ANNUAL REPORT 2019...KOSOVO CUSTOMS – ANNUAL REPORT 2019 4 YEAR 2019 – MAIN STATISTICS Revenue collection €’000 2018 2019 Changes in % Total revenues 1,135 1,179 …

KOSOVO CUSTOMS - ANNUAL REPORT 2019

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Republika e Kosovës Republika Kosova - Republic of Kosovo

Qeveria - Vlada - Government Ministria e Financave dhe Transfereve

Ministarstvo za Finansije i Transfere – Ministry of Finance and Transfers

Dogana e Kosovës – Carina Kosova – Kosovo Customs

ANNUAL REPORT

2019

KOSOVO CUSTOMS – ANNUAL REPORT 2019

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List of abbreviation

KC Kosovo Customs

AEO Authorized Economic Operators

CEFTA Central Europe Free Trade Agreement

DG Director General CRD Customs Regional Departments SAD Single Administrative Document

IPR Intellectual Property Right

MF Ministry of Finances SAA Stabilization and Association Agreement

EU European Union

KB Kosovo Budget

CBK Central Bank of Kosovo

IBM Integrated Border Management

KCHC Kosovo Chamber of Commerce

MTI Ministry of Trade and Industry

MPA Ministry of Public Administration

PSS Professional Standards Sector

SEEMS South East Europe Management System

CPEI Customs Procedures with Economic Impact

WCO World Customs Organization TP Training Plan

TS Training Sector

ACA Anti-Corruption Agency

DC Disciplinary Commission

BC Basic Court

SOPC Sector for Operating Procedures Compliance

LPP,LQP,LMP,PTI Procedures related to fiscal packages

NCIBM National Centre for Integrated Border Management

LES Law Enforcement Information System

GRK The Government of the Republic of Kosovo


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Prepared by: Director General Office

The copies of this document can be received by: Press Office, Customs Directorate, Pristine – The Republic of Kosovo Tel:

038 540 796 Fax: 038 540 065 E-mail: [email protected] The Report is also available on Custom’s web page: www.dogana-ks.org January, 2019

mailto:[email protected]

http://www.dogana-ks.org/


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YEAR 2019 – MAIN STATISTICS

Revenue collection €’000 2018 2019 Changes in

%

Total revenues 1,135 1,179 3.93%

Customs taxes 123.7 130.3 5.06%

Excise 420 435 3.4%

VAT 585.8 606.4 3.39%

Others (violations, confiscation’s sales etc.) 6.47 7.35 11.90%

Budget and Expenditures

Annual budget 9.3 10.3 9.70%

Salaries and Wages 6.1 6.2 1.61%

Goods and services 2.3 2.3 //

Utilities 0.13 0.14 7.14%

Capital expenditures 0.7 1.7 58.80%

The return of investments (indicator)

Expenditures /Revenues 0.008 0.008 //

The value of import goods €’000

The value of import (IM4) 3,325 3,472 4.23%

Net weight in Import (IM4) 4,870 4,819 -1.04%

The value of goods in export €’000

The value of Export (EX1) 329,2 349,4 6.16%

Net weight in Export (EX1) 574.6 484.5 - 15.68

Operational Statistics

Complains number 872 940 7.23%

Number of violations 2205 1892 -14.19%

Criminal charges 54 117 53.84%

The value of criminal charges 2.5 million € 2.9 million € 13.79%

Avoidance according to criminal charges 1.88 million € 2.97 million € 58.00%

Sequestrations 0.6. million € 2,2 million € 216.00%

Voluntary Declared Value 97% 97.8% 4.12%


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DIRECTOR’S GENERAL WORD

For Kosovo Customs 2019 was the jubilee year that coincided with the celebration of its 20th anniversary as the first institution established in Kosovo's new history. Customs, enters in the third decade with the history of successes, challenges and dedication that has shown in its mission over the last 20 years, it has also presented results in its mission and for this it has been acknowledged as one of the institutions with the highest organizational and professional principles. Since the foundation until now it has been one of the main contributors in the revenue collection for the country of Kosovo. During this period, Customs has achieved to collect for Kosovo budget over 14 milliard euro, thereby ensuring the financial existence and strengthening the state. Meanwhile, Kosovo Customs based on its mission will not stop combating trans-border crimes, smuggling and informal economy, ensuring that will be at the service of citizens, businesses and protection of interests of our country and beyond. Kosovo Customs enters in the new decade of its existence, with the aim of further modernization continuing to be an example for its professionalism and engagement, being one of the main pillars in strengthening the state of Kosovo. Moreover, Kosovo Customs during this period opened a new chapter in its history and the history of the country of Kosovo, becoming a member of a big family of the World Customs Organization. Undoubtedly, this would not be achieved without the dedication and professionalism of customs officers, continuous support of the government of Kosovo and our international partners, business community and citizen that were close to us in every period of our development. Therefore, let me express my gratitude and consideration to all abovementioned. January 2019, opened a new chapter in the history of Kosovo Customs, where according to decision of two governments (Albania and Kosovo), Kosovo Customs has opened its office in the port of Durres. Herewith is improved the free circulation of goods and passengers by reducing costs of doing business between two countries. 2019 we left behind, certainly has been a year of success for Kosovo Customs, considering the fact that has achieved to perform the revenue collection of about 1.18 milliard euro or compared with 2018 there were realized revenues for around 3.93 % more or around 44.5

million € revenues more. It was a challenge for Kosovo Customs, considering fiscal favorite policies for exemption from taxes for producers in import for raw material that is used in the manufacturing process, as stimulation of economic development, as well as those that derive from Stabilization Association Agreement that in 2019 had a great impact in strategic revenues.


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Kosovo Customs, according to its vision and strategic objectives aims its modernization based on standards of World Customs Organization and EU Custom’s Guide, with the purpose of advancing its institutional capacities to face with future challenges. For us, the staff of Customs is the most valuable asset and we will undertake necessary actions for further development on human capacities, advancing the expertise through the investments in continuous education in professional fields but also profiting from the assistance of our international partners.

Sincerely yours, Bahri Berisha

Director General


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CONTENTS

1. Collection of Revenues __________________________________________________8

2. The development of systems and procedures ______________________________12

3. Trade facilitation _______________________________________________________13

4. Legislation ____________________________________________________________16

5. Law enforcement and investigation ______________________________________ 18

6. Excise ________________________________________________________________23

7. Good governance and corruption combat _________________________________25

8. Human Resources _____________________________________________________27

9. Budget and Finances___________________________________________________ 28

10. Special events during the year ___________________________________________33


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1. THE COLLECTION OF REVENUES

Kosovo Customs during 2019, in the continuation of its great performance over the years

it is regarded as one of the institutions with high performance, based on its professional

and organizational values and becoming the main contributor in the aspect of revenue

collection of the state budget.

Kosovo Customs enters in the third decade of its existence, with the aim to further

modernization being an example for its professionalism and engagement, and being one

of the main pillars on state building of Kosovo. We are aware that the Government of

Kosovo in coming years will have great expectations from Kosovo Customs, where is

considered that only the projection of 2019, captured the value of over one milliard and

two hundred million euro.

Regarding this, Kosovo Customs has achieved high results on revenue collection for 2019,

despite fiscal policies that favored the tax cuts in certain categories, as a stimulation of

economic development, as well as those that derive from the agreement for Stabilization

and Association Agreement, Free Trade Agreement (FTA) that had a great impact on

planned revenues.

Whereas, such impact of SAA, FTA and fiscal policies are expected to have their positive

effect on the economic development of the country.

The plan of revenues for Customs for 2019 based on the Law for Budget 2019 has been

1,234 million, the amount of the realized revenues is 1,179 million euro or 95.40 % of the

revenues plan (projection).

Revenues

Revenues

Difference in %

January – December 2019 January – December 2018

1,179,586,031.50€ 1,135,015,816.01€ +3.93%

Kosovo Customs, for a midterm period will remain the main contributor on collection of

revenues for the budget of Kosovo from imported goods and internal excise taxes.

The expected revenue from Customs consists of over 60% of all taxes that are collected for

the total budget of the Republic of Kosovo for 2019. Considering the situation of economic

development environment, expectations from the Government of the Republic of Kosovo

will continue for one another midterm period, where is expected that the revenues from

Customs to participate 50% of the state budget.


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Similar to this, expectations will also be present on the creation of the favorable

environment for business in Kosovo, as well as further strengthening of the contribution

and the role of Kosovo Customs in the field of security, trans-border organized crime,

informal economy and terrorism combat. For all those duties in this role Customs is

responsible based on the implementation of the national and sectorial security strategy.

Kosovo Customs during 2019, as emphasized above, despite the challenges of continual

tax exemptions in one side and continuous increase of the projection from government,

collected revenues for 2019, certainly reflect the efficiency of the organization on

smuggling combat and fiscal evasion, has achieved to collect more revenues than

compared with the revenues of 2018 where there are realized around 3.93% of revenues

more or about 44.5 million € more.

Table 1: The trend of revenue collection and comparison for 2019 and 2018

From the total revenues for 2019, having to separate them according to type of taxes, we have the notes as in the following table.

0.00 €

200,000,000.00 €

400,000,000.00 €

600,000,000.00 €

800,000,000.00 €

1,000,000,000.00 €

1,200,000,000.00 €

Janar- Dhjetor 2019 Janar- Dhjetor 2018 Ndryshimi mes 2019dhe 2018

1,179,586,031.50 €

1,135,015,816.01 €

44,570,215.49 €

January- December January- December Difference 2019 2018 2019 and 2018


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Table 2: The statistics of revenues collection (€) divided as per categories for year 2019

0.00

200,000,000.00

400,000,000.00

600,000,000.00

800,000,000.00

1,000,000,000.00

1,200,000,000.001,179,586,031.30

606,406,725.58

460,799,977.09

130,325,417.74

4,696,217.78 3,206,984.91

1,893,455.05 940,820.09 1,316,433.26

THE IMPACT OF SAA ON REVENUES FOR 2019 SAA has had an impact in value of 64.015.961,68€, compared to previous year 43.555.692,78, there were an increase of the negative effect in relation with less revenues of 46,97%.

THE IMPACT ON REVENUES FROM GOODS THAT ARE EXEMPT FROM TAXES FOR KOSOVO MANUFACTURER

In relation with revenues, exempts have also had a negative impact. In 2019 have been 370 mln € the value of goods that are released for kosovo producers where the impact in revenues is 81.580.779€, compared to previous year there were an increase of exemptions for producers from 9, 76%.


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Import: As far as it concerns the subjects processed in import in total during this year, the

value of import was of 3.47 milliard € comparing with those in 2019 where were 3.32

milliard €, it has been marked an increase of 4.23 % compared with previous year

2019.Also, in the comparative period 2018 and he 2019 for IM4 regime, net weight has

marked a decrease of ▼50.504.405, 19 Kg or mentioned in percentage -1, 04%.

Table 3: The comparisons of the value and quantity of import among years 2019 and 2018

During 2019, there were evidences in total physical examination of the following goods:

● 74,971 physical examinations on goods are performed ● 24,064 visual controls on trucks in T1 ● 7,590 visual controls on trucks in T2 ● 279,165 controls on customs declarations ● 28,806 controls on vehicles in the second control line

Export of goods during 2019 has achieved the value of 349,481,567.54€, compared to the

value of exported SAD for the same period of 2018, compared with previous year 2018,

were in amount of 329,210,420.38€. Therefore, the comparisons done between 2019 and

2018, there is an increase of export from Kosovo in value of 20,271,147.16€ more and

marked an increase of +6.16%.

0.00

500,000,000.00

1,000,000,000.00

1,500,000,000.00

2,000,000,000.00

2,500,000,000.00

3,000,000,000.00

3,500,000,000.00

4,000,000,000.00

4,500,000,000.00

5,000,000,000.00

Vlera e importit € në 2019

Vlera e importit € në 2018

Sasia e importitkg në 2019

Sasia e importitkg në 2018

3,472,252,880.53 3,325,503,203.55

4,819,744,787.53 4,870,249,192.72

Value of import Value of import Weight of import Weight of import 2019 2018 2019 2018


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Table 4: The comparisons of regular exports for 2019 compared to 2018

Re-export of goods, during 2019 has arrived the value of 126,878,485.96, compared with

the value of SAD exported for the same period of 2018, where there was of re-export (EX3)

of goods in value of 147,666,236.53€. Therefore, the performed comparison between years

2019 and 2018 it turns out that there is a decrease of re-export from Kosovo in value of

20,787,750.57 € less and has dropped by -14.08%.

Table 5: The comparisons of re-exports for 2019 compared with 2018

0.00

50,000,000.00

100,000,000.00

150,000,000.00

200,000,000.00

250,000,000.00

300,000,000.00

350,000,000.00

EXP 2019 EXP2018 NDRYSHIMI

349,481,567.54 329,210,420.38

20,271,147.16

0.00

20,000,000.00

40,000,000.00

60,000,000.00

80,000,000.00

100,000,000.00

120,000,000.00

140,000,000.00

160,000,000.00

RI-Export 2019 RI-Export 2018 Ndryshimi

126,878,485.96 147,666,236.53

20,787,750.57

Difference

Difference


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2. THE DEVELOPMENT OF SYSTEMS AND PROCEDURES

With the purpose to continue with the created and good performance steadiness, and to keep up with new developments, always in agreement with Strategic Action Plan of KC, there are developed and implemented activities that came from the action plan 2019 and recommendation of NAO, where each activity in specific has reached to be fully achieved or to exceed the performance which was aimed since the beginning. Annual human resources general activities focused on identification, addressing and drafting of acts related to the implementation and procedural clarification of policies from employment relationships and continuous development of the staff of the institution. Kosovo Customs in 2019, in continuity with actions and its activities aimed its advancement toward the development of a modern customs administration and which is efficient in the service to citizens, community of the business and protection of interests of our country and beyond. As customs, in our daily work we are based on constitutional and legal principles, making our accountability, transparency and professional commitment follow us in every phase and action. In 2019 we have also realized to decrease the costs of legal trade, creating, developing and using modern methods to achieve the level of adequate equilibration between customs control and creating of trade facilities, using techniques for the evaluation of risk and selective controls, based on previous profiling. On 15.01.2019, commensurate to decisions from the meeting of two governments (Albania and Kosovo) and decision of GRK, Kosovo Customs has opened its office in the Port of Durrës. This office has greatly assisted in facilitation and free movement of goods and passengers by reducing doing business costs and meanwhile through the mutual collaboration and directly impacting on the economy development of two countries.

The image from the inauguration of the Kosovo Customs office in the port of Durrës on 15th of January 2019


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Regarding the IBM agreement, respectively the building of permanent buildings, Kosovo Customs as well as other border agencies are already located in new buildings financed by EU in Border Crossing Point in Mutivodë. Moreover, very soon we will begin to functionalize our work in Border Crossing Point of Stançiq-Belanocë between the Republic of Kosovo and the Republic of North Macedonia financed by EU. It’s worth to point out that in 2019, Kosovo Customs has undertaken many structural and electronic systems reforms, with the aim of advancing existing and those new ones, responding to the main organization needs, including full functionalization of the processes digitalization of tasks through the law enforcement system and multi-functional integration of duty functions. The majority of work processes are already automatized and this modernization trend will continue during next years. Through system’s modernization and digitalization, we have achieved to advance the access of “operatives headed by intelligence and risk analyze” in order to provide maximum efficiency on organized crime and informal economy combat. Kosovo Customs has offered the possibility of continuing the practical work with payment for total 55 students, who have followed practical work in three-months period. The number of training activities during 2019 marks the realization in total of 135 developing training activities in 121 different professionals, managerial and technical fields, where are trained 745 customs officers. Kosovo Customs, in 2019 has achieved to create more applications and modules within the existing customs systems that have been of specific importance for Kosovo Customs and is submitted to continuous advance for the digitalization of all customs procedures and some of the most important, we present them as follows:

The implementation of CEN system – The system that is in use by many World Customs Organization’s member states, have implemented CEN system which is used for the exchange of the information for the cases of law enforcement, customs offences, different drug’s confiscations, etc.

The implementation of EBTI system- During 2019 we have made the installation of EBTI system which is part of the international agreement for information exchange on tariffs.

There were made changes in ASYCUDA for the functionalization of customs office in Durrës. Amendments have to do with the exchange of T2 document among systems of the Kosovo Customs and Albania Customs.

By the end of the year there were modifications in the tariff regarding the SAA and FTA with Turkey.

It is added the EORI module in ASYCUDA.

In ASYCUDA the Selectivity is established in the Simplified procedure. This module replaces the ALTS application in ASYCUDA the Selectivity for the Simplified


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procedure is established. This module replaces the ALTS application which was used for selectivity in the part of import.

Development of new modules in the SIMS system.

The Virtual Platform VMware from version 6.5 is advanced two times in a row, SEED – during this year there were some disturbances with Information from Serbia, mainly the disturbances happen due to failure of communication of the SEED server placed in Rome.

The web application “Customs Mail” has been implemented and presentation of additional functionalities was done for the Postal Clearance officials.

During 2019, all the WCO activities are administered and managed, where apart from participating in main activities and with interest for Kosovo Customs, KC performance progress reports are also sent with informing data as WCO member. It’s worth mentioning that WCO accredited 1 Kosovo Custom’s official as an expert on the law enforcement matter within the COPES program. Customs activities during 2019 were closely related to institutional engagements in CEFTA committees and sub-committees, Transport Community, National Commission for Trade Facilitations and regional working group’s developments in various levels of Ministries, Agencies, etc. Also many projects from international organisms are coordinated, such as American Embassy, EU, GIZ, WB, IFC, UNODC, IPA, etc., in various fields.

Customs ensured the correct implementation of International Agreements on customs matters and Protocol IV of the SAA, where during 2019, 42 international correspondences are exchanged with neighboring countries as Turkey, European countries and OLAF.

Within the further increase of bilateral cooperation, during this year 2 international agreements were initiated: The mutual agreement on customs matters with Saudi Arabia, as well as the Agreement for customs control in the railway transport with Northern Macedonia.

In June 2019, Customs took part in the 133-134 WCO Council sessions; respectively this was the 4th meeting since Kosovo’s membership in the WCO. Kosovo Customs is taking part intensively in most of the WCO organized activities, with the purpose of fulfilling the international standards, respectively including best world practices in accomplishing Customs and WCO objectives. Only during this year, Customs participated in WCO organized international operations, such as meetings, working groups, conferences and trainings.

Customs for the first time concluded a bilateral agreement with WCO to borrow and use the nCen system, a system owned by WCO, through which all the Western Balkans Customs will exchange information on customs legislation violations, aiming to fulfil the objectives that came out from the Berlin process. Following the legislative aspect,


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Customs started to implement the Agreement, by upgrading the nCen system, according to WCO instructions, to be ready for the full national usage.

In cooperation with WCO, DMNI managed to accomplish 2-week training for Container Control Program organized by UNODC in partnership with WCO, which was held in April 2019 in Prishtina, as well as a practical training in Morine, held in month November 2019.

During this year customs presented the reports with the self-assessment findings process from the Blueprint for Customs and Excise, while the entire self-assessment process started during 2018.

Customs managed in cooperation with the European Commission to re-actualize Kosovo’s membership in the EU Program, by negotiating the budgetary cover through IPA funds starting from year 2020. All the legal procedures for signing the Agreement between Kosovo and EU are initiated, whereas the Government approval is pending for this Agreement Initiation.

DICI initiated and supervised the measures/priorities that shall be applied by Kosovo Customs during the certain period for Chapter 29 – Customs Union as per pertinent customs units.

3. BUSINESS FACILITATIONS

Simplification and harmonization of work procedures enabled cost decrease for traders and efficient administration of available resources. Kosovo Customs will continue to manage and to lead the existing system, in particular the one that connects all customs authorities by advancing data exchange systems with national agencies, in regional level and implementing the NCTS system where transit operations are subjected. With the purpose of decreasing the cost for international trade, Kosovo Customs aims to reach the balance between customs control and trade facilitations, by using the correct application of trade and customs policy measures, advanced work processes, advanced customs procedures and techniques for risk assessment and selective controls.


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Table 6: Statistics regarding the releases for manufacturers and customs warehouses

The trade portal which is connected with ECM is fully functionalized. We developed the trade portal modified for businesses and citizens. Now in the initial phase, the businesses have the possibility to communicate with KC through the portal for e.g.: placing requests, appeals and all the responses and their admission goes through the portal. Kosovo Customs continued in regular basis to publish the open data in the KC webpage for the trade balance, CEFTA impact, SAA impact, monthly performance, etc. All the reports are presented in the customs webpage. In the meantime, we entered other information such as Open Data which found huge usage by the business community and Kosovo citizens. The average period of time for clearance in export regime has been decreased compared to the same period from previous year. Over 86% of export declarations have completed the clearance procedure within 30 minutes’ time period. During 2019, the authorized economic operators program (AEO) has become completely operational. Ceremonially sponsored by the World Bank we organized to award certificates on date of 17.12.2019 for two first Kosovo AEO’s. The Galvazing Company and Auto Mita have benefited from these facilitations. These two companies have benefited AEO simplified customs type. Trade facilitations and customs procedures simplification will be a function for economic increase by supporting the legitimate businesses to stimulate the domestic export in order to be competitive in the regional markets and wider, which is documented from international reports in the following.

0.00

100,000,000.00

200,000,000.00

300,000,000.00

400,000,000.00

IM6 2019 €

IM6 2018 € IM7 2019 € IM7 2018 € Lirimet për prodhues

2019 €

Lirimet për prodhues

2018 €

7,534,657.48 6,580,112.30

387,121,619.02 367,135,686.44 370,219,551.91

322,190,680.32

Releases for producers 2019 2018


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IFC/World Bank Report: https://www.ifc.org/wps/wcm/connect/news_ext_content/ifc_external_corporate_site/news+and+events/news/impact-stories/kosovo-simplifying-trade-energizes-businesses

Customs activities will ensure further advance of paperless environment through Enterprise Content Management concept which contributes in trade facilitation and effective application of rules and protection of financial and security interests of Kosovo. Customs is in service for the legitimate business community and citizens and as a strategic objective has the aim to advance the procedures and new customs systems in order to reach the progress of legitimate trade facilitation for the business community and Kosovo citizens. During 2019, Customs continued to simplify the customs and administrative procedures through IT systems toward trade facilitation as well as providing the best services for the businesses. Also, they continued to ensure the correct application of fiscal and trade policy measures, updating TARIK and also correct application of origin rules. In the meantime, customs continuously organized round tables, meetings, trainings for and with the business community with the purpose of explaining customs procedures and various topics raised by them.

Having to consider the World Bank Report for 2020 “Doing business in Kosovo” it

presents the fact that Kosovo Customs has assisted in improving the business environment

in Kosovo, by increasing the cooperation in the framework of reform coordination between

relevant Kosovo institutions, the following development are praised:

As far as it concerns the trade indicator beyond borders, from two last reports from

the World Bank (2019 and 2020) can be seen that this indicator in the latest report

has marked very significant progress by going up for 20 spots, from spot 51,

referred to 2019 report, we moved to spot 31 referred to the 2020 report.

Kosovo facilitated export by simplifying the clearance at the border.

Kosovo decreased the time and cost of documents compatibility and the time

compatibility at the border for export by improving its automation, the customs

data system administration, by regulating clearance processes and applying the

Transit Corridor Albania – Kosovo.

https://www.doingbusiness.org/content/dam/doingBusiness/country/k/kosovo/KSV.pdf

While according the “Kosovo Progress Report” for 2019 of the EU commission, it

emphasizes the fact that KC achieved successes and progress is made in the following:

https://www.ifc.org/wps/wcm/connect/news_ext_content/ifc_external_corporate_site/news+and+events/news/impact-stories/kosovo-simplifying-trade-energizes-businesses

https://www.ifc.org/wps/wcm/connect/news_ext_content/ifc_external_corporate_site/news+and+events/news/impact-stories/kosovo-simplifying-trade-energizes-businesses

https://www.doingbusiness.org/content/dam/doingBusiness/country/k/kosovo/KSV.pdf


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Customs Administration shall continue maintaining its reasonable administrative

and operational capacities;

Paperless approach and the electronic payments system in Kosovo Customs has

helped in eliminating administrative bureaucratic barriers leading toward an

adjustment of clearance procedures.

https://ec.europa.eu/neighbourhood-enlargement/sites/near/files/20190529-kosovo-report.pdf

4. LEGISLATION Kosovo Customs based on international institutions reports also is assessed to have its own

customs legislation which is mainly complete and in accordance with international laws

requirements and relevant WCO regulations and solidly regulates the functionality of

action domains and directly lays out the responsibilities and obligations of main actors in

Customs field.

During year of 2019, Kosovo Customs main focus was on achieving objectives to

accomplish the legislative plan and the strategic plan and the national plan also for SAA

implementation; providing legal opinions based on the addressed requests, through which

the completion of legal duties has been ensured in law enforcement and other provisions

from the customs scope of activities as a goal to achieve the objectives and in favor for the

domestic economy.

During 2019, Kosovo Customs worked toward further progress of the customs legislation

to harmonize the requests of the domestic legislation in force as well as the European

Union legislation.

In this period, in total 991 requests for various legal advices are admitted and 13 internal

administrative instructions are issued. It’s worth mentioning that in this year compared to

the previous year, we had an increase of numbers of requests for review from 132 requests

more than the previous year, whereas 131 cases/requests are completed more than in the

previous year.

Also court subjects are received in number of 136 more than in the previous year, as well as

126 cases are completed more than the previous year. The following tables will render the

pertaining activities:

https://ec.europa.eu/neighbourhood-enlargement/sites/near/files/20190529-kosovo-report.pdf


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Regular cases 2019 2018

Regular cases carried over from the previous year 76 64

Admitted 940 808

Completed (solved) cases 927 796

Cases in procedure 89 76

Table 7: The comparison of cases for review for 2019 and comparison with 2018

During 2019 the number of requests for regular cases and Basic Court cases was as it

follows:

Basic Court cases returned for reinstatement 2019 2018

BC cases carried over from previous year 19 15

Admitted from BC 233 97

Completed (solved) BC cases 219 93

BC cases in procedure 33 19

Table 8: The comparison of cases from Basic Court for 2019 and comparison with 2018 The manner of submitting cases to the Basic Court: Basic Court – Total 233 cases, another 19 cases are included which were carried over from the previous year, completed are 219. From date of 01.09.2019, the Customs Representations sector based on the cooperation agreement with the State Advocacy and Kosovo Customs, it represents all the Kosovo Customs court contests.

5. LAW ENFORCEMENT AND INVESTIGATIONS

The Law Enforcement Directorate acted based on current concepts of operation lead by intelligence and based on the risk management process, with proactive orientation in the fight against crime, cross-border organized crime, contraband and informality in the domain of Kosovo Customs responsibilities. All the professional capacities are engaged in identifying frauds and actions and activities are undertaken in preventing the contraband and organized crime, either through the function of control with specialized officials or operational support at the border and within the territory of Republic of Kosovo. The Law Enforcement Directorate undertook measures and actions to implement government decisions on the protective measures toward Serbian and Bosnia and Herzegovina products. With the purpose of addressing the increased risk from the created circumstances, the number of Anti-smuggling units was increased, by increasing activities and by operating 24 hours in the high risk zones, in particular in the Mitrovica region. Besides the actions in zones with risk, the control is increased within the country as well,


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where based on information from intelligence, the Post Import Sector and Anti-smuggling sector have increased their control on locations suspicious for smuggled goods, suspicious origin, verification of goods without documents, trademarks, consumer fraud, etc. With the purpose of increasing the effectiveness via cooperation and mutual completion, a number of operational activities are performed in coordination with other institutions such as Kosovo Police, KTA, MTI, KFOR, etc. Overall, Customs showed efficient performance during this year and the result of this effect is direct combat against crime, contraband

and informality and around 10.5 million euros, not including the value of detained goods (weapons and narcotics), whereas the prevention effect is for sure couple times higher. The Anti-smuggling units performed 9,332 controls and patrols, 234 operational plans are

undertaken which resulted in discovering 455 customs offences or 9.23% increases compared to the previous year.

Anti-smuggling 2019 2018 Comparison 2019/2018 %

Discoveries 455 413 9.23%

The value of discovered goods

1,280,766.00 € 920,614.00 € 28.12%

Operational plans – assistance, Police/KFOR

234 191 30.35%

Table 9: Anti-smuggling statistics for 2018 and comparison with 2019

From the Post Import control 349 activities are performed in businesses and 59 thousand

customs declarations are also checked post clearance of goods, where the result is, verdicts

and re-evaluations are issued in amount of 2.33 million €. The Customs Offences sector handled 1,892 offences and imposed administrative fines in value of 1.25 million €.

Compared to the previous year we have a decrease of number of offences for about -14%, which came as a result of changes in the Criminal Code, since the new criminal code decreased the criteria of determination of criminal acts and consequently the majority of violations, in particular contraband, are determined as criminal acts, which is rendered in all the raised indicators in investigations, either for the number of criminal charges, the value of sequestrated goods and value of criminal acts prevention. It also impacted the prevention of offences initiation from previous year, due to the fact that by commencing to implement the valuation system of vehicles with passed kilometers, at the beginning of applying these criteria there were substantial frauds made, which are noticed and then offences are initiated for about 300 cases which during this year didn’t appear as an occurrence.


22

Table 10: Statistics of offences and values for 2019 and comparison with 2018

Customs investigations have shown excellent performance and results this year. Customs investigations are oriented toward investigating cases of evasion of customs and excise tariffs, prohibited trade and smuggled goods. In general, in the domain of investigation the sector’s activities are mainly directed in undertaking proactive actions, since the fiscal effect of the prevention action was indicated to be much higher compared to the investigation activities undertaken after the criminal act, when as per practice, the collection of lost means is difficult to be achieved. In 2019 customs investigations have submitted 117 criminal charges to the Prosecution where the ascertained evasions are in the level of 2, 98 million € and goods in value of 2, 2 million € are sequestrated.

Table 11: Statistics of criminal cases and values of 2018 and comparison with 2019

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

Viti 2019 Kundërvajtjetë proceduara

Vlera e gjobave/€

Viti 2018 Kundërvajtjetë proceduara

Vlera e gjobave/€

1892

€ 1,252,215.01

2205

€ 1,421,045.09

0

500000

1000000

1500000

2000000

2500000

3000000

145 117

€ 2,978,287.59

€ 2,252,215.01

69 54

€ 1,875,980.26

€ 639,563.53

Year 2019 Customs offences Value of offences Year 2018 Customs offences Value of offences

Proceeded € Proceeded €

Year 2019 New cases Criminal Sequestered Year 2018 New cases Criminal Sequestered charges charges


23

Note: the performance indicators of investigations have marked a significant increase as a result of two factors: changes on provisions in the criminal code, since with the new normative of the criminal act the standard that classifies a smuggling act as a criminal act have decreased and also the increase of efficiency and performance in the Investigations sector. The Intellectual Property Right – The undertaking of customs measures in the fight against counterfeiting and piracy are among the Kosovo Customs priorities, therefore this year had very good results in this field. Year after year the number of requests for application of customs action has increased, where now customs counts for 126 applications for 648 trademarks and 38 copyrights. 305 cases with counterfeited goods are

discovered and seized in value of 1.94 million €. Also the Risk Management had a crucial role in accomplishing the KC mission and strategic objectives in collection of revenues, preventing and fighting against informality by steering the capacities and controls onto the high risk domains.

YEARS 2019 2018

Number of cases 350 381

Amount of goods 313586 226337 pcs

Value of goods 3,341,592€ 2,626,752€

Table 12: The Intellectual Property Right statistics for 2018 and comparison with 2019

In the aspect of Intellectual Property Rights, Kosovo Customs has undertaken measures in raising awareness and capacities. In this respect many activities and organizations are held with businesses and citizens, where they were closely informed about the importance of protecting the intellectual property right and the risk that can be caused from these counterfeited products by exposing samples of seized products, products which infringe the intellectual property rights. Also training was organized for the business community, with the subject: “Enforcement of the new law on customs measures for protection of Intellectual Property Rights.”

Photo: Destruction of counterfeited goods


24

Kosovo Customs took part in two international operations organized by the World Customs Organization. One had the purpose of fighting and preventing the illegal trafficking of cultural objects and as a result beyond the creation of knowledge and awareness for customs officials, Kosovo Customs based on this engagement either with direct or indirect participation, managed to stop six antic African sculptures and 25 antic coins from the Illyrian period, which than were subject to the detention measure and other administrative and criminal procedures shall follow. The other WCO operation had the purpose of fighting the smuggling with cigarettes and tobacco, in which case Kosovo Customs managed based on the operational plan, to discover products such as cigarettes 3800 pcs, cigarettes filters 20.000 pcs, raw tobacco 17 kg, tobacco for hookah 4.5 kg etc. Kosovo Custom’s contribution was among the most highlighted in the operation and consequently the head of the operation expressed gratitude for the Kosovo Customs contribution in this operation.

The Law Enforcement Directorate officials have followed trainings and other educational events that enable progress of law enforcement capacities, including the advance training from the World Customs Organization for the Customs Operational Practices on Law enforcement and Seizure, advance managerial trainings – including the ones provided from the US Government, controlling the trade of strategic goods and distribution of mass destruction weapons, controlling vehicles and goods consignments, fighting corruption, contraband with cultural goods, the Aspects of Security for Classified Information and cybernetic crimes, etc. During this year Kosovo Customs started to implement the containers controlling aspect, a program which is standardized and implemented by the United Nations Development Program (UNDP), in which case necessary technical and human capacities are developed, after the agreement endorsement with the UNDP. Some of the special results

The activities are based in intelligent information and recommendations derived from the risk analysis on fighting against informality while achieving results and sequestrations of over 20 million pieces of cigarettes, 6.525 kg tobacco, 700 kg of hookah tobacco, 3.43 million pieces of cigarette filters, around 1000 pieces of mechanisms to fill with tobacco, 9 pieces of firearms, 10.485 liters of alcoholic beverages, 12.870 medicaments without banderols, etc.

The Law Enforcement Directorate continued the close cooperation with strategic international partners, with the purpose of exchanging information and benefiting in the field of capacities development. From which collaboration we managed to get results in developing capacities in Intelligence and Investigations, either with equipment, trainings, as well as we managed to discover international attempted


25

smuggling of cigarettes, where we managed to ensure temporary sequestration measures for two suspicious cigarettes consignments in quantity of around 20 million pieces of cigarettes.

The raid operation was performed on the case KATRANI, which was focused in identifying and stopping consignments of smuggled goods, mainly tobacco, where the participation was from around 150 members from Customs and Police and 4 customs officers are arrested under the suspicion of facilitating the goods smuggling. KATRANI is a case targeted from the Special Prosecution as s serious crime case, based on the Standard Action Procedure. The total number of arrested people in this case is 16 persons, including the four customs officers.

In month of March, Customs assisted Kosovo Police in the action organized by Kosovo Police – DHKE, with 77 officers, where the operation led to stopping around 206 games of fortune apparatus and around 222 games of fortune locations are closed. The purpose of the raid was to identify the games of fortune locations which were operating illegally.

In months of September and December two mini factories were discovered manufacturing counterfeited trademark goods, such as: ‘Mercedes”, “Nike’, “Adidas”, ‘Gucci’, “Fila” etc. The seized goods and machines are sequestrated and the cases were forwarded to criminal proceedings as per the authorization from competent prosecutions.

Photo: Some of the cases of discovered smuggled goods


26

6. EXCISE During 2019 as always Kosovo Customs with increased care oversaw the domain of import and production of excise goods having to consider that the excise tax has a special importance in the category of revenues collection. This efficient oversight by Kosovo Customs was enabled through management of: tobacco and its products banderols, banderols destruction and licensing of production and importing companies. Customs this year from the excise tax collected over 435 million € or compared to year of 2018, there is an increase in revenues from excise tax from +3.4%. In the following there is a table for 2019 where excise tax revenues are specified.

Table 13: Separation of excise revenues for 2019 and comparison with 2018

During 2019 from the Excise Sector 103 subjects are supervised which used the decision for

release from excise tax and in the same time in the table below for year 2019, the excise

goods types are elaborated by making a comparison with the previous year.

Types of excise goods 2019 2018

Alcoholic beverages 5,049,937.16€ 4,913,044.68€

Non-alcoholic beverages 5,601,788.05€ 5,069,927.34€

Inward excise – tobacco 1,570,075.20€ 0

Excise from tobacco import 142,280,950€ 130,035,111.45€

Tobacco banderols orders 326,904.23€ 324,701.93€

Alcoholic beverages orders 45,194.68€ 29,736.92€

Requests for tobacco banderols 154,445,000 pieces 157,990,000 pieces

0.00

50,000,000.00

100,000,000.00

150,000,000.00

200,000,000.00

250,000,000.00

300,000,000.00

350,000,000.00

400,000,000.00

450,000,000.00

Akciza total në2019

Akciza në kufi Akciza ebrendshme

Banderolat Ndryshimimes 2019 dhe

2018

435,865,582.00

430,799,977.09

4,696,217.78 369,333.13 16,605,148.01

Excise in total Excise at border Internal Excise Banderols Difference 2019 2019 and 2018


27

Requests for alcoholic beverages banderols

3,757,922 pieces 379,100 pieces

Table 14: Excise revenues as per categories for 2019 and comparison with year 2018

Kosovo Customs during 2019 assisted in improving the business environment in Kosovo

by simplifying customs procedures within coordinating reforms between relevant

institutions in Kosovo and offering simplified procedures and issued authorizations.

During 2019 issued authorizations for procedures as in the following table:

Decisions and authorizations for procedures Year 2019

General decisions for PWEI and Authorizations 372

Authorizations for Customs Warehouse WH 60

Decisions for Inward processing (IP) 343

Authorizations for Inward processing 56

Decisions for Processing under Customs Control (PCC) 24

Decisions for Authorizations for Simplified Procedure (SP) 185

Authorizations for EGW, CWEG and EGT 73

Licenses for import/export and producers of alcoholic beverages 91

Licenses for import/export of tobacco 31

Table 15: Authorizations and licenses issued for PWEI and SP for 2019

From Tariff Sector during 2019, are issued: 163 tariff opinions, 28 authorizations for

successive imports, around 125 responds to subject’s requests, etc. Also on date of

01.01.2020, the TARIK 2020 harmonization based on the European Community

nomenclature implemented in the Asycuda system and the public access is provided in the

official Kosovo Customs web page.

The Laboratory sector during 2019: performed the analyzing of derivatives samples 1350

samples, other samples 50 (various goods samples), analyzing of samples from accredited

laboratories in the country: 100 reports received from troupes for verification of conformity:

104 and non-conform cases 54, etc.

The Origin Sector during this year provided: explanations to requests in regard to

SAA/CEFTA 583 cases, held 252 meetings with subjects providing necessary explanations

on origin benefiting commensurate to FTA’s. Also, they checked 3886 SAD’s regarding the

correct application of FTA’s, received applications in REX 118, and received requests for

origin verification from CEFTA and EU 67 requests, while responds to requests for

verification are 673.


28

From the Valuation Sector for the reporting period we shall mention they achievements

such as: refreshing the file with 987 labels, responds to requests from organizational units

1114 cases with 13,134 labels, refreshing values for goods from Reuters Stock market 670

labels.

Especially we shall mention that according to the analysis of the valuation method for the

time period in 2019, the valuation methods which are applied in Kosovo Customs, where

the 1st method of valuation (goods transactional value) goes approximately to 98% and this

presents a very positive statistic in goods valuation by Kosovo Customs.

Table 16: Valuation methods which are applied in 2019 by Kosovo Customs

7. GOOD GOVERNING AND COMBATING CORRUPTION Kosovo Customs enters in its third decade to continue with maximum efforts to exceed the

expectations every year, in order to have a high level of duties, serving as an example on

leading and performing professional duties.

Having to be aware that we are paid from Kosovo taxpayers and this proven confidence for

the last two decades prevails from Kosovo citizens, and we shall continue to serve best the

Kosovo public and citizen’s interests. This is our commitment which resulted in significant

increase of duty level for each and every one in achieving financial objectives as well as in

result of combating informal economy, prohibited goods and other negative occurrences.

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

MV 1 MV 2 MV 3 MV 4 MV 5 MV 6

97.71%

0% 0% 0.01% 0% 2.27%


29

Kosovo Customs considers its personnel as the most valuable and most important source in

fulfilling its own strategic mission and objectives. Having a professional, motivated,

competent and with integrity personnel, we shall be more close to the citizens and business

community to assist the legitimate trade but in the meantime to prevent and combat

against criminal occurrences which result in efficient collection of revenues, prevention of

security risks, public health and creating equal conditions for all.

Also in the same time Kosovo Customs as continuously proven, in any single moment and

under any circumstance will not tolerate or neglect any case of official duty misuse by

customs officials and it shall have no compromises on undertaking disciplinary measures

and legal proceedings toward any customs officer. 26 inspections are performed in the

field with the purpose of verifying the procedures progress, the stamps and respecting the

working schedule.

In 2019 Kosovo Customs as a result of fighting against corruption and misuse of official

duty, undertook immediate measures by initiating and undertaking disciplinary measures

as per the table presentation below:

DISCIPLINARY ACTIONS AND DECISIONS YEAR 2019

Information in the investigation process in PSS 34

Disciplinary cases initiated during the reporting period 20

Cases completed in the local level 17

Cases reviewed by the Disciplinary Commission 9

Interviews 39

Imposed disciplinary measures 23

Financial penalties 4

Verbal warnings 18

Disciplinary transfer 1

Demotion 1

Competition ban 1

Promotion ban 1

Suspensions 6

Table 17: Statistics of disciplinary cases handled during 2019


30

8. HUMAN RESOURCES Promotion processes – During 2019, 5 internal vacancies are published to fill in

vacant positions of Heads of Departments, Heads of Customs Sectors/ Offices and Senior Customs Officer, which are still in process. According to the systematization of year 2019, the number of employees in Kosovo Customs is 569 officers. Gender report – 443 officials (77%) are of male gender, whereas 126 officials (23%) are of female gender. The ethnic report as per the ethnical structure is: 84% Albanian, 9% Serbian, 3% Bosnian, 1% Goran, 2% Turkish and 1% RAE, which are presented in the following table:

ETHNICITY

GENDER ETCHNICAL STRUCTURE – DECEMBER 2019

GENDER

STRUCTURE

RANK ALBANIAN

SERBIAN

BOSNIAN

GORAN

TURKISH

R/A/E M F TOT

CO7 1 0 0 0 0 0 1 0 1

CO6 5 0 0 0 0 0 5 0 5

CO5 9 0 0 0 0 0 8 1 9

CO4 38 0 0 0 0 0 27 11 38

CO3 143 0 6 0 2 0 120 31 151

CO2 204 19 5 2 11 8 194 55 249

CO1 76 34 4 1 1 0 88 28 116

TOTAL 476 53 15 3 14 8 443 126 569

% 84% 9% 3% 1% 2% 1% 77% 23% 100%

Table 18: Kosovo Custom’s personnel statistics during 2019

9. BUDGET AND FINANCES

During this year, duties and responsibilities of the budget and revenues sector are performed based on the monthly work dynamics: planning, receiving, spending, certification and completion of subjects for payments accomplishment, as well as works of the assets office, revenues reconciliation and returned means to the Treasury, also payments reconciliation with customs stations and offices which collect the revenues.


31

The expenses for the period January – December: having to consider the delays in budget approval at the beginning of the year and the staff’s engagement in the basic training, we managed to process all the expense requirements. The number of spent subjects is 3,583 payments (cases), whereas budget performance for 2019 is given in the following:

No Code Economic Category Budget – 2019 Expenses 2019 Remainder 2019

% of performa

nce

1 111 Salaries and wages 6,220,013.90 6,206,247.63 13,766.28 99.78

2 130 Goods and Services 2,316,862.00 2,011,940.81 304,921.19 86.84

3 132 Municipal utilities 147,375.00 109,088.29 38,286.71 74.02

4 300 Capital expenses 1,703,905.07 805,528.27 898,376.80 47.28

Total 10,388,155.97 9,132,805.00 1,255,350.98 87.92

Table 19: The approved budget with expenses for year 2019 and the budget remainder

From date of 15.03.2019 the registration of goods in ASYCUDA commenced and from now on goods which should be deposited in the central warehouse shall be registered in ASCYUDA. Registration in ASYCUDA is done via the DE7 document of goods stock admitted in the central warehouse, which are admitted until date of 31.12.2019 and around 13,145 items from 14,423 are registered for as much the two stocks lists contained – the list 2003 2008, 2009 – 14.03.2019 and 1,278 items remained in the registration process. Working groups are created between Customs and KEC on handling the seized goods with KEC capacities, an agreement was reached between both institutions to destroy a quantity of products in KEC furnaces (mainly tobacco products) and we are waiting to be equipped with an authorization from MESP. Based on the decisions from the state commission of Ministry of Finances for the needs of

State Institutions, 834 cases of various seized goods are donated (various clothes, IT used equipment and parts, hydraulic/motor oils, lubricants, derivatives/heating oils, pellets, etc.). According to the Government Decision No 07/96 of date 22.06.2016, at the Dubrava prison are transported/sent 62 subjects of smuggled livestock, in quantity of 287 live

cattle. For the goods which are initiated to be sold, 41 offers are accomplished, where 18 offers we accomplished the sale of 57 parts/lots in the total amount of 62,877.62 €. In total 1,718 cases are received with various goods and totally 278 cases are destroyed (small animals, poultry, food commodities, etc.), based on the requests from IPR Sector 29 cases of goods infringing the intellectual property right are destroyed (clothes, textile, lighters, telephones, holders and other phone accessories).

Procurement – The Procurement Department during year 2019 performed works in

the scope of this department determined by the Law on Public Procurement in Republic of


32

Kosovo and Administrative Instructions on handling and administering prohibited and seized goods, such as: tender preparations, purchase orders, sales, drafting of contracts and their binding with EO’s as well as necessary supplies for the Kosovo Customs work progress. Serial

No

Description of procurement activities Number of activities

1 The total of tenders (great values, small and minimal) 79

2 Accomplished tenders (great values, medium, small and minimal) 45

3 Cancelled tenders (great values, medium, small and minimal) 27

4 Tenders in procedure (great values, medium, small and minimal) 7

5 Signed contracts (great values, medium, small and minimal) 47

Table 20: Kosovo Customs Procurement Activities during 2019

Explanation: During the period between the Free Balance systems, in total 386 payments are executed in amount of 2,777,671.29 Euro. While during 2019, sales of seized goods and assets are accomplished as in the following table:

Table 21: Sale of seized goods and assets for 2019

No of auctions and bids

Accomplished

Failed

In

procedure

Assessed auctions

Value of assessed sold

parts

Sold as per EO

Bid (Assets)

5 4 1 0 167,563.95 € 15,444.97 € 23,163.00 €

Invitation for bids

42 20 21 1 371,162.47 € 47,280.22 € 62,976.90 €

TOTAL 47 24 22 1 538,726.42 € 62,725.19 € 86,139.90 €


33

10. SPECIAL SMUGGLING CASES

March 2019, Kosovo Custom’s officers caught

around 17kg of narcotics substances type

marihuana while attempted to be smuggled in

Kosovo

July 2019, customs officers managed to identify and capture a substantial amount of narcotic drugs which were attempted to be entered into Kosovo through Vermica border crossing. The weight of this narcotic substance was 54 kg and e 963.24 gr.

March 2019, following an investigation after authorization from the Basic Prosecution in Prizren, Kosovo Customs in cooperation with Police undertook a control operation based on the court order from Prizren Court in 32

various locations whereas the operation resulted in finding assets and substantial proof such as tobacco, firearms, etc.

Documents

ANNUAL REPORT 2019...KOSOVO CUSTOMS – ANNUAL REPORT 2019 4 YEAR 2019 – MAIN STATISTICS Revenue collection €’000 2018 2019 Changes in % Total revenues 1,135 1,179 …