FACILITATING INTRA-OIC TRADE:
Improving the Efficiency of the Customs Procedures in the OIC Member States
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building to developing countries and the LDCs to fulfill the obligations (Category C
Commitments) brought by the Agreement.
The OIC Member States are spread all over the world. They have different geographical
conditions, populations and economic structure. Some of the countries have diversified
their productions, established political stability and adopted modern policies. These
countries have also established a good working business environment and increased
dialogue with the private sector to respond possible challenges to be faced by the private
sector in their domestic and international operations. On the other hand, some of the
countries are facing severe obstacles for establishing necessary economic conditions.
They are facing financial, legal, and institutional and human resources problems. With
the contribution of donor countries and international development institutions, these
countries are trying to overcome the economic challenges.
This report analyzed in detail the various aspects of customs formalities in the Member
States. The available data shows that the cost and time required for international trade
transactions is over the world average in many OIC Member States. Most of the
Member States did not harmonize their customs policies and formalities with the
international standards. Many of them did not accede to the international conventions,
and their customs laws and legislations are not compatible with the modern standards.
The practices and the techniques applied in most of the Member States do not enable
them to handle the increasing demand for international trade in these countries.
Therefore, these practices constitute an important barrier for their economic
development. In order to increase their trade, which means more cargo to be processed
by the customs, these countries need to apply the modern customs procedures as soon as
possible.
On the other hand, some of the Member States have succeeded to develop their customs
formalities and improved their rankings in World Bank indices than the other
developing countries. These countries have acceded to the relevant international
conventions, updated their legislative framework and initiated comprehensive reforms
individually or with the support of donor countries or international financial institutions.
Our investigation reached concrete results showing that, Customs Administrations of
many Member States have similar characteristics. For example, most of the Customs
Administrations are functioning under the Ministry of Finance. They are functioning as
General Directorate or Department under the Ministry of Finance or Revenue Authority.
For some of them, customs revenue constitutes an important share in total tax revenues.
According to the relevant indicators, cost and time required for customs clearance is
relatively high in many Member States. As a result of continuous reforms some of the
Member States reduced the time and cost of customs clearance. However some of the
countries could not improve the situation too much. Customs Administrations are
applying the Customs Law adopted by their governments individually or by the
economic groupings they are belonging to.