Trade Facilitation Issues in WTO - Sri Lanka’s Perspective Presented by Presented by V. S. Sidath Kumar V. S. Sidath Kumar Deputy Director of Commerce Deputy Director of Commerce Department of Commerce Department of Commerce Colombo Colombo Sri Lanka Sri Lanka 02 nd May 2006

SRI LANKA’S PERSPECTIVE ON TRADE FACILITATION CONTENTS General Background General Background National Focal Point for Trade Facilitation National Focal Point for Trade Facilitation Customs Procedure Customs Procedure Fees and Formalities on Importation and Exportation Fees and Formalities on Importation and Exportation Release and clearance of Goods Release and clearance of Goods Matters Related to Goods Transit Publication and Availability of Information Conclusion Conclusion

Sri Lanka’s Perspective on TF General Background Sri Lanka is an island in the Indian Ocean with an area of 65,610 Sq. Km. and a total population of 19.6 million GDP grew by 6% in 2005 GDP Per capita income was US $ 1,197 in 2005 Agriculture, Industry and Services account for 17.2%, 27.0% and 55.8% of the GDP in 2005 respectively Exports and Imports stood at US $ 6,347 million and US $ 8,863 million in 2005 respectively

General Background (Con’d) Main exports: tea, rubber, coconut, spices, textiles and garments, ceramic products, footwear, gem and jewel lery, petroleum products Main imports: Petroleum, fertilizer, chemicals, textiles and clothing, machinery and equipment, building materials, transport equipment, rice, sugar, wheat

General Background (Con’d) Sri Lanka follows a liberalized market oriented trade policy since 1977 Sri Lanka is a founding member of the GATT/WTO

National Focal Point for TF Sri Lanka, together with WTO member countries’ governments and other international organizations has recognized the high significance of TF in improving competitiveness Department of Commerce (DOC) is the National Focal Point in Sri Lanka for TF related activities under the WTO Negotiating Group on TF DOC is currently working towards TF measures as defined by WTO (July Package) according to GATT 1994 Articles V, VIII and X (freedom of transit, fees and formalities, and publication and administration of trade regulations respectively) A Pilot workshop on TF was held in Sri Lanka in June 2005 in association with the Sri Lanka Customs and in sponsorship of WCO and WB

National Focal Point for TF(Con’d) The Pilot Workshop Aimed at: a) a) Creating a real time analysis and reporting link between Geneva based negotiators and capital based specialists and stakeholders b) b) Establishing an appropriate coordination mechanism within the capital c) c) Creating awareness among the government and semi-government agencies, private sector and members of the civil society about the importance and benefits of TF

National Focal Point for TF(Con’d) After the Workshop, the DOC established a Co- Coordinating Group (Core Group) with representatives from key stakeholders such as Department of Customs, Department of Agriculture, Department of Animal Production and Health, Board of Investment, Sri Lanka Ports Authority, Sri Lanka Standards Institute and leading Chambers of Commerce in Sri Lanka Purpose: to look into every possible avenue in the implementation of TF related works. The Core Group has met several times at the DOC to formulate Sri Lanka’s position at the WTO negotiations

National Focal Point for TF(Con’d) In the context of OECD Global Forum on Trade Series – A global Forum on TF was held in Sri Lanka in Oct The Forum was attended by 43 countries and senior officials from OECD, WB, ESCAP, WTO, WCO and UNCTAD Aim: to bring together the representatives from the government, business, research institutions, civil society and international organizations to discuss implications of ongoing negotiations on TF for DCs Forum focused on benefits of TF at country level costs of introducing and implementing TF measures, how to design appropriate technical assistance and capacity building programs, how to ensure a proper match between commitments and capacities

Customs Procedure Customs Procedure Automation of Processing of Customs Goods Declaration - Sri Lanka Customs established an Automated Data Processing Unit in Since 1994 entry lodgment and assessment is done by ASYCUDA (Automated System for Customs Data) - A computerized customs management system which covers most foreign trade procedures. - The system handles manifests and customs declarations, accounting procedures, transit and suspense procedures.

Customs Procedure(Con’d) - - Migrated to ASYCUDA ++ in This has enabled the entire accounting and statistics of customs recoveries done through the computerization process The Customs ADP (Automated Data Processing) Division has upgraded their hardware and software to handle the future situation -The Customs ADP (Automated Data Processing) Division has upgraded their hardware and software to handle the future situation

Customs Procedure(Con’d) More staff are trained locally and internationally to handle Oracle Data Base Management, Unixware Operating system and also data communication and networking More staff are trained locally and internationally to handle Oracle Data Base Management, Unixware Operating system and also data communication and networking Sri Lankan Customs is looking forward to implement the more upgraded version of Asycuda called Asycuda World in the near future Sri Lankan Customs is looking forward to implement the more upgraded version of Asycuda called Asycuda World in the near future

Functions of the ADP (Automated Data Processing ) Maintain and upgrade of ASYCUDA system, Cargo Control System, Motor Control System Maintain and upgrade of ASYCUDA system, Cargo Control System, Motor Control System Development of the software related to Customs functions Development of the software related to Customs functions Expansion of the system to non computerized areas of the Department Expansion of the system to non computerized areas of the Department Addressing day to day problems of the system Addressing day to day problems of the system Provide training to the customs staff and other stakeholders Provide training to the customs staff and other stakeholders Registration of importers and exporters into the system Registration of importers and exporters into the system

Functions of the ADP (Con’d) Provide technical assistance to the other divisions of the Department Provide technical assistance to the other divisions of the Department Recommend future developments to the other administration Recommend future developments to the other administration Provide and share information with other Departments Provide and share information with other Departments Provide information regarding traders to other organizations for the purpose of investigations Provide information regarding traders to other organizations for the purpose of investigations Provide training to Customs and BOI officials on ASYCUDA system Provide training to Customs and BOI officials on ASYCUDA system Coordination with EDI service provider and other IT divisions of the other Departments Coordination with EDI service provider and other IT divisions of the other Departments Provide statistical reports to Ministries, traders and the Central Bank Provide statistical reports to Ministries, traders and the Central Bank Maintain of Customs web site Maintain of Customs web site Screening of the data base and detect revenue frauds Screening of the data base and detect revenue frauds

Fees and Formalities on Importation and Exportation General disciplines on fees and charges on importation & exportation are partially implemented General disciplines on fees and charges on importation & exportation are partially implemented Non discrimination prevails on fees and formalities Non discrimination prevails on fees and formalities Periodic reviews and reduction of formalities are in practice Periodic reviews and reduction of formalities are in practice Customs Declaration (CUSDEC) is in uniformity with UN lay out key Customs Declaration (CUSDEC) is in uniformity with UN lay out key Processing of customs goods declaration is automated Processing of customs goods declaration is automated Single window is partially operated Single window is partially operated Customs brokers are not mandatory for baggage clearance Customs brokers are not mandatory for baggage clearance Border agencies cooperation is in practice Border agencies cooperation is in practice Objective criteria for tariff classification is in operation Objective criteria for tariff classification is in operation Pre-shipment inspection does not prevail Pre-shipment inspection does not prevail Consular transaction does not prevail Consular transaction does not prevail Licensing required only for certain items Licensing required only for certain items

Release and clearance of Goods Pre-arrival clearance scheme is in operation for courier cargo Pre-arrival clearance scheme is in operation for courier cargo Separate express declaration processing is done for perishable/urgent cargo Separate express declaration processing is done for perishable/urgent cargo Post clearance audit scheme has been introduced but needs development Post clearance audit scheme has been introduced but needs development Risk assessment based selectivity scheme is in operation but needs development Risk assessment based selectivity scheme is in operation but needs development Simplified goods declaration is used for postal cargo clearance Simplified goods declaration is used for postal cargo clearance

Release and clearance of Goods ( con’d) Online payment system is available in a limited scale Online payment system is available in a limited scale Advance ruling on classification of goods are issued on individual requests and also publish in customs web Advance ruling on classification of goods are issued on individual requests and also publish in customs web Importers/exporters have the right to appeal Importers/exporters have the right to appeal

Matters Related to Goods Transit 1. Non- Discrimination prevails 2. Discipline on Fees and Charges Partially done by some agencies Exchange of information is in practice on requirements 3. Disciplines on Transit Formalities and Documentation Requirements Simplified clearance procedure is in operation 4. Improved Coordination and Cooperation In practice 5. Operationalization and Clarification of Terms Guarantees are accepted in the clearance process

Publication and Availability of Information Publication of Trade Regulations Some of stakeholders are in the process of web publication. All the stake holders are willing to publish trade regulations in their respective webs Publication of Penalty Provision Stake holding agencies currently publish penalty provisions in the government gazette & some instances publish in institutional web sites Internet Publication Most organizations provide limited information & they are in the process of publishing them in the web Notification of Trade Regulations In general not in practice except in few instances Establishment of Enquiry Points Stake holders currently maintain their own information centers

CONCLUSION In order to formulate and implement areas covered under the TF, In order to formulate and implement areas covered under the TF, need: need: 1.Technical assistance and capacity building 1.Technical assistance and capacity building 2. Funds for infrastructure development 2. Funds for infrastructure development 3. Public – private sector collaboration 3. Public – private sector collaboration 4. Regional trade facilitation and customs 4. Regional trade facilitation and customs cooperation cooperation 5. Longer time period to institute the TF measures as a means to make S & D treatment effective and operational 5. Longer time period to institute the TF measures as a means to make S & D treatment effective and operational