1. Working with the Customs Blueprints: Preparation of a strategy for customs reforms – experiences of Slovenia and Czech Republic Customs Blueprint Workshop Brussels, 27/28 May 2008 Brane Gregorič; Customs Administration of the Republic of Slovenia Jan Skalický Czech Customs Administration

2. Legislation Organization & Mngt. Communication Ethics Training Revenue Collection Border & Inland Control Investigation & Enforcement Customs Laboratories Infrastructure and equipment Trade facilitation & relations with trade Transit & movement of goods Computerization  Phare/Tacis  Customs 2000  Eurocustoms  EU MS Areas Workshop National Reform plans EU MS CEEC COM Aims Objectives Indicators Gap&Need Analysis Creation of Blueprints

3. Conditions to be fulfilled before start of the process: Strong top management commitment and support for change Understanding the whole process (+ and -) Appropriate organisation and human resources (internal project manager) Involvement, understanding of the process and commitment of all responsible/key line managers

4. Which Blueprint(s) to start with? Area (BP) where is will/commitment and possibility for change Objectives are measurable and first results can be achieved in relatively short time (6 months – 1 year) Availability of competent human resources to undertake and lead the process Possibility to get external assistance for closing the gaps

5. Start: Gap analysis workshop Aim: “To provide guidance on the use of ‘gap analysis’ methodology” Selected BP: Legislation, Investigation & Enforcement and Training Objectives: – To define ‘gap analysis’ process and set in the context of other pre-accesion activities of Slovenian Customs – To introduce ‘gap analysis’ tools and explain how to use them – To complete draft ‘gap analysis’ tables in selected BP 13 participants from departments responsible for selected BP

6. Comparison with the standard described in the relevant blueprint For each individual key indicator a) description of the current situation b) gaps are divided into two parts: - technical shortfalls - behavioral shortfalls Gap analysis of BP

7. Description of the current situation Key & most critical part of the process Common understanding of indicators Indicators present ideal desired situation Identify shortfalls between desired future state (key indicator) and the current situation Description should be comprehensive and accurate “Trial and error” exercise Results should be scrutinized and agreed by top management

8. Technical shortfalls Formal framework: – Rules/regulations – Organisation – Procedures – Policies Tools – Equipment – Infrastructure – IT GD Dpt1Dpt2Dpt3

9. Behavioral shortfalls Practices Customs/habits Actions Knowledge – What needs to be known in order to meet the standard Skills – What skills are needed (technical, personal, interpersonal) Attitudes – The way or manner in which the work is carried out (loyalty, integrity, etc)

10. Gap analysis - example Blueprint Key Indicator Current situation Technical shortfalls Behavioral shortfalls CUSTOMS ETHICS Blueprint Key IndicatorsDetailed Description of Current SituationTechnical ShortfallBehavioral Shortfall Ethics Policy Top management acknowledges the importance of an ethical approach, sets a personal example to other employees, and demonstrates its commitment to ensuring that the ethics policy is applied in practice. Yes. Top management acknowledges the importance of an ethical approach and usually sets a personal example to other employees. A Code of Ethics not published. Insufficient awareness of importance of ethical behavior on operational level. The ethics policy observes all of the principles of the ‘Arusha’ Declaration. Since the Code of Ethics is not published, we can only say that they are observed in principle. Management is acquainted with the principles, but not all employees.

11. Practical use of the blueprints GAP ANALYSES Comparing the actual situation with the standards defined in the blueprintsComparing the actual situation with the standards defined in the blueprints Should be carried out at both the expert and the management levelShould be carried out at both the expert and the management level  for example: in CZ the expert departments described the situation in the Czech Customs – the management then judged whether there is a gap or not There are two reasons for gaps – technical problem (e.g. missing legislation) or behavioural problem (e.g. lack of training, reluctance of staff)There are two reasons for gaps – technical problem (e.g. missing legislation) or behavioural problem (e.g. lack of training, reluctance of staff)

12. Practical use of the blueprints GAP ANALYSES Step 1: Description of actual situation for each standard Step 2: Comparing the actual situation with the individual standards and judging whether it corresponds with the standard or not – if not, the gap must be described (example) example Step 3: Sorting the gaps according to departments (example) example

13. Example from the Investigation and Enforcement Blueprint StandardCurrent Situation Technical gap Behavioural gap Intelligence teams are established with responsibility for collection and analysis of information, and dissemination of up to date information and trend data to Investigation and Enforcement staff Intelligence-gathering teams that would explicitly and exclusively provide the required capabilities do not yet exist. Information support to the detection and investigation of violations is provided mainly from the HQ level (Enforcement Division of the Ministry of Finance - General Directorate of Customs), where both domestic information and information from abroad is collected. Not enough human and material resources and assets have been allocated to sorting and analysing the information. intelligence teams not establi shed none

14. Practical use of the blueprints GAP ANALYSES Step 1: Description of actual situation for each standard Step 2: Comparing the actual situation with the individual standards and judging whether it corresponds with the standard or not – if not, the gap must be described (example) example Step 3: Sorting the gaps according to departments (example) example

15. Department 1 - Legislation limited powers in the area of investigation customs laboratories have not been established by the Customs Act information brochures to public have not been published …. 3 more gaps Department 2 - Operations a system of targeting customs controls not fully used heat detection equipment not available …. 2 more gaps Department 3 – Customs Policy customs laboratories have not been established by the Customs Act internal regulations on analyses, storage and liquidation of samples still under preparation …. 1 more gap

16. Department 4 – Personnel career system not established performance measurement system not established …. 3 more gaps Department 5 - Finances the correspondence of the national accounting procedures with the EU standards not explored risk analyses function not incorporated in the accounting system … 3 more gaps

17. Based on the outcome of the gap analysis To determine what needs to be done to bring performance in each customs functional area up to the standard described in the relevant blueprint Solutions to close the gap and meet the need objective are identified. The final outcome is an activity list. Need analysis

18. Need analysis: Basic steps (1) Clarify the shortfalls first (in technical and behavioral terms – emphasis on behavioral) Break them down into KSB components (where appropriate) Identify the areas where the shortfalls can be addressed internally Identify the areas where the shortfalls require external assistance

19. Need analysis: Basic steps (2) Specify the need with regard to the following factors: – Scale of the problem – Priority of need – Law/internal regulations – Culture – History – Profile & location of target population – Infrastructure – What is already planned/going on – Absorption capacity – Desired impact

20. Needs Analysis - example BLUEPRINT: CUSTOMS ETHICSCOUNTRY: SLOVENIA KEY INDICATOR DEVELOP MENT NEED AIMOBJECTIVEKNOWLEDGESKILLSBEHAVIOUR 4.3.1. Ethics Policy To develop and implement Code of Ethics To develop and implement Code of Ethics which ensures that all employees follows prescribed regulations To produce Code of Ethic To approve Code of Ethics by top management To publish, disseminate and to introduce it To develop a plan how to introduce content of the Code to all employees which should be applied in daily practise To implement Code of Ethics into practise Legislation Regulation Experience Development Strategy Drafting Judgment Application Communication Analyzing Willingness to use Ethical Co-operation Commitment 4.3.2 Information and Training To implement elements of the ethics policy and Code of Ethics in basic training To ensure that the rules from the Code of Ethics are implemented in daily work To prepare appropriate training program which includes ethic rules To provide necessary training to all new employees Code of Ethics Training function History of organisation Infrastructure Legislation Motivation Organisation Planning Communication Co-operation Team work Willingness Key Indicator Dvlp. need Objective Knowledge; Skills; Behavior Aim

21. NEEDS ANALYSES For each gap identified it must be decided whether:For each gap identified it must be decided whether:  filling the gap is a priority  the gap will be filled by means of own resources, or  a TA project should be organised to fill the gap If technical assistance is needed If technical assistance is needed  a needs analyses sheet should be created (example) example  TA project fiche should be drafted

22. KEY INDICATO R DEVELOPMENT NEEDDESCRIPTION OF THE ACTION 7.3.3 Customs controls for clearance of goods Establish efficient post clearance control/audit procedures Aim: To establish efficient post clearance/audit system to enable efficient control after the customs clearance of goods Overall Objectives: 1.To create internal regulation setting efficient and standard procedures of audit to be implemented 2.To ensure that the staff is able to carry out audit procedures efficiently Enabling objectives: 1.To evaluate the current practices used in the EU 2.Provide training for the operational staff on risk analysis, creation of risk profiles and their practical use on daily bases ACTION I : Training course on practical implementation of post-clearance/audit procedures Focus Current practices used in the EU, knowledge about commercial operations, accounting skills, international system of payment, identification of risk areas, use of special software Location A training centre in the Czech Republic Date Second half of 1999 Duration: 1 week Trainers: 2 experts from an EU customs administration (preferably from Germany) Target group: 15 participants from the for Post-clearance Control Units

23. Preparation of action plan Description of each action: – Which BP/key indicator(s) covers – What the action will be – Where and when it will take place – How long will it take (start-end date) – Who should deliver it (responsible)

24. Action plan - example BLUEPRINT: CUSTOMS ETHICSCOUNTRY: SLOVENIA KEY INDICATOR DESCRIPTION OF THE ACTION 4.3.1. Ethics Policy 4.3.2. Information and Training Already in place: - Code of Ethics is already drafted, but need to be accepted by management Required action: - obtaining best practices with comparison of Code of Ethics from other countries (Slovak and Czech Republic, MS) - MS expert visit to inform on the ethics principles and their implementation in EU MS (Eurocustoms) - assistance in preparation and finalization of the Code of Ethics (MS expert) - to prepare the implementation plan and inform all the staff about Code rules (Slovenian Customs) Already in place: - basic customs training partly covers ethics behaviour Required action: - to study training programmes and training materials on Ethics in other countries (Macedonia - to prepare basic training module on ethics - TTT to gain knowledge how to train in the field of customs ethics (Eurocustoms - Norway expert) Key Indicator Description of the action

25. Summary of the programme Customs Blueprints Gap Analysis Needs Analysis BCMPTNA

26. to maintain and to update the Development Strategy of the Customs Administration of the Republic of Slovenia, and to manage and monitor its implementation; to manage and to organise the implementation of EC Blueprints; to manage and to organise all other pre-accession activities of the Customs Administration of the Republic of Slovenia. SI Customs Project group for EU integration (1998)

27. Strategic objectives of SI Customs Development Strategy till 2000 Corresponding EC Blueprints Improvement of the system for the collection of import duties Revenue collection Laboratory A higher level of protection for Slovenian societyBorder&inland control; Investigation Facilitation of the movement of goods and personsTrade facilitation and relations with business Transit and movement of goods Improvement in the level of professionalism and quality of work of employees Training; Customs ethics; Human resources Organization and management Improvement of material and technological working conditions Infrastructure & Equipment Computerization Provision of legal bases and standards for effective operation Legislation Preparation for accession to the EU

28. Business strategy & blueprints Preparation for EU accession Harmonisation of national legislationHarmonisation of national legislation Harmonisation of working practicesHarmonisation of working practices MODERNISATION OF CUSTOMS ADMINISTRATIONMODERNISATION OF CUSTOMS ADMINISTRATION Business strategy

29. PART IPART I  Background – description of current situation and relevant facts  Basic Aims... the Customs will be transformed into a new institution with customer oriented functions well balanced with other important functions in the area of protection and control. These aims will have to be achieved with reduced personal resources which have been newly and effectively restructured and re-distributed....... gradual adjustment of powers, namely over-taking of all responsibilities in the excise administration. Customs business strategy

30.  Strategic Objectives – 9 general objectives e.g.: „reinforce the existing indirect tax services by over-taking full responsibility in the administration of excise tax“ „harmonise the customs legislation with the EU standards“ „support business operators in increasing of the national economic potential by means of simplification of the legal trade operations“ „support business operators in increasing of the national economic potential by means of simplification of the legal trade operations“ „reallocate and improve the quality of staff, strengthen motivation and integrity of employees“

31. Business strategy & blueprints Customs business strategy  Critical Success Factors - e.g. Budgetary limitations in the financial recourses including the wage policy in the public sector does not allow justified and easy development of the organisational, personal and technical preconditions -The amendment of the legislation in the area of indirect tax administration and other areas (such as investigation of financial fraud, CAP, etc.) does not bring new powers to the CCA.

32. Tasks specification Tasks specification  Based on strategic aims (e.g. taking over the administration of the excise tax) and gaps identified on the basis of blueprints  Had to be regularly checked and updated  Structure: task, responsible department, deadline

33. Example: Example: „Ensure organisational, personnel and technical conditions for establishment of post-clearance audit units“ Responsible department: 8 – Fight against Fraud Deadline: 31/12/2000 „Amend the Customs Act so that it provides the customs authorities with powers to carry out criminal investigation and use operative means of investigation“ Responsible department: 8 – Fight against Fraud Deadline: 31/12/2002 Business strategy & blueprints

34. UPDATE AND EVALUATION PART IPART I  approximately once a year  minor changes PART IIPART II  much more flexible  when necessary or every three months  new tasks added and fulfilled tasks deleted

35. Excellent management tool for business change management plan (BCMP) in customs area: – Simple methodology – BP can be used individually (they are self-standing) For Achieving technical assistance from outside donors (EU, WCO, WB …); Favorable position for customs vs. other gvt. agencies in competing for the funds Administrative capacity of customs as described in the BP is one of the conditions for EU membership Why to go through this exercise?

36. Thank you for your attention ! Brane Gregorič Head of Director General's Office Customs Administration of the Republic of Slovenia Šmartinska 55, SI-1523 Ljubljana tel: +386 1 478 38 05; fax: +386 1 478 39 01 e-mail: brane.gregoric@gov.si; http://carina.gov.sibrane.gregoric@gov.si Jan Skalický Head of International Department Customs Administration of the Czech Republic Budejovicka 7, Prague 4 tel: +420 2 6133 2131; fax: +420 2 6133 2130 e-mail: skalicky@cs.mfcr.cz; http://www.customs.cz