News

Eliminating borders

María Alonzo García (Guatemala)

Customs are known as physical offices of the State located in national borders, in charge of receiving tax payments due to the incoming and outgoing of goods to the national territory. In accordance with the Código Aduanero Uniforme Centroamericano (CAUCA), “custom” means “Administrative services that are responsible for the customs legislation application, the tax import-export reception, and are also in charge of other laws and regulations application related to import, traffic and export of goods”.

Nowadays, governments have united their efforts to establish mechanisms that improve the traffic of goods, and the businesses between countries and customs compliance procedures that are adopted to the actual modern commerce.

This is how the Customs Union’s idea between Guatemala and Honduras rose with the main objective of eliminating borders between countries, creating one whole custom territory that evolves into a modern and efficient electronic system, eliminating current physical customs, and creating a unique external fee against third parties.

Among the Custom Union’s objectives is the elimination of the origin rules compliance, allowing a zone of free movement of goods. It has also become a free zone traffic for people between the two countries and physical customs have been eliminated for 26 products, circulating around freely about 97% of 6,500 products that conform the commercial interchange between both countries.

The Guatemala and Honduras’ Customs Union was confirmed on May 13th, 2016, through the Decree 3-2016 of the Republic Congress, giving to each State 5 to 6 months for its total implementation. This change was inaugurated on June 26th, 2017, date in which it became a reality, leaving an open door to the countries for its accession since the long-term objective is to create a Central American Customs Union. So far, the Central American Customs Union only supported standard customs processes and not specifically tax payments between the Central American countries. El Salvador and Nicaragua already have expressed their desire to be part of this union, in which they will be benefited, speeding up the commerce in Central America.

We stand before a transformation process of the previous idea we had about customs, with all its implications towards intangible customs. And like all processes, this should be conceived progressively because the full implementation and compliance should be completed in stages until the day it will turn into reality.

This process would culminate a series of regional tries that have rose through time with the creation of conventions and treaties between the States that have finally contributed to the current process and that will bring many benefits such as ease of transportation, infrastructure expansion, regional electronic integration, tax system convergence, investment attraction, increase of the annual GDP, a more efficient commerce, among others.