Presentation for the 8th CCC meeting under CAREC on Sep 15-16, 2009

Customs Reforms and Trade Facilitation

RECENT ACHIEVEMENTS AND WAY FORWARD IN AFGHANISTAN

By Gul Maqsood Sabit Deputy Minister (Customs & Revenue) Ministry of Finance Government of Afghanistan Reforms in Customs Laws

 Simplification and harmonization of Customs laws & procedures: - New Customs Code has been enacted in 2007 in line with the best international practices. - As many as 27 new procedures have been simplified and streamlined for trade facilitation

 Customs Tariff based on WCO’s Harmonized System of Nomenclature is already in place since 2005 with average peak rate of 5.7 % currently, the lowest in the region. Simplification of Transit Procedures

 A simplified procedure has been evolved for movement and clearance of international cargo through Afghanistan.  For this purpose, detailed instructions issued on movement of Bonded Carriers and International transit cargo  Automation under ASYCUDA international transit module is also in process.  Talks are on with Pakistan for further streamlining transit procedures, esp. direct access of Afghan transporters to carry transit cargo for exports to third countries.  Similar arrangements could also be worked out with Tajikistan, Uzbekistan and other CAREC members with reciprocal facilities. Automation of Customs Procedures

 Kabul Custom House, Kabul Airport, Jalalabad and Herat Custom Houses have been computerized with ASYCUDA Declaration Processing System (DPS).  It has streamlined customs clearance and has reduced dwell time. i.e. time taken in Customs formalities.  ASYCUDA DPS is being rolled out to other Custom Houses, including Mazar and Sher Khan Bandar where it’d become operational within the current year itself.  In addition, ASYCUDA Transit module has been put in place at the important border Customs stations of Hairatan, Torghundi, Islam Qala and Torkham for automation of internal transit. Post Clearance Audit & Risk Management

 Mechanism of Post Clearance Audit has already been operationalized in all the major Custom Houses and is in the process of being extended to other Custom Houses and border stations too.  This has significantly improved compliance levels and revenue collection.  PCA machinery is proposed to be further strengthened.  Risk Management System is also being envisaged in Afghan Customs in order to optimize resources and focus its efforts on high risk transactions. IT and Trade facilitation

 Customs Website has been launched last November bringing in public domain comprehensive information on Customs Code, tariff rates and other Rules & Regulations for the benefit of traders and public at large.  To further supplement trade facilitation efforts, Help Desks are being set up in every Custom House to help traders.  In addition, a Hotline has also been started in the Ministry to report any cases of harassment or corruption in Customs clearance anywhere in the country.  A Complaint Investigation Unit also set up to look into such complaints and initiate action against errant officers. Customs Infrastructure & Logistics

 A number of other initiatives have been taken for expediting Customs clearance and facilitating international trade, particularly relating to the development of Customs infrastructure and logistics at the borders on the economic corridors identified under CAREC.  They include enhancing and strengthening Customs facilities at the border crossing points through building infrastructure and getting cargo handling equipments  CAREC assistance needed especially for getting expensive equipments like cargo scanners, heavy duty cranes and weigh-bridges etc to aid in Customs examination. Afghan-Tajikistan border

 A world class Custom facility has already been developed at the Sher Khan Bandar and work on another Customs project at Takhar/Aikhanam has been started.  The Custom facilities at Sher Khan Bandar can handle over 400 trucks of cargo daily.  The Regional Customs Centre has also been shifted here from Qunduz to provide Customs clearance at the border station itself.  A Customs Training Centre is also envisaged at Sher Khan Bandar for training in border management.  Cargo scanner is warranted quickly at this port, particularly to intercept smuggling of narcotics. Afghan-Uzbekistan Border

 Existing infrastructure is being further expanded to cater to the future needs.  A new building for the Inland Customs Depot at Hairatan is under construction and it should be ready by year end.  Clearance of petroleum fuel & gas streamlined at this port to facilitate their import from northern neighbors.  Need to have a Cargo Scanner installed at Hairatan to thwart any attempts of narcotics smuggling through this important border crossing.  New building for the Custom House at Mazar is also complete and would become operational shortly. Other Borders…

 Logistics and border infrastructure have been strengthened on Afghan-Turkmenistan and other borders too.  A new building is already in place and the ASYCUDA System has become operational at Torghundi, on Afghan- Turkmenistan border, which has greatly facilitated transit trade through this important border post.  Additional infrastructure has also been raised at the Border Customs Stations of Islam Qala on the Afghan-Iran border and at Torkham on Afghan Pakistan border on CAREC corridors. Support needed from CAREC

 Establishment of common electronic platform for exchange of Customs data in the region, particularly relating to valuation, anti-smuggling and drug trafficking  Pilot projects on Joint Customs control of Afghanistan with Uzbekistan and Tajikistan required for integrated border management and cooperation with these countries  Greater integration of trade logistics needed with all the countries in the region for cost-effective transit trade  CAREC need to facilitate bilateral Customs cooperation agreements among neighboring countries for building up cooperation on various issues Areas of further support from CAREC

 Building a Regional Training Centre in the Northern region for Customs officers of the member countries in the region.  Technical assistance in developing training modules, esp. on Risk Management System and Border Management.  Provision of Cargo Scanners and other cargo handling equipments at major border Customs stations to facilitate Customs clearance and check smuggling & drug trafficking.  Integrating trade facilitation measures through effective cooperation among Customs establishments of CAREC members.