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  • QA 082
    Question:
    What are the usual border controls on coffee and why have them?
    Background:
    Why and how are cross-border coffee movements controlled?
    Asked by:
    Interested party - Venezuela
     
    Answer:

    Border or export controls vary from country to country but, usually, have a number of common objectives. 

    • Comply with international requirements;
    • Discourage smuggling;
    • Ensure foreign exchange is returned to the country;
    • Ensure any taxes and duties are paid;
    • Prevent uncontrolled movement of coffee, for example to stop spread of disease;

    Controls are enforced by demanding production of specific documentation such as

    • Export licence issued by a competent National Authority;
    • Export Entry for customs and valuation purposes;
    • Export invoice;
    • ICO Certificate of Origin;
    • Others (certificate of quality, weight, etc as may be the case);

    The 1990's saw the liberalization of the coffee industry in many countries. This followed the collapse of the ICO's quota system which itself caused the abolition of economic clauses in the International Coffee Agreement in 1994 (see 01.05.03). As a result many voices demanded the abolition of both licensing and movement controls but, as experience has shown, liberalisation does not equate anarchy and a reasonable number of controls must be in place to ensure orderly marketing and export. For example, without good controls (internal and external) over the movement of coffee growers would face a serious risk of theft whenever coffee prices rise. 

    In our view the issue with 'controls or not' is not so much with the principle but rather with the type of controls and how these are applied…

    • Licensing conditions, if any, should be simple and equitable;
    • Documentary requirements should be limited to what is absolutely necessary;
    • Administrative procedures should be easy to understand and apply;
    • Bureaucracy should not hamper or delay exports: monitor and control exports by all means, but do not unnecessarily complicate or lengthen the export procedure;
    • Understand that all unnecessary costs and delays in the end translate into lower producer prices!

    In QA 078 mention is made of the continuation of the International Coffee Organization's (ICO - www.ico.org) Certificate of Origin, even though the International Coffee Agreement no longer contains economic clauses. Producer member countries continue to issue the certificate, not only because they are obliged to do so under ICO regulations but also because for many it provides an excellent control and monitoring mechanism. In most instances the certificates are issued by coffee industry authorities, thereby assisting them to monitor the coffee export process.

    Posted 12 March 2006
     

    Related chapter(s):
    Related Q & A:
    QA 077 QA 078