Chea Samnang

17 March 2015, Jakarta, Indonesia

CHALLENGES AND WAYS FORWARD

0

IMPLEMENTING

WTO AGREEMENT ON TRADE FACILITATION

WCO AP Regional Workshop on Strategic Initiatives for Trade Facilitation – Mercator Programme

CONTENTS

1

1.Background

2.Self Assessment

3.Priorities and Challenges

4.Ways Forwards and Concluding Remarks

BACKGROUND

2

Sources: Ministry of Economy and Finance, Feb 2015

GDP : About 17 Billions USD

GDP Growth Rate: 7%

GDP per capita: 1,130 USD

PPP: 3400 USD

Trade Volume: 22B USD

(2013) Vs. 10B in 2010

Major Import: Petroleum

products, construction

materials, machinery, motor

vehicles, pharmaceutical

products

Major Export : Clothing,

footwear, timber,

rubber, rice, fish, tobacco

GDP GROWTH 2004-2014

PROGRESS OF INTEGRATION AND

INTERNATIONAL TRADE

ASEAN

WCO

WTO APEC?

3

???

2004

1999

2001

ASEAN +

GSP : Almost 40 countries

TAs :10 countries

ASEAN FREE TRADE AGREEMENTS AND

DIALOGUES PARTNERS

D

E

AK

AJ2010

4

ASEAN-JAPAN

ASEAN-KOREA

AFTA/

CEPT

ASEAN-CHINA

ASEAN-INDIA

AI

ASEAN-ANNZ

2010

ATIGA

1993 2005 2007 2009 2010 2010 2010

TAXES COLLECTED BY CUSTOMS

5

Tariff Rate CD ST VAT ET

0 1289 8647 1 8733

5 16 39

7 3784

10 239 9550 567

15 3482 47 49

20 137 21

25 346

35 992

45 121

50 82

15+0.02$/L 6

35+0.02$/L 1

0+0.04$/L 4

Source: Cambodia Customs Tariff Book 2012

Revenue collected by GDCE

represents:

approximately 70% of national

tax revenue

about 40% of national revenue

7% of GDP

CUSTOMS CHALLENGES

YearTariff collected

Tariff Rate

2007 2010 2015

20%

10%

5%

15%

Tariff Rate

Tax

Revenue

Emerging role of

Customs is to boost

trade by facilitate

global trade with the

balance of

protection of society

and environment

6in 2004 as the Royal Government of Cambodia has established Sub-Steering

Committees on Trade Facilitation

7

TRADE FACILITATION PAYOFF

Cambodia LPI : 83rd in 2014 Vs.129th in 2010,

improved by 46 places

Clearance time : 5.9 days Vs. 1.4 days

GDP Growth : 7%

Trade Volume : 22B Vs.10B

Revenue : USD 1.3BVs. USD 714M

Mainly resulted from modernization program 2004-

2008, 2009-2013: Law on Customs, abolish PSI,

ASYCUDA, Risk Management, PCA,CPPM,

AEOs, Advanced Ruling, RKC accession and

Capacity Building.

ACCESSION TO RKC

8

General Annex, 86%

Specific Annexes

Source: Chea Samnang, Research Paper of WCO 61 Fellowship Program,

Accession to the Revised Kyoto Convention and Cambodia Customs Reforms

and Modernization, 2013

II. TRADE FACILITATION SELF-ASSESSMENT

9

• The workshop for self assessment on needs and priorities was

organized by WTO and World Bank to evaluate its compliances

• Objectives of workshop is to define the challenges and the

technical assistances needed

• Workshop was participated by Ministry of Commerce, Customs,

Council Development of Cambodia, Ministry of Planning, JICA

and OECD.

• WTO assessment guide was used for self-assessment

• The result are preliminary and need for further scrutinized

LEVEL OF COMPLIANCE WITH MEASURES

10

294

7

2

Fully Substantially Partially No

Source: Cambodia Self-Assessment of Needs and Priorities, June 2014

IMPLEMENTATION CATEGORIES

11

30, 71%

2, 5%

10, 24%

A B CSource: Cambodia Self-Assessment of Needs and Priorities, June 2014

TIME TO IMPLEMENT

12

291

6

51

Immediate 1 year 3 years 5 years Other

Source: Cambodia Self-Assessment of Needs and Priorities, June 2014

ACTIONS REQUIRED

13

4

4

26

23

Legal/Policy

Procedures

Institutional Framework

Human Resources/ Training

Communications and Information Technology

Infrastructure and Equipment

Source: Cambodia Self-Assessment of Needs and Priorities, June 2014

14

Complied

Partially Complied

Substantially Complied

Non-Complied

WHAT ARE COMPLIED AND WHAT ARE NOT ?

WHAT ARE FULLY COMPLIED ?

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1.1 Publication

1.3 Enquiry points

1.4 Notification

2.1 Opportunity to comment

2.2 Consultations

3.1 Advance rulings

5.1 Notification of enhanced controls

5.2 Detention

5.3 Test procedures

6.1 General disciplines on fees and charges

6.2 Specific disciplines on fees and charges

6.3 Penalty disciplines

7.3 Separation of release from final determination

7.4 Risk management

WHAT ARE FULLY COMPLIED?

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7.6 Establishment and publication of release times

7.7 Measures for Authorized Operators

8.1 Border agency cooperation

9 Movement of goods under Customs control

10.2 Acceptance of copies

10.3 Use of international standards

10.5 Pre shipment inspection

10.6 Use of customs brokers

10.7 Common border procedures and uniform documentation

10.8 Rejected goods

10.9 Temporary admission

11.4 Transit strengthening and non discrimination

12 Customs cooperation

13.2 National Committee on Trade Facilitation

SUBSTANTIALLY COMPLIED

17

PARTIALLY COMPLIED

18

NON-COMPLIANCE MEASURES

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3. PRIORITIES AND CHALLENGES

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Like other LDCs, Cambodia customs is facing big challenges in

applying the information technology in the customs practices due to

its IT capabilities, resources and finance. it is found that the are at

least 14 provisions among 42 provisions of ATF are required the IT

capabilities, according to Global Express Association in WCO IT

conference 2014.

Implementation of a National Single Window system would contribute to full and effective implementation of several WTO TFA measures and would strengthen the overall trade facilitation regime in Cambodia.

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Measures Problems Solutions

1.2

Information

available

through the

Internet

A. No procedure the accuracy of

information by all trade related

agencies.

B. Websites varies greatly.

Agencies prefer to maintain own

websites.

E. ICT equipment inadequate in

some agencies and will need to

be upgraded

Period : 3 years

A. Coordination mechanisms to ensure

information is updated as changes occur.

B. An appropriate governance structure will need

to be developed and Support work on MoC

Trade Information Portal.

D. Some training necessary for focal points in

each participating agency.

WB finances the development of Trade Portal

under MOC.

RKC standard 9.2 (36 months)

7.1

Pre-arrival

processing

E. . Establish project to expand

the functionality to accept

electronic submission of

supporting documents.

2.Establish information sharing

mechanism among all relevant

agencies using electronic means.

A. 1.Develop procedures for pre-arrival

processing scheme, including acceptance of

electronic manifest.

Pre-arrival clearance procedure

Customs Strategic Plan 2014-2018 (medium

term)

2. Expand the number of traders with high

compliance to be under the pre-arrival

processing scheme.

AEO expansion in Customs Strategic Plan

2014-2018

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10.1

Formalities and

documentation

requirement

A. No legal requirement to

review procedures and

documentation.

Period: 5 Years

A. Prakas on review

B. Review Process

C. Monitoring Mechanism

D. Training on Review methods

E. Incorporate in NSW

10.4

Single Window

D. Lack of technical, legal

experts to develop the system

and law and regulation.

E. Lack of hardware and

software for develop the system

Period: 5 Years

D. Need Technical advisors to support

the development of the new system and

train the national operators of the

system.

E. Estimated cost is excess of 10 million

USD.

Top priority in Customs Strategic Plan

2014-2018 and AEC obligation

A 42 month implementation strategy

has been developed

11.1-3

Transit charges,

regulations and

formalities

A. Charges are imposed only on

certain categories of goods.

B.Transit procedures not

established

Period: 5 Years

A. Need to determine overall charging

regime for all goods.

B.need to Develop procedural manual.

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11.5-10

Transit

procedures

and controls

E. System and tools for control of transit

are not available and

Period : 5 years

E. need to Introduce transit

management system.

11.11.1-5

Transit

guarantees

A. Lack of functionality to connect

ADSYCUDA with banking system and

A. need to Develop banking system

to manage the rapid discharge of

bonds at exit point.

7.2

Electronic

Payment

A.Missing e-commerce law

D.Lack of technical expert,

E.ASYCUDA function.

Period : 3 years

A.Finalise the law,

D. technical advisor needed.

E. Customs is identifying IT solution

and cost.

Customs Strategic Plan 2014-

2018

7.8

Expedite

shipment

A.Lack of Provisions for Express

Consignment

Period : 5 years

A. need to Develop and implement

provisions for express

consignments.

TECHNICAL ASSISTANT AND CAPACITY BUILDING

NEEDED

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Technical assistance required to support full implementation of:

o Inquiry point(Measure1.3)

o Right to appeal and review(Measure4.1)

o Expedite shipments (Measure 7.8)

o Perishable goods(Measure7.9)

o Formalities and documentation (Measure 10.1)

o Single window (Measure 10.4): Support for automation –particularly development and implementation of a Single Window and related IT systems such as electronic payment

4. WAYS FORWARDS AND CONCLUDING REMARKS

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Ways Forwards

• Establish validate team for scrutinize the preliminary results of self-assessment

• Establish the national committee on trade facilitation

• Develop the gaps into details actions plan (What, Who, How much, and when).

• Cost-benefit analysis of the implementation should be carry out

• Preparation for notification and implementation

CONCLUDING REMARKS

• Assessment is only the start of a ongoing process. Results need to be validated by checking results with agencies that did not participate. Private sector also needs to be consulted.

• Need to identify small team at MoC to validate the findings with individual agencies. Other participating agencies encouraged to contribute.

• Then the final report can be prepared and shared with all stakeholders. Suggest this be done at a stakeholder communication event.

• Discussions should then be scheduled with development partners to discuss support for implementation assistance on identified needs.

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CONCLUDING REMARKS

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1. There is correlation between the level of development and the compliance of TFA,

therefore more time and assistances should be given to LDCs. Skeptics and scare

before self-assessment

2. Cambodia and LDCs should seize the opportunity to implement the ATF, as it will

produce more positives results than the negatives implications. Even there are

positives effects of ATF, Challenges and Gap Analysis should be carefully done

before making commitment as LDCs have flexibilities in implementing ATF

3. There will be economics implications such as expansion on international trade,

reduction in trade cost, increase in tax collection, efficiency in customs control,

increase in trade deficit for country with weak production capacity

4. Cambodia as LDCs will need a lots of capacity buildings to improve the human

resources, and the management of the implementation of ATF. Aide for Trade/

Capacity Building

5. The big challenging area is the ICT sector which will depend a lot on Donor funding

for launching ICT projects.

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cheasamnang@customs.gov.kh

cheasamnang@gmail.com

012840895

Thank you for your attention