Trade Facilitation Issues Trade Facilitation Issues in WTO - Sri Lanka’s in WTO - Sri Lanka’s

PerspectivePerspective

Presented byPresented by

V. S. Sidath Kumar V. S. Sidath Kumar

Deputy Director of Deputy Director of Commerce Commerce

Department of Department of Commerce Commerce

ColomboColombo Sri LankaSri Lanka 0202ndnd May 2006 May 2006

SRI LANKA’S PERSPECTIVESRI LANKA’S PERSPECTIVEON TRADE FACILITATIONON TRADE FACILITATION

CONTENTSCONTENTS

General BackgroundGeneral Background National Focal Point for Trade FacilitationNational Focal Point for Trade Facilitation Customs ProcedureCustoms Procedure Fees and Formalities on Importation and Fees and Formalities on Importation and

ExportationExportation Release and clearance of GoodsRelease and clearance of Goods Matters Related to Goods Transit Publication and Availability of Information ConclusionConclusion

Sri Lanka’s Perspective on TFSri Lanka’s Perspective on TF General BackgroundGeneral Background

Sri Lanka is an island in the Indian Ocean with an area of 65,610 Sq. Km. and a total population of 19.6 million

GDP grew by 6% in 2005 GDP Per capita income was US $

1,197 in 2005 Agriculture, Industry and Services

account for 17.2%, 27.0% and 55.8% of the GDP in 2005 respectively

Exports and Imports stood at US $ 6,347 million and US $ 8,863 million in 2005 respectively

General Background (Con’d)General Background (Con’d)Main exports: tea, rubber, coconut, spices, textiles and garments, ceramic products, footwear, gem and jewellery, petroleum products

Main imports: Petroleum, fertilizer, chemicals, textiles and clothing, machinery and equipment, building materials, transport equipment, rice, sugar, wheat

General Background (Con’d)General Background (Con’d)

Sri Lanka follows a liberalized market oriented trade policy since 1977

Sri Lanka is a founding member of the GATT/WTO

National Focal Point for TFNational Focal Point for TF Sri Lanka, together with WTO member countries’

governments and other international organizations has recognized the high significance of TF in improving competitiveness

Department of Commerce (DOC) is the National Focal Point in Sri Lanka for TF related activities under the WTO Negotiating Group on TF

DOC is currently working towards TF measures as

defined by WTO (July Package) according to GATT 1994 Articles V, VIII and X (freedom of transit, fees and formalities, and publication and administration of trade regulations respectively)

A Pilot workshop on TF was held in Sri Lanka in June 2005 in association with the Sri Lanka Customs and in sponsorship of WCO and WB

National Focal Point for TFNational Focal Point for TF(Con’d)(Con’d)

The Pilot Workshop Aimed at: a) Creating a real time analysis and reporting

link between Geneva based negotiators and capital based specialists and stakeholders

b) Establishing an appropriate coordination mechanism within the capital

c) Creating awareness among the government and semi-government agencies, private sector and members of the civil society about the importance and benefits of TF

National Focal Point for TFNational Focal Point for TF(Con’d)(Con’d)

After the Workshop, the DOC established a Co-Coordinating Group (Core Group) with representatives from key stakeholders such as Department of Customs, Department of Agriculture, Department of Animal Production and Health, Board of Investment, Sri Lanka Ports Authority, Sri Lanka Standards Institute and leading Chambers of Commerce in Sri Lanka

Purpose: to look into every possible avenue in the implementation of TF related works.

The Core Group has met several times at the DOC to formulate Sri Lanka’s position at the WTO negotiations

National Focal Point for TFNational Focal Point for TF(Con’d)(Con’d)

In the context of OECD Global Forum on Trade Series – A global Forum on TF was held in Sri Lanka in Oct. 2005

The Forum was attended by 43 countries and senior officials from OECD, WB, ESCAP, WTO, WCO and UNCTAD

Aim: to bring together the representatives from the government, business, research institutions, civil society and international organizations to discuss implications of ongoing negotiations on TF for DCs

Forum focused on benefits of TF at country level costs of introducing and implementing TF measures, how to design appropriate technical assistance and capacity building programs, how to ensure a proper match between commitments and capacities

Customs ProcedureCustoms Procedure

Automation of Processing of Customs Goods Declaration

- Sri Lanka Customs established an Automated Data Processing Unit in 1993

- Since 1994 entry lodgment and assessment is done by

ASYCUDA (Automated System for Customs Data) - A computerized customs management system which covers most foreign trade procedures.

- The system handles manifests and customs declarations, accounting procedures, transit and suspense procedures.

Customs Procedure(Con’d)Customs Procedure(Con’d)

- Migrated to ASYCUDA ++ in 1999. This has enabled the entire accounting and statistics of customs recoveries done

through the computerization process

- The Customs ADP (Automated Data The Customs ADP (Automated Data Processing) Division has upgraded Processing) Division has upgraded their hardware and software to handle their hardware and software to handle the future situationthe future situation

Customs Procedure(Con’d)Customs Procedure(Con’d)

More staff are trained locally and internationally More staff are trained locally and internationally to handle Oracle Data Base Management, to handle Oracle Data Base Management, Unixware Operating system and also data Unixware Operating system and also data communication and networkingcommunication and networking

Sri Lankan Customs is looking forward to Sri Lankan Customs is looking forward to implement the more upgraded version of implement the more upgraded version of Asycuda called Asycuda World in the near futureAsycuda called Asycuda World in the near future

Functions of the ADP Functions of the ADP (Automated Data Processing )(Automated Data Processing ) Maintain and upgrade of ASYCUDA system, Maintain and upgrade of ASYCUDA system,

Cargo Control System, Motor Control SystemCargo Control System, Motor Control System Development of the software related to Development of the software related to

Customs functionsCustoms functions Expansion of the system to non Expansion of the system to non

computerized areas of the Department computerized areas of the Department Addressing day to day problems of the Addressing day to day problems of the

systemsystem Provide training to the customs staff and Provide training to the customs staff and

other stakeholdersother stakeholders Registration of importers and exporters into Registration of importers and exporters into

the systemthe system

Functions of the ADP (Con’d)Functions of the ADP (Con’d)

Provide technical assistance to the other divisions of the Provide technical assistance to the other divisions of the DepartmentDepartment

Recommend future developments to the other Recommend future developments to the other administration administration

Provide and share information with other DepartmentsProvide and share information with other Departments Provide information regarding traders to other Provide information regarding traders to other

organizations for the purpose of investigationsorganizations for the purpose of investigations Provide training to Customs and BOI officials on Provide training to Customs and BOI officials on

ASYCUDA systemASYCUDA system Coordination with EDI service provider and other IT Coordination with EDI service provider and other IT

divisions of the other Departmentsdivisions of the other Departments Provide statistical reports to Ministries, traders and the Provide statistical reports to Ministries, traders and the

Central BankCentral Bank Maintain of Customs web siteMaintain of Customs web site Screening of the data base and detect revenue fraudsScreening of the data base and detect revenue frauds

Fees and Formalities on Fees and Formalities on Importation and ExportationImportation and Exportation General disciplines on fees and charges on importation & General disciplines on fees and charges on importation &

exportation are partially implementedexportation are partially implemented Non discrimination prevails on fees and formalitiesNon discrimination prevails on fees and formalities Periodic reviews and reduction of formalities are in practicePeriodic reviews and reduction of formalities are in practice Customs Declaration (CUSDEC) is in uniformity with UN lay Customs Declaration (CUSDEC) is in uniformity with UN lay

out keyout key Processing of customs goods declaration is automatedProcessing of customs goods declaration is automated Single window is partially operatedSingle window is partially operated Customs brokers are not mandatory for baggage clearanceCustoms brokers are not mandatory for baggage clearance Border agenciesBorder agencies cooperation is in practicecooperation is in practice Objective criteria for tariff classification is in operationObjective criteria for tariff classification is in operation Pre-shipment inspection does not prevailPre-shipment inspection does not prevail Consular transaction does not prevailConsular transaction does not prevail Licensing required only for certain itemsLicensing required only for certain items

Release and clearance of Release and clearance of GoodsGoods Pre-arrival clearance scheme is in Pre-arrival clearance scheme is in

operation for courier cargooperation for courier cargo Separate express declaration processing is Separate express declaration processing is

done for perishable/urgent cargo done for perishable/urgent cargo Post clearance audit scheme has been Post clearance audit scheme has been

introduced but needs developmentintroduced but needs development Risk assessment based selectivity scheme Risk assessment based selectivity scheme

is in operation but needs developmentis in operation but needs development Simplified goods declaration is used for Simplified goods declaration is used for

postal cargo clearancepostal cargo clearance

Release and clearance of Goods ( con’d)Release and clearance of Goods ( con’d)

Online payment system is available Online payment system is available in a limited scalein a limited scale

Advance ruling on classification of Advance ruling on classification of goods are issued on individual goods are issued on individual requests and also publish in customs requests and also publish in customs webweb

Importers/exporters have the right to Importers/exporters have the right to appeal appeal

Matters Related to Goods Transit

1. Non- Discrimination prevails

2. Discipline on Fees and Charges Partially done by some agencies Exchange of information is in practice on

requirements

3. Disciplines on Transit Formalities and Documentation Requirements

Simplified clearance procedure is in operation

4. Improved Coordination and Cooperation In practice

5. Operationalization and Clarification of Terms Guarantees are accepted in the clearance process

Publication and Availability of Information

1. Publication of Trade RegulationsSome of stakeholders are in the process of web publication. All the stake holders are willing to publish trade regulations in their respective webs.

2. Publication of Penalty Provision Stake holding agencies currently publish penalty provisions in the government gazette & some instances publish in institutional web sites

3. Internet PublicationMost organizations provide limited information & they are in the process of publishing them in the web.

4. Notification of Trade RegulationsIn general not in practice except in few instances.

5. Establishment of Enquiry PointsStake holders currently maintain their own information centers

CONCLUSION In order to formulate and implement In order to formulate and implement

areas covered under the TF,areas covered under the TF, needneed::

1.Technical assistance and capacity 1.Technical assistance and capacity buildingbuilding

2. Funds for infrastructure development2. Funds for infrastructure development 3. Public – private sector collaboration 3. Public – private sector collaboration 4. Regional trade facilitation and customs 4. Regional trade facilitation and customs cooperationcooperation 5. Longer time period to institute the TF 5. Longer time period to institute the TF

measures as a means to make S & D measures as a means to make S & D treatment effective and operational treatment effective and operational