PAKISTAN CUSTOMS COMPUTERISED SYSTEM (PaCCS) --- END-TO-END CUSTOMS SOLUTION PaCCS and TRADE FACILITATION UNCTAD October 2006 Dr. Mohammad Saeed Permanent Mission of Pakistan to the WTO Geneva

Federal Tax Receipts and the role of Customs Total trade volume of Pakistan = 45 b US$ Annual tax receipts= approx 12 b US$ 72% Collected at Imports by Customs = approx 8.51 b USD (Custom Duty, Sales Tax, Income Tax & Excises) 27 other laws are enforced by Customs.

Faisalabad Lahore Karachi Multan Rawalpindi Peshawar Gawadar Hyderabad Quetta Sialkot Each Collectorate a separate detached entity, with own Values, Procedures etc. No Central Data, uniformity or sharing of information. Two ports with three terminals. 10 inland custom stations ( Dry Ports)

Pre-PaCCS overview of stumbling blocks First use of computerized systems =early 80’s Fragmented system, Multiple Windows Differing software with little or no interface Paper environment Complex clearance procedures Lack of information sharing Integrity Issues

Each Goods Declaration 34 signatures & 62 verifications Multiple copies & multiple mandatory documents Documents had to be carried from desk to desk by the declarant

Dwell Time (Pre PaCCS) 50% of cargo cleared from the port 11 days after arrival in the country

Clearance Time ( Pre-- PaCCS) 50% of declarations completed by Customs 5 days after filing of declaration

Little or no trade facilitation 50 % cargo received clearance after 11 days (unloading to exit from the port) Just-in-time inventories non- existent. Business problems. Loss of revenue for state and private sector Customs controls---- yes Trade facilitation ?

Principles of Customs reforms (Project conceived in Feb 2002 as part of CARE) Completely Paperless Web enabled Online with all domestic stakeholders in the supply chain Online with all domestic regulatory authorities Advanced information of cargo, crew and passengers Risk management PaCCS to be home grown, motto “Built by Customs for Customs”

PaCCS - features PaCCS became operational on March 23, 2005 at one terminal (pilot project) Single window Paperless virtual environment Self assessment Clearance Speed Integrated Customs Integrity

PaCCS Components 1.TARIP -Tariff & Integrated Policy 2. INTRA -Integrated Regulatory Authorities 3. ECHO -Enhanced Cargo Handling & Port Optimization 4. ACCESS -Automated Customs Clearance System

TARIP -Tariff & Integrated Policy TARIP =backbone of the new system Complete set of regulations for import or export of cargo at HS line level : – The Import Tariff rates – The Export drawback rates – Details of Import & Export restrictions – Details of exemptions – Details of documentary requirements – List of declaration requirements TARIP is online

INTRA -Integrated Regulatory Authorities INTRA connects all the regulatory authorities involved in imports, exports of cargo. Some examples are : Government Ministries & Departments Central Board of Revenue and its wings All Customs Collectorates All Sales Tax Collectorates State and commercial banks

ECHO -Enhanced Cargo Handling & Port Optimization ECHO connects the carriers, Customs and Custodians and provides : One electronic document for the carriers Real time inventory and monitoring of ports No Customs staff at the gates (e-gates) Seamless, Transits and Transshipments Risk screening prior to arrival of the cargo under customs Controls. Instant duty drawbacks with the sail of vessel

ACCESS -Automated Customs Clearance System Salient features of ACCESS Carrier declaration Goods declaration Payments Risk Management System Assessments Clearance and release Status Reporting Law Cell and Adjudications Warehousing Licensing Transits and Transshipments

PaCCS Advantage Reduces the cost of doing business – Just in time inventory – Reduced clearing agency charges – Reduced port charges (less examinations 4%, 2%) – No un receipted expense – Better cash flow for trade High predictability and transparency Simplified procedures Built to best international practices (standardized)

Performance and Some results Total GDs cleared:90,343 Rev. Collected:500 Mil USD Containers cleared:2,22,675 Total # of Online Users:13,700 Speed - 70% of GD’s cleared in 5 min - 84% cleared in less than 30 min - 7 % needed more than 24 hrs

Performance & Some results-contd Examination and Assessment regime For imports: Pre PaCCS 100% & PaCCS 4% For exports: previously 100% and now 2% integrity issues.

Faisalabad Lahore Karachi Multan Rawalpindi Peshawar Gawadar Hyderabad Quetta PACCS online Users PortInt UserexternalBanks Karachi Lahore Sialkot Fasialabad Rawalpindi Peshawar Multan Islamabad33891 Sialkot PACCS Users by location Internet Users Traders Agents Shipping Lines Customs formations Warehousing Licensing Quotas Cargo receipt/dispatch Sales Tax formations Govt. ministries/ depts. Terminal authority Central Board of Rev Tariff Exemptions Drawbacks

Faisalabad Lahore Karachi Multan Rawalpindi Peshawar Gawadar Hyderabad Quetta Importers, Exporters, agents & banks using PACCS facilities PortexternalBanks Karachi62963 Lahore17552 Sialkot2441 Fasialabad2251 Rawalpindi1741 Peshawar1680 Multan1061 Sialkot PACCS Virtual Customs accessible over the web

Time taken between filing of Goods Declaration and Clearance from Customs through PACCS

Comparison of clearance time between PACCS and Manual System (Non PaCCS)

Some Lessons Learnt Holistic and comprehensive solution but progressive implementation Do not reinvent the wheel Automation means much more than putting a PC on each desk First decide the business process and then write the law Don’t change the team midway Consult, consult and consult No one knows Customs more than Customs itself Adopt best practices

Future Steps Roll out (Already operational on other two terminals since 14 August 2006) --- Only inland stations need to be covered by June 2007 Integrated API & immigration G2G communication TN/TF/W/135