Issue 3, 2012. June-July



In's newest feature - interviews with investors, CEOs, policy makers and economists - is a candid discussion with John Braeckevldt, the general manager of Gosselin in the Caucasus, a long time AmCham board member and the co-chair of the Trade and Transportation committee.

Maia Edilashvili

Q: The Georgian government boasts of easy customs and tax procedures. How would you evaluate the outcome of the reforms in this system?

A: As the Revenue Service has been implementing reform, the Trade and Transportation Committee at AmCham has been trying to make sure that business has a real say in the decision-making process, specifically concerning the customs legislation.

Until 2009, we always had problems communicating with the Ministry, but with the arrival of the new Head of the Revenue Service (RS), Jaba Ebanoidze, there was a complete change in attitudes and we have started monthly meetings with the representatives of the RS. The change was not only about giving us the right to make comments and express our ideas; the RS started asking ‘how can we make the procedures easier for you? What can we do for you?' So we have developed a very successful cooperation during the last two years, in particular with the Customs Department of the RS, whose representatives have even made visits to various businesses to witness their problems personally and have offered to work jointly on the existing problems.

Q: How open were representatives of the RS towards criticism?

A: For the last two years they have been listening to us. Moreover, there were even situations where officials from the RS were inviting us, saying: ‘Hey, we haven't heard from you; tell us if there's a problem. Please give us something to work on.' And this was exactly what business needed. Four years ago, the Trade and Transportation Committee at AmCham started its work with 200 discussion points. Now I am going around businesses asking members ‘what is the problem' and I don't hear much about problems anymore... What is important is that, with our meetings, we established a dialog between the government and businesses.

Q: What have the biggest disagreements been with the RS?

A: There will always be areas about which the government and businesses will disagree. ...One problem with my company, about which I still disagree with the RS, is the following: There should be a way to allow [people] to import [their] own goods free of charge for personal use. We requested that the Georgian government introduce the EU legislation's provision which makes it easier for foreign investors to come for residency and bring their personal items. They adopted this regulation but made another entry restricting it only to diplomatic people and investors of importance. So the next question is: who is important and who is not important, according to the RS? Also, the tariffs for the customs process are still an area of major disagreement: the RS reports that the rates were reduced with the opening of the new GEZi terminals, however we have first-hand experience that the customs process has gotten very expensive, which directly increases the prices of imported goods on the Georgian market.

Q: What should the government do first to further improve the environment concerning customs legislation?

A: Small problems, like declarations, have mainly been solved. The areas where I think improvements are possible are the providing of information to businesses, [for example] not to give the whole customs legislation to those who have questions, but instead provide simple booklets. For example, it would good if the government produced booklets for drivers passing through - in Russian, English, and Turkish - so they know where to go, where to stop, and what to do. In addition, the updated information should also be provided in English on the RS webpage. Currently, the information in English is incorrect or is missing.

And another important thing is that the government of Georgia still has to start development of Georgia's hub system- its logistics hub system -because it is still underdeveloped. For instance, I would welcome the giving of more opportunities in the law for storage facilities, and for local distribution.

Q: If you measure the impact of the reforms on businesses, how big was it? Did the reforms help make customs procedures cheaper, or just faster?

A: The financial part is still open to discussion. I still do not believe that it got cheaper: it got more expensive. But the work process has gotten better. It has been simplified; every transport export knows what to do. We have specialists and if we have questions, we communicate with customs people, and receive answers in five minutes. And AmCham is also there, ready to intermediate if any business has a problem.