Prime Minister Nawaz Sharif has approved the establishment of a National Single Window that would help traders submit import, export and transit information — required by different regulatory agencies — at a single electronic gateway.
The Customs Department will be the lead agency in the assessment process at the NSW.
Though the approval is ‘in principle’ only, it put into effect, on Feb 22, the Trade Facilitation Agreement (TFA) which Pakistan ratified in October 2015. Creating an NSW was obligatory under the TFA.
The NSW involves the establishment of infrastructure, IT support, capacity building and policy formulation. The government intends to make all these in a period of five years in order to exchange information, simplify the business process and link customs, traders and regulatory authorities involved in intentional trade.
Around 50 countries have already implemented the NSW system.
President Federation of Pakistan Chambers of Commerce and Industries Zubair Tufail told Dawn that the creation of a single window is a need of the time. He said it will help to facilitate border trade, simplify procedures and encourage electronic business.
“We expect the government will soon initiate the process to implement the decision”, he said, adding the FPCCI will extend its full support to make the proposal a reality with the ultimate objective to reduce human interaction in trade.
Pakistan ranks 172 out of 190 countries in the ‘trading across border’ indicator, according to the World Bank’s Doing Business Index 2017. The indicator measures the time, cost, documentation and procedure required to clear a typical Twenty-foot Equivalent Unit (TEU) container for import and export consignments.
Integration with other organisations will facilitate traders in complying swiftly with different regulations using a single platform
While Pakistan has taken steps to make trade easier by enhancing its electronic customs platform in both Lahore and Karachi, major improvement is still required to reduce the number of mandatory documents and the time taken at all customs stations, according to the World Bank report.
According to an FBR official, for the first step for the implementation of the NSW, the country should seek technical assistance from the WTO to carry out a pre-feasibility study, get recommendations for establishing a legal framework and obtain software information.
As per the current proposed plan, the NSW will replace web based one custom’s (WeBOC) old manual clearance system. Presently 80pc of overall goods declarations are processed through WeBOC which covers 83pc of overall revenue collected by Pakistan Customs.
WeBOC operates 24/7 with more than 58,646 users. Difficulties like connectivity at certain border custom stations and scarcity of resources for the WeBOC development team have been the main hindrances for a 100pc system roll out, said a customs official.
In the next phase, paperless customs will be integrated fully with other regulatory bodies issuing trade, import, export and transit-related permits, certificates and other pertinent documents. In this regard, the customs department has provided access to the engineering development board to issue online certifications.
Official documents show Customs, using WeBOC, has already integrated the ministry of textile and the Engineering Development Board. Efforts are underway to integrate additional regulatory bodies.
Integration with other organisations will not only facilitate traders in swiftly complying with different regulations using a single platform but will also bring transparency and improve regulatory authority control.
Recently, Pakistan Customs working with the State Bank of Pakistan integrated banks with WeBOC to issue Form-E covering export consignments; work is underway to do the same for Form-I, covering imports.
Similarly coordination with the Trade Development Authority of Pakistan for automated issuance of certificates of origin through the WeBOC platform is in the final stages.
The interface work to connect Animal Quarantine and Plant Protection departments has also been completed. However, due to lack of Information and Communication Technology (ICT) equipment in the Animal Quarantine and Plant Protection Departments, the link has not been established as yet.
Pakistan Customs is also assisting the provincial authorities in collecting provincial Cess on imports. Draft protocols for providing access to the provincial, statutory, regulatory authorities for the WeBOC system are under process.
As part of the NSW, customs department has already put in place reforms like establishing the Directorate of Risk Management System for overseeing custom clearance on a risk profiling basis instead of relying on examination. It covers both import and export consignments including trans-shipments.
With improvement in RMS, the cargo cleared under green channel is expected to increase which should improve trading across borders. Similarly, Afghan Transit consignments will be scanned reducing physical interceptions to less than 5pc. The WeBOC team is also developing a Risk Management System for Afghan Transit Trade cargo.
In tandem with RMS based clearances on self-assessment basis, the Directorate General of Post Clearance Audit was established in 2008. The aims and objectives of this organisation includes developing a comprehensive monitoring mechanism for the verification of trade-related declarations; detecting and investigating commercial and trade-related frauds and proposing measures to prevent their recurrence.
To bring transparency in trade, the department also plans to exchange real time data with partner countries at a bilateral or multilateral level. This will help in effective implementation of the TIR convention which provides access to 58 countries for a seamless flow of goods in transit.
Pakistan Customs is currently in the process of implementing this new transit system.
Moreover, work has been initiated on establishing an integrated transit trade management system to make the country an economic corridor by the developing trade and transit network connecting the Central Asian Republics and South Asia.
Published in Dawn, Economic & Business, April 10th, 2017