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Reform at Customs held up by vacancies

  • File - A Lebanese customs official displays seized material at Beirut Port, Wednesday, Sept. 12, 2012. (The Daily Star/Mohammad Azakir)

BEIRUT: As politicians call for a renewed effort to end alleged corruption in the Customs Department, a source at the Finance Ministry said that the minister’s hands were tied until the Cabinet filled key vacancies.

Speaking to The Daily Star on the condition of anonymity, an adviser to the finance minister did not deny that there were problems at the Customs Department, but he insisted that the corruption would end once the Cabinet appointed a director general and a board of directors.

“There are 100,000 ways for smuggling. I have manifestos from the customs, and some of them are scandalous to say the least,” he said. “But we need to be clear that we can’t do anything to stop these practices unless we appoint a board of directors and director general.”

He argued that the director general and board of directors would be held accountable for problems.

“The minister cannot take any action unless there is a director general. Once we appoint the director general and board of directors, then the minister can contain the practices at some customs department,” the adviser added.

He said the delay in filling these positions was due to the difficulty of agreeing on candidates.

“The main Christian, Shiite and Sunni parties insist on appointing their own people in these key positions, and this is the main reason the Cabinet is unable to fill these vacancies,” the adviser said.

He added that former Finance Minister Mohammad Safadi had been given exceptional temporary powers to make all the customs clerks fall under his direct authority following complaints of bribery.

“But once the new Cabinet was formed and a new finance minister was appointed, these prerogatives were taken away from Minister Ali Hasan Khalil,” the adviser said.

Many politicians and economists have stressed that the best way to finance the controversial new salary demand for government employees and public school teachers is to crackdown on waste and corruption in public officials, with the Customs Department most often singled out.

Critics say the political class turns a blind eye on the blatant corruption at some entry points, especially Beirut Port.

“There is definitely something wrong at the Customs Department, even if some officials try to downplay these reports. I am sure that some of imported goods are not being subjected to customs charges,” an insider familiar with the practices at Beirut Port told The Daily Star.

“How could anyone explain that customs revenues have dropped in 2013 even though imports last year have exceeded $21 billion.”

The insider, who spoke on condition of anonymity, pointed out that total imports in 2013 were $21.228 billion, compared with $17.964 billion in 2010.

“But the customs and value-added tax collected from imports in 2013 fell to $2.9 billion, from $3.44 billion in 2010. Even if there was a surge in the exempted imported goods, the drop in revenues should not have reached this level,” he said, adding that there was obliviously collaboration among customs officials and scouts who inspect the containers entering the customs zone at the port.

According to customs regulations, computers, raw materials, jewelry and some industrial parts are exempted from taxes when they are unloaded from the ships and enter the customs zone.

“Some suppliers and importers falsely declare that their containers are loaded with computers or raw material to avoid custom charges,” the insider said.

“These containers usually are loaded with shoes or garments and these products are subject to taxes and VAT. On many occasions, the customs officials and scouts do not open these containers for inspection in return for a big bribe from the suppliers.”

However, the acting director general of the Customs Department, Chafic Merhi, says that reports of corruption in his department are highly exaggerated.

In a statement issued Wednesday, Merhi said that the department lost significant revenues when the VAT was removed from fuel oil gasoline three years ago.

But the insider said that the VAT exemption for fuel oil did not explain the drop in customs revenues.

Some merchants, however, praised the customs at Rafik Hariri International Airport.

“I must admit that things are under control at Beirut airport after the authorities took a number of measures to end some bad practices that took place in the past. I collect my imported goods with relative ease and without bribing anyone,” Nadim Assi, the former president of the Beirut Merchant Association, told The Daily Star.

 
A version of this article appeared in the print edition of The Daily Star on April 18, 2014, on page 5.
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Summary

As politicians call for a renewed effort to end alleged corruption in the Customs Department, a source at the Finance Ministry said that the minister's hands were tied until the Cabinet filled key vacancies.

Speaking to The Daily Star on the condition of anonymity, an adviser to the finance minister did not deny that there were problems at the Customs Department, but he insisted that the corruption would end once the Cabinet appointed a director general and a board of directors.

Many politicians and economists have stressed that the best way to finance the controversial new salary demand for government employees and public school teachers is to crackdown on waste and corruption in public officials, with the Customs Department most often singled out.

However, the acting director general of the Customs Department, Chafic Merhi, says that reports of corruption in his department are highly exaggerated.

Some merchants, however, praised the customs at Rafik Hariri International Airport.


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