The cloud of confusion surrounding the ways and means of obtaining a Certificate of Origin document from the Ministry of Commerce should be lifted today.
Khek Ravy, secretary of state at the ministry, plans to explain to silk and other handicraft producers this morning just how easy it is to obtain the document, which is needed for exporters to take advantage of trade preferences to markets around the globe.
But some involved in the handicraft industry remain skeptical that anything can be done to loosen the noose of Certificate of Origin corruption.
“Some people were paying $15 and exporting to France while some people were paying $300 to $500 to do the same thing,” Khek Ravy said in interview Thursday. “I am going to explain to the procedure so that people don’t pay that amount.”
The handicraft industry, which includes a majority of silk producers, consists primarily of small businesses and NGOs that often employ disabled workers to make their goods. Several seminars and workshops, including one held this week in Phnom Penh, train entrepreneurs about everything from how to make products “unique” to how to connect with overseas buyers.
The government has secured duty-free, quota-free market access to the European Union, Japan, South Korea and others, as well as reduced tariff rates to the US.
But to take advantage of those trade preferences, manufacturers must obtain the crucial Certificate of Origin that proves the exported goods were made here with materials from Asean countries. If they export without the certificate, buyers in Europe and elsewhere must pay duties that usually amount to 20 percent of their purchase price.
So far, the procedure for obtaining the certificate ranges between notoriously obscure to outright bribery.
Ministry of Commerce sources, including Ho Sarann, director of the ministry’s Legal Affairs Department, said that only registered businesses could obtain a certificate. At the ministry, this involves registering $5,000 worth of capital and rounding up a host of documents that could easily run up to a few hundred dollars.
But, as discovered recently by Men Sineoun, project manager of the Artisan’s Association of Cambodia, an industry group comprised of aid groups and small businesses, even registering a business is a task of Herculean proportions.
Ministry of Commerce officials told him that to obtain a certificate, businesses must register at the Council for the Development of Cambodia with $1 million in capital.
Men Sineoun wondered why a government so enamored with touting silk exports in its poverty reduction plans would make it so difficult for small businesses and NGOs to export their products. “The effort has been made,” he said resignedly in an interview earlier this week. “I’ve discussed this with officials at the Ministry of Commerce. Like David Beckham, they all pass the ball.”
But Khek Ravy, who doubles as president of the Cambodian Football Federation, said NGOs and small businesses can obtain a certificate with no set amount of capital. They need to register at the ministry, but not as a business.
“Some of the people in my ministry didn’t understand the procedure,” he admitted.
After NGOs are registered, handicraft producers need to get their goods inspected by someone in the ministry’s trade preferences system department. But this, too, was a battle all its own.
Inspections are supposed to be free, but even officials close to the inspections admit money exchanges hands regularly.
“It’s not bribery, it’s more like sympathy,” said one official, adding, without even a hint of sarcasm, that inspectors deserve the money for spending their “time, energy and petrol.”
Khek Ravy said he would personally assist those asked to pay a bribe.
But workers in the industry doubted that would be enough to end the quagmire of corruption lurking behind the veils of his ministry’s bureaucracy.
“Sure, they say everything is free,” said one exporter. “But if you don’t pay, the documents don’t move.”
