The FINANCIAL — The Georgian Government has passed a law about broker companies working on customs-houses. According to the law each of the companies is obligated to present USD 50,000 as a guaranty sum to the banks.
Representatives of the broker companies say that they don’t see the need for stating the guaranty sum and that this is only aimed at monopolization of the market.
“The aim is to cancel the businesses of small sized companies. I can’t explain their decision any other way. There is no case of any broker company having a fine and not paying for it and accordingly they have made the decision to make changes in the law,” Guga Kerkadze, representative of broker company Georgian Express, told The FINANCIAL.
“Maybe someone really wanted to create market monopolization but the fact is that they failed in this respect. It is true that the number of broker companies has been sharply reduced but representatives of current companies have managed to keep their clients. Their customers were not attracted away by others. The demanded USD 50,000 was a barrier that is perhaps difficult for small sized companies to accomplish but after joining they managed to provide it,” Tamaz Svimonishvili, representative of declaration company Georgia Express, Daughter Company of DHL, notes.
“The company where I was working has been completely abolished. There were big sized companies that did not have any problem in presenting USD 50,000 as a guaranty sum. Most of the small sized companies joined together and presented the sum. Discussion of the law was started in the year 2006. We did not know the concrete amount of the sum that we had to present to the bank. Earlier broker companies presented at the custom-house were able to use the insurance and now they are refusing it,” Mari, 31, Director of a brokerage company, says.
“From the start of the received law we had a feeling of instability and were scared about losing everything. Representatives of broker companies tried to appeal against it. There has never been a case of a broker company avoiding paying a fine. After finding any mistakes broker companies tried to solve them as soon as possible. It was neither in the interests of the declaration companies nor the importers to extend time. In such a case the importer is not able to get back his goods and from his side the broker company has to halt its work. If there were a case of the Government or state budget reaching deadlock because of a broker’s fine then we would understand the new law. As it is that is not the case as all fines have always been paid by the sides responsible,” Svimonishvili says.
Svimonishvili underlines the only advantage of the newly passed law, “The advantage of the above mentioned law is that it will manage to control custom-house organs. Recently many brokers companies have appeared and now they will be under control.”
“If wise people become instated in the Government then they will have to do a total reorganization of the structure of custom-houses. The processes of customs clearance are so complicated that people have no desire to start business there, scared of involvement in it,” Kerkadze declares.
The declaration companies will lose money in any case. According to the new law the broker company will have to pay money from their own account presented to the bank as a guaranty sum in any case, whether they make a mistake or not.
“The mistake may be the fault of an importer but the sum will be cut from our account,” Svimonishvili says.
Svimonishvili notes that according to the customer-house article one broker company could service another’s customers if they faced the some problems and their working activity had been stopped. Everyone could serve another company’s customers according to the slanting agreement. But now we are scared to serve them because we are not ensured against being fined instead of others. Considering this situation I wouldn’t risk serving anyone else’s customers.”
“Annually our company is fined a sum from GEL 5 to 10,000. But 60% of the mentioned sum is paid by importers, counting for their mistakes,” Kerkadze says.
“After accepting the changes in the custom-house law many companies have halted their work,” Kerkadze notes.
As Svimonishvili notes the number of customers of Georgia Express has not increased after others have closed. “With the help of joining companies we have preserved our customers.”
“If an importer does not recognize that the mistake was done by him we continue discussing the case with the help of a court. After cutting the sum of the fine from the company’s account I will be obliged to fill it. The annual turnover of middle sized broker companies is around USD 50,000,” Mari says.
Against the background of the world economical crisis the total goods turnover has been shortened. The crisis reduced the goods turnover for our company by 60-70%. Customers are losing the stimulus of importing goods because demand on them is being reduced. Besides the reduced turnover we have not increased prices for our services.
“If the Government changes the article in the law according to which a broker company must pay money for the importer’s fine for its own account, then I would restore my business.”
Written By Madona Gasanova
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