Customs Posts Between Serbia and Montenegro

Pending End of the Common State?

Customs posts at Serbian-Montenegrin border are not the latest whim of the new Djindjic's Cabinet, but a proof that in the present common state there is no way for two members to be equal.

AIM Podgorica, February 16, 2001

The customs barrier at border crossings between Serbia and Montenegro was lowered again on Monday, February 12. After four months (since DOS assumed control over the federal state institutions) workers of the Federal Customs Office (SUC) returned to the checkpoints: Prijepolje, Brodarevo, Jabuka, Godovo, Mehov Krs and Uzice.

Their return was accompanied with the official explanation of Vladan Begovic, newly-appointed SUC Director: "By the establishment of these check points SUC wants to prevent goods liable to customs and taxes from entering the territory of Serbia without paid federal customs duties".

Customs officials at Brodarevo crossing point further explained that their job would be to control dutiable goods, i.e. cargoes, which are entering, or leaving Serbia. They will also carry out customs formalities on imported goods or goods intended for import, which have not been cleared through customs under the federal law.

In other words, the essence of the whole story is that customs will be paid on foreign goods coming to Serbia over Montenegro (mostly the port of Bar) two times. First time it will be collected by customs officials of the Montenegrin Customs Directorate, and the second by SUC workers, with the assistance of the members of the MUP of Serbia (Ministry of the Interior) when crossing from Montenegro to Serbia.

For those not so well versed in the relations within FRY, the newly emerged situation is quite paradoxical. Indeed, it is not easy to understand representatives of the federal state establishing in the middle of the country border crossings and collecting customs duties on goods coming from one Republic into the other, at the request of one Federation member (Serbia). By this they prevent the turnover of goods in the opposite direction because the Decree of the Government of Serbia on the prohibition of exporting flour, oil, sugar, meat and meat products and milk to Montenegro, is still in force. In addition, more cautious economists from Podgorica are warning that there is a possibility (already tested) of Serbia totally blocking commodity turnover on its border with Montenegro, under the guise of collecting customs.

What is this actually all about? After the open political conflict between Podgorica and Belgrade authorities in summer 1998, it turned out that the import-export regime and inter-republican turnover within FRY might serve as powerful means for exerting economic pressure on the Montenegrin authorities. Since they soon became aware of this fact, members of the then ruling Montenegrin coalition did not sit on their hands but, one by one, took over the competences of the federal state.

Very soon after that Montenegro formed its own Customs Office and the whole business was concluded last summer when Podgorica Government adopted the Decree on Foreign-Trade Operations and the Decision on the Categorisation of Goods According to Types of Imports and Exports.

The main characteristic of these regulations is that they introduced important liberalisation of import-export operations in relation to the valid federal laws: about 95 percent of Montenegrin imports were liberalised. It thus happened, for example, that according to the federal regulations custom duties on a kilogramme of bananas amounted to DM 4.5 while for that same quantity one had to pay DM 1 in Montenegro.

"Our (FRY) average customs rate is 15.46 percent and theirs (Montenegrin) five percent. Our highest customs rate is 40 percent and theirs is 15 percent", explained Mileta Skenderija from the Federal Customs Office in Belgrade. In the context of these figures it is quite easy to understand the decision of the Serbian authorities - both the republican and federal - to introduce customs regime at border crossings with Montenegro. Especially when it became clear that the Serbian Prime Minister, Zoran Djindjic, did not succeed in his attempt to persuade the Montenegrin Prime Minister, Filip Vujanovic, that his Government should give up the taken-over competences and return them to the federal state and its Customs Office.

It could be hardly expected for Montenegro to get the opportunity in a state and under federal authorities it did not recognise, to "sell" its own custom rates on the market of the other federal unit and based on the differential realise extra profit. Equally logical, it was to be assumed that the Serbian authorities would not sit on their hands and tolerate the migration of its importers to cheaper areas, which are only formally a part of the same state.

That is why the behaviour of the Montenegrin officials and their comments of the introduced customs regime on the border of Serbia and Montenegro are a bit surprising. Namely, they could be heard saying: "Even after Milosevic - you have Milosevic". What is particularly hard to understand is that advocates of the Montenegrin independence are against the new border regime. For, with the exception of petty political gain, which someone is attempting to make in this, entire case and the short-term economic damage that the Montenegrin budget will suffer, the decision of the Belgrade authorities is actually playing into their hands.

Truth to tell, only President Djukanovic showed understanding for this move of the Serbian Government. In a show of TV Montena, Djukanovic pointed out that customs check points on the Serbian-Montenegrin border were a practical proof that it would be very hard to make a real community of Serbia and Montenegro in view of differences in their economic strategies and necessity of the Serbian Government to protect the Serbian heavy industry.

It is obvious that, although neither Serbian nor Montenegrin officials are speaking about it, the SUC decision has made the annulment of the single FRY market official. Practically, the current Belgrade authorities have gone a step further revoking the seemingly unified customs system of Serbia and Montenegro.

Since for over a year now the payment transactions through official institutions are not functioning (since DM was accepted in Montenegro as the official currency) within FRY, it would not be to bold to say that

• fromthe economic point of view - FRY no longer exists.

Zoran RADULOVIC (AIM)