Customs Reform Project

Adel M. RadwanDirector of the Customs Reform Unit

Presented by

Arab Republic of EgyptArab Republic of Egypt

Ministry of Finance

17-2017-20 AprilApril, 2004, 2004

Customs Reform Project

Overview of Project output and activities

The Main Achievements

The Next Steps

Presentation Outline

Diagnosis: Symptoms

High transaction costs for importers with negative effects on external competitiveness

Imperfect compliance with multilateral agreements and international conventions

Relatively high number of disputes between Customs and the trade community

Limited use of IT in different sites

Ineffective duties relief schemes and customs systems

Customs administration burdened with bureaucracy

Diagnosis: Causes

Outdated legislative and regulatory framework

Cumbersome procedures and high clearance costs for

importers

Diversity and complexity of duty relief schemes

High average tariff rates and complicated tariff structure

Inadequate IT resources and systems

Outdated organizational structure, training strategy and

staffing policy

Our Vision

Integrate Egypt into the global economic system through full compliance with multilateral and bilateral agreements

Create partnership between Customs and the trade community

Enhance private sector external competitiveness through reducing transaction costs

Conceptualization Phase

Reform Principles

The legislative framework should be clear, flexible, and transparent Ports should be gates rather than warehouses The importer/broker should share responsibility with Customs Selectivity/risk management techniques should be used in

document verification and physical inspection Post-release audit and severe sanctions should replace excessive

controls Customs should operate in a fully automation / paperless

environment Tariffs should be generally non-prohibitive and easy to apply

Project Preparation Phase

2002Q1 Q2 Q3 Q4

Establish Advisory Committee

Appoint Project Director

Appoint Project Team

Develop Plan of Action

Secure Sources of Fund

Activities

Project Organizational Structure Steering

Committee

Project Director

Advisory CommitteeMinister of Finance

ValuationTariff Policy

ProceduresHuman Resources IT

Duties Relief/Exemptions

Technical Secretariat

Financial & International Cooperation expert

Legislation

Assistant Director

Customs commissionerSupreme Committee for law

Infra structures

Anti- Smuggling

IC

E- COMMERCE

2002 2003 2004 2005

Conceptualization

Post-Project Evaluation

Customs Reform Project spans a period of 3-4 years from late 2002 until 2005/2006 .

2001

Direct/Indirect Benefits to National Economy

Cost of Clearance

Implementation/Monitoring/Interim Evaluation

Preparation

Problem Identification

Customs Reform Project Project Cycle Project Cycle

Cle

ara

nce

Cost

s/B

enefits

to N

ati

on

al Eco

nom

y

Output 2002 2003 2004 2005 2006

New Customs Law

Streamlined/Simplified Procedures

Accurate Implementation of Article VII

Simplified Duties Relief Schemes

Restructured Organization

Full IT Support in all Ports of Entry

New Consolidated Tariff Structure

Customs Reform Project Reform Master Plan (Living Plan)

Customs Reform Project

Technical Assistance/Coordination with Other Donors

Financial/Technical Assistance (Assistance for Customs and Trade Facilitation (ACTF) Project)

Financial/Technical Assistance (TEP-A, TEP-B, and TEP-C)

CRU

Ministry of Finance

Ministry of Foreign Trade

Ministry of Transportation

Ministry of Industry

IMF

EU

USAIDOther Ministries and Government Agencies

The world Bank

Role of the CRU

Coordinate

Implement

MonitorW B

Trade Community

Concluding Remark

Participation of all Partners and the Support of the GOE are the Keys to Success

Legal Experts/Customs Law Legal Committee

Donor Agencies and International Community

Customs Commission /Project

Team

Trade Community

Advisory Committee

Government of Egypt

Implementation Phase

Activities

2002 2003 2004 2005

New Customs Law Customs Code of Ethics Explanatory Notes for new law Legal references for Procedures manuals Review of inconsistencies and simplification of customs related

regulations

June 2005

Legislation Committee

Implementation Phase

Activities

2002 2003 2004 2005

Operate the Customs Office in the MCTC on a pilot basis

Operate the Customs Office at Ein el Sokhna Port and test new procedures

Develop a risk management system

Develop post-clearance audit

Develop valuation database

Centralize cashier functions and develop electronic means of payment

Procedures Committee

June 2005

Implementation Implementation PhasePhase

Activities

Streamline temporary admission and duty drawback procedures

Issue relevant decrees to enhance duty relief schemes

Examine possible means to rationalize exemptions

Conduct an analysis of customs systems applicable to free zones

2002 2003 2004 2005

Exemptions and Special regimes Committee

June 2005

Implementation Phase

Activities

Automate all customs procedures at all ports of entry

Develop regional interfaces to connect all ports of entry

Provide MCTC IT support

Provide Ein el Sokhna IT support

Centralize data entry and cashier functions

Establish call centers, kiosks, and video conference facilities

Launch a dynamic website and EDI systems

2002 2003 2004 2005

Information Technology Committee

Dec. 2005

Implementation Phase

Activities

Establish new departments and functions (e.g., risk management unit, post-release unit)

Review the current structure and consider consolidating logically related functions

Develop new incentives and promotion systems

Train MCTC staff and regular customs staff on new procedures

Develop the curriculum and facilities of the Customs institutes

Human Resources Committee

2002 2003 2004 2005

Dec. 2005

Implementation Phase

Activities

Examine inconsistencies in the current tariff structure

Design alternative tariff structures

Study the impact of reducing tariff rates on revenues

Publish the integrated tariff on compact disks

2002 2003 2004 2005

Tariff Policy Committee

June 2005

Implementation Phase

Activities

Adherence to the WTO Valuation Agreement Valuation database Trained customs staff Trained Stakeholder

2002 2003 2004 2005

Valuation Committee

June 2005

Implementation Phase

Activities

Develop system for Valuation database Risk management database Customs information available electronically

2002 2003 2004 2005

Information Center Committee

Oct. 2005

Implementation Phase

Activities

Inspection handbook Intelligence gathering methodology Redistribution of security resources Database of enforcement actions

2002 2003 2004 2005

Anti-Smuggling Committee

June 2005

intro.html

Customs Encyclopedia Customs Web Site

Procedures Manuals

Valuation Manuals

Risk Management System

Pre-arrival release Exemptions Manuals

IT Support to Modernized Ports

Quick Action teams Training staff in the

customs valuation field

Workshops

Export encyclopedia

Performance and programs balances

system in the Egyptian customs

Participating in developing

Damietta

Interactive Integrated Tariff

Insert10-Digit HTS Code

Insert10-Digit HTS Code

MFN Tariff Rates

Preferential Tariff Rates

prices

Restrictions and Prohibitions

Laws and regulations

Procedures before Reform in the Egyptian Ports

Advanced Center

Registry Record#46

1

Importer premises

E-Data Entry

Through

General Organization for export & import Control

GOEIC

Physical Inspection and competent controls

2

NO

COORDINATIO

N

Cashier

3 Payment

Release of Goods

Customs Complexes

Procedures at modernized ports

CustomsGOEIC

Front window

EDI*

Data entry by the Importer

* EDI: Electronic Data Interchange

E-PAYMENT THROUGH THE BANK

Release of Goods

physical inspection and Competent controls

1

2

3

One-Stop Shop

port

Pre-arrival Process

123

Lodgment of declaration and presentation of

documents

Classification and calculation

of duties

Payment and review of release

order

MCTC

Contact point at port of entry

4

Release of goods

5

Arrival of Goods

Prior to the arrival of goods

physical inspection and Competent

controls

(MCTC)Model Customs and Tax Center

Sales Tax Department

Income Tax Department

Customs Commission

MCTC

Coordinate with Sales and Income Tax departments in post-clearance audits

Regional Offices

Advantages

Test new procedures (e.g., pre-processing of import documents and risk management techniques)

Sohkna Port /MCTC Procedures

Sokhna Port

• Electronic linkages with the trade community and other agencies• Pre-processing of import documents• Electronic means of payment

Alexandria Port

Dekheila Port

Short Term

Medium Term(

Port Said Port

Damietta Port

MCTC

Cairo Airport

Operational

Customs Web Site

intro.html

Publishing of EncyclopediaActivation of the CustomsWeb Site

Publishing of Manuals

Model Customs Center(One stop shop)

Clients Service

Modernization of Dammitta Port & Cairo Cargo

Terminal