WCO Regional Workshop on Strategic Initiatives for Trade Facilitation - Mercator Programme March 2015, Jakarta, Indonesia
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1 WCO Regional Workshop on Strategic Initiatives for Trade Facilitation - Mercator Programme March 2015, Jakarta, Indonesia ADB s Support for Customs Modernization and Trade Facilitation Across Asia and the Pacific
2 Outline About the Asian Development Bank ADB s Support for Customs Modernization and Trade Facilitation ADB-WCO Partnership Customs Modernization and Trade Facilitation: Major ADB Activities Challenges in the 21 st Century and Customs Reality Customs: Economic Development with Sound Social Development for All Project Cycle Developing a strong business case WTO ATF, WCO Tools and ADB Contact Persons for Customs Modernization, Trade Facilitation and Trade Security 2
3 About the Asian Development Bank Quick Facts Established in 1966 Long-term ratings: S&P: AAA Moody s: Aaa Fitch Ratings: AAA HQ in the Philippines 28 offices in Asia including Sydney 3 representative offices in Frankfurt, Tokyo, and Washington DC Over 2,800 employees 3 ADB HQ ADB Field Offices 3
4 About the Asian Development Bank - ADB Operational Structure Public sector funding and private sector funding operated under one corporate umbrella and strategy Policies and strategies Management Sovereign Operations (Regional departments) Non Sovereign Operations (PSOD) East Asia Southeast Asia South Asia All regions Central and West Asia The Pacific 4
5 About the Asian Development Bank Strategy 2020 (2008) Mid-term Review of Strategy 2020 (April 2014) Mid-term Review of Strategy 2020 Action Plan (July2014) Inclusive Growth Environmentally Sustainable Growth Regional Integration and Cooperation 5
6 About the Asian Development Bank Regional Cooperation and Integration (RCI) Strategy Overall Goal To reduce poverty in Asia and the Pacific through regional collective action that leads to greater physical connectivity; trade and investment expansion; financial market development and regional macroeconomic and financial stability; and improved environmental, health and social conditions Knowledge/ Capacity Building Pillar 1 Cross-border infrastructure and related software Knowledge/ Capacity Building Pillar 2 Trade and Investment Cooperation and Integration Knowledge/ Capacity Building Pillar 3 Monetary and Financial Cooperation and Integration Knowledge/ Capacity Building Pillar 4 Cooperation in Regional Public Goods Investing in cross-regional Infrastructure connectivity Research on Best Practices in RCI Lending and knowledge work on : (i) trade and investment creation and promotion; (ii) trade facilitation; (iii) trade finance Collaboration with international institutions (WCO and WTO) Regional macroeconomic and financial stability Regional policy dialogue (Finance Ministers meetings) Chiang Mai Initiative (CMI) Asian Bond Markets Initiative (ABMI) Environmental protection Management of natural disasters Prevention and containment of communicable diseases Energy efficiency Clean Energy funds and partnerships
7 ADB s Support for Customs Modernization and Trade Facilitation: Overview CMTF Projects ( ) 21 investment projects/programs ($227 million) 73 TA projects ($82 million) Increasing focus on trade facilitation and security Economic Competitiveness Program Promoting accession to RKC, SAFE, HS, etc New tools (Revised TRS, Single Window compendium and Risk Management compendium, etc) Close partnership with WCO MOU with WCO in 2010 WTO ATF (2015~) APEC SCCP (2010, 2011, 2015) 7
8 ADB-WCO Partnership: MOU to Maximize Operational Complementarity Facilitating and securing global trade will have a substantial economic impact on ADB's developing member countries and will further deepen regional economic integration in the region," said Mr. Kuroda. Under the MOU, ADB's transport infrastructure finance and regional cooperation programs and WCO's technical customs competency will complement each other and improve the efficiency of our efforts to facilitate and secure trade. ADB-WCO MOU signed during ADB Annual Meeting Tashkent (4 May 2010) 8
9 Negative Economic Impacts ADB-WCO Partnership to promote the good and contain the bad Negative Social & Health Impacts Trade/Traffic Increase Positive Economic & Social Impacts ADB and WCO Good (+) Infrastructure Improvement Illicit Trade Customs Improvement Human Trafficking Transit Improvement HIV/AIDS Trade Finance Accidents, pollution, etc Bad (-) ADB and WCO Source: Haruya Koide, ADB Central and South Asia Transport and Trade Forum. Modified in 2010 and 2012.
10 ADB-WCO-IDB: Asia and the Americas: Customs Leaders Partnership Dialogue Efficient and Secure Trade for Shared Prosperity (Panama City, Panama, 4-5 April, 2013) 136 participants from Asia and Latin America and the Caribbean (LAC) 97 customs leaders from 53 countries from the two regions and 39 staff from ADB, IDB, WCO, and Panama Customs, gathered to discuss and exchange views on key customs-related issues and challenges, as well as South-South cooperation opportunities between Asia and LAC. 10
11 ADB-WCO-IDB: Asia and the Pacific and the Americas (AP-A): Customs Leaders Partnership Dialogue Efficient and Secure Trade for Shared Prosperity (Panama City, Panama, 4-5 April, 2013) Topics strategic partnership for growth and development of the two regions; modern customs procedures (including the Revised Kyoto Convention [RKC]) towards improving economic competitiveness and deepening regional integration through implementing the Economic Competitiveness Package (ECP); customs contribution to interregional connectivity through introduction of information and communications technology (ICT); customs approach to facilitating and securing international trade including Authorized Economic Operator (AEO) and Mutual Recognition Agreement (MRA) schemes; transformation of customs operations through performance measurement; customs-to-customs (C2C) cooperation to counter illicit trade for protecting society; and capacity building 11
12 ADB-WCO-IDB: Asia and the Pacific and the Americas (AP-A): Customs Leaders Partnership Dialogue Efficient and Secure Trade for Shared Prosperity (Panama City, Panama, 4-5 April, 2013) The Dialogue identified four priority themes for cooperation between Asia and LAC trade facilitation trade security information exchange protection of society 12 12
13 Central Asia Regional Economic Cooperation (CAREC) -Customs Cooperation and Trade Facilitation Main Goals Reduce transaction costs and time by improving administrative efficiency simplifying, standardizing, and harmonizing trade procedures. Encourage the free movement of people and goods. Increase the transparency of trade regulations and procedures. In October 2012, the CAREC Custom Coordination Committee (CAREC CCC) agreed to adopt the self-assessment tools of the World Customs Organization (WCO) in their work on RKC. There are 5 CCC member customs that have not acceded to the RKC and others will still need to enhance compliance. Accession to the RKC has been one of the cornerstones of CAREC Customs Cooperation and Trade Facilitation 13
14 Central Asia Regional Economic Cooperation (CAREC) -Customs Cooperation and Trade Facilitation Main Reform and Modernization Agenda Amended Customs codes Joint customs control (JCC): PRC-Kazakhstan and PRC- Mongolia Time release studies (TRS) Capacity building Partnership with Shanghai Customs College (SCC) and WCO s ROCB AP WCO supported regional training center utilizing WCO approved curricula Regular customs courses for CAREC customs officials at SCC Customs Modernization Training Customs Inspection and Risk Management Techniques 14
15 Central Asia Regional Economic Cooperation (CAREC) -CAREC Customs Cooperation and Trade Facilitation Next steps Pair up those countries working on RKC accession with those seeking to accede Group 1: RKC contracting parties AZE, PRC, and PAK Non-contracting parties AFG, TKM, and UZB Group 2: RKC contracting parties KAZ and MON Non-contracting parties KGZ and TAJ Connect RKC accession/compliance efforts with WTO accession/compliance efforts Develop Accession Action Plans Identify common needs for accession assistance Identify common needs for compliance assistance 15
16 Mongolia: Customs Modernization Project Financing ADB ($5 million and $0.5 million easia Partnership Fund) Korean Government/KOICA ($2.5 million) Mongolian Government ($1.3 million) Project Scope Customs Automated Information System (CAIS) Data center installed at the HQ of Mongolian Customs General Administration, connected to all the customs houses in MON and border customs posts through VSAT Back-up system in the Ulaanbaatar Customs House Central laboratory in the HQ Training (ADB and KOICA) 16
17 17 Mongolia: Customs Modernization Project
18 Mongolia: Customs Modernization Project Customs Automated Information System: Overview Airlines Integrated Customs Information system OGA Railway Transport Companies Customs Brokers XML EDI External Portal Data Mart Data Warehouse Customs Administration Information System Clearance Management Cargo Management Statistics Management Integrated DB e-tracking System Risk Management Executive Information Tax & Revenue Management Classification Management External Connection XML EDI GDNT SGA SSIA MASM CCI Trading Companies WEB ICT Management System Server & Network Management System Backup Management System Security System ICT Infra Global Conn -ection Bank International Service Provider RUSSIA CHINA Scope of ADB Project Scope of KOICA Project 18
19 Mongolia: Customs Modernization Project - ADB s Behind the Border Support ADB lending to CAREC Corridor 4 (North South Road Transport Corridors) 4a:Ulaanbaishint-Yarant 4b:Suhbaatar-Ulaanbaatar-Zamyn-Uud 4a 4b ADB Regional Logistics Development Project (Zamyn-Uud) ADB has been recognized as the most valuable contributor to trade facilitation and infrastructure development by MON National Chamber of Commerce and Industry and was awarded the Honorary Order Silk Road during the biannual Silk Road Award Ceremony held in February
20 Mongolia: Customs Modernization Related Support PRC Customs Grant for X-ray at Zamyn-Uud ADB TA supporting PRC-MON joint customs control (JCC) pilots at 2 pairs of border crossing points 20
21 KGZ&TAJ: Reg Customs Modernization & Infra Dev Financing ADB ($10.7 million: TAJ component and $7.5 million: KGZ component) US Gov/the Bureau of International Narcotics and Law Enforcement Affairs (INL)($1.6 million: TAJ component [Kulma border post (BP) with PRC and Kizilart BP with KGZ]) TAJ Gov ($2.7 million) & KGZ Gov ($1.9 million) Project Scope Unified Automated Information System (UAIS) Construction of BP infrastructure and procurement of X-ray machines (12 scanners in TAJ) and generators (102 locations comprising 74 border points in TAJ and 28 border points in KGZ) Training Completed on 31 October
22 Financing KGZ&TAJ: CAREC Regional Improvement of Border Services Project ADB $17.4 million: TAJ ($9.2 million) and KGZ ($8.4 million) Governments $3.4 million: TAJ ($1.9 million) & KGZ ($1.5 million) Project Scope Border crossing point improvement Karamyk in Kyrgyz Republic and Guliston in Tajikistan National single window development Project management and supervision capacity strengthening Implementation Period: June 2013-December
23 Greater Mekong Subregion (GMS) - Transport and Trade Facilitation Action Plan Endorsed by the 16 th GMS Ministerial Conference in 2010 Implementation: 3 subprojects ( , , and ) 10 priority areas 1. Exchange of traffic rights 2. Improved transit 3. GMS-Freight Transport Association 4. Strengthened Road Transport Industry 5. Coordinated Border Management 6. Enhanced SPS Regime 7. Strengthened Trade and Transport Facilitation Institutions 8. Regional Trade Logistics Strategy 9. Capacity Development 10. Legal/Regulatory Improvement and Harmonization Partnership with WCO ROCB AP 23
24 GMS CBTA Single-Stop Customs Inspection at the Viet Nam-Lao PDR Border Allows border control authorities from two countries to jointly conduct one-stop inspection at inbound checkpoints. ADB supported bilateral meetings between the transport ministries of Lao PDR and Viet Nam on 3-4 October 2012 to revisit the SSI process Viet Nam and Lao PDR Customs officials are conducting joint inspection of cargo trucks under the CBTA SSI modality at the Lao Bao border in Viet Nam 24
25 GMS and Indonesia-Malaysia-Thailand Growth Triangle (IMT GT) - Trade Facilitation Support for ASEAN Regional TA: Trade Facilitation Support for ASEAN Economic Community Blueprint Implementation (2012) 1. Trade Facilitation Indicators (including TRS) 2. Improved Legal and Regulatory Framework (RKC Accession) 1. Efficient Border Agency Operations HS, rules of origin, risk management (customs enforcement network [CEN]), single window 2. Capacity building 25
26 BIMP-EAGA - Support for Trade Facilitation Brunei Darussalam Indonesia Malaysia Philippines East ASEAN Growth Area (BIMP-EAGA): Customs Sector Action Plan ( ) 1. Strengthening trade-related outreach activities 2. Enhancing risk management in local context 3. Strengthening compliance-based Post Clearance Audit (tradercentric, system-based) 4. Accreditation of reliable traders following the SAFE Framework principles 5. Adoption of various monitoring and evaluation tools (including the TRS) to measure results 26
27 South Asia - SASEC Trade Facilitation Program SASEC Trade Facilitation Program (TFP) 1. SASEC TF Program: support policy reforms (Bangladesh: $21M; Bhutan: $12M; and Nepal: $15M) TFP Promotes the RKC and SAFE Framework Customs Modernization Harmonization and Simplification Transport and Transit Information and Service Orientation 2. Technical Assistance Projects Support the TF Program design and implementation SASEC TF Program was designed and is being implemented in cooperation with WCO (Brussels and ROCB AP) SASEC TFP is being implemented in conjunction with SASEC regional road connectivity improvement in Bangladesh, Bhutan, India and Nepal. (SASEC = South Asia Subregional Economic Cooperation) 27
28 South Asia - Trade Facilitation Activities Research and Knowledge Production: Business Process Analysis (BPA) The BPA methodology is being used to collect data on costs and time of trade procedures and processes in SASEC countries on selected border crossing points and corridors. TA Support for SASEC Trade Facilitation ADB approved 3 TA projects in Bangladesh, Bhutan, Nepal and 1 regional TA project funded by Japan Fund for Poverty Reduction, totaling $6 million (August and September 2013 ) 28
29 Pacific - Trade Facilitation Activities PNG: Pilot Border Trade and Investment Development Project (2009) PNG: TA Pilot Border Trade and Investment Development Project PNG: Trade and Investment Institutional Strengthening RETA (PNG-Indonesia and Timor Leste- Indonesia): Capacity Strengthening and Institutional Development for Border Management and Trade and Tourism Development in the Pacific (2010) Improve capacity for border management and cross-border transport links between PNG and Indonesia, and between Timor Leste and Indonesia 29
30 Pacific - Trade Facilitation Activities TA 46502: Trade and Transport Facilitation in the Pacific ($2 million JFPR, approved in June 2014) The expected impact of the TA improved trade competitiveness of Pacific developing member countries (DMCs), and the outcome will be participating Pacific DMC governments strategically plan trade and transport facilitation investments. The TA s components (i) assessment tools for trade facilitation and transport logistics performance established and institutionalized; (ii) national and regional agencies capacities to assess trade and transport demand and design investment and policy options strengthened; and (iii) regional and national agencies capacities to improve logistics and customs performance strengthened. 30
31 ADB-WCO Activities (1-5) in Activity Joint Subregional Train-the-Trainer Workshop on Customs Valuation under the Multiyear Assistance Initiative Place (City, Country) Colombo, Sri Lanka Dates 3-7 February 2014 WCO Asia/Pacific Regional Workshop on Resource Mobilization Melaka, Malaysia February 2014 National Workshop on Trade and Transportation Facilitation Monitoring Mechanism (TTFMM) Phuntsholing, Bhutan March 2014 CAREC Trade Facilitation: Customs Cooperation Committee Technical Assistance Inception Workshop Baku, Azerbaijan 7-9 April 2014 National Workshop on TTFMM Dhulikhel, Nepal April
32 ADB-WCO Activities (6-10) in 2014 First GMS Transport and Trade Facilitation Development Partners Meeting ADB HQ, Manila, Philippines April 2014 Time Release Study (TRS) Exit Conference Putrajaya, Malaysia 29 April 2014 Second Meeting of the SASEC Customs Subgroup and Training on Customs Automation Kathmandu, Nepal May 2014 Revised Kyoto Convention (RKC) Training Workshop Yangon, Myanmar May 2014 National Workshop on RKC Implementation Thimphu, Bhutan 9-12 June
33 ADB-WCO Activities (11-15) in 2014 ADB-WCO Midterm Review ADB HQ, Manila, Philippines 23 June WCO Knowledge Academy for Customs and Trade Brussels, Belgium 30 June-11 July 2014 National Planning Workshop on TRS Ulaanbaatar, Mongolia 29 July 1 August th Customs Cooperation Committee Meeting Issyk-kul, Kyrgyz Republic September 2014 TRS Exit Conference Yangon, Myanmar 26 September
34 ADB-WCO Activities (16-20) in 2014 Risk Management Training and Systems Assessment Workshop Tashkent, Uzbekistan 29 September 4 October 2014 ADB Review of draft WCO Transit Handbook ADB HQ, Manila, Philippines 10 October 2014 Risk Management Training and Systems Assessment Workshop Astana, Kazakhstan October 2014 National Workshop on the Authorized Economic Operator (AEO) Program Baku, Azerbaijan October 2014 Second WCO-ADB Joint Subregional Train-the-Trainer Workshop on Customs Valuation Male, Maldives October
35 ADB-WCO Activities (21-25) in 2014 WCO ROCB A/P 10th Anniversary Bangkok, Thailand 7 November 2014 National Planning Workshop on TRS Bishkek, Kyrgyz Republic November 2014 National Planning Workshop on TRS Astana, Kazakhstan November 2014 RKC: Sharing of Accession Experiences for CAREC Countries Shanghai Customs College, People s Republic of China November 2014 Facilitation of Regional Transit Trade in CAREC Inception Workshop Almaty, Kazakhstan December
36 Asia and the Pacific - Japan Trade Facilitation Initiative (JTFI) Amount: $25 million Period: Geographical Focus: Asia and the Pacific Financing Source: The Government of Japan Administration: ADB Operational Partnerships: Customs and Tariff Bureau, Japan; JICA; WCO; and ADB 36
37 Asia and the Pacific - Level of RKC Accession 60% 50% 40% Developing Asia (ADB's DMCs) 30% World (Contracting Parties) 20% 10% 0% Source: ADB staff estimate based on the WCO web data on RKC accession. 37
38 Asia and the Pacific - RKC Accession Countries ADB DMCs 2000 Date of Accession 1. People s Republic of China 15 June Republic of Korea 19 February Pakistan 1 October India 3 November Azerbaijan 3 Febrauary Mongolia 1 July Viet Nam 8 January Malaysia 30 June Kazakhstan 19 June Sri Lanka 26 June Fiji Islands 29 January Philippines 25 June Bangladesh 27 July Armenia 19 July Papua New Guinea 31 January Cambodia 28 June Indonesia 22 August Bhutan 15 September Source: WCO web data on RKC accession.
39 Challenges in the 21st Century and Customs Reality Challenges 1. Increasing trade volumes and complexity Substantial Asia s trade increase (12% since 2000) Trade today is the world is making things together Private sector s calls for speedy customs services Increasing concerns over security and illicit trade 2. Human resource (HR) constraints 3. Budgetary constraints Customs Reality Customs administrations have to deliver efficient and effective services with limited budgets and staff in meeting the increasing trade volumes, speeds and complexities in the 21 st century. 39
40 Customs: Economic Development with Sound Social Development for All 21 st Century expects: Innovative and agile customs for trade facilitation and trade security Higher level of excellence in human capital and partnerships to deliver complex tasks Customs = the key role and responsibility for attaining sustainable prosperity and ensuring the welfare of the people in the Asia and the Pacific region in ongoing globalization 40
41 Project Cycle - Coordination at the early stage = Key 11. Evaluation 1. Country Partnership and Strategy Identification of Projects 2. Feasibility Study, PPTA Preparation, now part of project preparation 10. Completion 3. PPTA Implementatio n 9. Supervision, Monitoring & Reporting 4. Loan and ADTA Processing 8. Project Implementati on 5. Loan Negotiations 7. Loan Effectiveness 6. Loan Approval 41
42 Developing a strong business case Direct partners: Regional Departments and Field Offices Country Partnership Strategy Paper = the starting point for planning and coordinating ADB operations A concise proposal with good rationale Costs and benefits/with and without the proposed project, cost estimate, financing plan, implementation arrangement and schedule, etc Good perspectives more important than too detailed information Economic and social benefits (Example: ECP) Give a good overall picture to development partners in line with development partners strategies and operational plans Good communication and trust building skills Human factor (know your partners well) Dream team (DMC, WCO and development partner) Sell benefits (value addition) of the proposed partnership well (Mutually beneficial proposals) 42
43 Developing a strong business case What you want to do What you can do (including political commitment) Infrastructure Weak Technology Management Balanced Infrastructure, Management & Technology Weak Infrastructure Weak Management Technology Development partner 43
44 WTO ATF, WCO Activities and ADB Activities Source: WCO 2015 modified by ADB 2015
45 Source: WCO 2015 ADB is aware of WCO Tools to Support WTO ATF
46 Source: WCO 2015 ADB is aware of WCO Implementation Guidance for WTO ATF
47 ADB Contacts for Customs Modernization, Trade Facilitation and Trade Security East Asia (PRC and MON): East Asia Regional Department Public Management, Financial Sector and Regional Cooperation (EAPF) which also has the CAREC Customs Coordination Committee secretariat (Central and West Asia countries) Southeast Asia: Southeast Regional Department Regional Cooperation and Operations Coordination (SERC) South Asia: South Asia Regional Department Regional Cooperation and Operations Coordination (SARC) Pacific: Pacific Department Transport, Energy and Natural Resources Division (PATE) 47
48 ADB Contacts East Asia (PRC and MON): EAPF South Asia: SARC Ms. Cristina M. Lozano Astray Regional Cooperation Specialist (Local) Mr. Ronald Antonio Q. Butiong Principal Regional Cooperation Specialist (Local) Southeast Asia: SERC Pacific: PATE Ms. Kanya Sasradipoera Regional Cooperation Specialist (Local) Ms. Sarosh Khan Senior Transport Specialist (Local) 48
49 Q: Why do we do this? A: Efficient and secure trade creates shared prosperity and improves people s welfare across Asia and the Pacific Thank you
50 ADB s Support for Customs Modernization and Trade Facilitation across Asia and the Pacific For More Information Contact Mr. Haruya Koide Principal Regional Cooperation Specialist APEC Focal Point for ADB ADB-WCO Partnership Manager Transport and Trade Facilitation across Asia and the Pacific Office of Regional Economic Integration Asian Development Bank hkoide@adb.org Phone: Fax:
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