Article: Mona Mehfooz Additional Director, Directorate General of Transit Trade, Karachi.

Mona Mehfooz Additional Director, Directorate General of Transit Trade, Karachi.

Evolving challenges and data analysis in transit trade

This year the theme for international Customs Day is “Data Analysis” with the slogan of “Data Analysis for Effective Border Management”. This article shall discuss the importance of data analysis in transit trade in view of evolving opportunities and challenges to the transit trade in Pakistan and how collection and analysis of the data is the most effective tool available to Pakistan Customs tofacilitate and monitor movement of transit goods through our borders.

Recent important developments involving transit and economic corridors in the region have opened up opportunities and challenges for Pakistan.  Our land border stations and sea ports have immense potential as transit corridor and as regional transit hub.

Pakistan’s accession to TIR convention in 2015 is expected to increase the movement of international cargo using the transit corridor of Pakistan. In view of this, Federal Board of Revenue (FBR) has notified four land custom stations of Taftan, Sost, Chaman, Torkhumand Karachi and Gwadar seaports for TIR operations through SRO 127(I)/2016 dated February 15th 2016.

An important component of China Pakistan Economic Corridor (CPEC) is movement of Chinese cargo destined for various export destinations using the transit trade facilities of Pakistan.

Oil and Gas agreements such as TAPI (Tajikistan, Afghanistan, Pakistan and India) and IPI (Iran, Pakistan, India) are expected to make Pakistan a transit hub for movement of energy resources in the region. In future, Pakistan has the potential to play a vital role in supporting energy supply of the two big neighboring economies of China and India. In 2010 Pakistan joined CAREC. Pakistan’s road network is connected to CAREC Corridor-5, which opens a vital trading link between landlocked Central Asian nations and the country’s warm water ports of Gwadar and Karachi, on the Arabian Sea.

The GOP/ADB funded project of Integrated Transit Trade Management System (ITTMS) has been launched that aims to improve trade facilitation at key border crossing points.

Pakistan’s main transit partner is land locked Afghanistan to whom Pakistan is extending the facility of transit under APTTA 2011. APTTA 2011 also envisages the expansion to South Asia and Central Asia. The agreement provides Pakistan with access to all countries bordering Afghanistan.

Afghanistan has been granted access to China via the Sost/Tashkurgan border point and to India via the Wagah border point on principle of reciprocity.

Pakistan shares a complex physical border landscape especially with Afghanistan. A 2,430km border with several passes and transit points connects the two countries. This lengthy and porous border makes border management a challenging task for the border agencies as there are deep cultural and economic links between people that involve regular cross border movement of goods and people. This also opens avenues for illegal immigration and illegal flow of goods. Due to security situation at borders there are also often abrupt border closures and delayed border crossing.

In presence of these opportunities and challenges, Custom officers in transit trade look for solid decision support tools to ensure safe transit of goods from entry into Pakistan to enroute movement through the territory of Pakistan till the crossing of the border. Despite the fact that the jurisdiction of the Directorate General of Transit Trade stretches across the country, there are lots of infrastructural and structural weaknesses that create operational handicaps for the transit trade officers such as lack of modernized trucking industry and road & highway networks, lack of inter and intra agency intelligence sharing mechanism, lack of anti-smuggling powers, absence of border enforcement functions and shortage of staff and resources.

In this scenario, data analysis becomes one of the main decision support tool available to Custom officers in transit directorates. Many important decisions are based on data analysis.

Customs have access to substantial amount of clearance data. Besides   a number of open sources on internet such as websites of relevant government agencies and ministries, of other global organization’s i.e.World Bank etc. are also available. In addition, engagement with stakeholder’s data also provides useful insight about transit trade. Some of prominent stakeholders are tracking company, transporters and border agencies.

Collection and analysis of data is useful for both facilitation and enforcement of transit regime. On one hand, regular data analysis influence the decisions about risk management and enhanced detections of suspicious trade to promote safe transit efforts and enforcement activities. On the other, data analysis gives insights about the overall transit performance. Data provides information to measure and compare the performance of our transit corridor with other countries that also offers transit facilities by matching dwell time at sea ports, time release at land border stations, cost of doing business including scanning, tracking, guarantees, sanitary and veterinary requirements and other barriers and procedural requirements. So, in transit trade data analysis has two-pronged support, one in strengthening the enforcement and other increasing the facilitation of legitimate trade.

Collection and analysis of data support in many other ways too. Data can be analyzed to learn the trends in transit of goods through various time periods, to build knowledge base, profiling of goods and traders and also to check the practices and integrity of the customs staff/officers.

Through mirror analysis the bilateral trade, national imports and transit through other countries is compared with transit data. This is also very essential that transit data is shared with the partner country to ensure safe transit.

In order to achieve this WeBOC external user ID have been given to Afghan government to register Afghan traders and acknowledge cross border in the WeBOC system. Besides monitoring screens have also been provided to Afghan Customs.

This has promoted efficiency and transparency. Recently, data driven insights led to a number of operational improvements in transit trade such as reducing the transportation time, decreasing un-authorized stoppages and route deviations by the transport units and identification of risk prone items.

Transit trade is one of the sensitive areas of Pakistan Customs, Customs has to promote its viewpoint based on data evidence and to counter any mis-information. Here again data based argument stands its ground.

To sum up, foreseeing the transit trade related regional development Pakistan Customs and specifically the Directorate General of Transit Trade shall remain at the forefront as the most important implementing agency.

Data analysis shall assume greater importance as the most effective decision support tool to achieve the balance between enforcement and facilitation. In days to come, data analysis for effective border management shall in fact become a strategic priority.

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