Eden Building to Stock Exchange

Published:  12:00 AM, 19 March 2017

Independent tariff commission in market economy

Independent tariff commission  in market economy

The Tariff Commis-sion 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

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