Kosovo– Creating Performing Institutions, The Case of Kosovo Customs

One of the main attributes of a state is the existence of an effective customs administration which is able to control borders and facilitate their crossing, through specific routes and official checkpoints. In the case of Kosovo, Customs were created in 1999, and with the assistance of the international community, they could become a modern institution and address the challenges most customs are confronted with – in particular the prevention of corruption and controlling all borders.


Kosovo separated from Serbia in 1999. Such a move meant the need for new customs, with their border checkpoints. In August 1999, the Customs Service of UNMIK was established with the support of the EU; the new body was responsible for applying customs regulations and other provisions on all goods which are subject to customs supervision, as imports or exports. Following the adoption of a new Customs Code by the Assembly of Kosovo, “UNMIK Customs Service” became Kosovo Customs in December 2008.

A complex mission

Kosovo Customs’ mandate includes: contributing to the economic development of the country; the protection of the borders; the fight against crime, trafficking and smuggling; the protection of trademarks; the control of both imports and exports; the collection of import duties, VAT and excises; protecting the environment and the health of the citizens; recording and providing statistics; supporting trade facilitation, particularly with CEFTA members. Kosovo Customs have a complex mandate indeed, which requires general and specific competences, and material resources.

Staffing the customs

The recruitment of customs officers started immediately after separating from Serbia. The newly recruited staff came from various backgrounds, however, most officers had little or no knowledge at all of customs matters. In other words, training (especially on-the-job training) was quite essential to build new capacities in terms of human resources, with an ethical perspective in mind.


The role of the EU

The EU provided significant help to put in place, develop and strengthen Kosovo Customs. In fact, the EU assistance does concentrate on implementing a strategy named “Integrated Border Management” to fulfil duties related to border control, the freedom of movement of citizens and goods, and also combat negative tendencies such as, for instance, the smuggling of goods and the trafficking of human beings.


Since 1999, the US Government provides support to the development of economic activities in Kosovo. It also helps to enhance trade conditions with the adoption and the effective implementation of customs harmonization procedures in accordance with internationally accepted standards, including the World Customs Organization (revised) Kyoto Convention on the Simplification and Harmonization of Customs procedures.

IMF and World Bank

The Washington-based institutions were also involved in the building of the Kosovo State from its beginning.

Considering the IMF, a special importance was given to Customs because Kosovo started with a very basic tax system relying mostly on tax collection at the border.

The World Bank is involved in Kosovo with activities that do belong to its Trade Facilitation Support Program.


The risk of corruption

Regular bribes alter expectations and behaviors of both civil servants and private businesses. Thus, they may lead to a worsening of ethical values in the administration and also impact negatively on private investment plans. In the specific case of Kosovo, as mentioned in a 2013 report of the United Nations Office on Drugs and Crime (UNODC) on Business, Corruption and Crime in Kosovo, “The public officials with the highest risk of bribery in interactions with businesses are customs officers, officials in the tax/revenue administration and municipal or provincial officers.” According to the same document, the prevalence of bribes is the highest with customs officers (1.9 percent). Such practices take place because of frequent interactions with the administration and the existence of face-to-face meetings.

Impacts of anticorruption measures

According to recent news, the period January 15-September 15, 2015, would correspond to the highest tax collection ever since the establishment of customs, with an increase of about 7.5% or 44.7 million euro above what was collected during the same period in 2014. Apart from the effect of the new (and higher) excise rates on tobacco and alcohol drinks and the liberalization of import of used vehicles, this can be attributed to anticorruption measures and the improvement of customs procedures.

Preventing/deterring corruption

Preventing and fighting corruption in the state administration does require a strict enforcement of rules with deterring penalties. The private sector has also to be fully involved in the fight against corruption, especially as a whistle blower. In addition, so-called “e-governance” – with adequate portals – should be seen as a plus because it does reduce the scope of face-to-face contacts.


Kosovo Customs fully control in an effective manner all borders, in all regions, including those regions where minorities are located. Thus, significant efforts have been made to improve the control of borders, with the support of the international community, in particular the EU. Until a year ago, there might have been some grey spots, especially in so-called North Kosovo. In that respect, it is worth mentioning the warning that can be read on the website of the Foreign Office: “There were a number of security incidents in the north in 2012/13 affecting the route between Kosovo and Serbia via Gate 1 (Leposavic) and Gate 31 (Zubin Potok). Use alternative routes for travel between Kosovo and Serbia if possible.” (Reference date: 12 October 2015). In fact, such a warning is not anymore justified.

Final remarks: good governance and confidence building as priorities

Overall, Kosovo has a well-functioning customs administration. Nevertheless, despite such a positive assessment, corruption in the customs must continue to be addressed relentlessly with adequate measures, which implies a fair and equal treatment of all economic operators.

In addition, for the sake of transparency and completeness, an accurate assessment of customs fiscal performances - in terms of revenue collection - must take into account and properly weigh all pertinent factors, including the adoption of new taxation rates.

From a governance perspective, it is also most essential not to mix politics and the working of a key-administration like the customs – both professionalism and integrity must remain top priorities with human resources, at all levels.

Moreover, cooperation – including confidence building measures – between communities and all levels of government (central state, regions and municipalities) of Kosovo must continue to avert drawbacks


Daniel Linotte

Daniel Linotte holds a PhD in economics from Oxford University. He worked as adviser with international organizations and governments, and held teaching positions at Boston University, the Catholic University Leuven and the European Institute of Public Administration (Maastricht). Since 2008, he is a Senior Member of St. Antony’s College (Oxford). He is presently leading an EU project in the Balkans. He is the author of “The Eurasian Economic Union – Implications for Governance, Democracy and Human Rights”, The Central Asia Caucasus Analyst, publication of the Central Asia-Caucasus Institute & Silk Road Studies Program, a Joint Transatlantic Research and Policy Center... Read more about the author

Naim Huruglica

Naim Huruglica led the Kosovo Customs for a decade. As head of the Customs, he supported the development of a modern fiscal system and effective trade policy, and negotiated trade issues with neighboring countries. Presently, he works as consultant for state bodies and international organizations. He studied macroeconomics at Pristina University and obtained a Master degree in international finance at Sheffield University, UK. He also teaches international business.

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