Challenges of Privatizing Customs Affairs

Reporting Iranian Privatization Organization (IPO), quoting from Financial Tribune ...

Reporting Iranian Privatization Organization (IPO), quoting from Financial Tribune:

Privatization of the Islamic Republic of Iran Customs Administration, in line with the general policies of Article 44, has been a matter of debate over the past years. While the law obliges the government to transfer part of customs affairs to the private sector, experts believe the activities and responsibilities of IRICA must be prioritized for privatization and their ownership transferred in due time, according to an article by Persian daily Forsat-e Emrooz.

Privatization of customs affairs has previously been implemented in several customs warehouses across the country. Mohammad Lahouti, the head of Iran Export Confederation points out that while privatizing the customs warehouses resulted in improved quality of services, it eventually led to increased cost of import and export.

He suggests leaving the transfer of export and import activities to the private sector for the last stage of privatization, pointing out that “as long as the economic conditions for private, public and quasi-government sectors are not equal, privatization will lead to increased costs for consumers.”

Keyvan Kashefi, a board member at ICCIMA suggests that the supervisory affairs can be eventually transferred to the private sector through establishing organizations and agencies tasked with coordinating policy between ICCIMA and the private sector.

The expert also suggested the private sector be invited to participate in development of infrastructure and facilities required at customs terminals across the country.

He pointed out that while privatization could increase the costs of customs services, it should be partly compensated by higher efficiency.

The private sector can handle a task that may take 25 days for the public sector in less than 10 days. This would increase business turnover,” he noted.

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