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Cigarette makers hopeful new law will curb smuggling

By Sawsan Tabazah - Jul 24,2018 - Last updated at Jul 24,2018

AMMAN — Stakeholders expect newly introduced Customs Law amendments to enhance the economy, restrain smuggling and ease custom procedures, as the government says it is determined to fight smuggling as a form of corruption. 

The Jordan Customs Department’s (JCD) legal consultant Mohammad Bustanji told The Jordan Times in an interview over the phone recently that the legislative changes to the 1998 law were needed to enhance measures of combating custom smuggling by toughening penalties and fines to render them more deterring.

According to the 1998 law, smugglers’ detention was vested in the JCD’s director, while a jail sentence is the alternative to paying fines if the smuggler in question cannot afford the financial consequences of the violation, Bustanji noted.  

Under the amended version, “smuggling cases will become a judicial matter and smugglers will be referred to the prosecutor, not to JCD’s director, and those who repeat the offence will deserve over a year of imprisonment” Bustanji noted. 

Meanwhile, fines have been raised by three to six times the value of the smuggled item, the legal adviser added. 

The amendments, which went into effect on July 14, were received with relief by sectors affected by smuggling, foremost of which are the cigarette manufacturers. 

Philip Morris Spokesperson in Jordan Mohammad Aqrabawi said that the company estimates the value of smuggled tobacco to be around 15 to 18 per cent of the market’s overall value, causing an estimated annual loss of JD150 to 180 million to the national economy. 

Smuggled tobacco that enters the market are either original brands that are sold inside free zones, goods from nearby markets transported through land or sea crossings sold on the local market, products manufactured by the Qualifying Industrial Zones’ factories that are made only for exportation purposes but enter the market illegally or forged brands made inside illegal factories, Aqrabawi noted. 

The penalties imposed by the law are deterring “but we cannot judge the situation until we have in place measures that ensure full implementation of the regulation”, Aqrabawi noted, stressing the need for stricter control of border crossings and a closer eye on retailers to uncover black-market operations. 

Philip Morris will start a campaign soon in cooperation with the JCD to raise traders, and consumers’ awareness of the new amendments and their importance to enhance the Jordanian economy, he noted.  

For his part, General Manager of Azzawraa for Tobacco Wesam Addin Mohammad said while his company pays taxes, smugglers do not, and they and get away with it. “Increasing penalties on smugglers is in the best interest of both the state and the sector,” he said. 

Economist Mazen Irsheid said that such amendments will “absolutely” enhance the economy and generate faster revenues for the Treasury, but cast doubt on authorities’ ability to stop smuggling. 

“We need to collaborate with developed countries which use advanced technology to combat smuggling; fines alone are not deterring,” Irsheid noted. 

The application of the new regulations came as the public-opinion and media scene were grabbed by news of raiding illegal facilities used to fake and smuggle cigarettes (see separate story). 

The amount of taxes and fees lost as a result of the illegal operations was estimated at JD155 million, MP Nabil Gheishan said in remarks to The Jordan Times this week.   

On the other hand, The Jordanian Customs Bylaw amendments simplified importing procedures and documentation through introducing electronic documents and signatures and cancelling the certification condition on diplomats’ and foreign organisations’ imports. 

The 2018 amendments enable merchants to finish customs clearance before the arrival of goods to save time and to cut down procedures, Bustanji added. 

The director of the Amman Chamber of Industry, Nael Husami, said that the law has become more flexible and has eased bureaucratic procedures such as electronic signatures, which the chamber has for long called for. 

Husami hoped that the regulations and instructions under the law become as flexible as the law itself, stressing that these provisions are in real-life practice “more powerful than the law sometimes”.

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