Simplifying economic policy
On July 10, two and a half weeks after the presidential elections, President Tayyip Erdogan issued his first Presidential decree, marking the official transition to the “Presidential Government System”. The decree, outlining the implementation of the new system, also rearranged the executive organs. The regulation abolished many ministries, while introducing significant changes to others. One of the most important changes was the merger of the Ministry of Customs and Trade and the Ministry of Economy.
According to the Decree, there are 14 general directorates under the Ministry of Trade:
a) Directorate General of Customs
b) Directorate General of Customs Enforcement
c) Directorate General of Internal Trade
ç) Directorate General of Risk Management and Control
d) Directorate General of Consumer Protection and Market Supervision
e) Directorate General Tradesmen and Craftsmen
f ) Directorate General of Cooperatives
g) Directorate General of Liquidation Services
h) Directorate General of Exports
i) Directorate General of Imports
j) Directorate General of Conventions
k) Directorate General of Free Zones, Foreign Investment and Services
l) Directorate General of Product Safety and Supervision
m) Directorate General of European Union and Foreign Affairs
As the list shows, departments in the Ministry of Economy tasked with foreign trade and those in the Ministry of Customs and Trade departments in charge of external and internal trade services have been gathered under the Ministry of Trade. Thus, the departments that both create and implement the rules of internal and external trade now operate under a single organization.
Inward Process ng Reg me amalgamated
After the merger of the Ministries, the most important change in terms of customs applications involve the Inward Processing Regime (IPR). Both the establishment of the rules of the regime and its actual implementation have been gathered under a single organization . In the past, one of the main problems encountered in the implementation of the regime was its application by two different ministries. This situation not only resulted in coordination issues but also difficulties due to differences in understanding. The customs authority approached the application as a customs regime while the Ministry of Economy approached it as an export regime. These fundamental differences occasionally clashed.
The main problem with the IPR system, however, was not the disconnect between two separate ministries but the lack of simplicity and comprehensibility in the implementation of the regime itself, and those problems remain. Indeed, the complexity of the regime is exacerbated by the fact that the industry was not involved in its formulation, electronic harmony is lacking, violation conditions are not clearly and specifically regulated in the legislation and administrative fines are excessively high. In addition, the number of temporary articles is at least equal to the regulations themselves, which injects confusion into the system.
What should be done?
Gathering together all authorities involved in internal and external trade could be an opportunity to solve many issues in the customs applications. The IPR could set a good example for this. For instance, another issue has been ambiguities regarding proof of origin certificates in terms of additional customs duties, a problem linked to having two ministries. One disagreement was whether proof of origin certificates would be required for the import of products subject to these taxes via the European Union. A regulation was introduced, albeit late, but proved to be inadequate. Many other similar examples can be given. Thus, it would be helpful if the Ministry of Trade could resolve the issues created by the presence of two ministries as the first step and focus on their solution.