Flee market jeopardizing legal business – Action plans against illegal trade of electronic equipment and gas by end-year

The New Belgrade flee market has been characterized by the economy as the epicenter of illegal trade of various types of goods in great amounts and without any effective control. The problem of illegal trade, as eKapija was told at the Unit for Support to the Coordination Commission for Inspection Supervision at the Ministry of Public Administration and Local Self-Government, is addressed by the authorities through a coordinated action of all competent inspections and services. They have already struck a blow against the illegal tobacco trade, and electronic equipment and propane-butane (liquefied natural gas) are next on the agenda.

At the meeting of the Slovenian Business Club in early September, representatives of companies trading electronic equipment and electronic materials pointed out that they suffered great damage, as the same type of goods they sell is also available in the flee market, officially The Outdoor Shopping Center, at prices so low that they would be impossible if the trade was legal, entailing the payment of all charges, they claim.

– We have been contacted by traders of electronic equipment, as well as the company Messer-Tehnogas, due to the problem of illegal trade of propane-butane, requesting presentations in front of the Work Group for Illegal Trade – reveals Dragan Pusara, the head of the Unit for Support to the Coordination Commission for Inspection Supervision.

– Within the Work Group, we will develop action plans for suppressing unfair competition in the trade of electronic materials, as well as illegal trade of propane-butane and other industrial gases, which is claimed to cause large losses for the state through unpaid taxes, while also impacting the quality of the products through an insufficient input quality. The plan is for us to also have action plans for a coordinated conduct by inspection services in those two fields by the end of the year.

Hodograms – plans of coordinated actions by several inspections

When the Work Group for Illegal Trade proposes which inspections should be engaged in which phase of the production or the trade of a certain type of good, a hodogram is prepared – an action plan for countering the activity, coordinating the supervision of the inspections. This has been enabled through the establishment of the Coordination Commission for Inspection Supervision and is perhaps its most significant achievement so far.

– Hodograms are mini action plans, of which there are currently 15 – explains Jovica Damnjanovic, the coordination adviser at the Unit for Support to the Coordination Commission.

– One of the hodograms pertains to illegal tobacco trade. Those in the know say that tobacco smuggling pays off more than drug trade, as the earnings are big, and penalties relatively mild. A precise plan of activities has been prepared, defining which institution reacts in which situation, starting from the phase of the distribution of tobacco seeds, through the cultivation and further on. It is now clearly defined who controls what, whether its the phytosanitary, agricultural inspection, the police, the customs administration, if we're talking export, the Tobacco Administration, the Treasury Administration, the Directorate for Agrarian Payments... The results are visible as well: the legal tobacco industry is very satisfied with them.

Dragan Pusara says that everything can be resolved, and that, in the case of gray economy in flee markets, the problem lies in acquired rights.

– This is not only a problem in flee markets, but in other outdoor markets as well, in their so-called trade shop sections, where there are practically no tradesmen and where all sorts of things are sold. Through two large strikes against the fiscalization, in 2003 and 2005, the traders were allowed by the Ministry of Finance to use fiscal cash-registers, but to work as lump-sum taxpayers, to do trade as enterprises without the obligation of registering their sales. That's how a large amount of goods accumulated in these markets, including the goods from local factories, for which no one can determine how they ended up in the outdoor market.

The problem, Pusara says, creates the possibility of opening a sole trade business which can do trade.



The economy not using everything it can

Legal companies, the Unit for Support emphasizes, could help inspectors considerably if they used the possibilities provided for them by the Law on Inspection Supervision.

Under the current law, for example, there already is an institution of self-supervision, as in the USA, where taxpayers grade themselves and file their tax returns at the end of the year. The aim is for there to be more self-control, so that things would be made easier for the inspection, but also for companies.

The economy, unfortunately, doesn't use this and other possibilities, such as professional advisory visits, enough. Jovica Damnjanovic highlights the positive example of IKEA:

– When they intended to open a showroom in downtown Belgrade, representatives of IKEA invited the Unit, and we sent the market, fire, sanitary and labor inspections to assess the situation in the facility. They gave their suggestions. Later, when IKEA wanted to turn the showroom into a store, they again called the inspection for advice in late August. Out companies, however, have not yet developed that habit.

The success of the operations of inspection services also depends on how informed the company is of its rights and obligations, Pusara notes and adds:

– If, for example, the economy doesn't know and doesn't explicitly request the regular control to be announced three days ahead, the institution is not applied. It is very important for the economy to know that, say, it has the right to request a preventive visit, which cannot lead to sanctions.

Employing young inspectors

When it comes to HR, the situation in inspection services is extremely unfavorable. A Serbian inspector is between 53 and 56 on average. That's why, according to Dragan Pusara, they urgently need reinforcements:

– In the societies we compare ourselves with, it is considered an advantage if an inspector is 58 and is experienced, whereas here, a lot of people of that age are on sick leaves or are waiting for their retirement... In the past 15 years, rationalizations of the public administration have been executed at the expense of inspection – the first thing to be reduced is the number of inspectors. This is something we take care of now, so that we would have an inspection that acts preventively and educationally, not repressively. In order to implement all these institutions, we need a large number of capable, motivated inspectors. The analysis of the capacities of all state inspections is currently in progress, which will show exactly which inspector profiles are needed and in what number by areas and districts, so that we would present the finance minister with a proposition this autumn. He would then sign a three-year action plan of the employment of young inspectors together with the minister of public administration and local self-government.

The Unit for Support to the Coordination Commission for Inspection Supervision has detected the biggest problems on the level of towns and municipalities. It often happens, they say, that people in power, locally, push away people with vocational education, looking to remove them from their immediate surroundings, in cabinets, moving them to the utility inspection, for example.

Of the total of around 6,200 inspectors in Serbia, 3,200 work in local self-governments.

– It happens that, in a municipality, a single person is the inspector for sports, the environment and the transport. We are regulating this problem with implementing standards for local self-government units for what an efficiently organized inspection service on the level of a town or a municipality should look like. Local areas are the burning issue – Dragan Pusara says.

eKapija has already written about the proposed amendments to the Law on Inspection Supervision.

Slovenački poslovni klub Beograd

Messer Tehnogas ad Beograd

Ministarstvo državne uprave i lokalne samouprave Republike Srbije

Ministarstvo unutrašnjih poslova Republike Srbije

Ministarstvo finansija republike Srbije - Uprava za duvan

Uprava za trezor Republike Srbije

Uprava za agrarna plaćanja Republika Srbija

IKEA Srbija d.o.o. Beograd

Unit for Support to Coordination Commission for Inspection Supervision

Coordination Commission for Inspection Supervision

Dragan Pusara

Jovica Damnjanovic

New Belgrade flee market

Outdoor Shopping Center Belgrade

illegal trade with electronic materials

illegal trade with electronic equipment

illegal trade with propane butane

illegal trade with liquefied natural gas. illegal trade with tobacco

Work Group for Illegal Trade

illegal trade

hodograms

hodogram

phytosanitary inspection

market inspection

fire inspection

sanitary inspection

labor inspection

customs administration

employment of inspectors