KATHMANDU, April 15: Ministry of Commerce and Supply (MoCS) has endorsed new guidelines on export of betel nut, aiming to control illegal re-export of nuts imported from third countries to India.
The guidelines, which the Ministry enforced last week through a minister-level decision, outlines a new process of issuing certificate of origin (CoO) to check its possible smuggling to India.
Under the new arrangement, MoCS now holds the right of making recommendation for issuing CoO to the traders, Lal Mani Joshi, secretary of the ministry told Republica.
"Federation of Nepalese Chamber of Commerce and Industries (FNCCI) and local chambers will also need to receive recommendation from farmers´ associations and cross-check local production and export data from Ministry of Agriculture and Cooperatives (MoAC), apart from MoCS´ recommendation for issuing the CoO," Joshi said.
So far, FNCCI and local chambers were issuing CoO based on recommendation of the MoAC.
The ministry took over the recommendation authority from MoAC after multiple cases disclosed MoAC of issuing recommendation letter under the influence of traders, thereby facilitating unauthorized trade. "We believe the new guidelines will help control illegal re-export of imported nuts imported to India," said Joshi.
However, sources said that the new guidelines too is not free from loopholes, something which leaves scope of possible manupulation and misuse of authroity by MoCS itself.
"For instance, the guideline has reserved the sole right of issuing recommendation for CoO at the MoCS. But does this provision mean MoCS officials will act fairly or will not fall under the influence of illicit traders?" questioned a source.
His opinion was that the guidelines should have incorporated check and balance mechanism to ensure control over possible abuse of authority. "But that is completely lacking," he stated.
The MoCS had drafted the guidelines as per the ministerial decision of January 1, 2012, in which it had decided to form a new mechanism to control growing unauthorized export of betel nut. The decision aimed at addressing Indian concerns, which for last few years had been constantly complaining of the rise in illegal re-export of betel nut by Nepali traders to India.
Apart from formulation of new guidelines on issue of CoO, MoCS have also requested Ministry of Finance (MoF) to hike the import tariff of betel nut from third countries. However, MoF has not paid heed to this call.
According to MoAC statistics, Nepal produced around 7,500 tons of betel nut mainly in Jhapa, Sunsari, Ilam and Morang in 2010/11. But in the same year, Nepal had imported more than 108,000 tons of beetle nuts from East Asian countries.
Though MoAC has no specific data on actual demand of betel nut in the country, officials ruled out demand being that high. "Imports remained huge mainly because large portions were easily finding their way into the Indian market," said the source.