The World Customs Organization has dedicated the year 2016 to the promotion of digitization of customs processes. When we look back at the journey of digitizationin Pakistan Customs, it shows a continuous streak of bolstering stars packed with IT designs and applications for achieving the objectives of documentation of economy, online filing, computerized clearances and trade facilitation.
Inthe early 1980s,it was the need for documentation of economy and collection of trade and tax statistics which led Pakistan Customs to start capturing data through theFBR owned IT company, Pakistan Revenue Automated Limited (PRAL).During 1981-83, three software applications were launched. First; Appraiser Guidance System, second; Statistical Report System and third; Batch Data Entry System were initiated to capture customs processing data. These projects constituted the first phase of digitization of Customs in Pakistan.
Pakistan Customs then moved quickly to keep abreast with technological advancement and increased the use of IT applications to business processesreplacing manual registrations of transactions with computerization. In this phase, Online Transaction Processing System (OLTP) was introduced in 1992. Then Express Lane Facility (ELF) was initiated in 1998 which simplified examination and clearance procedures for big traders. In 2000, an electronic assessment system for customs clearances was launched and in 2002, a risk management systemwas added which selected consignments for examination. This resulted in trade facilitation and made Customs clearance functions more transparent.
The third phase of digitization of Pakistan Customs started in 2003 with the initiation of Customs Administration Reforms (CARE) project which was part of the overall Tax Administrative Reform Program (TARP) supported by the World Bank. The reform task force report, 2001,highlighted the inadequacy of the earlier piecemeal efforts for digitization of Customs processes and identified further challenges of transparency, facilitation, reduction in clearance time and better trading environment as required by changing times.
The CARE projectset out to redesign and modernize customs operations and services - through round the clock clearance, self-assessment, risk management, a paperless single window environment and transparency in business transactions (WB Doing Business Case Studies-2007). The distinguishing features of this initiative were the political will and spearheading of the project by Customs officers. The result was the Pakistan Customs Computerized Community System (PACCS) introduced in 2005-06, which unlike the earlier piecemeal efforts, was a comprehensive, integrated information technology system to implement user management, carrier declaration, goods declaration, risk management, assessment, examination, payments, MIS, transshipment management, warehouse management, adjudication module and so on, virtually covering all major customs operations. It was reported by the World Bank that trade became easier in Pakistan, with customs clearance at the Karachi International Container terminal dropping from 10 days in 2004 to 4 hours in 2007. Customs revenues also went up, from 115 billion rupees to 138 billion, despite a visible reduction in tariffs (WB, 2007).
Unfortunately, PAACS was shelved in 2010 due to a contractual dispute with the vendor. Pakistan Customs was forced to design an alternative computerized clearance system with indigenous resources by utilizing expertize accumulated during two decadesof digitization. The abrupt switch from a modern functional system to a home grown system, still under development, was a nerverackingexercise for Pakistan Customs. But the challenge was well met and the old One Customs System was extensively modified and a new comprehensive customs clearance software known as the Web Based One Customs (WeBOC) came into being in 2011.
The development of WeBOCsignifies the fourth phase of digitization of Pakistan Customs. All modern features required for revenue assurance, security of supply chain and trade facilitation are ingrained in the system putting it at par with any other modern customs clearance system in the world. It has the capability to adapt into a comprehensive National Single Window and a perfect system for coordinated border management. Today, WEBOC runs electronic filing, 24/7 operations, end to end integration, risk management system, MIS, advance manifest information management, communication with stake holder through EDI and electronic payment system linked with banks, the modules covering almost all customs related functions. It serves more than forty thousand users like traders, customs agents, airlines, bonded carriers, banks, port terminals, shipping lines, warehouse keepers and government departments. Recently, grant of access to Afghan Customs for confirming receipt of transit consignments has enhanced outreach of the system moving it closer to the concept of coordinated border management.
The journey of reforms and digitization of Pakistan Customs does not end here. Changing times continue to bring new challenges. By acceding to the Agreement on Trade Facilitation (ATF) in 2015, Pakistan Customs needs to adopt even more modern instruments like advance passenger information system by collating the information of API and PNR for raising secure customs enforcement regime at airports, installing an intelligence driven RMS and the partnership with trade through Authorized Economic Operators program for improved compliance and security of supply chain. Also moving from a system ofup front controls and checks to post clearance audit regime will result in better customs management. Pakistan Customs must, therefore, engage in thefifth phase of digitization to realize the vision developed by the World Customs Organization for Customs in the 21st century.
(The writer is Secretary FBR, Professional Associate, The World Customs Organization, Brussels)