Chea Samnang
17 March 2015, Jakarta, Indonesia
CHALLENGES AND WAYS FORWARD
0
IMPLEMENTING
WTO AGREEMENT ON TRADE FACILITATION
WCO AP Regional Workshop on Strategic Initiatives for Trade Facilitation – Mercator Programme
CONTENTS
1
1.Background
2.Self Assessment
3.Priorities and Challenges
4.Ways Forwards and Concluding Remarks
BACKGROUND
2
Sources: Ministry of Economy and Finance, Feb 2015
GDP : About 17 Billions USD
GDP Growth Rate: 7%
GDP per capita: 1,130 USD
PPP: 3400 USD
Trade Volume: 22B USD
(2013) Vs. 10B in 2010
Major Import: Petroleum
products, construction
materials, machinery, motor
vehicles, pharmaceutical
products
Major Export : Clothing,
footwear, timber,
rubber, rice, fish, tobacco
GDP GROWTH 2004-2014
PROGRESS OF INTEGRATION AND
INTERNATIONAL TRADE
ASEAN
WCO
WTO APEC?
3
???
2004
1999
2001
ASEAN +
GSP : Almost 40 countries
TAs :10 countries
ASEAN FREE TRADE AGREEMENTS AND
DIALOGUES PARTNERS
D
E
AK
AJ2010
4
ASEAN-JAPAN
ASEAN-KOREA
AFTA/
CEPT
ASEAN-CHINA
ASEAN-INDIA
AI
ASEAN-ANNZ
2010
ATIGA
1993 2005 2007 2009 2010 2010 2010
TAXES COLLECTED BY CUSTOMS
5
Tariff Rate CD ST VAT ET
0 1289 8647 1 8733
5 16 39
7 3784
10 239 9550 567
15 3482 47 49
20 137 21
25 346
35 992
45 121
50 82
15+0.02$/L 6
35+0.02$/L 1
0+0.04$/L 4
Source: Cambodia Customs Tariff Book 2012
Revenue collected by GDCE
represents:
approximately 70% of national
tax revenue
about 40% of national revenue
7% of GDP
CUSTOMS CHALLENGES
YearTariff collected
Tariff Rate
2007 2010 2015
20%
10%
5%
15%
Tariff Rate
Tax
Revenue
Emerging role of
Customs is to boost
trade by facilitate
global trade with the
balance of
protection of society
and environment
6in 2004 as the Royal Government of Cambodia has established Sub-Steering
Committees on Trade Facilitation
7
TRADE FACILITATION PAYOFF
Cambodia LPI : 83rd in 2014 Vs.129th in 2010,
improved by 46 places
Clearance time : 5.9 days Vs. 1.4 days
GDP Growth : 7%
Trade Volume : 22B Vs.10B
Revenue : USD 1.3BVs. USD 714M
Mainly resulted from modernization program 2004-
2008, 2009-2013: Law on Customs, abolish PSI,
ASYCUDA, Risk Management, PCA,CPPM,
AEOs, Advanced Ruling, RKC accession and
Capacity Building.
ACCESSION TO RKC
8
General Annex, 86%
Specific Annexes
Source: Chea Samnang, Research Paper of WCO 61 Fellowship Program,
Accession to the Revised Kyoto Convention and Cambodia Customs Reforms
and Modernization, 2013
II. TRADE FACILITATION SELF-ASSESSMENT
9
• The workshop for self assessment on needs and priorities was
organized by WTO and World Bank to evaluate its compliances
• Objectives of workshop is to define the challenges and the
technical assistances needed
• Workshop was participated by Ministry of Commerce, Customs,
Council Development of Cambodia, Ministry of Planning, JICA
and OECD.
• WTO assessment guide was used for self-assessment
• The result are preliminary and need for further scrutinized
LEVEL OF COMPLIANCE WITH MEASURES
10
294
7
2
Fully Substantially Partially No
Source: Cambodia Self-Assessment of Needs and Priorities, June 2014
IMPLEMENTATION CATEGORIES
11
30, 71%
2, 5%
10, 24%
A B CSource: Cambodia Self-Assessment of Needs and Priorities, June 2014
TIME TO IMPLEMENT
12
291
6
51
Immediate 1 year 3 years 5 years Other
Source: Cambodia Self-Assessment of Needs and Priorities, June 2014
ACTIONS REQUIRED
13
4
4
26
23
Legal/Policy
Procedures
Institutional Framework
Human Resources/ Training
Communications and Information Technology
Infrastructure and Equipment
Source: Cambodia Self-Assessment of Needs and Priorities, June 2014
14
Complied
Partially Complied
Substantially Complied
Non-Complied
WHAT ARE COMPLIED AND WHAT ARE NOT ?
WHAT ARE FULLY COMPLIED ?
15
1.1 Publication
1.3 Enquiry points
1.4 Notification
2.1 Opportunity to comment
2.2 Consultations
3.1 Advance rulings
5.1 Notification of enhanced controls
5.2 Detention
5.3 Test procedures
6.1 General disciplines on fees and charges
6.2 Specific disciplines on fees and charges
6.3 Penalty disciplines
7.3 Separation of release from final determination
7.4 Risk management
WHAT ARE FULLY COMPLIED?
16
7.6 Establishment and publication of release times
7.7 Measures for Authorized Operators
8.1 Border agency cooperation
9 Movement of goods under Customs control
10.2 Acceptance of copies
10.3 Use of international standards
10.5 Pre shipment inspection
10.6 Use of customs brokers
10.7 Common border procedures and uniform documentation
10.8 Rejected goods
10.9 Temporary admission
11.4 Transit strengthening and non discrimination
12 Customs cooperation
13.2 National Committee on Trade Facilitation
3. PRIORITIES AND CHALLENGES
20
Like other LDCs, Cambodia customs is facing big challenges in
applying the information technology in the customs practices due to
its IT capabilities, resources and finance. it is found that the are at
least 14 provisions among 42 provisions of ATF are required the IT
capabilities, according to Global Express Association in WCO IT
conference 2014.
Implementation of a National Single Window system would contribute to full and effective implementation of several WTO TFA measures and would strengthen the overall trade facilitation regime in Cambodia.
21
Measures Problems Solutions
1.2
Information
available
through the
Internet
A. No procedure the accuracy of
information by all trade related
agencies.
B. Websites varies greatly.
Agencies prefer to maintain own
websites.
E. ICT equipment inadequate in
some agencies and will need to
be upgraded
Period : 3 years
A. Coordination mechanisms to ensure
information is updated as changes occur.
B. An appropriate governance structure will need
to be developed and Support work on MoC
Trade Information Portal.
D. Some training necessary for focal points in
each participating agency.
WB finances the development of Trade Portal
under MOC.
RKC standard 9.2 (36 months)
7.1
Pre-arrival
processing
E. . Establish project to expand
the functionality to accept
electronic submission of
supporting documents.
2.Establish information sharing
mechanism among all relevant
agencies using electronic means.
A. 1.Develop procedures for pre-arrival
processing scheme, including acceptance of
electronic manifest.
Pre-arrival clearance procedure
Customs Strategic Plan 2014-2018 (medium
term)
2. Expand the number of traders with high
compliance to be under the pre-arrival
processing scheme.
AEO expansion in Customs Strategic Plan
2014-2018
22
10.1
Formalities and
documentation
requirement
A. No legal requirement to
review procedures and
documentation.
Period: 5 Years
A. Prakas on review
B. Review Process
C. Monitoring Mechanism
D. Training on Review methods
E. Incorporate in NSW
10.4
Single Window
D. Lack of technical, legal
experts to develop the system
and law and regulation.
E. Lack of hardware and
software for develop the system
Period: 5 Years
D. Need Technical advisors to support
the development of the new system and
train the national operators of the
system.
E. Estimated cost is excess of 10 million
USD.
Top priority in Customs Strategic Plan
2014-2018 and AEC obligation
A 42 month implementation strategy
has been developed
11.1-3
Transit charges,
regulations and
formalities
A. Charges are imposed only on
certain categories of goods.
B.Transit procedures not
established
Period: 5 Years
A. Need to determine overall charging
regime for all goods.
B.need to Develop procedural manual.
23
11.5-10
Transit
procedures
and controls
E. System and tools for control of transit
are not available and
Period : 5 years
E. need to Introduce transit
management system.
11.11.1-5
Transit
guarantees
A. Lack of functionality to connect
ADSYCUDA with banking system and
A. need to Develop banking system
to manage the rapid discharge of
bonds at exit point.
7.2
Electronic
Payment
A.Missing e-commerce law
D.Lack of technical expert,
E.ASYCUDA function.
Period : 3 years
A.Finalise the law,
D. technical advisor needed.
E. Customs is identifying IT solution
and cost.
Customs Strategic Plan 2014-
2018
7.8
Expedite
shipment
A.Lack of Provisions for Express
Consignment
Period : 5 years
A. need to Develop and implement
provisions for express
consignments.
TECHNICAL ASSISTANT AND CAPACITY BUILDING
NEEDED
24
Technical assistance required to support full implementation of:
o Inquiry point(Measure1.3)
o Right to appeal and review(Measure4.1)
o Expedite shipments (Measure 7.8)
o Perishable goods(Measure7.9)
o Formalities and documentation (Measure 10.1)
o Single window (Measure 10.4): Support for automation –particularly development and implementation of a Single Window and related IT systems such as electronic payment
4. WAYS FORWARDS AND CONCLUDING REMARKS
25
Ways Forwards
• Establish validate team for scrutinize the preliminary results of self-assessment
• Establish the national committee on trade facilitation
• Develop the gaps into details actions plan (What, Who, How much, and when).
• Cost-benefit analysis of the implementation should be carry out
• Preparation for notification and implementation
CONCLUDING REMARKS
• Assessment is only the start of a ongoing process. Results need to be validated by checking results with agencies that did not participate. Private sector also needs to be consulted.
• Need to identify small team at MoC to validate the findings with individual agencies. Other participating agencies encouraged to contribute.
• Then the final report can be prepared and shared with all stakeholders. Suggest this be done at a stakeholder communication event.
• Discussions should then be scheduled with development partners to discuss support for implementation assistance on identified needs.
26
CONCLUDING REMARKS
27
1. There is correlation between the level of development and the compliance of TFA,
therefore more time and assistances should be given to LDCs. Skeptics and scare
before self-assessment
2. Cambodia and LDCs should seize the opportunity to implement the ATF, as it will
produce more positives results than the negatives implications. Even there are
positives effects of ATF, Challenges and Gap Analysis should be carefully done
before making commitment as LDCs have flexibilities in implementing ATF
3. There will be economics implications such as expansion on international trade,
reduction in trade cost, increase in tax collection, efficiency in customs control,
increase in trade deficit for country with weak production capacity
4. Cambodia as LDCs will need a lots of capacity buildings to improve the human
resources, and the management of the implementation of ATF. Aide for Trade/
Capacity Building
5. The big challenging area is the ICT sector which will depend a lot on Donor funding
for launching ICT projects.
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