World Bank proposes customs reforms

Updated May 07, 2019


Three reforms highlighted by WB include enhancement of risk management system.
Three reforms highlighted by WB include enhancement of risk management system.

ISLAMABAD: The World Bank has released ‘Governance Notes on Pakistan Customs (PC)’ on Monday highlighting three key reforms including enhancement of risk management system (RMS), improving pre- and post-clearance facilities and broadening tax base to enable PC build on its relatively strong base of goods and revenue control capabilities.

The report proposes enhancement of the RMS to be the first reform priority at the PC so that the system can focus on risk profiles of authorised operators to ensure only those goods’ declarations posing noteworthy risk to revenue, safety, or security are selected for physical examination thereby reducing excessive controls.

An improved RMS will subsequently help customs manage large volumes of trade more effectively while relying less on physical and documentary inspections, the report adds.

The second reform priority suggested by the World Bank is to strengthen pre- and post-clearance facilities and enforcement capabilities. Post-release control and audit regimes work as a safety net for the entire facilitation approach. In this regime, traders can clear their goods without inspection upon arrival, but audits take place post-clearance and can be done at the aggregate firm level, rather than at the single goods’ declaration level.

Once improved RMS and post-clearance audit are being effectively utilised, physical inspections and documentary checks at the borders can be reduced. A well-designed RMS will allow PC to move away from traditional time-costly clearance approaches to more effective trade facilitation strategies that enable the immediate release of imported cargo.

Published in Dawn, May 7th, 2019