Customs Automation and Single Window

1. By SyedTanvir Ahmad Director (Reforms & Automation) Pakistan Customs Federal Board of Revenue Customs Automation and Single Window

2. Scheme of Presentation • History and basic features of automated system • Cost of development • Performance vis-à-vis previous semi automated system • Single Widow introduction in Pakistan • Stages achieved so far • What’s remaining to be done • Regional connectivity – Initiatives taken • Lessons learnt

3. Genesis & Evolution of Technology

4. Basic Features Of WeBOC • Paperless system – rolled out in 2012 (Karachi) 2013 (whole country) • On-line -- manifest filing (ships) & goods declaration filing (traders) 24/7 • Online payments (through PD account) • All custom processes performed on-line by customs staff • Assessment based on examination reports and images uploaded • Risk Management System (Green, Yellow, Red channels) • Inspection/Examination of goods reduced from 100% to 30%

5. Basic Features Of WeBOC • First-in, First-out (FIFO) • Online adjudication process • Complete log of all activities -- strict controls • Communication with custodian of goods through EDI • Transparency and less cost of doing business • Minimize Dwell Time

6. Cost of Development • M/s Agility demanded more than 100-150 million dollars (Rs 10 billion) for paperless software ‘PACCS’ • WeBOC developed indigenously --- One million dollars (Rs 10 crore) -- • Developed by: • Officers of Pakistan Customs; and • M/s Pakistan Revenue Automation Limited (PRAL) – IT company owned by FBR

7. PRE-WEBOC PAPER BASED SYSTEM

8. 34 signatures and 62 verifications on every GD Customs documents had to be carried from desk to desk

9. WeBOC Assessment Hall- Sambrial

10. WeBOC Facilitation Centre- Sambrial

11. WeBOC Exports Rebate Section- Sambrial

12. WeBOC Data Centre-Karachi

13. Performance

14. Training Imparted • Traders/importers/exporters • Customs clearing agents • Terminal operators/custodian of goods (NLC, Railways, Shaheen, PIA, Gerrys • Courier companies (DHL, FedEx etc.) • Shipping agents/lines • Bonded carriers • Warehouse keepers • Airlines • Laboratories • Banks (SBP and NBP,others) • Other government ministries and agencies--PSQCA (Standard Quality Authority), Plant Protection, Engineering Development Board, Anti Narcotics Force, Commerce, Foreign Affairs, Interior, National Tariff Commission etc

15. User Registration Status Goods Declarations Status

16. RMS Results Imports Exports

17. Single Window – Road Map • Ist Stage: Paperless Customs: e-payment of import duty /taxes - e-documents exchange with terminal operators/port authorities. • 2nd Stage: Port Community Information Exchange: e-document exchange with other stake holders -- importers, exporters, CA, shipping lines/their agents, bonded carriers, freight forwarders, insurance companies, Airlines, EPZ, etc. • 3rd Stage: Other Government Agencies for Paperless Permits and Certificates: connecting with other governmental agencies, trade, logistics –departments like Commerce, NTC, TDAP, Industry, EDB, Textile, Communication, Defence, Agriculture, Quarantine, VAT, I Tax, Law Enforcement Agencies (ANF, Interior, agencies) etc. • 4th Stage: National Single Window: An integrated national e-logistics platform with traders, logistics, service providers information exchange (booking of cargo to home delivery). • 5th Stage: Regional Single Window: Regional information exchange system.

18. Single Window Components • SWI comprises of four essential components: • ACCESS(Automated Customs Clearance System) • TARIP (Tariff & Integrated Policy) • ECHO (Enhanced Cargo Handling & Port Optimization) • INTRA (Integrated Regulatory Authorities)

19. ACCESS -- Automated Customs Clearance System • Valuation (VR , data base) • Manifest Clearance System • PD Accounts • Transit for US / NATO/ISAF • Electronic Data Interchange • SRO’s Management • Tariff Management • TARIP • Warehousing • Exemption Regime • Post Clearance Audit • EDB (CKD kits) • KPT • Bulk Solid • Bulk Liquid • Sealing / De-sealing • Safe Transportation • Agents License Management • Carrier declaration module • Goods declaration module • Assessment module • Examination module • Payment module • Security management module • Duty Tax Computation Engine • Risk management • Clearance system • Refunds Management • Rebate Management • Quota’s Management • Users Management • Lab Management • Transshipment • Inter-port movement • Recoveries Management • Adjudication Management

20. TARIP ----- Tariff & Integrated Policy • TARIP – gives complete picture of regulations for import or export. Following details are linked with each HS code: • Tariff rates (like duties, taxes, FED, income tax, anti-dumping, countervailing, various surcharges & cess etc • Export drawback rates • Banned items / Restrictions of import & export policies • Exemptions / concession and their requirements • Details of documentary requirements • List of declaration requirements • Documentary and certifications requirements • Other conditions / requirements • Automated Custom Clearance • Tariff & Integrated Policy • Enhanced Cargo Handling & Port Optimization • Integrated Regulatory Authorities • k Log Out

21. ECHO --- Enhanced Cargo Handling & Port Optimization • ECHO connects port authorities, carriers (shipping agents and co-loaders), customs etc • It provides following advantages: • One electronic document for the carriers • Real time inventory and monitoring of ports • Terminal Operators/Port Authorities linked with EDI • e-Gates -- No customs staff at the gates • No requirement by customs for export manifest • Risk screening prior to arrival of the cargo under customs controls • Instant duty drawbacks with the sail of vessel • Automated Custom Clearance • Tariff & Integrated Policy • Enhanced Cargo Handling & Port Optimization • Integrated Regulatory Authorities • k PaCCS Components Log Out

22. INTRA -- Integrated Regulatory Authorities • Connects the regulatory authorities involved in imports/exports: • LINKS DEVELOPED: • Federal Board of Revenue and its wings • All VAT and Direct Tax Commissionerates • Central bank / NBP and Scheduled Banks (partially) • Transport Sector (registered with customs) • Ministry of Commerce • Ministry of Production • Plant and Animal quarantine UNDER DEVELOPMENT: • Government Ministries & Department (such as: Agriculture, Oil and Gas, Health, Environment, National Tariff Commission, other ministries/departments etc • Automated Custom Clearance • Tariff & Integrated Policy • Enhanced Cargo Handling & Port Optimization • Integrated Regulatory Authorities

23. SWI Internal Users – FBR Departments

24. What is to be done?? • Declare Customs as lead agency (its in more than 35 countries) • Support and monitoring from the highest level • Monitored by the Prime Minister office in many countries • Legal frame work • Proposed that a summary may be moved to the Prime Minister for constitution of a committee: • Finance, Commerce, Industry, Production • Communication, Science and Technology, • Agriculture, Textile, Planning, etc

25. Lessons Learnt • Strong political will & commitment for reforms from higher management their (initial automation driven by junior officers and opposed by majority) • Ownership of the reform by customs -- Must get all stakeholders on board • Strategic /long term planning -- initially not focused and directionless • Our emphasis kept on changing --- from automation to trade facilitation to control corruption and to maximize revenues • Liberate the reform team from routine jobs (project office set up, purchasing / tendering process, hiring of IT consultants etc) • Customs must re-engineer its business processes (not necessarily automate old archaic manual process)

26. Lessons Learnt • Legislative Inertia (difficult to get through legislation and procedural approvals relating to other ministries/departments) • Resistance to change • Requirement of IT staff must be properly gauged • Capacity Building / Training (facing capacity issues for junior staff) • Customs must think out of the box (Question everything and include diverse stake holders in thinking process – planning as well minute details of processes) • Lack of Self Reliance – Automation team has no funds to finance expenses of reform project

27. Way Forward

28. Thanks syed.tanvir@fbr.gov.pk syedtanvirahmad@yahoo.com

29. Regional Connectivity • Afghanistan Customs • The EDI with Afghan Customs – Soft launching (pilot run) initiated on Nov 01, 2013 • Pakistan Customs sending EDI messages for transit consignments leaving Karachi Port for Torkham only • It will be replicated at Chaman after sucessful testing • Afghan Customs sending EDI msg (data). However, there are some problems in getting correct data and reconciliation is not possible • Afghan Customs is working on correction. Pointed out to afghan team and Canadians • In March work shall be started on IGM receipt for Afghan imports in Pakistan

30. Regional Connectivity • Connectivity with India • Efforts to harmonize border and trade controls • India and Pakistan have harmonized manifest format (Export General Manifest of India is Import General Manifest of Pakistan) • We shall start work on EDI in January, 2014. • Connectivity China • Working group constituted by FBR to develop EDI • Development of electronic certificate of origin • FTA verification • Connectivity for exchange of data also • Connectivity with CAREC (Central Asian Regional Economic Cooperation) • Efforts under way to extend EDI msg to Heritan and Sher Khan borders • Testing with Afghan Customs to be commenced soon • EDI with CAREC to commence subsequently • Airlines --- (e-pouch)