Public Disclosure Authorized Progress Report 2003 · BULPRO Bulgarian Pro-Committee CAFAO Customs...

Trade and Transport Facilitation in Southeast Europe Program

Progress Report 2003

http://www.seerecon.org/TTFSE

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Trade and Transport Facilitation i In Southeast Europe Program Progress Report 2003

Abbreviations and Acronyms AITA International Association of Road Hauliers ASYCUDA Automated System for Customs Data BCA Bulgarian Customs Administration BCP Border Crossing Point BCCI Bulgarian Chamber of Commerce and Industry BULPRO Bulgarian Pro-Committee CAFAO Customs and Fiscal Assistance Office (Bosnia-Herzegovina) CAM-A Customs Assistance Mission - Albania CARDS Community Assistance for Reconstruction, Development and Stabilization CAS Country Assistance Strategy CDRC Customs Directorate of the Republic of Croatia EC European Commission EMP Environmental Management Plan EU European Union FCA Federal Customs Administration FIATA Federation of International Forwarding Agents GCD General Customs Directorate GDC General Directorate of Customs GDP Gross Domestic Product IBRD International Bank for Reconstruction and Development ICR Implementation Completion Report ICIS Integrated Customs Information System ICT Inland Clearance Terminal IDA International Development Association IGRVWC International Goods Road Vehicle Weight Certificate IRU International Road Transport Union LPT Local Pilot Teams MCA Macedonia Customs Administration MDC Moldova Department of Customs MOF Ministry of Finance MOU Memorandum of Understanding NCVT National Center for Vocational Training PIT Project Implementation Team PMU Project Management Unit RAS Risk Assessment System RSC Regional Steering Committee RSCA Republika Sprska Customs Administration SECI Southeast European Cooperative Initiative SME Small Medium Enterprise STAT SECI-TTFSE Advisory Team TIR Transport International Routier TTFSE Trade and Transport Facilitation in Southeast Europe Program UN-ECE United Nations Economic Commission for Europe UNCTAD United Nations Conference on Trade and Development USAID United States Agency for International Development WB World Bank WCO World Customs Organization WTO World Trade Organization

Trade and Transport Facilitation ii In Southeast Europe Program Progress Report 2003

Contents

Page Abbreviations and Acronyms i

Foreword iiiIntroduction 1Program Development Objective and Implementation 3Program Financing and Disbursement 4

Program Outcome as of December 2003 6� Main Positive Achievements 6� Main Issues Observed During Implementation 21

Recommendations and Next Steps 22Status of Components as of December 2003

26

� Albania 26� Bosnia-Herzegovina 28� Bulgaria 30� Croatia 32� Macedonia 34� Moldova 36� Romania 38� Serbia and Montenegro 40

Annexes

42

1. Calendar of Events 43

2. TTFSE Performance Indicators as of December 2003 443. Participants to the TTFSE Program 494. List of Border Crossing and Pilot Sites under the TTFSE Program 525. User Perceptions of Customs Problems, PlanConsult for TTFSE 54

This report has been updated by staff from the World Bank. A core team consisting ofAnca Dumitrescu, Gérald Ollivier, and Philip Moeller was responsible for the overallpreparation. The report benefited from comments provided by Motoo Konishi, Paul Guitink, and Michel Zarnowiecki. Data collection was assisted by Bob Olson from the USCustoms assistance program, and Helmuth Kuntscher and staff of PlanConsult HoldingGmbH of Austria.

Trade and Transport Facilitation iii In Southeast Europe Program Progress Report 2003

Foreword This is the second Progress Report prepared for the Trade and Transport Facilitation in Southeast Europe (TTFSE) Program, which started in late 2000 and has been under implementation for about three years. The focus of the report is on the current status and progress of the project, and readers interested in additional background information and an overview of initial progress and issues under the TTFSE are advised to refer to the previous report for 2002. 1 The TTFSE program, seeking to mitigate the bureaucratic and often corrupt paper curtain that has served as a barrier to trade after the fall of the Iron curtain, is a regional program involving projects in eight countries: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Macedonia, Moldova, Romania, and Serbia and Montenegro. The objectives of the Bank projects under the TTFSE are to reduce transport costs, fight corruption, and help Customs administrations gradually align their procedures with EU standards. 2 Several of the projects are moving toward completion. Significant progress has been achieved in terms of strengthened cooperation between the Customs Administrations within the sub-region, reduced waiting time at border crossing points and inland clearance terminals, and improved communication with the users. This progress and the approach in achieving it has been the subject of a special case study prepared for an International Conference on Poverty Alleviation scheduled for June, 2004 in Shanghai, China. The task of improving the trade competitiveness of the Balkans for the benefit of all stakeholders is not yet completed, however, and efforts are needed to resolve such recurring issues as the slower than hoped for acceptance of modernizing Customs procedures using risk management based systems, excessive turnover of Customs staff leading to disruption in the program implementation, and less than expected progress in fighting corruption under the TTFSE program. The World Bank, as well as the other donors involved in the program, will continue their support to the TTFSE program with a view to consolidating and building upon the progress already achieved and possible replication and scaling up efforts under a proposed TTFSE II Program. Motoo Konishi Transport Sector Manager Europe and Central Asia Region, The World Bank

Paulus A. Guitink Program Team Leader Trade and Transport Facilitation in Southeast Europe Program

1 During the life of the TTFSE a limited edition of paper copies of the Progress Reports is being published in the spring of each year for the previous calendar year. Access to the report is also available at the TTFSE website, see http://www.seerecon.org/ttfse. 2 The Bank’s program has complemented ongoing EU assistance to these countries, and has been implemented in close cooperation with such other donors as the United States, France, the Netherlands and Austria. It has also involved collaboration with the Southeast European Cooperative Initiative (SECI). SECI includes Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Greece, Hungary, Moldova, Romania, Slovenia, Macedonia and Turkey, and was established in December 1996 to promote regional economic and environmental cooperation among the countries in the region. The initiative is being supported by UNECE, the U.S. Government, and the Governments of Italy and Austria.

Trade and Transport Facilitation 1 In Southeast Europe Program Progress Report 2003

Introduction Although the projects have been tailored to suit the initial conditions and needs of each participating country, including Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Macedonia, Moldova, Romania, and Serbia and Montenegro, the innovative approach used in the TTFSE program has included several common elements: (i) focusing on procedural reforms, monitored by clearly defined and standardized performance indicators, at selected pilot sites in each of the countries; (ii) strengthening the partnership in trade and transport facilitation between the public and private sector by moving border control agencies from being obstacles to being facilitators of such activities and strengthening the role of recently-established Pro-Committees; (iii) establishing a regional web-site and other mechanisms intended to open access to the private sector to information on trade and transport, ranging from government legislation and regulations to such practical issues as the hours of operation of particular border crossing points: (iv) providing professional training programs that could lead to certification of traders and operators; and (v) supplementing existing institutional mechanisms for improved communications among border control agencies at local, national, and regional levels. (See Exhibit 1). Customs modernization is at the core of the TTFSE program. Under the eight TTFSE projects, Customs administrations are modernizing their services and aligning their performance with the standards of the European Union. These projects support the implementation of an overall Customs Administration modernization program throughout the sub-region and focus on integrated solutions at selected pilot sites. The pilots have lead to a significant increase in productivity of border agencies, which enables shorter processing time at border crossings and

Exhibit 1. Regional Map: Participating Countries


inland terminals. They also contribute to improving the interagency cooperation within all the countries, thus supporting the governmental priorities to fight smuggling and organized crime. The TTFSE projects are part of the list of Quick-Start projects defined under the Stability Pact3. The design and implementation of the TTFSE program is based on participatory methodology to ensure that the projects belong to the participating countries and are endorsed and owned by the various stakeholders, including the beneficiaries. Consultations with Customs officials and users occurred during the design phase and mechanisms have been built into the project to obtain regular user input in the monitoring and evaluation process. One of the major challenges of the TTFSE program has been the coordination of the variety of inputs and support received to implement the program. Most TTFSE technical support relies on grant funding from the U.S. Government, which acts as a joint co-financer of the TTFSE program, while the World Bank finances border post infrastructure and inspection equipment, local area networks, and information systems for Customs clearance operations. At the same time the European Commission is a major donor in Customs reforms assistance in the region. The World Bank and European Commission therefore agreed to cooperate closely in this area, given the similar objectives of the Bank’s TTFSE program and the EU’s PHARE and CARDS4 programs. The encouraging results, lessons learned and best practices of the TTFSE program provide a solid basis to develop a model for the replication and the scaling up of regional trade and transport facilitation reform programs. The Customs administrations in Bulgaria and Romania, for example, are expanding the new procedures applied at the pilot sites to border crossings and clearance terminals throughout their countries. The TTFSE focus on policy dialogue, performance indicators, and public-private partnership is central to reform efforts developing in Armenia and Georgia. Elements of the approach are being applied to projects in Afghanistan, the Russian Federation, and in Central Asia. Follow-up activities under the proposed TTFSE II would be open to the initial eight countries as well as Turkey and Kosovo.

3 The Stability Pact for South Eastern Europe, adopted in Cologne on June 10, 1999 at a special meeting of Foreign Ministers, representatives of international organizations, institutions and regional initiatives concerned with South East Europe, commits these parties to the adoption of a comprehensive, coordinated and strategic approach to the region, replacing crisis management with preventative diplomacy. 4 Especially EU CARDS Customs support programs CAM A and CAFAO in Albania and Bosnia-Herzegovina.


Program Development Objectives and Implementation Each of the eight TTFSE countries has signed a Memorandum of Understanding (MOU) to strengthen their mutual cooperation to foster trade in Southeast Europe and with their main trading partners, while reducing smuggling and corruption at border crossings, through a set of coordinated and simultaneous measures under the TTFSE program. Accordingly each of the TTFSE projects has been designed with identical development objectives to: (i) reduce non-tariff costs to trade and transport; and (ii) reduce smuggling and corruption at border crossings. All of the TTFSE projects are well under implementation. The implementation duration of each project initially varied between three and four years, but each of the first six projects has been extended by at least six months. As of December 2003, the various projects, except for the more recent ones in Moldova and Serbia and Montenegro, were beyond their mid-term point and moving toward completion, as shown in Exhibit 2 below.

Exhibit 2. TTFSE: Project Starting and Closing Dates

No. Country Starting Date Initial Closing Date Current Closing Date

1. Albania

March 20, 2001 June 30, 2004 March 31, 2005

2. Bosnia and Herzegovina

December 27, 2001 September 30, 2004 March 31, 2005 (tent.)

3. Bulgaria November 29, 2000 December 31, 2004 December 31, 2004

4. Croatia

May 2, 2001 March 31, 2004 March 31, 2005

5. Macedonia

February 28, 2001 June 30, 2004 June 30, 2005

6. Moldova

January 1, 2003 September 30, 2007 September 30, 2007

7. Romania

November 8, 2000 December 31, 2003 June 30, 2004

8. Serbia and Montenegro

September 12, 2002 September 30, 2006 September 30, 2006

The overall rating of the program has been “Satisfactory” except with regard to some delay in elements of the procurement plans.


Program Financing and Disbursement Exhibit 3 below summarizes the financing plan of the TTFSE program, which totals about US$120 million, of which the World Bank Group5 contributes nearly two/thirds of the total.

Exhibit 3. TTFSE Program: Financial Plan

After the first year of implementation the overall disbursement rate for World Bank funding was rather low, i.e., at about 12 percent, excluding the Moldova and the Serbia and Montenegro projects, which were not yet effective. The main reason for the delay was the lack of experience of the Customs administrations of the client countries with World Bank procurement guidelines, and the time necessary to implement international competitive bidding processes. By the end of March 2004, however, disbursement had reached about US$65 million equivalent or about 75 percent of the loan and credit proceeds, excluding Moldova and Serbia and Montenegro where disbursement was about 7 percent (See Exhibit 4).

Exhibit 4: Disbursement by TTFSE Projects

Disbursement as of March 31, 2004

0.02.04.06.08.0

10.012.014.016.0

Albania BiH

Bulgari

a

Croatia

Maced

onia

Moldov

a

Roman

iaSaM

WB Financing (US$)

Disb. 03/04

5 IBRD loans for Bulgaria, Croatia, and Romania – IDA Credits for all other countries.

(US$ million) Government World Bank United States Other Total Albania 2.9 8.1 1.3 0.0 12.3

Bosnia-Herzeg. 3.2 11.0 0.7 0.0 14.9 Bulgaria 3.6 7.4 1.5 0.0 12.5 Croatia 6.2 13.9 1.9 0.0 22.0

Macedonia 3.1 9.3 2.1 0.0 14.5 Moldova 0.9 7.2 1.2 0.0 9.3 Romania 8.7 12.6* 1.4 0.0 22.7

Serbia - Monten. 1.1 6.8 2.3 0.8 11.0 Total 29.7 76.3 12.4 0.8 119.2

*the initial loan of US$17.1million was reduced to US$12.6 million during implementation


Program Outcome as of December 2003 After about three years of implementation, the TTFSE program has resulted in such very positive achievements as: (i) significant reduction of waiting time at both of the borders and at inland clearance terminals; (ii) improved dialogue among Customs administrations; (iii) constant monitoring of performance through indicators leading to the building of a regional data base; (iv) user surveys published for 2002 and 2003; (v) training of SMEs' staff through the Trade Facilitation component; and (vi) favorable preliminary evaluation of the economic impact of the program. Significantly, the TTFSE Program has raised the awareness of the clients of the need for: (i) increased in-country and inter-agency dialogue and cooperation, and (ii) treating trade facilitation bottlenecks in a holistic manner within a chain and corridor approach. At the same time, the program implementation highlighted such recurrent issues as: (i) the need to strengthen the role of national coordinators; (ii) resistance or delays in implementing risk management and selectivity; (iii) excessive turnover of staff in Customs administration; and (iv) limited progress in fighting corruption. The paragraphs below detail each of the achievements and issues observed in the implementation of the TTFSE program. Main Positive Achievements of the TTFSE Program 1) Reduction of waiting time - Results on the ground Significant reduction of waiting time at the Border Crossing Points and Inland Clearance Terminals: from a high of up to five hours average waiting time for trucks at the borders within the Balkans, the implementation of the TTFSE program has allowed for a significantly reduced waiting time at the pilot sites, down to just under one hour per crossing. Exhibit 5 below provides detailed figures from some SEE pilot sites between 2001 and 2003.

Exhibit 5. Reduction in Waiting Time TTFSE Pilots, 2001-2003

Country Pilot site WT 2001

(hours)

WT 2002

(hours

Reductionpercent 02 to 01

WT 2003*

(hours)

Reduction percent 03 to 01

Final target

(hours) Albania Tirana 4.5 1.7 62 2.1 53 1 Bulgaria Plovdiv 3.7 1.5 60 .7 81 .7 BiH Grude 2.1 1.3 36 .7 73 .8 Croatia Stara

Gradiska 3.3 0.4 88 .1 97 .3

Macedonia

Deve Bair

5.2 4.3 17 .5 91 .6

Romania Bacau 3.0 1.4 53 1.2 60 1 Average: 3.6 1.7 .9

Rounded up

Source: STATS data *2003 last reported month varies per site


Transparent and public Customs performance monitoring system in place: Performance indicators are now well managed and understood, and provide a regionally accepted standard. In two cases, the fact that delays were measured under the TTFSE has contributed to prompt local reforms, and in most cases, poor results have allowed the authorities to identify where reforms should take place as a priority. All the data collected under the TTFSE program is available to the public through the Internet. Users are now able to publicly voice their concerns: Annual surveys are carried out by an independent specialized consultant to measure the degree of satisfaction of the users vis-à-vis the pace and scope of the modernization of the Customs administrations. The results of the surveys are also made public through the Internet. Although it may be too early to witness spectacular results, the feedback from the trade community is encouraging so far. An example is Croatia, where importers divert traffic to Jankomir because clearance is better managed at that project pilot site. 2) Improvement in implementing selectivity A key element in the TTFSE approach has been the implementation of selectivity in Customs operations. Selectivity dictates that not all consignments are physically examined as they are cleared. Instead, physical verifications are based on the risk that a particular consignment may be irregular. Through effective risk management, Customs can detect the most likely and significant violations, without compromising the collection of Customs duties and taxes At the outset there was considerable resistance to shifting from 100 percent physical inspection to selectivity. As Exhibit 6 shows, however, the rate of physical examination of declarations has improved and is moving toward the agreed targets. This shift has been actively promoted by the STAT team and during supervision missions by the World Bank. Support from high level customs managers has been a key to progress.


Exhibit 6. December 2003, Physical Inspection Rates

Note: The average rates for Romania had decreased significantly in the past three years, but had jumped up just before December 2003 as a result of enforcement of a new law on intellectual property rights

3) Improved dialogue among Customs administrations within the region Since the first Regional Steering Committee (RSC) of the TTFSE program held in February 2000 in Skopje (Macedonia), seven other RSC meetings have taken place on a regular basis (as of spring 2004), with an average of two per year6. The next RSC meeting is scheduled to meet in Banja-Luka (BiH) in Fall 2004. RSC meetings are organized by the TTFSE National Coordinator of the country hosting the RSC. All the RSC meetings have been well attended and enabled: (i) exchange of experience and information among the countries in the sub-region, for example, best practice in managing Inland Clearance Terminal or introducing selectivity in Customs clearance procedures; (ii) presentation followed by discussions of the findings of studies and surveys by consultants as well as such other related initiatives as the SECI PRO Committees experience and EU PHARE and CARDS special assistance programs; (iii) regular tracking of the progress made in the implementation of the various TTFSE projects in member countries and discussing the generic issues encountered during implementation; (iv) strengthening the coordination among the various donors involved in the region, who also usually take part in the meetings, for example, the EU, U.S. Government, World Bank, GTZ, etc; and (v) the endorsement, at the regional level, of such international standards, as the International Goods Road Vehicle Weight Certificate (IGRVWC). In addition, it has become a custom that SECI PRO meeting be organized back to back with the RSC, thus enabling better public/private cooperation and interaction.

6 Bucharest (Romania), June 2000; Sofia (Bulgaria), Sept. 2000; Tirana (Albania), Feb. 2001; Cavtat (Croatia), Nov. 2001, Belgrade (Yugoslavia), June 2002; Chisinau (Moldova), February 2003; Sarajevo (BiH), April 2004.

Large Reduction in Physical Inspection Rates: 62%

01020

3040506070

8090

100

Albania Bih-Fed BiH-RS Bulgaria Croatia MacedoniaRomania SAM-BelSAM-Pod

%

Project start latest coll.


4) Monitoring of performance Local border officials, under the monitoring of the U.S. funded SECI/TTFSE Advisory Teams (STATs) continued monthly data collection of border crossing and clearance times and such related activities as the rate of physical examinations and the number of times irregularities were detected as a result of these examinations. The methodology for this collection has been constantly reviewed and improved based on the lessons learned during implementation for replication across the region. This process has now been sufficiently refined to ensure consistency across the region, and has provided the basis for an international measurement tool, which has subsequently been used in the Southern Caucasus, and is being introduced in Russia. At national level, a number of simple indicators are monitored annually, which combine different values giving a broad view of the cost effectiveness of the Customs administrations. These are: (i) Revenue collected/Customs staff; (ii) Total Customs cost/Revenue collected; (iii) Salaries/Revenue collected; (iv) Trade volume/Staff (US$); and (v) Declarations/Staff. Although somewhat global and possibly even arbitrary, the combination of these indicators show the trend in the evolution of the countries. For example, Exhibit 7 illustrates that in all TTFSE countries, the average revenue collected by staff has increased over the 1999-2003 period. The increase has ranged from 56 percent to 480 percent, averaging at 140 percent.

Exhibit 7. Revenue Collection/Staff by TTFSE Country

Revenue Collected/Staff (US$) Country 1999 2003 Percent Increase

Albania 270,000 421,000 56 BiH (Federation) 265,000 466,000 76 BiH (RS) 145,000 251,000 73 Bulgaria 257,000 498,000 93 Croatia 731,000 1,405,000 92 Macedonia 297,000 586,000 97 Moldova 76,000 (2000) 145,000 91 Romania 276,000 839,000 204 Serbia and Mont. 50,000 (2000) 290,000 480 Average 140 The total cost of the Customs service compared to the revenue collected is a useful index that reflects on the strategy of respective administrations, in terms of salaries and running costs (but exclusive of capital investment) compared to the evolution of the foreign trade and the tariff policy. The ability to compare results achieved from one country to the other also provides decision makers with a management tool, which describes the cost effectiveness of the administration.7 (See annex 2 for detailed data and graphics).

7 More refined studies can be subsequently carried out at the field level, to evaluate the optimal staffing and budget necessary to run, for example, an isolated Customs house.


5) PlanConsult survey 2003

As stated already, two essential principles of the TTFSE program are: (i) the continuous measurement of performance related to trade and transport facilitation; and (ii) a strong partnership with users (freight forwarders, Customs brokers, transport operators, traders) and their associations in the eight countries involved. Through these two instruments, decision makers understand better the areas where they need to act and the priority and type of response they need to formulate to meet user expectations.

The measurement process has been organized thanks to a partnership between the World Bank, the Austrian Government, the Consulting firm PlanConsult, and the Chambers of Commerce and PRO-Committees in Southeast Europe. PlanConsult has directed the conduct of periodic surveys of users (reaching about 700 in 2003) regarding: (i) their perception of problems confronted by border agencies in SEE; (ii) transport time and cost; (iii) trade evolution; and (iv) an index of corruption. The final goal of the phased cycles is to hand-over the methodology to local Chambers of Commerce so that the surveys are continued after the life of the program. An analysis of the survey results comparing the progress achieved since 1999 is summarized below but additional information is available on the TTFSE website.

The surveys track five primary problem areas related to; Customs Law; Communications; Procedures; Personnel; and Logistics. Various sub-issues are tracked under each of these. The comparison over time as indicated in the Phase III Interim Report for 2003 shows an improvement in general, however, there has been evident deterioration for some countries (see Annex 6). Specific comments by problem areas as an average follow: � Customs Law-related Problems. On average there was improvement. Albania, Bosnia

and Herzegovina, Bulgaria, and Macedonia all showed improvement, and Romania and Serbia and Montenegro improved strongly. Moldova remained the same but Croatia deteriorated.

� Communications-related Problems. Except for Croatia, where problems became worse,

other countries showed an improvement. Major improvement was shown in Romania and Serbia and Montenegro.

� Customs Procedures-related Problems. Although problems in this category improved

strongly for Romania and Serbia and Montenegro and somewhat in Albania and Bosnia and Herzegovina (2002 compared to 2001), deterioration was seen in Bulgaria, Croatia, Macedonia, and Moldova.

� Customs Personnel-related Problems. Improvement was indicated in Albania, Bosnia

and Herzegovina, Macedonia, and Serbia and Montenegro, and strongly in Romania. Moldova and Croatia showed a deterioration.

� Logistics-related Problems. Problems in this grouping improved in Bosnia and

Herzegovina, Moldova, and Serbia and Montenegro and strongly in Romania. Problems were worse in Bulgaria, Croatia, Macedonia.

Most problems (formerly all rated as “serious problems”) have improved and have a maximum rating of “average” or between “average” and “high”. A positive trend can be seen, resulting from the TTFSE program and other initiatives.


Most importantly, persons, institutions and companies involved have become increasingly aware of the problems and are encouraged to articulate them. These results from the “grass roots of the economy”, i.e., the private sector, upon the Chambers of Commerce may prompt them to exercise pressure on the governments and the administrations to achieve improvements in Customs affairs, strengthening the civic culture of the participating countries. PlanConsult has also been attempting to track issues related to corruption, separately from the five major problem areas discussed above. Although corruption in the public sector8 has always been known to exist, the understanding of the effects of corruption has grown substantially in the last decade. Corruption has been shown to be very costly to economic growth and investment as it increases the costs of business and introduces uncertainty into the business environment. It adds especially painful costs for the poor to the costs of goods. Customs administrations, by the nature of their being governmental organisations and as a result of their direct contact with goods, have a great scope for corruption. Various studies conducted by international watch-dog groups perceive the rate of unofficial payments related to border crossing as the highest of any government agency. Although the Customs services are usually named singly, and may in fact be the key party, in fact there are multiple border control agencies involved in such payments. In cycle 2 and 3, the PlanConsult surveys have tried to provide an index of the problem in terms of the average size of bribes and the frequency of bribes by a specific border control agency.9 The results for 2003 showed that the percentage of truck surveys that reported having paid bribes to Customs officers ranged from 76 percent in Croatia to 100 percent in Albania. Lower percentages were shown for other border control agencies. The average bribe per truck at a single crossing ranged from about Euro34 in Moldova to Euro 160 in Albania. The comparison of results over time were also a bit disappointing, both in terms of the average frequencies of payments and the average amount of bribes paid. (see Exhibit 8).

8 Corruption in the public sector is commonly understood as misuse of public office for private gain. 9 Note that the index has been generic and not confined to just TTFSE pilot sites.


Exhibit 8. User Perceptions of Corruption, PlanConsult

Corruption Data, 2003, PlanConsult Cycle 3 Survey

Recipients of Bribes (in percent of all surveyed

trucks crossing borders)

Countries Customs

Service Staff (percent)

Ministry of Interior Staff

(percent)

Staff of Other Agencies (percent)

Average Frequency of Payments at

Border Crossings (percent)

Average Bribes/Truck at one Border

Crossing (EUR)

Albania

100 74 39 2001 41.3 2002 41.6 2003 48.0

2001 386.9 2002 324.4 2003 160.3

Bosnia and Herzegovina

NA NA NA 2001 43.8 2002 32.5 2003 NA

2001 52.8 2002 53.4 2003 NA

Bulgaria NA NA NA 2001 15.7 2002 11.4 2003 NA

2001 79.3 2002 79.3 2003 NA

Croatia

76 41 29 2001 35.0 2002 34.5 2003 47.7

2001 102.3 2002 112.4 2003 146.6

Macedonia

78 27 14 2001 52.3 2002 47.7 2003 59.3

2001 42.8 2002 43.6 2003 77.0

Moldova

80 44 24 2001 79.0 2002 82.1 2003 69.5

2001 98.8 2002 109.0 2003 33.8

Romania

90 53 41 2001 65.6 2002 43.3 2003 76.7

2001 27.1 2002 23.7 2003 44.4

Serbia and Montenegro *

71 33 21 2001 50.4 2002 50.7 2003 45.0

2001 110.8 2002 120.8 2003 153.6

* Summer 2003 Source: PlanConsult, Interim report III (Note: Bosnia and Herzegovina: no participation in CYCLE 3; Bulgaria: survey data was incomplete)


6) Training of SMEs' staff through the Trade Facilitation Component The Trade Facilitation Component, while relatively small in size (2 percent of the project), symbolizes many of the core values of the TTFSE program: (i) regional in nature; (ii) building a wide partnership10 with the participation of local NGOs and international NGOs under the umbrella of national committees for the simplification of procedures (the PRO-Committees); (iii) based on feedback received from SMEs involved in trade and transport; (iv) providing access to new opportunities via training and provision of information; (v) funded both by multiple donors (U.S., Dutch) and by the local Chambers of Commerce; and (vi) supported by the Bank and a regional consortium of Universities. This component supported trade facilitation awareness raising, through 17 television and radio broadcasts, and 43 articles in newspapers, magazine and publications by the local Chambers of Commerce. The first phase of the implementation involved the preparation of training documents11 on business ethics, corruption, international delivery terms, commercial transaction documents, trade payment methods, transport operations and Customs transit procedures, for SMEs. After a train-the-trainer regional effort, each local partner organized seminar units, ensuring a large regional coverage and reaching a total of 59 cities. By the end of 2003, the Chambers of commerce delivered a total of 169 seminar units with a total attendance of 3142 participants (see Exhibits 9-13). The seminars were very well received within five of the countries ratings of satisfaction and high satisfaction exceeding 96 percent, and the last one exceeding 89 percent.

Exhibit 9. Participants Trained by City and Year

Year

Albania

Bosnia and Herzegovina

Bulgaria

Croatia

Macedonia

Romania

Total

I 2001-2002

128 205 283 192 135 289 1,232

II 2002- 2003

164 477 389 332 155 393 1,910

Total 292 682 672 524 290 682 3,142

(excludes later starting Moldova and Serbia and Montenegro)

10 See http://www.seerecon.org/ttfse/TTFSERoleParties.pdf 11 See these documents at: http://ecaweb.worldbank.org:8080/Transport.nsf/Training%20Materials?OpenView&Count=10&Start=1


Exhibit 10. Seminar Attendance

1232

1910

3142

0 500 1000 1500 2000 2500 3000 3500

YEAR I

YEAR II

TOTAL

COMPREHENSIVE SEMINAR ATTENDACE

SEMINAR ATTENDACE 1232 1910 3142

YEAR I YEAR II TOTAL


Exhibit 11. Seminar Units

Exhibit 12. Cities Reached

26

59

85

0 10 20 30 40 50 60 70 80 90

YEAR I

YEAR II

TOTAL

COMPREHENSIVE CITIES REACHED

CITIES REACHED 26 59 85


72

97

169

0 20 40 60 80 100 120 140 160 180

YEAR I

YEAR II

TOTAL

COMPREHENSIVE SEMINAR UNITS

SEMINAR UNITS 72 97 169



Exhibit 13. City Locations

The cost of these seminars was equally co-financed by the local Chambers of Commerce and the USAID. Because they built on a variety of synergies, the average costs of each seminar delivery was a very cost effective US$100 per attendee per week of training. Since Moldova was a recent entry and could profit from Romanian language materials, CCI/ROMPRO had agreed to share their materials with the Moldovan Chamber of Commerce and Industry, also demonstrating the spill-over synergies of the regional program. In addition to the conventional training seminars, the TTFSE program offered new tools to allow for more comprehensive training in road transport operations and initiated a similar approach with freight forwarding. The Trade Facilitation Component supported the piloting and rollout of two distance learning programs for road transport managers, with professional certification, in Southeast Europe under the leadership of the International Road Transport Union (IRU). This effort was jointly implemented with the road transport associations in Bosnia and Herzegovina, Macedonia, Albania, Croatia, Bulgaria and Romania, with Dutch and U.S. grant-funding secured through the program and the Global Facilitation Partnership for Transportation and Trade (www.gfp-dli.org). About 100 participants received an internationally recognized, EU-compatible, IRU Certificate of Professional Competence as a result of the pilot. The training


center in Bosnia and Herzegovina also became fully certified by the IRU, while centers in Albania and Croatia applied for such IRU certification. Once certified the centers can reuse the program either to deliver both distance learning and conventional training leading to IRU Diplomas. The IRU program is being further rolled out under the TTFSE program, with the inclusion next of Moldova and Serbia and Montenegro. A similar approach has been initiated to pilot a training program for freight forwarders, in four TTFSE countries, in partnership with the international freight forwarders' association, FIATA. Over the past two years, the Chambers of Commerce participated in the design and development of a regional website (www.ttfse.org) aimed at providing comprehensive information to traders and road transport SMEs on official border agency operations and requirements in the region as well as other user-specific transport information. Each TTFSE country established a Memorandum of Understanding to ensure that all border agencies provide the relevant information. During 2003 the responsible national agencies began to upload content on the site. The software platform is being improved, but content collection and upload is proving difficult, given the large number of participants involved and the need to evolve a new culture of inter-agency cooperation in the region. 7) Preliminary evaluation of the economic impact of the TTFSE program The overall cost savings for entering trucks waiting at border crossing points or trucks waiting for clearance at inland pilot terminals monitored through the TTFSE program is estimated to be a minimum of US$14 million for the year 2003 (see Exhibit 14). It is worth underlining that the TTFSE program does not cover all the existing border crossing points (BCP) and inland clearance terminals (ICT), as it has been voluntarily limited to a reduced number of pilot sites in each country, i.e., 23 border crossing points and 10 inland clearing terminals. Due to the absence of continuous data at several of the sites regarding exit times, exit time savings generally were not counted. The figure above does not attempt to measure the significant time savings that resulted from upgrading information system at non-pilot locations, although the program covers such extension in several of the countries. Therefore, additional savings have not been included in the figure of US$14 million for year 2003. An expanded TTFSE program to all existing BCP and ICT, including those related to rail transportation, would considerably increase the economic savings at those locations. At border crossing points and clearing facilities, all of the six countries have achieved significant results in reducing processing delays (entering and exiting the country), as shown in Exhibit 14 below. For border crossing, performance measurement was based on the time the vehicles crossed the border line entering the country until they were released for the onward, inland journey. For clearance terminals, the time is measured from the moment a truck enters the clearance terminal, until the moment when the declaration corresponding to the goods is released by Customs. It therefore includes: (i) declaration preparation by the broker or importer; (ii) declaration acceptance and processing by Customs; (iii) physical examination of the goods, and (iv) payment of duty.


Exhibit 14. Cost Savings Resulting from Time Reduction

Average Country Improvement

Gain in Time

(percent)

Estimated Cost Reduction

(US$ million)

Albania 46

0.5 BiH 56 3.4

Bulgaria 70 1.1 Croatia 60 4.1

Macedonia 61 1.7 Romania 41 1.0

By estimating the annual number of vehicles, and based on a cost of US$12.5 per hour per waiting truck12, it can be estimated that throughout the TTFSE region, the improved border processing has saved well over US$14 million last year considering only entering trucks coming at pilot border crossing points or trucks processed at pilot clearance terminal. Since this estimate reflects average time, and time reduction was substantial in the second part of the year, as shown on the graphs below which reflect November 2003 performance, the impact in 2004 is expected to be larger.

Reduction in Border Crossing Times: 67%

0

50

100

150

200

250

300

350

Giurgiu

Consta

nta

Qafe-Tha

ne

Taban

ovce

Deve-B

air

Kafasa

n

Rouss

e

Gyues

hevo

Macelj

Gradisk

a Exit

Izacic

Raca

Bosan

ska G

radisk

a

Orasje

Border Crossing Point Name

Min

utes

Project start Dec-03

12 US$300 per day on average.


Main issues observed during the implementation of the TTFSE Program 1) Lack of cooperation between border crossing agencies One of the key lessons determined in the initial user surveys was the serious lack of cooperation and communication between the various border crossing agencies both at the border crossing points and at the headquarters level. Long standing rivalries and a general tradition of tight police control over borders has led to conflicts in moving ahead with the modernizing of procedures and controls. The involvement of these agencies in the Local Project Teams has facilitated collaboration at some border crossing points, but deep seated rivalries and a culture that does not support collaboration among government agents remain imbedded in these agencies themselves. Especially significant is the tension between the border police and Customs, although there are countries where the situation has improved. The border police tend to consider that its main duty is to combat corruption in Customs. In certain countries, in fact, this responsibility is specified in national legislation and bi-laws on border crossing controls. The border police, however, often have neither the skills nor the resources to perform this role. Not only does this serve to further demoralize Customs staff, not the best way to promote professionalism and ensure integrity, it also leads to interventions that are in contraction with international agreements and guidelines. 2) Excessive turnover of staff in Customs administrations The turnover in staff in the Customs administration in the region exceeds the level that was expected during the preparation of the TTFSE program. In the three years of the TTFSE one Customs administration of a program country has had six different Director Generals, and most of the others have had three. In each instant, when a new person occupies the Director General position, the occupants of many other important positions within the organization also change. Each new Director General brings with him new assistants, new regional managers and very often new Customs Chiefs at the pilot sites. This all serves to slow down implementation and has had an impact on the ownership by Customs of the reform program. This problem also affects lower levels of staff. For example, one pilot site had five different Customs Chiefs in a period of six months. For a time in one TTFSE country certain pilot site Customs Chiefs were being replaced almost on a monthly basis. These, and other similar situations, only stabilized when the STAT was able to convince the Director General that the project could not possibly succeed unless key people were left in their positions for an extended period of time. Similar problems have occurred within the Local Project Teams. On some occasions particular border agencies have been represented by different individuals at consecutive meetings. The lack of a consistent presence has hampered the ability of the teams to maintain a consistent line of thought and the ability to bring their ideas to fruition. 3) Limited progress in fighting corruption at Border Crossings Although there has been some progress in reducing smuggling, the program has had marginal success in reducing the level of corruption within the TTFSE countries. Changing the culture within each country to adopt procedures and practices that would limit the opportunities for corruption, and clearly perceive information payments as unethical and unacceptable13 has been 13 For example, cultural differences have an effect on the perception of what is permissible or not; the notion of corruption, as understood in Western countries, is also subject to different interpretation in transition countries.


much more of a challenge than originally anticipated. Some of the investment included under the program is really just now coming on-line in terms of impact, and better result are expected in the coming years. Additionally, efforts to provide an index of corruption has the advantage of enabling a basis for discussion and stimulating more integrated efforts to address the issue of corruption. Seeking input from the users in the private sector, moreover, is empowering civil society to press for change of a corruption-accepting culture. Moving ahead with anti-corruption and the reform agenda of the TTFSE is also dependent upon having high-level government support. Experience with corruption in the region and the TTFSE program in particular has shown that where there have been strong “champions,” there has been progress. The TTFSE has sought to use national coordinators to support this need, and during supervision missions the National Coordinators have been regularly briefed on the various issues observed during the implementation of the TTFSE. Recommendations and Next Steps 1. Support for the TTFSE Website

Although the MoU signed by all of the participating TTFSE countries included the pledge to cooperate in the field of information sharing, progress in this area needs be improved. This is especially apparent in terms of the TTFSE website which is dependent upon the provision of information from various ministries and agencies within each country. Although the concept of transparency as an element of good governance is tacitly acknowledged, the dominating bureaucratic culture sees information as a source of power and, in some cases, revenue. There are examples of lack of cooperation and understanding of Government agencies who have failed to support the website. That makes the respective country’s contribution to the regional TTFSE website less successful despite the efforts of the Website Coordinator, and regardless of existing official Protocols on information sharing signed by all governmental institution with roles in trade and transport facilitation. Building a base of openly accessible data is one of the best ways to promote transparency and accountability. Transparent procedures are the cornerstones for regional trade and transport facilitation; the poor performance in making available the relevant public information on such a visible website constrain countries’ competitiveness on regional and international markets. Government agencies must upgrade their commitments to provide the necessary information in a timely manner. 2. Interagency Cooperation at Border Cross Points Insufficient interagency cooperation at border crossing points has already been mentioned. The LPTs are the specific mechanisms intended to facilitate collaboration at the operational level. Although the local project teams have increased communication, follow-up actions in many cases have been limited by the need to involve the respective headquarters in any local changes. The delegation of authority to agents at the border crossing is essential to enabling sustainable change and promoting pragmatic approaches to the resolution of problems. A cooperative culture should be encouraged and promoted from the top down by management of regulatory agencies.


3. Replication of Procedures at Pilot Sites

The lessons learned and the success experienced at the more progressive border crossing points provide a model for replication throughout each TTFSE country. The economic returns from such replication could be considerable, multiplying the economic returns to date by several times. Both Bulgaria and Romania have moved in this direction, making changes in procedures at border crossing points that were not included as pilot sites under their projects. Both countries have set up, and started to implement phased action plans aiming at expanding the performance monitoring process. These encouraging initiatives provide for the sustainability of reforms beyond the TTFSE life.

4. Shared Border Crossing Facilities

A practical way to reduce duplication of controls consists in setting up a common border post for two countries in a single physical location. In addition, the construction and maintenance of duplicate facilities on both sides of a border crossing is perhaps not the best use of resources. This approach reduces costs for both the countries in question and traders. It makes the communication of trade documentation between the two neighboring border administrations easier, reduces clearance processing time by unifying border control processes within a single sequence and results in significant savings (both investment and maintenance of border facilities). This physical setup requires however strong political support and must be accompanied by a realignment and streamlining of the procedures themselves, to avoid a sub-optimal design of the joint physical facilities and to optimize outcomes in terms of facilitation. While the shared border concept was not initially included in the TTFSE program and its components were not designed to finance such a scheme, the idea has been nevertheless advanced and discussed during RSC meetings and Bank supervision missions. Some shared border control activities based on bilateral agreements between countries (e.g. Bulgaria and Romania at Rousse-Giurgiu crossing point) existed even before launching of the TTFSE program. However, under the TTFSE (but going beyond the scope of projects) two joint border crossing points are being established between Croatia and Bosnia and Herzegovina with a cost sharing arrangement among the two countries. The border crossing of Tabanovce (between Macedonia and Serbia and Montenegro, on the Macedonian side) is a good candidate for a similar approach; significant investment in upgrading the facilities is on-going with Bank financing. The World Bank has encouraged both countries to follow the example cited above. The benefits of such an arrangement can be maximized when this approach is coupled with a single window environment.14

5. Continued Data Collection

The initiation of data collection at border crossing points and inland clearance centers was largely made possible as a result of support by the STAT under grant funding by the United States. TTFSE countries need to consider how the continue such data collection after projects completion and the discontinuation of the role of STAT. Bulgaria is considering reliance upon the Chamber of Commerce to provide this service, and Romania is proposing that the Customs service itself would take on this function according to an expansion plan that would gradually be applied to all borders and inland terminals within one year. Albania will start collecting data at two additional locations, and Macedonia will expand the performance monitoring through indicators at a main border with Greece. This is a priority need for all of the TTFSE countries.

14 To learn more about joint border posts visit gfptt.org


6. Regional Steering Committee (RSC) The MOU establishing the RSC envisioned a minimum life of seven years for this vital communication mechanism. The utility of the RSC that has already been demonstrated would support an extended if not indefinite life for the RSC. Some of the support functions needed for the RSC have been provided by grant funding. Alternate funding and support arrangements need to be considered and implemented to ensure the sustainability of the RSC. During program implementation there have been eight RSC meetings and one working meeting of the regional Directors General of Customs organized between February 2000 and April 2004 (Annex 1). It has been recognized that the initial meetings were not very productive, nor did they achieve the objectives stated in the MOU. Some of the reasons for the lack of original success were (i) lack of experience in organizing the events, with logistical arrangements that created an intimidating atmosphere not conducive to open dialogue; (ii) lack of ownership over the agenda, that did not allow discussion of relevant border; (iii) insufficient understanding of the cross-border and Customs issues by some of the participants (especially those who were not Customs directors). It took time to understand and recognize the shortcomings. During the latest gatherings starting with Belgrade, the quality and usefulness of RSC meetings improved, in particular through organization of smaller focus groups, and provision of more time for informal bilateral discussions. One of the most productive was the Ochrid working session, which in fact consisted of almost exclusive participation of Customs directors. The RSC provides now an excellent mechanism to achieve continuity in regional Customs procedures. The latest meeting has been instrumental in reaching agreement among Customs Directors on the border control requirements for the up-coming Olympics. Several lessons have been learned on these occasions, of which a couple may be of particular importance for the future. First - Customs directors are more willing to openly discuss and address important issues when they are alone among themselves; and second – effective leadership and permanent contact throughout the period of RSC chairmanship provide quality and sustainability to these events. 7. Looking toward TTFSE II Most of the TTFSE countries have expressed some interest in follow-up support for actions undertaken by the TTFSE program, leading to the consideration of TTFSE II projects. The participating countries will identify the needs such projects would serve, assess priorities to be addressed, and begin developing estimates of the costs that would be entailed. Options related to grant funding for a TTFSE II program also need to be considered.

�


Status of Components as of December 2003

Albania

The project consists of the following five components:

Component Description Comments a. Customs Services Procedures Reform US$0.8 million

Includes: (i) monitoring and review of Customs procedures; and (ii) enhancing interagency awareness and training.

Improved results over the last year. Close cooperation with CAM-A.

b. Trade Facilitation Development US$0.4 million

Includes: (i) provision of technical assistance and advisory services to trade and international transport participants through the Ministry of Economic Cooperation and Trade (Alba-Pro-Committee); (ii) improvement of communication between border control agencies and trading community by using a virtual forum; and (iii) provision of equipment to support information availability.

i) 24 seminar units (292 attendees); (ii) website launched, need for continuing updating; (iii) completed.

c. Support to Integrated Customs Information System (ICIS) US$2.3 million

Includes: (i) equipment for ICIS and communication improvement; and (ii) a regional program of experience-sharing. This component will stimulate regional and inter-agency cooperation.

(i) contracts completed except the telecom. System recently awarded; (ii) funds used for ASYCUDA training.

d. Improvement of Roads and Border Crossing Facilities US$8.2 million

Includes: (i) rehabilitation of Qafe-Thane and Morina border crossings; (ii) equipment for enforcing the processing and investigation capacity at Customs stations; and (iii) rehabilitation and completion of road and bridge works at Lezhe connection, Fushe Kruje-Mamurrassi, and Librazhd-Qafe Thane; and (iv) design and supervision of the civil works.

Completed.

e. Program and Project Implementation US$0.6 million

Includes the services required to support implementation of the program. At the regional level these will consist of the secretariat services to the RSC and at the national level the auditors and procurement consultants, the Project Implementation Team (PIT) staff, the establishment of a financial management system, and training to the PIT.

Unlike other TTFSE projects, the TTFSE project in Albania includes limited technical assistance on Customs service reform, since the European Commission has a large program in that field, through CAM-A. The project therefore has focused on border and related roads infrastructure improvements. The U.S. Customs assistance within the project provides support on performance indicators measurements.


Progress in Project Implementation. All but one project component have been completed; the telecommunication package has been recently awarded. The system is critically needed by Albanian Customs to complement the implementation and operation of ASYCUDA supported by the EU. Since execution of the telecommunication contract requires ten months, at the request of the Borrower, the Bank has extended the project Closing Date from June 30, 2004 to March 31, 2005. Over 83 percent of the credit proceeds have been disbursed, with the remaining amount to be committed once the last awarded contract is signed. An Action Plan was agreed with the Borrower in December 2003 on improving the pilot performance indicators and reducing Customs and border agencies' processing time, that has been completed to the Bank’s satisfaction and demonstrates the Government’s commitment towards streamlining the border procedures and enabling transparency. What has been achieved. While not all the monitored performance indicators achieved the initially agreed targets, significant improvements have been registered at the pilot sites, between project inception and December 2003, in terms of Customs clearance and border entry waiting times: 36 percent reduction at the port of Durres, 63 percent reduction at the Tirana inland terminal, and 51 percent at the border of Qafe-Thane – with the last constantly meeting the targets. These results were partly enabled by a dramatic drop in truck examination, associated with more efficient processing and better organized traffic flows. During implementation of TTFSE (2001-2003), Customs overall performance also improved, with revenue collected increased by 21 percent, from US$349 million to US$442 million. Trade volumes increased by 28 percent. Under the Trade Facilitation Development component, the training to private sector in trade, transport and logistic has continued successfully with 24 seminar units in 12 cities and almost 300 participants over the first two years of implementation. The TTFSE regional website has become operational in June 2003, and Alba-PRO (now reorganized under the Chamber of Commerce) remains active in uploading and updating the Albania country site. Remaining Issues � Further improve the pilot indicators, and establish a mechanism of data collection and

monitoring beyond the TTFSE project life;� Sign the telecommunication contract and implement it by March, 2005.


Bosnia-Herzegovina

The project consists of the following three components:

Component Description Comments a-1. Improvement of Border Crossing and Customs Facilities -Republika Srpska US$4.2 million

Includes: (i) construction of buildings and canopies at the Raca border crossing; (ii) construction of an inland truck terminal; (iii) purchase and installation of weighing scales; (iv) purchase of laboratory equipment and corresponding training; (v) design and supervision of works; (vi) technical services to monitor RSCA's performance at pilot sites; and (vii) training to enhance inter-agency awareness and cooperation. These activities would complement ongoing reform efforts by the RSCA supported by the CAFAO.

(i) construction contract for Raca signed; (ii) design for the inland terminal at Brod will be completed in May 2004; (iii) weighing scales purchased and installed; (iv) laboratory equipment delivered, but not yet installed; (v) design and supervision of works are ongoing; and (vi) pilot sites measurement is ongoing. Positive cooperation with CAFAO.

a-2. Improvement of Border Crossing and Customs Facilities –Federation US$9.4 million

Includes: (i) construction of part of the new border stations at Izacic and Orasje; (ii) reconstruction and building of inland terminals, including required information technology infrastructure; (iii) design and supervision services; (iv) technical services to monitor FCA's performance at pilot sites; and (v) training to enhance inter-agency awareness and cooperation. These activities would complement ongoing reform efforts by the FCA supported by the CAFAO.

(i) construction of new border stations at Izacic and (ii) Orasje completed; (iii) design of the border crossings Kamensko and Gorica completed; (iv) monitoring is ongoing. Positive cooperation with CAFAO.


Includes: (i) provision of conventional and distance learning training to participants in trade, logistics and international freight transport in cooperation with the Chamber of Economy (BCE) and other professional associations in the field of road transport; (ii) improvement of cooperation between public and private parties using a virtual forum; (iii) creation of a website and provision of corresponding equipment to support information availability.

(i) 10 seminar units (462 attendees); internationally recognized distance learning program for road transport operators; (ii) multiple public outreach events; and (iii) website is being uploaded.

c. Program and Project Implementation US$0.8 million

Includes the services required to support the regional and national implementation of the project. The regional support will consist of the secretariat services to the RSC. The national support will comprise the support of procurement advisors and of an accountant, external auditing services, support in the establishment of a financial management system, and training to the Project Manager and his Project Implementation Team.

As in Albania, the TTFSE project in Bosnia and Herzegovina does not include sizable technical assistance for Customs reform, since the European Commission has a large program of technical assistance in that field delivered by the CAFAO. As such the project focuses on infrastructure improvement and performance measurements from the user standpoint.


Progress in Project Implementation. In the Federation of BiH all project components have been contracted. In Republika Srpska (RS), progress has been slower, often impacted by elements external to the project. Except the construction works at Brod, other project components in the RS have been contracted. As of December 2003, the total disbursement was US$7.5 million or 68 percent of the credit amount. What has been achieved. The performance at pilot sites, in terms of processing times and other indicators, has improved considerably and is now at or close to the targets, except for some indicators at the Izacic BCP and the Banja Luka ICS. Based on the monthly measurements carried out under the TTFSE project, using the TTFSE methodology, the reduction of processing times since 2000 ranges from 58 percent to 89 percent, with the bulk of progress achieved during the year 2003. Compared with the other participating countries, Bosnia and Herzegovina is now one of the best performers in Southeast Europe at its TTFSE pilot sites. Under the Trade Facilitation Component, 462 staff of SMEs in the trade, transport and logistic sector participated in seminars to refresh their skills on Incoterms, methods of payment, business ethics, commercial transaction documents and transport operations. In addition, the International Road Transport Union and the Chamber of Commerce in partnership with the Bank launched a distance learning program for road transport operators leading to an internationally recognized Certificate of Professional Competence. During the first pilot, 15 candidates received the Certificate and a new group of 12 candidates is presently preparing for the exam. Remaining Issues � Provide premises for the laboratory equipment in Banja Luka. � Construct the joint facilities at Izacic. � Complete data entry in the regional TTFSE website.


Bulgaria


Component Description Comments a. Bulgarian Customs Administration (BCA) Institutional Reform US$0.9 million

Includes: (i) technical services to monitor BCA's performance; (ii) technical services to streamline operations at two border posts and one inland terminal on a pilot basis; and (iii) training for inter-agency awareness and cooperation. This technical support complements ongoing EU activities to help implement the BCA strategic plan. Cooperating partners in the Inter-Ministerial Council on Border Point Issues will be involved in the definition of the new procedures and combat against fraud.

Substantial progress.


Includes: (i) provision of technical assistance and advisory services to trade and international transport participants through the Chamber of Commerce; (ii) improvement of cooperation between public and private parties using a virtual forum; and (iii) provision of equipment to support information availability.

(i) 672 participants have been trained under the project by the National Center for Vocational Training (within BCCI) to date on topics such as trade procedures and documentation, transport contracts, INCOTERMS; (ii) multiple public outreach events; and (iii) operational and uploaded website.

c. Improvement of Bulgaria Integrated Customs Information System (BICIS) US$0.1 million

Includes a regional experience-sharing program on integrated systems for border agencies. This component will stimulate regional and interagency cooperation.

Not used (replaced by EU funding so far).

d. Improvement of Border Crossing Facilities US$10.5 million

Includes civil works and improvement of the utilities at six border posts: exit and entry processing lanes; new buildings, booths and canopies; utilities; heating, sanitary and electrical systems; and truck terminal areas at (i) Gyueshevo, (ii) Vidin, (iii) Rousse, (iv) Kapitan Andreevo, (v) Kulata and (vi) Bourgas. It also comprises design and supervision of the civil works.

(i) the works at Guyeshevo started; (ii) the works at Vidin are in progress (iii) the works at Rousse completed; (iv) and (v) the works at Kapitan Andreevo and Kulata are in progress; and (vi) the works at Bourgas being procured.


Includes the services required to support the regional and national implementation of the project. The regional support will consist of secretariat services to the RSC. The national support will comprise the services of an auditor and procurement advisors, the establishment of a financial management system, incremental operating costs and training to the Project Manager and its Project Implementation Team.


Progress in Project Implementation. The BCA continued to make progress in meeting the project development objectives with an increase in revenue collected, while processing time performance targets at pilots sites are substantially met. All contracts, except for the construction of Vidin III and Bourgas, have been awarded and the total amount committed is Euro 5,567 million, with an expected saving of about Euro 0.7 million. Total disbursement amount as of December 2003 is Euro 2,966 million or 38.4 percent of the loan amount. The project was extended for 12 months during which period all components will be implemented as foreseen. BULPRO made equally good progress in implementing the trade facilitation component.

What has been achieved. The macro performance has improved significantly in 2003. Revenue collected by staff has increased by 42 percent, trade volume by 40 percent, while operating costs compared to revenue collected are among the best at 1.1 percent. Performance meets or exceed to a large extent the targets for development objectives. Developments that took place over the period 2000-2003 are sizable.

The 2003 training program has been successfully carried out by NCVT/BCCI. The TTFSE website is entering its final stage of development with a software upgrade scheduled over the next three months and full information upload two months after completion of the upgrade.

Remaining Issues � Replicate performance monitoring at other BCPs. � Start works at Bourgas and Vidin III.


Croatia


Component Description Comments a. Institutional Reform on Customs Procedures US$1.4 million

Includes: (i) technical services to define and prepare required legal amendments, bylaws and administrative regulations to fulfill Customs functions while facilitating legitimate trade, in cooperation with other agencies; (ii) technical services to prepare and introduce new Customs procedures and documentation; (iii) technical services to reform the CDRC; (iv) technical services to monitor CDRC performance; (v) technical services to streamline operations on a pilot basis; and (vi) training to enhance inter-agency awareness and cooperation. This technical support would complement ongoing Croatian efforts to implement the CDRC strategy.

(i) legal amendments adopted; (ii) to (vi) substantially accomplished.


Includes: (i) provision of conventional and distance learning training to participants in trade, logistics and international freight transport through the Croatian Chamber of Economy (CCE); (ii) improvement of cooperation between public and private parties using a virtual forum; and (iii) creation of a website and provision of corresponding equipment to support information availability.

(i) The program covered to date 520 participants in 4 cities with 67 percent of highly satisfactory and 28 percent of satisfactory ratings; (ii) multiple public outreach events; and (iii) operational and uploaded website.

c. Support to CDRC Information System Improvement US$8.0 million

Includes: (i) software and technical services to enable exchange of all information related to trade (Electronic Data Interchange, electronic signature, digital payment) with other border inspection agencies, users and neighboring countries; (ii) software and technical assistance to support operation (selectivity, tariffs); (iii) hardware needed to improve the current information system (equipment availability and telecommunication) at border crossings and Customs offices; and (iv) a regional experience-sharing program on integrated systems for border agencies to stimulate regional and interagency cooperation.

(i) being procured; (ii) under progress; (iii) completed; and (iv) no activity to date.


Includes improvements of the border crossing facilities at Slavonski Brod, Gunja, Maljevac and Samac. These border posts are located on the border with Bosnia and Herzegovina. The component will consist of paving and service lanes, the provision of building modules and buildings, lighting and canopies, and drainage and other utilities at the four border stations.

New BCPs at Maljevac and Gunja completed; BCPs at Slavonski Brod and Samac will be completed in April 2004.


Includes the services required to support the regional and national implementation of the project.


Progress in Project Implementation. The project has made good progress as far as project implementation is concerned, with all civil works completed at four border crossing points (BCPs) and the building works in progress. It is expected that all works will be completed by the end of April 2004. The complete IT networking of Customs is completed and the hardware and software is in the last phase of implementation. The new tariff system is proceeding without delay. The fourth package of the IT component (paperless transactions) is being procured. What has been achieved. At a cost of 1.1 percent of revenue collected, CDRC remains the most cost-effective Customs Administration in Southeast Europe exceeding the development objective target of 1.5 percent. Performance at border crossing points has improved to a large extent, but delays in implementing selective controls and advance processing at pilot sites, as well as difficulties in modifying procedures of other border agencies, have continued to impact performance at some of the pilot sites. Training of transport and trade companies, organized under the project by the Chamber of Economy and the Road Transport Association has been very successful and the TTFSE website will be fully uploaded by March 2004. Disbursement from the loan has reached Euro 6 million and is accelerating rapidly as all but two contracts are under implementation. Remaining Issues � Continue implementation of the Action Plan for Pilot Sites in order to meet the targets

with a focus on advance processing, traffic management and selective processing � Start replication of performance measurement


Macedonia


Component Description Comments a. Customs Administration Institutional Reform15 US$2 million

Includes: (i) improvement of Customs procedures; (ii) assistance to streamline operations at three border posts and one inland terminal on a pilot basis; (iii) Customs training in new procedures, and training for interagency awareness and cooperation; and (iv) organizational restructuring of the MCA.

Substantial progress on (i) use of risk analysis and selectivity, (ii) enforcement, and (iii) simplification and user-friendly Customs procedures; and (iv) cross-border cooperation with Bulgaria.


Includes activities to be financed by the U.S. Government: (i) provision of technical assistance and advisory services to trade and international transport participants through the Economic Chamber; (ii) improvement of communication between border control agencies and trading community by using a virtual forum; and (iii) provision of equipment to support information availability.

(i) 24 seminar units (290 participants); (ii) operational website structure, progress in uploading – but some agencies don’t provide the necessary information.

c. Improvement in Integrated Customs Information System (ICIS) US$5.6 million

Includes: (i) software and assistance for information system improvement; (ii) hardware and works for ICIS and communication improvement; (iii) ICIS personnel training; and (iv) a regional program of experience-sharing. This component will stimulate regional and inter-agency cooperation.

(i) procurement completed; (ii) last contract under execution; (iii) completed; and (iv) no activity to date.


Includes: (i) rehabilitation and a new truck terminal at Tabanovce border crossing; (ii) improvement of Deve Bair border crossing; (iii) improvement of Kafasan border crossing; (iv) equipment for enhancing the processing capacity at Customs stations, and improving the MCA's training capacity; and (v) design and supervision of the civil works.

Civil works contracts started under (i), (ii), and (iii); (iv) completed; and (v) design completed, supervision under way.


Services required to support implementation of the project: assistance to implementation team, training, financial management system, etc.

15 In 2003 the EU deployed a Customs Assistance and Fiscal Affairs Office (CAFAO) in Macedonia. The overall goal of CAFAO is to assist the MCA in implementing the EU blueprint covering all thirteen aspects of Customs activities and procedures.


Progress in Project Implementation. Procurement under the project is almost completed, with all but two small contracts signed, and several contracts completed. The execution of the civil works contracts for improvement of border crossing points is delayed due to cumbersome procedures in obtaining construction permits, beyond Customs authority. The last contract will be completed by May, 2005 – which triggered a one year extension of project closing date, from June 30, 2004 to June 30, 2005. About 96 percent of the credit amount has been committed through signed contracts, and about 54 percent has been disbursed. What has been achieved. The main project beneficiary - Macedonia Customs Administration (MCA) - is one of the most advanced and committed among TTFSE program countries to procedural reforms, transparency, fighting against smuggling and corruption, and inter-agency and regional cooperation. These reforms are reflected in significant improvements of performance indicators monitored under the project, from reduction of clearance and border crossing times between 52-90 percent to increase in Customs revenue collection by 37 percent (from US$324 million to US$512 million), over the last three years. Trade volumes in Macedonia increased by 31 percent during the same period. MCA is implementing a series of new initiatives such as (i) clearance of goods by licensed importers at their premises, aimed at increasing Customs efficiency, and (ii) systematic cross-border information sharing with neighboring countries of Albania, Bulgaria, and Greece (soon to be started with Serbia and Montenegro), aimed at increasing detection of irregularities and curbing illegal traffic of excised goods between countries. Under the Trade Facilitation Component, the training to private sector in trade, transport and logistics has continued successfully with 24 seminar units in 10 cities and 290 participants over the first two years of implementation. The TTFSE regional website has been operational since April, 2003, under the Economic Chamber of Macedonia.

Remaining Issues � Speed-up the implementation of civil works contracts at border crossing points. � Improve the activity of the Customs’ risk analysis unit, and better clarify its role. � Identify ways and means for making the TTFSE website sustainable beyond the project

life.


Moldova

The project consists of the following six components:

Component Description Comments a. Strengthening of MDC Institutional Capacity US$1.4 million

Includes technical assistance and training to: (i) improve operations at pilot sites by collecting and refining performance indicators data, facilitating inter-agency local project teams, cooperation and awareness; and (ii) re-engineer procedures by introducing selectivity and targeting, and strengthening valuation and post-release activities.

(i) started in February 2004 with U.S. Customs assistance (STAT).

b. Development of Integrated Customs Clearance and Information System (ICCIS) US$6.0 million

Includes provision of technical assistance, equipment, and training to: (i) install and implement the ASYCUDA comprehensive system for Customs clearance assisted by UNCTAD; and (ii) ensure the computerization of MDC through an integrated package including equipment, software, acquisition and installation of telecommunication, and services.

(i) started in March, 2004; (ii) bidding documents under preparation.

c. Implementation of a Transit and Inland Control System US$0.3 million

Includes acquisition and operation of mobile intervention equipment to strengthen the preventive and enforcement capacity of MDC along major transit routes and the border line. The system requires the establishment and training of a preventive and enforcement unit, and issuance of guidelines for the unit’s activity.

the system design is being discussed with STAT-Moldova.


Includes minor works, repairs, and vehicle inspection equipment to (i) reorganize the traffic flows and work stations at selected border locations; and (ii) enhance Customs' control and processing capacity.

not yet started.

e. Trade Facilitation Development US$0.4 million

Includes (i) participation in the regional TTFSE website to ensure full transparency of procedures and requirements of border agencies, and to provide travel information; (ii) provision of conventional and distance learning training to participants in trade, logistics, and international freight transport through the Chamber of Commerce; (iii) distance learning programs for road transport operators and freight forwarders; and (iv) annual survey of trade and international transport environment.

(i) started in March, 2004; (iv) first year survey completed by the regional consultant.

f. Project Implementation US$0.6 million

Includes the services and office equipment required to support the implementation of the project consisting of the Project Implementation Team (PIT), procurement and information technology advisors, external auditors, the establishment of a financial management system, and training for the PIT staff.

team restructured, and financial management system still to be refined.

Progress in Project Implementation. The World Bank’s credit became effective in December, 2003, and the U.S. Customs assistance on data collection for monitoring indicators has started in February, 2004. While it is too early to claim much progress in project implementation, the


current Customs management appears committed to speeding-up the implementation pace to catch-up with the rest of TTFSE program countries. To that end (i) implementation of Asycuda clearance system has started; (ii) preparation of several procurement packages is under way; and (iii) mechanisms for inter-agency cooperation and information sharing to enable Moldova’s contribution to the TTFSE regional website are being established. Remaining Issues � Start-up monthly data collection for the performance indicators at pilot sites. � Enact the Government Decision on local project teams and provision of information to

the website. � Select a new project manager and establish his/her clear responsibilities, tasks, and

relations with the National Coordinator. � Refine the project financial management system.


Romania


Component Description Comments a. Customs Administration Institutional Reform US$0.8 million

Includes: (i) assistance to monitor GCD's performance; (ii) assistance to streamline operations at two border posts and one inland terminal on a pilot basis; and (iii) training for interagency awareness and cooperation. This technical support will complement the on-going EU activities to help implement the GCD's reform strategy.

(ii) substantial progress in introducing and using Asycuda selectivity module; (iii) less successful on border inter-agency cooperation.


Includes: (i) provision of technical assistance and advisory services to trade and international transport participants through the Chamber of Commerce and Industry; (ii) improvement of cooperation between public and private parties by using a virtual forum; and (iii) provision of equipment to support information availability.

(i) 31 seminar units (950 participants); (ii) public outreach events; (iii) operational website, but difficult to get information from transport agencies.

c. Improvement of Integrated Customs Information System (ICIS) US$3.4 million

Includes: (i) hardware for ICIS; (ii) software and assistance for information system improvement; (iii) a regional program of experience-sharing; and (iv) an inter-departmental information system. This component would stimulate regional and interagency cooperation.

completed, except (iii).

d. Improvement of Border Crossing Facilities US$17.6 million16

Includes (i) civil works for expansion of the Siret border crossing (on the highway from Turkey to Kiev); (ii) equipment for the modernization of Constanta Customs station, and for enhancement of processing capacity at this and other major Customs stations; and (iii) supervision of the civil works.

(i) under execution; (ii) completed; (iii) under execution.


Includes the services required to support implementation of the project, including auditors, the PMU staff, the establishment of a financial management system, and training to the PMU.

Progress in Project Implementation. Implementation is almost completed, with the remaining civil works contract for the border crossing of Siret to be finalized in June, 2004 and one minor training package to be executed in May, 2004. About 90 percent of the current loan amount is committed, and about 70 percent disbursed. The project closing date was extended by six months, until end-June 2004 to enable completion of civil works. About 27 percent of the loan amount was cancelled due to savings and replacement of a procurement package for an expensive fixed X-ray equipment by a mobile one.

16 This project component cost was reduced by about US$4.5 million.


What has been achieved. Although not all the performance targets have been met, between 2001 and 2003 a reduction of 45 percent in total clearance/waiting times at the monitored pilot sites has been registered. Romanian Customs have successfully introduced the selectivity module of Asycuda, that resulted in a 67 percent reduction of clearance time at the clearance terminal of Bacau, from 223 minutes in 2001 to 73 minutes in 2003 compared to a target of 60 minutes. During the first year (2003) of operation of the X-ray equipment purchased with the loan proceeds, detection of smuggling of narcotics and excised goods has increased. About 28 percent of the seizures (or $8 million) in 2003 were made using the newly purchased X-ray detectors and mobile X-ray machines. Over the last three years Customs revenues have registered a 100 percent increase, from $1.7 billion to $3.5 billion, and the trade volume doubled, from $21 billion to $42 billion. The trade facilitation component has made very good progress on the delivery of conventional and distance learning programs to the private sector. A total of 950 people have participated in the training modules delivered by the Chamber of Commerce and Industry in about 30 cities of Romania. The first distance learning program for road transport operators is operational, and leads to certification by the International Road Transport Union (IRU). The second program for freight forwarders is expected to be implemented by September 2004, with issuance of a Diploma by the International Freight Forwarders’ Association (FIATA).

Remaining Issues � Provision of information to the TTFSE regional website by the various governmental

agencies involved in trade and international transport Roll-out of selectivity to other locations.

� Improvement of the border processing by the National Administration of Roads (NAR); selective weighing of international trucks; gradual withdrawal of NAR from the border.

� Completion of existing contracts by closing date.


Serbia and Montenegro

The proposed project consists of the following four components:

Component Description Comments A1. Modernization of the SCA US$3.2 million

Includes: (i) technical services to coordinate and integrate the various modernizations; (ii) technical services to review and revise laws, regulations and guidelines; (iii) technical services to support the introduction of a Preventive and Enforcement Service in the SCA; (iv) technical services to prepare and introduce new Customs procedures and documentation; (v) technical services to strengthen human resource management; and (vi) equipment to improve the quality and efficiency of checks.

(i), (ii), (iii) substantial progress in cooperation with CAFAO.

A2. Modernization of the MCA US$0.4 million

Includes: (i) Organizational and procedural review and related reforms at border stations and clearance terminals; and (ii) introduction of selectivity and targeting in Montenegro. It is expected that the European Commission will provide most of the support for Customs modernization in Montenegro.

(i) ongoing efforts at pilot sites; (ii) tender documents under preparation.

B1. Support to SCA Information System Improvement US$5.4 million

Includes: (i) consulting services; (ii) training and equipment for the information system to establish a fully functional Customs system; and (iii) the first phase of the Single Electronic Window Initiative.

Initial procurement launched. New strategy being developed.

B2. Support to MCA Information System Improvement US$0.8 million

Includes computer and telecommunication hardware to equip and connect the various border crossing points and clearance centers and software development to expand the current system and cover selectivity and transit functions.

Hardware and telecommunication network rolled out.

C. Trade Facilitation Development US$0.6 million

Includes: (i) provision of short training sessions to road transport operators, forwarders, Customs brokers, and traders; (ii) provision of distance learning programs for road transport operators and freight forwarders; (iii) support to the PRO-Committees in the formulation of proposals to facilitate trade, building on a public-private dialogue; (iv) participation in the regional TTFSE website; (v) exchange programs to stimulate experience-sharing on facilitation and border agency reforms; and (vi) development of a public outreach program and establishment of an Internet-based, multi-national publication.

Grant funding for this component effective as of early 2004 only.

D. Project Implementation US$0.6 million

Includes the services required to support the implementation of the project. These will include training, procurement advisors, external auditors, and support in the establishment of a financial management system.

Ongoing.


The project provides support to both the Serbian Customs Administration and to the Montenegrin Customs Administration. The project is highly focused on the modernization process and on the information technology infrastructure. Progress in Project Implementation. The project became effective on January 7, 2003. In Serbia, a new Customs Law and its implementation regulations were adopted in 2003. The restructuring of the Serbian Customs Administration is underway. The implementation of the Customs information technology component in Serbia has been delayed due to management change, the need to adapt the existing system to new requirements and the formulation of a new strategy. The Serbian Customs Administration nonetheless developed a preliminary risk management system using its own resources. In Montenegro, the Customs Law and Law on VAT entered in force on April 1, 2003. A unit to work on risk analysis and selectivity has been created. The hardware, office software and telecommunication platform for the Customs administration, funded by the project, has now been fully rolled out. What has been achieved. Although not all performance targets have been met, the new Customs laws in both Republics provides a much enhanced legal environment for traders. This combined with the inputs from various donors in improving border crossing procedures and infrastructure is expected to lead to significant progress over the coming year. Trade volume and Customs revenue continued to increase rapidly, with close to US$700 million in Serbia compared to US$316 million in 2001. Trade with Serbia increased by 45 percent over the same period. Border processing improved with a reduction in truck examination rates, but processing time remains quite high. The detailed measurement carried out to date enabled a better understanding of impediments. A large proportion of delays come from the slow submission of proper documentation to Customs and controls carried out by other border agency than Customs. The set up of a multi-agency coordinating group is being considered to facilitate coordination among these agencies. The Montenegrin Customs Administration improved significantly its processing at the Podgorica inland terminal, by introducing selectivity based controls. The number of trucks waiting more than 6 hours dropped, while traffic volume increased. The effectiveness of controls was quite high with a rate of irregularities discovered of about 23 percent of inspected vehicles. Processing time for entering trucks at Debeli Breg has been reduced by about 30 percent. Revenue per staff increased from US$282,000 in 2001 to US$646,000 in 2003. Main issues � Finalize and implement the new Single Electronic Window Strategy in Serbia. � Improve interagency coordination. � Develop a risk management and selectivity system in the Montenegrin Customs

Administration.


Annexes

1 - Calendar of Key Events 2 - TTFSE Performance Indicators as of December 2003 3 - Staff Involved in the TTFSE Program 4 - List of Border Crossing and Pilot Sites under the TTFSE Program 5 - User Perceptions of Customs Problems, PlanConsult for TTFSE


Annex 1 - Calendar of Key Events

Event Date Observation RSC#1 MOU on TTFSE Program February 2000 Skopje ( Macedonia) TTFSE project for Bulgaria May 2000 WB approval TTFSE project for Romania May 2000 WB approval TTFSE project for Macedonia June 2000 WB approval RSC#2 Meeting June 2000 Bucarest (Romania) RSC#3 Meeting September 2000 Sofia (Bulgaria) TTFSE project for Albania October 2000 WB approval TTFSE project for Croatia October 2000 WB approval TTFSE project for Bosnia and Herzegovina January 2001 WB approval RSC#4 Meeting February 2001 Tirana (Albania) RSC#5 Meeting November 2001 Cavtat (Croatia) TTFSE project for Serbia and Montenegro May 2002 WB approval RSC#6 Meeting June 2002 Belgrade (Yugoslavia) RSC#7 Meeting February 2003 Chisinau (Moldova) TTFSE project for Moldova April 2003 WB approval TTFSE Customs DGs Meeting June 2003 Ochrid (Macedonia) RSC#8 Meeting April 2004 Sarajevo (BiH)


Annex 2 - TTFSE Performance Indicators as of December 2003 A - Customs Related Performance Indicators

1. Revenue collected / Staff ('000 USD) 2. Trade volume / Staff ('000 USD)1999 2000 2001 2002 2003 1999 2000 2001 2002 2003

Albania 270 358 368 375 421 Albania 1,471 1,448 1,446 1,285 1,814BiH_Fed 265 284 305 414 466 BiH_Fed 3,626 3,007 2,368 3,161 3,255BiH_RS 145 159 152 169 251 BiH_RS 1,117 1,422 1,091 1,302 1,775Bulgaria 257 283 315 355 498 Bulgaria 2,508 2,952 3,365 3,651 4,926Croatia 731 684 746 1,577 1,405 Croatia 3,030 3,707 4,101 5,255 6,344Macedonia 297 442 381 456 586 Macedonia 4,266 2,554 2,199 2,507 3,102Moldova 76 86 117 145 Moldova - 748 884 1,170 1,462Romania 276 346 429 545 839 Romania 3,340 4,178 7,242 7,289 9,720Serbia 50 100 195 290 Serbia - 1,788 2,059 2,501 3,892Montenegro 646 Montenegro 3,136

REVENUE COLLECTED/STAFF

0200400600800

1,0001,2001,4001,6001,800

Alb

ania

BiH

_Fed

BiH

_RS

Bul

garia

Cro

atia

Mac

edon

ia

Mol

dova

Rom

ania

Ser

bia

Mon

tene

gro

US

D th

ousa

nds

1999 2000 2001 2002 2003

TRADE VOLUME/STAFF

0

2,000

4,000

6,000

8,000

10,000

12,000

Alb

ania

BiH

_Fed

BiH

_RS

Bul

garia

Cro

atia

Mac

edon

ia

Mol

dova

Rom

ania

Ser

bia

Mon

tene

gro

US

D th

ousa

nds

1999 2000 2001 2002 2003

3. Total Customs cost / Revenue collected 4. Salaries / Revenue collected1999 2000 2001 2002 2003 1999 2000 2001 2002 2003

Albania 2.52% 2.59% 2.52% 1.85% 1.95% Albania 1.26% 1.46% 1.28% 1.22% 1.32%BiH_Fed 2.77% 3.17% 3.12% 3.15% 3.05% BiH_Fed 1.73% 2.12% 1.91% 1.56% 1.63%BiH_RS 3.86% 6.76% 5.79% 4.62% 4.37% BiH_RS 2.45% 3.61% 2.57% 3.33% 3.27%Bulgaria 1.37% 1.28% 1.17% 1.30% 1.27% Bulgaria 0.66% 0.56% 0.82% 0.98% 0.95%Croatia 1.78% 1.76% 1.59% 0.85% 1.16% Croatia 1.31% 1.40% 1.22% 0.70% 0.92%Macedonia 2.16% 1.31% 1.39% 1.20% 1.40% Macedonia 1.54% 0.90% 0.92% 0.92% 1.10%Moldova 2.09% 2.39% 2.41% 1.90% Moldova 0.95% 1.23% 1.05% 0.80%Romania 1.86% 1.72% 1.58% 1.56% 1.15% Romania 0.63% 0.73% 0.54% 0.51% 0.51%Serbia 3.10% 4.76% 0.00% 3.31% Serbia 2.23% 2.73% 0.00% 1.78%Montenegro 0.00% 1.34% Montenegro 1.25%

TOTAL CUSTOMS COST / REVENUE COLLECTED

0%

1%

2%

3%

4%

5%

6%

7%

8%

Alba

nia

BiH

_Fed

BiH

_RS

Bulg

aria

Cro

atia

Mac

edon

ia

Mol

dova

Rom

ania

Serb

ia

Mon

tene

gro

1999 2000 2001 2002 2003

SALARIES / REVENUE COLLECTED

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

Alba

nia

BiH

_Fed

BiH

_RS

Bulg

aria

Cro

atia

Mac

edon

ia

Mol

dova

Rom

ania

Serb

ia

Mon

tene

gro

1999 2000 2001 2002 2003


5. Declarations / Staff 6. Cost per declaration (US$)1999 2000 2001 2002 2003 1999 2000 2001 2002 2003

Albania 229 267 278 293 270 Albania 29.72 34.66 33.40 22.00 30.31BiH_Fed 292 315 287 334 373 BiH_Fed 25.24 28.59 33.21 19.00 38.17BiH_RS 225 238 179 429 223 BiH_RS 24.83 45.18 49.28 0.03 49.13Bulgaria 267 306 339 561 737 Bulgaria 13.22 11.83 10.88 24.00 8.59Croatia 639 569 422 447 424 Croatia 20.35 21.11 28.06 30.00 38.32Macedonia 324 353 317 387 383 Macedonia 19.82 16.44 16.75 39.00 21.42Moldova 63 80 147 110 Moldova 25.04 25.69 8.00 25.11Romania 190 248 320 379 439 Romania 26.98 23.98 21.09 18.00 21.94Serbia 133 148 0 324 Serbia 21.23 32.23 14.00 29.66Montenegro 232 Montenegro 37.37

COST PER DECLARATION

0

10

20

30

40

50

60

Alb

ania

BiH

_Fed

BiH

_RS

Bul

garia

Cro

atia

Mac

edon

ia

Mol

dova

Rom

ania

Ser

bia

Mon

tene

gro

US

D

1999 2000 2001 2002 2003

NUMBER OF DECLARATIONS / STAFF

0

100

200

300

400

500

600

700

800

Alba

nia

BiH

_Fed

BiH

_RS

Bulg

aria

Cro

atia

Mac

edon

ia

Mol

dova

Rom

ania

Serb

ia

Mon

tene

gro

1999 2000 2001 2002 2003


B - Border Crossing Operational Indicators (samples)

BOSNIA AND HERZEGOVINA

Bosnia and Herzegovina: Banja Luka, Clearance Times, December 2003

Bosnia and Herzegovina: Banja Luka, Examination Times, December 2003

050

100150200250300

Oct 00

Jan 0

1

Mar 01

May 01

Jul 0

1

Sep 01

Nov 01

Jan 0

2

Mar 02

May 02

Jul 0

2

Sep 02

Nov 02

Jan 0

3

Mar 03

May 03

Jul 0

3

Sep 03

Clearance actual time (minutes) Clearance in <15 min. (%) Target timeTarget <15 min. (%) Clearance Time Trend

0102030405060708090

100110120

Jun 01

Jul 0

1

Sep 01

Feb 02

Apr 02

May 02

Jun 02

Jul 0

2

Aug 02

Sep 02Oct

02

Nov 02

Dec 02Ja

n 03Feb 0

3

Mar 03

Apr 03

May 03Ju

n 03Ju

l 03

Aug 03

Sep 03Oct-

03

Nov-03

Dec-03

Act.exam. Act. detect. Target exam. Target detect. Actual Examination Rate Trend


BULGARIA

Bulgaria: Plovdiv, Clearance Times, November 2003

Bulgaria: Plovdiv, Examination Times, November 2003

0

50

100

150

200

250

300

Oct

00

Nov

00

Jan

01

Feb

01

Mar

01

Apr

01

May

01

Jun

01

Jul 0

1

Aug

01

Sep

01

Oct

01

Nov

01

Dec

01

Jan

02

Feb

02

Mar

02

Apr

02

May

02

Jun

02

Jul 0

2

Aug

02

Sep

02

Oct

02

Nov

02

Dec

02

Jan

03

Feb

03

Mar

03

Apr

03

May

03

Jun

03

Jul 0

3

Aug

03

Sep

03

Nov

-03

Clearance actual time (minutes) Clearance in <15 min. (%) Target time Target <15 min. (%) Clearance Time Trend

0102030405060708090

100110120

Oct 00

Nov 00

Jan 0

1Feb

01

Mar 01

Apr 01

May 01Ju

n 01Ju

l 01

Aug 01Sep

01Oct

01

Nov 01

Dec 01Ja

n 02

Feb 02

Mar 02

Apr 02

May 02Ju

n 02Ju

l 02

Aug 02Sep

02Oct

02

Nov 02

Dec 02Ja

n 03

Feb 03

Mar 03

Apr 03

May 03Ju

n 03Ju

l 03

Aug 03Sep

03

Nov-03



MACEDONIA

Macedonia: Kumanovo, Clearance Times, November 2003

Macedonia: Kumanovo, Examination Times, November 2003

050

100150200250300350400450500550

Oct

-00

Nov

-00

Dec

-00

Jan-

01

Feb-

01

Mar

-01

Apr

-01

May

-01

Jun-

01

Jul-0

1

Aug

-01

Sep

-01

Oct

-01

Nov

-01

Dec

-01

Jan-

02

Feb-

02

Mar

-02

Apr

-02

May

-02

Jun-

02

Jul-0

2

Aug

-02

Sep

-02

Oct

-02

Nov

-02

Dec

-02

Jan-

03

Feb-

03

Mar

-03

Apr

-03

May

-03

Jun-

03

Jul-0

3

Aug

-03

Sep

-03

Oct

-03

Nov

-03

Clearance actual time (minutes) Clearance in <15 min. (%) Target time Target <15 min. (%) Clearance Time Trend

0102030405060708090

100110

Oct-00

Nov-00

Jan-02

Apr-01

Nov-01

Jan-02

Feb-02

Apr-02

May-02

Jul-02

Aug-02

Sep-02

Oct-02

Nov-02

Jan-03

Feb-03

Mar-03

Apr-03

May-03

Jun-03

Aug-03

Sep-03

Oct-03

Nov-03



Annex 3 – Participants to the TTFSE Program

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�� National Coordinator Project Manager Trade Facilitation

Coordinator Website Coordinator WB Project Officer,

Tirana Mr. Arben Malaj Minister of Finance

c/o Mr. Gjergj Teneqexhi, General Secretary

Tel: (355 42) 27 937 Fax: (355 42) 27 937 MOF - Email: [email protected]

Ms. Sabina Shyti, MOF PIT, Deshmoret e Kombit, No 3. Tirana, Albania

Tel : (355 68) 20 46 336

Fax: (355 42) 67 637 Mobile: (355 38) 204 6336 E-mail: [email protected]

Mr. Luan Bregasi, President, Union of Chambers of Commerce and Industry (ALBAPRO) Contacts: Ms. Ariola Shehaj Tel: (355 42) 32-446 Fax: (355 42) 27-997 Mobile: (355 69) 2501 844 Pranvera Kastrati ALBAPRO Tel: (355 42) 286 56 Fax: (355 42) 646 58 E-mail: [email protected]

Pranvera Kastrati ALBAPRO Tel: (355 42) 286 56 Fax: (355 42) 646 58 E-mail: [email protected]

Mr. Artan Guxho [email protected]

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National Coordinator Project Manager Trade Facilitation Coordinator

Website Coordinator WB Project Officer, Tirana

Mr. Želimir Rebac Director Federation Customs Administration [email protected] Mr. Trivo Marinkovic, Director of Republic Customs Administration, Republika Srpska Fax: (387 51) 314 740 E-mail: [email protected]

Mr. Kemal Karkin Tel: (387 71) 664 831 E-mail: [email protected]

Zijad Sinanovic Trade Facilitation and Website Coordinator E-Mail: [email protected]

Zijad Sinanovic Trade Facilitation and Website Coordinator E-Mail: [email protected]

Mr. Nikola Kerleta [email protected]

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Stamen Stanoev Tassev Phone: (359 2) 9859 2005 Fax: (359 2) 987 2157 E-mail: [email protected]

Nedialka Cholakova Ministry of Finance Tel. (359 2) 9859 2709 E-mail: [email protected]

Gueorgui Tchernev Vice President of BCCI Tel: (359 2) 989 6251 Fax: (359 2) 987 3209 E-mail: [email protected]

Gueorgui Tchernev Vice President of BCCI Tel: (359 2) 989 6251 Fax: (359 2) 987 3209 E-mail: [email protected]

Mr. Doncho Baralov [email protected]

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Mr. Mladen Barišić Director General Customs Directorate of the Republic of Croatia Humboldtova 4a 10000 Zagreb tel. + 385 (0) 1 61 02 461 fax. + 385 (0) 1 61 55 280 email: [email protected] Ms. Dina Gacina (secretary) Email: [email protected]

Mr. Vedran Ivanisevic Assistant Director GeneralInternational Customs Cooperation E-mail: [email protected]

Sasa Subotic CRO-Pro President Croation Chamber of Economy, 1000 Zagreb, Draskoviceva 45 (PP 630) Tel: (385 1) 456 1572 Fax: (385 1) 456 1540 E-mail: [email protected]

Mr. Alexander Friedman Croatian Chamber of Commerce Zagreb, Rooseveltov trg 2 Tel: (385 1) 456 1573 Fax: (385 1) 456 1520 E-mail: [email protected]

Mr. Vladimir Skendrovic [email protected]

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Mr. Nikola Popovski, Minister of Finance c/o Goran Anceski, Assistant to the Minister, MOF Tel: (389 2) 310 6454 Fax: (389 2) 310 6140 E-mail: [email protected]

Sladjana Damjanoska 13, Lazar Licenovski Str. 1000 Skopje Tel: (389 2) 129 155 Fax: (389 2) 237 832 E-mail: [email protected]

Ljupco Kovcegarski Secretary General Economic Chamber of Macedonia E-mail: [email protected]

Ms. Sofce Jovanovska Head of the Information Centre Economic Chamber of Macedonia Tel: (389 91) 116 543 Fax: (389 91) 116 210 E-mail: [email protected]

Mr. Zarko Bogoev [email protected]

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Mr. Nicolae Vilcu, General Director The Department for Customs Control Tel. (373 2) 54 22 10 or (373 2) 54 94 60 Fax. (373 2) 27 30 61

Proj. Implem. Team Tel. (373 2) 54 95 95 / 10 51 66 Fax. (373 2) 54 95 95 e-mail: [email protected]

Mr. Sergiu Harea, CCI Tel: (373 2) 24 51 48 Fax. (373 2) 241453 E-mail: [email protected]

Mr. Ghenadie Taulean AITA Tel: (373 2) 27 88 49 Fax: (373 2) 27 88 38 E-mail: [email protected]

Ms. Silvia Paghinu [email protected]


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Mr. Tudor Tauotescu Director General of Customs Administration c/o Silvia Savu Project manager E-mail: [email protected]

Silvia Savu 13, Matei Milo St. Sect 1 Bucharest Romania Tel: (40 1) 312 1338 Mobile: (40 92) 721 731 Fax: (40 1) 312 5261 E-mail: [email protected]

Liliana Deac Director Foreign Relations Department Chamber of Commerce and Industry of Romania Tel: (40 1) 322 9516 Fax: (40 1) 322 9517 E-mail: [email protected]

Viorela Popescu Director of Trade Point Tel: (40 1) 336 0107 Fax: (40 1) 311 1491 E-mail: [email protected]

Mrs. Doina Visa [email protected]

� ��



Vladan Begovic Director General of Customs (FCA) Tel: (381 11) 695 025 Fax: (381 11) 690 614 E-mail: [email protected]

Miodrag Radusinovic Republican Coordinator Director General of MCA E-mail: [email protected]

Dragan Dragovic (FCA) Tel: (381 11) 311 6610 E-mail: [email protected]

Olivera Zivkovic (MCA) E-mail: [email protected]

Jadranka Zeljkovic Yugoslav Chamber of Commerce and Industry Tel: (381 11) 324 8109 E-mail: [email protected]

Olivera Stankovic Yugoslav Chamber of Commerce and Industry Tel: (381 11) 324 8000 E-mail: [email protected]

Mr. Miroslav Frick [email protected]

��)

Sector Manager Program Team Leader Institutional Specialist Task Team Leaders STAT Regional Coordinator

Motoo Konishi Tel: (202) 453 4278 Fax: (202) 614 0900 E-mail: [email protected]

Paulus A. Guitink Tel: Skopje Field Office 389 2 3117 159 ext. 273 or 5250 273 (satellite) Fax 389 2 3117 627 Fax: (202) 614 0900 E-mail: [email protected]

Philip W. Moeller Tel: (202) 478 9070 Fax: (202) 614 0900 E-mail: [email protected]

Anca Dumitrescu Tel: (202) 458 9754 Anchor at Hq. Fax: (202) 614 0900 E-mail: [email protected] Gérald Ollivier, Trade Facilitation Specialist Tel: (202) 458 4023 Fax: (202) 614 0900 E-mail: [email protected]

Bob Olson (in Sofia) Tel: (359-2) 953 1824 E-mail: [email protected]


Annex 4 - List of Border Crossing and Pilot Sites under the TTFSE Program

Location� Infrastructure� Design Project Border Pilot� Inland Pilot�

Albania��

� ��

� ��

� ��

� ��

�

Durres� � � X� � Qafe Morina� X� � � � Qafe Thane� X� � X� � Tirana� � � � X�

Bosnia-Herzegovina��

� ��

� ��

� ��

� ��

�

Doljani (Fed)� � X� � � Gorica (Fed)� � X� � � Grude (Fed)� � � � X�

Izacic (Fed)� X� � X� � Kamensko (Fed)� � X� � � Orasje (Fed)� X� � X� � Banja Luka (RS)� � � � X�

Gradiska (RS)� X� � ��

Novi Grad (RS)� X� � � � Raca (RS)� X� � X� �Bulgaria�

��

� ��

� ��

� ��

� ��

�

Bourgas� X� � � � Plovdiv� � � � X�

Gyueshevo� X� � X� � Kapitan Andreevo� X� � � � Kulata� X� � � � Rousse� X� � X� � Vidin� X� � � �Croatia�

��

� ��

� ��

� ��

� ��

�

Gradiska� � � X� � Gunja� X� � � � Jankomir� � � � X�

Macelj� � � X� � Maljevac� X� � � � Samac� X� � � �


Slavonski Brod� X� � � � Zupanja� � � X� � Macedonia�

��

� ��

� ��

� ��

� ��

�

Deve Bair� X� � X� � Kafasan� X� � X� � Kumanovo� � � � X�

Tabanovce� X� � X� �Moldova�

��

� ��

� ��

� ��

� ��

�

Chisinau� � � � X�

Leuseni� � � X� � Palanca-Tudora� X� � X� � Cahul� � � X� �Romania�

��

� ��

� ��

� ��

� ��

�

Bacau� � � � X�

Constanta� X� � X� � Giurgiu� � � X� � Siret� X� � � �Serbia and Montenegro�

��

� ��

� ��

� ��

� ��

�

Belgrade� � � � X�

Podgorica X

Presevo� X� X�

Gradina� X� � X� �

Horgos� X� � X� �

Debeli-Breg� X� � X� �

Batrovci X� X�

Total:��

� 28�

��

� 3�

��

� 23�

��

� 10�

��

�


Annex 5 - User Perceptions of Customs Problems, PlanConsult for TTFSE

(rated on the scale: mid rating = 5, maximum rating = 10) (blue lines = 2001*, red lines = 2002**, green lines = 2003***)

* Data from CYCLE 1 (Survey 2001/02) except MD and YU (UoS&M) (data from Survey 2003 as a retrospect to 2001) ** Data from CYCLE 2 (Survey 2003 in AL, BiH, BG, CR, MAC and RO) and CYCLE 1 (Survey 2003 in MD and YU

(UoS&M) as a retrospect to 2002) *** Data from CYCLE 3

Bulgaria

Communications

Procedures

PersonnelLogistics

Law

Bosnia & Herzegovina

Communications

Procedures

PersonnelLogistics

Law

Bulgaria

Communications

Procedures

PersonnelLogistics

Law

Croatia

Communications

Procedures

PersonnelLogistics

Law


(rated on the scale: mid rating = 5, maximum rating = 10) (blue lines = 2001*, red lines = 2002**, green lines = 2003***)

* Data from CYCLE 1 (Survey 2001/02) except MD and YU (UoS&M) (data from Survey 2003 as a retrospect to 2001) ** Data from CYCLE 2 (Survey 2003 in AL, BiH, BG, CR, MAC and RO) and CYCLE 1 (Survey 2003 in MD and YU

(UoS&M) as a retrospect to 2002) *** Data from CYCLE 3

Moldova

Communications

Procedures

PersonnelLogistics

Law

Romania

Communications

Procedures

PersonnelLogistics

Law

Union of Serbia & Montenegro

Communications

Procedures

PersonnelLogistics

Law

Macedonia

Communications

Procedures

PersonnelLogistics

Law

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