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Business-Finance

Published on April 9, 2008

Author: Tarzen

Source: authorstream.com

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Governance and Customs Operations: the Role of Information and Communications Technology Regional Conference on Investment Climate and Competitiveness in East Asia 21-22 November 2005, :  Governance and Customs Operations: the Role of Information and Communications Technology Regional Conference on Investment Climate and Competitiveness in East Asia 21-22 November 2005, Luc De Wulf International Trade Department World Bank Overview of the presentation:  Overview of the presentation 1.Governance and Customs 2. Information and Communications Technologies in Support of Integrity and Customs 3. The example of Single Window (SW) 4. Ghana TradeNet : A Single Window in a developing country 5. Conclusions 1. Governance and Customs:  1. Governance and Customs Customs often identified as the most corrupt public sector agency . This undermines investment climate and growth. New WTO concerns in ongoing Trade Facilitation Negotiations But corruption in Customs also reflect the situation of integrity in the country as a whole. Anti corruption efforts at Customs are best when other agencies are also targeted. However Customs operations are especially vulnerable to corrupt practices. Integrity campaign can be formulated along two axes Reduce Opportunity : Modernize with ICT support Reduce Motive : Need and greed 2. ICT in Support of Integrity at Customs:  2. ICT in Support of Integrity at Customs Its importance is recognized by most Customs today. Yet, many operate with ICT systems that are outmoded, or fail to take full advantage of their ICT system for a variety of reasons—including the reluctance to implement the transparency that good use of ICT use implies. ICT use forces the adoption of streamlined clearance practices,mainly inspired by WCO- Kyoto Agreement. It would be a mistake to design the ICT system around present clearance practices. The “troyan horse” opportunity. The adoption of modern ICT platform is a necessary but not sufficient condition for modernity in Customs. 3. Single Window:  3. Single Window A Single Window is a system that allows traders to lodge information with a single body to fulfill all import and export related regulatory requirements. It involves all members of the trading community private as well as public Does not necessarily have to be electronic, but manual processes have many disadvantages Transparency and simplicity are main objectives; improved integrity is a side result. Single window is intended to reduce the number of transactions to a minimum, reduce error rate, speed up clearance time, drastically reduce the face-to-face contact between traders and government agents so as to enhance transparency. Requirement for successful introduction of a Single Window:  Requirement for successful introduction of a Single Window Political will overcomes resistance and mobilizes resources Strong Lead Agency has the necessary authority and access Partnership between Government and Trade ICT savvy and mastery of good procedures in the participating agencies, particularly Customs Clear objectives that take capacities of various stakeholders into account Single Window is user friendly—training and support Legal environment is enabling Adoption of international standards helps greatly A communications strategy keeps stakeholders informed and solicits their contribution 4. Ghana TradeNet :Inspiration and Implementation :  4. Ghana TradeNet :Inspiration and Implementation 4.1 Singapore’s example Seeds were sown in 1979 when Singapore leadership stimulated IT, training as well as adoption of IT solutions in government agencies. Deliberate decision. Application of IT to trade received priority in 1985, a reaction to a year of economic recession. Trade documentation flows were studied and drastically simplified. Top level government support was announced end-1986; TradeNet’s operation was announced for early-1989 and Singapore Network Services (since renamed Crimson Logic) was created to own and operate the TradeNet system. Competitive bidding for an integrator was won by IBM. TradeNet was actually launched in early 1989, use was at first voluntary but made mandatory in 1991. Extensive training and IT savvy of members of the trading community helped a lot. TradeNet links about 34 members of the trading community to a single transaction point. Slide10:  Results of TradeNet From 1989 to today Processing time fell from 2-7 days to 2 minutes Number of documents required for clearance fell from a maximum of 3035 to one Transactions rose from 10,000 per day to 30,000 per day Trade forwarders estimate that they saved 20-35 % of transaction costs Customs duty and excise tax revenues enter Treasury’s coffers immediately rather than with long delay Trade statistics are prepared promptly 4.1 Ghana Context and GCNet design:  4.1 Ghana Context and GCNet design Ghana is a mid-sized English Speaking country on the coast of West Africa. Its per capita income defines it as low income country. Misguided economic and social policies had left it very impoverished at the end of the 1980s. In the early 1990s new leadership chose for an open market-oriented economy. Multilateral and bilateral aid supported this new direction. New trade policies: low tariffs, fewer tariff lines, elimination of import quotas, creation of export processing zones, total revision of the regulatory framework for private sector operation By 1998, results were found wanting and FDI was lagging. New direction to lift structural investment constrains was decided upon. WB supported GATEWAY project. Field visits to Singapore, Mauritius, Malaysia led by strong Minister of Trade. Impressed by the Mauritius model. Minister of Finance trusted that revenues would rise and supported the project. Did not trust Customs to guide the project. Operational decisions:  Operational decisions A joint venture company was created to launch the Ghana Community Network (GCNet) patterned on the Singapore TradeNet. GCNet was to become the system integrator. Capital of US$ 5.3 million :60% private-foreign and 40% private-public Ghanaian (Customs 20%,Shipping Council 10%, two banks 10%). GCNet would own and operate the system for 10 years and would charge a fee per transaction. GCNet operates under a service contract with Ministry of Trade and Industry. The IT system consists of Singapore’s TradeNet Customs Management system of Mauritius Ghana’s TradeNet Vision:  Ghana’s TradeNet Vision GCNet Implementation:  GCNet Implementation Customs adopts new management system: diagnostic analysis of its procedures, simplification of procedures, adjust the Mauritius customs management system to its situation. Full fledged customs modernization would follow at a later stage. Political uncertainties hampered implementation but autonomy of GCNet allowed progress to continue. Customs needed to be brought on board slowly as its staff correctly foresaw a loss of ‘facilitation money’ to which it had become accustomed. But staff compensation was adequate (Autonomous Revenue Agency since early-1990’s). GCNet had to establish its own private communications network; fiber optic between Customs and GCNet, radio links with Customs collections stations,dedicated leased lined, because of weakness in national network and slow modernization program there. GCNet assisted Customs with the introduction of its management system and simplification of procedures including the Tariff Book. GCNet sensitized traders and other Government users to use and advantages of the system. GCNet was rolled out gradually, station-by-station. But for stations connected its use was made obligatory for all users. Contrast with Tunisia where use still is voluntary. Outcomes :  Outcomes Revenues are up: In the first year by about 30% when accounting for growth in trade volume, composition and exchange rate shifts. Clearance times are down; No benchmark data though, improvements slowed down in recent years At airport: 75% same day;15% between 1- 2 days At Sea port: 14% same day; 30% between 1-2 days Customs review takes 15 minutes (against 245 hours earlier); bank payment 10 minutes compared with a few hours earlier. Community network is gradually expanding and is being used more intensely; scope for more members and for making better use of the Network Winners (traders, Treasury, Shippers) are happy; losers are Customs staff and customs brokers; they are coming on board, but need further convincing that future modernization will enhance their status and “esprit de corps”. Continued professional communications efforts are needed. Lessons learned:  Lessons learned Private-public partnership can work Use if ICT can provide quick results Hands on support for Customs may be necessary, but can pay off Top level support for the initiative is necessary and needs to be continuous. The Road Ahead Full Customs Modernization needs to be tacked to assure further progress and avoid regression More Members of the trading community need to be drawn into the Network Clearance time is only one aspect of improving the trade logistics chain: improvement needs to be made in port processes and the still excessive standard inspections. 5. Conclusion:  5. Conclusion ICT can be used to promote integrity in Customs. Single Window is one approach that goes beyond Customs and aims at streamlining operations of other agencies and members of the trading community. It can be used to reduce the opportunity for corrupt behavior. But its overall impact on integrity will be countered if the “need motive” remains strong. Modalities of implementing the reforms are important : political support, technical expertise, independence , financial stability, often external support. Ghana’s example showed that a Single Window can be implemented with success in a developing country, but also that further progress depends on overall customs modernization. Why not tackle overall customs modernization at the same time as introducing the Single Window? Thank You:  Thank You

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