ESTABLISHING THE NATIONAL TRADE FACILITATION COMMITTEE IN TAJIKISTAN FROM DEFINITION TO VALIDATION

Transcription

1 ESTABLISHING THE NATIONAL TRADE FACILITATION COMMITTEE IN TAJIKISTAN FROM DEFINITION TO VALIDATION

2 Photos: Thinkstock.com Street address: Postal address: ITC rue de Montbrillant 1202 Genvea, Switzerland ITC Palais des Nations 1211 Geneva 10, Switzerland Telephone: Fax: Internet:

3 ESTABLISHING THE NATIONAL TRADE FACILITATION COMMITTEE IN TAJIKISTAN: FROM DEFINITION TO VALIDATION i

4 The designations employed and the presentation of material in this document do not imply the expression of any opinion whatsoever on the part of the International Trade Centre concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. ii

5 ACKNOWLEDGEMENTS This report was prepared by Amer Zafar Durrani under the guidance of the International Trade Centre (ITC). ITC would particularly like to acknowledge the contribution of Manzura Makhkamova, Saidmumin Kamolov, Nargiza Abdumajidova, and Inoyatullo Kasimov. ITC would also like to acknowledge the contribution of all the stakeholders who proposed concrete recommendations during bilateral meetings in May and June 2015, and during the Validation Workshop on 13 June In addition, ITC would like to extend its gratitude to Mr Saidrahmon Nazriev, First Deputy Minister of Economic Development and Trade of the Republic of Tajikistan, who provided valuable contribution to this report and ensured broad participation of stakeholders from line Ministries, State agencies and private sector institutions. The report was made possible thanks to the financial support from the Government of Switzerland. iii

6 Table of Contents ACKNOWLEDGEMENTS... III LIST OF ABBREVIATIONS... VI EXECUTIVE SUMMARY... VII CHAPTER 1: CONTEXT FOR THE TAJIKISTAN NATIONAL TRADE FACILITATION COMMITTEE NTFC NOT JUST AN OBLIGATION POST TFA, BUT PART OF THE BROADER NATIONAL TRADE AND DEVELOPMENT AGENDA TRADE FACILITATION AS THE BRIDGE BETWEEN TRADE DEVELOPMENT AND TRADE DELIVERY OBJECTIVES OF TAJIKISTAN NTFC NTFC REQUIRES THE RIGHT STATURE GOVERNANCE OF NTFBS SOME GLOBAL LESSONS GOVERNANCE OF BODIES SIMILAR TO THE PROPOSED TTFC SOME SPECIFIC LESSONS FROM TAJIKISTAN TOPICS AND SKILLS REQUIRED IN TRADE FACILITATION ACTIVITIES COMMON OUTPUTS OF NATIONAL TRADE FACILITATION BODIES... 7 CHAPTER 2: RECOMMENDATIONS FOR ESTABLISHING THE TAJIKISTAN NTFC TERMS OF REFERENCE FOR TAJIKISTAN NTFC Create Knowledge Database on Trade Facilitation Identify Trade Facilitation Issues and Stakeholders and Stakeholders Perspectives Raise Awareness about Issues and Perspectives Develop TF Performance Indicators Related to Issues Develop Action Plan for Resolution of TF Issues Research and Develop Possible Options for Resolution of Issues Facilitate TF Issues Negotiations, Resolution and Implementation TF Performance Measurement Budgeting and Financing THE FUNCTIONS OF NTFC COORDINATE, FACILITATE DISCUSSION AND DECISION, AND DIRECT GOVERNANCE AND ACCOUNTABILITY OF TAJIKISTAN NTFC Structure and Governance of the Tajikistan NTFC Membership of TTFC Accountability Mechanism for the TTFC Consolidating Councils, Committees, and Working Groups working on similar issues ESTABLISHMENT OF THE TTFC SECRETARIAT FUNDING MECHANISM NATIONAL IMPLEMENTATION FRAMEWORK FOR THE TTFC ANNEX 1: TYPES OF NATIONAL TRADE FACILITATION BODIES ANNEX 2: COMMITTEES, WORKING GROUPS, AND OTHER ENTITIES WORKING ON TF RELATED ISSUES IN TAJIKISTAN ANNEX 3: TERMS OF REFERENCE FOR THE DCC REGIONAL TRADE FACILITATION WORKING GROUP ANNEX 4: TTFC VALIDATION WORKSHOP ANNEX 5: SUMMARY OF TAJIK NTFC QUESTIONNAIRE ANNEX 6: EVALUATION OF THE WORKSHOP ANNEX 7: MEDIA COVERAGE REPORT ON TAJIKISTAN ESTABLISHES THE NATIONAL TRADE FACILITATION COMMITTEE ANNEX 8: LIST OF WORKSHOP PARTICIPANTS BIBLIOGRAPHY iv

7 FIGURE 1: PERSPECTIVES ON COUNTRY'S INTERNATIONAL TRADE - AS MANDATED... 2 FIGURE 2: WTO TFA SECTION MANDATING THE ESTABLISHMENT OF A TRADE FACILITATION COORDINATION MECHANISM... 3 FIGURE 3: % OF PUBLIC, QUASI, AND PRIVATE NTFBS BY LEVEL OF DEVELOPMENT... 4 FIGURE 4: STRUCTURE OF THE TAJIKISTAN TRADE FACILITATION COMMITTEE FIGURE 5: THE RELATIONSHIP BETWEEN THE TTFC AND THE TAJIKISTAN COUNCIL FOR TRADE FACILITATION FIGURE 6: ESTABLISHMENT AND OPERATIONALIZATION OF THE TTFC v

8 LIST OF ABBREVIATIONS ADB AKDN CAREC DFID EU GoT GIZ ITC JICA KFW KPI MEDT NTFB NTFC SECO SMART TFA TF DCC ToR TTFC WTO USAID UNDP WBG Asian Development Bank Agha Khan Development Network Central Asia Regional Economic Cooperation UK Department for International Development European Union Government of Tajikistan Deutsche Gesellschaft für Internationale Zusammenarbeit International Trade Centre Japan International Cooperation Agency Kreditanstalt für Wiederaufbau Key Performance Indicator Ministry of Economic Development and Trade National Trade Facilitation Body National Trade Facilitation Committee Swiss Secretariat for Economic Affairs Sustainable-Measurable-Attainable-Realistic-Time bound Trade Facilitation Agreement Trade Facilitation Donor Coordination Committee Terms of Reference Tajikistan Trade Facilitation Committee World Trade Organization United States Agency for International Development United Nations Development Program World Bank Group vi

9 EXECUTIVE SUMMARY The Government of the Republic of Tajikistan (GoT) is in the process of formalizing a National Trade Facilitation Committee (NTFC) as a part of their national obligations after recently ratifying the World Trade Organization (WTO) s Trade Facilitation Agreement (TFA). According to Article 23.2 of the TFA: Each Member shall establish and/or maintain a national committee on trade facilitation or designate an existing mechanism to facilitate both domestic coordination and implementation of the provisions of this Agreement. This formalizing of the NTFC is a part of a wider trade facilitation process that has been evolving in Tajikistan over the past several years such as the work being coordinated by the Single Window Coordination Committee in the Tajikistan Ministry of Economic Development and Trade (MEDT). As such, the GoT has been working towards facilitating Tajikistan s international trade well beyond the present scope of the WTO TFA. Thus, the GoT s objective in establishing the Tajikistan NTFC is to implement the WTO TFA obligations as well as to more broadly facilitate the simplification and harmonization of international trade procedures. The International Trade Centre (ITC), at the request of the MEDT, has prepared this reference document Establishing the National Trade Facilitation Committee in Tajikistan from Definition to Validation to establish the Tajikistan NTFC. This report sets out the context and provides a synthesis of relevant global experiences with similar NTFCs and a review of Tajik experiences with similar committees set up for other purposes. Based on global experience and interaction with local stakeholders, including feedback from a validation workshop, this report lays out the recommendations for the establishment and operationalization of the Tajikistan Trade Facilitation Committee (TTFC). These recommendations include the terms of reference (ToR) for the TTFC, its structure and governance, its accountability mechanism, its funding mechanism, and its implementation framework and timelines. The TTFC s ToR encompass three broad areas: (a) identifying the key trade facilitation issues and their unique stakeholders, building a knowledge base linked to these issues, and building related awareness in the identified stakeholders; (b) benchmarking identified issues and establishing resolution positons to be tabled for decision making, and developing required time-bound national action plans to support the resolution of the issues; and (c) facilitating negotiations and decisions to achieve required resolutions, measure its own performance in facilitation of trade based on global benchmarks, and procure financing to sustain its working. Structure of the Tajikistan Trade Facilitation Committee TTF Steering Committee Minister MEDT TTFC Secretariat MEDT General Body TF Stakeholders Working Groups Concerned Stakeholders TF DCC Active TF Donors vii

10 The TTFC will be established through appropriate legislation and, as set out in the diagram above, will comprise the following: (a) Tajikistan Trade Facilitation Steering Committee (TTFSC), that will be chaired by the Minister for MEDT; (b) Permanent Secretariat for the TTFC; (c) General Body of the TTFC; (d) Working Groups required for the TTFC; and (e) Trade Facilitation Donor Coordination Committee (TFDCC). The initial nominees to the TTFSC will comprise the principals (i.e. senior members/leaders) of the organizations selected from the members of the General Body, such that there is adequate representation of Tajik trade facilitation stakeholders, while also avoiding functional duplication. At a minimum, the following agencies will be represented in the TTFSC: Public Sector: Finance and Central Bank, Customs, Tax, Economy, Planning, Commerce, Standards, Agriculture, Health, Border Control and related Police/Security Agencies. Private Sector: Chambers of Commerce, Transport and Freight Forwarding Associations, Banking Associations, Insurance Associations, Customs Brokers Associations, Importers and Exporters Associations, and Trade and Industry Associations. The CEO of the Secretariat will be a permanent member of and Secretary to the TTFSC. The principal of the Donor leading the TF DCC will also be a permanent member of the TTFSC; however, the membership will be extended to all active TF DCC donors. The TTFSC will report to the GoT, and the Tajikistan Council on Trade Facilitation will be created under the chairmanship of the First Deputy Prime Minister for this purpose. The function of this Council will be to (a) monitor and evaluate the performance of the TTFC, (b) provide a core high level multi-ministerial platform to discuss and decide on issues that require supra-ministerial powers, and (c) direct the implementation of decisions. The TTFC after its creation will slowly absorb and/or consolidate all such committees that are working on the issues that are covered by the NTFC. This will be clearly set out in the decree/legislation enabling the creation of the Tajikistan NTFC. It is expected that the TTFC activities, and particularly the TTFC Secretariat, will be financed as a project through external financing provided by a group of donors. There is interest in the TF DCC to discuss this further. It is also foreseen that over 5 to 10 years, the GoT will progressively contribute to the budget of the TTFC, eventually taking it over in the 10 th year of its operation. There is consensus on the need to establish solid donor support for the government s commitment towards a performance accountable TTFC, which will progressively establish its utility and move towards less donor financing support and more government and private support. Two main activities will require financing: (a) the initial establishment, and operational and maintenance expenses of the Secretariat; and (b) the activities of the Working Groups including the conduct of studies and workshops. The timelines for the implementation of the TTFC and its activities are summarized below. TTFC Implementation Activity Workshop for validation of proposed TTFC structure and establishment Publication of the reference document for establishment of the TTFC MEDT to notify TTFC Secretariat MEDT to appoint CEO TTFC Secretariat CEO TTFC and MEDT draft TTFC decree TTFC National Legislation/Decree by Parliament/President Inaugural meeting of the TTFSC TTFC Secretariat Staffed and Design Work Program Work Program of TTFC circulated to General Body First set of Working Groups notified by Secretariat First Work Program and TTFC performance indicators sent to Council on TF Second meeting of TTFSC 2015 Jun Jul Aug Sep Oct Nov Dec viii

11 CHAPTER 1: CONTEXT FOR THE TAJIKISTAN NATIONAL TRADE FACILITATION COMMITTEE 1. NTFC not just an obligation post TFA, but part of the broader national trade and development agenda The Government of Tajikistan (GoT) is in the process of formalizing a National Trade Facilitation Committee (NTFC) as part of their national obligation after recently ratifying the World Trade Organization (WTO) s Trade Facilitation Agreement (TFA). The requirement for an NTFC (or the designation of an existing mechanism) is set out in Article 23.2 of the TFA. This formalizing of the NTFC is a part of a wider trade facilitation process that has been evolving in Tajikistan over the past several years, such as the work being coordinated by the Single Window Coordination Committee in the Ministry of Economic Development and Trade (MEDT). The GoT has been working towards facilitating their international trade well beyond the present scope of the WTO TFA, which in terms of institutional frameworks only seeks to establish a national coordination mechanism for implementation of the TFA. 1 Thus the ambit of the NTFC is broader than Tajikistan s present international obligations, while at the same time taking into account its sovereign development ambitions. 2. Trade facilitation as the bridge between trade development and trade delivery Trade facilitation in a Tajik context is best defined as facilitating all activities that bridge trade development and trade delivery. 2 Trade development refers to all activities that help in the development of a trade transaction between the two trading parties and trade delivery means actual delivery of the trade obligation of the delivering party to the receiving party. 3. Objectives of Tajikistan NTFC To facilitate in the simplification and harmonization of international trade procedures, 3 implementation of the WTO TFA obligations. including, the The achievement of this objective will be measured on a regular basis by trade facilitation indicators defined and agreed by the NTFC. This facilitation of trade is not limited to the movement of goods; therefore, for the purpose of Tajikistan s NTFC, vehicles and people involved in international trade and all related services are included. Furthermore, the definition of international trade will be deemed to include all internal trade procedures that form or contribute to an international trade value or supply chain, including procedures covering special and free economic zones. 1 The special and differential treatment available to countries does not apply to the establishment of the coordination mechanism for implementing the TFA i.e., it cannot be treated as a Category B or C obligation. However, donor assistance for creation of this mechanism may be available to countries requesting it. 2 Adapted from Malcom McKinnon, SITPRO, UK. 3 This is in line with the WTO definition of trade facilitation, and therefore the term trade procedure encapsulates the activities, practices, and formalities, involved in collecting, presenting, communicating, and processing required for the movement of goods and vehicle and people in international trade. 1

12 4. NTFC requires the right stature Trade facilitation, especially when concerning at-the-border and behind-the-border issues, requires working with and across many institutions (organizations/agencies) within the country; and at many different levels within these institutions. Not all of these institutions have complete control over their policy and institutional functions. For example, while Customs enforces and collects tariffs, the actual policy on tariffs is set by finance, or commerce, or economic planning ministries. The work of the NTFC requires building consensus between institutions that often have very divergent views of trading across borders. Therefore, national trade facilitation bodies (NTFBs 4 ) are most effective if they have an authorizing environment such that the various institutions instrumental to facilitating trade clearly understand their accountability towards the NTFC, and its national development agenda which includes: increasing Tajikistan s competitiveness, increasing trade led growth, creating jobs, and enhancing investment in the economy (by increasing the ease of developing cross border global value chains). Figure 1: Perspectives on country's international trade - as mandated by government Perspectives on country's international trade Agency Revenue Protection Security Trade Growth Subsidies Jobs Substitution Finance Customs Tax Commerce Industry Security Agriculture Standards 5. Governance of NTFBs some global lessons Governance, in the context of the NTFC and this report, is defined as the tradition and institutions by which the trade facilitation body will exercise authority to achieve its objective. 5 This includes (1) the process by which NTFC is established, (2) the capacity of NTFC to effectively perform these functions, and (3) the respect of stakeholders for the business process followed to facilitate trade. The following is a synthesis of some key lessons relating to well governed trade facilitation bodies worldwide with the overall summary presented in Figure 2. 6 a) The majority (more than 70%) of the NTFBs around the world have a formal institutional structure. b) The type of structure of the NTFBs in each country is dependent on the political and administrative governance structure prevalent in the respective country. 4 For this report, the term NTFB (National Trade Facilitation Body) is used when referring to a generic institution involved in trade facilitation activities and the term NTFC (National Trade Facilitation Committee) is used when such as institution is being considered in the context of the WTO TFA. 5 Adapted from Governance Matters, Kaufmann, 1999, D., A. Kraay, and P. Zoido-Lobatón. Policy Research Working Paper The World Bank, Washington, DC. 6 National Trade Facilitation Bodies in the World, 2014, UNCTAD, Transport and Trade Facilitation Series No. 6. 2

13 c) Successful NTFBs are notified by an act of the parliament or through a presidential decree, or in other words, are legislated; this is even more applicable now that establishing and maintaining a NTFC is an obligation post accession to the WTO TFA. 7 Figure 2: WTO TFA section mandating the establishment of a trade facilitation coordination mechanism d) Almost all NTFBs have permanent secretariats; in most instances, the Ministry of Commerce, Trade, or similar ministries form the reporting ministries (also known as the Lead Ministry 8 ) for these permanent secretariats. In some cases, these ministries even house them. e) NTFBs in developing and least developed countries are mostly public or quasi-public bodies. f) The majority of NTFBs interact with other working groups, and are very broadly constituted (in terms of their general membership and/or general body). 7 Figure taken from National Trade Facilitation Bodies in the World, 2014, Asia Pacific Trade Facilitation Forum, BITEC, Bangkok, Thailand, presentation by José Maria Rubiato, UNCTAD. 8 The following are the factors to consider when choosing the lead agency: (i) the envisaged focus and scope of, the trade facilitation efforts; (ii) the commitment of the agency to trade facilitation and competitiveness; (iii) the capacity (intrinsic authority and experience) of the agency to coordinate and communicate with the other agencies involved, as well as the private sector; and (iv) the capacity of the agency to mobilize the necessary level of political support, and dedicate adequate and sustainable financial and human resources to trade facilitation. Regardless of the agency selected, intra-government cooperation will succeed only if it becomes a priority of the political leadership. As such, the lead agency may report on trade facilitation matters directly to the Prime Minister s office. Designing and implementing trade facilitation in Asia and the Pacific, 2009, Asian Development Bank. 3

14 Figure 3: % of public, quasi, and private NTFBs by level of development 16 (74 per cent) 5 (33 per cent) 4 (29 per cent) 6 (26 per cent) 11 (67 per cent) 10 (71 per cent) Source: UNCTAD, based on data from the online repository of national trade facilitation bodies available at Findings from Global Review of NTFBs by UNCTAD, UNCTAD review of NTFBs in 2013 a) Rationale: The creation of more than one-third of the 50 NTFBs surveyed was externally driven, risking its sustainability if the motivation is removed; b) Objectives and scope: Fostering trade facilitation by simplifying, standardizing or harmonizing trade procedures was the most cited goal, regardless of the level of development of a country, while negotiation support and coordination were also important functions for developing countries; c) Degree of institutionalization: The less developed a country, the higher level of the authority institutionalizing the NTFB; d) Terms of reference: The most relevant factor influencing the adoption of terms of reference was the type of body; e) Coordinating agency and permanent secretariat: The Ministry of Trade assumed the role of coordinating agency in a majority of cases, with chambers of commerce or customs agencies mentioned in a limited number of cases; f) Regularity of meetings: The majority of NTFBs met regularly, but those in developing countries met less frequently; g) Composition: The more developed a country, the greater the number of members of the NTFB and the higher the participation of the private sector; average membership was 17; the private sector was more highly represented in PRO committees; h) Communications and promotion: The capacity and willingness to inform the general public and particular stakeholders depends upon the type of NTFB, the level of development of a country and the geographical region, with Europe having the highest number of NTFBs that communicate with the general public; 4

15 i) Financing: The share of NTFBs financed solely by Government is inversely proportional to the level of development of a country; private financing is provided only for PRO committees, with Government, sometimes with support from donors, the most usual source; j) Outputs and impacts: The type of body and the level of development of a country influence the outputs and impacts highlighted; PRO committees greatest impact was awareness raising and information exchanging; for NTTFCs, preparation of concrete projects was most important; k) Key success factors: Key success factors highlighted related to the members of the NTFB and their behaviour towards the group; most important was being able to rely on support from relevant members; as well as training, capacity building, work plans and financial resources; l) Main obstacles: The majority of obstacles cited related to the members of the NTFB and their behaviour towards the group, the lack of financial resources being the biggest handicap; m) Main lessons learned: NTFBs can be effective instruments in establishing and maintaining a communications channel between Government and the private sector, as well as maintaining coordination among all public agencies. 6. Governance of bodies similar to the proposed TTFC some specific lessons from Tajikistan In Tajikistan, many councils, committees and working-groups exist, that have been formed by the GoT, which have mandates that can contribute to the TTFC s proposed mandate. Some of these are listed in Annex 2 along with their functions, membership, and method of governance. Reviewing these councils, committees, and working groups (we will refer to all these simply as bodies for the purpose of this section), provides some lessons [specific to Tajikistan] for consideration in the TTFC proposal. a) Sector specific consultative, advisory, and coordination bodies work well, as they have a limited scope and specific objectives, e.g. the working group on Tax issues or the Customs consultative committee. b) Multi-sector consultative, advisory, and coordination bodies, are successful if they are chaired at the appropriate level, e.g. the Consultative Council on improving the business and investment climate. c) Common reasons for inactive consultative, advisory, and coordination bodies are: donors or government losing interest; lack of focus on key issues; inability to demonstrate any visible tangible outcomes; a lack of definition of proper business processes for the working of the consultative, advisory, and coordination body; multi-sector issues being dealt by a single lead ministry; inability to formulate the technical issues practically with well researched solutions/proposals. 5

16 7. Topics and skills required in trade facilitation activities As part of the process to define the objectives of the Tajikistan NTFC, it is important to briefly review the broad topics covered under trade facilitation activities as well as common skills and stakeholders involved. Broadly, the four interdependent topics that describe practical trade facilitation are as follows. 9 The simplification and harmonization of applicable rules and procedures Harmonization of Procedures For example: the adoption of international conventions and instruments; and the harmonization of controls applied by the various different government agencies. Avoidance of Duplication For example: regional or bilateral agreements to recognize export controls in lieu of import control; shared inspection facilities, for instance for customs officers, veterinarians, plant health inspectors and health inspectors; and the formal recognition of private sector controls (e.g. in the area of security or quality) in lieu of official checks. Accommodate business practices For example: to accept commercial documents (such as the invoice) in lieu of official documents; and to allow goods to be cleared inland, away from the bottlenecks at ports and border-posts. The modernization of trade compliance systems Solutions For example: use of electronic information systems, the Single Window concepts, electronic customs systems, port community systems, websites, and information portals. Standardization For example: electronic standards for the exchange of information between computers; paper document standards; barcode standards; documents referencing conventions; and standards for the description of locations. Sharing of experiences For example: training and awareness building; development of toolkits and implementation guides; collaborative and open source systems developments. Administration and Standards Service standards For example: public service level commitments; publish and make available applicable rules and procedures; produce plain language guides; develop online websites; keep the customs tariff up-to-date; and provide for efficient appeal mechanisms. Management principles For example: enforcement of controls in proportion to the risk against which they seek to protect; and selective (risk based) controls that reward compliant behavior (e.g. preferential treatment at the border). Standardization of Means Simplification of Procedures Trade Facilitation Harmonizing of Laws and Regulations Institutional mechanisms and tools For example: establishing a NTFB, and producing and publishing white papers setting out reform ambitions and inviting stakeholder comments. 9 Developing the case for trade facilitation in practice, Andrew Grainger, 2011, World Customs Journal, Volume 5, Number 2. 6

17 Trade facilitation skills Trade facilitation skills cover business (traders and associated businesses those using trade procedures), technicians (those required for standardizing the means of trade), and lawyers (those defining the required harmonization to the legal environment of trade). Taking the case of a container moving across border on a truck, these three skills can be explained as follows: the means would include the truck standards (gross weight, size, axle loads), road standards (driving side), ICT for data exchange, documents, and so on; the procedures would mean documentary and physical procedures on either sides of the borders e.g., a duplication of Customs procedures on both sides of the border versus unified Customs; the laws and regulations would be those enabling the procedures that the vehicle, the driver, and the goods are subject to. 8. Common outputs of National Trade Facilitation Bodies 10 Awareness raising and information exchange on trade facilitation and related topics. Preparation of concrete projects. Helping the country participate better in the multilateral trading system. Consultations between the public and private sectors. Coordinating among public and private stakeholders. Preparing and negotiating country position on trade facilitation issues. Improving import and export procedures. Preparing and facilitating implementation of required legislative changes. Preparing trade facilitation strategies, action plans, and related reports. Reduction of import and export documentation. Reduction of time and costs for imports and exports. 10 National Trade Facilitation Bodies in the World, 2014, UNCTAD, Transport and Trade Facilitation Series No. 6. 7

18 CHAPTER 2: RECOMMENDATIONS FOR ESTABLISHING THE TAJIKISTAN NTFC The following are the recommendations for the establishment and operationalization of the Tajikistan NTFC. These recommendations are a synthesis of the discussions with stakeholders in Tajikistan, global and local experiences, and the suggestions from the validation workshop that took place on 13 June Terms of Reference for Tajikistan NTFC The ability of a trade facilitation body to prioritize and thereafter monitor trade facilitation reforms above and beyond implementing the WTO Agreement on Trade Facilitation is essential to its sustainability and relevance. According to Doran: The objectives and scope of a trade facilitation body will determine the goals pursued when establishing the group as well as the main functions allocated to it. The objectives contemplated by the trade facilitation body should be SMART, that is, sustainable, measurable, attainable, realistic and time-bound, and not expressed in terms of to-do lists or activities, as is currently often done (Doran, 1981) 11. Using the SMART (Sustainable-Measurable-Attainable-Realistic-Time bound) approach to defining the terms of reference for the Tajikistan NTFC (TTFC), the following scope is agreed Create Knowledge Database on Trade Facilitation Gather information on state-of-the-art and best-practices in trade facilitation from around the world. The knowledge database should be created and continuously developed for informing the particular trade facilitation context of Tajikistan Identify Trade Facilitation Issues and Stakeholders and Stakeholders Perspectives Identify the trade facilitation issues, the stakeholders both general and specific to certain issues, and their respective perspectives on these issues. This will be an ongoing process as (a) various issues will have different resolution timelines depending on their complexity, (b) resolution of issues may highlight other issues in the trade facilitation chain, and (c) the evolving trade environment (means, standards, and regulations) will require new trade facilitation measures Raise Awareness about Issues and Perspectives TF Knowledge Database Issues, Stakeholders Perspectives Increase the awareness among public and private trade facilitation stakeholders about the trade facilitation issues impacting Tajikistan s trade competitiveness. Information dissemination to, education of, and communication with all parties of the various identified Inform, Educate, Communicate 11 Doran GT (1981). There s a S.M.A.R.T. way to write management s goals and objectives. Management Review. 70(11): National Trade Facilitation Bodies in the World, 2014, UNCTAD, Transport and Trade Facilitation Series No As part of the ITC s project, webpages dedicated to the work of the TTFC will be launched this year. These webpages will help support and communicate the TTFC s work and thereby increase its outreach. 8

19 issues will be a core and continuous activity of the TTFC. For example, a short Communications booklet will be drafted for the public and private stakeholders, which will explain the role of the TTFC Develop TF Performance Indicators Related to Issues Develop and adopt trade facilitation performance indicators for Tajikistan that are comparable over time, at both a national and international level. It is important that identified trade facilitation issues easily link to these indicators. The process of development and adoption of indicators has to also be periodically reviewed for the same reasons as those elucidated for the identification of issues, stakeholders, and perspectives, above Develop Action Plan for Resolution of TF Issues Develop time-bound 14 action plans for resolution of identified trade facilitation issues in Tajikistan Trade Facilitation Action Plans (TF Action Plans). These TF Action Plans will be updated on a quarterly basis. They will build on the following minimum process actions: a) Establish the cost (economic, social, and political) to the Tajik economy of non-resolution of the identified issues. b) Establish the ease or otherwise of resolution of the identified issues based on complexity, and time and cost required. c) Establish a prioritization among the various identified issues. KPIs and Benchmar king Resolution Positions d) Highlight issues requiring substantive cost for resolution. TF Action Plans e) Benchmark issues to relevant global states-of-practice and bestpractices Research and Develop Possible Options for Resolution of Issues As part of the development of the TF Action Plans and the benchmarking to global performance, carry out all required research and develop positions or options for resolution of the trade facilitation issues. It is particularly important to address the stakeholders perspectives particular to each of the issues Facilitate TF Issues Negotiations, Resolution and Implementation Facilitate the negotiations of the trade facilitation issues between concerned stakeholders in order to arrive at a consensus resolution. In addition, facilitate the adoption of concrete actions/activities with clearly identified steps and responsibilities to implement the resolution, and then facilitate and monitor the implementation. The TTFC can convert such activities into stand-alone projects, if the project is complex enough to warrant such actions, and then either execute the project(s) itself or out-source its implementation. All these activities will also be included in the TF Action Plans TF Performance Measurement Budget and Financing Negotiation, Resolution, Implement TF Performance Measurement Measure performance improvement and report on trade facilitation performance indicators post implementation. 14 Setting a goal as to by when each of the issues needs to be resolved. 9

20 1.9. Budgeting and Financing Budget and finance the implementation of the TF Action Plans along with establishing sources of financing. Create any required special purpose vehicles for financing and implementing the TF Action Plans. 2. The functions of NTFC Coordinate, Facilitate Discussion and Decision, and Direct Following the objectives of the TTFC, To facilitate in the simplification and harmonization of international trade procedures, 15 including, the implementation of the WTO s TFA obligations, its role is advice, coordination, facilitation until decisions are reached, and provision of direction/guidance on implementation, with the actual regulation and implementation being carried out by the relevant line ministries. 16 These functions are important to clarify, as the NTFC does not implement solutions it is the public and private organizations that implement solutions as part of their mandated day-to-day operations. From these functions flows the structure and governance of the NTFC i.e., the governance structure should be such that enables the NTFC to carry out its described functions. 3. Governance and accountability of Tajikistan NTFC 3.1. Structure and Governance of the Tajikistan NTFC The Tajikistan National Trade Facilitation Committee, or simply the Tajikistan Trade Facilitation Committee, 17 has a ToR that is broader than just focusing on the WTO TFA obligations; its structure should be one that is similar to trade facilitation bodies that address both trade and transport facilitation issues implying a more tiered but inclusive organization with clear and high level accountability. The framework structure of the TTFC is shown below. Figure 4: Structure of the Tajikistan Trade Facilitation Committee TTF Steering Committee Minister MEDT TTFC Secretariat MEDT General Body TF Stakeholders Working Groups Concerned Stakeholders TF DCC Active TF Donors 15 This is in line with the WTO definition of trade facilitation, and therefore the term trade procedure encapsulates the activities, practices, and formalities, involved in collecting, presenting, communicating, and processing required for the movement of goods and vehicle and people in international trade. 16 Guidelines on Establishing and Strengthening National Coordination Mechanisms for Trade and Transport Facilitation in the ESCAP Region, 2012, UNESCAP. 17 As it will be notified by the Parliament or President. 10

21 The Tajikistan Trade Facilitation Committee will comprise the following: Tajikistan Trade Facilitation Steering Committee (TTFSC), Permanent Secretariat for the TTFC, General Body of the TTFC, Working Groups required for the TTFC, and Trade Facilitation Donor Coordination Committee. TTFC established through appropriate legislation by the Government of Tajikistan The structure, governance, and ToR of the Tajikistan NTFC will be legislated through a presidential decree/act of the parliament, prepared and presented by the TTFSC. The Tajikistan Trade Facilitation Steering Committee (TTFSC) Function The Tajikistan Trade Facilitation Steering Committee (TTFSC) will be the decision making body of the Tajikistan NTFC. It will also provide direction and guidance to concerned entities on the implementation of decisions, and report back to the Government on its performance. Governance The TTFSC will be chaired by the Minister of MEDT. It will comprise heads of the core trade facilitation stakeholder agencies (both public and private) specifically in the case of the stakeholder ministries it will comprise the first Deputy Ministers. The TTFSC s permanent membership will be recommended by its permanent Secretariat. It will also co-opt temporary members as and when required through the same process. The TTFSC will meet at an inaugural meeting, and following that it will conduct a minimum of four meetings a year (quarterly). The TTFSC can also hold special meetings to resolve specific issues as and when required. Permanent Secretariat of the TTFC Function The Secretariat will advise on and coordinate the trade facilitation issues by providing the technical expertise and administrative facilitation required to: (a) identify, prepare and present the priority trade facilitation issues; (b) analyze and establish best options for resolution of the issues; (c) coordinate the discussion on the issues with the relevant stakeholders; (d) facilitate consensus among the stakeholders on the best available options for the resolution of the issue; and, (e) present the consensus option to the TTFSC for its decision, enabling the implementation of solutions to resolve issues raised by the respective stakeholder organization. Governance This will be the permanent technical secretariat of the TTFC and will be housed in MEDT. It will consist of merit based hired technical staff and will report to the TTFSC through the First Deputy Minister of MEDT. It will be led by a Chief Executive Officer, who will also be the Secretary to the TTFSC. This will be a lean organization that will comprise the CEO, a lead trade facilitation specialist, a lead legal specialist, a lead communications specialist, an administration and accounts officer, and an office assistant. The selection of the Secretariat staff shall be transparently carried out on the basis of merit. The ToR for each employee of the Secretariat shall be clearly drafted and agreed upon, in order to ensure that qualified professionals are selected and their performance can be assessed. The Secretariat will procure any temporary specialists/skills from the market as and when required. The Secretariat will have a separate budget for its functioning and for supporting the analytical work in the Working Groups. General Body of the TTFC Function The General Body of the TTFC will: (a) form the membership of the TTFC from which stakeholders will be selected to participate in Working Groups and other TTFC meetings depending on their relevance to the issue; (b) highlight key trade facilitation issues to the Secretariat and lobby for the creation of Working Groups around these issues; and (c) validate the TTFC s annual work program and its performance report. 11

22 Governance The General Body of the TTFC will consist of all public and private sector stakeholder organizations represented through their respective principals. The General Body will be nominated by the TTFSC based on recommendations of the Secretariat. The CEO of the Secretariat will also be the Chairman of the General Body. The General Body will not be required to meet. Members of the General Body will be considered as members of the TTFC. The Secretariat will define the required business process for the General Body to enable it to fulfill its intended function. The General Body will validate the annual Work Plan prepared by the Secretariat. Working Groups of the TTFC Function The Working Groups will discuss, review solutions for resolution, and recommend the final solutions for their respective trade facilitation issues. Governance The Working Groups will be notified by the Secretariat. The Working Group will be temporary and formed to respond to particular and specific issues; therefore, the membership of each Working Group will be notified by the Secretariat. Each Working Group will be co-chaired by the CEO of the TTFC Secretariat and one member from the Working Group who will be elected at the first meeting of the Working Group. The Working Groups will meet as regularly as required, and these meetings will be arranged within each Group. The Secretariat will provide all required analytical support to the Working Groups. Donor Coordination Committee on Trade Facilitation Function The Donor Coordination Committee will lobby for the resolution of trade facilitation issues, and support the Working Groups and the Secretariat through knowledge and resources (including financial support). Governance The Trade Facilitation Donor Coordination Committee (TF DCC) for Tajikistan already exists and its ToR are included in Annex Membership of TTFC Membership of the General Body The founding members of the General Body of the TTFC are listed below these members include both public sector and private sector organizations. As the TTFC evolves, it will expand and revise its membership as required. Type of organization PUBLIC SECTOR Finance and Central Bank Customs Tax Economy, Planning, and Commerce Transport (all modes) Standards Agriculture Organization s Name Ministry of Finance of the Republic of Tajikistan National Bank of Tajikistan Customs Service under the Government of the Republic of Tajikistan Tax Committee under the Government of the Republic of Tajikistan Ministry of Economic Development and Trade of the Republic of Tajikistan Ministry of Transport of the Republic of Tajikistan Department of Civil Aviation Inland Transport Department Department on Automobile transport Department on Railway transport Agency on Standardization, Metrology, Certification and Trade Inspection under the Government of the Republic of Tajikistan Ministry of Agriculture of the Republic of Tajikistan 12

23 State Inspection on Phytosanitary and Plant Quarantine Service of the Republic of Tajikistan State Veterinary Control Service of the Republic of Tajikistan Health Border Control, Police, and Immigration Ministry of Health of the Republic of Tajikistan State Sanitary and Epidemiological Control Service of the Republic of Tajikistan Control of Pharmaceutical Activities Service in the Republic of Tajikistan Ministry of Interior of the Republic of Tajikistan Main Department of Border Forces of the State Committee on National Security of the Republic of Tajikistan PRIVATE SECTOR Chambers of Commerce Transport and Freight Forwarding Associations Banking Associations Insurance Associations Customs Brokers Associations Trade and Industry Associations (importers and exporters) Industry Associations Chamber of Commerce and Industry of Tajikistan American Chamber of Commerce in Tajikistan Association of International Freight Forwarders of Tajikistan (ABBAT) Association of Banks of Tajikistan Association of microfinance organizations of Tajikistan (AMFOT) To be nominated To be nominated Association of entrepreneurs and exporters of Tajikistan Agribusiness Association of Tajikistan (AAT) Association of Construction companies of Tajikistan Association of entrepreneurs of Sogd province Association of fruit and vegetable producers and processing companies "Golden Valley" National Association of Business Women of Tajikistan National Association of Dehkan Farmers National Association of Small and Medium Enterprises of Tajikistan Seed Association of Tajikistan Tajik Veterinarian Association Trustees Association Union of commercial pharmaceutical organizations Association of Internet Providers Association of Light Industry Enterprises Association of Mobile Companies Once the TTFC is functional and as and when required by the members of the General Body and the TTFSC, the Secretariat can also recommend co-opting key stakeholders individuals in their individual capacity. As a rule, the membership of the General Body should be based on need, consensus, and transparency. Membership of the TTFSC The original nominees to the TTFSC will comprise the principals (i.e. senior members/leaders) of the organizations selected from the members of the General Body, such that there is adequate representation of Tajik trade facilitation stakeholders but at the same time to avoid functional duplication. At a minimum, the following agencies will be represented in the TTFC. 13

24 Public Sector: Finance and Central Bank, Customs, Tax, Economy, Planning, Commerce, Standards, Agriculture, Health, Border Control and related Police/Security Agencies. Private Sector: Chambers of Commerce, Transport and Freight Forwarding Associations, Banking Associations, Insurance Associations, Customs Brokers Associations, Importers and Exporters Associations, Trade and Industry Associations. The CEO of the Secretariat will be a permanent member of and Secretary to the TTFSC. The principal of the Donor leading the TF DCC will also be a permanent member of the TTFSC; however, the membership will also be extended to all active TF DCC donors. Membership of the Working Groups The membership of each Working Group will be decided by the Secretariat, based on the issue relevant stakeholders, and will be drawn from the General Body. The Secretariat will notify the principal of each issue relevant stakeholder organization as the member of the notified Working Group; however, the stakeholder organization will have the flexibility to bring its relevant staff/specialist to the Working Group meetings. The Secretariat will also identify and include relevant members of the TF DCC interested in the Working Group issue. Membership of the TF DCC The TF DCC will determine its membership internally and will subsequently inform the Secretariat Accountability Mechanism for the TTFC Tajikistan Council on Trade Facilitation The TTFSC will report to the GoT, and the Tajikistan Council on Trade Facilitation will be created under the chairmanship of the First Deputy Prime Minister for this purpose. The function of this Council will be to (a) monitor and evaluate the performance of the TTFC, (b) provide a core high level multi-ministerial platform to discuss and decide on issues that require supra-ministerial powers, and (c) direct the implementation of decisions. The following organizations will be the permanent members of this Council: a) The Ministry of Finance of the Republic of Tajikistan b) The Ministry of Economic Development and Trade of the Republic of Tajikistan c) The Ministry of Justice d) The Customs Service under the Government of the Republic of Tajikistan e) The Ministry of Transport of the Republic of Tajikistan f) The Ministry of Agriculture of the Republic of Tajikistan g) The Ministry of Health h) The Agency on Standardization, Metrology, Certification and Trade Inspection under the GoT i) Private Sector, Business Associations, and Civil Society leaders. 14

25 Figure 5: The relationship between the TTFC and the Tajikistan Council for Trade Facilitation Council on TF TTFSC Secretariat General Body Working Groups TF DCC The Tajikistan Trade Facilitation Committee The Council should not influence the working of the TTFC implying that TTFC is not under the administrative control of the Council for any Human Resource or other administrative matters. Regular reporting to WTO Additionally, the GoT will report regularly to the WTO on the activities of the TTFC, particularly on its work program and on the progress on meeting its TFA obligations Consolidating Councils, Committees, and Working Groups working on similar issues The Government of Tajikistan aims to avoid any duplication in the working of the Tajikistan NTFC. Therefore, after an exhaustive review, the GoT have decided to create the Tajikistan NTFC by revising the existing committees that were created to coordinate and facilitate national trade and transport facilitation issues as part of Central Asia Regional Economic Cooperation (CAREC), in the MEDT, and the Coordination Committee for the National Single Window. The Tajikistan NTFC after its creation will slowly absorb and/or consolidate all such committees that are working on the issues that are covered by the NTFC. This will be clearly set out in the decree/legislation enabling the creation of the Tajikistan NTFC. The structure for the Tajikistan NTFC is described in the following section. 4. Establishment of the TTFC Secretariat The establishment of the TTFC Secretariat will comprise the following steps. MEDT will notify the TTFC Secretariat within its Ministry and proceed to identifying and appointing the CEO. Once the ToR and the overall structure and governance of the TTFC have been approved internally, the WTO Department of the MEDT will take the lead in the vetting and internal approval process. The appointed CEO will work with MEDT staff towards drafting the overall national legislation/decree for the approval of the Parliament/President. This legislation/decree will include the initial membership of all 15

26 constituent bodies of the TTFC and the business process of the TTFC; and any other provisions required to create the structure and operational environment described earlier. The TTFC legislation/decree will be enacted/decreed, following which the TTFC will call its inaugural meeting. The inaugural meeting will inform the General Body about the ToR and structure and governance of the TTFC, and approve the first budget of the permanent Secretariat. The CEO will staff the Secretariat following the approval of the budget and commence preparation of the first work program for the TTFC. This work program will then be circulated to the General Body for its feedback and once agreed between the General Body and the Secretariat, the Secretariat will notify the formation of the first set of the Working Groups within the ambit of operationalizing the TTFC. This process is summarized as follows. Figure 6: Establishment and Operationalization of the TTFC MEDT to notify TTFC Secretariat TTFC Secretariat Staffed and Design Work Program Work Program of TTFC circulated to General Body MEDT to Appoint CEO TTFC Secretariat Inaugural Meeting of the TTFC First set of Working Groups notified by Secretariat CEO TTFC and MEDT draft TTFC decree TTFC National Legislation/Decree by Parliament/President First Work Program and TTFC performance indicators sent to Council on TF 5. Funding mechanism Successful NTFBs in developing and least developed countries have sustainable and defined funding mechanisms in place. These are often supported through long-term commitments by donors. This trend is increasing as now more Category C obligations are being defined by countries. It is expected that the TTFC activities, and particularly the actions of the TTFC Secretariat, will be financed as a project through external financing provided by a group of donors. There is interest in the TF DCC to discuss this further. It is also foreseen that over 5 to 10 years the GoT will progressively contribute to the budget of the TTFC, eventually taking it over in the 10 th year of its operation. The issues surrounding sustainability, public-private partnerships, over-reliance on donor financing, and government commitment in the context of financing the functioning of the permanent Secretariat of the TTFC, have been considered. There is consensus on the need to establish solid donor support for government commitment towards a performance accountable TTFC which will progressively establish its utility and move towards less donor financing support and more government and private support. Two main activities will require financing: i. the establishment, operational, and maintenance expenses of the Secretariat; and ii. the activities of the Working Groups including the conduct of studies and workshops. 16