1. REPUBLIC OF BULGARIA MINISTRY OF FINANCE TRADE AND TRANSPORT FACILITATION IN SOUTHEAST EUROPE PROJECT Zagreb, June 17, 2005 Stamen Tassev Deputy Minister of Finance and TTFSE National Coordinator

2. SOME HISTORY  The new democracies in the 90’s – new challenges -New “Paper Curtain” replaced the former “Iron Curtain”  More and new borders between the countries in the region - bureaucracy and complex customs and other procedures

3. NEED OF REGIONAL COOPERATION IN THE PROCESS OF REFORMS The countries realized the necessity to join efforts for solving the problems appeared on the way to the EUThe countries realized the necessity to join efforts for solving the problems appeared on the way to the EU  The EU was the first organization to provide assistance to the countries  Six countries of Southeast Europe, supported by SECI, requested the World Bank support in designing a regional program of trade and transport facilitation in Southeast Europe in late 1998  The need for complex measures and reforms outlined core components of the regional program.

4. WORLD BANK SUPPORT  World Bank’s Regional Approach: designing of a program aiming at: reducing transport costs reducing transport costs fighting corruption and fighting corruption and helping Customs Administrations to harmonize gradually their procedures with EU standards. helping Customs Administrations to harmonize gradually their procedures with EU standards.

5. TRADE AND TRANSPORT FACILITATION IN SOUTHEAST EUROPE PROGRAM  First regional program of eight countries: Albania, Bosnia and Herzegovina, Bulgaria, fYR Macedonia, Moldova, Romania, Serbia and Montenegro and Croatia Albania, Bosnia and Herzegovina, Bulgaria, fYR Macedonia, Moldova, Romania, Serbia and Montenegro and Croatia  The Regional Program is supported by the Stability Pact, which complements the ongoing EU assistance projects  Implementation in close cooperation with other donors such as the United States, France, the Netherlands and Austria.

6. REGIONAL CHARACTER OF THE PROGRAM  Memorandum of Understanding was signed in February 2000 in Skopje by six countries: Albania, Bosnia and Herzegovina, Bulgaria, fYR Macedonia, Croatia and Romania  The Memorandum was joint also by Serbia and Montenegro and Moldova later  The MoU aims at strengthening of mutual cooperation to foster trade in Southeast Europe under the Trade and Transport Facilitation Regional Program

7. BEGINNING OF THE BULGARIA TTFSE PROJECT  Bulgaria was the first country in the Region to sign in 2000 a Loan Agreement at the amount of EUR 7.73 million for financing the Trade and Transport Facilitation in Southeast Europe Project  The Project has development objectives identical to the projects in the rest of the countries: to reduce non-tariff costs to trade and transport; and to reduce non-tariff costs to trade and transport; and to reduce smuggling and corruption at border crossings. to reduce smuggling and corruption at border crossings.

8. NEW CHALLENGES  Border Control Organization: 5 agencies Border Police Border Police Customs Customs Veterinary Control Veterinary Control Phyto-Sanitary Control Phyto-Sanitary Control Road Taxes Road Taxes  As a new challenge: the TTFSE Project, which binds the five border agencies under its implementation

9. THE PROJECT IMPLEMENTATION IN BULGARIA  Institutional arrangements: The Project is implemented by the Ministry of Finance The Project is implemented by the Ministry of Finance The National Coordinator performs coordination on a high inter- institutional level The National Coordinator performs coordination on a high inter- institutional level  TTFSE Project Implementation Team at the MoF The PIT works in close cooperation with certain Directorates of the Ministry of Finance The PIT works in close cooperation with certain Directorates of the Ministry of Finance The TTFSE PIT coordinates the project components implementation among the rest of the Ministries and Border Agencies The TTFSE PIT coordinates the project components implementation among the rest of the Ministries and Border Agencies  Inter-institutional cooperation: Inter-ministerial Committee on the Border Crossing Control Issues Inter-ministerial Committee on the Border Crossing Control Issues expert working group, provides assistance to the work of the Committee expert working group, provides assistance to the work of the Committee

10. ACHIEVEMENTS AND SUCCESSES UNDER THE BULGARIA TTFSE PROJECT IMPLEMENTAION  Monitoring of performance: local teams for data collection of border crossing and clearance time  For measurement of border agencies performance three pilot sites were selected: the Danube Bridge Border Crossing Point (at Rousse), the “Gyueshevo” Border Crossing Point and the Plovdiv Inland Customs Terminal  Reduction of Clearance Time for 4 years: 81% total reduction for the three pilot sites 81% total reduction for the three pilot sites 74% for Plovdiv (from 230 to 59 minutes) 74% for Plovdiv (from 230 to 59 minutes) 53% for Rousse (from 42 to 19 minutes) and 53% for Rousse (from 42 to 19 minutes) and 11% for Gyueshevo (from 25 to 20 minutes) 11% for Gyueshevo (from 25 to 20 minutes)

11. ACHIEVEMENTS AND SUCCESSES (Cont’d)  The development objectives mark a steady increase: There is an increase in the revenues collected by the Customs of 2.7 times for a period of 4 years, and for 2004 the revenues have reached 2 615.957 million USD. There is an increase in the revenues collected by the Customs of 2.7 times for a period of 4 years, and for 2004 the revenues have reached 2 615.957 million USD. The number of SAD has increased 2.25 time form 1 172 402 in 2000 to 2 636 236 in 2004 The number of SAD has increased 2.25 time form 1 172 402 in 2000 to 2 636 236 in 2004 The total foreign trade volume has grown by 2.14 times: from 11 331.7 million USD to 24 203.242 million USD The total foreign trade volume has grown by 2.14 times: from 11 331.7 million USD to 24 203.242 million USD The indicator named “total Customs revenues towards total Customs expenditures” is the lowest one in the Region having a level of 1.2 % for 2000, and for 2004 its value is less than 1% (0.99 %) The indicator named “total Customs revenues towards total Customs expenditures” is the lowest one in the Region having a level of 1.2 % for 2000, and for 2004 its value is less than 1% (0.99 %)

12. ACHIEVEMENTS AND SUCCESSES (Cont’d)  Replication of pilot sites initiatives: The Bulgarian Customs Administration effectively applied the broadened set of measures for processing improvement at the initially selected sites in Rousse, Gyueshevo and Plovdiv The Bulgarian Customs Administration effectively applied the broadened set of measures for processing improvement at the initially selected sites in Rousse, Gyueshevo and Plovdiv Approaches and practices used on the pilot sites will be replicated to other border crossing points and inland customs terminals in Bulgaria Approaches and practices used on the pilot sites will be replicated to other border crossing points and inland customs terminals in Bulgaria

13. ACHIEVEMENTS AND SUCCESSES (Cont’d)  Improved Dialogue among Customs Administration within the Region The Bulgarian side has been actively participating in the eight meetings of the Regional Steering Committee The Bulgarian side has been actively participating in the eight meetings of the Regional Steering Committee The BCA initiated the creation of an expert working group on mutual exchange of information between the countries participating in the TTFSE regional program. The first meeting of this joint working group was held in Sofia in 2003. The BCA initiated the creation of an expert working group on mutual exchange of information between the countries participating in the TTFSE regional program. The first meeting of this joint working group was held in Sofia in 2003. The Customs Administration initiated also numerous bi-lateral meetings with all neighboring countries: Romania, Serbia, fYR Macedonia, Greece and Turkey. The Customs Administration initiated also numerous bi-lateral meetings with all neighboring countries: Romania, Serbia, fYR Macedonia, Greece and Turkey.

14. ACHIEVEMENTS AND SUCCESSES (Cont’d)  Bulgarian Integrated Customs Information System (BICIS) Improvement BICIS was successfully implemented at a national level BICIS was successfully implemented at a national level Additional Advanced Submission of Customs Declarations Module was also developed within the framework of the TTFSE Project Additional Advanced Submission of Customs Declarations Module was also developed within the framework of the TTFSE Project The Module has been tested in the Plovdiv Customs House and its implementation in all customs offices is forthcoming The Module has been tested in the Plovdiv Customs House and its implementation in all customs offices is forthcoming  Regional TTFSE Website Launched BULPRO continues to play its role of a regional TTFSE web site coordinator BULPRO continues to play its role of a regional TTFSE web site coordinator

15. ACHIEVEMENTS AND SUCCESSES (Cont’d)  Training BULPRO has achieved a sound progress in the implementation of the trade facilitation component BULPRO has achieved a sound progress in the implementation of the trade facilitation component Trade community training was spread countrywide through numerous seminars and events Trade community training was spread countrywide through numerous seminars and events

16. ACHIEVEMENTS AND SUCCESSES (Cont’d)  And not last in significance: Infrastructure Improvement at Border Crossing Points : The reconstruction and modernization of buildings and facilities at both the border crossing points and inland customs terminals started in the 90’s, initially performed by the Bulgarian Customs Agency and consequently by the Ministry of Finance The reconstruction and modernization of buildings and facilities at both the border crossing points and inland customs terminals started in the 90’s, initially performed by the Bulgarian Customs Agency and consequently by the Ministry of Finance This successful tradition also continued in the course of the implementation of the Trade and Transport Facilitation in Southeast Europe Project. This successful tradition also continued in the course of the implementation of the Trade and Transport Facilitation in Southeast Europe Project. Six selected border crossing points were either built or modernized under the Bulgaria TTFSE project Six selected border crossing points were either built or modernized under the Bulgaria TTFSE project

17. ACHIEVEMENTS AND SUCCESSES (Cont’d)  The facilities at the Rousse Border Crossing Point (at the border with Romania) were completed and put into operation  The modernization of the “Vidin - Ferry” Border Crossing Point (at the border with Romania) was completed – it became the most nicely looking border post in Bulgaria  The facilities at the “Kapitan Andreevo” Border Crossing Point (at the border with Turkey) were completed and put into operation  A new Customs Terminal at the “Kulata” Border Crossing Point was completed and is operational

18. ACHIEVEMENTS AND SUCCESSES (Cont’d)  A new Facility for Detailed Customs Inspection of Containers on the territory of Container Terminal - port Bourgas was completed – this is the first of its kind in Bulgaria The completion of the “Gyeshevo” Border Crossing Point widening and reconstruction (at the border with fYR Macedonia) is forthcomingThe completion of the “Gyeshevo” Border Crossing Point widening and reconstruction (at the border with fYR Macedonia) is forthcoming The completion of the new Customs Office and Truck Terminal – Vidin Customs is also forthcoming.The completion of the new Customs Office and Truck Terminal – Vidin Customs is also forthcoming.

19. ACHIEVEMENTS AND SUCCESSES (Cont’d)  The total value of the investments is at the amount of approximately 10.3 million EUR, of which 6.7 million EUR are loan proceeds  Thus the Bulgaria TTFSE project has achieved a maximum use of the loan proceeds for investments: 87% of the 7.73 million Euro total loan amount Some explicit examples and pictures from the sites follows:

20. LESSONS LEARNED AND NEXT STEPS  Positive results: The process of the TTFSE Project implementation provides a good example for an inter-institutional cooperation The process of the TTFSE Project implementation provides a good example for an inter-institutional cooperation The Project’s complex structure imposed a continuous coordination and cooperation with both the five border control agencies and other ministries and institutions The Project’s complex structure imposed a continuous coordination and cooperation with both the five border control agencies and other ministries and institutions  Achievements within the period 2001-2004 TTFSE I Project was initially designed as a 8-10 year long process of reforms TTFSE I Project was initially designed as a 8-10 year long process of reforms In practice, within a considerably shorter period of time of just 4 years (2001-2004) it achieved significant result on both regional and national level In practice, within a considerably shorter period of time of just 4 years (2001-2004) it achieved significant result on both regional and national level

21. LESSONS LEARNED AND NEXT STEPS (Cont’d)  Lessons learned: The necessity for targeted and coordinated actions by all institutions involved in the commercial traffic border processing; The necessity for targeted and coordinated actions by all institutions involved in the commercial traffic border processing; The ultimate usefulness of procedural reforms can be achieved only if they are applied to all BCPs and most significant internal customs offices; The ultimate usefulness of procedural reforms can be achieved only if they are applied to all BCPs and most significant internal customs offices; The need for the trade and transport facilitation measures to cover also the other modes of transport; The need for the trade and transport facilitation measures to cover also the other modes of transport;

22. LESSONS LEARNED AND NEXT STEPS (Cont’d) The need of optimizing the activities alongside whole traffic routes, such as the trans-European transport corridors The need of optimizing the activities alongside whole traffic routes, such as the trans-European transport corridors This is aimed at achieving a constant and adequate quality of transport services This is aimed at achieving a constant and adequate quality of transport services Lack of supply of high quality and flexible logistic services Lack of supply of high quality and flexible logistic services

23. THE SECOND TRADE AND TRANSPORT FACILITATION IN SOUTHEAST EUROPE PROJECT  Despite the successes achieved, continuing actions are needed for the more complete facilitation of the transport and trade in the region as a whole and in Bulgaria, in particular.  The first TTFSE project was aimed at carrying out customs procedural reforms on road border crossing points,  The proposed TTFSE II program will focus on the main trans-European transport corridors, passing through Southeast Europe

24. THE SECOND TTFSE PROJECT (Cont’d)  The World Bank would provide support to the countries participants in the program in the view of: Assuring continuation of the innovation mechanisms, popularity and positive results achieved within the TTFSE – I Assuring continuation of the innovation mechanisms, popularity and positive results achieved within the TTFSE – I Supplementing the EU assistance in the line with the national programs for the separate sectors. Supplementing the EU assistance in the line with the national programs for the separate sectors.

25. Thank you for your attention ! Stamen Tassev Phone: +359 2 9859 2005 E-mail: S.Tassev@minfin.bg