UNMIK/PR/1042
Thursday, 2 October 2003

Administrative Direction signed on temporary exemption from Customs Duty of wheat, wheat flour and wheat seeds.

PRISTINA - On 30 September, PDSRSG Brayshaw signed for SRSG Holkeri Administrative Direction 2003/24 on the temporary exemption from Customs Duty for imports into Kosovo of milling wheat, wheat flour and wheat seed. The temporary exemptions take effect as of
1 October 2003.
Wheat and wheat flour will be exempted from customs duty until 30 April 2004. Wheat seed will be exempted from customs duty until 30 December 2003. The exemption will apply only to certified seed wheat, with the aim of assisting farmers to sow wheat, which should generate higher yields. Further extending the exemptions will be addressed in early 2004 as part of a wider review of avenues for improving agriculture in Kosovo.
The promulgation of this Administrative Direction is the outcome of a consultation process between UNMIK and the PISG following a government proposal in the EFC to apply a customs duty exemption for wheat to offset part of the expected increase in bread price due to poor wheat harvests in Kosovo and in Europe.
"Bread is of significant importance to Kosovo's population", PDSRSG Brayshaw stated, "Therefore UNMIK and the Government felt it appropriate to take the necessary measures within their control, to offset part of the expected increase in bread price caused by the bad harvests." The government will monitor the wheat and flour prices and the bread prices to see that the benefit of the exemption from the customs duty of 10% on the imported price is passed on to the final consumers.
Background
Unsuitable weather conditions have resulted in poor wheat harvests in Kosovo and elsewhere in Europe. This is already causing wheat and flour prices to rise. Kosovo imports significant quantities of wheat and flour. Usually these imports come from Serbia and Montenegro and are exempt from the 10% Customs Duty. As Serbia and Montenegro is restricting exports due to the poor harvest, Kosovo needs to import from other places which may result in higher prices, increased transport costs and Customs Duty (10%). To offset at least part of any price increase due to Customs Duty the government proposed the Customs Duty exemptions, which were considered out of session by the EFC in the third week of September, following which the Administrative Direction 2003/24 was signed by the PDSRG.