Strategically important commodities that cannot be securely supplied by the national economy (e.g. certain foods, inputs or machines) are exempted from customs duties. Tariff exemption is based solely on the customs tariff and exists for commodities that are subject to the ‘free’ tariff rate.
Non-tariff exemption applies to commodities for which there is no tariff exemption. Requirements for exemption are defined in various legal regulations and are mainly based on the purpose for which the commodity is intended.
If tariff rates become too differentiated, the public authorities become overstretched. Tariff and non-tariff exemption from duty can therefore only be applied to specific customs measures and cannot be varied at short notice.
- A properly functioning country-wide administration and monitoring system with access to the relevant information and sufficient technical and human capacities for its design, implementation and monitoring
- Clear and coherent political strategy and targets for policy-makers and public authorities
- Clear responsibilities in public authorities
- Compatible regional and world trade law (WTO conformity)
- Constant market surveying and forecasting
- Efficient customs administration
- Open-access to all farms, regardless of size and location
- Regulatory framework
Possible Negative Effects
- Barrier to the development of domestic industry
- Lower government revenues
- Corruption and personal gain
- Lack of maintenance opportunities if international machinery manufacturers do not provide an adequate sales and service network