UNECE Trade Commission. 5 th session.

1. UNECE Trade Commission. 5th session. Priority needs in trade facilitation, regulatory cooperation and agricultural development in Kazakhstan Geneva, Switzerland 18 June, 2012 Oleg Samukhin Samukhin@MSN.com

2. Business Process Analysis • Business Process Analysis helps pinpoint particular problems faced by Traders • Two Large Exporters were selected: • Producer of Candies and Biscuits • Producer of Flour, Pasta and Biscuits • Companies have operations in 2 different corners of the country, which results in regional differences in: • Speed of control • Arrangement of transport

3. Scope of BPA study in Kazakhstan

4. Core Business Processes and Stakeholders in export by Rail For all shipments Not for all shipments

5. Core Business Processes and Stakeholders in flour export Stakeholders Processes

6. Core Business Processes and Stakeholders in export by Road

7. Core Business Processes and Stakeholders in export by Road Stakeholders Processes

8. Use Case Diagram.Export by Road to the EU

9. Use Case Diagram.Export by Railto the CIS

10. Modes of Land Transport in Export-Import operations

11. Trade flows. Export Oil, metals, grain Oil, metals, grain Astana st. Dostyk Khorgos Fuels, grain, flour Kordai st. Lugovaya st. Sary-Agach

12. Trade flows. Import Equipment, consumer goods, food Consumer goods, food, equipment Astana st. Dostyk Khorgos Agricultural products Kordai st. Lugovaya st. Sary-Agach

13. SHIP: Arrange Rail Transport • Rail cars not always available => delays or lost sales • Private wagons are more expensive => loss of profit • Rail companies not always acknowledge bookings, Traders have to get what is available

14. SHIP: Obtain Certificate of Origin • Chambers of Commerce do thorough examination once a year, but • Certificates have to be issued for every shipment • One company spends days, the other – hours for obtaining CoOs

15. Business Process.Obtain Phytosanitary Certificate • It is needed for Flour export • It takes 3 steps in 3 different locations • But 3 steps take only few hours • Certificates are mostly received based on the Producer’s lab reports

16. SHIP: Load, Pay, Ship cargo and documents • Rail cars have to be checked and repaired by Traders • Payment for services of foreign Rail companies have to be done through freight forwarders

17. SHIP: Do Export Customs Clearance • Declarations are prepared electronically, but must be printed and stamped • Payment for declarations are in EUR, which is not always convenient for Traders

18. Time-procedure Chart: Export of Candies • Getting Certificate of Origin sometimes can be the critical path activity

19. Export of Flour, Pasta • Time to Arrange transport cannot be forecasted • The whole process duration depends on availability of rail wagons • Export procedures take only one day

20. Road crossings between Customs Union and the EU • Export to the EU is done by road transport through Russia • Queues up to several days at the borders • Excessive control on Customs Union BCPs • Risk Management is not duly applied Imatra - Svetogorsk Nujamaa - Brusnichnoe Vaalimaa - Torfianovka Narva - Ivangorod Koidulla – Kunichina Gora Luhamaa - Shumilkino Grebneva - Ubylinka Terehova - Burachki Silene - Urbany Salchininkai - Beniakoni Medidnkai – Kamenny Log Kuznitsa Bialostoka - Bruzgi Bobrowniki - Berestovitca Kukuryki - Kozlovichi Terespol - Brest

21. Recommendations • Border Crossing by Road should be facilitated through use of Risk Management systems and full implementation of relevant Transport Conventions (TIR and Harmonization Convention 1982) • Rail transport is important for export of Kazakh products and needs reforms • Simplification of procedures for certificates and permits and electronic single window is very important for exporters and critically important for importers

22. Specific Recommendations • Phytosanitary certificate: • Eliminate unnecessary steps • Issue certificates on the basis of periodic inspections of Producers’ production and management systems and Producers’ laboratory test results • Implement electronic submission of documents

23. Specific Recommendations • Certificate of Origin: • Within CIS allow both the certificates issued for a particular shipment (like it is done now) and periodic certificates for a particular product (such certificates can be copied and added to shipments the same way as the Certificates of Conformity) • Simplify documentary requirements and reduce time • Prepare CoO on basis of periodically submitted data. Implement electronic Certificates

24. Specific Recommendations • Customs clearance: • Collect customs fees in national currency • Consider waiving fees for selected list of exported goods • Currency control: • New law eliminated one document, but did not eliminate the procedure • New regulation (will become effective since 1 July 2012) imposes similar requirements of traders as the previous one • These requirements may need further revision

25. Specific Recommendations • Payments and Trade Financing: • Although use of trade financing instruments is the importers’ decision, Exporting country can promote their use and benefit from increased trade • Letters of Credit and other trade financing can be promoted through banks, professional associations, freight forwarders, etc.

26. UNECE Trade Commission. 5th session. Priority needs in trade facilitation, regulatory cooperation and agricultural development in Kazakhstan Geneva, Switzerland 18 June, 2012 Oleg Samukhin Samukhin@MSN.com