Digitalization of Transit Trade; Pakistan Customs at the forefront
The year 2016 has been dedicated to promoting the digitization of Customs processes under the slogan “Digital Customs: Progressive Engagement”. Pakistan Customs has made considerable achievement in automation of transit trade.
Country’s main transit partner is land locked Afghanistan to whom Pakistan is extending the facility of transit under Afghanistan Pakistan Transit Trade Agreement (APTTA) 2011. As a transit country, Pakistan has immense potential.
There are also a number of international and regional developments that would help Pakistan in exploring its transit corridor potential. Such as Pakistan’s accession to TIR convention 1975 in July 2015. TIR stands for “Transports Internationaux Routiers” (International Road Transports). This is an international transit system that allows customs-sealed vehicles and freight containers to transit countries without border checks.
Pakistan is also a signatory to the Quadrilateral Agreement on Traffic in Transit (QTTA) among Pakistan, China, Kyrgyzstan and Kazakhstan that will give Pakistan an access to Central Asian Republics (CARs) without passing through Afghanistan. Beside Pakistan’s membership of ECO and Transit Transport Framework Agreement (TFFA), CEPEC and a number of bilateral agreements are important steps towards expansion of transit trade.
Locally, the Government of Pakistan/Asian Development Bank funded project, Integrated Transit Trade Management System (ITTMS), has been launched that aims to improve trade facilitation at key border crossing points.
Keeping in mind the future expansion of transit work, Federal Board of Revenue has taken the apt decision of formation of a separate Directorate General of Transit Trade in the year 2013 with regional directorates at Peshawar, Quetta and Karachi. In the coming transit trade scenario, Pakistan Customs shall remain at the forefront as one of the most important implementing agencies to safeguard the national interests on the trade and economic front.
Pakistan Customs has covered a lot of ground in redefining the transit trade system
through new rules, procedures and business process re-engineering. Automation is the most effective decision support tool to achieve an improved post APTTA 2011 clearance system and has visible positive outcomes.
It has contributed to the effectiveness, efficiency, transparency and coordination of Customs activities and has transformed the way that Customs operates. The WeBOC module of Transit Trade Management has achieved full automation of loop of transit cargo movement, starting at clearance from the three seaports i.e. Karachi, Port Qasim and Gwadar, en route monitoring at designated check posts and final cross over at Border Stations of Torkhum in KPK and Chamman in Balochistan.
In order to introduce multi modal transit movement, the WeBOC module of Railways has been rolled out in November 2015. Automation has also served to increase coordination between Afghan Customs/Government and Pakistan Customs. An important achievement is the electronic exchange of information through WeBOC system.
First such step is online acknowledgement of T1 (cross border verification) by Afghan Customs in the WeBOC system over the internet. Second achievement is the issuance of user IDs of Afghan Traders by Afghan Government.
This has promoted transparency as the IDs are issued online by Afghan Customs and WeBOC System withholds the filing of a Goods Declaration to Pakistan Customs if the Jawaznama (Afghan Trader import license) is fake or expired.
Automation has further contributed to smooth compliance of the agreed Principles of APTTA 2011. The Agreement requires that 5.0 percent of the transit goods shall be examined and 20percent shall be scanned. Currently, the agreed percentage of cargo under goes examination/scanning process through system selection. The dwell time has reduced to 1 to 2 days in around 90 percent of the transit cargo.
There is a reduction in unnecessary human intervention and a faster clearance time for legitimate trade. Looking ahead, the implementation of TIR shall open new avenues for transit trade. Karachi and Port Qasim would be the main ports linking transit trade between Central Asia, South Asia, Middle East and China. The TIR System is highly computerized with various IRU (International Road Network Union) IT applications that permit electronic pre-declarations to Customs and real-time traceability of the TIR Carnet.
In view of potential increase in international trade stakeholders, Pakistan Customs is looking forward to establishing EDI (Electronic Data Interchange) and EDE (Electronic Data Exchange) with all transit partners.
To sum up, digitization of customs procedures of movement of transit cargo through increased automation and electronic activity is a pre-requisite to keeping pace with fast development of transit trade and transportation in Pakistan, the South Asian region and globally.
A Digital Customs shall contribute towards achieving a balance between revenue protection and trade facilitation which shall ultimately boost Pakistan’s trade and economy and shall keep Pakistan prepared for a progressive engagement with modern challenges and opportunities.