1. Armenia: Integrated Border and Corridor Management Integrated Border and Corridor Management Tbilisi May, 2004

3. Competitiveness Conformity Connectivity for better Market Access

4. Performance Indicators Improvements in Armenia's balance of trade: import over export was 2.9 in 2002 and 1.8 in 2003**. 5.5 % growth in the level of foreign investment in Armenia in 2003 against 2002. 9.3% increase in the level of FDI in 2003 against 2002 9.1 % growth of customs collections in budget revenue in 2003 against 2002. Decrease in Customs staff turnover and increase in competence of Customs officials. 40 % salary increase for Customs staff in 2003 against 2002. TransportationRoadsRailway Cost ($ USD) 27701590 Non official Payments (%) 23-249 Time (Hours) 545661 The logistical cost of moving one TEU from N. Europe to Yerevan, by road or rail, via Poti (2002 prices)* *Halcrow Report, WB, 2002, Trade and Transport Facilitation in the South Caucasus ** Source of data: State Department of Statistics of RA

5. 5 INSTITUTIONS LEGAL PROCEDURES INFRASTRUCTURE Consolidated payment documents used at the customs points into a single form Red/Amber/Green system is applied while customs control WB and Lincy Fund support construction of roads, railways, tunnels, bridges, depots, rolling stock, etc. Supply of Optical Cable to Railways for communication and signaling systems. Improvement of licensing procedures for customs brokers Escort (02 Service) Facilitation Establishment of Consultative Committee at the State Customs. Establishment of import audit department at the State Customs Introduction of Customs ASYCUDA++ automated system Introduction of Governmental Decree N-1779 on November 21, 2003 on documentation required for customs import and export control. Publication of the Customs Code and a guidebook for business community ACHIEVMENTS Armenia has MFN status under the PCA with EU A Customs Consul and a WG for unification and simplification of customs procedures have been established among CIS countries FTA with almost all CIS countries, membership in the International Convention on Harmonization of the Frontier Control of Goods (Geneva 1982) Establishment of ArmPro Committee as a mechanism for facilitation of dialogue between public & private bodies involved in trade & transport Existence of training programs for forwarders and brokers and software monitoring training needs of Customs Staff Introduction of revised Customs Code (2001) and Customs Service Law (2002) Establishment of specialized Customs anti- smuggling department The customs station at Megri and Bagratashen are well equiped and connected (Bagratashen) to interregional network The Zvartnots Airport and Cargo Terminal are modern points of entry and exit for CSC

6. 6 Work Underway: Armenia is introducing the concept of integrated border and corridor management by:  Considering “Measures on procedures harmonization at the border crossing points” elaborated within the TRACECA initiative  Mobilizing efforts aimed at joining to the list of international conventions on Trade and Transport  Considering the possibility of using an advance declaration system allowing pre-clearance of goods  Establishing landline or satellite connections between customs points, between customs points and customs houses and between customs houses  Developing software that allows the automation of current manual procedures, automate current manually completed documents  Establishing database to monitor frequency of exemptions used by natural persons

7. 7 Bottlenecks INSTITUTIONS LEGAL PROCEDURES INFRASTRUCTURE Customs procedures are not harmonized Problems with Declarations frequently completed by Customs officials Customs clearance time is excessive Local laboratory testing insufficient, lack of tools to perform professional searches Poor quality of phisical infrastructure, especially international connection via Georgia Institutional Instability in State Customs up to 2001 Limited use of selectivity: 50% of all consignments are passing red channel Lack of licensed customs brokers to execute a preliminary declartion Conflict of interests in licensing of customs brokers Customs points are not eligible to perform customs clearance Application of «Check list» instead of invoice while customs valuation Administrative Corraption Warehouses are poorly equipped BOTTLENECKS Inadequate computerization and lack of X-ray equipment Weak execution of Laws /WTO rules in places Weak enforcement of dispute resolution between Customs and traders Weak enforcement against smuggling Power supply shortage hampers the ability to track transit traffic, limits the operating hours Poor condition of of the Zvartonts Airport runway No agreements are currently in place for mutual recognition of a neighboring country documents

8. Exchange of Information: Enhancement of data exchange across borders, SC states, customs and other concerned agencies and parties involved in foreign trade  The Customs Code has been published and a guidebook is available for the business community  Brochure on resolution of customs claims is published and is available for business community  Methodology on how to conduct customs audit is shaped and will be published soon.  Public-private dialogue is being facilitated through: www.ttfsc.org website-to be a single information window www.ttfsc.org  Interagency website with information database is in place (www.customs.am)www.customs.am  Introducing of ASYCUDA (v. 1.1.6f) version  Establishing of database to monitor frequency of exemptions used by natural persons in Bagratashen customs point  Establishing landline or satellite connections between customs points, between customs points and customs houses and between customs houses  Developing software that allows the automation of current manual procedures, automate current manually completed doc.

9. 9 Customs and Transport Capacity Building: Key Elements for Inter-Agency Cooperation CUSTOM PROCEDURES TRANSPORT DOCUMENTATION UNCTAD UN ECE Transport and Trade Development Harmonization of border procedures, transit strategy TRACECA Assistance to modernize customs administration and implication of Customs Code USAID INTERNATIONAL TRADE RULES AND AGREEMENTS WTO Economic Diagnostic Country Studies, Analysis of Existing Obstacles for Trade promotion WB Trade and Transport Facilitation ARMPRO Chamber of C&I of RA Road Transport Unions, Forwarders Associations, IRU, FIATA, AIRCA, AAFF COOPERATION

10. Further steps in the implementation of the concept for integrated border and corridor management:  Active cooperation to avoid a duplication of efforts among agencies  Creation of a Single Window for both document processing and payment for all border agencies using a common payment center  Establishment of teams of selected representatives involved in the processing of vehicles and consignments to simplify procedures, facilitate trade and transport, increase revenue collection  Active cooperation with Iran and Georgia to improve transit of trade through these two countries, to and from Armenia Armenia We will be judged on the difference we can make together ! Steps To Be Done Together:

11. Thank You