Wads of US dollars. (Credit: Dado Ruvic/Reuters)
BEIRUT — As of Dec. 1, customs duties will be calculated at a rate of LL15,000 per US dollar, up from the longstanding official LL1,507.5 rate, according to a letter sent by Finance Minister Youssef Khalil to Banque du Liban Wednesday.
The measure is likely to be accompanied by a massive increase in prices in Lebanese lira, already up 1,574.3 percent between Oct. 2019 and Oct. 2022, according to the latest figures from the government’s Central Administration of Statistics.
This monster inflation comes amid Lebanon’s economic crisis, which has seen a meteoric depreciation of the lira against the dollar — nearly LL40,000 at the market rate in recent days and LL30,000 on BDL’s Sayrafa platform.
The implementation of this new “customs dollar,” though expected for months, was not explicitly included in the 2022 budget adopted at the end of September — several months late — and which came into force Nov. 15.
However, its inclusion was anticipated by both Parliament and the caretaker cabinet, who agreed to calculate government revenues using the LL15,000-to-the-dollar rate.
In August, the caretaker Finance Minister cited two pieces of legislation justifying his authority to intervene with the BDL on the customs dollar without going through Parliament, cabinet or the presidency.
The first is Law No. 93 of Oct. 10, 2018, through which Parliament granted the government the right to intervene in customs matters for a five-year period.
The second is Article 35, paragraph 4 of Decree No. 4461, issued on Dec. 15, 2000, which stated that customs fees would be determined based on a daily average of the exchange rates in effect.
The increase in the customs dollar was long anticipated by many traders. Some are suspected of having stored imported products and cleared customs when the rate was still LL1,507.5, in order to later sell the products at the oncoming higher rate, according to several sources in business circles.
The responsibility for price control lies with the Economy Ministry, but the legal and human resources available to its Directorate of Consumer Protection are too limited to ensure effective price control throughout the country.