TTFSE: Trade and Transport in Southeast Europe Program

TTFSE: Trade and Transport in Southeast Europe Program • Transparency and Accountability: Promoting Customs Reform and Anti-corruption through improved processes, computer applications, and public access to results data and operational information http://www. seerecon.org/RegionalInitiatives/TTFSE/

Agenda for Session Introduction of TTFSE Team • Overview of Approach and Design Elements • Review of Progress to Date • Assessment by the TTFSE Customs Specialist • Comments and Questions by PREM/other Participants

Context for the Program Origin in the mid/late 1990s • Transitional Economies and Societies • Need to Promote Regional stability • Cost of Trade and Corruption as Key Obstacle • Solutions Best Served by Regional Program • Appropriate Role for the Bank -Infrastructure Versus Reform: Need for Both -Infrastructure as precondition but not sufficient alone

Development Objectives • Reduce non-tariff costs to trade and transport • Reduce smuggling and corruption at border crossings

Country Specificity Versus the Regional Program: Each project was designed to be country specific, but supported the development objectives by the selection of elements under similar components

Common Components • Supporting customs reform • Strengthening mechanisms of interaction and cooperation between private and public parties at regional, national, and local levels • Disseminating information and providing training to the private sector

Initial Countries Albania Bosnia and Herzegovina Bulgaria Croatia Macedonia Romania [FRY added, Moldova Under consideration]

Common Components • Financing infrastructure and equipment at selected border crossing points • Implanting at pilot sites an integrated set of news customs procedures, information technology, human resource management techniques, supporting infrastructure, and cooperation mechanisms for agencies at border crossings.

How to Achieve the Desired Results? • Initial considerations broad range of reforms, including reduction in staff: -Comprehensive but high risk -Institutional Setting • Management advice: -Simplify and ensure client Ownership

Building Ownership: User Surveys and Interviews of Customs Managers: • Trade Facilitation Audit Prepared by John Raven, and • Reform Readiness Analysis

Survey: Conclusion, Weak Institutional Links • The most significant finding was that the major blockage at every level was inadequate communications, between border control agencies at the border crossing point, between the representatives of these agencies at the border crossing point and with their respective headquarters, among the various agencies nationally, and across international borders.

Survey: Conclusion, Ownership Strengthened • The survey itself along with previous consultations provided an adequate base for ownership, but this would need reinforcement during supervision

Survey: Conclusion, Reinforced Approach • Transparency and accountability, and anti-corruption would be best served by improved processes and procedures with support for computer applications and the open publication of information on customs operations and performance rather than by pushing externally generated reform programs.

Some of the Key Elements • Pilot Border crossing points and in-land stations • National Coordinator [surrogate champions] • On-the-ground customs specialist enabling an increased presence • Performance indicators [performance]

Some of the Key Elements (2) • Local project teams [LPTs] • Survey of users [performance and corruption] • Regional Steering Committee (RSC) and MoU • Regional Website

Joint Financing • Countries unwilling to borrow for TA • TA provided by grants from USAID

Launch Workshop: • Focus on Change Management • New organizational culture and ethics • Anti-Corruption, a Management Issue • Linkage to Strategic Plan Each Customs Agency Prepared

Initial Focus: Where did we start? • Procurement Packages • Local Project Teams (USAID/US Customs) SECI-TTFSE Advisory Teams, STATs

Progress Report 2000: Where are we? • Project outcome as of September 2002 • Where we stand with our development objectives?

Main Positive Achievements • Reduction of Waiting Time • Improved dialogue among customs administrations within the region • Monitoring of Performance • PlanConsult Survey • Training of SMEs staff through the trade facilitation component. • Economic Impact

Reduction of Waiting Time • Down from a high of up to five hours average to two hours • Varies by country, from 31% to 88% reduction

Improved dialogue among customs administrations within the region • RSC provides interaction among officials from the agencies represented, private sector participants, and donors

Monitoring of Performance • Common methodology in place for monthly monitoring • Data compilation shows results to date

PlanConsult Survey 2001 [2002 and 2003] • Measurement of performance from perspective of users (freight forwarders, customs brokers, transport operators, traders)

Training of SMEs staff through the trade facilitation component. • 67 seminars in 26 cities with 1,082 participants • 108 seminars for 2003 • Distance Learning Initiative being launched

Economic Impact • US $ 8.4 million savings for trucking industry since the beginning in 2000 • If expanded beyond the pilot sites would result in at least twice this savings

Remaining Issues • Lack of Cooperation between border crossing agencies • Excessive turnover in staff in Customs Administrations • Need to Strengthen role of National Coordinators • More progress needed in fighting smuggling and corruption • Resistance to Implementing Selectivity

Lack of Cooperation between border crossing agencies • Especially a problem in terms of border police and Customs • Also with other border control agencies, phyto-sanitary and veterinary • Progress with environmental officials

Excessive turnover in staff in Customs Administrations • From level of Director General to Customs officers at border crossing points

Need to strengthen role of National Coordinators • More action oriented recommendations • More pro-active

More progress needed in fighting smuggling and corruption • Cannot yet document reduction in either area • Selectivity not readily embraced by Customs • Changing the organization culture within each country is more of a challenge than originally anticipated

Resistance to Implementing Selectivity • General rate of physical examinations is still high and exceeds targets

Next Steps • Strengthen dialogue at ministerial level on policy issues • Increased focus on selectivity • Performance indicators to be made public • New initiatives to better fight smuggling and corruption at the border

Since the Report • Some progress with selectivity • Topical presentations at the next RSC Feb 6-7th will address anti-corruption and interagency cooperation

Risks • Institutional mechanisms for follow up -they exist, but follow-up with sanctions and real costs remains uncertain. • Staff turn over -this is not under our control, threatens champions at highest level and ownership at all levels

Agenda for the RSC7 • Continued institutional evolution leading to sustainable and quasi permanent arena • Approach and reinforce subtly, but address issues clearly and firmly

TTFSE: Trade and Transport in Southeast Europe Program