Reforming Trade Facilitation: Experience of Pakistan Presentation for Trade Logistics Advisory Program World Bank, Washington DC Dr. Manzoor Ahmad Ambassador Pakistan Mission to WTO May 2008

2 Evolution of reforms Need for reform Outsourcing of Customs functions Early initiatives Express Lane Facility Electronic Assessment System Risk Indicated Selective Examination

3 Overall reform process Simplification of tax laws Simplification of tariff Review of procedural notifications Introduction of self-assessment for all taxes Customs Administrative Reforms (CARE) Pakistan Customs Computerized System (PACCS)

4 PACCS Salient Features Self-assessment Filing of Declaration over the web 24/7 Checking through PACCS Processing and Risk Management System One electronic declaration replaced 26 clearance steps, 34 signatures and 62 verifications Four components: –TARIP (Tariff & Integrated Policy) –INTRA (Integrated Regulatory Authorities) –ECHO (Enhanced Cargo Handling & Port Optimization) –ACCESS (Automated Customs Clearance System)

5 Process Flow of Clearance Authorization Filing of Declaration Accepted Payment of Taxes More Information OK to Clear PACCS Processing Declaration NOT Accepted First Review Second Review Relevant Committee or Appeal Procedure Clearance Authorized

6 Comparison of clearance time Pre-PACCS

7 Comparison of clearance time between Post-PACCS Comparison of clearance time

8 Challenges Resentment by users of old system Adjustment by regulatory authorities Continuity of the system

9 Overcoming challenges Pareto Principle (80:20 Rule) –Bringing on board 20% traders with 80% share in trade, 4 shipping lines, 1 container terminal Successful results Dedicated team International endorsement

10 Key players A small team of Customs experts supported by top management Karachi International Container Terminal American President Lines Software developers

11 What could have been done better More clarity about the roll out programme Better communication with stake-holders

12 Lessons learnt Outsourcing of customs not cost effective Piecemeal reforms only yield piecemeal results Continuity at top level Need for a dedicated team Financial incentives Firm up business process and then make corresponding legal changes Need for changes in regulatory framework