November 2010
          Report on the Customs Administration’s activities realized in October 2010

 I. Institutional Capacity Building

 1.   The Customs Administration passed the following Guidelines on a variety of
      Customs Administration areas of work in October 2010:

      -    Guidelines on utilization of the application for system data exchange-
           SEED, which regulate the modus operandi and the standard electronic
           data exchange procedures between the Customs Administrations of two
           neighbouring countries, regarding loaded and empty freight motor
           vehicles passing the border crossing points at the national frontiers;
      -    Guidelines on the work of the Mobile Teams Unit, which regulate the
           independent action of the Mobile Teams in support to the other
           organizational units of the Customs Administration;
      -    Guidelines on the Customs Administration’s official seals and stamps,
           which defines the form, dimensions and contents, as well as the
           purchase, registration, manner of keeping, use and destruction of the
           Macedonian Customs Administration’s official seals and stamps used for
           affairs of Customs Administration's legally prescribed competence;
      -    Guidelines on the procedure of discharge of entry at the customs
           terminals with alternative proofs, which are amendments to the
           Guidelines on collection of fee for stay at a customs terminal. These
           Guidelines amend the User Manual for the application for weighing and
           collecting terminal tax, which is a constituent part of the Border
           software and now include the procedure of discharge of entries of
           vehicles with alternative proofs. The alternative proofs confirm justified
           objective reasons by which the unannounced vehicles’ departure is
           announced at the moment of exit from the customs terminal;
      -    Amendments to the Guidelines on selective controls in customs
           operations, with a User Manual on the operations with the Risk
           Management Module at the border and inland Customs Offices, which
           objective is to provide further strengthening of the capacities engaged in
           risk analysis based control.

 2.   The Customs Administration collected a total of MKD 4,538 million (about
      EUR 73 million) of budget revenues in October 2010.

      Of the total revenues collected in October 2010, MKD 350 million was
      collected as customs duties and other related taxes (about EUR 5.7 million),
      which is 16% less than the amount collected in the same period in 2009. The
      reduced collection of customs duties revenues for the compared period
      2009/2010 is mainly manifested in the domain of customs duties levied for
      meat and other consumable butchery products, clothes and clothes

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       Report on the Customs Administration’s activities realized in October 2010

      accessories (except for the knitted and crochet products), electrical
      machines and equipment and their spare parts, recording devices and
      vehicles and their spare parts and equipment (except for the rail or trolley

      The revenues from VAT collected in October 2010, amount to MKD 2,842
      million (about EUR 46 million), which is an increase of 5 % compared to the
      amount collected the same month in 2009. The rise in the VAT collection is
      established in trade exchange of plastic masses and the products thereof,
      iron and steal, mineral oils, mineral fats and products of their distillation,
      bitumen materials, mineral waxes and fats and oil of animal or vegetable
      origin and products of their decomposition, processed consumable fats and
      waxes of animal or vegetable origin.

      MKD 51 million (about EUR 829 thousand) was collected from other
      customs fees, which compared to October 2009 is a 12% increase.

      The revenues collected as excise duties in October 2010 were MKD 1,295
      million (about EUR 21 million). The excise collected from the import of
      excise goods amounts to MKD 82 million (about EUR 1.3 million). MKD 1,213
      million (about EUR 20 million) of excise duties was collected from the
      internal trade in excise goods. MKD 79 million (about EUR 1.3 million) of
      excise duties was collected from alcohol and alcoholic beverages in October
      2010, compared to MKD 77 million (about EUR 1.2 million) collected in
      October 2009, meaning that the collection of excise for these products has
      increased for 3%. The revenues from excise on tobacco and tobacco products
      in October 2010 were MKD 422 million (about EUR 6.9 million), while in
      October 2009 – MKD 364 million (about EUR 5.9 million), which is a rise of
      16 % in favour of October 2010. MKD 759 million (about EUR 12 million) was
      collected as excise duties from oil and oil derivates in October 2010,
      compared to MKD 761 million (about EUR 12 million) collected in October
      2009, being an insignificant decrease. Excise duties collected from
      imported passenger vehicles in October 2010 amounted to MKD 33 million
      (about EUR 549 thousand), compared to MKD 48 million (about EUR 780
      thousand) that was collected in October 2009, i.e. 30% less than the
      collected amount in 2009.

 3.   On grounds of additional controls (undervaluation-as basis for calculation
      of import duties, inappropriately declared origin of goods as a base for
      exemption of customs duties, incorrect tariff classification to apply lower
      customs duty rates etc.), in October 2010 the Customs Administration

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        Report on the Customs Administration’s activities realized in October 2010

      passed 413 Decisions for subsequent collection of duties in total amount of
      MKD 52 million (about EUR 851 thousand).

 4.   The Customs Administration issued the following licenses and
       authorizations in October 2010:
      - 24 amendments to authorizations for inward processing;
      - 4 authorizations for inward processing;
      - 2 authorizations for simplified procedure for authorized consignee;
      - 1 authorization for simplified procedure of local customs clearing under
         import procedure;
      - 5 authorizations for simplified procedure of local customs clearing under
         export procedure;
      - 1 amendment to authorization for simplified procedure of local customs
         clearing under export procedure;
      - 3 authorizations for customs warehousing and facilities for temporary
         storage of goods;
      - 14 amendments to authorizations for customs warehousing and facilities
         for temporary storage of goods;
      - 68 authorizations for temporary admission and export, under simplified
      - 20 authorizations for procedure of temporary admission (partial
         exemption of duties), under simplified procedure;
      - 2 authorizations for using special kind of seal;
      - 1 authorization for authorized consignor;
      - 1 authorization for authorized exporter.

II. Administrative Capacity

 5.   19 training events attended by 132 customs officials were held in October
       2010. The average duration of training per participant was 24,7 hours, while
       the average time of training per all customs officials was 2,9 hours.

       To the end of further enhancement of the administrative capacity, the
       following training courses, seminars, presentations, workshops and
       courses were held:
      - Study visit to the Dutch Customs Service, realized in Rotterdam-
          Netherlands, within the framework of the MATRA Project, to familiarise
          with the system of control of dual use goods;
      - Border - Targeting Training;
      - Study visit to the Slovenian Customs Service – Customs Office Airport
          Ljubljana, realized within the framework of the IPA 2007 Project for
          reinforcement of the border controls;

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         Report on the Customs Administration’s activities realized in October 2010

     -    Workshop entitled “Technical aspect of the implementation of the
          regimes of control of the export of dual use goods”, held in Ispra-Italy;
          upon invitation by the European Commission's Joint Research Center;
     -    Events realized upon invitation by the World Customs Organization:
             Regional Seminar entitled “Protection of Intellectual Property
             Rights”, held in Belgrade-Serbia;
             Workshop on the “Transit Control Systems”, held in Astana-
     -    ECA Regional Green Customs Workshop, realized as one of the activities
          of the United Nation Environment Protection Programme, held in
     -    Second part of the training entitled “ Techniques of negotiation with
          EU”, held in Ohrid, in cooperation with the Center for European
          Perspectives from Slovenia;
     -    Events realized in framework of the IPA-IT Component:
             TEMPO - Project Management Methodology;
             Study visit to the Lithuanian Customs Service;
     -    Workshop on the implementation of the regulations concerning the
          protection of intellectual property rights, held in Rome within the
          Customs 2013 Programme;
     -    Two trainings entitled “ Lobbying and Negotiation with EU”, held in
          Skopje and Mavrovo, upon invitation of the Secretariat for European
     -    Regional Conference in Tirana, Albania as part of the Regional
          Programme on the Protection of Industrial and Intellectual Property
     -    Workshop on “Career System against system of posts-advantages,
          weaknesses and impacts”, organized in Ohrid, by the Public Servants
     -    Training on “Claims of customs duties, taxes and excises”, realized with
          the TAIEX support.

      Customs Administration representatives participated at the following
      international events organized in October 2010:
     - Meetings of the Capacity Building Committee-WCO and Regional
         Training Centers in Brussels-Belgium;
     - WCO Forum “Building Momentum for Effective Partnership”, held in
     - Working Meeting of the SECI Center and CARICC Member States, held
         in Istanbul-Turkey;
     - Meeting on “The EU dual-use export control regime”, held in Ispra-Italy;

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          Report on the Customs Administration’s activities realized in October 2010

      -    Meeting of the Task Force on Anti-Customs Fraud and Anti-Smuggling,
           held in Durres-Albania.

III. Integrity and fight against corruption

 6.   There were 11 internal investigations in the organizational units of the
      Customs Administration in October 2010. The investigations resulted in
      grounded suspicions that customs officials have acted contrary to the legal
      provisions, sub-legal acts, operational guidelines and the Code of Conduct
      in 3 cases, i.e. it has been established that they had not complied with the
      provisions of the Law on Customs Measures for Protection of Intellectual
      property Rights and with the provisions of the Code of Conduct of the
      Customs Officials and the Rules on Order and Discipline of the Customs
      Administration of the Republic of Macedonia. The investigations of the
      other 8 cases did not establish any infringements of the legal provisions,
      sub-legal acts, operational guidelines and the Code of Conduct.

      Extraordinary controls were carried out at the border crossings Cafasan
      and Blato in cooperation with the Ministry of Interior, Sector for Internal
      Control and Professional Standards.

      One disciplinary procedure was initiated against one customs official and
      its proceedings were suspended as no liability could be established.

 7.   At the end of October 2010, there were 103 pending labour relations court
      cases against the Customs Administration. 35 of them are in the First-
      Instance Courts (1-24 months old), 39 cases (1-13 months old) in the Courts of
      Appeal, while 29 cases (1-15 months old) before the Supreme Court.

      During October 2010, the First Instance Courts passed 10 verdicts related to
      lawsuits against the Decisions of the Customs Administration's
      Commission, one of which dismissing the action for revocation of the
      decision for termination of employment, one verdict dismissing the action
      for revocation of the decision for suspension, one verdict dismissing the
      action for revocation of the decision for deployment. 4 verdicts
      acknowledged the request for payment of salary and allowances related to
      salary. In the course of October, 3 decisions were brought resulting in
      withdrawal of actions. In one case the claim was accepted and the passed
      verdict obliges the Customs Administration to pay damages. One passed
      verdict resulted in a withdrawal of the damage compensation appeal.

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        Report on the Customs Administration’s activities realized in October 2010

      Within the same period, the Courts of Appeal passed 3 verdicts dismissing
      the Customs Administration’s appeal and acknowledging the First Instance
      Courts verdicts revoking the employment termination decision.

      Two verdicts were received from the Supreme Court during this month,
      rejecting the plaintiffs’ requests for revision.

      Not in October 2010 the Customs Administration did receive decisions of
      the Second Instance Commission on labour relations issues. A large
      number of customs employees are still registered with the Employment
      Agency and work at the Customs Administration despite the employment
      termination decisions. The pleaded decisions for termination of
      employment for which the Customs Administration has not received the
      Commission’s decisions date from November 2009 and from the beginning
      of 2010 onwards.

 8.   Of the total of 169 criminal inquiries initiated within 2002-2010, 108 of the
      inquiries involving 90 customs officials who are still employed by the
      Customs Administration and 84 former employees were still pending at the
      end of October 2010. These criminal inquiries involved cases, some of which
      are 2 months old, while some are up to 7 years old.

      A total of 50 criminal cases have seen their closings with final verdicts,
      while the status of 11 such cases is unknown.

      There are 100 criminal cases in the First-Instance Courts, some 2-months
      old, while some lasting for 7 years.

      Of these, 40 cases are under investigation, 11 cases have been returned to
      re-trying and there are ongoing court trials for 10 cases. 39 cases are in a
      phase of judicial analysis.

      Eight inquiries are ongoing with the Courts of Appeals. These cases are
      from 1 to 5 years old.

 9.   Following the completion of the regular internal controls in the
      organizational units of the Customs Administration and the established
      irregularities and faults in the procedures, the Internal Inspection
      Department drafted 11 Reports in October 2010, in conformity with the
      Guidelines on the work of the Sector for Professional Responsibility. The
      reports refer to the untimely preparation of administrative decisions
      returned by the Ministry of Finance or by the Second Instance Decision

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       Report on the Customs Administration’s activities realized in October 2010

      Commission of the Government of the Republic of Macedonia and to the
      conducted control of the work of the Customs Office Kumanovo, in area of
      import of goods classified under particular tariff heading, realized within
      the period from 01.01.2010 to 21.10.2010.

 10. One internal audit was done in October 2010, which resulted in 5 findings
     and 4 recommendations for actions.

IV. Transparency

 11. A total of 2.661 calls were received in October 2010 on the 197 – Customs
     hotline, an average of 86 calls a day. In order to provide easier coordination
     and to take effective actions, the calls are classified and submitted to the
     competent units for further processing.

      34 notifications were published on the Customs Administration’s web-site,
      while 27 notifications were published on the intranet portal.

      Within this month, the Customs Administration provided answers to 24
      questions, either posted by citizens and companies on the website of the
      Customs Administration or received in writing.

V. Prevention of illicit import, export and transit of goods and protection of
   intellectual property rights

 12. 1.551 lorries, 263 buses and about 2.000 passenger vehicles, or a total of 3.814
      means of transport were controlled in October 2010 based on intelligence
      information and risk analysis. At the border crossings and customs offices,
      the Mobile X-Ray Units scanned a total of 1.296 vehicles, of which 1.081
      lorries, 118 passenger vehicles and 97 buses.

      During their controls at the border and inland customs offices, the customs
      officials prevented several attempts at smuggling and trafficking of goods.
      They seized 360 thousand pieces of different goods and about 43 thousand
      euros. The total value of the goods is estimated to about MKD 2.3 million
      (about EUR 38 thousand). The evaded duties are estimated at about MKD
      693 thousand (about EUR 11 thousand). The seized goods include the
     - 303, 500 pieces of medicines;

November 2010                                                                       8
         Report on the Customs Administration’s activities realized in October 2010

     -    63,027 pieces of cigarettes;
     -    29,200 pieces of decorative paper and wrapping strip;
     -    12,270 textile products and textile accessory;
     -    10,650 reproduced pictures for making icons;
     -    3,040 pieces of constituent parts of furniture;
     -    1 freight motor vehicle and 1 automobile.

 13. In October 2010, the Customs Administration pressed 10 criminal charges
      against 13 natural and 8 legal entities. In one case criminal charges were
      brought for unauthorized manufacture and release in circulation of
      harmful means for medical treatment. In other case criminal charges were
      brought for forging signs indicating value. In the rest 8 cases, criminal
      charges were brought for customs fraud. The amount of evaded import
      duties and taxes is estimated at about MKD 10 million (about EUR 164

 14. Following the detected attempts at illicit traffic of goods and other illegal
     activities, a total of 128 requests for initiation of offence procedures were
     submitted to the Commission on Customs Offence Procedures and
     Sanctions within the Customs Administration. Of them, 6 requests filed by
     the Control and Investigation Sector, 121 requests submitted by the
     Customs Offices and 1 request forwarded by the Primary Court in
     Kumanovo. The Commission on Customs Offences and Sanctions solved
     109 cases in regular and urgent procedures in October 2010 and imposed on-
     the-spot fines in the amount of EUR 52,5 thousand, while the fines imposed
     after regular proceedings amount to MKD 4 million (about EUR 63,5
     thousand). 12 cases were solved in procedures for direct settlement at
     occasion of which the Customs Administration collected fines in amounts
     of EUR 650 and pecuniary penalty in amount of MKD 100 thousand.

     In October 2010, a total of 46 lawsuits were filed to the Administrative
     Court against the Customs Administration’s Decisions establishing offence
     liabilities. The Customs Administration has in all 46 cases responded
     within the prescribed deadlines. In October 2010, the Administrative Court
     passed 6 verdicts, out of which 4 verdicts accepted the actions and 2
     verdicts dismissing the actions as groundless. The Supreme Court passed 3
     verdicts, one of which dismissing the appeal and 2 verdicts rejecting the

 15. In October 2010, the Regional Customs Houses imposed 168 on-the spot
      fines in amount of about MKD 1.1 million (about EUR 18 thousand) for the
      established customs offences.

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       Report on the Customs Administration’s activities realized in October 2010

 16. Following grounded suspicions of counterfeit goods, the Customs
     Administration intervened in several cases of attempts at violation of
     intellectual property rights and impounded 9.875 items.

      The impounded goods include:
      - 6,303 pieces of children’s toys;
      - 2,450 pieces of textile products;
      - 548 telephones, masques and chargers for mobile phones;
      - 300 radio-cassettes players;
      - 234 pairs of shoes.

      In October 2010, the Customs Administration accepted 4 requests for
      customs protection in conformity with the Law on Protection of
      Intellectual Property Rights, for the trademarks TIGER, POLICE, 8&4 and

      During this month, the Customs Administration passed approvals for the
      destruction of 3,536 pieces and 100 m of goods infringing intellectual
      property rights: children’s T-shirts GANT, TOMMY HILFIGER, T-shirts
      ADIDAS, D & G, NIKE, CUCCI, jeans DIESEL, D & G, LEVI’S, textile labels
      NIKE, tracksuits ADIDAS, shirts TOMMY HILFIGER, trainers CONVERSE,
      ADIDAS, Bermudas VERSACE, telephones PANASONIC, mobile phones
      NOKIA, SAMSUNG and CD players PANASONIC.

      A total of 1,013 pieces of goods were destroyed: T-shirts GUCCI, GANT,
      men’s shoes CAMEL, socks PUMA, ADIDAS, tracksuits ADIDAS, D & G,
      sport shoes CONVERSE, underwear CALVIN KLLEIN.

      737 pieces of textile products were released as the holders of the rights did
      not lodge requests for customs measures.

VI. Inter- Institutional and International Cooperation and Projects

 17. The delegations of the Customs Administrations of Kosovo and Macedonia
     harmonized the text of the Agreement on mutual cooperation in customs
     matters in Skopje on 1st October 2010. This Agreement creates a legal
     framework for joint and constructive cooperation in the area of facilitation
     and enhancement of transport and trade, exchange of professional, expert
     and technical assistance for improvement of the customs operations, as
     well as prevention and tackling trans-border crime and customs fraud. At

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        Report on the Customs Administration’s activities realized in October 2010

       the same time, an Agreement on harmonized data set to be exchanged
       electronically through the SEED system was signed between the Customs
       Administration of the Republic of Macedonia and the Kosovo Customs. Its
       implementation will introduce higher standards in the enhancement and
       facilitation of the traffic of goods at the border crossings.

 18.   Upon the invitation by the Secretary General of the World Customs
       Organization, Kunio Mikuriya, the Director General of the Customs
       Administration, Vančo Kargov, participated at the 4th World Customs
       Forum held in Istanbul from 6th -8th October 2010, entitled: “Globally
       Networked Customs and Private Sector”. The Forum was attended by 400
       representatives of the business community, Directors of Customs Services
       and academics. At the Forum the Director General of the Macedonian
       Customs delivered a presentation and informed the audience about the key
       role and the strategic approach of the Macedonian Customs in field of
       establishing partnership with the private sector.

 19. The Customs Administration makes permanent efforts for strengthening of
     the cooperation established with the business community. On 7th October
     2010 a regular Meeting of the Advisory Body was held at the premises of
     the Customs Administration, where the business community was invited to
     consider the draft amendments to the Customs Law, specially the
     necessary transitional and final provisions regarding the necessary times
     for the representatives to adjust to the new legal provisions; to further
     specify the sanctions related provisions, the need to correct the price paid
     for stay of the vehicles at the customs terminal, re-consideration of the
     possibility for revision of the already pronounced on-the spot fines and
     other actual customs matters.

 20. Within the period from 6th-8th October 2010, the Customs Administration
     hosted the 5th Meeting of the European Commission’s Project Group for
     Single Window, which is to define the basic standards for the
     implementation of this concept in the European Union. Besides the
     representatives of the European Commission, this Group includes also
     representatives of the Member States of the EU and Republic of Macedonia
     as a unique country candidate, on grounds of the proven progress made in
     implementation of the systems based on this concept.
      The meeting was an occasion to demonstrate the national Single window
      system for license for import, export and transit of goods and tariff quotas-
      EXIM, with focus on its compatibility being in conformity with the
      strategic plans and EU directions for operating in this field. The Project
      Group took this opportunity to stress the significant progress of the

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       Report on the Customs Administration’s activities realized in October 2010

      Republic of Macedonia in implementation of this concept and decided to
      provide its presentation before the representatives of all Member States of
      the European Union, in framework of the forthcoming Workshop to be held
      within the period from 9th-10th November 2010 in Warsaw - Poland.

 21. In October 2010, the Customs Administration organized workshops for the
      businesses community in Kavadarci, Strumica and Tetovo on customs
      related topics of interest. They dealt with actual customs issues and were
      used for presentation of the application for managing authorizations for
      inward processing, application for electronic transmission of all kinds of
      submissions      (decisions, authorizations and etc.) to the Customs
      Administration by the external portal of the Electronic Documents
      Management System of the Customs Administration (EDMS), simplified
      customs procedures, with focus on the advantages for their users, as well as
      the concept of the Authorized Economic Operator.

 22. The Customs Administration of the Republic of Macedonia in cooperation
     with the Centre for European Perspective of the Republic of Slovenia
     organized the 3rd module of the Project "EU Negotiations: Techniques,
     Skills and Content"”, held from 11th – 16th October 2010. The training was a
     continuation of the previous two modules and was focused on the efforts to
     additionally improve the Macedonian capabilities in negotiating and
     presenting national positions in the area of taxation. Particular stress was
     put on the two processes of negotiations with the EU-multilateral and
     bilateral screening. The training was financed by the EU IPA Project for
     Further Alignment of Legislation with the Acquis in the Field of Customs.

  23. The Customs Administration, with support of the Technical Assistance and
      Information Exchange Instrument (TAIEX), organized a training event on
      the application of the excise related legislation, delivered in the period 27-
      29 October. The training agenda included the following topics: Taxation of
      excise goods as per the EU Directive 1008/118, The main aspects of the
      Excise Movement and Control System, Overview of the EU and Macedonian
      legislation, Customs debt as per the Customs Code and as per the
      Modernized Customs Code.

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