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Corruption and Other Crimes in Customs

© Bryan Johnson

Ever since the end of World War II, it has become a popular past time amongst many policymakers to focus their attention on reducing global barriers to trade. Indeed, the world's trading nations established the World Trade Organization (WTO) and its predecessor, the General Agreement on Tariffs and Trade (GATT) to accomplish just that. However, the early GATT rounds focused almost exclusively on reducing tariffs (the tax governments impose on imports). In later GATT rounds, other issues were considered like: subsidies, agricultural policy, barriers to investment, etc. Now, the WTO continues this tradition. But what are often ignored in many of these trade negotiations are the prevalence of corruption, and the negative effects it has on international trade.

The Financial Times recently reported, "Venezuela's sea and air ports - lifelines for an oil rich country dependent on large imports of consumer goods - are notoriously corrupt and plagued by red tape" ("Peril at the Ports as Caracas Takes on Criminal Customs"Financial Times August 21, 1998, page 5). Yet, Venezuela is hardly alone. Indeed, in many countries around the globe, corruption within the customs service is becoming the single greatest barrier to trade.

Consider the following:

1. Azerbaijan: "Companies often face problems in getting goods through customs due to officials who delay in hope of receiving bribes," (U.S. Department of Commerce);

2. Bangladesh: "Customs procedures are lengthy and burdensome, and further complicated by corruption," (U.S. Department of State);

3. Cameroon: "Customs fraud is endemic in Cameroon and protracted negotiations with customs officers over the value of imported goods are common," (U.S. Department of Commerce);

4. Dominican Republic: "Arbitrary customs clearance procedures sometimes cause problems for business. The use of 'negotiated fee' [bribes] practices to gain faster customs clearance continues..." (U.S. Department of State);

5. Ecuador: "The government has appeared to backtrack on the customs reform program that was designed to reduce corruption and improve efficiency in the customs service and thereby eliminate a major constraint on trade," (U.S. Department of State);

6. Haiti: "[C]orruption among customs officers does pose a problem in the petty bribes are sometimes necessary to clear shipments expeditiously," (U.S. Department of Commerce);

7. Kyrgyzstran: "Corruption is evident in tax and customs collection and in the enforcement of many laws and regulations and is especially noticeable in trade and in construction," (U.S. Department of Commerce);

8. Nepal: "U.S. firms and other foreign investors have identified pervasive corruption as an obstacle to maintaining and expanding direct investment," (U.S. Department of Commerce);

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