Customs Reform

The experience of the World Bank

Essential: Cooperation and information

Manage by objectives rather than by institutionDelegation of powersCross-designation of officialsSingle window

Role of private sectorWebsite

What is needed to do a project

DiagnosticBaselinesOwnershipObjectives: Integration and/or accessionChange managementMeasurement

Risk management

Selectivity only addresses part of the problem

Narrowly focused Too dependent on

local systems Can be easily diverted Not always

sustainable Interpreted as

excluding security

Risk management must apply to the entire logistics chain

Must be shared Must include security Addresses all aspects

of control Involves rewards for

compliance

Integration

Taskforce rather than administrationIT can provide support (single window)Training must be entirely reshapedReforms must be set in concrete

Regional User SurveyFirst phase – strengthening baseline and methodology

Objectives:

- supplementing performance measurements through survey, interviews and discussion groups to analyze improvement of border agencies’ performance in each country

- drawing attention to decision makers on areas of priority improvements (strong tool)

Sample: 150 companies, with validation from international cities

Six dimensions: Customs law; Communication; Procedures; Personnel; Logistics; Integrity

Phasing methodology: refined after phase I to increase comparability of results (2002, 2003); transfer to Chambers of Commerce in phase II

User Survey ResultsProblem groups

all problems above average communication the most

acute Bulgaria closest to average

Integrity Assessment covers petty/small corruption

only main recipients Customs

officers highest level of payments BiH highest frequency Macedonia

Example

Pilot site concept

Objective: To improve operational efficiency To promote cooperation among border

agencies and across borders

Concept Small scale operational approach Ownership by participants Incubator for new ideas and initiatives Monitoring

Change Management –Convince rather than impose

List core functions affecting import, export, transiting, payments, suspense schemes, and cross border movements of individuals Identify the corresponding enabling legislation and associated secondary regulations and operational guidelines Prepare accordingly a matrix of interactions

The legislative critical path

Agency Activity

Customs MoF MoInt MoT Commerce Chamber

Ind

Cargo control

(x) X

Transit X

Valuation (x) X

Passenger control

X

Standards

X

Petroleum

X

Evaluate legislative and regulatory

interactions

Develop a best practice model in coordination with international donors, identify the gaps with the local model Recommend a reform path to optimize the business model and subsequently harmonize it with international standards Factor local strengths

Detect potential socio-institutional

blockages

vested interests corrupt and/or criminal practices traditional, religious and cultural standards administrative and organizational templates multi ethnic communities

Documented job process flowchart

Monitoring indicators Avoidance strategy Remedial action consistent with the project achievement critical path

Identify relevant elements of

the social pact

List operations and processes which are thwarted Risk management: Identify the mechanisms with which officials carry out risk-managed activities Establish the relationships and mechanisms that ensure accountability and reporting

Prepare a communication

strategy

Disseminate within the administration new objectives and operations FeedbackPrioritiesField inputs

Some other requirements

LegislationIntern-agency relations mapPreventive and enforcement role is an issue and an example

Change management – Act 2

Act 1 was to work out the environment and make action recommendationsAct 2: Assist in designing policies

Change management – Act 3

Act 1 was to work out the environment and make action recommendationsAct 2: Assist in designing policiesSustainability Networking Training Gradual approximation

Results on the ground: Savings

Countries Beginning Sep-02 Time savedAlbania 245 142 103 42.04%BiH-Fed 153.7 63.5 90.2 58.69%BiH-RS 324.4 280 44.4 13.69%Bulgaria 148.3 60 88.3 59.54%

Croatia 293.3 166.8 126.5 43.13%

Macedonia 196.1 177.9 18.2 9.28%Romania 188.5 94 94.5 50.13%

Savings to the economy

Each idle truck has a cost of US$ 15 per hour

Multiply total number of trucks by time reduction

RESULT: In SEE,

approximately US$ 6.4 in 2003

Results

Reports on corruption are very encouragingTransit times and costs are reducingSeizures are increasingReasonable chances of sustainabilityBut there is a lot we cannot do on our own

What are we doing now?

South East EuropeRussiaCentral AsiaAfghanistanSouth East AsiaBrazil…