A Committee of Concerned Parties to Concretize the Recommendations within 5 Years

27 March 2018
A Committee of Concerned Parties to Concretize the Recommendations within 5 Years

The First National Conference to Combat Illicit Trade to update laws, Speed Up and aggravate sentences, and strengthen cooperation between agencies

The 28th of March: an Annual National Day to combat Illicit Trade

Jaber: Smuggling Is No More Limited to Small Quantities and Judicial System to Act Firmly

Baroud: Main Challenges of Combating Smuggling Are Illegal Crossing Points, the Protection of some Smugglers, and Lack of Personnel
Participants at the First National Conference to Combat Illicit Trade, organized by the Regie at the Seaside Front Complex in Beirut, considered that the conference aims to "lay the foundation of a comprehensive initiative by all concerned parties to combat smuggling". They agreed to adopt "the 28th of March, as a national day to combat illicit trade and to accordingly adopt a committee of the mentioned parties in an attempt to concretize the recommendations within the next five years".
The participants recommended the Public Prosecutor's Office, the ISF, the Ministry of Economy, and the Customs Directorate, as well as the Regie and the Association of Industrialists "to urge the judicial and legislative bodies to update the laws and regulations necessary to combat smuggling and to enforce the application of judgments toward penal sanctions", as well as "to activate the role of border control authorities to prevent smuggling and strengthen their ability to supervise illegal crossings". They called for "linking the data between agencies engaged in combating smuggling through modern technologies and adopting a unified network in order to simplify procedures at the legitimate border crossings, and customs procedures, and to reduce clearance of goods”.
The participants stressed the need to "speed up the issuance of judicial sentences to force the violators to close their cases and pay the fines" and the importance of "strengthening cooperation and coordination between security and judicial agencies toward a joint committee of different agencies to enhance investigation, intelligence, and prosecution". They noticed the importance of "the ongoing partnership and cooperation between domestic and international agencies and legitimate representatives of tobacco industry".
They called for "the establishment of a common national database for the exchange of information through the adoption of modern technologies and the implementation of an advanced tracking and tracing system".
In term of taxation policy, participants agreed to "work with neighboring countries to harmonize prices and tax rates in order to control the imbalance of tobacco prices across the borders, especially in light of lower prices of tobacco products in some neighboring countries compared to Lebanon".
The participants found that "citizens should be warned against the dangers of contraband goods and their negative impact on their health and the Lebanese economy", along with "increasing consumer awareness through campaigns and dissemination of information about health, social, and economic risks associated with illicit tobacco trade."
The participants stressed the importance of "developing human resources and enhancing the performance of employees through capacity building courses. These trainings must be held by specialized consulting companies", along with "training field personnel to combat smuggling".
The participants called for "enabling the Lebanese industry to produce high quality commodities, reducing the cost of production and thus to compete smuggled goods from a point of view of price and quality, and developing stimulating program for the development and protection of the industrial sector within the concluded agreements".
Closing Session
The last interactive dialogue of the conference, which was presided by the IFBS’s President Lamyaa Moubayed Bsat, was entitled "Combating Smuggling between the Reduction of Supply and Demand", in which participated MP Yassin Jaber, former Minister of Interior and Municipalities Ziad Baroud, Director of Public Finance Dr. Alain Befani, Director General of the Ministry of Economy and Trade Alia Abbas, and the President of the Association of Lebanese Industrialists, Dr. Fadi El-Gemayel.
Jabir noted that smuggling "has a great financial impact on an important administration that provides a great income to the Lebanese treasury", pointing out that "this scourge goes hand in hand with corruption". He said that the Lebanese Customs Law "is well but poorly implemented. The Parliament had legislated it but the implementation needs operational tools".
Jaber said that "many laws passed by the Parliament were disregarded, which led the President of the Parliament Nabih Berri to form a committee that control the implementation of the laws."
Recalling that in 2015 the Parliament adopted "the utmost law, of Anti-Money Laundering Act (...), which actually helps to combat corruption", he considered that this law "can be a very important tool in the hands of justice today". He stressed the importance of "coordination between security agencies and concerned parties in order to control the border and combat smuggling", pointing out that smuggling "is no longer done in small quantities but in trucks". "This issue should be an absolute priority, and the judicial system should firmly act. The law is very effective." He pointed out that the law "lays the responsibility of reporting on the officials of the banking system, lawyers, auditors, and notaries. The Special Anti-Money Laundering Commission has the right to lift bank secrecy for any suspicious account". "If an official is held accountable today for breaching the law or misusing his function, the sect and community to whom he belongs deplore the action”.
"We are at an important crossroads, Lebanon is in a financial crisis, the State is in a race and we have to recognize the problem and seek treatment. The Cedar conference could be an opportunity and a beginning of a new path. We shall take advantage of it and begin to seriously address things in a different approach. The most important subjects are smuggling, illicit trade, and corruption, which deteriorate our country".
Baroud then spoke, stressing in turn how "serious it is to adopt a law and then not to implement". He said: "We are required to protect licit commodity, not out of compel to the monopoly of the Regie, but rather out of the importance of implementing laws and because smuggling is a criminal offense".
"Illicit trade is a form of corruption in private as well as public sector”. He noted that "the large number of illegal crossings" contributed to aggravating the problem of illicit trade. He stressed that the "joint border force", which includes the Lebanese army, the ISF, and GSF tried to control the movement at illegal crossings, through which the majority of smuggling operations take place rudely by trucks. He underlined that "most smugglers are protected". "There exists a legal framework to combat smuggling”, however "illegal crossings and sometimes the protection of some smugglers and the severe shortage in the number of smuggling control personnel" are the most important obstacles in this field.
Baroud said that "the number of the Regie’s personnel is very low in proportion to the required tasks. Thus, the need is to recruit the necessary staff to meet the required tasks efficiently and effectively".
Baroud proposed "the establishment of a joint operation room between the Regie, Customs, the Ministry of Economy, the ISF, and GSF, or at least a platform for the exchange of information, for a more effective smuggling combat". He added that "the punishment of smuggling should be increased because condemnation as felony is insufficient, especially if repeated”.
The Director General of Public Finance, Alain Biffani, said that smuggling "deprives the treasury of tax revenues that can be collected if smuggled goods were legally imported: such as customs duties, consumption charges, and VAT". It leads to "lowering exchange rate of local currency due to increased demand for foreign currencies for the purpose of buying and smuggling goods from abroad. It harms as well national industry and products subject to protection as a result of unequal competition due to the entry of foreign goods without paying fees, which lower prices and prevent the purchase of local products”.
He pointed out that "successful administrations must compete with smugglers; however this is impossible under current situations, which affects the competitiveness of the Lebanese economy."
Beffani said that "the Lebanese state's anti-smuggling initiatives are based on four means: moderate taxes and fees, fair system, clear legislation, transparent procedures and severe penalties."
The Director General of the Ministry of Economy and Trade, Alia Abbas, addressed the negative effects of smuggling, including those affecting consumers, in terms of "the uncertainty of goods’ conformity to specifications because they cannot be examined and treated as they enter Lebanon through illegal crossings."
Concerning updating procedures at Beirut Port to combat smuggling and counterfeit, she said that "a committee has been named to simplify the procedures at the port, which has developed a mechanism for working on border crossings. Thus were adopted standardized and documented procedures, which led to cancelling unnecessary steps and merging others by increasing the number of transactions completed in one day, to conducting transactions transparently by reducing the interference in the workflow that may impact the result of the control, and effectively completing transactions based on risk analysis and good management of resources”.
On fighting counterfeiting, “cooperation has been established with public and private sector to combat fraud and counterfeiting. Notably, coordination is made with the customs and a cooperation agreement is signed with the BPG to train controllers of the MET and related administrations on how to identify counterfeit and fraud products in the market".
Gemayel talked about the impact of smuggling on individuals, society, and economy, noting that "it leads to a class of beneficiaries i.e. a mafia that negatively impacts social, economic, and even political environment. Those engaged in smuggling steal large sums of money then launder them in the economic cycle, regardless the impact on the efficiency of the investment. The aim of these corrupt is to reuse these funds against law, economic regulations, and international agreements, in order to gains profits at the expense of the economic hierarchy of the whole society".
Gemayel said that the fight against smuggling "increases revenues without imposing additional taxes, which provides more services such as housing, medicine, education, and transportation. In sum, increasing the Government’s income reduces deficit and public debt".
Gemayel stressed the need to "controlling the port and crossings through customs, and using the technology of Radio-Frequency Identification (RFID) to electronically monitor and detect goods."
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