The forgotten Agreement on Customs Stamps

BFPE Office

21. January 2020

The forgotten Agreement on Customs Stamps

Author: Shpresa Belegu

Photo Petrit Rrahmani

The Kosovo-Serbia technical dialogue, facilitated by the EU, started in Brussels in March 2011. One of the first topics raised in this process was that of the customs stamps. Kosovo insisted that Serbia should recognize Kosovo’s stamps, thus allowing the export of goods to Serbia and the use of its territory as a transit for the goods aiming the European market and beyond. On the other hand, Serbia insisted for Kosovo to return the “old stamps” – the UNMIK stamps.

On 20 July 2011, Kosovo issued a decision to not recognize Serbia’s customs stamps. Immediately after the tensed July and August, on 02 September 2011, the Agreement on Customs Stamps was reached in Brussels. Serbia agreed to remove the parallel stamps used by their structures in the north to over-stamp Kosovo’s documents. These stamps were from the Serbian Tax Administration, which enabled the shipment of goods from Kosovo to SerbiaThis practice of using parallel stamps became completely extinct after a while. Whereas the stamps that Kosovo had already set, as of 2008, with the inscription ‘Kosovo Customs’ remained unchanged and were officially accepted by Serbia.

The Agreement on Customs Stamps implied the beginning of the free trade, whereby similar to the Serbian goods that would come to Kosovo without any obstacle, Kosovo goods would also go to Serbia, and use the Serbian territory as a transit to the European market. The agreement certainly had a major impact on the relations between Kosovo and Serbia, since it is in the spirit of the European standards for free trade, as envisaged in CEFTA’s commitments. It enabled Serbia to expand the trade with Kosovo, while for Kosovo businesses it fostered their export opportunities to Serbia and eased the access to the European market.

One of Kosovo’s companies that had exported products to Serbia is the Cement Factory, “Sharrcem”, located in Hani i Elezit / Elez Han. The sales manager of this company, Naxhid Raka, had stated: “We have exported with old documents and this export was done through a company registered with UNMIK”. After this agreement, Kosovo companies can export without the need of using alternative solutions in regards to the documentation, as in the case in question or even going to the parallel offices for having their documents stamped.

According to Kosovo Customs data the value of Kosovo’s exports to Serbia has increased throughout the years upon entry into force of this Agreement. In 2013, Kosovo’s export was about 19.5 million Euros, whereas its value has continuously increased over the years. In 2016, the export value reached 39.7 million, while in 2017, it amounted to approximately 46.3 million. The value of exports in 2018 however, dropped to around 31.9 million Euros as a result of the Kosovo Government decision to apply a 100% tariff on goods originating from Serbia and Bosnia and Herzegovina.

The importance of this agreement was more in the fact that it enabled Kosovo to use Serbia’s territory for exports to the European market. According to Kosovo Customs’ data, the value of goods that have passed as transit through the Serbian territory destined for the European market has continuously increased. In 2013, their value was around 26.8 million Euros, while in 2018, the value of goods reached approximately 92.2 million Euros.

Immediately after the implementation of the agreement, which implied the lifting of the ban on goods from Serbia, Mr. Shkelzen Osmani, Head of the Customs Office in Merdare, stated that the number of shipments coming from Serbia had reached to 264 trucks: “Many goods are being brought. Since the measures have been lifted, the number of trucks has now reached to 264. Construction materials are being brought, but even wheat, soybeans, maize, drinking water, plastic products, live cattle, colours, catalysts and so on.”

Notwithstanding challenges and shortcomings, the agreement enabled the parties to improve their trade relations and it paved the way for the achievement of the Agreement on the Establishment of a Development Fund for the four municipalities in north Kosovo. After the Agreement, Kosovo Parliament in the annual Kosovo Budget Laws has envisaged that all the public money collected from the goods imported from businesses registered in North Mitrovica, Zubin Potok, Leposavic or Zvecan that are intended for consumption in these municipalities and enter Kosovo through customs crossing points in Jarinje or Brnjak should be sent to the Kosovo Fund. The incomes budgeted for this purpose in the Treasury should be transferred to the beneficiary municipalities, upon the approval of specific projects by the Managing Board of the Trust Development Fund.

Investments started to be made through community development projects with the collected revenues. As reported, around 20 million Euros were collected by the end of 2018. Of these, the Management Board of the Fund-supported 30 economic and social development projects for the four northern municipalities, which amounted to over 11 million Euros.

Today, there is a disarray in trade relations between these two countries considering that the EU facilitated dialogue has stopped and Kosovo in November 2018 decided to apply a 100% tariff on goods originating from Serbia and Bosnia and Herzegovina. As a result, the inflation rate was 3.3 per cent in March 2019, compared to March 2018. Whilst the value of export and import of goods from Serbia has decreased.

Regardless of the progress in resolving political issues, Kosovo and Serbia should continue to resolve their technical issues. The main emphasis should be on practical issues that have a direct impact on citizens’ lives; the issue of customs stamps was one of them. The implementation of the Agreement on Customs Stamps, together with the Agreement on Free Movement, have facilitated the movement of people and goods into the countries of the region and the countries of the EU.

This article has been produced with the financial assistance of the European Union. The contents of this publication are the sole responsibility of Kosovo-Serbia Policy Advocacy Group and can in no way be taken to reflect the views of the European Union.