Sunday, March 19, 2017

http://dailyasianage.com/news/52278/independent-tariff-commission--in-market-economy

Independent tariff commission in

market economy
M S Siddiqui

The Tariff Commission should be an independent body to look into tariff related matters and
recommend appropriate levels of tariff for different products and industries keeping in view the
larger economic interests of the country. They are mandated for the study of the market to identify
the tariffication process to select economic activities; and classification of goods, and products along
with applicable tariff on such good.

They also study impact with change in cost and competitiveness in the domestic and global market.
They monitors trade developments that result from the implementation of trade related policies,
programs, and regulations such as the import liberalization programs as member of WTO and
exemptions from the payment of import duties.

They will evolve an overall tariff structure and look into the issue of tariff rationalization; critically
study market access offers received from trading partners as part of the WTO framework and advise
government on opportunities and challenges generated by these offers. They are used to give views
on commitment to WTO on complexities in tariff and tariff related matters, which may have very
vital impact on domestic industry as well as on the economy of the country.

The commission is responsible for readjusting and interpreting tariff items, tariff nomenclature
heading numbers and tariff rates in the Tariffs and the Import Tariff Rates for new entry Articles,
which shall take effect as per import policy; it makes decisions on the goods subject to temporary
tariff rates, the tariff rates and time limit; it makes decisions on the rate of tariff quota, the
imposition of antidumping duties, countervailing duties, duty under safeguard measures, retaliatory
duties; makes decisions on the implementation of other measures in relation to customs duties and
the application of tariff rates under special circumstances, and exercises the other functions as
provided for by Government.

They should closely monitor and maintain inventory of tariff rates and changes in other countries.
They maintain sufficient eye on global trends and also activities of other countries and update
decision of WTO. In order to have such study they conduct detailed impact analysis of the global
regulatory regime and market trend through multi-disciplinary team of experts.

The commission also serves as a national resource where trade data and other trade policy-related
information are gathered and analyzed. The information and analysis are provided to the
government and parliament to facilitate the development of sound and informed trade policy. The
commission makes most of its information and analysis available to the public to promote
understanding of international trade issues. The commission studies to determine whether such
agreement is in the national interest.

The commission uses to issues tariff classification rulings after thorough research and analysis on the
commodities imported or to be imported. Such classifications are binding upon the National Board
of Revenue or similar department in other countries except if the higher authority of the government
takes a decision otherwise considering the political and other global issues and commitments.

The commission should conduct formal investigations, including public hearings, on petitions filed
against the importation of articles at dumping prices to determine whether the domestic industry is
injured or threatened with injury because of this importation and recommend any bounty, subsidy or
subvention.

They have responsibilities to make policy to restrict unfair business practices investigated have
included anti-competitive agreements of both horizontal and vertical nature ie, collusive and cartel-
like behavior, such as price fixing and market-sharing arrangements, and bid-rigging, exclusive
dealing, and resale price maintenance, and abuse of dominant or monopoly positions (ie, excessive
pricing, discriminatory distribution, tied and conditional trading, undue refusal to distribute
commodities or services, and predatory pricing. Some consumer welfare abuses etc.

The Bangladesh Tariff Commission has been established as a statutory body as per The Bangladesh
Tariff Commission Act, 1992. The law has given some authorities, their recommendations are
advisory, and not binding on government although similar commission in other countries has legal
accountability to relevant departments unless intervened by highest political authority.

The commission is not an independent commission in formation since the chairman, members,
officers and employees of the commission are deemed to be public servants (article 20) within the
meaning of section 21 of the Penal Code (Act XLV of 1860) and the commission may, only on prior
approval of the Government and by notification in the Official Gazette, make regulations, not
inconsistent with this Act or any rules, for carrying out the purposes of this Act (article 23).

The Imports and Exports (Control) Act, 1950, empowers the government to regulate the import and
export of goods and services. The Import Policy Order (IPO), which governs the conditions for
imports, is formulated under the authority of the 1950 Act on a five-year basis.

The Protective Duties Act 1950 to enable the immediate imposition of protective duties of customs
on imported goods produced or manufactured outside Bangladesh and imported into Bangladesh,
where such imposition is urgently necessary in the interest of industries in Bangladesh. Since
Bangladesh became member of WTO and adapted the policy of market economy, the application of
the protective law as pre-WTO regime.

The Customs Act, 1969, governs the levying and collection of customs duties. Bangladesh also
amended Customs Act, 1969, introducing provisions on anti-dumping and countervailing rules in
1995 and on safeguard rules in 1997.The National Board of Revenue (NBR), under the Ministry of
Finance, administers all taxes, including customs duties and VAT, as well as tax holidays and other
tax concessions.

The formation of policy and implementation should not be same department as per standard norm
and practice. The policy maker may formulate the policy as per their choice and this is not desirable.
These two should be amended to authorize the Tariff Commission to determine the tariff etc on
import and export since NBR is collecting authority of tax and VAT.

The commission could not take a single step under antidumping, countervailing and safeguard
measures to protect local industries from undue practices in the international trade because low has
no such provision and local business may not also not aware of such possibility available under WTO
rule and more other Tariff Commission has no such authority. The commission should have legal
authority to undertake remedial measures by way of anti-dumping, countervailing and safeguard
actions.

The recommendation of Bangladesh Tariff Commission is advisory and not mandatory like any other
countries. The commission also not allowed determining the import tariff rather it has been done by
National Board of Revenue (NBR) and became policy formulator and regulator. The law made by
regulators is usually drafted as per their own convenience but not for other stakeholders.

The duel responsibility of rule madding and imposing on others is not permission in various counts.
Because of its being merely a recommending body, the Commission is not vested with any executive
function in the implementation of its suggestions and recommendations.

Section 8 and 9 of the Act holds that the Commission may conduct investigation on any industrial
and commercial institution and in so doing may exercise powers of the Code of Civil Procedure 1908
(Act v) for summoning any person for hearing and for supplying to it any information and
production of any document required for such investigation.

The commission unable to execute the order due to absence of logistic and manpower since there is
no full time lawyer in the organogram and no full time lawyer working for commission. In the
existing Bangladesh Tariff Commission Act-1992, there is no legally binding provision for all
stakeholders to provide the BTC with information and data.
The commission should be empowered for conducting study on the viability of any proposed trade
agreement bilaterally or regionally, monitoring trade developments resulting from implementation
of such trade-related agreements, programs, policies, regulations. It should be allowed to provide
information to the government on tariff related issues, preparing tariff classification rulings by
thorough research and analysis on essential commodities and thus remove anomalies in HS coding
of products and formulating national tariff policy.

Tariff and Trade Commissions of various countries viz., India, Philippines, Zimbabwe, Korea,
Denmark, Australia, South Africa etc are enjoying such legal authorities to undertake remedial
measures by way of anti-dumping, countervailing and safeguard actions.

The customs department shall have statutory powers and legal procedures, exercise their functions
of collecting the customs duties, safeguard the interests of the state, protect the legitimate rights and
interests of the customs duty payers, and accept supervision pursuant to law.

In some countries, there is one commission for Competition and Tariff regulation established under
the Competition Act to regulate competition and to give advisory opinions on trade tariffs matters.
Bangladesh has a Competition Commission in infant condition.

The Import & Export Control Act 1952, The Protective Duties Act 1950, The Customs Act, 1969 and
Bangladesh Tariff Commission Act-1992 should be duly revised to give legal authority as
independent Commission to undertake responsibility to formulate the functions and empower to
efficiently handle international trade and tariff related issues. The advice of Commission should be
binding on the relevant government departments except certain intervention of highest political
authority on national interest.

There is an initiative to strengthen the commission through amending the existing law since 2009
but government unable to pass the law as the Ministry and other departments resist the formation of
independent and powerful Commission. They are happy with the existing Commission without any
authority but under their control.

The writer is a legal economist