Stability Pact Working Group on Trade Liberalization and Facilitation Trade and Transport Facilitation in Southeast Europe http://www.seerecon.org/ttfse.htm Preliminary Lessons and Challenges World Bank Stability Pact Working Group on Trade Liberalization and Facilitation May 13-14, 2002

TTFSE Program Regional Investment Program - US$120 million, WB $78 million Co-financed with the US, partnership with the EU 8 countries/one project in each - implementation started in 2001 for first six Three years implementation Goals: (a) reduce : (i) processing time for legitimate traders/transporters, (ii) facilitation payments, and (iii) corruption related to international transport and trade; and (b) in parallel improve effectiveness of controls and of anti-smuggling efforts Components: (i) TA for border agency modernization (Customs), (ii) IT equipment and TA, (iii) border crossing improvements, (iv) training to trade & transport communities, (v) website on all applicable rules/procedures of border agencies

TTFSE Principles Holistic approach (all border agencies included) Measurement of performance related to trade and transport facilitation Use of regional mechanisms: *Regional Steering Committee (RSC) *Regional Website *Regional Training for border users Strong Involvement of users: *Constant dialogue (participation in RSC) *Building on an existing regional network (PRO-Committees) *User surveys (in each country) *implementation of trade facilitation component *Building distance learning programs with professional associations (IRU, FIATA)

Performance Indicators comparable across countries Customs efficiency indicators - 6 measures of national customs performance - allow for comparison (evolution) Pilot site indicators - data collected regionally - overall processing measurement (from entry to exit) - three main indicators linked to loan/credit covenants : (I) percentage of vehicles cleared in less than 15 minutes; (ii) percentage of physical inspections; (iii) trucks opened at border. - consistency of data collection to ensure comparability www.seerecon.org/ttfse//RegionalInitiatives/TTFSE/TTFSE_Manual.pdf

Customs Performance Indicators: Revenue Collected per Staff (US$) Croatia

Regional User Survey First phase (2001/2002) – strengthening baseline and methodology Objectives: - supplementing performance measurements through survey, interviews and discussion groups to analyze improvement of border agencies’ performance in each country - drawing attention to decision makers on areas of priority improvements (strong tool) Sample: 150 companies, with validation from international cities Six dimensions: Customs law; Communication; Procedures; Personnel; Logistics; Integrity Phasing methodology: refined after phase I to increase comparability of results (2002, 2003); transfer to Chambers of Commerce in phase II

User Survey Results Problem groups all problems above average communication the most acute Bulgaria closest to average Integrity Assessment covers petty/small corruption only main recipients Customs officers highest level of payments BiH highest frequency Macedonia Example

Ttfse cost and trade map Results in the User Survey report Green arrow show improvements compared with 1999/2000

TTFSE and Distance Learning Professional competence-an EU requirement for road transport Operators *EU-accession  legal harmonization *Creation of 13 vocational training centers (EU-PHARE/TACIS) *IRU Academy established regional quality standards/planned Distance Learning *Bank/TTFSE program catalyst to attract funding for knowledge transfer *Distance Learning Certificate of Professional Competence for truckers: two countries being piloted BA, MK - 2 other enrolled-three more involved shortly Similar approach with FIATA-Preparation of a Distance Learning Program for Forwarders, started in SEE Next steps in Distance Learning *Creation of a web platform for the Global Facilitation Partnership-Distance Learning Initiative (GFP-DLI) (under finalization) *Creation of a mechanism for new Bank projects to build on available content and programs with certification and support their expansion, as appropriate to new countries *Prof. Associations: Leadership role *WB: catalyst to attract funding and help in content pooling. *Sustainable capacity building tool *Integration and use of content produced by donors, professional associations *Development of a Supply Chain Manager Program *Cooperation with other regions to see what program could be expanded

TTFSE Achievements after on year of implementation Sharp improvement in performance at some pilot sites through streamlined procedures: -Inland terminal (HR) : processing time reduced by 50% (150 minutes); Border crossing exit time (HR) reduced by 75%; -Advanced declaration module (BG): reduction of clearance from 210 to 15 minutes for pre-cleared goods, and average reduction to 40 minutes RSC: decision on International Weighing Certificate recognized by Customs New Customs Law adopted in Croatia and Macedonia Customs modernization: introduction of Mobile Enforcement Teams (MK) Border inter-agency cooperation: joint check points Customs-Border Police (RO) Improved communication: regional website launched Increased awareness of border users: leads to pressure on authorities to improve User surveys validate all above positive trends

Main Lessons Benchmarking contribute to improved performance Performance measurements prove futility of 100% physical inspection …thus selective inspection based on risk assessment is essential Reducing inland clearance time may be more important than reducing border time Roles of Border Police and Customs need clarification Participation of business community offers best dynamic for reform 1. We cannot improve what is not measured

Challenges Ahead High rotation of key staff at country level intense Bank supervision to preserve initial results Delays in introducing selectivity Close coordination made difficult by the large number of players Setbacks (conflict in Macedonia) First phase of an 8 year modernization process-demonstrating the approach validity

Conclusions Concrete positive results of TTFSE after one year Replication of pilot improvements to other sites will prove the success of the program Simultaneous projects yield a bonus Individual countries could also benefit Development of similar program in other regions (Caucasus, Central Asia)