Customs’ partnership with trade and other government agencies

Sanaullah Abro, Director Customs Reforms and Automation (Digitalization)

The World Customs Organization has set a theme of the year 2024 for Customs to engage with traditional and new partners with purpose. This reminds the WCO SAFE framework of standards which was approved by the WCO council in 2007.

The framework contained three pillars of establishing partnership for security and facilitation of trade.

The first pillar contained Customs to Customs cooperation, second pillar Customs to Trade and third pillar was about forging partnership with other Government agencies related to cross border trade.

The aim of the frame work was security and facilitation of cross border trade. The SAFE framework provided detail guidelines and principles for establishment of partnership with trade and government regulatory agencies.

Another international instrument standing for forging a close partnership with international trade stakeholders is the Trade Facilitation Agreement, 2013 to which Pakistan is a signatory.

It is estimated that by the implementation of TFA the global trade cost can be reduced by 14 percent and it will add 2.7 percent to world export growth. The article 8 of TFA stipulates the provisions for Border Agency Cooperation.

It provides that each Member shall ensure that its authorities and agencies responsible for border controls and procedures dealing with the importation, exportation, and transit of goods cooperate with one another and coordinate their activities in order to facilitate trade.

Moreover, it requires that to the extent possible and practicable, cooperate on mutually agreed terms with other Members with whom it shares a common border with a view to coordinating procedures at border crossings to facilitate cross-border trade.

Such cooperation and coordination may include(a) alignment of working days and hours; (b) alignment of procedures and formalities; (c) development and sharing of common facilities; (d) joint controls; (e) establishment of one stop border post control.

To achieve the objectives of facilitation and compliance Pakistan Customs’ reform initiatives such as establishment of Pakistan Single Window (PSW) and electronic customs clearance system (WeBOC) have provided a robust platform for seamless exchange of information at one portal where hassle free trade processing and issuance of regulatory certificates and NOCs by more than a dozen regulatory institutions is accomplished.

Now 100% of Pakistan’s cross border trade transactions are taking place through PSW and WeBOC system online electronically.

This has significantly reduced the time and cost of doing business in Pakistan that is why Pakistan has demonstrated jump improvement on Ease of Doing Business Index of the World Bank.

The WeBOC modules such as Risk Management System for clearance of goods based on the international best practices and developed on the principles of the WCO guidelines has been instrumental in reduction of time of clearance from three - four days to few hours.

Now more than 73% of cargo is cleared in 24 hours from port area saving the cost of millions of dollars and supporting the economic growth in country. Another mile stone recently achieved by the Customs for facilitating the exporters is timely and hassle-free payment of rebate claims.

No more offices are visited by the exporters for their rebates. It is all computerized, online and automated based on the computerized risk management system where amount of rebate claims are paid to exporters in their bank account through State Bank of Pakistan.

Pakistan Customs has already using AI and Machine learning techniques to Customs clearance risk management system and have planned to take the Customs system to advanced technologies.

Customs has been engaging with stakeholders for increasing compliance and trade facilitation in different ways.

Firstly, Customs maintains a close coordination with Chambers of Commerce and industry, Federation of businesses and various trade associations by holding dialogue and consultations to get their input regarding trade-related policies, regulations, and procedures.

The engagement provides valuable insights to design and implement effective trade facilitation programs.

Why the WCO places emphasis on establishing a strong partnership with trade and other stakeholders has many objectives. For example, the close coordination with trade partners will bring transparency, predictability to procedures and help in elimination of corrupt practices.

This is one of the components of the WCO Arusha Declaration 1993. On the other hand, partnership will bring higher level of compliance for Customs and for trade regulatory bodies as the trade will be having clear and accessible information about trade regulations, customs procedures, and documentation requirements.

As a way forward, Pakistan Customs needs to further build on the milestones so far achieved. Despite existing level of collaboration with trade bodies a regular interactive session for the Capacity building and awareness programs at the Federation houses, Chamber of commerce should be scheduled.

This will enhance the understanding and compliance of stakeholders with customs regulations. Another essential element for improvement of any system is the mechanism of regular feedback and evaluation.

Customs should seek feedback and input from stakeholders on the effectiveness of trade facilitation measures on regular basis.

A system should be devised that traders shall provide comments and feedback under confidential mannerfor further improvements.Feedback can be collected through surveys, consultations, or dedicated channels for reporting concerns or suggestions.

The feedback should be used to assess the impact of customs procedures on stakeholders and guide continuous improvement efforts.

We lack in an area where it comes the recognitionand appreciation of the stakeholders where they are good at compliance of laws and procedures. Customs should acknowledge and appreciate stakeholders who demonstrate compliance with customs regulations and actively engage in trade facilitation efforts.

Such recognition be in the form of awards, certificates, or incentives, encouraging stakeholders to maintain a positive approach toward customs requirements and further promote trade facilitation measures.

In conclusion, customs can effectively promote compliance and trade facilitation by forging partnerships with stakeholders and collaborating purposefully. Through stakeholder engagement, capacity building, transparency, and technological advancements, customs can create an environment that ensures higher compliance level and trade facilitation essential for reducing cost of doing business and economic development of Pakistan.

Copyright Business Recorder, 2024