CORRUPTION ASSESSMENT: MOZAMBIQUE - World Bank

policy aspects of the ongoing work of the customs administration, including coordinationof customs restructuring with all matters relating to customs reform, and drafting ofcustoms legislation, including the Tariff Code and customs procedures.TURC invited international companies to bid to implement the customs reform to:• take over the complete management of customs, including training• appoint key customs officials to perform the contracted functions in accordancewith local employment laws• supervise imports and other external trade operations subject to the customslegislation, as well as to prevent fraud and the evasion of tax and exchangecontrol regulations• maintain customs assets in good order and prepare an effective assets inventorysystem• procure and maintain equipment assigned to the reform project, including vehiclesand data processing software and hardware.Crown Agents was awarded the implementation contract in 1996. A build-up of CrownAgents staff (which peaked at some 70 members) enabled a rapid increase inperformance. However, the build-up of local staff to fully assume the responsibilitiescarried out by foreign consultants has lagged, making the significant progress still fragile.Accordingly, the sustainability of reform has yet to be determined and the CustomsAuthority still needs to develop more reliable systems to deal effectively with persistentcorruption and smuggling problems. That being said, a skeleton staff of seven CrownAgents consultants are still with the Customs Authority, and the customs system has beenoverhauled through a set of complementary and interlocking policy measures thatprovided the following underpinnings for institutional reform.Customs code. Control systems were slow and inefficient. This produced a combinationof inefficient public service, low revenue collection and fraud. Simplified tariffclassification codes and user-friendly methods, such as internet access are now available,though mostly still limited to well-established firms, rather than individuals and smallenterprises, which still can be harassed and are vulnerable to corruption.Change management. A steering committee made up of representatives from TURC, theIMF, the World Bank, and the DFID oversees the process of change managementimplemented by Crown Agents. As the role of Crown Agents is unwinding, moreinternally-driven oversight processes will have to take over the responsibilities that hadbeen driven by external parties.Avenues for actionDuties, custom charges and revenue performance. Taxes and duties can be powerfulinducements for evasion and avoidance, particularly when there is ambiguity and roomfor interpretation. Streamlining and simplification of duties and custom charges are theFINAL REPORT 37