Piles of cargos, particularly essential goods, that have not been cleared by the consignee are posing problems to most Iranian ports.
Shahram Bakhshipour, the head of the Port Terminal Operators Association, has outlined hurdles complicating customs clearance in a write-up for the Persian economic daily Donya-e-Eqtesad. The translation of the full text follows:
To better understand the customs clearance process, we need to go over the import process first. After selecting the seller and negotiating the purchase of goods, the consignee (importer) should register the shipment order in the system [of the Ministry of Industries, Mines and Trade]. When banking procedures for the transfer of money and the method of payment is completed, the freight transportation company, regardless of the mode of transport, is determined and finally the goods are imported.
When goods arrive at the port, the consignee must go through customs procedures for the clearance of import. Ports are in fact customs’ agents. It is not possible to import the goods directly due to document management problems. The goods should not be kept in the port either, therefore they will be left on the premises of ports until the customs procedures are completed.
Customs procedure is carried out according to the law, based on which the Ports and Maritime Organization of Iran and the representatives of shipping companies are not involved in customs procedure. The consignee should inform companies affiliated to PMO and representatives of shipping firms and announce the estimated time of arrival only after the container vessel reaches Iranian waters.
According to the law, imports must be declared at the port of entry; their discharge permit will be issued after they’ve been evaluated and customs formalities have been finalized. The goods will remain in warehouses supervised by the Islamic Republic of Iran Customs Administration as long as the owner of the goods has not provided the necessary documents to obtain the permits required, which is conditioned on various factors.
Ports should not be regarded as warehouses or freight depots. If not, as time passes, they should be expanded, which is not economically viable, or they must pay demurrage fees for failure to unload containers.
Banking operations have also become a major challenge for consignees due to sanctions; commodities pile up at ports when foreign currency is not allocated promptly, and consequently ports lose their efficiency and agility for handling goods over time.
Various decision-making authorities and requirements that should be fulfilled, depending on the type of imports, also contribute to the prolonged customs procedure and pile-up of goods. On top of that, swift market developments resulting from forex rate fluctuations and low costs of port services encourage importers to keep their goods at the customs terminal.
It must be noted that the goods remain at the disposal of freight transportation company as long as the importer has not secured the customs clearance permit. Laws and rules related to abandoned goods don’t have the teeth to deter this behavior, as customs clearance laws can be easily extended for at least six months. Hence, ports become the safest and cheapest place for storage of goods.
Easing customs formalities, centralizing import licensing agencies, timely allocation of foreign currency by the central bank, making the rate of port and warehousing services real based on the cost pricing of companies that provide such services can help resolve this issue.
By law, no agreement can be reached between the consignee and the port to keep the goods there. Therefore, the goods must be cleared, but due to the existing customs problems that are beyond the purview of PMO, the operators and their subsidiaries, the goods inevitably remain at the port.
In recent years, due to the fluctuations of exchange rate, PMO took the initiative and reduced the time goods are allowed to remain at special trade zones from three to two months to prompt the clearance procedures as much as possible. Goods will be seized by the Organization for Collection and Sale of State-owned Properties of Iran, if importers fail to collect their properties.
In addition, incentives and warehousing discounts will be offered by PMO to importers who collect their goods within 45 days.
Customs clearance procedures vary depending on the type of goods. One of the important permits needed for customs clearance is issued by the Ministry of Industries, Mining and Trade. Some commodities, namely wheat, barley and rice, must be quarantined before they could be discharged.
The faster the goods are cleared, the better for port terminals, and the greater the potential for making income because of clearing the space and the delivery of new cargo. The pile-up of cargo in the terminals is by no means desirable and cost-effective for the terminals, while the clearance of these goods is beyond the authority of the port, port operators and even the representatives of shipping companies.
It is not possible to import goods before they’ve been registered. When the ship is unloaded, we basically do not know if the goods are registered or not, because no license is available. The gap between the unloading of vessels and the provision of permits by importers is at the disposal of the shipping company, hence the port and the port operator do not have any authority in this regard.
Customs formalities are initiated only after the clearance permit has been presented. Some commodities might be cleared within a week and some within a month. We [terminal operators] have no authority in this matter. The first step, i.e. import order registration, must be taken by the Industries Ministry.
At present, we are facing unforeseen conditions, so it is necessary to reduce the clearance process as much as possible with the help of all related organizations.
