bangladesh, bhutan, nepal: south asia subregional

Completion Report

Project Number: 45260-001 Loan Numbers: 2954 and 2955 Grant Numbers: 0321 and 0322 April 2017

Bangladesh, Bhutan, Nepal: South Asia Subregional Economic Cooperation (SASEC) Trade Facilitation Program This document is being disclosed to the public in accordance with ADB’s Public Communications Policy 2011.

CURRENCY EQUIVALENTS

Bangladesh Currency unit – taka (Tk)

At Appraisal At Project Completion (5 September 2012) (15 November 2015)

Tk1.00 = $0.0122 $0.0128 $1.00 = Tk81.78 Tk78.09

Bhutan

Currency unit – ngultrum (Nu)

At Appraisal At Project Completion (8 September 2012) (31 December 2015)

Nu1.00 = $0.0181 $0.0151 $1.00 = Nu55.36 Nu66.39

Nepal

Currency unit – Nepalese rupee (NRe/NRs)

At Appraisal At Project Completion (1 September 2012) (15 November 2015)

NRe1.00 = $0.011316 $0.009447 $1.00 = NRs88.36 NRs105.85

ABBREVIATIONS

ADB – Asian Development Bank ASYCUDA – Automated System for Customs Data CMM – Customs management module CSD – client service desk DMF – design and monitoring framework DOC – Department of Customs NSW – national single window NTTFC – National Transport and Trade Facilitation Committee PMU – program management unit PSC – program steering committee RAMIS – Revenue Administration Management Information System RIA – regulatory impact assessment RKC – Revised Kyoto Convention SAFE – Framework of Standards to Secure and Facilitate Global

Trade SASEC – South Asia Subregional Economic Cooperation TA – technical assistance TRS – time release study WCO – World Customs Organization

NOTES

(i) The fiscal year (FY) of the Governments of Bhutan and Bangladesh and their agencies ends on 30 June, e.g., FY2015 ends on 30 June 2015. The fiscal year of the Government of Nepal and its agencies ends on 15 July, e.g., FY2015 ends on 15 July 2015.

(ii) In this report, "$" refers to US dollars.

Vice-President W. Zhang, Operations 1 Director General H. Kim, South Asia Department (SARD) Director R. Butiong, Regional Cooperation and Operations Coordination Division,

SARD

Team leaders R. Butiong, Director, SARD (Bangladesh) R. McKenzie, Senior Regional Cooperation Specialist, SARD (Bhutan) S. Sunayama, Senior Economist, SARD (Nepal)

Team members A. Pangilinan, Programs Officer, SARD L. Reyes-Tayag, Senior Operations Assistant, SARD

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

CONTENTS

Page

BASIC DATA i I. PROGRAM DESCRIPTION 1

II. EVALUATION OF DESIGN AND IMPLEMENTATION 1

A. Relevance of Design and Formulation 1 B. Program Outputs 4 C. Program Costs 6 D. Disbursements 7 E. Program Schedule 7 F. Implementation Arrangements 7 G. Conditions and Covenants 9 H. Related Technical Assistance 9 I. Consultant Recruitment and Procurement 9 J. Performance of Consultants, Contractors, and Suppliers 10 K. Performance of the Borrower and the Executing Agency 10 L. Performance of the Asian Development Bank 10

III. EVALUATION OF PERFORMANCE 10

A. Relevance 10 B. Effectiveness in Achieving Outcome 11 C. Efficiency in Achieving Outcome and Outputs 12 D. Preliminary Assessment of Sustainability 12 E. Impact 12

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 13

A. Overall Assessment 13 B. Lessons 14 C. Recommendations 15

APPENDIXES 1. Performance Against Design and Monitoring Framework 16 2. Status of Tranche 1 and Tranche 2 Policy Conditions 20 3. Status of Compliance with Covenants 31 4. Technical Assistance Related Activities 44 5. Key General Indicators 51 6. Trade Facilitation Indicators 55 7. List of Persons Met 58

BASIC DATA: BANGLADESH A. Loan Identification 1. Country Bangladesh 2. Loan Number 2954 3. Program Title South Asia Subregional Economic Cooperation Trade Facilitation Program 4. Borrower People’s Republic of Bangladesh 5. Executing Agency National Board of Revenue 6. Amount of Loan SDR13.579 million ($21.0 million at design stage) 7. Program Completion Report REG 1614 Number

B. Loan Data 1. Appraisal – Date Started 2 September 2012 – Date Completed 5 September 2012 2. Loan Negotiations – Date Started 1 November 2012 – Date Completed 1 November 2012 3. Date of Board Approval 29 November 2012 4. Date of Loan Agreement 20 January 2013 5. Date of Loan Effectiveness – In Loan Agreement 20 April 2013 – Actual 19 April 2013 – Number of Extensions 0 6. Closing Date – In Loan Agreement 31 December 2015 – Actual 15 November 2015 – Number of Extensions 0 7. Terms of Loan – Interest Rate 1.0% per annum during the grace period, and 1.5% per annum thereafter – Maturity 24 years – Grace Period 8 years 8. Terms of Relending (if any) None – Interest Rate – Maturity (number of years) – Grace Period (number of years) – Second-Step Borrower

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9. Disbursements a. Dates

Initial Disbursement

3 May 2013

Final Disbursement

22 December 2014

Time Interval (months)

19.67

Effective Date

19 April 2013

Original Closing Date

31 December 2015


32.42

b. Amount ($ million)

Tranche

Original

Allocation

Last Revised

Allocation

Amount

Canceled

Net Amount

Available

Amount

Disbursed

Undisbursed

Balance

Tranche 1 8.00 8.00 0.00 10.74 10.74 0.00 Tranche 2 13.00 13.00 0.00 9.47 9.47 0.00 Total 21.00 21.00 0.00 20.21 20.21 0.00

10. Local Costs (Financed)

- Amount ($) 0 - Percent of Local Costs 0 - Percent of Total Cost 0 C. Program Data

1. Program Cost ($ million)

Cost Appraisal Estimate Actual

Foreign Exchange Cost 21.00 20.21 Local Currency Cost 0.00 0.00 Total 21.00 20.21

2. Financing Plan ($ million)


Implementation Costs Borrower Financed 0 0 ADB Financed 21.00 20.21 Other External Financing 0 0 Total 21.00 20.21 IDC Costs Borrower Financed 0 0 ADB Financed 0 0 Other External Financing 0 0 Total 0 0

ADB = Asian Development Bank, IDC = interest during construction.

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3. Cost Breakdown by Program Component ($)

Component Appraisal Estimate Actual

Not Applicable

Total

4. Program Schedule

Item Appraisal Estimate Actual

First tranche release 3 May 2013 Second tranche release 22 December 2014 Source: Asian Development Bank.

5. Program Performance Report Ratings

Implementation Period

Ratings

Development Objectives

Implementation Progress

From November 2012 to December 2015 S S

D. Data on Asian Development Bank Missions

Name of Mission

Date

No. of Persons

No. of Person-Days

Specialization of Membersa

Consultation mission Fact-finding mission

7–10 May 2012 2–5 September 2012

4 5

16 20

a(2), b, c a(2), b(2), c

Inception mission Review mission 1 Review mission 2 Review mission 3 Review mission 4 Review mission 5b

23 January 2013 5 July 2013

9–10 March 2014 9 October 2014 2 March 2015 28 March 2016

5 5 6 2 4 5

5 5

12 2 4 5

a, b(2), c(2) a, c(2), d, e

a, c, e(4) a, c

a, c, e(2) a, c, e(3)

a a = specialist, b = economist, c = Bangladesh Resident Mission staff, d = director, e = consultant. b This is the final review mission, and can be considered as program completion report for the loan.

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BASIC DATA: BHUTAN A. Project Identification 1. Country 2. Grant and Loan Numbers 3. Program Title 4. Borrower and Recipient 5. Executing Agency 6. Amount of Grant and Loan

7. Program Completion Report Number

Bhutan 0321 and 2955 South Asia Subregional Economic Cooperation Trade Facilitation Program Kingdom of Bhutan Ministry of Finance (MOF) $3.33 million (grant) and SDR5.412 million (loan) ($8.34 million at design stage) REG 1614

B. Loan/Grant Data 1. Appraisal – Date Started – Date Completed 2. Loan/Grant Negotiations – Date Started – Date Completed 3. Date of Board Approval 4. Date of Grant and Loan Agreement 5. Date of Grant/Loan Effectiveness – In Loan Agreement – Actual – Number of Extensions 6. Closing Date – In Loan Agreement – Actual – Number of Extensions 7. Terms of Loan – Interest Rate – Maturity – Grace Period 8. Terms of Relending (if any) – Interest Rate – Maturity (number of years) – Grace Period (number of years) – Second-Step Borrower

6 September 2012 8 September 2012 1 November 2012 1 November 2012

29 November 2012

30 January 2013 30 April 2013 26 March 2013 0 31 December 2015 26 March 2013 (grant) and 15 November 2015 (loan) 0 1.0% per annum during the grace period and 1.5% per annum thereafter 24 years 8 years None

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Initial Disbursement G0321: 26 March 2013 L2955: 26 March 2013

Final Disbursement Not applicable

29 December 2014

Time Interval 0 months

21.09 months

Effective Date 26 March 2013 26 March 2013

Original Closing Date G0321: 26 March 2013

L2955: 15 November 2015

Time Interval 0 months

32.64 months


Tranche

Original

Allocation

Last Revised

Allocation

Amount

Canceled

Net Amount

Available

Amount

Disbursed

Undisbursed

Balance

Tranche 1 6.50 6.50 0.00 6.42 6.42 0.00 Grant Loan

Tranche 2

3.33 3.17 5.17

3.33 3.17 5.17

0.00 0.00

3.33 3.09 4.87

3.33 3.09 4.87

0.00 0.00 0.00

Total 11.67 11.67 0.00 11.29 11.29 0.00

10. Local Costs (Financed)

- Amount ($) 0 - Percent of Local Costs 0 - Percent of Total Cost 0 C. Program Data



Foreign Exchange Cost 11.67 11.29 Local Currency Cost 0 0 Total 11.67 11.29



Implementation Costs Borrower Financed 0 0 ADB Financed 11.67 11.67 Other External Financing 0 0 Total 11.67 11.29 IDC Costs Borrower Financed 0 0 ADB Financed 0 0 Other External Financing 0 0 Total 0 0


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Not Applicable

Total

4. Program Schedule


First tranche release 26 March 2013 Second tranche release 29 December 2014 Source: Asian Development Bank


Program No. Implementation Period

Ratings



Loan 2955-BHU From November 2012 to November 2015 S S


Name of Mission

Date

No. of Persons

No. of Person-Days


Fact-finding mission Consultation mission Review mission 1 Review mission 2 Review mission 3 Review mission 4 Review mission 5 Review mission 6 Review mission 7 Review mission 8 Review mission 9 Review mission 10 Program completion report

6–8 September 2012 26–28 November 2012

15 February 2013 24–25 April 2013 20 January 2014

6 June 2014 21–23 August 2014 14 15 October 2014 9–11 February 2015

13–14, 16–17 April 2015 28–31 July 2015

14–18 December 2015 28–29 April, 4–5 May 2016

4 4 1 3 2 3 4 2 3 3 3 5 6

12 12 1 6 2 3

12 4 9

12 12 25 24

a(2), b(2) a, b(2), c

b a, b, d a(2)

a, d(2) a, d(3)

a, e a, d(2) a, d(2) a, d(2) a, d(4) a, d(5)

a a = specialist, b = economist, c = assistant, d = consultant.

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BASIC DATA: NEPAL A. Project Identification 1. Country 2. Grant Number 3. Program Title 4. Recipient 5. Executing Agency 6. Amount of Grant 7. Program Completion Report Number

Nepal 0322 South Asia Subregional Economic Cooperation Trade Facilitation Program Government of Nepal Department of Customs (DOC) $15.0 million REG 1614

B. Grant Data 1. Appraisal – Date Started – Date Completed 2. Grant Negotiations – Date Started – Date Completed 3. Date of Board Approval 4. Date of Grant Agreement 5. Date of Loan Effectiveness – In Grant Agreement – Actual – Number of Extensions 6. Closing Date – In Loan Agreement – Actual – Number of Extensions 7. Terms of Loan – Interest Rate – Maturity (number of years) – Grace Period (number of years) 8. Terms of Relending (if any) – Interest Rate – Maturity (number of years) – Grace Period (number of years) – Second-Step Borrower

26 August 2012 1 September 2012 1 November 2012 1 November 2012

29 November 2012

25 February 2013 26 May 2013 10 April 2013 0 31 December 2015 15 November 2015 0 N/A N/A

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Initial Disbursement

10 May 2013

Final Disbursement

22 December 2014


19.43

Effective Date

10 April 2013

Original Closing Date

15 November 2015


31.16


Tranche

Original

Allocation

Last Revised

Allocation

Amount

Canceled

Net Amount

Available

Amount

Disbursed

Undisbursed

Balance

Tranche 1 8.0 8.0 0.0 8.0 8.0 0.0 Tranche 2 7.0 7.0 0.0 7.0 7.0 0.0 Total 15.0 15.0 0.0 15.0 15.0 0.0

10. Local Costs (Financed) - Amount ($) 0 - Percent of Local Costs 0 - Percent of Total Cost 0 C. Program Data



Foreign Exchange Cost 0 0 Local Currency Cost 15.0 15.0 Total 15.0 15.0



Implementation Costs Borrower Financed 0 0 ADB Financed 15.0 15.0 Other External Financing 0 0

Total 15.0 15.0 IDC Costs Borrower Financed 0 0 ADB Financed 0 0 Other External Financing 0 0 Total 0 0


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Not Applicable

Total

4. Program Schedule


First tranche release 10 May 2013 Second tranche release 22 December 2014 Source: Asian Development Bank


Implementation Period

Ratings



From November 2012 to November 2015 S

S


Name of Mission

Date

No. of Persons

No. of Person-Days


Consultation mission Consultation mission Fact-finding mission Consultation mission Review mission 1 Review mission 2 Review mission 3 Review mission 4 Review mission 5 Review mission 6 Review mission 7b

2–4 May 2012 23 Jul 2012

26 Aug–1 Sep 2012 30 Nov 2012 14 Feb 2013 22 Apr 2013

7–12 Dec 2013 9–11 Sep 2014

2 Nov 2014 27 Jan 2015 5 Apr 2015

5 3 6 4 3 5 4 3 2 3 2

15 3

42 4 3 5

24 9 2 3 2

a, b, c, d a, c, d

a, b, c, d a, b, c, d

b, c, d a, b, c, d, e a, b, c, d b, d(2)

b, d b, d(2)

b, d

a a = specialist, b = economist, c = Nepal Resident Mission staff, d = consultant, e = procurement officer. b This is the final review mission, and can be considered as the program completion review mission for the grant.

I. PROGRAM DESCRIPTION 1. In 2012, South Asia was one of the least integrated regions in the world for trade, hindered by high transaction costs, poor logistics performance, and a proliferation of nontariff barriers. In the area of trade facilitation, major challenges included cumbersome customs procedures and long processing times for cross-border transactions,1 limited automation of customs operations, inadequate cross-border facilities, and limited and poor infrastructure for providing information to the private sector. Physical remoteness from ports and access to global trading hubs was an additional challenge for landlocked Bhutan and Nepal. As a result, the region accounted for only 2.0% of world trade and 1.7% of world foreign direct investment in 2010. 2 Bangladesh, Bhutan, and Nepal also ranked low in terms of cross-border trade performance, 3 and were classified logistics unfriendly in several categories of logistics performance, including customs clearance.4 2. Against this backdrop and in line with the goals of the South Asia Subregional Economic Cooperation (SASEC) Program countries, the SASEC Trade Facilitation Program was approved in November 2012 as a regional initiative to assist Bangladesh, Bhutan, and Nepal in facilitating cross-border trade. 5 The program’s intended impact was to increase trade, including intraregional trade, of SASEC countries by reducing or removing nontariff barriers, specifically institutional, administrative, and technical barriers to trade. The intended outcome was to support a more efficient, transparent, secure, and service-oriented processing of trade in the subregion. To achieve this, the program supported activities under three outputs: (i) modern and effective customs administration and/or management; (ii) streamlined and transparent trade processes and procedures; and (iii) improved services and information for private sector traders and investors, including women entrepreneurs.

II. EVALUATION OF DESIGN AND IMPLEMENTATION

A. Relevance of Design and Formulation 3. The program design was relevant at appraisal and remained so during implementation. The report and recommendation of the President correctly identified weaknesses related to intraregional trade in South Asia, and intended program outcomes were largely aligned with respective national development priorities. The program was consistent with Asian Development Bank (ADB) policies and strategies, including ADB’s South Asia Regional Cooperation Strategy 2011–2015, 6 which indicates the need to boost cross-border trade and improve logistics performance in support of emerging global supply chains. Approved after program

1 For instance, in 2012, it took six documents and 25 days to complete normal export processing in Bangladesh,

nine documents and 38 days in Bhutan, and 11 documents and 41 days in Nepal. International Finance Corporation–World Bank. 2012. Doing Business 2012: Doing Business in a More Transparent World. Washington, DC.

2 International Monetary Fund. 2010. Direction of Trade Statistics. Washington, DC. 3 According to the Doing Business survey, Bangladesh ranked 119 out of 185 countries in the Trading Across

Borders indicator set in 2012, with Bhutan ranked 172 and Nepal 171. International Finance Corporation–World Bank. 2012. Doing Business 2012: Doing Business in a More Transparent World. Washington, DC.

4 According to the World Bank’s Logistics Performance Index, a score that is lower than 2.35 classifies a country logistics unfriendly. For customs clearance, all three countries scored under 2.35 in both 2010 and 2012: www.lpi.worldbank.org/international/scorecard

5 Asian Development Bank (ADB). 2012. Report and Recommendation of the President to the Board of Directors: Proposed Policy-Based Loans and Grants: South Asia Subregional Economic Cooperation Trade Facilitation Program. Manila. SASEC is a project-based partnership established in 2001 by Bangladesh, Bhutan, India, and Nepal, and was joined in 2014 by the Maldives and Sri Lanka. The goal of SASEC is to strengthen regional economic cooperation through improved cross-border connectivity in transport, trade facilitation, and energy. India did not participate in the SASEC Trade Facilitation Program as it allocates national budget in support of trade facilitation reform.

6 ADB. 2011. South Asia: Regional Cooperation Strategy, 2011–2015. Manila.

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effectiveness, the SASEC Trade Facilitation Strategic Framework 2014–2018 included elements of the SASEC Trade Facilitation Program policy-based loans and grant, thus creating greater complementarity of actions across trade facilitation initiatives at the regional level. 7 At the country level, the program was well aligned with ADB country partnership strategies.8 4. Respective national development priorities for customs modernization reform were likewise reflected in the SASEC Trade Facilitation Program: Bhutan’s Eleventh Five-Year Plan 2013–2018 stressed the need to strengthen trade policies and regulatory frameworks to address deteriorating terms of trade, excessive reliance on imports, and low-value exports.9 In Nepal, the 2010 National Trade Integration Strategy and the Thirteenth Plan FY2014–FY2016 highlighted the priority need to address weak connectivity, upgrade customs management, and improve export competitiveness and trade facilitation arrangements.10 The Seventh Five-Year Plan FY2016–FY2020 of Bangladesh seeks to aggressively undertake trade facilitation at land and sea borders and promote adequate investments in trade and transport logistics and infrastructure to facilitate growth of trade and investment.11 5. In addition, the SASEC Trade Facilitation Program design was well-aligned with international frameworks and best practice for modern and efficient customs procedures, including the Revised Kyoto Convention (RKC) and the Framework of Standards to Secure and Facilitate Global Trade (SAFE).12 6. Program formulation was satisfactory, with preparatory work helping align actions with the needs expressed by stakeholders, obtain buy-in from stakeholders, and seek complementarity with the interventions of other donors.13 The programmatic approach based on three specific outputs was adequate to address the needs of Bangladesh, Bhutan, and Nepal in forging ahead with reform and modernization in trade facilitation. ADB scoping missions were useful to more precisely define the scope of intervention and help key stakeholders take ownership of their respective roles and responsibilities under the program. No major change was required in program scope. 7. However, weakness was identified in program formulation and implementation, relating to the causal link between indicators and policy conditions. For example, one design and monitoring framework (DMF) output called for the reduction of required import and export trade documents in all countries, yet program formulation did not include policy actions that directly

7 ADB. 2013. South Asia Subregional Economic Cooperation Trade Facilitation Strategic Framework, 2014–2018.

Manila. 8 ADB. 2011. Country Partnership Strategy: Bangladesh, 2011–2015. Manila; ADB. 2013. Interim Country

Partnership Strategy Bhutan, 2012–2013. Manila; and ADB. 2013. Country Partnership Strategy: Nepal, 2013–2017. Manila.

9 Government of Bhutan. 2013. Eleventh Five-Year Plan Document, Gross National Happiness Commission. Thimphu.

10 Government of Nepal, Ministry of Commerce and Supplies. 2010. Nepal Trade Integration Strategy 2010. Kathmandu; Government of Nepal, National Planning Commission. 2016. Approach Paper of the Thirteenth Plan, FY2014–FY2016. Kathmandu.

11 Government of Bangladesh, Planning Commission. 2015. Seventh Five-Year Plan FY2016–FY2020. Accelerating Growth, Empowering Citizens. Dhaka.

12 The World Customs Organization (WCO) adopted the RKC in June 1999 as the blueprint for modern and efficient customs procedures in the 21st century. The RKC promotes trade facilitation and effective controls through legal provisions that detail the application of simple yet efficient procedures. The WCO adopted the Framework of Standards to Secure and Facilitate Global Trade (SAFE framework) in 2005 to, among others, establish standards that provide supply chain security and facilitation at a global level, enable integrated supply chain management, strengthen cooperation between customs administrations, and promote the seamless movement of goods through secure international trade supply chains.

13 For instance, the SASEC Trade Facilitation and Transport Working Group, which met in Bangkok in October 2011, Kolkata in March 2012, and Thimphu in November 2012, discussed priority activities and technical assistance needed in the area of transport and trade facilitation. A SASEC Trade Facilitation Week was also held in March 2013 in Bangkok to exchange knowledge and best practices on trade and transit facilitation.

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supported business process reengineering, which most likely contributed to the less robust results for this output indicator (para. 14). Similarly, one outcome indicator called for at least 20% of shipments to be “green-channeled” (i.e., not physically inspected) by 2018. Yet only one country (Bangladesh) out of the three included a policy action in support of this desired outcome; Bhutan made no progress in green-channeling during the lifetime of the project. Outcomes should have been measured at most 12 months after program completion, and indicators and monitoring sources should have been more adequately defined. For instance, the first outcome indicator expected that border transit would improve by 15% against baseline data provided by a time release study (TRS) to be conducted in 2013. Not only was it unclear what the 15% was referring to, but also the program design and DMF wrongly assumed that TRS findings would be available in 2013. Neither were TRSs included as first tranche policy conditions. TRSs were ultimately completed at the earliest in 2014 in Bangladesh (under the International Finance Corporation South Asia Regional Trade and Investment Project14), as a second tranche policy condition. It was overly ambitious to have assumed that all countries would have been ready to produce rigorous TRS baseline data at program inception. Secondly, reporting systems to measure outcome performance were not designed for effective and reliable reporting. For instance, the methodology to measure the second outcome indicator—the percentage of green-channeled shipments—was not in place in the countries at program inception, and the use of benchmark data from the international Logistics Performance Index could not accurately gauge effective progress in the three countries. The DMF also included an indicator to pilot national single windows (NSWs) in Bangladesh, Bhutan, and Nepal by 2015.15 No definition was provided for piloting an NSW, however, leaving the indicator open to national interpretation in each country. It is, thus, difficult to accurately measure achievement of the outcomes. 8. Other factors likely to have impeded progress include implementation phasing challenges with development partners and nonprogram activities. For instance, the World Bank Nepal–India Regional Trade and Transport Project in Nepal financed implementation of the NSW16 concurrently with the ADB-financed program. However, implementation schedules of the Nepal–India Regional Trade and Transport Project and the SASEC Trade Facilitation Program could have been better synchronized to avoid phasing challenges in NSW development. Although Nepal complied with the NSW-related program policy condition,17 implementation of the Nepal–India Regional Trade and Transport Project NSW output was delayed at the procurement stage. In Bhutan, program formulation could have better anticipated potential risks in basing the development of the automated customs management module (CMM) on the timely performance of the nationwide Revenue Administration and Management Information System (RAMIS) Project, which fell outside the direct control of program implementation.18 Significant delays and technical issues in RAMIS development negatively impacted the development of the CMM under the program (para. 13).

14 www.disclosures.ifc.org/#/projectDetail/AS/597407. 15 A national single window is a facility that allows parties involved in trade and transport to lodge standardized

information and documents with a single entry point to fulfill all import, export, and transit-related regulatory requirements, thus helping reduce excessive paperwork and procedures.

16 A World Bank combined loan and grant package of $99.0 million was approved for the Nepal–India Regional Trade and Transport Project in 2013, $14.4 million of which was allocated to NSW design and implementation. A national Trade Information Portal was developed under the program by the Ministry of Commerce (MOC) and launched in September 2016.

17 ADB. 2014. Progress Report on Tranche Release. Nepal: South Asia Subregional Economic Cooperation Trade Facilitation Program (Second Tranche). Manila.

18 ADB. 2011. Technical Assistance to Bhutan for Developing a Revenue Administration Management Information System. Manila. RAMIS intended to replace the existing stand-alone Bhutan Automated Customs System with a web-based online system comprising four modules: direct tax, sales tax, revenue and accounting, and customs and excise (including the CMM). Customs and excise was added to the original technical assistance (TA) design, which focused only on tax. The TA completion date has been extended to 31 July 2017.

http://www.disclosures.ifc.org/#/projectDetail/AS/597407

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9. The two-tranche disbursement design was appropriate for the SASEC Trade Facilitation Program. Essential groundwork in the three countries was carried out to both accelerate preparation of necessary legislative reform, and to trigger disbursement of the first tranche upon program effectiveness. The second tranche encouraged the three governments to sustain the pace of customs reform, and make significant additional progress within the first 18-months to meet the necessary policy actions to trigger the release of the second tranche. B. Program Outputs 10. The program’s objective was pursued through three outputs, summarized in paras 11–16. A list of outputs and achievements against the performance targets is in Appendix 1. Status of the first and second tranche policy compliance is in Appendix 2. The program outputs laid the legal, institutional, and technical ground for comprehensive trade facilitation reform in the three participating countries. In each, critical customs legislation was prepared or approved to enable implementation of modern best practice, information management systems were implemented or upgraded to streamline customs processes, and better-quality trade information was provided to a broader base of the private sector through well-structured mechanisms.

1. Output 1: Modern and Effective Customs Administration and/or Management

11. The first program output was designed to support the customs administrations develop modern systems and procedures, in line with international best practice. Accession to and compliance with the provisions of the RKC was successfully achieved, with Bangladesh, Bhutan, and Nepal all recognizing the RKC as an appropriate international framework for the modernization of customs regimes. This output was instrumental in helping all three governments put in place strategic frameworks to facilitate the implementation of modernization and reform measures.19 The program also assisted in developing a systematic approach for building capacity and making steady progress on RKC implementation in each country. 12. Although the three countries started from different points of RKC accession and implementation, the program enabled major progress in simplifying and harmonizing customs procedures around a common benchmark of modern customs standards to ease the movement of bilateral and transit trade in the subregion. In Bangladesh, the program supported the National Board of Revenue in drafting key amendments to the existing Customs Act (1969) to make it fully compliant with the General Annex of the RKC.20 It further assisted in preparation of the RKC accession proposal, regulatory impact assessment (RIA), gap analysis, specific standard operating procedures for high-priority provisions of the RKC, and a translation of the new rules into Bengali. Similarly, in Bhutan, extensive preparatory work for RKC accession included a gap analysis to identify necessary amendments to the rules, orders, and regulations of the Sales Tax, Customs and Excise Act of 2010; and an RIA to ensure Bhutan’s compliance with the General Annex of the RKC. Bhutan formally acceded to the RKC in September 2014, and put in motion a phased series of customs-based reforms, including preparation and

19 Nepal finalized the Customs Reform and Modernization Strategies and Action Plan, the E-Customs Master Plan,

and the Client Service Desk implementation plan under the first tranche policy actions of the program. Government of Nepal. Ministry of Finance. Department of Customs. 2013. Customs Reform and Modernization Strategies and Action Plan (CRMSAP) 2013–2017. Kathmandu; Government of Nepal. Ministry of Finance. Department of Customs. 2013. E-Customs Master Plan. Internal document. Kathmandu. Many of the RKC-related activities listed in Bangladesh’s 2013 Customs Strategic Action Plan were included as tranche conditions under the program. In Bhutan, the program provided substantial support for planning RKC accession, and the development of the Bhutan Customs Reform and Modernization Strategic Plan 2016–2018.

20 In Bangladesh, accession to the RKC took place in September 2012, before program effectiveness.

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submission to Parliament of a new independent Customs Act and Rules and Regulations.21 In September 2016, the Parliament of Nepal ratified the RKC and formally acceded in February 2017. This process has been supported through the SASEC Trade Facilitation Program by completion of an RIA, a gap analysis of the Customs Act 2007, and the drafting of amended customs legislation and related legal documents. 13. In addition to compliance with international frameworks and best practice, modern customs administrations seek to optimize information and communication technology options to expedite border formalities, reduce excessive paperwork, improve the efficiency of the clearing process, and increase transparency. Bangladesh and Nepal made robust progress under the program in automating their respective customs systems. In Bangladesh the government upgraded to ASYCUDA World,22 with successful installation of the new system at 18 locations during 2013–2016, including the container terminal management system of Chittagong Port, which laid the technical ground for implementation of the pilot NSW.23 In Nepal, the government piloted ASYCUDA World at Sirsiya Dry Port (Birgunj) and Mechi Customs (Jhapa) in 2016. In Bhutan, the government embarked on an ambitious project to develop a tailor-made CMM under the nationwide RAMIS initiative.24 However, technical challenges affected the performance of the wider RAMIS project launched in 2015 and led to significant delays in the development of the CMM, as resources shifted towards the stabilization of the tax modules. Despite these issues, a pilot CMM was produced and tested in 2014.25

2. Output 2: Streamlined and Transparent Trade Processes and Procedures 14. The second program output aimed to address long delays and high transaction costs faced by traders in the region by initiating the reengineering of business processes and trade documentation to comply with international best practice and reduce time and costs incurred. This output proved challenging within the program period. Ultimately, only Bhutan managed to reduce the combined number of import and export documents (Appendix 1). However, robust progress was made in streamlining processes and procedures. For example, in Bangladesh the program supported establishment of an authorized economic operator program under the SAFE framework in 2014, in compliance with World Customs Organization (WCO) supply chain security standards, reducing data requirements and expediting processing. The National Board of Revenue also updated its standard operating procedures on risk management, post-clearance audit, assessment, physical inspection, and nonintrusive inspection. A business process analysis provided valuable inputs to the document audit process and helped outline options for improving the efficiency of clearance at border points. In Bhutan, alignment of customs forms and trade documentation with the WCO data model and United Nations Layout Key standards was completed in December 2016. 15. The program sought to pilot NSWs in the three countries. As noted, this was difficult to measure as no clear definition of NSW was provided (para. 7). Progress toward piloting NSWs, however, was demonstrated. In Bangladesh, the installation of ASYCUDA World at the Chittagong Port container terminal management system prepared the technical ground for

21 After adoption by the National Assembly (lower house), the Act was considered by the National Council (upper

house) in December 2016. It will be considered by the joint houses in June 2017, and is expected to be fully ratified.

22 ASYCUDA is a computerized customs management system developed by the United Nations Conference on Trade and Development and is used by over 90 customs administrations worldwide. Covering most foreign trade procedures, the system handles manifests and customs declarations, accounting procedures, and transit and suspense procedures, as well as generating trade data for use in statistical economic analysis.

23 Installation is planned for a further 28 locations in Bangladesh. 24 ADB. 2011. Technical Assistance for Developing a Revenue Administration Management Information System.

Manila. 25 ADB. 2014. Progress Report on Tranche Release. Bhutan: South Asia Subregional Economic Cooperation Trade

Facilitation Program (Second Tranche). Manila.

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implementation of the pilot NSW. In Bhutan, despite the delays in developing the automated CMM, strategic planning for an NSW began in December 2015, together with WCO-assisted capacity building in coordinated border management and the single window, and an NSW prefeasibility study is planned for 2017. In Nepal, the e-Customs Plan formulated under the program included government commitment to embark on upgrading the customs management system to a web-based version and establishment of an NSW. While the roll-out of the web-based ASYCUDA World pilot successfully commenced in January 2016, the phasing challenges experienced in Nepal subjected NSW development to delay (para. 8).

3. Output 3: Improved Services and Information for Private Sector Traders and Investors, Including Women Entrepreneurs

16. Under the third output, the program assisted in providing better services to importers and exporters, including accurate and detailed information on trade- and customs-related laws, regulations, procedures, and documentation. Starting from different points of readiness to launch trade and market access information portals, the countries achieved varying degrees of progress. In Bangladesh, the Ministry of Commerce successfully launched a national trade portal in March 2016 and undertook activities to implement the Online Licensing Module.26 In Bhutan, the government established the National Trade Facilitation Committee in February 2013,27 to facilitate interagency and public–private engagement in the trade facilitation reform and modernization processes and the effective exchange of trade information. The program also commissioned a feasibility study for implementation of a web-based trade information portal, likely to be developed in 2017. In Nepal, the Department of Customs (DOC) established client service desks (CSDs) at several customs border posts, 28 to provide information on customs-related procedures, facilities, and tariffs to exporters and importers, women entrepreneurs, noncorporate sector clients, foreign investors in Nepal, and Nepalese working abroad returning home. At least 994 inquiries made to the six CSDs (8.7% of the total 11,422 inquiries made in person) in FY2016 were made by women entrepreneurs. Additionally, more female entrepreneurs are assumed to have made use of the email and telephone inquiry service of the CSDs, on which no gender-disaggregated data is available.29 C. Program Costs 17. The ADB Board of Directors approved the equivalent of $47.7 million in policy-based loans and grants for the SASEC Trade Facilitation Program to Bangladesh, Bhutan, and Nepal. The program was made effective in Bangladesh on 19 April 2013 (SDR13.58 million loan), in Bhutan on 26 March 2013 (SDR5.41 million loan and $3.33 million grant), and in Nepal on 10 April 2013 ($15.00 million grant). Program costs totaled $47.67 million at final appraisal, and $46.50 million at program closure (Table 1). No additional resources were mobilized. All loans and grants were from Asian Development Fund resources. Each government committed counterpart funding and resources according to their respective loan agreements. An explicit clause in the grant agreement for Nepal referred to counterpart funding, and the government ensured that annual budget allocation to the DOC fulfilled this commitment from FY2014.30 The

26 The Bangladesh Trade Portal is available at www.bangladeshtradeportal.gov.bd. The MOC made the online

licensing module function fully operational during 2016. 27 The National Trade Facilitation Committee was expanded to include transport in 2015, following the signing of the

Motor Vehicle Agreement between Bangladesh, Bhutan, India, and Nepal. The committee was renamed the National Transport and Trade Facilitation Committee (NTTFC).

28 Birgunj, Biratnagar, Bhairahawa, DOC headquarters, Mechi Customs (Kakarvitta), and Tribhuvan International Airport Customs (Kathmandu).

29 It is also worth noting that whenever a mixed-gender group submitted an inquiry at a CSD, the registration was

made under the gender of the group representative, who in almost all cases was male, according to DOC sources.

30 Approximately $15 million—equivalent to the grant amount—was allocated additionally to the DOC operating

budget during FY2014–FY2017 to implement the Customs Reform and Modernization Strategies and Action Plan.

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Government of Bangladesh likewise provided counterpart funding for implementation of ASYCUDA World, the national single window, and establishment of the trade portal. The Government of Bhutan allocated funding for implementation of the RAMIS automation project. Each government also fulfilled its commitments for provision of human resources and other assets (including office space, equipment, and logistical support) to ensure successful implementation of the program.

18. Table 1: Program Costs Financed by ADB

Program Costs

At appraisal Actual

Country Loan/Grant ($ million) ($ million)

Bangladesh Loan 2954-BAN 21.00 20.21 Bhutan Grant 0321-BHU 3.33 3.33

Loan 2955-BHU 8.34 7.96

Nepal Grant 0322-NEP 15.00 15.00

Total 47.67 46.50 Source: Asian Development Bank.

D. Disbursements 18. The proceeds of the loans and grants were disbursed in accordance with ADB's Simplification of Disbursement Procedures and Related Requirements for Program Loans.31 The program was designed to be released in two tranches per country—the first upon loan and/or grant effectiveness, the second 18 months later upon verified compliance of second-tranche actions. Each country’s disbursements were not cross-conditional to the policy actions of other countries. Disbursement took place on schedule in the three countries and no corrective measures were required on the disbursement process. 32 The two-tranche disbursement approach was deemed appropriate for the program (para. 9). E. Program Schedule 19. The program was designed to become effective in 2013 and be fully disbursed by the end of 2015. Following timely program effectiveness, the program was closed on target: 15 November 2015 in Bangladesh, 26 March 2013 (grant component) and 15 November 2015 (loan component) in Bhutan, and 15 November 2015 in Nepal. There were no program extensions. Notably, Nepal and Bhutan fully complied with all second-tranche policy conditions more than 1 year before the program completion date of 31 December 2015, demonstrating strong national commitment to pursuing key trade facilitation reforms for expanded trade and improved competitiveness.

F. Implementation Arrangements

20. Implementation arrangements were adequate to achieve the program objectives. The program was implemented by government departments, committees, and institutions (Table 2). All program steering committee (PSC) and program management unit (PMU) mechanisms

31 ADB. 1998. Simplification of Disbursement Procedures and Related Requirements for Program Loans. Manila. 32 The first tranche was released on 3 May 2013 for Bangladesh (loan of $10.74 million); on 26 March 2013 for

Bhutan (loan of $3.09 million and grant of $3.33 million), and on 10 May 2013 for Nepal (grant of $8.00 million). The second tranche was released on 22 December 2014 for Bangladesh (loan of $9.47 million), on 29 December 2014 for Bhutan (loan of $4.87 million), and on 22 December 2014 for Nepal (grant of $7.00 million), reflecting compliance with the policy conditions stipulated in the policy matrix of each country.

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performed satisfactorily, with each country developing their respective implementation arrangement model. In Bangladesh, the PSC and PMU were created in February 2013 and provided adequate guidance and support to the implementation of the program. In Bhutan, the Department of Public Accounts was responsible for implementation of the required policy actions, while the Department of Revenue and Customs and the PMU created in January 2013 were responsible for daily operations, planning, and monitoring. The National Transport and Trade Facilitation Committee (NTTFC), set up as the PSC in February 2013, developed into a successful forum bringing government agencies involved in trade facilitation together with representatives of the private sector. The PMU served well as the NTTFC secretariat. In Nepal, the DOC was responsible for the program’s overall implementation and timely achievement of the policy actions. The PSC and the PMU, established in April 2013, were superseded by the Customs National Trade Facilitation Committee, a broader group involving many stakeholders from the private and public sector. The DOC ensured that the agreed policy actions were carried out on time. These national implementation arrangements were valuable in creating platforms for both interagency and public–private consultation and cooperation. They are likely sustainable in the post-program completion phase. For example, in the case of Bhutan, national budgetary allocation has been secured to ensure continued operations of the NTTFC (Appendix 3), and in Nepal, the Customs National Trade Facilitation Committee continues to hold meetings every 3–4 months and discusses the most contemporary issues on trade facilitation.

Table 2: Implementation Arrangements for the SASEC Trade Facilitation Program Implementation Bangladesh Bhutan Nepal

Executing agency NBR MOF DOC

Implementing agency NBR, MOC, MOS DRC DOC, MOCS

PMU NBR DRC DOC Steering committee PSC NTTFC DOC DOC = Department of Customs, DPA = Department of Public Accounts, DRC = Department of Revenue and Customs, MOC = Ministry of Commerce, MOF = Ministry of Finance, MOCS = Ministry of Commerce and Supplies, MOS = Ministry of Shipping, NBR = National Board of Revenue, NTTFC = National Transport and Trade Facilitation Committee, PMU = program management unit, PSC = program steering committee. Source: Asian Development Bank.

21. At the regional level, the program benefited from regular interaction of senior and mid-level officials through two established SASEC platforms: (i) the SASEC Trade Facilitation and Transport Working Group, a high-level forum to review transport and trade facilitation issues in South Asia;33 and (ii) the SASEC Customs Subgroup, which focuses on issues relevant to customs cooperation, including institutionalization of regular customs administration meetings, development of automated customs management systems and NSWs, and implementation of the RKC.34 The Trade Facilitation and Transport Working Group provided overall guidance in the formulation and early stages of the program (footnote 13), and regular SASEC Customs Subgroup meetings during 2013–2016 ensured alignment of customs reform agenda with program implementation; several program activities, for example, were directly supported by capacity building programs under the SASEC Customs Subgroup.

33 Trade Facilitation and Transport Working Group meetings were convened in Bangkok (2011), Kolkata (2012),

Thimphu (2012), Singapore (2013), Kathmandu (November 2014), and Tokyo (2015) to review and discuss ongoing and planned projects, as well as progress made under the STFP.

34 SASEC Customs Subgroup meetings were convened in March 2013 (Bangkok), May 2014 (Kathmandu), March 2015 (Goa), October 2015 (Cebu), and May 2016 (Maldives).

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G. Conditions and Covenants

22. All countries complied with the policy conditions associated with the first and second tranches as per the provisions and schedules of the loan and grant agreements.35 The three governments remained strongly committed to the program over the period of implementation (Appendix 2). There were no major delays in meeting the conditions for effectiveness, and policy actions were adequately designed to support the majority of program outputs and outcomes. Loan covenants were relevant and in line with program requirements. All covenants under the loan and grant agreements were complied with. No covenants were modified, suspended, or waived during the program (Appendix 3).

H. Related Technical Assistance 23. The program was supported by country-specific and regional technical assistance (TA) projects. An ADB-administered TA project funded by AusAID provided support to the program design phase,36 and three ADB-administered Japan Fund for Poverty Reduction national TA projects focused on a set of common areas that helped the countries achieve their respective policy actions.37 National TA activities and outputs were closely aligned with the program and contributed significantly to efficient and effective implementation of the program, helping keep the reforms on track. They also enabled ADB to strengthen trade facilitation policy dialogue with the three countries. Implementation of the program further benefited from a regional TA project that strengthened the program’s interaction with overall SASEC program strategic planning and capacity building activities.38 This regional resource enabled the three program countries to benefit from the sharing of knowledge and experience on the wider SASEC platform, such as the field visit made by Nepal Department of Customs to Sri Lanka Customs to study and better understand the practical implementation requirements and associated risk factors of ASYCUDA World, and helped formulate an implementation and sustainability action plan for use in Nepal.39 I. Consultant Recruitment and Procurement 24. There were no consultants or procurement activities under the program.

35 In the case of the policy-based loan to Bangladesh, three policy conditions were included for the first tranche and

seven for the second tranche. For the policy-based loan and the policy-based grant to Bhutan, three policy conditions were included for the first tranche and four for the second tranche. For the policy-based grant to Nepal, three policy conditions were included for the first tranche and five for the second tranche.

36 ADB. 2006. Technical Assistance for the Development Partnership Program for South Asia. Manila. This TA funded Subproject 28 (Capacity Building for SASEC Trade Facilitation). AusAID became part of the Australian Department of Foreign Affairs and Trade in 2015 and was renamed Australian Aid.

37 ADB. 2013. Technical Assistance to Bangladesh for Supporting Participation in the South Asia Subregional Economic Cooperation Trade Facilitation Program. Manila; ADB. 2013. Technical Assistance to Bhutan for Supporting Participation in the South Asia Subregional Economic Cooperation Trade Facilitation Program. Manila; and ADB. 2013. Technical Assistance to Nepal for Supporting Participation in the South Asia Subregional Economic Cooperation Trade Facilitation Program. Manila.

38 ADB. 2013. Technical Assistance for Trade Facilitation in South Asia. Manila. At a strategic level, this regional TA supported the SASEC Trade Facilitation and Transport Working Group (Kathmandu, November 2014), the Third Meeting of the SASEC Customs Subgroup (Goa, January 2015), and SASEC Trade Facilitation Week: Sanitary and Phytosanitary Measures and Technical Barriers to Trade (Bangkok, December 2014). It supported the ADB–World Customs Organization Customs Valuation multiyear capacity building program in Bangladesh (Dhaka, 2015), Bhutan (Phuentsholing, 2016), and Nepal (Nagarkot, 2015), and Customs Valuation and Risk Management capacity building workshop, in partnership with India’s Central Board of Excise and Customs (Mumbai, 2015).

39 www.sasec.asia/index.php?page=event&eid=133&url=study-visit-sri-lanka-asycuda-world

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J. Performance of Consultants, Contractors, and Suppliers

25. Except for the support provided by consultants engaged under separate TA projects (para. 23), the program did not make use of consultants, contractors, or suppliers, and no procurement was undertaken. K. Performance of the Borrower and the Executing Agency

26. The performance of the borrowers and executing agencies is rated satisfactory. The government agencies worked closely with ADB in meeting program outcomes in each country, and complied with all loan and grant covenants. The commitment of major stakeholders to the reform process was evident from timely achievement of policy actions, with each executing agency successfully leading the implementation of customs reform under the program, and playing a critical role in keeping implementation on track. Although implementation arrangements were unique to each country (Table 2), the borrowers ensured that the proper oversight functions were in place at program inception, and maintained ownership and professional engagement throughout program implementation. A significant aspect of borrower performance was the extent and quality of stakeholder consultations in each country as reform processes got under way, resulting in strong consensus for actions taken under the program. Through the various public–private platforms created and maintained, the governments have both strengthened their ownership of program outputs and deepened their engagement with a wider base of trade facilitation stakeholders. Overall, the performance of the borrowers was adequate to ensure the quality of project preparation, meet loan effectiveness requirements, implement program activities, comply with policy actions, and ensure likely project sustainability. Of particular note, despite a devastating earthquake and an uneasy political environment that hampered progress on customs modernization and reform, the Government of Nepal has demonstrated strong commitment to continued engagement. L. Performance of the Asian Development Bank 27. The performance of ADB is rated satisfactory. ADB staff monitored reform progress closely and the program benefited from regular ADB missions to Bangladesh, Bhutan, and Nepal (Basic Data, pages i–xi), with good continuity of program officers. These missions were effective in monitoring implementation progress and providing technical inputs. Issues identified during missions in relation to implementation of the program were adequately documented and efficiently resolved by the ADB project team through effective communication and action. Disbursement of funds was managed efficiently. In each country, ADB assistance was adequate, timely, and highly praised by the executing and implementing agencies. Overall, the borrowers rated ADB’s role satisfactory.

III. EVALUATION OF PERFORMANCE

A. Relevance 28. The program was relevant, both at appraisal and on completion. It was relevant to the development challenges and needs identified in each country, and timely in helping address significant constraints related to trade facilitation, including the lack of integration, high costs of trade, poor logistics performance, and nontariff barriers. It was designed in close cooperation with the three governments and other stakeholders to identify appropriate policy reforms. The program was, therefore, responsive to each government’s request for budget support, and ADB policy-based support was recognized as an effective way to move structural customs reform forward and support service delivery. The program was well-aligned with ADB policies and strategies and took into account the plans and priorities of each government for customs

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modernization. It adopted a strategic and selective approach in choosing three appropriate intervention areas, and no changes were made to program outputs during implementation. However, despite the significant relevance of the policy actions, the program is rated only relevant overall because it demonstrated areas of design weakness. Efforts were made to correct these drawbacks during implementation, including through conduct of the Transport and Trade Facilitation Monitoring and Measurement initiative to provide baseline data for outcome indicators, although this initiative also required longer than anticipated to develop the capacity of implementing agencies and yield results.40 Given the absence of direct linkage between the policy actions and the DMF indicators, primary focus was on achieving the policy actions rather than the longer-term goal of achieving the DMF indicator targets. Program formulation could have benefited from a more comprehensive assessment of implementation risks.

B. Effectiveness in Achieving Outcome 29. The program was rated less than effective in achieving the target outcome of implementing more efficient, transparent, secure, and service-oriented processing of cross-border trade of SASEC countries, although the 25 policy actions grouped under three outputs did lay a robust foundation for sustainable improvement in cross-border trade and customs administration. Guided by the program policy matrix, each government refined its own strategies and plans to modernize customs administration and provide better services. Most of the outputs were achieved, while some that were partially delivered are being continued by the countries and are expected to be delivered by 2018. Outputs already achieved most notably include:

(i) full accession to the RKC by all countries, and amended RKC-compliant national legislation and rules and regulations, in various stages;

(ii) web-based customs management systems were launched and implemented in Bangladesh and Nepal, and are expected to be launched in 2017 in Bhutan;

(iii) reduced import and export trade documentation aligned to WCO international standards was introduced in Bhutan, and measures are under way in all three countries to reduce this further through effective risk management practices, simplified release, and full roll-out of automated procedures;

(iv) NSW was piloted in Bangladesh, is under development in Nepal, and a NSW prefeasibility study will be conducted in Bhutan in 2017; and

(v) trade information portals were launched in Bangladesh and Nepal, and a feasibility study completed in Bhutan in 2016 with development planned for 2017.

30. In addition to output delivery, other features of the program contributed to significant progress in the program outcome. First, the program encouraged each country to implement a stronger and broadly inclusive national trade facilitation coordination mechanism, e.g., the NTTFC in Bhutan and the Customs National Trade Facilitation Committee in Nepal. The implementation arrangements and management structures and procedures were in accordance with those agreed upon in the loan agreements and the DMF. The establishment of these working groups provided essential forums for stakeholders to (i) learn about trade facilitation priorities and reform in their country; (ii) interact with local trade-related bodies, including the private sector; (iii) engage in the development of new processes; and (iv) monitor the advancement of specific reform and modernization measures. Second, the participatory approach adopted under the program was equally effective in achieving the intended outcome of more efficient, transparent, secure, and service-oriented processing of cross-border trade. There were strong synergies leveraged to strengthen the institutional links of the stakeholders, and the program encouraged participation of the private sector in consultative processes to provide inputs to meet policy targets in a timely manner. In Bhutan, for instance, several

40 The Transport and Trade Facilitation Monitoring and Measurement initiative comprised a three-pronged approach

to measuring progress in trade facilitation: implementation of a time release study, a time–cost–distance study, and a business process analysis. www.sasec.asia/index.php?page=sasec-ttfmm

../../../AppData/AppData/AppData/AppData/AppData/AppData/Local/Microsoft/Windows/Temporary%20Internet%20Files/Content.IE5/Working%20Copy/www.sasec.asia/index.php?page=sasec-ttfmm

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capacity building workshops raised awareness of the private sector on the RKC and revised the Customs Act and Rules and Regulations. In Nepal, the CSDs helped institutionalize the information sharing process with the private sector, including with women entrepreneurs. 31. Notwithstanding these positive developments, because of indicator definition and data insufficiencies, it was not possible to show that the two DMF outcome indicators were substantially met. However, despite difficulties in obtaining timely, comprehensive, and accurate outcome data, it is expected that the outcome targets will be met in the foreseeable future. C. Efficiency in Achieving Outcome and Outputs 32. The program was rated efficient. Bangladesh, Bhutan, and Nepal needed to embark on customs modernization and reform to facilitate intraregional trade and remove nontariff-related constraints, and the program enabled this in a timely manner. ADB responded efficiently to the governments’ request for policy-based budget support with a program that provided both financial support and a structured approach to policy reform. The financial arrangements were approved and implemented under a strict schedule in the three countries. Tranche releases were disbursed on time, funds were used as planned, and policy actions were complied with. Throughout implementation, the executing agencies enabled coordination between government officials, ADB staff, TA consultants, and other stakeholders, and the program was successfully mainstreamed through the respective customs administrations. Although some actions related to RKC implementation and automation processes were delayed during implementation (paras. 13–15), substantial progress was made and has ensured continued government commitment to the modernization process in the three countries. In summary, budget support to the three governments was justified and the program policy actions enabled work to begin on fundamental and difficult reforms that could otherwise have taken significantly longer. D. Preliminary Assessment of Sustainability 33. The program is rated likely to be sustainable. While the adoption of new policies, frameworks, and systems requires time to become fully operational and take effect, the current reform actions prepared and piloted under the program were already providing concrete benefits to the targeted beneficiaries at the time of evaluation. For instance, the preparation of key legislation and legal documentation allowed each government to roll out reforms to strengthen customs administrations. Public and private stakeholders benefitted from development and enhancement of automated customs systems, including the upgrading of ASYCUDA World in Bangladesh and the roll out of ASYCUDA World in Nepal. A trade information portal was launched in Bangladesh, as well as several CSDs at different customs offices in Nepal to share information on cross-border trade on a sustainable basis. The Government of Nepal has allocated national budget for CSD operation in FY2016 and FY2017. In Bhutan, the NTTFC was established as a robust and sustainable platform for interagency and public–private consultation and initiatives in trade facilitation, and it has secured public funding for future operations. Capacity building activities in the three countries—at both national and subregional levels—has strengthened institutional skills and experience, and created a common vision for customs reform that will support broad-based trade growth. Moreover, although the risk of political and economic stability cannot be excluded in any country and region, program outcomes are likely to be sustainable over time because of the strong commitment of the three countries to continued customs reform and modernization, as well as continued policy dialogue and capacity building being provided through support from the SASEC Customs Subgroup. E. Impact 34. The impact is rated satisfactory. Implementation of reform under policy-based loans can be a long-term process requiring institutional development changes as new policies and

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initiatives are launched and take hold. In the case of the SASEC Trade Facilitation Program, the two DMF impact indicators were demonstrating good progress toward development impact at the time of evaluation and to which the program outcomes have contributed (para. 33). First, intraregional trade for the SASEC countries increased from 3.27% in 2011 to 4.50% in 2015 (a rise of 37.6%). 41 Secondly, the program targeted an increase in customs revenue in the subregion by at least 10.00% by 2018, which was achieved during the program lifetime—in Bangladesh by 3.06% during FY2012, 2.89% during FY2013, and 15.31% during FY2014; in Bhutan by 2.37% during FY2013 and 43.04% during FY2014; and in Nepal by 26.53% in FY2012, 19.41% in FY2013, and 10.26% in FY2014 (Appendix 1). Given the countries’ ongoing application of reform and modernization measures under ADB and other development partner activities, development impact is expected to increase further by the DMF target date of 2018. 35. Moreover, a key impact for the success of the program was the ownership taken by the governments and stakeholders. In particular, private sector businesses indicated that program interventions resulted in positive effects upon their trading conditions and improvements in cross-border trade. For instance, the licensed clearing agents working at Kathmandu Airport cargo facilities confirmed improvement in the clearing processes under web-based systems, with CSDs providing better levels of information to the trading community. 42 The program brought trade facilitation stakeholders closer together by giving them an opportunity to collaborate under a cohesive approach. It was also recognized that the program was well-suited to increasing trade over time and therefore contribute to economic growth and prosperity in the region.43 As pointed out by several private sector stakeholders, the ease of cross-border flows will enhance the business environment in each country and lead to positive impacts for small and medium-sized enterprises and entrepreneurs involved in international trade.

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS

A. Overall Assessment

36. Overall, the program is rated successful, based on its ratings for relevance, effectiveness, efficiency, and sustainability. The design was well-aligned with the development priorities of the three countries and consistent with ADB strategies. The program was largely implemented as planned in the DMF. Despite some identified weaknesses in the design formulation, the program had no major changes in scope, and was implemented within targeted time and cost. It delivered most outputs and policy actions set out by the three governments and ADB at program inception within the targeted time and is expected to continue delivering anticipated outcomes in the foreseeable future. Most importantly, the program set a vision and

41 The original indicator data source was the Asian Development Outlook 2011, and the indicator required an

increase in intraregional trade from 6.0% in 2011 to 7.5% by 2018 (a rise of 25%). However, the Asian Development Outlook 2015 did not provide the required data. The online Asia Regional Integration Center database was used as an alternative and produced the recalculated baseline and result for SASEC country intraregional trade: 3.27% in 2011 and 4.50% in 2015. Available at www.aric.adb.org/integrationindicators/ result?sort=country&filter=all&r_indicators%5B0%5D=TCINTSHR_DOT&r_reporters%5B0%5D=801&r_partners%5B0%5D=801&r_years%5B0%5D=2011&r_years%51%5D=2015

42 A group of licensed clearing agents from the Kathmandu Airport cargo facilities were interviewed on 22 June 2016. These agents process the clearing of goods documents on behalf of a client, either an importer or exporter. This group of key informants praised customs modernization in Nepal, in particular in the area of automation for the clearing process and the harmonization of customs documentation. In particular, they indicated that the new version of the web-based ASYCUDA platform allowed them to significantly streamline clearing operations.

43 Group discussions with the private sector were organized in the three countries as follows: on 20 June 2016 in Nepal with the Federation of Nepalese Chamber of Commerce and Industries as well as several representatives from small and medium-sized enterprises, on 27 June 2016 in Bhutan with the Chamber of Commerce and Industry, and on 17 October 2016 in Bangladesh with the Chamber of Commerce and Industry and Customs Clearing and Forwarding Agents Association. Other private sector representatives were interviewed during the field missions, including commercial banks, business associations, freight forwarders, import–export agents, and clearing agents (Appendix 7).

http://www.aric.adb.org/integrationindicators/%0bresult?sort=country&filter=all&r_indicators%5B0%5D=TCINTSHR_DOT&r_reporters%5B0%5D=801&r_partners%5B0%5D=801&r_years%5B0%5D=2011&r_years%51%5D=2015



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schedule for significantly modernizing customs services in the three countries. As such, activities under the program during 2013–2015 began a phased series of customs-based reform in each country. Policy actions successfully laid the legal, institutional, and technical ground for comprehensive trade facilitation reform in the three countries. B. Lessons

37. Several lessons may be relevant to future interventions:

(i) Tight focus of policy actions under a cohesive and integrated approach. The well-defined focus of the program on three specific outputs, supported by targeted TA projects, helped strengthen implementation of policy actions by the governments and achieve the necessary milestones in customs reform.

(ii) Regional dimension of the program. There were specific advantages in adopting a regional approach in the design of the program that promoted conceptual clarity and set a common vision on customs reform in the three countries. Importantly, the broader support available to the program countries through their participation in various SASEC platforms opened up opportunities for strategic guidance, south–south knowledge and experience sharing that directly benefited implementation of program activities, and capacity building, which significantly enriched the outcomes of the program.

(iii) Capacity development and training. The program benefited from several ADB TA projects, as well as inputs from other development partners. By incorporating focused TA deliverables into the program design and implementation, ADB strengthened government competencies and commitment to policy reform agendas.

(iv) Ambitious program scope and time frame. Under the program, the capacity to implement the NSW concept seems to have been overestimated. A proper definition was not agreed or harmonized, and the time frame for complex activities related to NSW was not adequately assessed to ensure correct configuration and sequencing of actions. In addition, adequate time for adoption of institutional and legal change (e.g., preparation, review, and approval of new customs acts) was different in each of the countries and required further consideration.

(v) Active stakeholder consultations. Active stakeholder consultations during both program inception and implementation significantly helped leverage constructive policy dialogue with all stakeholders, in particular with the private sector. The positive effects of stakeholder input will benefit the likely sustainability of the program.

(vi) Cross-linkages between programs. Caution should be exercised when program activities are contingent on performance of a larger activity that falls outside the direct control of those implementing the program, such as the Bhutan RAMIS CMM module.

(vii) Measurement of outcome performance. Baseline data were not available or could not be collected on time in some instances, including the time release study, which led to difficulties in measuring program outcome. Better definition of outcome indicators could have led to better understanding of the overall program performance.

(viii) Availability of counterpart funds. Counterpart funds were fully available to meet specific agreements, as in the case of Nepal, and overall commitments made by each government to ensuring successful implementation of the program. All governments also fulfilled their commitments to provide human resources and other assets (including office space, equipment, and logistical support). Successful compliance with all policy conditions demonstrated the high level of government commitment to build the necessary institutional and human capacity.

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C. Recommendations 38. The momentum gained by the program’s successful implementation should be maintained. The design, implementation, and management of future programs in trade facilitation should be informed by the following recommendations:

1. Program Related 39. Future monitoring. The sustainability of the outputs related to the RKC, system automation, and trade portals should be subject to future monitoring. The lack of reliable performance data may continue to hamper the results orientation of the program in the future. 40. Covenants. The covenants in the loan and grant agreements should be maintained in their existing form in the future. 41. Continued engagement. The program was timely and relevant. In recent years, ADB has maintained a high degree of continuity in its support to Bangladesh, Bhutan, and Nepal. Recognizing the governments’ strong commitment to trade facilitation, a follow-up program is recommended to sustain and deepen the reforms. The conclusion of the Trade Facilitation Agreement of the World Trade Organization in December 2013 opened a new era in the global commitment to increase trade flows through trade facilitation. This multilateral agreement obligates World Trade Organization members, such as Bangladesh and Nepal, to undertake the specified trade facilitation reforms, a majority of which relate to customs reform. The agreement is groundbreaking both because trade facilitation has now become a binding global commitment and also because it explicitly acknowledges the developing countries’ need for and entitlement to international technical and financial support to meet the standards set in the Trade Facilitation Agreement. ADB is well-placed to continue providing support to trade facilitation in Bangladesh, Bhutan, and Nepal because of its sustained policy dialogue with the individual governments to date, and the established support of the SASEC program platforms. The SASEC program has enabled ADB to complement the country-level support with subregional initiatives, and its 10-year strategy approved in 2016—the SASEC Operational Plan 2016–2025—envisages greater harmonization of trade procedures among the SASEC countries in the decade to 2025.44 42. Additional assistance. Various TA projects contributed significantly to the ability of the three governments to build strong support among key stakeholders to implement customs modernization and reform. To enable the program to deliver quality benefits in a timely manner, consideration should be given to additional capacity building support in prioritized areas associated with RKC implementation and automation processes. 43. Timing of the program performance evaluation report. Given that (i) implementation of reforms under policy-based loans can be a long-term process, and (ii) impact indicators are targeted for fulfillment only by 2018, the program performance evaluation report should be conducted in or after 2018 to enable accurate assessment of the overall impact of ADB support.

2. General 44. Regional project design and implementation. The key features that help make a trade facilitation program or project at the regional level operational should be identified, and clarity provided for how DMF indicators, baseline data, and credible data sources should be utilized. For cases of regional programming where no established regional platform already exists, careful consideration should be given to optimal models of a regional PMU arrangement, to increase opportunities for knowledge- and experience sharing and for full benefits to emerge.

44 ADB. 2016. South Asia Subregional Economic Cooperation Program Operational Plan, 2016–2025, Manila.

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PERFORMANCE AGAINST DESIGN AND MONITORING FRAMEWORK

Design Summary

Performance Indicators/Targets Achievements / Status

Impact Increased trade, including intraregional trade, of SASEC countries

Intraregional trade increases to 7.5% by 2018 (2011 baseline: 6.0%)

Country 2012 2013 2014

Bangladesh 3.06% 2.89% 15.31%

Bhutan … 2.37% 43.04%

Nepal 26.53% 19.41% 10.26%

Customs revenues in the subregion increase by at least 10% by 2018a (baseline: Not determined under the DMF)

Bangladesh (% change from previous year): 2012–2013: 3.06% 2013–2014: 2.89% 2014–2015: 15.31% Bhutan (% change from previous year): 2012–2013: (30.30%) 2013–2014: 2.37% 2014–2015: 43.04% Nepal (% change from previous year): 2012–2013: 26.53% 2013–2014: 19.41% 2014–2015: 10.26%

Outcome More efficient, transparent, secure, and service-oriented processing of cross-border trade of SASEC countries

Border transits in Bangladesh, Bhutan, and Nepal for freight traffic improve by 15% by 2015 (baseline: results of 2013 time release study)

TRS baselines for the SASEC Trade Facilitation Program area were not conducted until 2016. The 2016 TRSs therefore serve as the baseline, and it is not possible to show that this outcome was met as anticipated by the DMF performance indicator. The 2014 TRS conducted in Bangladesh applied WCO methodology at Chittagong Port and Benapole, whereas the 2016 TRS applied methodology of the ADB-UNESCAP Transport and Trade Facilitation Monitoring and Measurement mechanism in the SASEC Trade Facilitation Program area at Banglabandha and Burimari border crossing stations. Bangladesh: The 2016 TRS shows average transit time for cargo processing from arrival in customs to release: (i) Burimari: 5 hours 11 minutes 46 seconds for import, and 2 hours 14 minutes 26 seconds for

export; and (ii) Banglabandha: 6 hours 34 minutes 24 seconds for import, and 1 hour 45 minutes 45

seconds for export. Bhutan: Average transit time from arrival in customs area at Phuentsholing Customs House to release from customs area, 2016 TRS shows

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Design Summary


(i) export: 13.33 minutes; (ii) import from India: 58 minutes (taxable goods); 28 minutes (nontaxable and/or exempted

goods); and (iii) import from third country: 16 hours (taxable goods), 6 hours 50 minutes.

(nontaxable/exempted goods) Nepal: 2016 time release study survey shows the average time taken between entry of the cargo vehicle to its exit from inland container depot as follows: (i) Mechi: 18 hours 58 minutes (import) and 18 hours 28 minutes (export). (ii) Biratnagar: 1 day, 4 hours, 20 minutes (import) and 2 hours 1 minute (export).

Minimum of 20% of shipments “green- channeled” or not physically inspected, by 2018 in Bangladesh, Bhutan, and Nepal (baseline: 100% inspection)

Bangladesh: Based on the 2014 Logistics Performance Index (LPI) of the World Bank, 65.0% of import shipments were not physically inspected. Of shipments subjected to multiple inspections, 93.0% were not physically inspected. Based on the 2016 LPI, 70.2% were not physically inspected. Of shipments subjected to multiple inspection, about 88% were not physically inspected, which represents an improvement in import and a deterioration in multiple inspection. Bhutan: To date, all cargo remains subject to physical inspection unless coming from a country with a bilateral trade agreement, e.g., India, and for selected products showing low risk. Under its trade facilitation National Strategic Framework and Action Plan 2014–2016, the DRC is targeting compliance-based control with risk management as a priority activity of the RKC requirements for implementation in 2016–2017. Nepal: Based on the 2014 LPI (domestic logistics performance), 91.3% of import shipments were not physically inspected. Of shipments subjected to multiple inspections, 89.7% were not physically inspected. However, the DOC’s FY2016 statistics from the ASYCUDA selectivity module show the following statistics on inspection:b Red lane (physical verification): 84.79%, Yellow lane (document check): 2.74%, Green lane (no physical or document inspection): 12.47%

Outputs 1. Modern and effective

customs administration and/or management

Accession of Bangladesh, Bhutan, and Nepal to the Revised Kyoto Convention by 2015 (baseline: 0)

Bangladesh: Accession to the RKC took place on 28 September 2012. Bhutan: Bhutan formally acceded to the RKC on 15 September 2014. Nepal: Nepal formally acceded to the RKC on 03 February 2017.

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Design Summary


Web-based customs management system launched in Bhutan, Bangladesh, and Nepal by 2015 (baseline: 0)

Bangladesh: NBR successfully installed and implemented ASYCUDA World in 18 customs houses and land customs stations by 2015 (four in 2013, eight in 2014, and six in 2015). In 2016, National Board of Revenue continued the roll-out of ASYCUDA World in eight land customs stations and off-docks, and plans to complete the roll-out in 2017 with 13 more off-docks in Chittagong. Bhutan: The direct and sales tax modules of Revenue Administration Management Information System (RAMIS) are operational in the public domain. The RAMIS customs management module (CMM) was partially developed and tested in 2015 for user acceptance. However, the greater RAMIS information technology architecture experienced stabilization problems, which had to be addressed before further CMM modules were developed. Development has restarted and the new target date for CMM launch is mid-2017. Nepal: Nepal finalized the e-Customs Master Plan in November 2013, which provided the foundation for the roll-out of the web-based ASYCUDA World system. The first ASYCUDA World pilot was launched at Mechi Customs in January 2016, followed by Sirsiya Dryport Customs in July 2016.

2. Streamlined and transparent trade processes and procedures

Combined 8–10 documents for exports and imports in Bangladesh by 2015 (2012 baseline: Total 14 documents for export and import) Combined 10–12 documents required for exports and imports in Bhutan and Nepal by 2015 (2012 baseline: total of 19 documents for export and import)

Bangladesh: According to Doing Business 2016 and 2017, the combined number of documents to export and import was 22 as of 1 June 2015 and 1 June 2016 (13 for export and 9 for import). Under the new methodology for the Trading Across Borders indicator, the documents to export include 7 other documents in addition to 6 in Doing Business 2012–2016. Bhutan: According to Doing Business 2016 and 2017, the combined number of documents to export and import was 14 as of 1 June 2015 and 1 June 2016 (eight for export and six for import). Nepal: According to Doing Business 2016, the combined number of documents to export and import was 20 as of 1 June 2015 (10 for export and 10 for import). In Doing Business 2017, the combined number as of 1 June 2016 was 19 (8 to export and 11 to import).c

Pilot national single windows established in Bangladesh, Bhutan, and Nepal by 2015 (baseline: 0)

Each country started to lay the foundation for the NSW, with some level of piloting and testing taking place as follows: Bangladesh: An initial pilot national single window (NSW) was successfully conducted through the installation and implementation of ASYCUDA World in Chittagong Customs House and in the Ministry of Commerce and the Ministry of Shipping. Bhutan: Bhutan is conducting an NSW prefeasibility study in 2017. Delays arose because of the need to stabilize the broader RAMIS IT architecture, which will interface with electronic platforms of all government agencies involved in trade facilitation, both behind and at the border. The ongoing

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Design Summary


work of the NTTFC is strengthening essential interagency cooperation to build consensus and groundwork for a future NSW. Strategic guidance for an NSW and capacity building activities on coordinated border management and a single window were undertaken in 2016. Nepal: The World Bank’s NIRTTP, signed in July 2013, includes an NSW development output. While some delay was reported, project implementation has commenced and procurement is under way. The NSW output of the NIRTTP has an implementation plan extending to the end of 2019.

3. Improved services and information for private sector traders and investors, including women entrepreneurs

Trade and market access information portals operational in Bangladesh, Bhutan, and Nepal, with links to sites of special interest to women entrepreneurs, by end 2015 (baseline: 0)

Bangladesh: The NTP was launched on 13 March 2016 and is now operational and accessible to the public online with information relevant to the import and export of goods into Bangladesh or its export to other countries: www.bangladeshtradeportal.gov.bd/ Bhutan: An ADB-financed Trade Information Portal feasibility study was conducted in 2016, and Bhutan is seeking to develop a trade information portal in 2017. The feasibility study was prepared under guidance of the NTTFC—the primary national coordination mechanism for public and private sector stakeholders in trade facilitation in Bhutan. The NTTFC has met seven times since inception in March 2013, bringing together government agencies and private sector stakeholders to share information and consult jointly on trade-related reform and projects. Nepal: DOC established CSDs in five customs offices (Tribhuvan International Airport, Mechi, Biratnagar, Birgunj, and Bhairahawa customs). DOC’s website was improved in content and presentation, and is regularly updated with information on new procedures and legislation. The Ministry of Commerce launched the Nepal Trade Information Portal under the World Bank’s NIRTTP in September 2016 (www.nepaltradeportal.gov.np).

( ) = negative number a The fiscal years are different in the three countries. The fiscal years of the Governments of Bhutan and Bangladesh ends on 30 June, i.e., FY2015 ends on 30 June

2015. The fiscal year of the Government of Nepal ends on 15 July, e.g., FY2015 ends on 15 July 2015. b The fiscal years are different in the three countries. The fiscal years of the Governments of Bhutan and Bangladesh ends on 30 June, i.e., FY2015 ends on 30 June

2015. The fiscal year of the Government of Nepal ends on 15 July, e.g., FY2015 ends on 15 July 2015. C The DOC issued a circular to customs offices on 28 March 2013 (15.12.2069) in an effort to streamline procedures and reduce the number of documents. Under the

circular, the DOC intended to (i) relieve Bill of Lading in Export; (ii) relieve Insurance documents in import and export; (iii) relieve cargo order or delivery order in export; (iv) ask only those documents from importers and exporters as referred in customs regulation; and (v) ask for only one submission per fiscal year of the VAT registration, the PAN registration, agent authorization letter, and firm registration.

ADB = Asian Development Bank, ASYCUDA = Automated System for Customs Data, CMM = customs management module, CSD = client service desk, DOC = Department of Customs, DRC = Department of Revenue and Customs, FY = fiscal year, ICD = inland container depot, LPI = Logistics Performance Index, NIRTTP = Nepal–India Regional Trade and Transport Project, NSW = national single window, NTTFC = National Transport and Trade Facilitation Committee, RAMIS = Revenue Administration Management Information System, RKC = Revised Kyoto Convention, SASEC = South Asia Subregional Economic Cooperation, TA = technical assistance, TRS = time release study, UNESCAP = United Nations Economic and Social Commission for Asia and the Pacific.. Source: Asian Development Bank.

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STATUS OF TRANCHE 1 AND TRANCHE 2 POLICY CONDITIONS

Table A2.1: Status of Tranche 1 and Tranche 2 Policy Conditions: Bangladesh

Objectives First Tranche Policy Actions

(Quarter 1 2013) Achievement Status

Modern and effective customs administration and/or management

1. The government will have submitted to the World Customs Organization (WCO) Bangladesh’s instrument of accession to the International Convention on the Simplification and Harmonization of Customs Procedures (Revised Kyoto Convention). Document required: Official copy of Bangladesh’s instrument of accession submitted to the WCO

Complied with. On 28 September 2012, the chair of the National Board of Revenue (NBR), Nasir Uddin Ahmad, deposited Bangladesh’s instrument of accession to the International Convention on the Simplification and Harmonization of Customs Procedures (Revised Kyoto Convention) with the WCO. See official document (www.wcoomd.org/~/media/ wco/ public/global/pdf/about-us/legal-instruments/ conventions-and-agreements/cuba/contracting-parties-and-instruments/bangladesh/bd201210-instrument-of-accession.pdf?la=en) and copy of instrument of accession signed by Dipu Moni, minister for foreign affairs. NBR certified on 14 February 2013.

Streamlined and transparent trade processes and procedures

2. The NBR will have finalized an action plan with respect to Bangladesh’s compliance with the Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework) of the WCO, which will include (i) a gap analysis to identify the steps required to ensure compliance with the SAFE Framework; (ii) recommendations on the priority areas for reforms; and (iii) a time-bound implementation plan to effect the priority reforms. Document required: Certified copy of NBR’s action plan

Complied with. NBR certified copy of Bangladesh Customs’ Strategic Action Plan 2013–2016, including the priority areas and time frame, on 14 February 2013, including the gap analysis between standards operated within NBR and those necessary for implementation of the WCO SAFE Framework.

Improved services and information for private sector traders and investors, including women entrepreneurs

3. The NBR will have finalized as-is and to-be analyses for the development of an electronic national single window as part of its customs management systems upgrade to the Automated System for Customs Data (ASYCUDA) World. Document required: NBR certified copy of as-is and to-be analyses for the national single window

Complied with. NBR certified copy of document, titled Single Window for Bangladesh through ASYCUDA World, dated February 2013, where the as-is and to-be analysis are embedded in the document.

http://www.wcoomd.org/~/media/%20wco/%20public/

http://www.wcoomd.org/~/media/%20wco/%20public/

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Objectives 2nd Tranche Policy Actions (18 months after Tranche 1) Achievement Status


1. Customs Act: The government will have submitted to its Parliament proposed amendments to the Customs Act, 1969 to make it fully compliant with the General Annex of the Revised Kyoto Convention. Document required: Certified copy of the government’s submission to parliament of the proposed amendments to the Customs Act 2. Regulatory impact assessment: The NBR will have completed a regulatory impact assessment (RIA) of proposed amendments to the Customs Act and related legislation to make them fully compliant with the General Annex. Document required: Certified copy of the NBR’s RIA

Compliance still in progress. On 15 September 2014, the new draft Customs Act 2014 was approved in principle by Cabinet (certified translated version of the decision Cabinet provided on 9 October 2014). It was agreed to submit the act to the Legislative Division of the Ministry of Law for vetting, after consultation is organized with all stakeholders. The Ministry of Finance (MOF) submitted a letter requesting partial compliance with File No. 09.521.024.01.00.058.2013-188 on 16 October 2014. However, submission to the Parliament was delayed to take into account proposals expressed by the Bangladesh Economic Zone Authority and the Banking and Financial Institution Division of MOF. Complied with. The NBR submitted the RIA report on the Current Customs Regulatory Framework on 30 June 2014 with File No. 1(2) Shulka: International Trade/ADB/2011 (Part-1)/211. In this context, NBR also conducted a full gap analysis to understand current gaps to comply with the RKC and the WCO SAFE framework and the WTO Agreement on Trade Facilitation.


3. Authorized economic operators (AEO) program: Based on the findings and recommendations of the action plan, the NBR will have issued a directive to establish an AEO program. Document required: Certified copy of the NBR’s order establishing the AEO program 4. Standard operating procedures (SOPs): Based on the findings and recommendations of the action plan, the NBR will have issued updated SOPs on risk management, post-clearance audit, assessment, physical inspection, and non-intrusive inspection that are compliant with the SAFE

Complied with. The NBR submitted a copy of the memorandum introducing the Green Channel System (titled AEO for Trade Facilitation) on 30 June 2014 with File No. 1(2) Shulka: International Trade/ADB/2011 (Part-1)/211. Complied with. NBR also formulated SOPs for specific, high-priority provisions of the RKC, such as risk management, post-clearance audit, and physical and non-intrusive inspection. An 11-member core committee of NBR with assistance from ADB

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Framework. Document required: Certified copy of standard operating procedures

consultant prepared framework document for five SOPs in the first half of 2014. The draft SOPs were reviewed in an external stakeholders’ meeting on 30 April 2014. The NBR submitted to ADB the SOPs on 30 June 2014 with File No. 1(2) Shulka: International Trade/ ADB/2011 (Part-1)/211. NBR through further ruling will implement those SOPs in the field, thus fulfilling the tranche condition.


5. Time release study (TRS): The NBR will have completed a World Customs Organization TRS covering Chittagong Port and Benapole Land Port operations to serve as benchmarks for a performance monitoring system. Documents required: Certified copy of TRS report 6. Automated System for Customs Data (ASYCUDA) World: The NBR will have launched its operations of ASYCUDA World with a pilot national single window program that will include the NBR and, at a minimum, the Ministry of Shipping. Document required: Certified copy of the NBR’s administrative order for the establishment of ASYCUDA World and the pilot national single window program

Complied with. The NBR submitted the TRS Report of Customs House Chittagong and Chittagong Port on 18 June 2014 with File No. 1(30) Customs, International Trade Agreements/Time Release Study/2013/199. The NBR submitted the TRS Report of Benapole Customs House on 6 July 2014 with File No. 1(30) Shulka: International Trade/Time Release Study/2013/221. In addition, TRSs were conducted at two cross-border points in 2016. Complied with. NBR successfully installed and implemented ASYCUDA World in 18 custom houses, land customs stations (LCS), off-docks, and export processing zones by 2015, and 8 in 2016. The custom houses, land customs stations, off-docks, and export processing zones that have rolled out ASYCUDA World are Chittagong Customs House, Inland Container Depot, Dhaka Customs House, and Chittagong Export Processing Zone (2013); Benapole Customs House, Teknaf LCS, Mongla Custom House of Khulna, Bhomra LCS, Burimari LCS, Hilli LCS, Sonamasjid LCS, and Mongla EPZ (2014); Customs House Pangaon, Airfreight Unit of Shah Amanat International Airport at Chittagong, Essack Brothers Off-Dock of Chittagong, Ocean Containers Limited Off-Dock of Chittagong, Summit Alliance Port Limited (West) Off-Dock of Chittagong, and SAPL (East) Off-Dock of Chittagong (2015); and

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7. Trade portal (with online access for processing of import and export registration certificates): The Ministry of Commerce will have established a trade portal with online access for the processing and issuance of import and export registration certificates that is linked to the national single window program. Documents required: Certified copies of auto-generated import and export registration certificates

Khulna LCS, KDS Limited Off-Dock of Chittagong, Port link Off-Dock of Chittagong, Darshana LCS, Tamabil LCS, Akhaura LCS, Banglabandha LCS, and Muktapur LCS (2016). NBR submitted a copy of the memorandum on implementation of ASYCUDA World software and establishment of the pilot NSW on 30 June 2014 with File No. 1(2) Shulka: International Trade/ADB/2011 (Part-1)/211. All import–export consignments are processed by ASYCUDA World. The application has been extended to the Customs House at Benapole. Complied with. NBR confirmed that the Bangladesh Trade Portal was launched by the Ministry of Commerce on 13 March 2016, and is now accessible to the public (www.bangladeshtradeportal.gov.bd/). The portal is online as the official source of regulatory information relevant to import and export of goods into Bangladesh, or its export to other countries. Regarding the OLM for the processing and issuance of import and export registration certificates, the prototype was designed with support of the International Finance Corporation (IFC). IFC also conducted a mapping of the processes to implement the OLM, indicating that (i) comprehensive software is needed, and (ii) establishing connectivity and integration with other government agencies and private stakeholders would make the OLM functional. The MOC and Office of the Chief Controller of Imports and Exports will discuss the technical issues and automation for a permanent OLM.

ADB = Asian Development Bank, AEO = authorized economic operator, ASYCUDA = Automated System for Customs Data, EPZ = export processing zone, IFC = International Finance Corporation, LCS = land customs station, MOF = Ministry of Finance, NBR = National Board of Revenue, RIA = regulatory impact assessment, RKC = Revised Kyoto Convention, SAFE = Framework of Standards to Secure and Facilitate Global Trade, SOP = standard operating procedure, TRS = time release study, WCO = World Customs Organization, WTO = World Trade Organization. Source: Asian Development Bank.

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Table A2.2: Status of Tranche 1 and Tranche 2 Policy Conditions: Bhutan




1. Department of Revenue and Customs (DRC) will have finalized an Action Plan for the purposes of Bhutan’s accession to the Revised Kyoto Convention (RKC). The Action Plan will include (i) a gap analysis to identify the gaps between national legislation and the requirements of RKC (gap analysis); (ii) an analysis of the process required for Bhutan to prepare for accession to and implementation of RKC including the administrative and infrastructure enhancements required; (iii) the expected benefits to Bhutan of acceding to and implementing RKC; and (iv) a time-bound implementation plan, including budgetary requirements, for accession to and implementation of RKC. Document required: Certified copy of the Action Plan finalized and approved by DRC.

Complied with. DRC submitted the action plan by email dated 28 February 2013 and by letter dated 15 March 2013.


2. DRC will have finalized the system requirement specifications document for the Customs Management System Component (CMSC) of the Revenue Administration Management Information System (RAMIS) and will have finalized a time-bound Action Plan to implement CMSC at Bhutan’s land and air borders. Document required: Certified copy of the system requirement specifications document and Action Plan finalized and approved by DRC.

Complied with. DRC submitted the action plan by email dated 8 March 2013 and by letter dated 15 March 2013.


3. The government will have issued an executive order for the establishment of Trade Facilitation Committee with designation of the roles and responsibilities of the committee, which will include representation from Bhutan Standards Bureau (BSB), Ministry of Finance (MOF), Ministry of Economic Affairs (MOEA), Ministry of Agriculture and Forests (MOAF), Ministry of Home and Cultural Affairs (MOHCA), and private sector entities. Document required: Certified copy of the executive order issued by the government establishing the Trade Facilitation Committee.

Complied with. The Ministry of Finance issued an executive order on 13 February 2013 to set up the National Trade Facilitation Committee in Bhutan.

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Modern and effective customs administration and management

1. The government will have submitted to the World Customs Organization Bhutan’s instrument of accession to the Revised Kyoto Convention (RKC). Document required: Certified copy of Bhutan’s instrument of accession to RKC.

Complied with. Ministry of Foreign Affairs deposited Bhutan’s instrument of accession to the RKC with the World Customs Organization on 21 August 2014, and formally acceded to the RKC on 15 September 2014. On 17 September 2014, DRC submitted to ADB a copy of its accession to the RKC signed by the minister of foreign affairs and certified by the DRC director. A new Customs Bill is scheduled to be passed by a joint sitting of the National Assembly and the National Council in June 2017.

2. Based on the findings of the gap analysis, the Beneficiary will have finalized a regulatory impact assessment report on the proposed amendments to the Bhutan’s laws, rules, and regulations, which are required to ensure Bhutan’s compliance with the General Annex of the RKC. Document required: Certified copy of Regulatory Impact Assessment Report finalized and approved by the government.

Complied with. On 17 September 2014, DRC submitted a certified copy of the RIA Report on the Draft Amendments to the Sales Tax, Customs and Excise Act of the Kingdom of Bhutan, 2000 (Customs Act), Reference No. DRC/SASEC-TF/PAT 2-06.


3. DRC will have piloted the CMSC of RAMIS in accordance with its approved Action Plan. Document required: Certified copy of an implementation report finalized and approved by DRC on the piloting of RAMIS.

Complied with. DRC presented the report on piloting the CMM of the RAMIS to DRC management on 3 September 2014. DRC management approved and certified the completed piloting phase of as-is customs functions under the CMM with letter No. DRC/STFP/PA3-T2 and report No. STFP-PA3-T2-0.2 on 3 September 2014. In addition, two major workshops on end user testing on the customs and excise modules took place in July and September 2015 under TA funding (Appendix 4).

Improved services and information for private sector traders and investors, including women

4. DRC, in coordination with the Trade Facilitation Committee, will have piloted the RAMIS-based automation of the application and approval process of trade-related transactions at Bhutan’s border agencies. Document required: Certified copy of an implementation report

Complied with. DRC presented the report on piloting the CMM of the RAMIS to the Fourth Meeting of the NTFC of Bhutan on 5 September 2014. The NTFC endorsed the piloting phase of as-is customs functions under the CMM with letter No. NTFC-

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entrepreneurs

finalized and approved by DRC and the Trade Facilitation Committee on the piloting of the automated application approval process.

4/STFP/PA4-T2 and report No. STFP-PA4-T1-0.1 on 3 September 2014.

CMM = customs management module, CMSC = customs management system component, DRC = Department of Customs and Revenue, NTFC = national trade facilitation committee, RAMIS = revenue administration management information system, RKC = Revised Kyoto Convention, STFP = SASEC Trade Facilitation Program. Source: Asian Development Bank.

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Table: A2.3: Status of Tranche 1 and Tranche 2 Policy Conditions: Nepal




1. Department of Customs (DOC) will have completed, subject to consultation with stakeholders and inclusion in the annual budget 2013–14, its Strategic Plan for Customs Reform and Modernization (July 2013–July 2017), which will include a timetable for (i) Nepal’s accession to the Revised Kyoto Convention (RKC), and (ii) implementation of legislative reforms required to comply with RKC provisions. Document required: Certified copy of DOC’s Strategic Plan.

Complied with. DOC submitted CRMSAP Plan to ADB on 22 March 2013, which included the timetable for RKC and legislative reform for RKC. The government adopted the CRMSAP 2013–2017 in June 2013, as the fourth phase of the Customs Reform and Modernization Program that originally started in 2003.


2. DOC will have commenced the development of an e-Customs Master Plan which will include a time-bound implementation plan to (i) upgrade its automated Customs management system, and (ii) integrate customs operations with the proposed national single window (NSW) program being supported by the World Bank. Document required: Certified copy of the notice to proceed from DOC to the consultants selected to develop the e-Customs Master Plan.

Complied with. DOC issued the letter on 13 January 2013 to national and international consultants to commence work on the e-Customs Master Plan. The e-Customs Master Plan was submitted in November 2013.


3. DOC will have finalized an implementation plan for the establishment of client service centers at customs border posts to effectively address client concerns. The implementation plan will include time-bound actions for (i) the provision of dedicated and trained staff at the designated customs border posts; (ii) establishment of a dedicated telephone client services facility; and (iii) enhancement of the DOC’s central customs client services website to provide greater access to, and increased levels of, customs information relevant to importers and exporters. Document required: Certified copy of DOC’s Implementation Plan for client service centers.

Complied with. DOC issued letter to ADB on 13 March 2013 and submitted the implementation plan of the Client Service Center.

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1. The Ministry of Finance (MOF) will have forwarded to Cabinet a proposal to submit a resolution to the legislature Parliament for Nepal’s accession to the Revised Kyoto Convention (RKC). Document required: Certified copy of MOF’s submission to Cabinet, Nepal’s instrument of accession to RKC.

Complied with. The following was made available: (i) A copy of the letter dated 2071/2/7,a corresponding to 21 May 2014 issued by Office of the Prime Minister stating the approval of the proposal submitted by MOF and proposal submitted by MOF on 2071/1/17 corresponding to 30 April 2014 to Prime Minister Office and Council of Ministers (Nepali). (ii) English translated copy of the letter dated 2071/2/7 corresponding to 21 May 2014 issued by Office of the Prime Minister stating the approval of the proposal submitted by MOF. (iii) English translated proposal submitted by Ministry of Finance on 2071/1/17 corresponding to 30 April 2014. Sample of the letter to be issued by MOF to ADB for compliance with this policy action. (iv) MOF submitted a certified copy of a letter, dated 21 July 2014, conveying Cabinet’s decision on Nepal’s accession to the RKC. (v) To initiate the process of RKC accession, the government undertook a gap analysis and legal text formulation for the Customs Act, 2007, with support from several development partners (most notably IFC, USAID, WCO, and ADB). DOC conducted a regulatory impact assessment of the proposed amendments to Nepal’s Customs Act, 2007 and related regulations to make them fully compliant with the general annexes of the RKC as part of the program tranche 2 policy actions. (vi) DOC prepared and submitted a new proposal to the Parliament on 23 March 2015 through MOF. DOC prepared customs legislation as per the gaps identified with the general annex.

2. The Department of Customs (DOC) will have completed a regulatory impact assessment (RIA) of proposed amendments to the Customs Act, 2007, and related regulations to make fully compliant with the General Annex

Complied with. DOC submitted a certified copy of the RIA on 22 October 2014; the annex includes a list of proposed amendments to the Customs Act, 2007.

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of the RKC. Document required: Certified copy of RIA.


3. The Cabinet will have issued a directive to establish a National Single Window (NSW) program that will (i) specify the lead agency and other participating agencies; (ii) outline the roles and responsibilities of participating agencies; and (iii) provide an implementation plan, which includes gender and social inclusion objectives. Document required: Certified copy of Cabinet order to establish the NSW

Complied with. MOF submitted the following: (i) a certified letter from the Cabinet secretariat, the Office of the Prime Minister, and Council of Ministers, to MOF, dated 20 October 2014, on Cabinet approval to accept the World Bank’s NIRTTP including its NSW output (Dispatch No. 71/071-072/125); (ii) a certified MOF directive to DOC (5 September 2014) to lead the NSW and to assign responsibilities to the participating agencies (Letter Number 2070/71, Dispatch No.162); (iii) annexes to the MOF directive (5 September 2014), including the roles and responsibilities of participating agencies for Nepal NSW and the NIRTTP implementation plan (dated November 2013); and (iv) an updated NSW implementation plan (submitted 22 October 2014), including gender and social inclusion actions; the NIRTTP appraisal document and financing agreement were attached for reference.

4. MOF will have issued a directive (i) supporting DOC’s participation in the NSW program in accordance with the e-Customs Master Plan; and (ii) allocating resources and funding required for DOC’s participating in the NSW program and for the implementation of DOC’s Strategic Plan for Customs Reform and Modernization (July 2013–July 2017) beginning with the annual budget 2014–2015. Document required: Certified copy of MOF order, in the form of a formal letter, supporting DOC participation in the NSW and allocating appropriate budgetary resources for DOC’s participation in the NSW and implementation of the DOC’s Strategic Plan for Customs Reform and Modernization (July 2013–July 2017).

Complied with. MOF submitted a certified copy of its directive to DOC, dated 21 July 2014 (Letter No. 070/71, Dispatch No. 1094), conveying the decision to allocate budget to the Nepal NSW and the Customs Reform Modernization Strategies and Action Plan (CRMSAP) for FY2015. The letter included an instruction to DOC to participate in the NSW. Additionally, the World Bank’s NIRTTP appraisal document (www.documents.worldbank.org/ curated/en/801711468306290657/pdf/781990PAD0P1 44010Box377322B00OUO090.pdf), approved by MOF, contains an article that states DOC’s leading role in NSW development.

http://www.documents.worldbank.org/%20curated/en/

http://www.documents.worldbank.org/%20curated/en/

30

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5. DOC will have established client service centers at the customs border posts at Birgunj, Biratnagar, and Bhairahawa. Document required: Certified copy of the order from DOC establishing the client service centers at Birgunj, Biratnagar, and Bhairahawa

Complied with. MOF submitted a certified copy of the letter, dated 21 July 2014, stating the operation of client service desks in Biratnagar Customs (since October 2012), Birgunj Customs (since March 2014), and Bhairahawa Customs (since March 2014). The letters from the three customs offices to DOC, indicating the date of operation, were attached.

a Bikram Samwat calendar, used in Nepal.

ADB = Asian Development Bank, CRMSAP = Customs Reform and Modernization Strategies and Action Plan, DOC = Department of Customs, IFC = International Finance Corporation, MOF = Ministry of Finance, NIRTTP = Nepal–India Regional Trade and Transport Project, NSW = national single window, RIA = regulatory impact assessment, RKC = Revised Kyoto Convention, USAID = United States Agency for International Aid, WCO = World Customs Organization. Source: Asian Development Bank.

Appendix 3 31

STATUS OF COMPLIANCE WITH COVENANTS

Table A3.1: Status of Compliance with Covenants: Bangladesh

Covenant

Reference in Loan

Agreement Status of Compliance

Covenants Section 4.02. (a): The Borrower shall maintain, or cause to be maintained, records and documents adequate to identify the Eligible items financed out of the proceeds of the Loan and to record progress of the Program.

Art. IV, page 5, Particular Covenants

Complied with. Records and accounts were managed satisfactory to requirements of ADB.

Section 4.02. (b): The Borrower shall enable ADB's representatives to inspect any relevant records and documents referred to in paragraph (a) of this Section.


Complied with. NBR provided relevant records or documentation as requested by ADB.

Section 4.03. (a) As part of the reports and information referred to in Section 6.05 of the Loan Regulations, the Borrower shall furnish, or cause to be furnished, to ADB all such reports and information as ADB shall reasonably request concerning the implementation of the Program, including the accomplishment of the targets and the carrying out of the actions set out in the Policy Letter.


Complied with. The borrower cooperated with and provided documentation to ADB on the progress and targets to achieve the policy action conditions in July 2013, March 2014, May 2014, and October 2014, and any required information during the loan review missions and post-review mission activities.

Section 4.03. (b) Without limiting the generality of the foregoing or Section 6.05 of the Loan Regulations, the Borrower shall furnish, or cause to be furnished, to ADB quarterly reports on the carrying out of the Program and on the accomplishment of the targets and carrying out of the actions set out in the Policy Letter.


Complied with. The borrower cooperated with and provided to ADB documentation on progress and targets to achieve the policy conditions in July 2013, March 2014, May 2014, and October 2014, and any required information during loan review missions and post-review mission activities.

Implementation Arrangements NBR shall be the executing agency for the Program and shall be responsible for the timely implementation of the Program. NBR, MOC and MOS shall be the implementing agencies for the Program.

Schedule 4, Program Implementation and Other Matters, para. 1, page 14

Complied with. NBR was the executing agency for the program, and the MOC and MOS were the implementing agencies.

Implementation Arrangements The Borrower shall, within 60 days of the Effective Date, have established in the National Board of Revenue (NBR) the Program Management Unit (PMU) which shall be responsible for implementing the policy actions and other activities for the Program in coordination with NBR, Ministry of Commerce (MOC) and Ministry of Shipping (MOS).


Complied with. A PMU with a program coordinator and other necessary staff was established in the NBR on 27 February 2013. Subsequently, one more staff member (first secretary, NBR) was attached to the PMU.

Implementation Arrangements The Borrower shall, within 60 days of the Effective Date, have established the Program

Schedule 4, Program Implementation

Complied with and being implemented on an ongoing basis. A 10-member PSC was formed on 27

32 Appendix 3

Covenant

Reference in Loan


Steering Committee (PSC) which shall be responsible for coordinating and monitoring the implementation of reforms under the Program.

and Other Matters, para. 3, page 14

February 2013, with the chair of the NBR as chair, and representatives from the ministries of commerce, shipping, industry, foreign affairs, and finance, and the ERD.

Implementation Arrangements The Borrower shall ensure that the Program Steering Committee meets at least semiannually and, if needed, on an ad hoc basis to (i) monitor the progress of the Program; (ii) provide guidance and direction for Program implementation to NBR, MOC, MOS and other relevant ministries; and (iii) recommend adjustments or supplementary measures to facilitate and ensure timely implementation of the Program.


Complied with and being implemented on an ongoing basis. Since its formation, the PSC has so far met four times, and it has been (i) actively monitoring the progress of the program; (ii) providing necessary guidance and direction for the program implementation to all relevant ministries and agencies; and (iii) providing suggested adjustments or supplementary measures to ensure timely implementation of the program, including other trade facilitation activities in Bangladesh.

Policy Actions, Continuity of Reforms, and Dialogue The Borrower shall ensure that (i) all policy actions adopted under the Program, as set out in the Policy Letter and Policy Matrix, continue to be in effect for the duration of the Program and subsequently; (ii) the reforms specified in the Policy Letter and Policy Matrix continue to be implemented in a phased and timely manner in accordance with the approved plans and orders issued pursuant to the Policy Matrix; and (iii) all of its obligations as stipulated in the Loan Agreement are carried out in a timely and efficient manner.


Complied with. The borrower met all the first three tranche conditions within the scheduled time, and the tranche was released as scheduled. For the second tranche, the borrower has complied with five out of seven conditions, substantially complied with one condition, and compliance is still in progress for one condition. It has also met with all other obligations in a timely and efficient manner.

Policy Actions, Continuity of Reforms, and Dialogue The Borrower shall keep ADB informed of policy discussions with other multilateral and bilateral aid agencies that may have implications for the implementation of the Program and shall provide ADB with an opportunity to comment on any resulting policy proposals. The Borrower shall take into account ADB’s views before finalizing and implementing any such proposals.


Complied with and being implemented on an ongoing basis. Other development partners, including IFC and USAID, participate in the PSC and coordination meetings. The last coordination meeting with other development partners took place on 8 October 2014 with the program coordinator and members, with the NBR as chair. In addition, the program officer regularly meets with other development partners during loan review missions.

Use of Counterpart Funds The Borrower shall ensure that the Counterpart Funds are used to finance the implementation of certain programs and activities consistent with the objectives of the Program, including (i) customs management


Complied with. The government has invested about Tk300 million in counterpart funds for implementing ASYCUDA World, the national single window, and establishment of the trade portal. It has

Appendix 3 33

Covenant

Reference in Loan


systems upgrade to ASYCUDA World; (ii) development of the pilot national single window; and (iii) trade portal and related capacity building activities.

also been bearing all staff salary and office expenses of the PMU.

Capacity Building Subproject To the extent applicable to the Borrower, the Borrower, NBR, MOC and MOS shall ensure timely completion of the Subproject and any other assistance, including technical assistance, that ADB may provide to support the Borrower in implementing the Program and promptly implement the recommendations of the Subproject and all other assistance provided by ADB.


Complied with and being implemented on an ongoing basis. Technical Assistance to Bangladesh for Supporting Participation in the South Asia Subregional Economic Cooperation Trade Facilitation Program is the main TA used to support implementation of the program. Under this TA and the STFP, several workshops, training courses, and events were conducted and national and international consultants deployed assisted the beneficiary in implementing the program.

Governance and Anticorruption The Borrower, NBR, MOC and MOS shall (i) comply with ADB’s Anticorruption Policy (1998, as amended to date) and acknowledge that ADB reserves the right to investigate directly, or through its agents, any alleged corrupt, fraudulent, collusive or coercive practice relating to the Program; and (ii) cooperate with any such investigation and extend all necessary assistance for satisfactory completion of such investigation.


Complied with and being implemented on an ongoing basis. The project is being implemented in a transparent manner and the borrower extends all cooperation to ADB for satisfactory implementation of the program.

Monitoring and Review The Borrower shall ensure that PMU submits to PSC and ADB, Program monitoring and evaluation reports and time-based work programs in a form acceptable to ADB on a quarterly and semi-annual basis. The PMU shall present its semi-annual monitoring and evaluation reports and work programs at the semi-annual meetings of the PSC. Based on the feedback from the PSC and ADB, the PMU shall, if necessary, amend and revise its work programs to ensure timely and effective implementation of the Program.


Complied with. The borrower complied with the functions of the PMU. It also convened and coordinated the meetings of the PSC to set the work plan and monitor the implementation of the program policy conditions. The PMU, as the secretariat of the PSC, recorded the decisions reached during the PSC meetings in July 2013, March 2014, May 2014, and October 2014, and distributed to the members tasked to undertake further action, and to ADB. In addition, the PMU also provided information and reports required during the loan review missions in March 2015 and March 2016, and post-review mission activities.

Monitoring and Review ADB shall undertake periodic review missions to (a) confirm progress and fulfillment of policy actions for tranche release; (b) confirm release of adequate funds from the Beneficiary for Program-


Complied with. Following the release of the first tranche in May 2013, five review missions were conducted between July 2013 and March 2016.

34 Appendix 3

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Reference in Loan


specific activities; (c) monitor continued applicability of the assumptions that might impact Program success, as well as specified risks and their mitigating measures; and (d) advise on actions to maintain effective implementation within the Program period. ADB = Asian Development Bank, Art. = article, ASYCUDA = Automated System for Customs Data, ERD = Economic Relations Division IFC = International Finance Corporation, LCS = land customs station, MOC = Ministry of Commerce, MOS = Ministry of Shipping, NBR = National Board of Revenue, para. = paragraph, PMU = program management unit, PSC = program steering committee, STFP = SASEC Trade Facilitation Program, TA = technical assistance, USAID = United States Agency for International Aid. Source: Asian Development Bank

Appendix 3 35

Table A3.2: Status of Compliance with Covenants: Bhutan

Covenant

Reference in Financial


Covenants Section 4.02. (a) The Beneficiary shall maintain, or case to be maintained, records and documents adequate to identify the Eligible Items financed out of the proceeds of the Loan and Grant and to record the progress of the Program.


Complied with. Records and accounts were managed satisfactory to requirements of ADB.

Section 4.02. (b) The Beneficiary shall enable ADB's representatives to inspect any relevant records and documents referred to in paragraph (a) of this Section.


Complied with. MOF’s DPA, as the executing agency, and DRC, as the implementing agency, have shown full support and cooperation with ADB missions and other inquiries through provision of relevant documentation as requested by ADB.

Section 4.03. (a) As part of the reports and information referred to in Section 6.05 of the Loan Regulations and Section 6.04 of the Grant Regulations, the Beneficiary shall furnish, or cause to be furnished, to ADB all such reports and information as ADB shall reasonably request concerning (i) the Counterpart Funds and the use thereof; and (ii) the implementation of the Program, including the accomplishment of the targets and carrying out of the actions set out in the Policy Letter.


Complied with. DPA and DRC have provided ADB with reports, status, and situation updates and other information relating to the program.

Section 4.03. (b) Without limiting the generality of the foregoing or Section 6.05 of the Loan Regulations and Section 6.04 of the Grant Regulations, the Beneficiary shall furnish, or cause to be furnished, to ADB quarterly reports on the carrying out of the Program and on the accomplishment of the targets and carrying out of the actions set out in the Policy Letter.


Complied with. Through updates by the chair of the NTFC of Bhutan, reports on progress in achieving the program policy action conditions have been fully shared on a quarterly basis with ADB in October 2013, January 2014, May 2014, and September 2014.

Implementation Arrangements Within 60 days of the Effective Date, the Beneficiary shall have established at DRC the PMU which shall be responsible for implementing the policy actions and other activities for the Program in coordination with MOF, DRC, MOEA and MOAF.


Complied with. A PMU was established in the DRC on 1 January 2013. Two DRC staff members are attached to the PMU (one deputy collector and one joint collector). A program coordinator, financed by the Bhutan technical assistance (funded by the JFPR), supports the PMU.

Implementation Arrangements Within 60 days of the Effective Date, the Beneficiary shall have established the Program Steering Committee which shall be responsible for coordinating and monitoring the implementation of reforms under the Program.


Complied with. In lieu of a program steering committee, and to avoid duplication of scarce human resources, the NTFC was established under Office Order DPA/ADB-3p/2013/666 dated 18 February 2013. The NTFC members

36 Appendix 3

Covenant



are secretary, MOF (chair); director, Department of Trade, MOEA; executive director, BAFRA, Ministry of Agriculture and Forests; director, Department of Immigration, Ministry of Home and Cultural Affairs; director general, National Statistics Bureau; deputy governor, Royal Monetary Authority; secretary general, Bhutan Chamber of Commerce and Industries; and director, Department of Revenue and Customs. The PMU within the DRC is the official secretariat of the NTFC.

Implementation Arrangements The Beneficiary shall ensure that the Program Steering Committee meets at least semi-annually and, if needed, on an ad hoc basis to (a) monitor the progress of the Program; (b) provide guidance and direction to the MOF, DRC, MOEA and MOAF and other relevant ministries for Program implementation; and (c) recommend adjustments or supplementary measures to facilitate and ensure timely implementation of the Program. ADB shall be invited to attend all meetings of the Program Steering Committee as an observer.


Complied with. The NTFC was mandated to meet on a quarterly basis with the objective of ensuring proper coordination and smooth implementation of the program. The NTFC (NTTFC) met in October 2013, January 2014, April 2014, September 2014, May 2015, March 2016, and October 2016, and is convening its next meeting for April 2017. The NTTFC has prepared a note to Cabinet to seek institutionalization of the NTTFC in the Government of Bhutan, including clear reporting lines to Cabinet and appropriate decision-making powers. ADB has been invited to all program meetings and has attended one meeting as observer. Nevertheless, the NTFC has shared all meeting minutes with ADB.

Policy Actions, Continuity of Reforms, and Dialogue The Beneficiary shall ensure that (a) all policy actions adopted under the Program, as set out in the Policy Letter and Policy Matrix, continue to be in effect for the duration of the Program and subsequently; (b) the reforms specified in the Policy Letter and Policy Matrix continue to be implemented in a phased and timely manner in accordance with the approved plans and orders issued pursuant to the Policy Matrix; and (c) all of its obligations as stipulated in this Financing Agreement are carried out in a timely and efficient manner.


Complied with. The recipient met all three first tranche conditions within the scheduled time, and the tranche was released as scheduled. For the second tranche, the recipient has fully complied with all four tranche release policy conditions. It has also met all other obligations in a timely and efficient manner.

Policy Actions, Continuity of Reforms, and Dialogue The Beneficiary shall keep ADB informed of policy discussions with other multilateral or

Schedule 4, Program Implementation and Other

Complied with. To date, no policy discussions have been held with implications for program implementation. When such

Appendix 3 37

Covenant



bilateral aid agencies that have implications for implementation of the Program, and shall provide ADB with an opportunity to comment on any resulting policy proposals. The Beneficiary shall take into account ADB’s views before finalizing and implementing any such proposals.

Matters, para. 5, page 16

implications arise, the beneficiary will inform ADB.

Budgetary Support and Use of Counterpart Funds The Beneficiary shall ensure that sufficient funding is allocated in its annual national budgets to ensure the efficient and timely implementation of RAMIS.


Complied with. To ensure adequate provision of training to the users from the DRC of the new RAMIS system, budgetary allocation of Nu5 million has been committed by the Government of Bhutan.

Budgetary Support and Use of Counterpart Funds The Beneficiary shall ensure that the Counterpart Funds are used to finance the implementation of certain programs and activities consistent with the objectives of the Program.

Schedule Program Implementation and Other Matters, para. 7, page 16

Complied with. NTTFC (PSC) has a modest fund allocated from the government budget. In addition, the DRC has mobilized resources to conduct meetings and various working sessions with the RAMIS customs focal official based in regional revenue and customs offices to assist development of the customs system. Such resources are met from government resources and not by ADB.

Capacity Building Subproject To the extent applicable to the Beneficiary, the Beneficiary shall ensure timely completion of the Subproject and any other assistance, including technical assistance, that ADB may provide to support the Beneficiary in implementing the Program and promptly implement the recommendations of the Subproject and all other assistance provided by ADB.


Complied with. The beneficiary has been involved in many activities of TA funded by ADB and largely complied with any requirements related to implementation. The main TA used is Technical Assistance to Bhutan for Supporting Participation in the South Asia Subregional Economic Cooperation Trade Facilitation Program, which supported participation in the program. Under this TA and other regional TA under the program, several workshops and events were held, and national and international consultants were deployed to assist the beneficiary in implementing the program (Appendix 4).

Governance and Anticorruption The Beneficiary shall (a) comply with ADB's Anticorruption Policy (1998, as amended to date) and acknowledge that ADB reserves the right to investigate directly, or through its agents, any alleged corrupt, fraudulent, collusive or coercive practice relating to the Program; and (b) cooperate with any such investigation and extend all necessary assistance for satisfactory completion of such


Complied with. The project is being implemented in a transparent manner and the recipient extends all cooperation to ADB for satisfactory program implementation.

38 Appendix 3

Covenant



investigation.

Monitoring and Review The Beneficiary shall ensure that PMU submits to PSC and ADB, Program monitoring and evaluation reports and time-based work programs in a form acceptable to ADB on a quarterly and semi-annual basis. The PMU shall present its semi-annual monitoring and evaluation reports and work programs at the semi-annual meetings of the PSC. Based on the feedback from the PSC and ADB, the PMU shall, if necessary, amend and revise its work programs to ensure timely and effective implementation of the Program.


Complied with. NTTFC serves as a PSC and the program PMU serves as NTTFC secretariat. The M&E function is well covered under the NTTFC process and minutes have been produced to take stock of progress on a regular basis.

Monitoring and Review ADB shall undertake periodic review missions to (a) confirm progress and fulfillment of policy actions for tranche release; (b) confirm release of adequate funds from the Beneficiary for Program-specific activities; (c) monitor continued applicability of the assumptions that might impact Program success, as well as specified risks and their mitigating measures; and (d) advise on actions to maintain effective implementation within the Program period.


Complied with. Four review missions were conducted following the release of the first tranche in April 2013: May 2013, January 2014, July 2014, and October 2014. DRC shared information requested by ADB and showed commitment to achieving the program goals in a timely manner.

ADB = Asian Development Bank, Art. = article, BAFRA = Bhutan Agriculture and Food Regulatory Authority, DPA = Department of Public Accounts, DRC = Department of Revenue and Customs, JFPR = Japan Fund for Poverty Reduction, M&E = monitoring and evaluation, MOAF = Ministry of Agriculture and Forests, MOEA = Ministry of External Affairs, MOF = Ministry of Finance, NTFC = national trade facilitation committee, NTTFC = national transport and trade facilitation committee, para. = paragraph, PMU = program management unit, PSC = program steering committee, RAMIS = Revenue Administration Management Information System. Source: Asian Development Bank.

Appendix 3 39

Table A3.3: Status of Compliance with Covenants: Nepal

Covenant

Reference in Grant


Section 4.02 (a): The Recipient shall maintain, or cause to be maintained, records and documents adequate to identify the Eligible Items financed out of the proceeds of the Grant and to record the progress of the Program.

Art. IV, Particular covenants, page 4

Complied with. Budgets and financial records have been maintained over time and made available to ADB, including funding under the program and general budget from government.

Section 4.02 (b): The Recipient shall enable ADB's representatives to inspect any relevant records and documents.


Complied with. The recipient has been responsive to requests for information on an ongoing basis.

Section 4.03 (a): The Recipient shall furnish, or cause to be furnished, to ADB all such reports and information as ADB shall reasonably request concerning the implementation of the Program, including the accomplishment of the targets and carrying out of the actions set out in the Policy Letter.


Complied with. The recipient has been responsive to requests for information on an ongoing basis.

Section 4.03 (b): Without limiting the generality of the foregoing or Section 6.04 of the Grant Regulations, the Recipient shall furnish, or cause to be furnished, to ADB quarterly reports on the carrying out of the Program and on the accomplishment of the targets and carrying out of the actions set out in the Policy Letter.


Complied with. The recipient has been responsive to requests for information on an ongoing basis, and has provided minutes and progress reports on program achievements.

Implementation Arrangements DOC shall be the executing agency for the Program and shall be responsible for the timely implementation of the Program. DOC and MOCS shall be the implementing agencies for the Program.


Complied with. The DOC was the executing agency for the program, and was also the lead implementing agency, together with MOCS.

Implementation Arrangements The Recipient shall, within 60 days of the Effective Date, have established in the Department of Customs the Program Management Unit which shall be responsible for implementing the policy actions and other activities for the Program in coordination with Ministry of Finance, Department of Customs, and Ministry of Commerce and Supplies.


Complied with. Following the declaration of effectiveness on 10 April 2013, the PMU was formed on 26 April 2013, comprising the following members: Program coordinator: D. Regmi, deputy director general, DOC; Members: R. Pokharel, undersecretary, MOCS; L. Prasad Paudel, director, DOC; G. Prasad Bhattarai, section officer, DOC

Implementation Arrangements The Recipient shall, within 60 days of the Effective Date, have established the Program Steering Committee which shall be responsible for coordinating and monitoring the implementation of reforms under the


Complied with. The PSC was established, on 26 April 2013. It comprises the following members: Chair: S. Prasad Acharya, director general,

40 Appendix 3

Covenant

Reference in Grant


Program.

DOC; Members: T. Prasad Sapkota, undersecretary, MOF; R. Pokharel, undersecretary, MOCS; R. Sharma, chair, Nepal Freight Forwarders Association; Chair of the Nepal Chamber of Commerce (while the serving chair since July 2014 is R. Kaji Shrestha, his formal nomination as a PSC member has not yet been issued by the Chamber of Commerce); Member and Secretary: L. Prasad Paudel, director, DOC.

Implementation Arrangements The Recipient shall ensure that the Program Steering Committee meets at least semiannually and, if needed, on an ad hoc basis to (i) monitor the progress of the Program; (ii) provide guidance and direction for Program implementation to DOC, MOF, MOCS and other relevant ministries; and (iii) recommend adjustments or supplementary measures to facilitate and ensure timely implementation of the Program.


Complied with. The first PSC meeting, convened on 2 August 2013, reviewed progress made for the SASEC Trade Facilitation Program tranche 2 policy actions. The committee also observed the need for consultants working on the NSW, e-Customs Master Plan, and other trade facilitation initiatives to work in a coordinated manner. The committee recommended that the NSW technical committee under the DOC director general ensure, from the onset, close interaction between the NSW project team and the e-Customs Master Plan development team. In lieu of the second meeting of the committee, the MOF and MOCS held a special meeting involving senior MOF and MOCS staff on 27 January 2014, chaired by the MOF joint secretary. The decision to convene this meeting rather than the committee meeting was taken considering the following: (i) Of the five policy actions under the

program tranche 2, only action 3 on NSW was encountering major technical issues that required deliberation and intervention.

(ii) Given that the NSW is implemented under the World Bank’s NIRTTP, whose executing agency is MOCS, DOC concluded that a coordination meeting of senior MOF and MOCS staff to explore the way forward in meeting the tranche 2, action 3 condition would be more appropriate and timely.

Appendix 3 41

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Reference in Grant


During the MOF–MOCS meeting, MOCS was requested to convene a meeting of stakeholders to explore ways to comply with tranche 2, action 3. MOCS accordingly convened a stakeholders meeting on the NSW on 16 February 2014, chaired by the MOCS secretary, and instructed the NSW technical committee—also known as the Automation and Simplification of Trade and Transport (Single Window) Subcommittee—to prepare documents for compliance with tranche 2, action 3. The NSW technical committee subsequently prepared the project implementation plan for the NSW output and defined the roles and responsibilities of the NSW participating agencies, which were submitted to ADB as evidence of compliance with tranche 2, action 3. The PSC and the PMU, established in April 2013, were taken over by the CTFC, a broader group involving many stakeholders from the private and public sectors.

Policy Actions, Continuity of Reforms and Dialogue The Recipient shall ensure that (i) all policy actions adopted under the Program, as set out in the Policy Letter and Policy Matrix, continue to be in effect for the duration of the Program and subsequently; (ii) the reforms specified in the Policy Letter and Policy Matrix continue to be implemented in a phased and timely manner in accordance with the approved plans and orders issued pursuant to the Policy Matrix; and (iii) all of its obligations as stipulated in the Loan Agreement are carried out in a timely and efficient manner.


Complied with. The recipient met all of the three conditions of the first tranche within the scheduled time, and the tranche was released as scheduled. The recipient met all five tranche conditions of the second tranche in less than 18 months after the first tranche release and with over 1 year left before program completion in December 2015. It has also met all other obligations in a timely and efficient manner. DOC continues the policy matrix implementation through the CRMSAP.

Policy Actions, Continuity of Reforms and Dialogue The Recipient shall keep ADB informed of policy discussions with other multilateral and bilateral aid agencies that may have implications for the implementation of the Program and shall provide ADB with an opportunity to comment on any resulting policy proposals. The Recipient shall take into account ADB’s views before finalizing


Complied with and being implemented on an ongoing basis. DOC has provided regular updates on initiatives with other development partners during ADB mission visits. In addition, the program officer has regularly met with other development partners during the program review missions, in particular with the World Bank team implementing the trade

42 Appendix 3

Covenant

Reference in Grant


and implementing any such proposals.

facilitation loan and grant (NIRTTP), including NSW establishment.

Use of Counterpart Funds The Recipient shall ensure that the Counterpart Funds are used to finance the design and implementation of the outputs described in the Policy Matrix.


Complied with and being implemented on an ongoing basis. Budget allocated and disbursed in Customs Reform, Client Service Center, ASYCUDA World, and Nepal National Single Window for FY2014, FY2015, and FY2016 (separate from tranche release and from government financing) and budget allocated for FY2017 (from tranche release and from government financing).

Capacity Building Subproject To the extent applicable to the Recipient, the Recipient, DOC and MOCS shall ensure timely completion of the Subproject and any other assistance, including technical assistance, that ADB may provide to support the Recipient in implementing the Program and promptly implement the recommendations made under the Subproject and other assistance provided by ADB.


Complied with and being implemented on an ongoing basis. The project is being implemented in a transparent manner and the recipient extends all cooperation to ADB to support satisfactory implementation of the program.

Governance and Anticorruption The Recipient shall (i) comply with ADB’s Anticorruption Policy (1998, as amended to date) and acknowledge that ADB reserves the right to investigate directly, or through its agents, any alleged corrupt, fraudulent, collusive or coercive practice relating to the Program; and (ii) cooperate with any such investigation and extend all necessary assistance for satisfactory completion of such investigation.


Complied with and being implemented on an ongoing basis. The project is being implemented in a transparent manner and the recipient extends all cooperation to ADB to support satisfactory implementation of the program.

Monitoring and Review The Recipient shall ensure that PMU submits to PSC and ADB, Program monitoring and evaluations reports and time-based work programs in a form acceptable to ADB on a quarterly and semiannual basis. The PMU shall present its semiannual monitoring and evaluation reports and work programs at the semiannual meetings of the PSC. Based on the feedback from the PSC and ADB, the PMU shall, if necessary, amend and revise its work programs to ensure timely and effective implementation of the Program.


Complied with. DOC published program brochures in 2013, 2014, and 2015 and circulated these to PMU and stakeholders for its progress status and evaluation, which were acceptable to ADB. PSC also shared minutes of PSC meetings with ADB.

Monitoring and Review ADB shall undertake periodic review missions to (a) confirm progress and fulfillment of policy actions for tranche release; (b) confirm release of adequate

Schedule 3, Program Implementation and Other Matters, para.

Complied with. Seven ADB review missions were conducted between February 2013 and April 2015.

Appendix 3 43

Covenant

Reference in Grant


funds from the Recipient for Program-specific activities; (c) monitor continued applicability of the assumptions that might impact Program success, as well as specified risks and their mitigating measures; and (d) advise on actions to maintain effective implementation within the Program period.

11, page 13

ADB = Asian Development Bank, Art. = article, ASYCUDA = Automated System for Customs Data, CRMSAP = Customs Reform and Modernization Strategies and Action Plan, CTFC = customs trade facilitation committee, DOC = Department of Customs, FY = fiscal year, MOCS = Ministry of Commerce and Supplies, MOF = Ministry of Finance, NIRTTP = Nepal–India Regional Trade and Transport Project, NSW = national single window, para. = paragraph, PMU = program management unit, PSC = program steering committee, SASEC = South Asia Subregional Economic Cooperation. Source: Asian Development Bank.

44 Appendix 4

TECHNICAL ASSISTANCE RELATED ACTIVITIVES A. Bangladesh

1. 2013 to 30 September 2016 (Completed)

Purpose Participants Location Duration

Output 1: ADB and WCO in AEO Bangladesh Workshop

26 Cox’s Bazar, Bangladesh

17–23 September 2013

Output 1: ADB–UNESCAP National Training on Trade and Transport Facilitation Monitoring Mechanism

23 Dhaka, Bangladesh

28–29 April 2014

Output 1: Visit of Bangladesh Officials to Malaysian Customs on AEO Program

6 Kuala Lumpur, Malaysia

17–18 June 2014

Output 1: National Seminar for Bangladesh Customs: Combating Counterfeiting and Piracy

36 Sri Mangal, Moualvi Bazar, Bangladesh

2–6 August 2015

Output 2: Dialogue on the Development and Sustainability of ASYCUDA World


17 August 2015

Output 1: National Workshop on the New Customs Act and Respective Best Practices


17–20 August 2015

Output 1: National Board of Revenue, Bangladesh: Expert Mission on Customs Valuation

7 Dhaka, Bangladesh

14–18 December 2015

Output 1: Bangladesh NBR Second National Workshop on Customs Valuation

9 Dhaka, Bangladesh

22–24 March 2016

Output 1: Workshop with Trade Representatives on PCA

15 Chittagong, Bangladesh

28 April 2016

Output 1: Workshop with PCA Team on the PCA Pilot Program


14–16 June 2016

Output 1: Systems-Based PCA Training Workshop


13–20 July 2016

Output 1: Trade and Transport Facilitation Monitoring Mechanism National Validation Workshop


31 July–1 August 2016

Output 1: Bangladesh National Consultation on Sanitary/Phytosanitary and Technical Barriers to Trade Diagnostic Study


28 September 2016

ADB = Asian Development Bank, AEO = authorized economic operators, ASYCUDA = Automated System for Customs Data, NBR = National Board of Revenue, PCA = post-clearance audit, UNESCAP = United Nations Economic and Social Commission for Asia and the Pacific, WCO = World Customs Organization. Source: Asian Development Bank.

2. 2016–2017 (Planned)


Output 1: Workshop with OGA stakeholders to identify any changes that need to be undertaken to comply with the provisions of the new Customs Act

To be confirmed

Dhaka, Bangladesh

Q4 2016

Output 1: Workshops for drafting new rules and regulations, or revising existing rules and

To be confirmed

Dhaka, Bangladesh

Q4 2016

Appendix 4 45


regulations

Output 1: Discussion meetings on the development of AEO program organization and process

10–12 Dhaka, Bangladesh

Q4 2016

Output 1: Discussion meetings on coordinated border management to define and finalize the strategy


Q3–Q4 2017

Output 1: Workshops on change management with the introduction of an AEO program

To be confirmed

Dhaka, Bangladesh

2017

Output 1: Workshop to develop a communication strategy to inform internal and external stakeholders on the introduction of an AEO program


2017

Output 1: AEO validation events to promote use of audit methodology and tools and share practical experiences


2017

Output 2: Workshop on the alignment of express courier business procedures with the WCO Immediate Release Guidelines - Customs


Q4 2016

Output 2: Workshop on the alignment of express courier business procedures with the WCO Immediate Release Guidelines - Industry


Q4 2016

ADB = Asian Development Bank, AEO = authorized economic operators, OGA = other government agency, Q = quarter, WCO = World Customs Organization. Source: Asian Development Bank.

46 Appendix 4

B. Bhutan

1. 2013–2016 (Completed)


Output 1: National Workshop on Secured Cross-Border Transport Model

17 Thimphu, Bhutan

21 Jan 2014

Output 1: National Workshop on TTFMM 35 Phuentsholing Bhutan

10–14 Mar 2014

Output 1: RKC Implementation Workshop 29 Thimphu, Bhutan

9–12 Jun 2014

Output 1: Sensitization Workshop on RKC 103 Gelephu, Samtse, Phuentsholing, Paro

6–22 Oct 2014

Output 1: Consultative Meeting on the Amended Part and General Provision of Sales Tax, Customs and Excise Act

29 Paro, Bhutan 3–7 Nov 2014

Output 1: Sensitization Workshop on the Revised Kyoto Convention for the Private Sector

31 Phuenstholing, Bhutan

16 Mar 2015

Output 1: Consultative Workshop on Draft Customs Act with the Private Sector


17–18 Mar 2015

Output 1: Consultative Workshop on Draft Customs Act


19–20 Mar 2015

Output 1: Consultative Workshop on Draft Customs Act for Government and Autonomous Agencies

31 Thimphu, Bhutan

26–27 Mar 2015

Output 1: Draft Customs Bill Finalization Retreat 6 Paro, Bhutan 8–12 Jun 2015

Output 1: DRC Officials meeting with CBEC and NACEN

3 Delhi, India 18–19 Jun 2015

Output 1: First National Expert Mission on Customs Valuation in Bhutan

8 Paro, Bhutan 22–26 Jun 2015

Output 1: First Consultative Workshop on Draft Customs Rules and Regulations

17 Paro, Bhutan 10–12 Sep 2015

Output 1: Second Consultative Workshop on Draft Customs Rules and Regulations

20 Bhutan 30 Nov–4 Dec 2015

Output 1: Risk Management Training Program for Core Customs Officials

15 NACEN, Faridabad India

16–20 Feb 2016

Output 1: Bhutan Customs Reform and Modernization, Customs Core Group Preparatory Session on Risk Management, PCA, Compliance and Form Optimization (2 May) and Consultative workshop on Draft Customs Rules with the Private Sector (3 May)

51 Phuentsholing Bhutan

2–3 May 2016

Output 1: The Final Activity on Customs Valuation under the WCO–ADB Multiyear Assistance for SASEC Countries


9–12 May 2016

Output 1: Classification of Commodities as per Harmonized System Nomenclature (5-day workshop)

25 Gelephu, Bhutan

22–26 Aug 2016

Output 2: RAMIS UAT on Priority 1 Customs and Excise Module

32 Thimphu, Bhutan

25 May–1 Jun 2015

Appendix 4 47

Output 2: RAMIS EUT on Priority 1 Customs and Excise Module

284 Paro, Samtse, Phuentsholing, Samdrup Jongkhar, Gelephu, Bhutan

1–11 Jul 2015

Output 2: RAMIS UAT on Priority 2 Customs and Excise Module

34 Thimphu, Bhutan

17–26 Aug 2015

Output 2: MySQL Data Architecture Training Program

5 Delhi, India 31 Aug–10 Sep 2015

Output 2: RAMIS EUT on Priority 2 Customs and Excise Modules

280 Paro, Samtse, Phuentsholing, Samdrup Jongkhar, Gelephu, Kolkatta

7–18 Sep 2015

Output 2: Advanced Java Programming Training 6 Delhi, India 9–19 Nov 2015

Output 2: Web Security Training Program 7 Delhi, India 11–21 Jan 2016

Output 3: Study Tour to Nepal–India, India–Bangladesh, and India–Bhutan Border Customs

8 Various 3–11 Nov 2014

Output 3: WCO Regional Workshop on Leadership in Single Window and WCO Data Model

1 Brisbane, Australia

5–9 May 2014

Output 3: WCO National Workshop on Coordinated Border Management and Single Window

36 Paro, Bhutan 23–27 Nov 2015

Output 3: NTTFC Working Group Orientation Meeting

24 Thimphu Bhutan

19–21 Oct 2015

Output 3: Bhutan Trade Information Portal Workshop


21–22 Jan 2016

Outputs 1–3: Bhutan Standards Bureau ISO/IEC 17025 Training Program - Labor Management and Internal Audit Courses

5 Singapore 19–23 Oct 2015

ADB = Asian Development Bank, CBEC = Central Board of Excise and Customs, DRC = Department of Revenue and Customs, EUT = end user testing, IEC = International Electrotechnical Commission, ISO = International Standards Organization, NACEN = National Academy of Customs, Excise, and Narcotics, PCA = post clearance audit, RAMIS = revenue administration management information system, RKC = Revised Kyoto Convention, SASEC = South Asia Subregional Economic Cooperation, TTFMM = transport and trade facilitation measuring and monitoring, UAT = user acceptance testing, WCO = World Customs Organization. Source: Asian Development Bank.

2. 2016–2017 (Planned)


Output 2: RAMIS User Acceptance: Priority 3 for Focal Officials (9-day training)

35 Thimphu, Bhutan

Q3 2016

Output 2: RAMIS End User: Priority 3 for DRC Personnel (4-day training)

280 Thimphu, Bhutan

Q3 2016

Output 3: National Single Window Preparation Seminar: NTTFC (3 days)

25 Thimphu, Bhutan

Q2–Q3 2016

Output 3: Meetings of NTTFC (6 x 1-day meetings)

25 Thimphu, Bhutan

Q2 2016–Q4 2017

NTTFC = national transport and trade facilitation committee, Q = quarter, RAMIS = revenue administration management information system. Source: Asian Development Bank.

48 Appendix 4

C. Nepal

1. 2013–2016 (Completed)


Output 1: National Workshop on Transport and trade Facilitation Monitoring Mechanism

49 Kathmandu, Nepal 14–17 Apr 2014

Output 1: Technical Workshop to Explore Possible Implementation of ASYCUDA World

48 Kathmandu, Nepal 4–7 Mar 2014

Output 1: National Workshop on Time Release Study

88 Kathmandu, Nepal 15–19 Mar 2015

Output 1: National Workshop on RKC Implementation

62 Nagarkot and Kathmandu, Nepal

14–16 Apr 2015

Output 1: National Seminars and focal group discussions on RKC standards and validation of legal changes, relief consignment, and CRMSAP midterm review

100 Kathmandu, Nepal 25–28 Jan 2016

Output 1: National seminars and focal group discussions on WTO and WCO conventions and legal changes

10 Kathmandu, Nepal 3–7 May 16

Output 1: Field Trainings and Validation Seminar on TRS survey

25 Mechi, Biratnagar, Kathmandu

Mar–Aug 2016

Output 2: Focused Workshop on ASYCUDA World Prototype Development

17 Biratnagar, Nepal 29 Jun–5 Jul 2015

Output 2: SASEC Workshop on ASYCUDA World Implementation

40 Pokhara, Nepal 8–11 Sep. 2015

Output 2: SASEC ASYCUDA Subregional Network Meeting

40 Kathmandu, Nepal

8–9 Jun 2015

Various outputs: Midterm Review and Validation Seminars on Fourth CRMSAP (2013–2017) 235

Kathmandu and customs points Oct 15–May 2016

Various outputs: Validation Seminars Including Need Identification Workshops on Fifth CRMSAP (2017–2021) 130

Daman, Kathmandu, Nepal Jun–Oct 2016

2. 2016–2017 (Planned)


Output 1: National seminars and focal group discussions on WTO/WCO conventions and legal changes

75 Kathmandu, Nepal Mar 2017

Output 1: National seminars and focal group discussions on RKC standards and validation of legal changes

135 Kathmandu, Lalitpur, Nepal

Apr 2016

Output 1: National seminars with focal group discussion for awareness creation to stakeholders on Trusted Traders Program and AEO


Output 1: National workshop with core group discussion on Trusted Traders Program and AEO

75 Kathmandu, Nepal June 2017

Output 1: Stakeholder consultation seminars and focal group discussions for review of export–import procedure and documentation

100 Kathmandu, Nepal May 2017

Appendix 4 49


Output 2: Familiarization of ASYCUDA World and relevant information technology training for customs officials of major customs offices (various sessions)

220 Kathmandu and customs points

Jan–Jul 2017

Output 3: National workshop on gap analysis and draft SOP on client service center including DOC headquarters-field linkage


Various outputs: Validation seminars including need identification workshops on fifth CRMSAP (2017–2021)

130 Kathmandu, Nepal Jan–Feb 2017

AEO = authorized economic operator, ASYCUDA = Automated System for Customs Data, CRMSAP = Customs Reform and Modernization Strategies and Action Plan, DOC = Department of Customs, RKC = Revised Kyoto Convention, SASEC = South Asia Subregional Economic Cooperation, SOP = standard operating procedure, WCO = World Customs Organization, WTO = World Trade Organization. Source: Asian Development Bank.

50 Appendix 4

D. Regional Technical Assistance Related Activities

1. Regional Technical Assistance for Trade Facilitation in South Asia, Fund 02

(Completed)

Purpose Location Duration

Output 1. MySQL database administrator training

Gurgaon, India 31 Aug–10 Sep 2015

Output 2. ADB–UNESCAP finalization workshop feasibility study on pilot implementation of UNESCAP secure cross-border transport model

Hua Hin, Thailand 10–12 Dec 2014

Output 2. Meeting of Bangladesh, Bhutan, India, and Nepal transport ministers on regional road transport connectivity

Thimphu, Bhutan 14–15 Jun 2015

ADB = Asian Development Bank, UNESCAP = United Nations Economic and Social Commission for Asia and the Pacific. Source: Asian Development Bank.

2. Regional Technical Assistance for Trade Facilitation in South Asia, Fund 46

(Completed)

Purpose Location Duration

Output 1. Second meeting of the SASEC Customs Subgroup

Kathmandu, Nepal 22–23 May 2014

Output 1. Training on customs valuation and risk management

Mumbai, India 2–6 February 2015

Output 1. Knowledge-sharing workshop on customs compliance programs

Goa, India 11 March 2015

Output 1. Third meeting: SASEC Customs Subgroup Goa, India 11–12 March 2015

Output 1. Consultative meetings with concerned officials of the Central Board of Excise and Custom

New Delhi, India 1 June 2015

Output 1. Nepal Department of Customs national workshop on customs valuation

Nagarkot, Nepal 19–21 August 2015

Output 1. Learning event on customs operations in special economic zones

Lapu Lapu City, Cebu 27 October 2015

Output 1. Fourth meeting of the SASEC Customs Subgroup

Lapu Lapu City, Cebu 27–28 October 2015

Output 2. SASEC Trade Facilitation Week: Sanitary/ Phytosanitary and Technical Barriers to Trade

Bangkok, Thailand 1–3 December 2014

Output 2. Subregional workshop on automated system for customs data (ASYCUDA) World

Pokhara, Nepal 8–11 September 2015

ASYCUDA = Automated System for Customs Data, SASEC = South Asia Subregional Economic Cooperation. Source: Asian Development Bank.

3. Regional Technical Assistance for Support to South Asia Regional Economic

Cooperation (Completed)

Output 1. Bangladesh National Board of Revenue expert mission and workshop on customs valuation

Dhaka, Bangladesh 14–18 December 2015

Output 1. Bhutan Department of Revenue and Customs second national workshop on customs valuation

Phuentsholing, Bhutan 9–12 May 2016

Source: Asian Development Bank.

Appendix 5 51

KEY GENERAL INDICATORS

Table A5.1: Key General Indicators: Bangladesh

Fiscal Year

Item 2011 2012 2013 2014 2015

A. Income and Growth 1. GDP per capita ($, current) 860.0 880.0 976.0 1,110.0 1,236.0

2. GDP growtha (%, in constant prices) 6.5 6.6 6.0 6.1 6.6 a. Agriculture 4.5 3.0 2.5 4.4 3.0 b. Industry 9.0 9.4 9.5 8.2 9.6 c. Services 6.2 6.6 5.5 5.6 5.8 B. Saving and Investment (current market prices, % of GDP)

1. Gross domestic investment 27.4 28.3 28.4 28.6 28.9

2. Gross domestic saving 21.3 17.4 16.7 16.1 12.4

C. Money and Inflation (annual % change)

1. Consumer price index (FY2006 base, average) 10.9 8.7 6.8 7.4 6.4

2. Liquidity M2 21.3 17.4 16.7 16.1 12.4

D. Government Finance (% of GDP)

1. Revenue and grantsb 10.4 11.2 11.3 10.9 11.2

2. Expenditure and onlending 14.0 14.4 14.5 14.0 15.8

3. Overall fiscal deficitc (3.6) (3.2) (3.3) (3.1) (4.7)

E. Balance of Payments

1. Merchandise trade balance (% of GDP) (7.7) (7.0) (4.7) (3.9) (5.1)

2. Current account balance (% of GDP) (1.3) (0.3) 1.6 0.8 (0.8)

3. Merchandise export ($ million) 22,592.0 23,989.0 26,567.0 29,777.0 30,768.0

growth (annual % change) 39.2 6.2 10.7 12.1 3.3

4. Merchandise import ($ million) 35,527.0 33,309.0 33,576.0 36,571.0 40,685.0

growth (annual % change) 52.1 2.4 0.8 8.9 11.2

F. External Payments Indicators

1. Gross official reserves (including gold, $ million in weeks of current year’s imports of goods and services)

10,911.6 10,364.4 15,315.2 21,508.0 25,020.5

2. External debt service (% of exports of goods and services) d

3.7 3.6 3.8 3.9 3.3

3. External debt (% of GDP) 17.2 16.6 14.9 14.1 12.0

G. Memorandum Items

1. GDP (Tk billion, current prices) 9,158.3 10,552.0 11,989.2 13,436.7 15,136.0

2. Exchange rate (Tk/$, average) 71.2 79.1 79.9 77.7 77.7

3. Mid-year population (million) 149.7 151.6 153.7 155.8 157.9

( ) = negative, GDP = gross domestic product, M2 = money supply. a Based on constant 2005-2006 market prices. b Receipts excluding grants in comparison with GDP are 10.2% for 2011, 10.9% for 2012, 10.7% for 2013, 10.4% for 2014,

and 10.8% for 2015. c Fiscal deficits excluding grants in comparison with GDP are 3.9% for 2011, 3.6% for 2012, 3.8% for 2013, 3.6% for 2014,

and 5.0% for 2015. d The ratios of debt services to total foreign exchange earnings from exports of goods and nonfactor services including

workers’ remittances are 2.5% for 2011, 2.4% for 2012, 2.5% for 2013, 2.7% for 2014, and 2.3% for 2015.

52 Appendix 5

Sources: Bangladesh Bureau of Statistics; Bangladesh Bank; Export Promotion Bureau; Ministry of Finance and Asian Development Bank estimates.

Appendix 5 53

Table A5.2: Key General Indicators: Bhutan

Fiscal Yeara

Item 2011 2012 2013 2014 2015

A. Income and Growth 1. GDP per capita ($, current) 2,452 2,517 2,522 2,455 2,664

2. GDP growth (%, in constant prices) 9.7 6.4 3.6 3.8 5.9 a. Agriculture 1.6 2.3 2.3 2.38 (…)

b. Industry 8.0 5.4 5.3 3.5 (…)

c. Services 12.7 6.6 1.2 5.0 (…)

B. Saving and Investment (current prices, % of GDP)

1. Gross domestic investment 64.9 67.8 56.6 52.2 (…)

2. Gross domestic saving 36.1 41.2 33.5 30.8 (…)


1. Consumer price index 8.6 10.2 8.8 9.6 6.6

2. Liquidity M2 21.2 (1.0) 18.6 6.6 7.8


1. Revenue and grants 35.8 35.8 30.2 33.6 28.4


3. Overall fiscal surplus (deficit) (2.1) (1.1) (4.2) 3.8 1.5



2. Current account balance (% of GDP) (30.0) (21.5) (25.4) (26.4) (28.8)

3. Merchandise export ($) growth 26.8 (7.3) (11.5) (2.0) 8.2

(annual % change)

4. Merchandise import ($) growth 41.6 (10.0) (8.8) 0.5 7.5

(annual % change)


1. Gross official reserves (including gold, $ million in months of current year’s imports of goods)

8.5 8.0 11.9 12.9 11.5

2. External debt service (% of exports of goods and services)

51.7 127.1 229.2 27.1 19.9


G. Memorandum Items

1. GDP (Nu billion, current prices) 78.7 91.2 101.4 112.5 125.2

2. Exchange rate (Nu/$, average) 45.3 50.3 54.8 61.5 62.1

3. Population (million) 0.71 0.72 0.73 0.75 0.76

(…) = data not available, GDP = gross domestic product, M2 = money supply. a Each fiscal year ends on 30 June.

Sources: Asian Development Bank staff estimates; Government of Bhutan; National Statistics Bureau of Bhutan. 2015. Statistical Yearbook of Bhutan 2015. Thimphu; Royal Monetary Authority of Bhutan. 2015. Annual Report 2014/15. Thimphu; Royal Monetary Authority of Bhutan. 2015. Monthly Statistical Bulletin. December. Thimphu; National Statistics Bureau of Bhutan. National Accounts Statistics 2015. Thimphu; Ministry of Finance. National Budget Financial Year 2015–2016. Thimphu.

54 Appendix 5

Table A5.3: Key General Indicators: Nepal

Fiscal Yeara

Item 2011 2012 2013 2014 2015P

A. Income and Growth 1. GDP per capita ($, current) 716.0 704.0 709.0 717.0 764.0

2. GDP growth (%, in constant prices) 3.8 4.6 3.8 5.1 3.0 a. Agriculture 4.5 4.6 1.1 2.9 1.9

b. Industry 4.3 3.0 2.7 6.2 2.6

c. Services 3.4 5.0 5.7 6.3 3.9

B. Saving and Investment (current market prices, % of GDP)

1. Gross domestic investment 38.0 34.5 36.9 36.6 (…)

2. Gross domestic saving 37.0 39.5 40.3 46.1 (…)


1. Consumer price index 9.6 8.3 9.9 9.1 7.1

2. Liquidity M2 12.3 22.6 16.4 19.1 19.9


1. Revenue and grants 17.9 18.6 19.5 20.8 20.2


3. Overall fiscal surplus (deficit) (2.4) (2.2) 0.7 0.6 (0.2)



2. Current account balance (% of GDP) (0.9) 5.0 3.4 4.6 5.1

3. Merchandise export ($) growth 11.7 5.7 (2.9) 5.1 (3.9)

(annual % change)

4. Merchandise import ($) growth 18.5 23.5 25.7 28.2 29.1

(annual % change)


1. Gross official reserves ($ million in months of current year’s imports of goods)

7.3 10.3 10.1 10.0 11.2

2. External debt service (% of exports of goods and services)

11.1 10.6 10.1 10.0 11.2


G. Memorandum Items

1. GDP (NRs billion, current prices) 1,267.0 1,527.3 1,692.6 1,942.0 2,125.0

2. Exchange rate (NRs/$, average) 72.1 80.7 87.7 98.0 99.2

3. Population (million) 26.5 26.9 27.3 27.6 28.0

(…) = data not available, GDP = gross domestic product, P = provisional. Note: FY2015 started on 16 July 2014 and ended on 15 July 2015. Sources: Ministry of Finance. 2015. FY2015 Budget Speech. Kathmandu; Nepal Rastra Bank. 2015. Macroeconomic Situation. Kathmandu; Central Bureau of Statistics. 2015. FY2015 National Accounts Statistics. Kathmandu; Financial Comptroller General Office. 2015. Quarterly Debt Position of Government of Nepal 4th Quarter Data. Kathmandu.

Appendix 6 55

TRADE FACILITATION INDICATORS

Table A6.1. Trading Across Borders

Year Rank

Documents to Export (number)

Time to Export (days)

Cost to Export ($ per

container)

Documents to Import (number)

Time to Import (days)

Cost to Import ($ per

container)

Bangladesh 2011 115 6 25 965 8 31 1, 370

2012 119 6 25 1,025 8 34 1,430

2013 130 6 25 1,075 8 35 1,470

2014 140 6 28 1,281 9 34 1,515

2015 2016

172 173

13 13

… …

… …

9 9

… …

… …

Bhutan

2011 169 8 38 2,230 12 38 2,805

2012 172 9 38 2,230 12 38 2, 330 2013 172 9 38 2,230 12 38 2,330

2014 165 9 38 2,230 11 37 2,330

2015 2016

21 26

8 8

… …

… …

6 6

… …

… …

Nepal

2011 162 9 41 1,960 9 35 2,095

2012 171 11 41 1,975 11 38 2,095

2013 177 11 42 2,295 11 39 2,400

2014 171 11 40 2, 545 11 39 2,650

2015 2016

60 69

10 8

… …

… …

10 11

… …

… …

… = data not available. Notes:

1. The number of countries surveyed are 183 in 2012, 185 in 2013, 189 in 2014–2015, and 190 in 2016. 2. The Doing Business survey methodology changed in 2015 and therefore some of the metrics are not reported in the

same format or not available any more, except that Doing Business still collects the data on the number of documents needed to export and import and the list of documents is found in the country profiles.

3. The data collected in the annual Doing Business reports are valid as of 1 June of the precedent year. For example, 2011 data in column 1 was published in Doing Business 2012. Source: World Bank. Doing Business Reports 2012–2017. Washington, DC. www.doingbusiness.org/Reports/

56

Ap

pe

ndix

6

Table A6.2: Logistics Performance Index International, Ranking and Score, by Dimension

Overall LPI Customs Infrastructure

International Shipments

Logistics Competence

Tracking and Tracing Timeliness

Year Rank Score Rank Score Rank Score Rank Score Rank Score Rank Score Rank Score

Bangladesh

2007 87 2.47 125 2.00 82 2.29 96 2.46 103 2.33 88 2.46 54 3.33

2010 79 2.74 90 2.33 72 2.49 61 2.99 96 2.44 92 2.64 70 3.46

2012 … … … … … … … … … … … … … …

2014 108 2.56 138 2.09 138 2.11 80 2.82 93 2.64 122 2.45 75 3.18

2016 87 2.66 82 2.57 87 2.48 84 2.73 80 2.67 92 2.59 109 2.90

Bhutan

2007 128 2.16 135 1.95 127 1.95 134 2.06 116 2.18 109 2.27 126 2.57

2010 128 2.38 118 2.14 141 1.83 120 2.44 127 2.24 105 2.54 122 2.99

2012 107 2.52 109 2.29 117 2.29 102 2.61 111 2.42 101 2.56 111 2.90

2014 143 2.29 140 2.09 132 2.18 131 2.38 111 2.48 140 2.28 158 2.28

2016 135 2.32 128 2.21 151 1.96 108 2.50 131 2.30 131 2.20 129 2.70

Nepal

2007 130 2.14 141 1.83 144 1.77 131 2.09 124 2.08 102 2.33 110 2.75

2010 147 2.20 130 2.97 143 1.80 143 2.21 143 2.07 140 2.26 139 2.74

2012 151 2.04 125 2.20 149 1.87 151 1.86 146 2.12 149 1.95 153 2.21

2014 105 2.59 123 2.31 122 2.26 104 2.64 107 2.50 87 2.72 92 3.06

2016a 124 2.38 149 1.93 112 2.27 109 2.50 140 2.13 109 2.47 104 2.93

… = data not available, LPI = Logistics Performance Index. a The Nepal ranking during 2015 and 2016 has been severely impacted by the earthquake and subsequent economic blockage of the country in 2015. Notes: 1. The number of countries surveyed are 150 in 2007, 155 in 2010 and 2012, 160 in 2014, and 167 in 2016. 2. The LPI overall score reflects perceptions of a country's logistics based on six core dimensions: (i) efficiency of customs clearance process, (ii) quality of trade-

and transport-related infrastructure, (iii) ease of arranging competitively priced shipments, (iv) quality of logistics services, (v) abili ty to track and trace consignments, and (vi) frequency with which shipments reach the consignee within the scheduled time. The six core dimensions are evaluated on a scale from 1 (worst) to 5 (best). The scores for the six areas are averaged across all respondents and aggregated to a single score using principal components analysis. The distribution of LPI scores is broken down into four categories: (i) logistics unfriendly (if score is less than 2.35), (ii) partial performers (if score is between 2.35 and 2.85), (iii) consistent performers (if score is between 2.85 and 3.35), and (iv) logistics friendly (if score is greater than 3.35). See also data.worldbank.org/ indicator/LP.LPI.OVRL.XQ

Source: World Bank. Logistics Performance Index Reports 2007, 2010, 2012, 2014, and 2016. Washington, DC. www.lpi.worldbank.org/

Appendix 6 57

Table A6.3: Logistics Performance Index, Domestic: Performance

Number of Agencies

Number of Forms Clearance Time (days) Physical Inspection

Multiple Inspections

Year

Imports Exports Imports Exports Without physical

inspection

With physical

inspection

(% of import

shipments)

(% of shipments physically inspected)

Bangladesh

2012 2014

4 4

4 4

5 5

4 5

3 2

4 3

9.68 35.03

5.49 6.77

2016 4 3 5 4 2 3 29.85 12.31

Bhutan

2012 2014

… …

… …

… …

… …

… …

… …

… …

… …

2016 … … … … … … … …

Nepal

2012 2014

5 5

5 4

6 6

5 6

1 1

1 1

29.54 8.66

9.51 10.32

2016 … … … … … … … …

… = data not available. Source: World Bank. Logistics Performance Index 2012, 2014, and 2016. Washington, DC. www.lpi.worldbank.org/ domestic

58 Appendix 7

LIST OF PERSONS MET

BANGLADESH NATIONAL BOARD OF REVENUE Farid Uddin, member, customs policy Shafiqur Rahman, system manager FEDERATION OF BANGLADESH CHAMBERS OF COMMERCE AND INDUSTRY Abdul Haque, member MINISTRY OF COMMERCE Jahangir Hossain, joint secretary Ishwari Prasad Ghimire, executive director, Trade and Export Promotion Centre CHITTAGONG PORT AUTHORITY Enamul Karim, deputy traffic manager PANGOAN INLAND CONTAINER TERMINAL Karim Chowdhury, terminal manager ASIAN DEVELOPMENT BANK Syed M. Hossain, senior public management officer, Bangladesh Resident Mission Maruf Hossain, Bangladesh Resident Mission

BHUTAN DEPARTMENT OF PUBLIC ACCOUNTS, MINISTRY OF FINANCE Choiten Wangchuk, director general Phuntsho Wangmo, program officer DEPARTMENT OF REVENUE AND CUSTOMS, MINISTRY OF FINANCE Yonten Namgyel, director Tenzin Norbu, commissioner, Customs and Excise Division Phuntsho Dorji, deputy collector, Customs and Excise Division/SASEC Trade Facilitation Program Program Management Unit Karma Sherpa, head, IT Division; project manager Revenue Administration Management Information System Nidup Gyeltshen, director, Regional Revenue and Customs Office, Thimphu DEPARTMENT OF TRADE, MINISTRY OF ECONOMIC AFFAIRS Mr. Zeko, chief trade officer, Export Promotion Division Pema Thinley, senior trade officer, Export Promotion Division POLICY AND PLANNING DIVISION, MINISTRY OF INFORMATION AND COMMUNICATIONS Bhimlala Suberi, chief planning officer Sittar Dorji, senior planning officer ROYAL MONETARY AUTHORITY OF BHUTAN Phajo Dorji, deputy governor

Appendix 7 59

Jigme Dorji T, senior research officer, Research and Statistics Department BANK OF BHUTAN Pema Nadik, chief executive officer BHUTAN NATIONAL BANK Kipchu Tshering, chief executive officer BHUTAN CHAMBER OF COMMERCE AND INDUSTRY Kesang Wangdi, deputy secretary general Yeshi Dorji, senior research officer PRIVATE SECTOR REPRESENTATIVES Dorji Tashi, executive director, Loden Foundation Sunil Rasaily, general manager, RSA Pvt. Ltd Sonam Tobgay, managing director, Sonam Thuendrel Export and Import, Thimphu ASIAN DEVELOPMENT BANK: Tshewang Norbu, resident representative, Bhutan Resident Mission Achyut Bhandari, national trade facilitation expert (national consultant), SASEC Trade Facilitation Program Phuntsho Wangdi, national trade facilitation and customs expert (national consultant), SASEC Trade Facilitation Program Sonam Dema, program coordinator, SASEC Trade Facilitation Program

NEPAL MINISTRY OF FINANCE Laxman Aryal, joint secretary, Revenue Management Division DEPARTMENT OF CUSTOMS Sishir Kumar Dhungana, director general Shreekrishna Nepal, deputy director general Mimangsa Adhikari, director, Customs Reform and Modernization Section Ramesh Sharma (Poudyal), project coordinator, project management unit Nitu Bharati, director, IT Section Ananta Prasad Timsina, section officer, Customs Reform and Modernization Section Ashok Guragai, section officer, Customs Reform and Modernization Section Gopal Khatri, section officer, project management unit Phanindra Khatiwada, section officer, project management unit Ram Datta Bhatta, IT officer, project management unit Ashim Ghishing Lama, IT officer, project management unit Ram Hari Regmi, computer engineer, project management unit Deepak Adhikari, computer officer, project management unit PROJECT COORDINATION OFFICE Hemanta Dawadi, non-tariff measures expert Himal Thapa, trade facilitation advisor Chandra Kishor Misra, procurement advisor Kamal Raj Shrestha, section officer

60 Appendix 7

TRADE AND EXPORT PROMOTION CENTRE, MINISTRY OF COMMERCE Ishowri P. Ghimire, executive director Surendra Gangol, deputy director Nick Small, team leader/ project manager, Nepal National Single Window and Trade Portal FEDERATION OF NEPALESE CHAMBERS OF COMMERCE AND INDUSTRY Rajan Sharma, executive member/chair, Road Transport and Transit Kamala Shrestha, chair, Women Entrepreneurship Development Shrijana Singh Yonjan, vice-chair, Women Entrepreneurship Development Shanker Pandey, executive committee member Hari Har Thapa, vice-president, Federation of Nepal Cottage and Small Industries HIMALAYAN BANK Kapil P. Lohani, chief manager/ executive human resource officer Naveen K. Poudyal, senior manager/head, Correspondent Banking and Trade Operation Centre TRIBHUVAN INTERNATIONAL AIRPORT CUSTOMS/CLEARING AGENTS Bharat Ghimre Khaoya Karki Ropo Meuporo Shiv Mahanjoshi Bishnu Khamal SOUTH ASIA WATCH ON TRADE, ECONOMICS AND ENVIRONMENT Posh Raj Pandey, executive chair