 Duration of a storage procedure 1. There shall be no limit to the length of time goods may remain under a storage procedure.Article 245 Presentation of goods and their placing under the procedure 1. Goods brought into a free zone shall be presented to customs and undergo the prescribed customs formalities in any of the following cases: (a) where they are brought into the free zone directly from outside the customs territory of the Union; (b) where they have been placed under a customs procedure which is ended or discharged when they are placed under the free zone procedure; (c) where they are placed under the free zone procedure in order to benefi t from a decision granting repayment or remission of import duty;(d) where legislation other than the customs legislation provides for such formalities. 2. Goods brought into a free zone in circumstances other than those covered by paragraph 1 shall not be presented to customs. 3. Without prejudice to Article 246, goods brought into a free zone are deemed to be placed under the free zone procedure: (a) at the moment of their entry into a free zone, unless they have already been placed under another customs procedure; or (b) at the moment when a transit procedure is ended, unless they are immediately placed under a subsequent customs procedure.

It is proposed to introduce a new Article 7/1 regulating the entering, stationing and exiting of goods through the Port. It introduces the duty to notify the Customs by Bill of Lading (or by other transport document) electronically and 6 hours in advance. Goods may stay in Port up to 90 days (with possibility for extension) without import duties or guarantee, a� er which shall be placed under a Customs regime or exited. The goods may be handled with the view to ensure their integrity or prepare for sale/transportation (such as sorting, packing, marking, etc.) without changing their tariff classifi cation. Such handling does not require Customs authorization (only informing). The article would allow temporary entry of goods and vehicles from the rest of Customs territory to the Port’s territory for up to 20 days, not for consumption, by only informing Customs, according to a procedure to be approved by Government.

145

Article 139 Presentation of goods

to customs

1. Goods brought into the customs territory of the Union shall be presented to customs immediately upon their arrival at the designated customs offi ce or any other place designated or approved by the customs authorities or in the free zone by one of the following persons: (a) the person who brought the goods into the customs territory of the Union; (b) the person in whose name or on whose behalf the person who brought the goods into that territory acts; (c) the person who assumed responsibility for carriage of the goods a� er they were brought into the customs territory of the Union (…).3. Notwithstanding the obligations of the person described in paragraph 1, presentation of the goods may be eff ected instead by one of the following persons: (…)a) any person who immediately places the goods under a customs procedure;(b) the holder of an authorisation for the operation of storage facilities or any person who carries out an activity in a free zone. (…)7. Goods presented to customs shall not be removed from the place where they have been presented without the permission of the customs authorities.

Inward processing

Art. 173Non-Community goods placed in a free zone (…) may, while they remain in a free zone (…) be placed under the inward processing procedure under the conditions laid down by that procedure.

Article 211

Special procedures/Authorisation 1. An authorisation from the customs authorities shall be required for the following: (a) the use of the inward or outward processing procedure, the temporary admission procedure or the end-use procedure(…)3. Except where otherwise provided, the authorisation referred to in paragraph 1 shall be granted only to persons who satisfy all of the following conditions: (…)c) where a customs debt or other charges may be incurred for goods placed under a special procedure, they provide a guarantee in accordance with Article 89;

Article 247 Non-Union goods in free zones Non-Union goods may, while they remain in a free zone, be released for free circulation or be placed under the inward processing, temporary admission or end-use procedure, under the conditions laid down for those procedures. In such cases the goods shall not be regarded as being under the free zone procedure (...).

It is proposed to introduce a new Article 7/2 which would allow for entering goods for purpose of processing, including with the view to change their tariff classifi cation. The entering/exiting of goods is proposed to be carried out according to the inward processing procedure prescribed by the Moldovan Customs Code.


146

Goods for fi nal consumption

Art. 173Non-Community goods placed in a free zone (…) may, while they remain in a free zone (g) be destroyed, provided that the person concerned supplies thecustoms authorities with all the information they judge necessary.Art. 1751. (…) non-Community goods and the Community goods (…) shall not be consumed or used in free zones (…). 2. Without prejudice to the provisions applicable to supplies or stores, where the procedure concerned so provides, paragraph 1 shall not preclude the use or consumption of goods the release for free circulation or temporary importation of which would not entail application of import duties or measures under the common agricultural policy or commercial policy. In that event, no declaration of release for free circulation or temporary importation shall be required. Art. 2051. A customs debt on importation shall be incurred through (…) the consumption or use, in a free zone or a free warehouse, of goods liable to import duties, under conditions other than those laid down by the legislation in force. Where goods disappear and where their disappearance cannot be explained to the satisfaction of the customs authorities, those authorities may regard the goods as having been consumed or used in the free zone or the free warehouse.2. The debt shall be incurred at the moment when the goods areconsumed or are fi rst used under conditions other than those laiddown by the legislation in force.3. The debtor is the person who consumed or used the goods as well as any person knowingly participating. Where no such person can be determined, the last person known to the customs authorities to have been in possession of the goods is liable for payment of the customs debt

Article 246 Union goods in free zoneUnion goods may be entered, stored, moved, used, processed or consumed in a free zone. In such cases the goods shall not be regarded as being under the free zone procedure.Article 247

Non-Union goods in free zones (...)Without prejudice to the provisions applicable to supplies or to victualling storage, where the procedure concerned so provides, paragraph 1 shall not preclude the use or consumption of goods of which the release for free circulation or temporary admission would not entail application of import duty or measures laid down under the common agricultural or commercial policies. In the case of such use or consumption, no customs declaration for the release for free circulation or temporary admission procedure shall be required. Such declaration shall, however, be required if such goods are subject to a tariff quota or ceiling.

It is proposed to introduce a new Article 7/3 which would allow for entering both foreign and domestic goods for purpose of fi nal consumption. Such foreign goods would be placed under import procedure, while domestic ones – under export, and be subject to customs duties and economic policy measures, except for facilities provided for the Port’s residents (in Art. 7 (3) & (4)). The daily non-commercial entries of domestic goods not exceeding 500 Euros shall not be declared. Exited waist for destruction shall not be declared under Customs supervision. For frequent entries, “periodic declarations” may be submitted (exception: excised goods). Customs may require a guarantee (a Bank letter or money transfer) to secure payment of potential customs duty.

Customs Code No corresponding provisions identifi ed.

Some additions are proposed to the Customs Code with the view to exclude the transports operating through the Port from application of Art. 144 (obligation to notify) and Art. 175 (obligation to declare). It is also proposed a minor fi ne-tuning of the wording in Art. 175 (place of declaration).

147

Annex IX: Export Processing Zones (EPZ)16

EPZs are geographical enclaves established outside the country’s customs territory to encourage manufacturing for export and to provide services to foreign enterprises.

The objectives for establishing EPZs in general are to promote exports of nontraditional manufactured goods, strengthen the competitiveness of exporters, attract investors, diversify the economy, create employment, transfer technology, and achieve development and growth.

Issues

In EPZs, enterprises can import raw materials and components without payment of import duties and taxes. In addition, they enjoy several other advantages, which may include exemption from sales taxes, excise duties, and profi t taxes; exemption from industrial regulations applied elsewhere in the country; benefi ts relating to labor regulations, foreign exchange, and others; and provision of infrastructure. These benefi ts are subject to the condition that the manufactured products are exported, and that all the imported inputs are either used in the zone or are re-exported. In some countries, sale to the local market of a part of the output is allowed.

In recent years, with the shi� of emphasis from import substitution to export-oriented industries, many developing countries have been attracted to establishing EPZs, and their use has proliferated. However, experience has shown that only in a limited number of cases has the establishment of EPZs been successful in promoting exports. Many of these zones have proved to be poor investments as a result of unwise location, high investment costs, inadequate management, or, more profoundly, because the economic policy environment within the country was not conducive to effi cient production for export.

EPZs are usually restricted to a designated industrial estate; but in some cases, and recently more so, factories outside the restricted area have been approved as single factory zones. Leakage of EPZ goods to the domestic market without duty payment has been frequently reported by developing countries. This has been the case especially where the EPZs are not well separated geographically from the regular customs zone, and where several single factory zones exist, making it diffi cult for customs to organize control over what enters and exits each of these zones. Unless the EPZ enterprises keep books and accounts properly and are mostly tax compliant, and customs has the capability to rely mainly on accounts-based controls, diversion of EPZ goods to the domestic market is bound to be a problem, with revenue loss as a result.

Customs Administration of Export Processing Zones

For application of the customs law, EPZs are located outside the customs territory, although they are physically located within the national boundaries and are part of the national economy. EPZs,therefore, require customs to arrange for two types of customs control.

First, with respect to the movement of goods from the EPZ to the local market and vice versa, the EPZ has to be dealt with like a foreign country. Customs posts need to be established on the roads from the zone to the rest of the country to ensure that the relevant customs laws are properly enforced. Imports from the EPZ into the local market, if allowed, need to be dealt with like imports from abroad. Deliveries of goods from the domestic market to the EPZ need to be dealt with like exports.

16 Customs Modernisa on Handbook refers


148

Customs surveillance needs to be established, to prevent incidents where goods imported or manufactured in the EPZ enter the local market fraudulently. Insofar as the EPZ is a geographically enclosed area, all this should not establish major diffi culties for customs, because this is all part and parcel of normal customs operations. However, the situation is diff erent when the EPZ is not well separated geographically from the regular customs area, and especially when it comes to single factory zones. As mentioned above, single factory zones are diffi cult to police.

Second, with respect to imports into and exports out of the EPZ, customs documentation is required for control and statistical purposes. One of the main characteristics and conditions for smooth operation of the typical EPZ is streamlined administration. This includes streamlined customs documentation requirements for imported raw materials and capital goods and exported fi nal products. In countries where customs administration is not up to modern standards, the customs documentary requirements in connection with EPZ trade may interfere with its smooth operation.

To solve that problem, a separate administrative branch has o� en been created to mediate between EPZ fi rms and the government, with the purpose to reduce zone fi rms’ administrative costs and to prevent unnecessary delays in their operations. However, as pointed out by Warr (1989), the degree to which these bodies are empowered to act on behalf of the government varies, but other departments can resent interference with their “normal” functions and becomeuncooperative with the zone bodies.

The experience with the arrangements in Jordan’s Aqaba export processing zone illustrates some of the diffi culties that, for instance, the creation of a separate customs agency for the zone can create. Instead, the recommended arrangement is to give responsibility for customs functions relating to the EPZ operations to an autonomous or semiautonomous division under the umbrella of the national customs service.

Other Administrative Issues and Guidelines

If sales in the local market are provided for in the regime, they should be limited to wholesale transactions. It would be impossible for customs to eff ectively control retail transactions.

If there is no adequate customs capability for auditing manufacturer’s accounts, single factories located outside the EPZ enclave should not be granted EPZ status. However, such factories could possibly qualify for the MUB regime.

BOX 10.6 Customs Administration of the Aqaba Export Processing ZoneSource: Harrison, Mark. 2003.

149

Annex X: Main Trade Related Legislation in Force in Moldova 2015 Source: WTO Secretariat

Agriculture Law on food (No. 78 of 18/03/2004)Law on establishing general principles and requirements of food safety legislation (No. 113 of 18/05/2012)Law regarding the identifi cation and registration of animals (No. 231-XVI of 20/07/2006)Law on selection and reproduction in animal husbandry (No. 371 of 15/02/1995)Law on animal husbandry (No. 412 of 27/05/1999)Law on vine and wine (No. 57 of 10/03/2006)Law on horticulture (No. 728 of 02/06/1996)Law on seeds (No. 68 of 04/05/2013)Customs Law approving the Combined Nomenclature of goods (No. 172 of 25/07/2014)Customs Code (Law No. 1149-XIV of 20/07/2000)Law on Customs Tariff No. 1380 of 20/11/1997CompetitionLaw on Competition (No. 183 of 11/07/2012)Energy

National Energy Regulatory Agency (Governmental Decision No. 767 of 11/08/1997)Law on Energy (No. 1525-XIII of 19/02/1998)Law on Electricity (No. 124-XVIII of 23/12/2009)Law on Natural gas (No. 123-XVIII of 23/12/2009)Financial services

Law on Foreign Exchange Regulation No. 62-XVI, 21/03/2008Law on the National Bank of Moldova (No. 548-XIII of 21/07/1995)Law on Financial Institutions (No. 550-XIII of 21/07/1995)Law on Payment Services and Electronic Money (No. 114 of 18/05/2012)Law on Capital Market No. 171 of 11/07/ 2012Law on National Commission for Financial Markets (No. 192 of 12/11/1998)Law on Insurance (No. 407 of 21/12/2006)Law on Joint Stock Companies (No. 1134-XIII of 02/04/1997)Free zones

Law On Free Economic Zones (No. 440-XV of 27/07/2001)Government procurement

Law on Government Procurement (No. 96 of 13/04/2007)Investment

Law on Investments in Entrepreneurial Activity (No. 81-XV of 18/03/2004)IPR Law on Copyright and Related Rights (No. 139-XIII of 02/07/2010)Law on the Protection of Geographical indications, appellations of Origin and traditional specialties guaranteed (No. 66-XVI of 25/10/2008)


150

Law on the Protection of Inventions (No. 50-XVI of 07/03/2008, as amended by the Law No. 173 of 25/07/2014)Law on the Protection of Trademarks (No. 38-XVI of 29/02/2008, as amended by the Law No. 173 of 25/07/2014, Law No. 20 of 23/02/2012)Law on the Protection of Plant Varieties (No. 39-XVI of 29/02/2008, as amended by the Law No. 173 of 25/07/2014 and the Law No. 85 of 13/04/2012)Law on the Protection of Industrial Designs (No. 161 of 12/07/2007, as amended by the Law No. 173 of 25/07/2014)Law on the Protection of Topographies of Integrated Circuits (No. 655-XIV of 29/10/1999, asamended by the Law No. 238 of 13/11/2008, Law No. 205 of 28/07/2005, Law No. 469 of21/11/2003, Law No. 1446 of 08/11/2002)Law on Commercial Secrets (No. 171-XIII of 06/07/1994, as amended by the Law No. 111 of 17/05/2012, Law No. 195 of 15/07/2010, Law No. 204 of 28/07/2005, Law No. 290 of 22/07/2004, Law No. 390 of 20/07/2001, Law No. 312 of 28/06/2001, Law No. 1079 of 23/06/2000).Licensing Improving the Mechanism of Regulating External Trade (Import Licensing) (Government DecisionNo. 777 of 13/08/1997)Law on Regulation by Licensing of Entrepreneurial Activity (No. 451-XV of 30/07/2001)Manufacturing

Government Decision on industry development strategy for the period until 2015 (No. 1149 of 05/10/2006)Pricing policy

Law on internal trade (No. 231 of 23/09/2010)Government Decision on measures of state coordination and regulation of prices and tariff s (No. 547 of 04/08/1995)Law on petroleum products market (No. 461-XV of 30/07/2001)Decision of the National Agency for Energy Regulation approving the methodology for calculating and applying the prices of petroleum products (No. 263 of 05/10/2007)Law on medicaments (No. 1409-XIII of 17/12/1997)Law on pharmaceutical activity (No. 1456-XII of 25/05/1993)Government Decision approving the Regulation on the mode of approval and registration ofproducer prices for medicaments (No. 525 of 22/06/2010)Government Decision on approval of the Regulation on the formation of prices of medicamentsand other pharmaceutical and parapharmaceutical productsPrivatization Law on Public Property Management and Privatization No. 121-XVI of 04/05/2007SPS Law regarding sanitary-veterinary activity (No. 221-XVI of 19/10/2007)Law on plant protection and plant quarantine (No. 228 of 23/09/2010)Government Decision on Urgent measures to prevent the introduction and spread in the Republic of Moldova of quarantine organisms (No. 558 of 22/07/2011)Government Decision on approving the rules for surveys to be carried out for purposes of therecognition of protected zones areas in the Republic of Moldova, as well as the rules for themovement of some plants, plant products and other objects in a protected zone (No. 557 of22/07/2011)

151

Government Decision on approving Special Conditions for the introduction and movement of plant, plant products and other objects within the territory of the Republic of Moldova (No. 594 of 02/08/2011)Government Decision on approving some normative acts on the implementation of the Law No. 228 of 23/09/2010 on plant protection and Phyto-sanitary quarantine (No. 356 of 31/05/2012)Government Decision approving the methods of sampling for the offi cial control of pesticide residues in and on products of plant and animal origin (No. 1004 of 25/10/2010)Government Decision on approving the technical Regulation “Mineral fertilizers. Essential Requirements” (No. 268 of 26/04/2012)Government Decision approving the Sanitary Regulation on maximum level of residues of plant protection products in or on food products and feed of plant and animal products for animals (No. 1191 of 23 /12/2010)State trading

Law On State Regulation of External Trade Activity (No. 1031-XIV of 08/06/2000)Taxation Fiscal Code (No. 1163-XIII of 24/04/1997)TBT Law on Standardization (No. 590-XIII of 22/09/1995)Law on technical regulation activity (No. 420-XVI of 22/12/2006)Law on accreditation and conformity assessment (No. 235 of 01/12/2011)Telecoms

Law on Electronic Communications (No. 241-XVI of 15/11/2007)Law on Electronic Commerce (No. 284-XV of 22/07/2004)Law on electronic signature and electronic document (No. 91 of 29/05/2014)Tourism Law on the organization and development of tourist activity in the Republic of Moldova(No. 352-XVI of 24/11/2006)Transport Railway Code (No. 309 of 17/07/2003)Civil Aviation Law (No. 1237 of 09/07/1997)Aviation Security Law (No. 92-XVI of 05/04/2007)Government Decision approving the National Program for Air Transport Facilitation (No. 1034 of 16/10/2000)Government Decision on approval of supervision charge rate for maintaining certifi cationconditions of Civil Aviation Authority (No. 1 of 04/01/2013)Airspace Control Law (No. 143 of 21/06/2012)Law on approval of the Road Transport Code (No. 150 of 17/07/2014)Government Decision on the reorganization of the automated information system for search "car" in the State Register of transport and the introduction of testing of vehicles and their trailers (No. 1047 of 08/11/1999)Government Decision on Regulation of road transport of passengers and luggage (No. 854 of28/07/2006)Law on the Road Traffi c Safety (No. 131-XVI of 07/06/2007)Law on approval of the commercial maritime navigation Code of the Republic of Moldova (No. 599 of 09/30/1999)Law on domestic shipping (No. 176 of 12/07/2013)


152

Maritime navigation Code (No. 599 of 30/09/1999)Inland naval transport Law (No. 176 of 12/07/2013)Government Decision on approval of the rules for the registration of ships (No. 855 of30/07/2007)Government Decision on the implementation of the International Management Code for the SafeOperation of Ships and for Pollution Prevention (International Safety Management Code - ISM Code) (No. 997 of 28/08/2006)Government Decision on the implementation of the International Code for ship and port facility security (ISPS Code) and the International Maritime Organization Resolution A.959 (No. 955 of 18/08/2006)Government Decision on the approval of the Transport and Logistics Strategy for2013-2022 (No. 827 of 28/10/2013)Government Decision on the approval of the National Road Safety Strategy (No. 1214 of27/12/2010)Roads Law (No. 509 of 22/06/1995)Road Fund Law (No. 720 of 02/02/1996)Road Safety Law (No. 131 of 07/06/2007)Government Decision on the approval of the Action Plan for implementing the National RoadSafety Strategy (No. 972 of 21/12/2011)Government Decision on the approval of the National and Local Roads Lists (No. 1323 of29/12/2000)Law of Quality in Construction (No. 721 of 02/02/1996)

153

Annex XI: Questionnaire Veterinary & Phyto-sanitary Services at GIFP Veterinary

Action / Event Comments

1. a) When a vessel arrives at Giurgiulesti Port that requires the presence of the Veterinary Service please describe the procedures and controls that are followed by the inspector i.e. documentary checks, organoleptic inspection, physical examination and /or sampling controls

2. b) Are these controls normally completed prior to the submission of the Customs declaration?

The Port Agent decides if the cargo loaded onto the vessel needs the veterinary check. In case the check is needed he/she convenes a commission composed of the Veterinary Doctor, Port Agent, MDCS and MDBP.

The control is mandatory if:1 – A vessel loaded with containers of goods that OFFICIALLY require the control arrives at the port;2 – A vessel loaded with livestock arrives at the port: physical check is mandatory.

Note: in case a vessel carrying passengers arrives at the port the presence of the Veterinary doctor is mandatory, due to the possibility of pets’ presence: the veterinarian must check the documents (Veterinary Certifi cate and passport) and the presence of the microchip.

The Customs Declaration must be submitted before starting the controls.

3. Please describe in detail the procedures and controls for goods at import in particular for live animals?

In case of import of goods/animals, the Veterinarian must check the country of origin of goods/animals. There is no a Database which includes the import interdiction information: countries forbidden to be imported from or goods/products forbidden to be imported. Though, periodically the Veterinarians receive offi cial orders which include the import interdiction information. If one of the aforementioned countries or some of those goods are indicated in the declaration, the whole cargo is sent back.The prohibition on entry and the refoulement abroad is decided and conducted by ANSA without consulting Customs: a protocol which describes the reasons of the refusal is initiated, the Veterinarian affi xes his stamp, and also the other members of the commission affi x their stamps and the refoulement is performed.When the vessel arrives at the port the economic agent submits the following documents: CU declaration, commercial documents, stops and the period of stationing at diff erent ports, and the Maritime Declaration of Health (in order to show that all the crew is in good health).The Veterinarian checks that the load on the shipcorresponds to that described in the documents. All the documents are sent to the Veterinarian via mail (as a sort of pre-arrival information), but a� er the control all documents must be submitted in original.According to risk criteria the Veterinarian candecide if it is necessary to proceed to deepercontrols (organoleptic inspection, physicalexamination and/or sampling). If this is the case, then the seal is applied and the whole cargo is sent to ANSA (Chisinau), due to the fact that the port is not equipped for this kind of controls.


154

4. Please describe in detail the procedures and controls for goods at export in particular for live animals?

Only livestock is exported from Giurgiesti International Free Port (GIFP) The steps are the following:

1 – The Port Agent informs ANSA (Veterinary Service) about the arrival of the ship.2 – Commission, composed of Veterinary doctor, Port Agent, MDCS and MDBP, is initiated. 3 – The Commission together with the Captain of the vessel (or someone designated by him) checks the vessel (area, containers, cleaning, and lighting) and the related documents (permits, disinfection certifi cate).4 – If everything is in order the Commission issues an “ACT OF RECEIVING THE VESSEL TO THE PORT”, signed by each member of the Commission.5 – The Economic Agent and the Port Agent install the ramps for loading the animals and the veterinarian checks if everything is done in a proper way.6 – Hay is loaded onto the vessel.7 – The *trucks loaded with animals approach the vessel; the drivers present all the documents related to Veterinary Service (authorization for transport of animals, veterinary certifi cate (Form 1), passport of animals). Other documents related to CU are not presented to the Veterinarian.

*Note: specifi c trucks should be used for transportation of the animals, certifi ed with a specifi c truck passport. Due to the fact that this kind of trucks is extremely expensive the normal trucks are used for carrying the animals (for this kind of trucks the above-mentioned specifi c passport is issued).

5. Do you consider that in the control of live animals you lack suitable infrastructure and equipment? e.g. • Lack of adequate temperature controlled

storage facilities for perishable goods? • Clean and dry warehousing space for unloading

of consignments?• Areas for the safe keeping and humane

treatment of animals subject to sampling or examination?

• Quarantine facilities? • Secure and safe ramps / gantries to enable the

tallying of live animals in 2-3 tier trucks?• Lack of basic examination tools and health and

safety equipment?6. • Any other I&E issues?

According to the expert’s assessment of the infrastructure and conditions for performing the sanitary control it should be mentioned that there’s a complete lack of all the needed facilities. As to the basic examination tools it can be said that the Veterinarians are in possession of microchip readers for pets.

Note: The ramps belong to the Port authorities.

7. Is it current practice that a ‘standard’ inspection of all shipments - for goods subject to veterinary control – is completed irrespective of where the goods will be fi nally cleared?

The “standard” inspection of all shipments for goods subject to veterinary control is completed irrespective of where the goods will be fi nally cleared.

8. A� er documentary checks have been completed could you please describe the method by which goods selected for inspection, physical examination and/or sampling are presented to the Veterinary Service and the location where these procedures normally take place in the port?

9. Also please specify if it is common practice to conduct physical examination and sampling procedures jointly with other border control services e.g. Customs?

A� er documentary checks, in case of import, the physical control is performed only if the goods are not under the thermal regime; it takes place in the port area. No specifi c/proper infrastructure is suitable for the control/sampling in the port.

In case of export the Veterinarian together with the MDCS offi cer monitors the loading of animals from trucks onto vessel a� er checking documents (see answer to the question n.2).

10. Are you able to provide any statistical information in respect of the number of;

a). Standard Inspections and b). Extended inspections undertaken as part of

Veterinary Service border control procedures at the port?

Import into the Republic of Moldova of the products subject to sanitary-veterinary control registered at the Sanitary/Veterinary and Phyto-sanitary control Post Giurgiulesti/Galati/Port/Reni, Cahul.

01.06.2015 - 31.12.2015 – 43 stocks01.01.2016 - 28.03.2016 – 28 stocks

155

11. Is there, to your knowledge, any continued overlap of responsibility between the Veterinary Service and other Border Control Services with regard to sampling and testing of products?

No overlap of responsibilities between Veterinary Service and other Border Control Services with regard to sampling and testing of products are registered, because there is not a possibility of acting in this regard, also because of lack of infrastructure.

12. Is it common practice to regularly/routinely inspect, physically examine and/or sample goods in transit in order to perform Veterinary Service controls?

If yes, please explain the reasons for doing so and the sequence of actions and events that enable these procedures to take place?

As to cargoes in transit the Veterinary Service does not perform the control.

13. Are you able to provide an indication of the average time required to complete Veterinary Service border control procedures at the port?

The average time of performing the procedure is around minutes to check the documents. The average time of following the ship loading is not measured.

14. Please list the main legal instruments i.e. laws, orders or decrees under which the Veterinary Service of Moldova operates?

GD 51 of 16.01.2013 & GD1045 of 05.10.2005

15. Have there been any recent signifi cant amendments which have signifi cantly changed the way in which your procedures are carried out?

The most recent signifi cant amendment is GD 1073, of 19/09/2008 modifi ed subsequently by:GD 787 of 25.10.2011, MO182-186/28.10.11, art.864.

Phyto-sanitary Services at GIFP

Action / Event Comments

16. a) When a vessel arrives at Giurgiulesti Port that requires the presence of the Phyto-sanitary Service please describe the procedures and controls that are followed by the inspector i.e. documentary checks, organoleptic inspection, physical examination and /or sampling controls

b) Are these controls normally completed prior to the submission of the Customs declaration?

c) Please describe the procedures and controls required for Phyto-sanitary controls at export?

At the Giurgiulesti Port a Commission consisting of Sanitary Service (in this case Phyto-sanitary Service), MDCS, MDBP and Port Authority representatives are responsible for the issuance of an act that demonstrates that the cargo arrived. The stamps and signatures of each commission members are affi xed to the act.A� er signing the aforementioned document the Phyto-sanitary inspector together with MDCS offi cer proceed to the visual inspection of the cargo on the vessel.The cargo is accompanied by the Phyto-sanitary certifi cate issued by the local Phyto-sanitary Agency of the country the goods are exported from.

When Phyto-sanitary control is completed, the economic agent submits Import declaration to MDCS.

In case of Export the truck carrying goods for export must be accompanied by a Phyto-sanitary certifi cate, issued by the Sanitary Service of the country that exports the goods, together with the Export declaration. ANSA checks the regularity of the certifi cate and if everything complies, it issues an act that allows the economic agent to take the goods out of the country. Then the customs clearance can be performed by MDCS.When cargo reaches the port ANSA takes care of performing the controls as soon as possible. If the goods are stored in the port for more than 14 days, ANSA must take the samples of these goods and send them to the Laboratory in Chisinau. If everything is regular and the analysis results of the samples are negative, the economic agent must provide the disinfection of the cargo, before allowing it to leave the country.The agent contacts the “Center of Quarantine, Identifi cation, Arbitration Expertise and Disinfection of Production” from Chisinau which subsequently sends a team to proceed with the disinfection of the cargo, before issuing the act of disinfection.


156

17. A� er documentary checks have been completed please describe procedures by which goods selected for inspection, physical examination and/or sampling are presented to the Phyto-sanitary Service and the location where these procedures normally take place?

Also please specify if it is common practice to conduct physical examination and sampling procedures jointly with other border control services e.g. Customs?

1.Phyto-sanitary inspector check the presence of the Phyto-sanitary certifi cate;2. Both, MDCS and Phyto-sanitary inspectors board the vessel to check the cargo, to be sure that the labels and the seals are undamaged – in case of open cargo (fruits and vegetables) the inspectors check that the cargo corresponds to the description in the documents and that the standard procedures of transportation are respected;2a. If the cargo has some irregularities samples are taken and sent to the laboratory in Chisinau. If the case is of emergency then the result arrives in 24 hours, otherwise there’s no deadline for laboratory procedures. That’s why ANSA branch responsible for the port suspends the control until the laboratory results come. When the results are negative then the import procedures initiate. In case the results are positive, ANSA decides whether to send the goods back or destroy them.3. If everything is regular, the Phyto-sanitary inspector issues an act that permits the goods to enter the country, economic operator completes import declaration and submits it to MDCS;4.Cargo is unloaded and MDCS inspector proceeds with a deeper control opening seals (when in his opinion is required) and checking the correspondence of the goods with the export declaration from the country of origin;5. A� er ascertaining the regularity of the load, the further procedures of clearance are undertaken.There is no a specifi c place, where the checking procedures take place. Phyto-sanitary Service and MDCS representatives perform the controls together in the presence of the economic agent. Sometimes the other members of the commission can be present if there’s a need.

18. Are there any procedures for the inspection, physical examination and/or sampling of goods in transit performed by the Phyto-sanitary Service?

If yes, please describe?

In case of Transit the Phyto-sanitary inspector proceeds only with the visual and documentary control. In case of some irregularities (e.g. broken seal) he/she calls MDCS representative who takes care of the necessary measures.

19. Are you able to provide any statistical information in respect of the number of;

a). Standard Inspections and b). Extended inspections undertaken as part of Phyto-sanitary Service border control procedures at the port?

Phyto-sanitary inspector was not able to provide FOGU expert with the required statistical information because the data is mixed and there’s a need of time to extract the necessary information.

20. Are you able to provide an indication of the average time required to complete;

a). Standard and b). Extended Phyto-sanitary border control procedures at the port?

The average time of the standard control is about 20 minutes.In case of samples’ analysis the average time varies: there is no deadline to receive the answer from the Laboratory in Chisinau, so the procedure can take several days. Only in case when ANSA sends the samples to the Laboratory requiring offi cially an urgent response the procedure can take not more than 2 days (It is referred to the emergency cases when the cargo represents biological or chemical threat.

21. Are there, to your knowledge, any areas of overlap of responsibility between the Phyto-sanitary Service and other Border Control Services with regard to sampling and testing of products?

In the opinion of the interviewed Phyto-sanitary inspector there are no areas where the procedures are overlapping with the other Border Control Services in regard to sampling and testing the products, because each of the service has its own competence.

22. Please list the main legal instruments i.e. laws, orders or decrees under which the Phyto-sanitary Service of Moldova operates?

Law 228 from 23.09.2010GD 557 from 22.07.2011GD 558 from 22.07.2011GD 594 from 02.08.2011GD 1073 from 19.09.2008GD 1004 from 25.10.2010

23. Have there been any recent signifi cant amendments which have signifi cantly changed the way in which your procedures are carried out?

No any recent signifi cant amendments which have signifi cantly changed the way of carrying the Phyto-sanitary procedures.

157

Annex XII: ISPS & Single Window ODESSA Port Example

At the seaports of Odessa and Illichivs’k automated electronic procedures, which facilitate international trade and transport for containerized cargo and rail transport based on the Single Window concept for import and export are implemented through the Port Community System (ISPS). This follows the adoption of the Law “On Sea Ports of Ukraine” on 17 May 2012 by the Verkhovna Rada of Ukraine and other amendments to the relevant legislation17, designed to simplify transport and customs procedures at the ports. The implementation of the ISPS comes a� er the launch in 2011 Odessa sea port of the Single Window – Local Solution. The ISPS is implemented in Ukraine with the support of the Cabinet of Ministers. The port innovation was created by the recommendations of UN experts and on the basis of experience taken from the largest world ports of Rotterdam and Yokohama. Local introduction of the ISPS could potentially serve as a foundation for the consequential national introduction of the full-fl edged “Single Window” Concept.

The ISPS was designed to integrate all participants to the cargo-carrying and cargo-processing operations under the umbrella of a single IT system. This system is intended to provide access to information used in the technological processes in the port and protected by the government-approved means of data protection. In general terms, the ISPS is a system aimed at providing control agencies with means to utilize (store, check, process and transfer) information and documents in electronic form for the purposes of border, customs and other types of control, clearance of goods and vehicles. The ISPS is a business-to-business and business-to-government solution, based on an E&T (extraction and transformation) communication hub. The unit of information in the ISPS is a document. A document is an information-carrying container based on the PCS#7 standard.

The ISPS is a neutral and open-end system providing for an intellectual and safe exchange of information between public control agencies and traders aimed at increasing competitiveness and eff ectiveness of all users of port services. The system is designed to optimize, manage and computerize the port-based logistical processes through the uniform lodgement of data and linking various elements of cargo-carrying and logistical processing.

This system is an advanced method of exchanging information in the port or within a group of ports and relevant entities. It is built upon an agreement between the participants to submit trade-related data in a single place, to develop the IT infrastructure, technical cooperation and favourable legal base, to avoid duplication of data in the documents. Thus the ISPS creates a precisely purposed integrated environment to cover processing of exports, imports, transit traffi c, consolidation, hazardous consignments and statistical reporting on international maritime shipping. The system includes control agencies (like Customs and Border Guards), Administration of the port, stevedore companies, agents, freight forwarders, Public Railroad Company and others.

In December 2013 Illichivs’k Port followed Odessa in becoming the second port in Ukraine to operate, the integrated information system, which is expected to be, implemented in the future at all other Ukrainian container ports.

As of June 2nd 2014 at both Odesa and Illichivs’k ports lodgement of the electronic order via the ISPS is obligatory (at Illichivs’k Port it is duplicated by a paper copy). As of August 2014 the clearance of goods in containers, brought into the territory of Ukraine by sea transport, can also now be performed electronically without the need for hard copy documents, in compliance with order of the Chairman of the State Enterprise “Ukrainian Sea Ports Authority” dated 23.07.2014 №156, 17 Legisla on that supports the introduc on of the Port Community System is contained in: Ministry of Infrastructure as of 18.10.2012 No 622, giving the

legal status to electronic shipping documents. CMU Decree as of 07.03.2013 No 553 “On Amending the Resolu on of the Cabinet of Ministers as of May 21, 2012 No 451” making commercial opera on possible and connec on with other ports of Ukraine to the ISPS


158

“Information system of Port Community” (ISPC). This is related to the mutual consent of customs and the port authority for the procedure of allowing motor vehicles entry into the port for loading with containers.

Consequently, clearance and release of containers and consignments is impossible without a properly lodged and visaed order via ISPS; issuance of a release pass for a freighted import container to exit the territory of the ports is performed with an obligatory indication of the registration number of the electronic order assigned by ISPS. This requires clients of the port to sign a contract to obtain access to the ISPS, install respective so� ware, buy a standardised digital signature and be ready to pay a service fee of 48 UAH per container.

The ISPS is continuously developed and adjusted. Hence, in August 2014 a new module was introduced. This module codifi es reasons for a certain type of customs control (weighing, scanning or examination) that are linked to respective regulations; in other words the ISPS shows which regulatory act was chosen by a customs offi cer when assigning a certain type of control. Port authorities claim that introduction of this module led to the decrease in the amount of cases of applying the abovementioned control measures and therefore to the decrease in the stay period of trucks in the port18.

While Customs accept electronic declarations they cannot at this time be submitted through the ISPS because of restrictions placed on the exchange of information between the Government and non-Government entities, as the ISPS is privately owned.

According to international expert opinion the transfer to an electronic information base will enable a substantial reduction in time required to process cargo for clearance and raise the ports effi ciency to the level of other world leading ports.

Customs was the fi rst organisation to support the initiative of the Ministry of Infrastructure and the Port of Odessa on the implementation of the electronic manifest. One of the main advantages of electronic manifest for customs is the ability to pre-monitor possible risks, which corresponds to the new CC.

Single Window19

The Global Facilitation Partnership for Transport and Trade (GFPT) a World Bank partner is promoting the use of the single window for cross-border crossings, particularly, but not exclusively, road crossings. Their single window defi nition states:

“A Single Window is a facility that allows parties involved in international trade and transport to lodge standardized information and documents with a single entry point to fulfi l all import, export, and transit-related regulatory requirements. If information is electronic, then individual data elements should only be submitted once.”

The UK Customs defi nes the single window as:

“A platform to allow traders to submit international trade-import, export or transit-data required by government departments or agencies once only through a single electronic interface thereby fulfi lling all the regulatory requirements in respect of each transaction.”

18 h p://www.port.odessa.ua/index.php/ru/press-tsentr/novos /otrasl/14011-srednij-pokazatel-oformleniya-avtokontejnerovozov-v-odesskom-por-tu-snizhen-do-rekordno-nizkogo-urovnya.

19 Trade Facilita on and The Single Window-Key Factors in Establishing Single Windows for Handling Import/Export Procedures and Formali es: United Na ons Economic And Social Commission For Western Asia (ESCWA) 10/11/11 refers.

159

A key feature in the movement and clearance of goods across borders is the speed by which information can be effi ciently exchanged. Border control agencies in order to complete their approved functions frequently require the submission of a plethora of documents resulting in those businesses involved in international trade having to lodge them in a variety of diff erent methods, o� en using disparate unconnected systems (automated or paper based) and/or at diff erent times and separate distant locations. All these variations create a signifi cant barrier to trade facilitation by not only increasing the time needed to complete clearance but also costs. The smooth fl ow of information thus becomes a major issue to overcome as global economies and trade become ever more connected and inter–linked.

To address such diffi culties the single window concept aims to simplify the fl ow and exchange of information and provide “a system that allows traders to lodge information with a single body to fulfi l all import or export related regulatory requirements” 20 that enhances the effi cient exchange of information between trade and governments.

The introduction of the single window inevitably requires Government via the border control agencies to undertake considerable rationalization and simplifi cation, as well as greater harmonisation and standardisation of processes, data and documentation. In addition, Government must commit to and adopt e-commerce/e-customs strategies and policies and be prepared in partnership together with business in determining the way forward in a spirit of co-operation and coordination particularly in regard to the interconnection and compatibility of systems.

Fig 8: Single Window

Single Windows facilitating trade generally have two functions to fulfi l: the fi rst is usually to automate the process of electronically lodging documents in respect of the application for trade licensing, certifi cation and/or approvals normally on behalf of the Technical Inspection Agencies (TIAs) such as: Veterinary, Phyto-sanitary, Sanitary, Ecological, Radiological services etc. The second is to automatically transfer the approved data into the relevant, electronically lodged customs declarations for import, export, transit, trans-shipment or re-export.

These objectives might be achieved by integrating processes or by separate means as each single window can be diff erent ranging from specifi cally designed and complex end-user computer so� ware

20 United Na ons Economic Commission for Europe – The Single Window Concept refers.


160

systems allowing remote access to example of completing and lodging downloaded forms from a trade website. Nevertheless the single window in both cases connects border control agencies systems to the lodged data and processes it for approval, rejection or further information requests.

In many advanced trading economies, such as the EU, the US and China, the National Single Window concept has not been implemented. Instead, other forms of Single Windows, in particular Port Community Systems and Customs Single Windows are being successfully used to enhance a high-performing logistics sector. However, linking these diff erent platforms into a national or regional network remains a challenge21.

‘The ultimate national single window includes all of the information exchanged by traders; Government departments (including customs); maritime, air, road, rail and inland waterway transport systems; port and terminal operators; and a range of other participants in the trade process, including freight forwarders, customs brokers, shipping agents, banks and insurance companies22.

Where they have been implemented they have simplifi ed and automated business procedures, introduced change and brought about collaboration between government agencies and the private sector providing the opportunity for them to improve their trade-facilitation indicators, as illustrated in surveys such as the World Bank’s Doing Business - Trading Across Borders, and the World Bank Logistics Performance Index.

Examples of International Best Practice in the application of the Single Window23

Some examples that demonstrate the importance of careful planning, top-level sponsorship, adequate funding and good governance include Felixstowe, in the United Kingdom, for an integrated “provincial” version of a national single window; similar examples exist in Germany, France, the Netherlands, and Scandinavia. In virtually every case, maritime ports led the initiative, collaborating with customs authorities.

There are several examples in Asia. Singapore is well known. Japan, Korea and Taiwan are in the forefront. Generally, Asian single windows have been led by customs and OGA (Other Government Agencies) before some sort of port and logistics integration. Singapore and Hong Kong started the movement since both had the benefi ts of open ports, minimum customs intervention and a single trade approvals authority, which demonstrates the advantage of a non-stop shop as a starting point.

There are a number of later starters in Asia. China has concentrated on port developments; hence it exhibits “islands” of best port practices. The ASEAN countries are almost all participating in individual single window developments, starting with customs automation, and a single administration document (SAD), both national and ASEAN-wide. There is a long way to go although many ASEAN countries have been working on customs automation for more than ten years and on a local variety of single windows for as many as fi ve years.

Except Singapore, Indonesia is leading the pack in the development of a full national single window although they have adopted a strategy of providing full single window facilities to only a small number (just over 100) of authorized economic operators (AEO).

Australia and New Zealand both have mature single windows, integrating customs and OGA. 21 United Na ons Global Trade Facilita on Conference 2011 Connec ng Interna onal Trade, Single Windows and Supply Chains in the Next Decade, Ten

Years of Single Window Implementa on Lessons Learned for the Future Discussion Paper Author Jonathan Koh Tat Tsen refers.22 Trade Facilita on and The Single Window-Key Factors in Establishing Single Windows for Handling Import/Export Procedures and Formali es: United

Na ons Economic and Social Commission For Western Asia (ESCWA) 10/11/11 refers.23 Ibid.

161

However, port single windows are at an earlier stage of development and full integration with formalities single windows is still some time away.

Good examples of smaller countries single windows are typifi ed by Mauritius who has a version of a national single window in operation, as does Tunisia.

Some West African countries have opted for a port-based single window as their fi rst priority. With the exception of Ghana, who is the most advanced in the region, all of these port single windows are at a very early, as yet unproven, stage. It also remains to be seen what sort of reactions the local customs authorities might take in response.

Fig 9: Roadmap of Single Window24

1.Single Window benefi ts for the Policymaker

• To raise regional and national awareness of the potential of automated trade facilitation and the single window, and to help facilitate regional collaboration, integration and exchange of regional trade information.2. Single Window benefi ts for State BCSs

• More effi cient and productive use of resources;• Enhanced collections of fees, duties and penalties;• More comprehensive, streamlined and automated business compliance to Government legislative and regulatory requirements, including the terms of international trade treaties;• Enhanced risk analysis and management and improved security;• Reductions in corruption and illegal trade activities, enhanced transparency and accountability.

24 h p://www.unece.org/fileadmin/DAM/trade/Trade_Facilita on_Forum/BkgrdDocs/TenYearsSingleWindow.pdf


162

3. Single Window benefi ts for traders

• Cost reductions through minimized clerical eff orts, time taken to reduce and to eliminate delays, and more predictable, reliable and authoritative decisions;• Faster goods clearance, exception handling and dispute resolution, leading to reduced inventory holding costs;• Predictable and reliable consignment clearance and availability of advanced goods release information;• Reduction in face-to-face meetings, greater transparency and reduced opportunities for ‘rent-seeking’ and corruption.4. Single Window benefi ts for the logistics operator

• Faster movement of goods through formalities and trade junctions, leading to better and more productive utilisation of resources;• Reliable information on timing of goods movement, allowing accurate scheduling, allocation of resources and improved accuracy of information provided to clients;

163

Annex XIII: Types of Corruption in Customs25

‘Rent-seeking’ - is literally, rent sought to recover the cost of acquiring or retaining a lucrative position. It includes petty or routine corruption (also called tea or facilitation money), whereby a trader pays a bribe at various stages to get goods cleared. The most common form is “speed” payments, such as those paid to expedite processing of documents and signatures to achieve a faster clearance. However, it may also include the issuing on non-essential certifi cates, avoiding examination and inspection routines or fees collected for using the examination facilities when no examination takes place. Generally, these tend to be relatively small payments paid in cash to individuals and are o� en perceived an acceptable part of the clearance process.

Sometimes called survival corruption (as poorly paid government offi cials try to make ends meet), petty corruption is pervasive and o� en almost accepted as a necessary evil in some countries. The overall rent may be almost fi xed, the size and frequency of bribes depending on the bargaining powers of payer and recipient. Though mainly associated with increased business costs, ‘rent-seeking’ can have a large and immediate fi scal impact when rents are considered too high and so encourage evasion. Petty corruption o� en can be reduced by using automation to limit personal interactions between customs offi cials and traders. Two things are required to combat ‘rent-seeking’ in border management. One is an adequate working relationship among agencies. The other is a release by default approach—based on a risk management approach, which o� en can exist before full computerization is rolled out—to eliminate some ‘rent-seeking’ opportunities.

Patronage - is the making of appointments as part of a reciprocal exchange of favors among political or other interest groups. Patronage networks impede the emergence of an effi cient, modern bureaucracy.

They facilitate evasion, so they have high fi scal as well as social impacts. And they o� en extend to law enforcement agencies, leading to pervasive impunity. While there are no technical methods for dealing with patronage, it is possible to introduce alert mechanisms into customs systems to point out patronage patterns.

Collusion - occurs when a trader or agent evades all or part of a fi scal obligation and a customs offi cer receives a share in the unpaid amount. Leading to direct—o� en major—revenue leakage, collusion is largely a political and social problem. Yet it can be partly checked through simple but eff ective, real time alert mechanisms that bring suspicious transactions to the attention of a network of managers and auditors inside and outside the customs agency. Examples of such transactions include systematic valuation queries or waivers, the repeated processing of imports from the same importer by the same customs offi cer, and the like.

Collusion at borders can be addressed through:• Checks and balances using external data (for example, data obtained automatically from across

the border) to validate processing.• As much as possible, automatic capture of basic data that cannot be interfered with later.• Downstream control.

Grand (or criminal) corruption - occurs when criminal interests pay or otherwise exert pressure to protect their illegal operations, such as drug traffi cking. O� en such corruption amounts to state capture by criminal networks. Assessing its impact is diffi cult, as family or gang networks—sometimes intricate— collude in corrupt practices that allow large revenue leakage and the passage of illicit and hazardous goods (drugs in particular). The greatest costs of corruption to state and

25 World Bank Customs Modernisa on Handbook Chapter 20 refers.


164

society are not the rents and bribes as such but the underlying distortions, revenue leakages and criminal activities that they reveal and facilitate on a larger scale. Indeed, in fragile states grand corruption does not cause large fi scal leakages—rather, in more severe ways; it threatens the writ of the state. Grand corruption can be partly addressed through an overhaul of procedures, legislation, and institutional mandate with auditing tools to help detect corruption levels. Such an overhaul can be only partly eff ective, because the deep social and political roots of criminal networks undermine any attempt at overhauling systems—especially in fragile states and countries in confl ict, where the rule of law is generally extremely weak.

165

Annex XIV: Veterinary & Phyto-sanitary control clearance Common weaknesses in SPS control procedures.

• SPS control measures in most developing countries are far from satisfactory. They do not ade-quately protect against trade related health hazards, do not sufficiently ensure market access, and are too costly for traders. Health protection weaknesses o�en include:

• The inability to identify (diagnose) health hazards as a result of weak staff qualifications at both inspectorates and border posts, insufficient diagnostic and testing capacities to verify animal health and product safety, and an insufficient operating budget.

• Lack of systematic data gathering and an absence of risk profiles.• Little guidance for inspectors about priority health hazards.• The absence of inspection manuals.• A bias in interventions toward revenue generation from fees and informal payments.

Market access weaknesses o� en include:• Inadequate data collecting and processing, leading to an inability to provide needed information

to trading partners for obtaining market access.• Inadequate expertise to challenge adverse decisions by importing countries.• The non-recognition of a country’s competent authority by its trading partners—because of

weaknesses in its institutional framework, in its control capacities, or in its technical expertise.

Costs of doing business o� en include:• Separate declarations for SPS control and customs.• Duplication of tasks and data gathering at the border by customs, quarantine agencies, and

border police (immigration).• Poor coordination of border processes and time consuming sequential processes.• Inadequate information technology, making electronic lodging impossible.• Inefficient and redundant bureaucratic procedures.• Higher inspection rates than necessary because of poor risk management.• Unnecessary duplicative administrative requirements for private and public safety (quality) as-

surance schemes and transport documentation.• ‘rent-seeking’ and corruption.• Unnecessary testing, inspection, and disinfestation treatment costs.

Priorities in developing countries.

Most developing countries seem to give the highest priority to promoting market access by meeting importing countries’ requirements. Health protection also receives attention, yet health controls are o� en ineff ective and driven partly by ‘rent-seeking’ (fees and informal payments). Developing countries generally give much less attention to the cost of doing business, at least at the agencies responsible for conducting controls. The incentive structure for developing country quarantine agencies, for example, o� en prompts many inspections, tests, certifi cations, and permits—with little emphasis on risk management and reducing inspection rates. International support from donors and international organizations (such as FAO and OIE) usually targets SPS control capacities for improving market access and health protection, while it gives less attention to the transaction costs borne by the private sector.

Performance measurement.

Measuring the performance of SPS agencies is very diffi cult. No performance indicators exist. Virtually no eff orts are made to assess performance, other than through specialists’ subjective judgments. Time release studies could capture some of the time spent on SPS controls at the border—but such data are not used in SPS services. One reason for not using time release study


166

data is the preoccupation with market access and health protection. Another may be that the cost of SPS procedures is generally higher away from the border than at the border. Moreover, the individual contribution of each SPS service (plant health, animal health, and food safety) in time release studies may be too small to be measured precisely, so the results may be less useful for reforming policy.

SPS agencies and customs agencies.

It may be cost eff ective for customs agencies to perform certain general tasks for SPS agencies—tasks such as checking conformity between goods and documents, deciding whether goods should be checked by quarantine offi cers on referral, and checking expiration dates on food labels. Indeed, some countries formally delegate these powers to customs.

Yet SPS agencies generally see such cooperation with customs as a mixed blessing, if not as a direct threat. Regularly heard from SPS agencies are the complaints that customs is interested only in taxation, not in health protection; that customs offi cials have no expertise in SPS issues; and that delegating SPS tasks to customs results (allegedly) in the release of goods that need SPS checking. Accordingly, SPS agencies frequently expend much political energy protecting their existing mandates and administrative competence. (It is also fair to say that many customs agencies are not eager to take on additional tasks.) Similar arguments arose in turf struggles between customs and immigration authorities. But the successful delegation models used for many years by customs and immigration in Australia—and more recently in the United States—suggest that customs can perform routine tasks, such as immigration processing, without lowering standards. With eff ective information technology, and with a dataset based on harmonized system codes, it should be possible for customs to ensure that goods subject to SPS inspection are sent to the proper quarantine offi cials. However, the experience of one middle income country with extensive international trade shows that, despite many years of talks, customs and SPS agencies have not been able to agree on information sharing procedures for control and risk management. That is why many SPS agencies still collect their own information—failing to make progress in e-commerce and to establish a national single window. To be sure, more product and process information may be required for SPS control than for customs control. For SPS there may be more product details, as well as seasonality information, so a shared database using harmonized system codes might require additions beyond those codes. The problem is not insurmountable with eff ectively deployed information technology, developed in cooperation with all users. At present SPS agencies typically are behind in their adoption of such technology.

The typical SPS agency is also behind in using risk management techniques eff ectively. One reason why cooperation between customs and SPS agencies may be diffi cult is that risk assessment generally seems more complex for SPS than for customs. Causes of complexity include:

The range of products, hazards, and ecological conditions related to SPS.• The cost of collecting data on health hazards.• The varying SPS control requirements imposed by importing and exporting countries.

Because of this technical complexity and the gap in capacities, involving SPS agencies actively in collaborative border management will require prolonged capacity building as a precondition. At present there is apparently little understanding of the diff erences between customs agencies and SPS agencies in risk parameters, risk assessment, and risk management. This lack of understanding can lead to the mistaken belief that the goal is to establish a single integrated risk management system for both agencies. In fact, the most that is possible is some coordination in selecting shipments for physical inspections.

What is needed is not one risk management system but, instead, one comprehensive risk management

167

framework. Such a framework should use proven disciplines to meet the risks faced by both customs and SPS agencies.

Coordination among SPS agencies.

Overlapping jurisdictions and rivalry among SPS agencies are common —especially between agencies in agriculture ministries and public health ministries. Overlapping responsibilities may be functional (animal product safety and human health), or they may arise from agency responsibilities for diff erent parts of the overall supply chain (agricultural inputs, production, primary processing, transport, and wholesale and retail markets). Some countries have tried to solve coordination problems by merging the various services into a single agency. A� er recent changes, the United States has only one border inspection agency (the Department of Homeland Security). China has one organization responsible for inspection and market access policies (the General Administration of Quality Supervision, Inspection and Quarantine). And other countries have only a single agency for food safety. No solution is perfect—a single agency may struggle to acquire the necessary competence in policymaking, data collection, standard setting, risk management, and control over domestic production and markets. Having a single quarantine agency on the border gives some advantages in effi ciency and in cooperation with customs and other border agencies. But these advantages may be reduced by additional coordination issues and by strife among SPS agencies behind the border’.


168

Annex XV: Development of ports ‘WB Port Reform Toolkit Module 3 Refers’

Ports represent a mix of public / private services and goods that include areas concerned with; safety, security, care of the environment, import export and processing of goods all of which help to generate direct economic benefi t through their operation, as well as additional indirect benefi ts in the form of trade development and facilitation, increases in production volumes, and furthermore in parallel increases in trade-related services.

These “economic multiplier eff ects” are used by many ports to justify and increase investment. This is particularly the case in the fi elds of marine and port safety, port security, and the protection of the marine environment. The Box below lists a number of areas where ports generate economic multiplier eff ects.

• Petro-chemical industry.• Value-added services.• Repair and maintenance.• Packing and repacking.• Labeling.• Testing.• Telecommunications.• Banking.• Customs.• Inland transport.• Warehouse and distribution.• Ship chandlery.• Cleaning and laundry.

Through targeted development policies and also the unplanned growth of interrelated industries, many ports have become the location for “industrial clusters” which are described as:

“geographic concentrations of private companies that may compete with one another or complement each other as customers and suppliers in specialized areas of production and distribution. Industrial clusters represent a kind of value chain, a web of interrelated activities that are mutually supportive and continuously growing. Clustering of related activities improves the competitive advantage of cluster participants by increasing their productivity, reducing transaction costs among them, driving technological innovation, and stimulating the formation of new business spin-off s” 26.

Ports are part of the fully integrated logistics chain which through the creation of new services help to boost economic performance as well as their attractiveness to existing and potential clients which helps to maintain and improve the port’s competitive position As part of a strategic development policy, ports seek to encourage the co-development of a variety of value-added services (VAS)27 through franchising, licensing, and incentive leasing. Ports need to attract enterprises and extend their logistics chains or provide them with specialized capabilities to add value to cargoes that

26 WB Port Reform Tool Kit Module 3 P 74 refers.27 “VAS can be divided into value-added logis cs (VAL) and value-added facili es (VAF). VAL has two major components: general logis cs services (GLS)

and logis cs chain integra on services (LCIS). GLS are, among other ac vi es, loading and unloading, stuffing and stripping, storage, warehousing, and distribu on. These are the more tradi onal logis cs ac vi es and do not directly affect the nature of the product as it moves through the port. Beyond these tradi onal ac vi es, more complex LCIS are being developed. To carry out ac vi es that manufacturers do not consider part of their core business, logis cs service providers may take over parts of the produc on chain (for example, assembly, quality control, customizing, and packing) and a er sales services (for example, repair and reuse). However, LCIS are only appropriate for certain types of goods. The products that have the highest poten al to benefit from such services include consumer electronics, pharmaceu cs, chemical products (except for those carried in bulk), clothing, cosme cs and personal care products, food, machinery, and control engineering products”. WB Port Reform Tool Kit Module 3 refers.

169

are stored and handled in the port. General services that many ports attempt to develop include chandlering, ship repair, container maintenance, marine appraisals, insurance claims inspections, and banking.

Governments are o� en involved in port development and use a “growth pole” indicator to justify direct fi nancing of basic port infrastructure. The ‘growth pole’ logic originates from a view that investments in port assets have a clear ‘multiplier eff ect’ on the national economy and, in addition, that public resources are frequently necessary to encourage joint investment by the commercial and industrial sectors, stimulating investments that would ordinarily be absent without public investment in port infrastructure.

Elements infl uencing inter-port competition

The inland transport system (road, rail, waterway, and pipeline) determines to a great extent the captive area of a port. Improvements to the inland transport system place ports in a more competitive environment. In cases where major ports may have a hinterland that covers a number of countries, their zone of competitiveness overlaps that of other ports. As a result, fi erce price competition might exist.

TransshipmentTransshipment (sea-sea transfer of cargo) of cargo, particularly containerized cargoes, is a major market chased by many, if not almost all, major ports in the world. Transshipment has the advantage that it generates additional traffi c (two moves for one box) and the weakness of being foot loose. Cargo owners and shipping lines constantly look for the portwhere the price-quality ratio best serves their particular interests. Because the penalty for changing ports of call for transit traffi c is not very severe, carriers tend to switch their transshipment ports with little provocation.

Freight Forwarders and Multimodal Transport OperatorsFreight forwarders and multimodal transport operators (MTOs) play a decisive role in today’s transport evolution, particularly within the framework of the door-to-door transport of commodities. As transport and distribution specialists, they greatly infl uence port choice and interport competition.Freight forwarders and MTOs have their own networks in the region that provide up to-date information about technical, commercial, operational, and social diff erences between (competing) ports. They contribute to the loss of identifi cation with and loyalty to specifi c ports on the part of the consignees and shippers. Freight forwarders and MTOs o� en have representative offi ces in competing ports.Switching ports is much easier for transport specialists such as freight forwarders and MTOs than it is for shippers and consignees. In addition, as consolidators of small consignments and shipper representatives, they are relatively strong compared to transport providers and other relevant parties, which makes modifi cation of transport routings easier. Assisted by freight forwarders and MTOs, large shipping lines now can change the ports of call with much less diffi culty.


170

The second group of VAS, that is, VAF, is very diverse. These types of activities cannot generally be assigned to a particular type of product or freight fl ow. It is possible, however, to impute a certain VAF potential by analyzing freight fl ows such as dry and liquid bulk, general cargo, containerized cargo, and roll-on roll-off all of which are available at Giurgiulesti Port.

A large container throughput might create the economic basis for establishing container repair facilities, handling vast quantities of chemicals requires port reception facilities, and substantial roll-on roll-off traffi c might justify truck maintenance and repair shops. Containerized and general cargoes typically have the highest VAL potential. GLS and LCIS have the best opportunity to serve these cargoes.

The VAL potential for roll-on roll-off (RO-RO) is very limited. Trucks with drivers are too expensive to be delayed while the cargo is modifi ed; additionally, these loads are usually customer tailored. VAF, such as tanking, cleaning, repair, parking, security, renting, and leasing facilities have a better potential to serve the RO-RO market.

Dry and liquid bulk fl ows have the lowest potential for both VAL and VAF. To provide a favorable environment for VAL and VAF, many ports are developing distriparks28.

28 A distripark is an area where companies are established to perform trade and transport related value-added services and can also include loca ons within the port’s larger hinterland region. There is no standard development plan for a distripark. As can be seen from the various developments in the Netherlands, France, Germany, and the U.K. for instance, there is a large variety in distriparks. For example, in Ro erdam, there are three distriparks. The oldest one (Eemhaven) is devoted to container cargo distribu on, the second one (Botlek) is devoted mainly to chemicals, and the third and most recent one is also dedicated to containerized cargoes, and includes large warehouses containing goods for European distribu on (for example, Reebok). WB Port Reform Tool Kit, Module 3 P 92 refers.

171

Basic Port Infrastructure Port Equipment:

Maritime access channels.• Port entrance.• Protective works, including breakwaters and shoreprotection.• Sea locks.• Access to the port for inland transport(roads and tunnels).• Rail connection between the hinterland andthe port.• Inland waterways within the port area andconnecting port areas with their hinterland

• Tugs.• Line handling vessels.• Dredging equipment.• Ship and shore handling equipment.• Cargo handling equipment (apron and terminal).

Operational Port Infrastructure: Port Superstructure:

Inner port channels and turning and port basins.• Revetments and slopes.• Roads, tunnels, bridges, and locks in the port area.• Quay walls, jetties, and fi nger piers.• Aids to navigation, buoys, and beacons.• Hydro and meteorological systems.• Specifi c mooring buoys.• Vessel traffi c management system.• Patrol and fi re-fi ghting vessels.• Docks.• Port land (excluding superstructure and paving).• Access roads to general road infrastructure.• Rail connection to general rail infrastructure,and marshalling yards.• Dry docks for ship repair.

• Paving and surfacing.• Terminal lighting.• Parking areas.• Sheds, warehouses, and stacking areas.• Tank farms and silos.• Offi ces.• Repair shops.• Other buildings required for terminal operations.

Concession Arrangements

In concession agreements, governments are still widely involved in port management, mainly through public landlord port authorities. Concessions are widely used in the port sector today. A port concession is a contract in which a government transfers operating rights to private enterprise, which then engages in an activity contingent on government approval and subject to the terms of the contract. The contract may include the rehabilitation or construction of infrastructure by the concessionaire. These characteristics distinguish concessions from management contracts on one end of the reform spectrum and comprehensive port privatization on the other. Concessions, by permitting governments to retain ultimate ownership of the port land and responsibility for licensing port operations and construction activities, further permit governments to safeguard public interests. At the same time, they relieve governments of substantial operational risks and fi nancial burdens. There are two main forms of concession used in ports today: lease contracts, where an operator enters into a long-term lease on the port land and usually is responsible for superstructure and equipment, and concession contracts, where the operator covers investment costs and assumes all commercial risks. Such contracts are o� en combined with specifi c fi nancing schemes such as Build-Operate-Transfer (BOTs).


172

The benefi ts of concessions in the port

sector include:

Disadvantages associated with concession

contracts include:

Better and more effi cient port management(especially port operations) performedby private operators.• Avoidance of the drawbacks associatedwith monopolies through the inclusion ofdetailed concession conditions.• The application of private capital tosocially and economically desirable projects,freeing up government funds forother priority projects.• Under certain circumstances, the creationof new revenue streams for governments.• The transfer of risks for construction,fi nance, and operation of the facility tothe private sector.• The attraction and use of foreign investmentand technology.

The need for continuing close governmentregulation and oversight.• The system requires a legal frameworkthat permits transfer of land rights to aprivate party.• Winning bids are sometimes based onunrealistic fi nancial projections, placingthe sustainability of the concession agreementin jeopardy.• The danger that a concessionaire will notproperly maintain the facilities underconcession, returning them to the governmentin bad condition, or the danger thatthe concessionaire and the port authoritydisagree on the operational need for andfi nancial feasibility of critical investments

173

Annex XVI: EU Border Police Four Tier Access ModelAccording to the EU Integrated Border Security Strategy, a four-tier access control model contains a) inland activities, b) activities at border, c) cooperation across border and d) activities in third countries. Therefore, the border control, constituted by border checks,

border surveillance and risk analysis, provides migration management, fi ght against crime and facilitation of cross-border traffi c. The legal documents on border guard issues are:

• Schengen Convention (Convention implementing the Schengen Agreement of 14 June 1985);\• Council Regulation (EC) No. 2007/2004 of 26 October 2004 (European Agency for the Manage-

ment of Operational Cooperation at the External Borders - FRONTEX);• Regulation (EC) No. 562/2006 of the European Parliament and of the Council of 15 March 2006

establishing a Community code on the rules governing the movement of persons across-borders (Schengen Borders Code);Commission recommendation of 06/XI/2006 establishing a common “Practical Handbook for Border Guards (Schengen Handbook)” to be used by Member States’ competent authorities when carrying out the border control of persons;

• Council Conclusions of 4-5 December 2006 on Integrated Border Management (2768th Justice and Home Affairs Council meeting in Brussels);

• Regulation 863/2007/EC of 11 July 2007 of the European Parliament and of the Council estab-lishing a mechanism for the creation of Rapid Border Intervention Teams and amending Council Regulation No. 2007/2004 as regards that mechanism and regulating the tasks and powers of guest officers;

• Commission “Border Package” communications of 13 February 2008 Council Conclusions of 5-6 June 2008 on the management of the external borders of the Member States of the European Union (2873rd Justice and Home Affairs Council meeting in Luxembourg).

Procedures

The external borders should be crossed only at designated BCPs and during fi xed opening hours. The opening hours should be clearly indicated at BCPs that are not open 24 hours a day and Member States should notify the list of their BCPs to the Commission. The procedures carried out by the border guards at a BCP or along the border or the immediate vicinity of that border, according to the Schengen at BCPs and border surveillance between BCPs and the surveillance of BCPs outside the fi xed opening hours. On entry and exit, the fi rst service in contact with passengers and drivers is usually the border guard service responsible for border control of persons. Further to the fi rst line control at the location at which all persons are checked, second line check may be carried out in another special location.

Following the Schengen Borders Code, all persons should undergo a minimum check that can be carried out in the traffi c line, as a rule for persons enjoying the Community right of free movement, in order to present their travel documents. This minimum check should consist of rapid and straightforward verifi cation information exclusively on stolen, misappropriated, lost and invalidated documents, of the validity of the document authorizing the legitimate holder to cross the border and of the presence of signs of falsifi cation or counterfeiting.

The checks may also cover the means of transport and objects in the possession of the persons crossing the border. Checks should be carried out, wherever possible, by two border guard offi cers. The law of the Member State concerned should apply to any searches which are carried out. Third country nationals, according to the Schengen Borders Code, must be subject at entry to a thorough check, which in addition to the examination of the travel document involves verifying their purpose and length of stay and whether they possess suffi cient means of subsistence, as well as a search in the Schengen Information System (SIS) and in national databases. Consequently, the checks involve a number of conditions that are verifi ed by the border guard through questions put to the traveller.


174

Also, the validity of the travel document needs to be inspected by the border guard in each case. Checks are the same regardless of whether persons are subject to the visa requirement or not. Border guards are obliged to manually stamp – indicating the date and place of entry and exit – the travel documents of third country nationals crossing the external border.

In exceptional and unforeseen circumstances, where unforeseeable events lead to traffi c of such intensity that the waiting time at the BCP becomes excessive, border checks at external borders may be relaxed and the border checks on entry movements should in principle take priority over border checks on exit movements.

Checks on rail traffi c should be carried out both on train passengers and on railway staff on trains crossing external borders, including those on goods trains or empty trains. Those checks should be carried out either on the platform, in the fi rst station of arrival or the last one before departure in the territory of a Schengen State, or on board (on the train), during transit. In order to facilitate rail traffi c fl ows of high-speed passenger trains, the Member States on the itinerary of these trains from third countries may also decide, by common agreement with third countries concerned, to carry out entry checks on persons in trains from third countries either at the stations in a third country where persons board the train, or in the stations where persons disembark within the territory of the Schengen States, or on board the train during transit between the stations on the territory of the Schengen States, provided that the persons stay on board the train in the previous station/ stations.

The border guard may inspect the cavities of carriages in order to ensure that objects subject to border checks are not concealed in them. Border guard offi cers will always search the train thoroughly when there is a suspicion of hidden explosive materials or drugs.

Due to the stringency in terms of staff and facilities/ equipment and the fact that the waiting times at borders should not become excessive, the checking of all the traffi c crossing the borders is both impracticable and ineffi cient, especially in cases of heavy traffi c. Therefore, the evaluation of the probability of noncompliance with legal provisions through risk analysis either ex ante (before preparing an action) and ex post (a� er action) in all fi elds is required, in order to facilitate the application of selective but eff ective controls and minimise the disruption to trade and traffi c fl ow, based on risk indicators, risk profi les and typical operational methods of individuals involved in cross-border crime.

Risk analysis needs to be based upon systematically gathered and centrally coordinated communication fl ows and management. Professional border management systems should be able to gather information, analyse it and utilize the results in fi eld work. The risk profi le is the means by which the risk analysis is put into practice. It is a tool for border authorities, assisting them in the operation and management of their offi ce, station or region and therefore should be made as accessible as possible. It is designed to replace a certain percentage of random and routine examinations of documents and goods with planned and targeted checks, which are based on a set of predefi ned criteria. It is essential that the risk profi le is fl exible and kept up to date at regular intervals (e.g. every three months) to remain eff ective. Offi cers at all fi elds and levels should be trained to gather relevant information and to contribute to the review. Thus, the criterion for the evaluation of the eff ectiveness of a risk analysis system is the correlation of the number of checks and the number of detected cases: the aim is to keep the diff erence between these fi gures as small as possible.

EUBAM is fully funded by the European Union

International Organization for Migration is the implementing partner