© Confederation of Indian Industry 1 Air-Cargo: Suggestions for Efficiency Enhancement 10 July 2013 Udyog Bhawan: New Delhi

© Confederation of Indian Industry 2 Current Process: Presentation of physical Annexure C document, followed by manual entry of details into system, and assignment of Examining Officer (EO). This is followed by manual carting of export cargo into cargo terminal. Suggested Changes EDI submission of Annexure C information online with reference to HAWB and MAWB. RFID scan enabled entry registration process at terminal ramp. EO assigned automatically post-scan Export RMS allows segregation of shipments into those requiring physical examination and those not at the RFID scan stage. Carting into separate zones based on this segregation Mechanical Carting: Mandating Terminal Operator in Major Airports to use ramp-carts Waiting Time of 3-4 hours plus (in truck que and ramp que), due to Manual Ramp Operations and Lack of IT integration in processes

© Confederation of Indian Industry 3 Current Process - Physical documents (invoice, Declarations etc) submitted to EO. EO takes a call on physical examination. Once he gets a break from document assessment, makes a round of terminal for physical examination. Sometimes second physical examination is mandated Suggested Change All documents (incl scanned pdf versions of supporting documents such as invoice, packing list etc) are submitted on EDI, and can be viewed and assessed by EO. EO can then take a call on whether further physical examination is required. If physical examination is required, system automatically assigns a EO on the floor (on physical examination duty), and message alert is send to the assigned officer. Physical examination is undertaken in a zone fitted with CCTV cameras, whose footage can be retained for a specific amount of time. Second physical examination is dispensed with. Once physical examination EO (on floor duty) sends back confirmation to EO on document assessment duty, and LEO is given automatically Time to taken to complete customs procedures can be reduce by half as well as reduce the pressure on Customs officials through greater use of IT, allowing EDI to accept pdf scanned documents, separation of document based assessment and physical examination functions, and use of CCTV for record keeping

© Confederation of Indian Industry 4 Current Process - Physical submission of documents () to incentive cell. Work usually starts after 1 PM. Assessment and clearances takes up to 2 hours best case scenario. If marked for physical examination process can take much longer. This ensures that cargo often does not get opportunity to enter terminal until next day (due to congestion). Adds 1 day to the dwell time on average. Since shipment has not been brought into the terminal and carted in, this dwell time is not considered as an official ‘cargo dwell time’. Suggested Change All documents (incl scanned pdf versions of supporting documents such as invoice, packing list etc) are submitted on EDI, and can be viewed and assessed by EO in incentive cell prior to arrival. Physical submission is dispensed with. All scheme imports are automatically send to the ‘physical inspection’ zone post RFID entry System automatically assigns a EO on the floor (on physical examination duty), and message alert is send to the assigned officer. Physical examination is undertaken in a zone fitted with CCTV cameras, whose footage can be retained for a specific amount of time. Second physical examination is dispensed with. Once physical examination EO (on floor duty) sends back confirmation to EO on document assessment duty, and LEO is given automatically EPCG/Chapter 3 scheme exports need special assessment that adds to dwell time

© Confederation of Indian Industry 5 CHANGES IN THE GRANTING OF NOC PROCESS

© Confederation of Indian Industry 6 Suggested Change Prior Submission of Documents Online Clearance Based on Message Exchange with EDI Minimum Service Standards Introduction of RMS Current Process -The current (both inbound and outbound) process involves physical submission of documents (as listed by agency) post arrival at the airport/port to concerned agency responsible for the specific NOC -After processing of such documents, samples might be drawn if deemed necessary by the agency. In case no samples are drawn, NOC is granted. In case samples are drawn, NOC is granted post laboratory testing analysis results. Fine Tuning the NOC Granting Process: Introduction of Prior Submission, Acceptance of PDF documents online and direct response to (message exchange) to the EDI system

© Confederation of Indian Industry 7 EXEMPTIONS FOR REQUIREMENT OF NOC FOR SPECIFIC TYPES OF SHIPMENT Imports and Exports of SEZ/FTWZs units should not be subject to customs compulsory requirements (CCR) related to compliance with allied agencies Exemption of all samples AND shipments coming for Research and Development Services Exemption for the requirement for NOC for bulk drug export shipments

© Confederation of Indian Industry 8 Trade Facilitation for SEZs and FTWZs Imports bound for SEZ/FTWZs Cleared on Arrival Facility using CCTV enabled trucks Cleared on arrival based on prior declaration, with no requirement for physical inspection or checks at the point of entry (port or airport). A basic message exchange system in Customs ICEGATE should be able to transmit this information to SEZOnline CCTV enabled truck movement between entry port and SEZ/FTWZ (or bonded truck) All checks would be conducted at the SEZ/FTWZ entry point, where shipments would be tallied with the information provided by SEZ/FTWZ importer to ICEGATE (observable through message exchange with SEZonline, as suggested) Officials can also check CCTV footage in case of doubt or systemically ask for such CCTV footage on a random basis based on some RMS criteria

© Confederation of Indian Industry 9 Doing away with the requirement of customs escort Some customs field formations still insist on customs escort for truck movement between port of entry and SEZ/FTWZ. This adds to costs (and also delays, due to lack of availability of officers) It is suggested that such requirements are done away with. Instead, customs can over-time insist that trucks doing sealed movement of goods (container sealed, sealed packages) are CCTV enabled, with the provision to be able to see CCTV footage on demand

© Confederation of Indian Industry 10 Customs Related Suggestions

© Confederation of Indian Industry 11 Export promotion copy is required to be signed by the proper officer despite introduction of EDI, which creates delays Removing the need for EP copy or ARE1 certification by proper officer where Export shipment is cleared under EDI mode EDI message to be exchanged or print out to be used. This requirement results in paperwork build-up despite the fact that there is EDI which has a direct impact on environment EDI was introduced with the intention of reducing paperwork, ease of record maintenance and retrieval to government, improving transparency and trade enablement. It is suggested that the need for maintaining import and export shipment related physical records by the agents is removed, and customs accepts electronically stored versions (pdf scanned images) of the same Requirement that physical records be maintained for 5 years

© Confederation of Indian Industry 12 Customs EDI enabled to accept pdf images as submission of proof Customs EDI should be enabled to accept pdf images of licenses, invoice, declarations etc so that the requirement for ANY PHYSICAL PAPER copy is dispensed with RMS based checks introduced. Heavy NON-NEGOTIABLE penalty in any case where pdf scanned documents are not the same as the original hard copy

© Confederation of Indian Industry 13 Delegation of powers to ensure quicker clearance time and reduce burden on senior level officers There are delays when file move beyond the Assistant / Deputy Commissioner levels due to the busty work schedule and responsibilities of the higher level officers Delays also happen at assessment level where Assistant / Deputy Commissioner counter signature is required due to assessable value being greater then INR 1 lakhs or 1st check order is required or such other cases It is requested to the below change be introduced considering the increasing value of products and exchange rates for all situations except adjudication Import: a. Assessing / Officer on duty: Value below INR 5 lakhs b. AC / DC: No limit Export: Free, NFEI& Scheme shipping bill a. Assessing / Officer on duty: Value below INR 5 lakhs b.AC / DC: No limit Export: Drawback shipping bill a. Assessing / Officer on duty: Drawback Value below INR 1 lakhs b. AC / DC: No limit

© Confederation of Indian Industry 14 Shortage of staff in particular locations leading to delays in assessment Currently assessment is done locally in each customs station. Shortage of staff especially during holiday season impacts the trade and creates difficulties for the officers and trade It is our suggestion that a common assessment pool be introduced on all India basis on various levels required for assessment Under this system, while officers may continue to be located in different locations physically, they can be available to assess files submitted at any port/airport/point of entry. The file can be routed to the login officer who is free and has the capability to assess the shipment for Import and export. (This is possible due to the fact that all customs are connected via EDI 1.5 version).

© Confederation of Indian Industry 15 Daily duty allocation of customs officials (Exports & Imports) Currently the deployment of customs officials in the warehouses is manually done daily to provide for warehouse wise rotation. Then manual roster is circulated daily for necessary internal approvals, which leads to increased processing time and delays in the actual start of the daily operations in the morning The rostering can move to a system generated roster which can provide all the necessary controls and the officers can start work immediately on arrival on the shift and not wait for the manual roster to be provided

Optimum Utilization of EDI

IEC usage security and Data Transparency (Exports & Imports ) Currently there is no mechanism for an Importer or exporter to get information on the unauthorized usage of their IEC. No options to get reports on monthly / regular intervals with reference to imports/export done in each clearance location by importer /exporter or the statement of usage of their licenses, bonds, etc. There is an option to Track shipments on ICEGATE. It is suggested that IEC Holder receives  Import / Export alerts as & when a document is filed on EDI  Monthly report of Bill or entry / Shipping bill filed  Monthly report of licenses / bonds used with closing balance

Enabling Repair Return shipments Currently the EDI does not identity repair return shipment. The onus of ensuring that the Customs examination report mentions about “identity being established” lies with the exporter despite the fact that they have no control on the report The repair return business has huge business opportunity and the same should be encouraged by making simpler process & EDI doing cross reference It is suggested that the EDI should have “Repair Return” as a shipping bill type. Where there is no objection, it must be considered re-export has been done. Where there is negative report, Broker / Exporter approval received Exporter should get copy of examination report with Shipping bill Mechanism for automatic closure of bond which get executed at time of export where import BOE is mentioned in S/Bill

Smooth Multi Port clearance Enabling logistics convenience will enable the Trade Current day Exporters procure material from multiple locations due to multiple manufacturing set up / vendor set up Presently an exporter has to register self in each of the port from where export / import propose to be done EOU have to undergo registration process in every proposed port of clearance It is suggested that there should be automatic registration for EOU / SEZ / FTWZ as soon as the set up formalities is completed & Similarly where IEC is issued the information should get reflected in EDI automatically without the need for any registration. Additional information filed in one port should get reflected in every port

EDI for Trade convenience Basic principal of EDI is avoid submission same data to various authorities transit points The Export trade can be enabled by starting a paperless environment where shipping bill filed become the document of reference without the need for physical copy of Invoice & various other declarations All Chapter 3 licenses should be online to enable export import from any port without the need for Transfer release advice or origin copy of license ( more secure) Bond executed in any one port or drawback account opened in one port should be valid for clearances in other ports License issued by any allied agency should get reflected in EDI so that license debiting takes place on line & clearance can be done from any location

© Confederation of Indian Industry 21 Thank You