Russia (SCC- effective)
Loan Amount: $140.0 million
Project Amount: $187.2 million
Terms: 17-years, with 5-year grace period
Responsible Agency: RF State Customs Committee
Expected Closing Date: 30 June 2009
Afghanistan (ACD - preparation)
Emergency Customs Modernization and Trade Facilitation
Project Amount: $30 millionDuration: 39 monthsImplementation: UN Office for Project
Services (UNOPS)In addition to 7 different donors
Objectives
RussiaAccede to the WTOPromote best
practiceImprove complianceIntegrityRisk management
AfghanistanPost conflict
recoverySecure revenueImprove complianceIntegrityRe-establish transit…and security
Russian indicators2002 Russia Average SEETotal Customs revenue (USD million) 18,300.00 1,169Total Customs cost (USD million) 349.15 16.73Total Customs staff 62,802 2,212Total Customs salaries (USD million) 90.78 10.42Annual number of declarations 2,200,000 796,516Value of recorded imports (USD million) 41,200 5,552Value of recorded exports (USD million) 100,700 3,332Trade volume (USD million) 141,900 8,884
Revenue collected/ Customs staff (USD) 291,392 528,693Total Customs cost/ Revenue collected (%) 1.91% 1.43%Salaries/ Revenue collected (%) 0.50% 0.89%Trade volume/ Staff (USD) 2,259,482 4,016,812Declarations/ Staff 35 360Economic cost per declaration (USD) 158.71 21Average monthly salary cost 120 393
Afghan Indicators2002 - US Dollars KZK KRG TJK AFG SEE Total Customs revenue (US$ million) 1,013.67 91.70 22.41 1,169Total Customs cost (US$ million) 20.08 1.03 16.73Total Customs staff 5,539 1,308 1,500 1,100 2,212Total Customs salaries (US$ million) 10.77 0.25 10.42Annual number of declarations 330,121 69,740 25,914 100,000 796,516
Imports (US$Milion) 6887.9 632.8 693.42 1271.07 5,552Exports (US$Million) 9001.5 500 692.39 3,352Total (US$Million) 15889.4 1132.8 1385.81 8,884
Revenue collected/Customs staff 183,006.20 70,109.66 20,374.09 528,481.01Total Customs cost/Revenue collected 1.98% 1.13% 1.43%Salaries/Revenue collected 1.06% 0.89%Trade volume/Staff (USD) 2,868,641 866,055 923,873 4,016,275Declarations/Staff 59.60 53.32 17.28 90.91 360.09Cost per declaration 60.82 14.81 21.00Average monthly salary 162.01 13.70 392.56
Lessons learned from past experience
Focus on objective rather than institution
Involve closely the private sectorTargets and performance indicatorsClear strategic approachMinimal pre-requirements
Project - Russia
ComponentsCustoms control and clearanceTrade facilitationFiscal policyLegal frameworkOrganizational structure and operational mngtFinancial managementHR managementIntegrityITProject management
Investment
4.029.594.055.0410.236.487.272.49133.233
Integrity
Customs inevitably are blamed for whatever goes wrong at the border
Customs are more vulnerable to corruption than other comparable agencies because they have immediate discrete control over tangible wealth
Russia – Strategy to promote integrity
MotiveElite ethos and esprit de corpsPositive career developmentHigh skill oriented trainingIncentives for high
performanceStronger supervision and
controlsSanctions for corruptionStakeholder surveys
OpportunityValuation proceduresAutomationInspection based on risk analysisReduction in discretionary
authorityTransparent clearance
requirementsRotation of officersFunctional organizationInternal anti-corruption strategy Audit unitStakeholder surveys
Russia - Risk Management
Selectivity is at times misunderstood “Greenn” can mean “Red” Negative selectivity: “White lists”
Risk management is at the core of the project Automation but not yet artificial intelligence Feedback
It expands beyond cargo processing Fully integrated in SCC management approach Drives the business process and administration
What is important
NEEDED:CommitmentUnderstandingIT supports, not an endJob process re-assessmentSocial pactPerformance measurementPilot sitesRegional?
RUSSIA:PreparedRisk managementIT system upgradeableMappingSpecificity factoredIndicatorsCorridorsEVRAZES support
How does this apply to Afghanistan?
Use Persuasion rather than ImpositionRespecting the Afghan Social PactsInternational performance standards may not be directly applicable without heeding the Afghan cultural contextPolitical and “informal” commercial realities cannot be ignored
Afghanistan - Building on efforts to-date
New WB-supported staff policyNew Customs declaration (ACCD) implemented in KabulChanging role of Chambers of Commerce—valuation at Kabul now done by CustomsDecree for new tariff regime with rationalized exchange rate awaiting decreeKey Afghan Customs Managers being recruitedProvincial/Regional customs consultants in-place in Herat and MazarOverall decision to roll-out reforms to provinces/regions
Like everywhere, problems remain in Afghanistan
Valuable but scattered assistance/inputsLimited ACD recipient capacity (has been slow in emerging)--in HQ, DG, Directors; in regions, Directors, operations staff; under-resourced HQ administration (human, equipment, communications, environment)Missing link between budget and policy—direct funding of TA by donors a problemThe strategic role of Afghan Customs still to be defined—both in terms of revenue and public administration and socio-economic (i.e., protecting society and promoting trade)Under-developed synergies with Commerce, Transport, and Police (Interior)
Redefining the role of Afghan Customs which…
Secure revenueHelp protect societyFacilitate trade and thus economic development and job creation
Hopefully, this will generate (i) interest, (ii) motivation, (iii) recognition, and even (iv) enthusiasm…
Reforming the Customs and Trade Regime—To build upon the good work to-date, we need….
Clear definition of, and an agreement on, the role of Customs in the development of AfghanistanEmpowered and supported Afghan leadership in CustomsBetter Donor CoordinationEnhanced Communication and Trust between all stakeholders and change process enablers (MoCommerce, MoInterior, MoTransport, MoF/ACD)Well targeted, coordinated, and enhanced resources
The donors
DFID – HR, training, management advice, change management processUSAID – Implementation and Operations (Valuation and classification,Procedures and documentation, Customs code, Customs brokers) and Enforcement (Border control and management, Drugs/smuggling, Corruption)EC – Transit development and facilities (preferably at borders)And the Bank
The World Bank
Customs Policy and overall strategic framework Performance based Budget management Customs automation (ASYCUDA) Implementation advisors (officers from various
customs services to work with Afghan line-staff) ACD HQ restructuring implementation and roll-out to
regions Infrastructure (preferably regional ICDs, HQ, and
Regions) Information and communications infrastructure Incremental operating costs for the overall program
The World Bank (continued)
Trade Facilitation Policy and overall strategic framework for restructuring Alignment of national trade documents (ASYCUDA
related first) Transit treaties (bringing reality into “political”
agreements+corridor agreements) Bureau of Standards (through UNIDO) Measurement of trade and transport logistics costs and
time Incremental operating costs and some infrastructure
and information and communications support to the above
WTO accession assistance through UNCTAD Review role of state-owned enterprises
The legislative critical path
Agency Activity
Customs MoF MoInt MoT Commerce Chamber
Ind
Cargo control
(x) X
Transit X
Valuation (x) X
Passenger control
X
Standards
X
Petroleum
X
A cautious approach
There is control, but it does not look like what we are used toReporting mechanisms are different, but solidEven without bank guarantees, trucks arrive at destinationCommunication does not follow our standards