[size=30]Customs.. Will China's goods be smuggled from Iraq's ports towards Kurdistan?.. Mortada Al-Azzawi
2022-03-05
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Mortada Al-Azzawi wrote:
The Ministry of Finance announced that the General Authority for Customs has begun to automate its customs procedures.
The authority indicated that today, Thursday, 3/3/2022, the actual launch of the application of the global Skoda system.
Question: Will the customs automation include the official and unofficial outlets of the Kurdistan region, or only the outlets in the center and south of Iraq!?
In this regard, we want to state the following:
More than 80% of Iraq's imports of goods come from three countries:
Turkey (10-15 billion dollars) annually
China (10-14 billion dollars) annually
Iran (8-11 billion dollars) annually
Turkey and Iran are neighboring countries and they have hundreds of kilometers of common borders with the Kurdistan region of Iraq. There are dozens of official and unofficial border crossings. As the Minister of Finance admitted last week, the central government has no control over these ports.
There is a wide gap between the sales of the Central Bank of 44 billion dollars and the value of officially registered imports of 15 billion dollars in 2020, and the main reason for this gap is the imports coming from the border crossings in the Kurdistan region, as most Iranian goods and all Turkish goods enter Iraq through Kurdistan Region Road.
Here we want to highlight the transit laws in Iran:
Article IV of the Law on the Transport (Transit) of Foreign Goods Through the Territory of the Islamic Republic of Iran says:
Goods and containers transiting Iranian territory with a transit address are not considered part of imports and exports, and therefore they are completely exempted from customs rights and commercial profits.
Fifth Article: All goods under this definition must be transported by internal Iranian transport companies officially registered with the Iranian Ministry of Transport and the Tax Authority.
The official price of subsidized gas oil (gas) truck fuel in Iran is 1,000 tomans or 4 cents per liter, while the price of a liter of gas oil in Iraq is 400 dinars or 27 cents per liter according to the new exchange rate, and you can imagine the size of the difference.
The average price of transporting a container from Iranian ports in the south to the Iranian provinces of Kermanshah and Sanandaj, adjacent to the Kurdistan region of Iraq, ranges between $400 and $600 per container, while transporting a container from Umm Qasr port to Baghdad costs more than $1,000.
The aforementioned ligament:
If the Iraqi state insists on controlling the border crossings and automating the customs completely and correctly in the center and the south in order to generate revenues to support the general budget, then after days you will not be surprised when you see Chinese and international goods entering Iraq through the Kurdistan region and not through the ports of Basra If it is already happening now, because the merchants are naturally looking for customs evasion and reduce transportation expenses to increase profit, and the region provides them with that.
This means that the state, in any case, will not get the planned revenues from customs, and also that the border provinces in the center and south, especially Basra, will lose a lot of business and revenues in favor of the region.
The best solution (currently) is to impose a (fixed) tax on the central bank's dollar sales and make customs control qualitatively over goods and implement state policies with regard to imports and exports.
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