The Dividends of Automation
The development of paperless customs systems is seen as the crucial starting point for any country to influence the growth of e-commerce and thereby improve economic performance. The spread of ICT is an opportunity for custom administrations to strengthen their positions as the vanguard of strategic developments in all countries.
International Trade Organizations (ITOs) have also emphasized the pivotal role of Customs in the creation and fostering of a global e-commerce system. Customs organizations have a significant international footprint as they are essential in regulating the trade supply chain, ensuring its security, all in the presence of a risk-based strategy that encompasses minimal physical / intrusive controls.
This approach materially reduces the cost of doing business and also acts to catalyze other national agencies to follow in its foot-steps i.e. whatever Customs decides, tends to set the standard for others to follow.
Customs administrations’ vital and fundamental significance in the 21st Century is highlighted in documents of the World Custom Organization namely; “The Revised Kyoto Convention” and “The SAFE Framework of Standards” and the World Trade Organization’s “Trade Facilitation Agreement” (Bali, 2013).
Importantly international organizations such as the World Customs Organization will have to increase their efforts to bridge the digital divide by coordinating modernization and capacity-building activities in the customs domain with other international organizations active in this field.
Pakistani Perspective: In 2011, Pakistan Customs switched to an indigenously developed, web-enabled clearance platform namely Web-based One Customs (WeBOC) whose footprint and scope are considerably broader than its predecessor technologies. It is based on international best practices and provides real time integration of all stakeholders in the clearance process e.g. clearing agents, traders, terminal operators, cargo handlers, shipping agents, bonded carriers, warehouses, airlines and customs officials.
It allows for 24/7 electronic filing, simplified paperless procedures, end-to-end integration, risk-based clearances, minimum dwell-time, better controls and minimal interaction between traders and Customs authorities. By expeditiously clearing cargo in a transparent manner, it helps in reducing the cost of doing business.
Essentially the system has brought about uniformity in customs clearances across the country. A number of joint initiatives are underway: electronic Form-E Issuance (in collaboration with State Bank of Pakistan) has allowed for tremendous improvement in the monitoring of export credentials & Foreign Exchange remittances, Electronic Data Exchange (EDE) between China and Pakistan and EDI with airlines to receive cargo and passenger manifests using IATA-Cargo XML and API standards respectively (MOU with IATA has been signed on 17th August).
Another important area that is being focused upon is acquisition of Business Intelligence tools that are required for providing support to all tiers of custom management for analysis of clearance data.
The Trade Facilitation Agreement (FTA) aimed at improving customs cooperation, contains unique special and differential treatment (SDT) measures that link implementation requirements with the capacity of individual countries. The Agreement also recognizes the need for donor members to enhance assistance and support for capacity building. The Agreement will enter into force when it has been ratified by two thirds of the WTO Membership.
However, the SDT provisions allow each developing country to determine when they will implement each of the individual provisions as well as those provisions for which they will need technical assistance and support for capacity building in order to implement.
The arrival point for all aforementioned development initiatives would be the National Single Window (NSW), which would allow for lodging of standardized information and documents with a single entry point, sharing of all information within a legal framework, relevant information and addition of facilities to provide trade related government information, and receive payment of duties /other charges.
The concept examines regulatory controls through the eyes of the trader and views all interactions between trade and regulatory agencies without regard for any jurisdictional limitation within government. The approach simply unifies the interface between government and the trade (Business to Government (B2G) and Government to Government (G2G) facility.
This additional software layer will ensure compliance with the international standards as mentioned in the Trade Facilitation Agreement under the multilateral framework of World Trade Organization. The development and implementation of national single window will depend upon the political support and availability of resources including necessary human resource under the framework of a small, separate and agile IT company for customs automation in view of international best practices.
Dr. Fareed Iqbal Qureshi
Director (Reform & Automation-WeBOC)
Federal Board of Revenue