1. Customs Automation and Single Window By Syed Tanvir Ahmad Director (Reforms & Automation) Pakistan Customs Federal Board of Revenue

2. Scheme of Presentation History and basic features of automated system Cost of development Performance vis-à-vis previous semi automated system Single Widow introduction in Pakistan Stages achieved so far What’s remaining to be done Regional connectivity – Initiatives taken Lessons learnt

3. 3 Genesis & Evolution of Technology 1981-83 Appraiser Guidance System; Statistical Report System; Batch Data Entry System 1992 On-line Transaction Processing System (OLTP) 2004 Implementation of One Customs System 2005 Roll Out of PaCCS at KICT, PICT and QICT 2009 Development of WeBOC at Islamabad Airport 2011 Pilot run at Port Qasim 2012 Roll Out of WeBOC Karachi 2013 Country-wide Roll Out

4. Basic Features Of WeBOC Paperless system – rolled out in 2012 (Karachi) 2013 (whole country) On-line -- manifest filing (ships) & goods declaration filing (traders) 24/7 Online payments (through PD account) All custom processes performed on-line by customs staff Assessment based on examination reports and images uploaded Risk Management System (Green, Yellow, Red channels) Inspection/Examination of goods reduced from 100% to 30%

5. Basic Features Of WeBOC First-in, First-out (FIFO) Online adjudication process Complete log of all activities -- strict controls Communication with custodian of goods through EDI Transparency and less cost of doing business Minimize Dwell Time

6. Cost of Development M/s Agility demanded more than 100-150 million dollars (Rs 10 billion) for paperless software ‘PACCS’ WeBOC developed indigenously --- One million dollars (Rs 10 crore) -- Developed by: –Officers of Pakistan Customs; and –M/s Pakistan Revenue Automation Limited (PRAL) – IT company owned by FBR

7. PRE-WEBOC PAPER BASED SYSTEM

8. 34 signatures and 62 verifications on every GD Customs documents had to be carried from desk to desk

9. WeBOC Assessment Hall- Sambrial

10. WeBOC Facilitation Centre- Sambrial

11. WeBOC Exports Rebate Section- Sambrial

12. WeBOC Data Centre-Karachi

13. Performance Manual systemWeBOC Customs Clearance TimeMore than 4 daysImports-54% within 24 hours Exports-98% within few hours Import clearance steps26 steps1 step Export clearance steps10-12 steps1 step Documentary Requirements Goods DeclarationPaper-based multiple copies Electronic Carrier DeclarationSubmission on electronic media Online submission and amendment Physical intervention of goods100%Appx 30%

14. Training Imparted Traders/importers/exporters Customs clearing agents Terminal operators/custodian of goods (NLC, Railways, Shaheen, PIA, Gerrys Courier companies (DHL, FedEx etc.) Shipping agents/lines Bonded carriers Warehouse keepers Airlines Laboratories Banks (SBP and NBP, others) Other government ministries and agencies--PSQCA (Standard Quality Authority), Plant Protection, Engineering Development Board, Anti Narcotics Force, Commerce, Foreign Affairs, Interior, National Tariff Commission etc

15. User Registration Status TradersClearing Agents Shipping Lines / Agents Internal Users Import + Export 253331782237711 Goods Declarations Status S.No Title Facts 1Total import GD’s filed since inception3,00,000 + 2Total export GD’s filed since inception400,000 +

16. RMS Results GD’s Processed through Green Channel GD’s Processed through Yellow Channel GD’s Processed Through Red Channel 25%44%31% GD’s Processed through Green Channel GD’s Processed through Yellow Channel GD’s Processed Through Red Channel 78%12%10% Exports Imports

17. Single Window – Road Map Ist Stage: Paperless Customs: e-payment of import duty /taxes - e-documents exchange with terminal operators/port authorities. 2nd Stage: Port Community Information Exchange: e-document exchange with other stake holders -- importers, exporters, CA, shipping lines/their agents, bonded carriers, freight forwarders, insurance companies, Airlines, EPZ, etc. 3rd Stage: Other Government Agencies for Paperless Permits and Certificates: connecting with other governmental agencies, trade, logistics –departments like Commerce, NTC, TDAP, Industry, EDB, Textile, Communication, Defence, Agriculture, Quarantine, VAT, I Tax, Law Enforcement Agencies (ANF, Interior, agencies) etc. 4th Stage: National Single Window: An integrated national e-logistics platform with traders, logistics, service providers information exchange (booking of cargo to home delivery). 5th Stage: Regional Single Window: Regional information exchange system.

18. SWI comprises of four essential components: ACCESS (Automated Customs Clearance System) TARIP (Tariff & Integrated Policy) ECHO (Enhanced Cargo Handling & Port Optimization) INTRA (Integrated Regulatory Authorities) Single Window Components 18

19. 1.Carrier declaration module 2.Goods declaration module 3.Assessment module 4.Examination module 5.Payment module 6.Security management module 7.Duty Tax Computation Engine 8.Risk management 9.Clearance system 10.Refunds Management 11.Rebate Management 12.Quota’s Management 13.Users Management 14.Lab Management 15.Transshipment 16.Inter-port movement 17.Recoveries Management 18.Adjudication Management ACCESS -- Automated Customs Clearance System 19.Valuation (VR, data base) 20.Manifest Clearance System 21.PD Accounts 22.Transit for US / NATO/ISAF 23.Electronic Data Interchange 24.SRO’s Management 25.Tariff Management 26.TARIP 27.Warehousing 28.Exemption Regime 29.Post Clearance Audit 30.EDB (CKD kits) 31.KPT 32.Bulk Solid 33.Bulk Liquid 34.Sealing / De-sealing 35.Safe Transportation 36.Agents License Management

20. Log Out TARIP – gives complete picture of regulations for import or export. Following details are linked with each HS code: Tariff rates (like duties, taxes, FED, income tax, anti- dumping, countervailing, various surcharges & cess etc Export drawback rates Banned items / Restrictions of import & export policies Exemptions / concession and their requirements Details of documentary requirements List of declaration requirements Documentary and certifications requirements Other conditions / requirements Automated Custom Clearance Tariff & Integrated Policy Enhanced Cargo Handling & Port Optimization Integrated Regulatory Authorities k TARIP ----- Tariff & Integrated Policy 20

21. Log Out PaCCS Components ECHO connects port authorities, carriers (shipping agents and co-loaders), customs etc It provides following advantages: One electronic document for the carriers Real time inventory and monitoring of ports Terminal Operators/Port Authorities linked with EDI e-Gates -- No customs staff at the gates No requirement by customs for export manifest Risk screening prior to arrival of the cargo under customs controls Instant duty drawbacks with the sail of vessel Automated Custom Clearance Tariff & Integrated Policy Enhanced Cargo Handling & Port Optimization Integrated Regulatory Authorities k ECHO --- Enhanced Cargo Handling & Port Optimization 21

22. Connects the regulatory authorities involved in imports/exports: LINKS DEVELOPED: Federal Board of Revenue and its wings All VAT and Direct Tax Commissionerates Central bank / NBP and Scheduled Banks (partially) Transport Sector (registered with customs) Ministry of Commerce Ministry of Production Plant and Animal quarantine UNDER DEVELOPMENT: Government Ministries & Department (such as: Agriculture, Oil and Gas, Health, Environment, National Tariff Commission, other ministries/departments etc Automated Custom Clearance Tariff & Integrated Policy Enhanced Cargo Handling & Port Optimization Integrated Regulatory Authorities INTRA -- Integrated Regulatory Authorities 22

23. SWI Internal Users – FBR Departments 23

24. What is to be done?? Declare Customs as lead agency (its in more than 35 countries) Support and monitoring from the highest level Monitored by the Prime Minister office in many countries Legal frame work Proposed that a summary may be moved to the Prime Minister for constitution of a committee: –Finance, Commerce, Industry, Production –Communication, Science and Technology, –Agriculture, Textile, Planning, etc

25. Strong political will & commitment for reforms from higher management their (initial automation driven by junior officers and opposed by majority) Ownership of the reform by customs -- Must get all stakeholders on board Strategic /long term planning -- initially not focused and directionless Our emphasis kept on changing --- from automation to trade facilitation to control corruption and to maximize revenues Liberate the reform team from routine jobs (project office set up, purchasing / tendering process, hiring of IT consultants etc) Customs must re-engineer its business processes (not necessarily automate old archaic manual process) Strong political will & commitment for reforms from higher management their (initial automation driven by junior officers and opposed by majority) Ownership of the reform by customs -- Must get all stakeholders on board Strategic /long term planning -- initially not focused and directionless Our emphasis kept on changing --- from automation to trade facilitation to control corruption and to maximize revenues Liberate the reform team from routine jobs (project office set up, purchasing / tendering process, hiring of IT consultants etc) Customs must re-engineer its business processes (not necessarily automate old archaic manual process) Lessons Learnt 25

26. L egislative Inertia (difficult to get through legislation and procedural approvals relating to other ministries/departments) Resistance to change Requirement of IT staff must be properly gauged Capacity Building / Training (facing capacity issues for junior staff) Customs must think out of the box (Question everything and include diverse stake holders in thinking process – planning as well minute details of processes) Lack of Self Reliance – Automation team has no funds to finance expenses of reform project L egislative Inertia (difficult to get through legislation and procedural approvals relating to other ministries/departments) Resistance to change Requirement of IT staff must be properly gauged Capacity Building / Training (facing capacity issues for junior staff) Customs must think out of the box (Question everything and include diverse stake holders in thinking process – planning as well minute details of processes) Lack of Self Reliance – Automation team has no funds to finance expenses of reform project Lessons Learnt 26

27. Way Forward WeBOC Implementation across Pakistan Integration with allied government agencies and FBR’s ST & IT wings Creating a National Single Window bringing business, logistic providers, service sectors on a platform for seamless integration of trade Integration of NSW into Regional Information- Exchange System

28. Thanks syed.tanvir@fbr.gov.pk syedtanvirahmad@yahoo.com

29. Regional Connectivity Afghanistan Customs – The EDI with Afghan Customs – Soft launching (pilot run) initiated on Nov 01, 2013 – Pakistan Customs sending EDI messages for transit consignments leaving Karachi Port for Torkham only – It will be replicated at Chaman after sucessful testing – Afghan Customs sending EDI msg (data). However, there are some problems in getting correct data and reconciliation is not possible – Afghan Customs is working on correction. Pointed out to afghan team and Canadians – In March work shall be started on IGM receipt for Afghan imports in Pakistan

30. Regional Connectivity Connectivity with India – Efforts to harmonize border and trade controls – India and Pakistan have harmonized manifest format (Export General Manifest of India is Import General Manifest of Pakistan) – We shall start work on EDI in January, 2014. Connectivity China – Working group constituted by FBR to develop EDI – Development of electronic certificate of origin – FTA verification – Connectivity for exchange of data also Connectivity with CAREC (Central Asian Regional Economic Cooperation) – Efforts under way to extend EDI msg to Heritan and Sher Khan borders – Testing with Afghan Customs to be commenced soon – EDI with CAREC to commence subsequently Airlines --- (e-pouch)