Transcript Document

Governance and Customs Operations: the Role of
Information and Communications Technology
Regional Conference on Investment Climate and Competitiveness in East
Asia
21-22 November 2005,
Luc De Wulf
International Trade Department
World Bank
Overview of the presentation
1.Governance and Customs
2. Information and Communications Technologies in Support of
Integrity and Customs
3. The example of Single Window (SW)
4. Ghana TradeNet : A Single Window in a developing country
5. Conclusions
1. Governance and Customs
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Customs often identified as the most corrupt public sector agency . This
undermines investment climate and growth. New WTO concerns in ongoing Trade
Facilitation Negotiations
But corruption in Customs also reflect the situation of integrity in the country as a
whole. Anti corruption efforts at Customs are best when other agencies are also
targeted.
However Customs operations are especially vulnerable to corrupt practices.
Integrity campaign can be formulated along two axes
 Reduce Opportunity : Modernize with ICT support
 Reduce Motive : Need and greed
2. ICT in Support of Integrity at Customs
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Its importance is recognized by most Customs today.
Yet, many operate with ICT systems that are outmoded, or fail to take full advantage
of their ICT system for a variety of reasons—including the reluctance to implement
the transparency that good use of ICT use implies.
ICT use forces the adoption of streamlined clearance practices,mainly inspired by
WCO- Kyoto Agreement.
It would be a mistake to design the ICT system around present clearance
practices.
The “troyan horse” opportunity.
The adoption of modern ICT platform is a necessary but not sufficient condition for
modernity in Customs.
3. Single Window
A Single Window is a system that allows traders to lodge information
with a single body to fulfill all import and export related regulatory
requirements.
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It involves all members of the trading community private as well as public
Does not necessarily have to be electronic, but manual processes have many
disadvantages
Transparency and simplicity are main objectives; improved integrity is a side result.
Single window is intended to reduce the number of transactions to a minimum,
reduce error rate, speed up clearance time, drastically reduce the face-to-face
contact between traders and government agents so as to enhance transparency.
Requirement for successful introduction of a Single
Window
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Political will overcomes resistance and mobilizes resources
Strong Lead Agency has the necessary authority and access
Partnership between Government and Trade
ICT savvy and mastery of good procedures in the participating agencies,
particularly Customs
Clear objectives that take capacities of various stakeholders into account
Single Window is user friendly—training and support
Legal environment is enabling
Adoption of international standards helps greatly
A communications strategy keeps stakeholders informed and solicits their
contribution
4. Ghana TradeNet :Inspiration and
Implementation
4.1 Singapore’s example
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Seeds were sown in 1979 when Singapore leadership stimulated IT, training as
well as adoption of IT solutions in government agencies. Deliberate decision.
Application of IT to trade received priority in 1985, a reaction to a year of
economic recession.
Trade documentation flows were studied and drastically simplified.
Top level government support was announced end-1986; TradeNet’s operation
was announced for early-1989 and Singapore Network Services (since
renamed Crimson Logic) was created to own and operate the TradeNet system.
Competitive bidding for an integrator was won by IBM.
TradeNet was actually launched in early 1989, use was at first voluntary but
made mandatory in 1991. Extensive training and IT savvy of members of the
trading community helped a lot.
TradeNet links about 34 members of the trading community to a single
transaction point.
Results of TradeNet From 1989 to today
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Processing time fell from 2-7 days to 2 minutes
Number of documents required for clearance fell from a maximum of
3035 to one
Transactions rose from 10,000 per day to 30,000 per day
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Trade forwarders estimate that they saved 20-35 % of transaction
costs
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Customs duty and excise tax revenues enter Treasury’s coffers
immediately rather than with long delay
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Trade statistics are prepared promptly
4.1 Ghana Context and GCNet design
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Ghana is a mid-sized English Speaking country on the coast of West Africa. Its
per capita income defines it as low income country. Misguided economic and
social policies had left it very impoverished at the end of the 1980s.
In the early 1990s new leadership chose for an open market-oriented
economy. Multilateral and bilateral aid supported this new direction. New
trade policies: low tariffs, fewer tariff lines, elimination of import quotas,
creation of export processing zones, total revision of the regulatory framework
for private sector operation
By 1998, results were found wanting and FDI was lagging. New direction to lift
structural investment constrains was decided upon. WB supported
GATEWAY project. Field visits to Singapore, Mauritius, Malaysia led by strong
Minister of Trade.
Impressed by the Mauritius model. Minister of Finance trusted that revenues
would rise and supported the project. Did not trust Customs to guide the
project.
Operational decisions
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A joint venture company was created to launch the Ghana
Community Network (GCNet) patterned on the Singapore
TradeNet. GCNet was to become the system integrator. Capital
of US$ 5.3 million :60% private-foreign and 40% private-public
Ghanaian (Customs 20%,Shipping Council 10%, two banks
10%). GCNet would own and operate the system for 10 years
and would charge a fee per transaction. GCNet operates under a
service contract with Ministry of Trade and Industry.
The IT system consists of
 Singapore’s TradeNet
 Customs Management system of Mauritius
Ghana’s TradeNet Vision
GCNet Implementation
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Customs adopts new management system: diagnostic analysis of its procedures,
simplification of procedures, adjust the Mauritius customs management system to its
situation. Full fledged customs modernization would follow at a later stage.
Political uncertainties hampered implementation but autonomy of GCNet allowed
progress to continue. Customs needed to be brought on board slowly as its staff
correctly foresaw a loss of ‘facilitation money’ to which it had become accustomed. But
staff compensation was adequate (Autonomous Revenue Agency since early-1990’s).
GCNet had to establish its own private communications network; fiber optic between
Customs and GCNet, radio links with Customs collections stations,dedicated leased
lined, because of weakness in national network and slow modernization program there.
GCNet assisted Customs with the introduction of its management system and
simplification of procedures including the Tariff Book.
GCNet sensitized traders and other Government users to use and advantages of the
system.
GCNet was rolled out gradually, station-by-station. But for stations connected its use was
made obligatory for all users. Contrast with Tunisia where use still is voluntary.
Outcomes
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Revenues are up: In the first year by about 30% when accounting for growth
in trade volume, composition and exchange rate shifts.
Clearance times are down; No benchmark data though, improvements slowed
down in recent years
 At airport: 75% same day;15% between 1- 2 days
 At Sea port: 14% same day; 30% between 1-2 days
 Customs review takes 15 minutes (against 245 hours earlier); bank
payment 10 minutes compared with a few hours earlier.
Community network is gradually expanding and is being used more intensely;
scope for more members and for making better use of the Network
Winners (traders, Treasury, Shippers) are happy; losers are Customs staff and
customs brokers; they are coming on board, but need further convincing that
future modernization will enhance their status and “esprit de corps”. Continued
professional communications efforts are needed.
Lessons learned
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Private-public partnership can work
Use if ICT can provide quick results
Hands on support for Customs may be necessary, but can pay off
Top level support for the initiative is necessary and needs to be continuous.
The Road Ahead
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Full Customs Modernization needs to be tacked to assure further progress and
avoid regression
More Members of the trading community need to be drawn into the Network
Clearance time is only one aspect of improving the trade logistics chain:
improvement needs to be made in port processes and the still excessive
standard inspections.
5. Conclusion
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ICT can be used to promote integrity in Customs. Single Window is one
approach that goes beyond Customs and aims at streamlining operations of
other agencies and members of the trading community. It can be used to
reduce the opportunity for corrupt behavior. But its overall impact on integrity
will be countered if the “need motive” remains strong.
Modalities of implementing the reforms are important : political support,
technical expertise, independence , financial stability, often external support.
Ghana’s example showed that a Single Window can be implemented with
success in a developing country, but also that further progress depends on
overall customs modernization. Why not tackle overall customs modernization
at the same time as introducing the Single Window?
Thank You