Customs Modernisation - MI 27032019_PPT.pptx

Customs Modernisation

1. Study on Customs Modernisation in the LanCang-Mekong Countries Mekong Institute, Khon Kane Thailand 27 March 2019

2. Rationale of the Project In order to promote trade and investment in the region (Subregion), reducing trade costs and enhance connectivities and competitiveness Recommendations of the revised Kyoto Convention on the simplification and harmonisation of customs procedures emphasis on application of new technologies towards customs modernisation especially e-customs and single window (also advanced customs procedures such as customs automation, risk management, post-clearance audit, ICT, etc) At the regional level, LM countries have engaged in agreement to cooperate in implementing the Cross-Border Transport Facilitation Agreement (CBTA) initiated in 1999

3. Significant of ASIAN Economy

4. Global Trade Connectivity

5. Specific focus of the Project Customs reform and Customs modernisation in connection with trade facilitation Customs modernisation through assessment of development progress so as to suggest hard infrastructure investment project in support of customs modernisation and paperless trade Establishment of feasibility with cost estimate for investment project in support of customs modernisation in specific locations (LM countries) Soft infrastructure projects and capacity building in customs and trade facilitation in support of regional cooperation in trade facilitation in the LM countries

6. Objectives of the Project Obtain the country status regarding the process and implementation status of the customs modernisation by location specific approach Identify gaps in technological advancement; the estimate potential economic benefits of customs modernisation based on technology options in specific cross-border check point in the Lancang-Mekong countries Suggest hard and soft infrastructure investment project to assessing and realise potential benefits of customs modernisation Establish feasibility analysis with estimated investment costs of the proposed hard infrastructures in customs modernisation Suggest specific capacity building measures necessary to utilise the potential benefits in hard infrastructure proposed to customs modernisation in promoting and facilitating seamless trade and among and between the Lancang-Mekong countries

7. Methodology To achieve the objectives set for the project, the study will be carried out in 3 steps Trade facilitation “status checking” for LM countries (particularly related to custom procedures activities; export/import declaration, duty/fee payments, custom clearance) current status and problem related to customs procedures will be gathered and reviewed from well documented information and on field information Assessments of needs customs modernisation Suggestions of what needs to be done

8. Status Checking Both in depth interview with key informants and review of some documents related to the issue of TF for LM countries will be conducted; Reviews of customs procedures for Lancang-Mekong countries current status especially for much traded goods  In depth interviews with key informants consist of 1) Custom officers in border traded related department 2) Custom officers in related procedures in the field 3) NTB related (TBT and SPS) officer (department of foreign trade, ministry of commerce; department of industrial trade standard; Food and Drug Administration) 4) Local exporters and importers 5) Logistic services providers 6) Officers related to sub-regional and regional agreements 

9. Status Checking (cont) The topics for the interviews and document reviewed are as follows; Current customs procedures and status (How long does it takes for a normal good trading activity? What are the regular procedures involved? What the special procedure are for some specific products? etc) Current activities (or utilisation) and procedures for goods in transit Current problems/issues existed related to TF for LM countries both for border trade and goods in transit especially those that leads to a “less than potential” trading activities.

10. Status Checking (cont) Review of regional and sub-regional agreements (particularly GMS) related to TF (especially on logistic issues such as permission of vehicles (different types) to go across border and operate in LM countries. What are the limitations? Review on the implementation of e-customs and ASEAN Single Window (ASW) progress where are the main issues discuss under AEC 2015 and AEC 2025. The possibility of setting up a common and neutral area at the border checkpoint for simultaneous and collaboration in custom procedures. Some mutual recognition agreement (MRA) for goods in transit. And perhaps some harmonisation of custom procedures in support of e-custom and ASW.

11. Some of the Related TF performance Index 2017 LM Countries LP index
1-5 (worst to best) Burden of customs procedures
1-7 (worst to best) Documentary Compliance
Cost to Ex ( to IM) in $ Cambodia 2.58 2.9 100 (120) China 3.61 4.6 84.6 (170.9) Lao PDR 2.7 3.8 235 (115) Myanmar 2.3 3 140 (210) Thailand 3.41 4 97 (43) Vietnam 3.27 3.7 139 (183)

12. The need for customs modernisation (In almost every customs checkpoints) there is an increasing trend of trading activities (export and import) as well as varieties of products There is a gap in terms of custom development capability among LM countries There are some bottlenecks in the customs process as longer line of trucks accumulated at the borders Harmonisation of standards and customs procedure together with timely data and information exchange are keys foundations for customs improvement

13. Mae Sot (Thailand) - Myawaddy (Myanmar)

14. Mae Sot (Thailand) - Myawaddy (Myanmar) Economic growth and FDI inflows in Myanmar following economic and social reforms have lead to increasing in border trade activities between the two countries The customs checkpoint by itself has become an essential path for economic development along East-Wast economic corridor There are some improvement in paperless customs (ICT) and customs efficiency but further development still needed There is a potential gap of customs modernisation both in terms of physical and soft infrastructure toward the creation of National Single Window (NSW)

15. Aranyaprathet (Thailand) - Poipet (Cambodia)

16. Aranyaprathet (Thailand) - Poipet (Cambodia) Experiences an increasing volume of trade both import and export There are some bottle neck in the customs process as long line of trucks loaded with containers is a regular feature There are differences in trading activities between the two countries and hence, different needs for custom upgrade There is an establishment of OSS (One-stop service) in CCA (Common Control Area) but still lack of fully implementation

17. Ruili (China) - Muse (Myanmar)

18. Ruili (China) - Muse (Myanmar) An increasing volume of trade following opening border agreement between China and Myanmar Possibility of the main trading gateway between China and Myanmar especially the eastern part of China There are some obstacles in terms of customs and regulations lead to increasing costs particularly transhipment from Myanmar to Chinese trucking system Further agreement on border transportation and customs modernisation can be a great benefits

19. Assessment of Needs for Customs modernisation Physical (hard) Infrastructures Soft Infrastructures Linkages system and softwares (domestically and internationally) Collaborations and/or Agreements in related matters To some extent, the analysis in this part aim at; Identify the necessary customs improvement and how (what are the options?) to upgrade custom procedures and mitigate some of the current problems exist Identify customs improvement needed for goods in transit

20. Suggestions of what needs to be done Identification of customs modernisation infrastructures (hard and soft) needed in support of the implementation of E-customs (Paperless customs) National Single Window (NSW) and ASEAN Single Window (ASW) which requires information exchange that are timeliness, low cost, and secure - custom modernisation gaps between LM countries need to be narrowed and eventually eliminated Implementation of one single-stop inspection in the Common Control Area (CCA) Cost assessment of investment needs for customs improvement