WIDESPREAD CORRUPTION IN AFGHANISTAN’S CUSTOMS: ITS CAUSES AND WAYS OF PREVENTION

Amanullah Kakar

Preface

In the past two decades, corruption in various institutions of Afghanistan has reached its pinnacle. There have also been reports of widespread corruption in Afghanistan’s customs from time to time. Although the Afghan government has always promised its people and the international community an effective fight against corruption; despite these promises, the level of corruption seems to be increasing rather than decreasing.

In addition to various reports from international organizations about corruption in Afghanistan, President Ghani has recently made it clear that more than half of Afghanistan’s revenue is being stolen. On 19th of last May, acting finance minister Muhammad Khalid Payenda also confirmed to the Wolesi Jirga that, on a daily basis, at least 8 million dollars are being lost in customs revenue. The acting finance minister had promised to reveal the names of those accused of corruption in customs, but this has not been yet done and the Wolesi Jirga is trying to force the finance minister to reveal the names of the accused authorities.

Cases of corruption in customs remain limited to media coverage and no serious steps have been taken to fight against them. While the most of Afghanistan’s annual budget is still funded by foreign aid, the government is trying to increase its domestic revenue; but if there is this much corruption in revenue collection as the president and finance minister confirmed, it seems that with foreign aid declining the country’s economy will face a serious crisis in the near future. In a simple calculation, if we consider seven to eight million dollars loss on a daily basis, in a year, 2.7 billion dollars of revenue is lost which makes half of Afghanistan’s total annual budget.

Considering that fighting corruption can move the country towards self-sufficiency and looking at the importance of this issue especially due to the widespread corruption in the country’s customs, this article seeks to address the issue of corruption in the country’s customs identifying its causes and providing possible solutions for its prevention.

Corruption in Customs

Customs, as an economic structure, enforce state regulations many important areas besides transit, imports and exports. Revenue collection, which is one of the basic functions of customs, is recognized as an important source for the economic, political and social development of countries. At the same time, researches show that in developing countries, the most corrupt institutions are customs. Generally, the following three types of corruption occur in customs.

1. Daily Corruption: Private companies and traders pay bribes to expedite their day-to-day customs operations.
2. Fraudulent Corruption: Private companies and traders try to avoid paying tax or to pay less tax on their goods by bribing customs officials during the customs process.
3. Criminal Corruption: Import of illegal goods and commodities, for example, the import and export of a number of illicit goods besides narcotics.

Looking at the published reports on corruption in the customs, all the above three types of corruption are practically seen in the customs in Afghanistan. In addition to corruption in the process of importing and exporting legal goods, illegal goods are also exported and imported through customs. For example, chemicals used in explosives or drugs such as alcohol and “Tablet-K) are brought into the country due to the negligence and corruption of customs officials. According to the findings of the United Nations Office on Drugs and Crime (UNODC) (2012), the highest number of bribes is paid in customs after the judiciary. According to the (UNODC) report, bribes are paid on an average of 300 dollars in the judiciary and $200 in customs.

Cases of Corruption in Afghanistan’s Customs

Here we give an example of eyewitness accounts of a customs officer. In Barmal district of Paktika province, the customs office was officially inaugurated in 1398 [solar year]. Eyewitnesses told the Center for Strategic and Regional Studies (CSRS) on condition of anonymity that customs officials there had printed fake papers instead of official customs papers, which did not differ from the original ones, and therefore, the many collected in the custom does not go to the government revenue. Also, if any collected money goes to the government revenue, less than half of the real money is collected, as half the weight of the goods is taken through collusion and corruption with the traders. According to them, a large amount of goods is also being smuggled across the border to Wana, the capital of South Waziristan, and everything from precious stones to military vehicles and other such items are being smuggled out of the country. According to the eyewitnesses, these goods are being smuggled under the guise of Kabar (old irons) and involve everyone from customs officials to NDS officials and border forces. Border forces commanders, for example, receive $20000 every month, but the customs officials check these goods in the Kabar Sarai (parking) and charge them according to the type of goods, charging between Rs 50,000 and Rs 300,000 per vehicle, and in this way prohibited goods are smuggling out of the country. Also the money for goods transported by small vehicles does not go to the government revenue, only after taking the money a signature is put on the driver’s hand to be identified by the customs officers and allow him to cross the border. Wooden vehicles also cross the border without a formal permit for a certain amount of money (usually 2000 Rs per vehicle). There are also restrictions on the installation of scanners, for example, the road was closed from June 20 to July 3 and a local tribe protested against the installation of scanners by the Pakistani side. Vehicles coming from the other side, on the other hand, are parked without any reason and are allowed to leave in the evening, to arrive late to the general custom in the Urgoon area and pass through the custom with illegal payments.

Reasons of Corruption in Customs

            On daily basis, millions of Afghanis go to the pockets of customs officials, local officials and commissioners rather than the government’s treasure. As an example, the presence of customs commissioners who has the support of warlords and powerbrokers has led to intimidation of customs officials, which at times, leads to the passage of goods without customs clearance process and in some cases expensive goods of high prices are cleared through customs by illegal documents in the name of low-cost merchandise. According to the data, the cost of a truck loaded with expensive goods ranges from one million to ten million Afghanis, but due to corruption, only 80 to 250 thousand Afghanis are deposited in the government’s treasure.

In all the customs offices of the country, 565 commissioners were working in the customs clearance of traders’ goods. But as the presence of these commissioners had paved the way for widespread corruption, last month, the commissioning process was abolished after the Cabinet amended Articles 1, 2 and 3 of the Customs Law. Although this should have been done years ago, it is now a good step that traders create their own users in the Automated System for Customs Data (ASYCUDA) without the need for commissioners to process their merchandise. However, this move will be proved more helpful in combating illegal acquisitions, fighting corruption, collecting revenue transparently and simplifying administrative processes if the system is implemented and used effectively.

Another problem that has made it difficult to prevent corruption in customs is the lack of proper oversight and monitoring systems. It has most often happened that the government has sent a delegation to investigate cases of corruption in customs, but later on, its own investigation team has been accused of corruption. For example, in December of 2020, a Senate delegation was sent to the Hairatan port in Balkh province to assess customs revenue, but according to security departments, the three senators in the delegation were arrested while taking 40,000 dollars bribe. Although the Anti-Corruption Justice Center (ACJC) convicted the men of bribery in its first trial and sentenced them to 10 years and one month of jail, but later, they were released on bail.

The most important and fundamental problem that has led to corruption in the customs is the buying and selling of government jobs related to customs. Security officials at customs, high-ranking and ordinary employees start working by bribing thousands and hundred-thousands of dollars, and there is no place in customs for a large number of people who do not have recommenders or money to pay bribes. Also, some documents show that nearly half of the customs officials have been hired based on the recommendation of MPs and other powerbrokers.

The buying and selling of government jobs has been there for the last two decades. According to the (2007) report of Integrity Watch Afghanistan (IWA), the most fundamental cause of corruption in that year was the buying and selling of jobs.  Beyond these, Afghan media outlets have also reported that government jobs are being sold in the country. For example, the position of an ordinary teacher has been sold for up to 80 thousand Afghanis. Customs are the institutions that are most often viewed as high-income positions and are at the forefront of the heinous cycle of the selling of government jobs. There is a high, medium and low level of buying and selling jobs and it is due to the selling and buying government jobs that those who buy the jobs get involved in corruption after starting the job in order to get back the money that they had spent on the job.

The Role of Government Officials and Powerbrokers

According to a report by the Independent Joint Anti-Corruption Monitoring and Evaluation Committee (MEC) published last year, the main cause of corruption in customs and revenue departments in Ministry of Finance (MoF) has been marked the illegal interference and pressure of powerful individuals, members of parliament and government officials. Most of the times, it has also happened that ordinary customs officials have been forced and warned to sign documents by illicitly powerful individuals. Acting Finance Minister Mohammad Khalid Payenda also complained about the same problem in the Wolesi Jirga and said, “Unfortunately, in some places, governors, police chiefs, commissioners and anyone who has the power takes his/her illegal part.”

The government’s efforts to prevent corruption in customs have not been very effective and practically, no steps have been taken to prevent corruption in customs. Even there are cases where the government helps rise the level of corruption. In some cases, people with corruption cases are re-employed in customs rather than bringing them under law, or the officials who have been accused of corruption, after a period of time, without having their cases settled in the judiciary, are re-employed in the customs or other government agency in exchange for bribes or recommendations. These acts give more courage to those who are currently involved in customs corruption.

Earlier, the case of police using force and other irresponsible gunmen taking money from traders on highways became serious and truck drivers went on strike. According to them, money is demanded illegally from the trucks loaded with goods by the police and if they do not pay, they are threatened or killed. Although the government proclaimed to be taking action in this regard and therefore the drivers’ strike ended, the situation deteriorated once again after a few days and some of the drivers were killed by the police. This has also led to traders paying illegally on highways due to delays and spoilage of goods, as well as pay bribes to customs officials to expedite the passage of their goods.

Internal political disagreements within the government and, in some cases, interference in customs have also contributed to the rise in corruption. In the first month of the 2021, the Presidential Palace accused the Ministry of Finance of illegally hiring in customs and therefore ordered the immediate dismissal of 138 employees. The disagreements between the two sides reached such a point that paved the way to the change of leadership of Ministry of Finance. The finance minister, who also has received vote of confidence from the Wolesi Jirga was fired by the president. According to the released documents, the president had fired 60 employees of the Ministry of Finance and ordered them to be referred to the attorney general’s office, but those employees were not only referred to the attorney general’s office, but continued their jobs.

Beside this, another cause of corruption is the involvement of foreigners which has contributed to the growth of corruption in Afghanistan. After 2001, most of the aid to Afghanistan has been spent by foreigners and their aid agencies, and a small percentage has been channeled through the Afghan government’s budget. For example, from 2002 to 2009 the donor countries have assisted Afghanistan 3.6 billion dollars from which only 23 percent of it is spent by Afghan government.  Foreign countries spending these aids and giving contracts to the relatives of senior Afghan government officials paved the way to corruption. Former President Hamid Karzai, during his term, has repeatedly accused foreign countries of corruption and promoting corruption. Even Karzai’s brother’s involvement was discussed, and Karzai himself blamed foreigners for it. An accountant of US says, who has worked in Afghanistan, that he has been instrumental in evaluating contracts equivalent of 106 billion dollars. As a result of this evaluation, more than 40 percent of these amounts were wasted in other ways or went into the pockets of criminal gangs and corrupt Afghan officials.

The Consequences of Corruption in Customs

According to the 42 Article of the Afghan Constitution, every Afghan is obliged to pay taxes to the government in accordance with the law, and the taxes are paid to the government’s treasure. But unfortunately, due to the existing corruption, either taxes are not paid to or go into the pockets of corrupt officials instead of the government’s treasure. This way, Afghanistan loses billions of dollars every year, while the country is in a very bad economic situation and the economic sustainability of the government is still threatened without the presence of foreign aid.

Afghanistan’s annual budget is approximately four to five billion dollars. While, according to recent findings, due to the high level of corruption in customs more than 2.5 billion dollars are wasted every year which makes nearly half of Afghanistan’s budget. Because of this, more than 50 percent of Afghanistan’s annual budget is still dependent on foreign aid. In (1400 AP), Afghanistan’s national budget was 473 billion Afghanis, of which 311 billion was ordinary budget and 161 billion was development budget. 45.8 percent of the (1400 AP) budget is funded by domestic revenue and the rest by aids.

As a whole, loss of customs revenue and administrative corruption are a major part of corruption in Afghanistan and plays its role in making Afghanistan as part of the most corrupt countries of the world. Each year, Transparency International ranks Afghanistan in the first row of the most corrupt countries in the world. Overall, corruption in customs has increased the level of corruption in Afghanistan and has even hampered the flow of foreign aid to Afghanistan, as the international donors has repeatedly linked their aid to reduction of corruption.

Widespread corruption and existing problems in customs have also played its role in widening the gap between the people and the government and creating mistrust. According to IWA (2018), 43 percent of Afghans believe that corruption leads Afghan people to join the Taliban, and 62 percent of the respondents mark widespread corruption in the government as the reason of the influence of the Taliban.

On the other side, widespread corruption in customs negatively affected domestic production. Despite insecurity, power outages and many other problems, investments are being made in domestic production, but in return, imports are being smuggled into the country through customs illegally and without customs clearance, and eventually, leads to rising prices of domestic products in the market which then leads to the problems of the domestic products not being sold. On the one hand, the tax of the imported product does not go to the national income and on the other hand, it creates problems for domestic production and domestic investment.

How Can the Level of Corruption in Customs Be Decreased?

First and foremost, strong political will is needed to fight corruption effectively, especially in the customs sector, and to prevent the loss of revenue. Information on the multimillion-dollar corruption in customs shows that the MoF also has easy access to identify and find sources of corruption. Acting Finance Minister Khalid Payenda declared on 10th of June that considering the decline in the level of corruption, now, on daily basis, 330 million Afghanis are collected from the customs while three months ago only 180 million Afghanis were being collected. These revelations show that an increase in customs revenue is easily possible in the presence of strong political will.

Corruption is a global problem and various countries of the world are trying to prevent it in different ways. There is an urgent need for customs reform as well as modernization of customs to prevent corruption in the customs sector in Afghanistan. In 2004, with the help of the World Bank, customs reform was launched in Afghanistan, which increased the annual revenue from 77 million dollars in 2003-2004 to 900 million dollars in 2009-2010. Despite these developments, political instability, security problems, and ineffective implementation of technology and controlling systems were other factors that still need to be acted upon.

In the past years, some efforts led to bringing in some effective customs reforms. The Customs Reform and Trade Facilitation Project, which was implemented with the help of international aid from 2003 to 2009, brought effective changes in customs. For example, trade volume increased from 2 billion to 8 billion dollars and customs revenue increased from 50 million to 400 million dollars. Therefore, there is an urgent need to pay more attention to customs and implement various advanced systems.

Making the systems online, implementing reform plans, installing scanners in customs, constructing modern facilities and a number of other steps can play an effective role in preventing corruption in customs. Even though, every year for the last 13 years, billions of Afghanis have been allocated by the government for equipping and constructing customs. In the annual budget of (1400 AP) 2.7 billion Afghanis are allocated for the maintenance of modern equipment and construction of customs, but scanners and modern equipment and facilities have not yet been installed in all customs offices, which contributed to the rise in corruption on the one hand and the spoilage of traders’ goods on the other and no modern systems or constructions has taken place yet. For example, at the Islam Qala port in Herat, large-scale excavations were carried out instead of building standard facilities to prevent trucks from escaping the goods without customs clearance, and when a fire broke out at the Islam Qala port in February of 2021, 60 people were injured, and traders suffered financial losses of up to 100 million dollars, which pushed up commodity prices by 15 percent. At that time, the main obstacle to the rescue of trucks was the presence of deep excavations and absence of fire extinguishers.

The ASYCUDA or Automated System for Customs Data has created effective customs facilitation and transparency in customs revenue over the past 30 years in more than 100 countries. Activation of the ASYCODA system plays an important role in transparency of revenue collection, punctuality of administrative processes, control of trade rates and fight against corruption. The works of ASYCUDA project started in Afghanistan’s customs in October of 2011 and was completed in June of 2015.  The activation of this system has significantly increased the revenue from imports and made the customs process easier. For example, at Torkham Customs, the waiting time for goods’ trucks was reduced from 18 hours to 90 minutes. But, the system is not fully operational in all the customs and due to the weak internal control system in the customs, information is not entered into the system accurately, that is why still the levels of corruption in the customs is high. If the shortcomings of the internal control system are addressed and the related problems are eliminated, it will both increase the level of revenue and play an effective role in preventing corruption.

Recommendations

Serious steps need to be taken to prevent corruption in customs, some of which are outlined here:

• First of all, corruption in customs is an important aspect of overall corruption in the country. Therefore, as a whole, the Afghan government’s genuine commitment and serious political will to fight corruption can reduce the level of corruption in customs.
• So far, no serious and effective steps have been taken to prevent corruption in customs. Therefore, there is a need to implement short-term and long-term programs to prevent corruption in customs.

• One of the major sources of corruption in customs is the buying and selling of government jobs and positions, especially those of senior and junior customs officials, who then resort to corruption in order to earn their dues. There is, therefore, a serious need to recruit customs officials through a transparent process and to seriously prosecute those involved in the buying and selling of government posts.
• The interference and role of government officials and powerful figures in the recruitment process of customs officials must stop and the names of those who illegally use their influence in the recruitment of customs officials must be revealed.
• A competent and independent committee for the registration and investigation of complaints to prevent corruption in customs and a central liaison system to both record and investigate cases of corruption in customs must be established. Traders and the general public should be made aware of this system of complaints, to report incidents of corruption in customs.
• Serious steps for the accuracy and transparency of information and statistics must be taken and reformations regarding the recording of accurate statistics of exports and imports by the national statistics and information agencies must improve and coordination with the relevant customs agencies should increase, so that comparisons between registered numbers and revenue can be made to avoid wastage of revenue.
• The monitoring and control system must be strengthened and in particular steps should be taken to improve the internal control system. Modern technology to monitor customs gates during informal hours should be utilized.
• The process of licenses, customs tariffs and other related documents must be accepted only in digital form and the paperwork must be completely erased.
• Standard infrastructure for customs that facilitates the protection of goods must be established which can be helpful in prevention of corruption.
• Those who are illegally involved in bringing unprocessed goods to market must be identified and brought to justice.
• Opportunities of research for governmental and nongovernmental research organizations should be provided in the customs, and in the light of those findings of the researches, the policies of preventing corruption should be modified.

The end