Road Transport and Border Crossing Facilitation in the Arab World Riyadh, Kingdom of Saudi Arabia, 13 November 2013 Jean Acri Special TIR Advisor

« Towards Trade and Road Transport Facilitation Strategy for the LAS Region » Study prepared by Wissam Hossari, TIR Consultant

IDB-AULT-IRU JOINT PROJECT FOR FACILITATION OF TRADE AND ROAD TRANSPORT IN THE ARAB REGION 1. 1.Promotion and facilitation of international road transport and trade in the LAS Member States 2.Developing professional training at international standards 3.Improving road safety Main Objectives: Page 3 © International Road Transport Union (IRU) 2013

How can we change this view and let road transport drive trade, progress and prosperity? Page 4 © International Road Transport Union (IRU) 2013

Solutions: Use UN multilateral instruments   UN multilateral instruments: Open to all UN Members Global (no geographical restriction) Page 5 © International Road Transport Union (IRU) 2013

Scope of work of the TIR Consultant o o Inventory of UN Trade and Transport Facilitation Conventions in LAS Region o o Data collection on Customs Transit Procedures in the region o o Identification of key benefits of TIR for LAS Member States o o Preparation of Action Plan for promoting TIR in LAS Region Page 6 © International Road Transport Union (IRU) 2013

I – Identification of key UN Trade and Transport Facilitation Conventions Page 7 © International Road Transport Union (IRU) 2013

Diagnosis of the current implementation of the UN Conventions by Arab contracting countries Despite the global coverage of the UN trade and road transport facilitation instruments, and their successful contribution to developing trade in other regions of the world (Europe, Central Asia, Caucasus), Most Arab countries seem to have a low interest, and remain inactive with respect to ratifying and implementing these global UN Conventions. Page 8 © International Road Transport Union (IRU) 2013

Diagnosis of the current implementation of the Key UN Conventions by Arab contracting countries Status of UN Conventions in the LAS region (as of January 2013) Page 9 © International Road Transport Union (IRU) 2013

II: Identification of the Bilateral and Multilateral Transport Agreements in the LAS Region   The Agreement Organising “Transit Transport” between member states of the Arab League, 1977;   Protocol unifying rules and measures for the crossing of vehicles of participant countries between their territories and through them in transit (Lebanon, Syria, Jordan, KSA, and Yemen), 2001;   United Nations ESCWA Agreement on the International Roads in the Arab Mashreq, 2001;   Road Transport Agreement of the Arab Maghreb Union (AMU). Page 10 © International Road Transport Union (IRU) 2013

Identification of the Bilateral and Multilateral Transport Agreements in the LAS Region   Lots of efforts deployed to regulate and harmonise road transport in the LAS Region ………. But ……..   Sometimes leading to confusion and conflict, focus mainly on certain aspects of transport (e.g. transit) and largely neglect other fundamental aspects such as the training for drivers, vehicle conditions, road security, etc…   Limited geographical scope to only a few of the LAS countries, and its non-harmonised implementation has undermined its contribution to facilitate inter-Arab trade and transport. Page 11 © International Road Transport Union (IRU) 2013

III: Applicable Customs Transit Procedures in the LAS Region   Description of Customs transit procedures;   Costs (transit fees, formalities, etc…);   Guarantees;   Time needed for completion;   Main land transport border posts;   Documentation needed;   Statistics on the number of international transports by road. Page 12 © International Road Transport Union (IRU) 2013

III: Applicable Customs Transit Procedures in the LAS Region - Takes time and requires the involvement of local intermediaries - Creates additional costs for bilateral or inter-Arab trade and transport. - Takes time and requires the involvement of local intermediaries - Creates additional costs for bilateral or inter-Arab trade and transport. Oblige transport operators to handle these national procedures at the Customs office of entry of each country Disparity of the national procedures Lack of mutual recognition Disparity of the national procedures Lack of mutual recognition Penalty to regional trade and integration Page 13 © International Road Transport Union (IRU) 2013

III: Applicable Customs Transit Procedures in the LAS Region   The national regulations and procedures are well documented and have proven their efficiency at national level.   The disparity of rules, documentation, data to be submitted to Customs, cost of the transit Customs guarantees, the compulsory intervention of intermediaries, and time necessary to accomplish national transit procedures have not contributed to facilitate and develop inter-Arab trade and transport.   These regulations and procedures are carried out and repeated at each and every border transited. This generates important waiting times which increase the cost of the transported goods. Page 14 © International Road Transport Union (IRU) 2013

IV: TIR Member States in the Arab Region MOROCCO TUNISIA LEBANON JORDAN SYRIA KUWAIT Page 15 © International Road Transport Union (IRU) 2013

Implementation of TIR System in LAS Region   The benefits of the TIR System are dramatically underused.   The TIR System is widely used by foreign transport operators to deliver goods in the TIR Arab countries.   Efforts should be undertaken by both public and private players in the transport industry to promote the use of the TIR procedures by Arab transport operators, in order to allow them to compete on equal terms with foreign road transport operators. LEBANON JORDAN KUWAIT TUNISIA MOROCCO Page 16 © International Road Transport Union (IRU) 2013

Implementation of TIR System in LAS Region The issuance of TIR Carnets had been constantly increasing ( ), thanks to an active promotion of the TIR System by Public Authorities and the local Association. SYRIA Page 17 © International Road Transport Union (IRU) 2013

V: Comparison between the TIR System and the Arab Transit System TIR SystemArab Transit System Geographical Scope 68 signatory countries. TIR is operational in 57 countries 13 Arab countries. Guarantee systems One unique guarantee system for all Carnets. Multiple suppliers of guarantees in each country of transit. Monetary limits of guarantee Flat-rate guarantee of USD or Euro per TIR Carnet. The limit is always independent of the value of goods in transit. Different flat rate guarantee per Country. Selection of guarantors Guarantor is the TIR National Association of the Country, backed by the international guarantee chain organised by the IRU. Approved transit commercial companies in each country are entitled to provide guarantees. Page 18 © International Road Transport Union (IRU) 2013

V: Comparison between the TIR System and the Arab Transit System TIR SystemArab Transit System Goods Covered by the guarantee All goods (except alcohol and tobacco that cannot be transported under the TIR procedures). All goods under transit system (Alcohol is prohibited to transport in many Arab countries). Selection of transport operators All users of the TIR regime must be authorised by the local competent authorities and approved by the TIR National Association Any transport company without quality selection according to agreed standards. Page 19 © International Road Transport Union (IRU) 2013

V: Comparison between the TIR System and the Arab Transit System TIR System Arab Transit System Security and Risk Management - SafeTIR is a computerised control system to monitor each TIR transport operation; - The TIR Electronic Pre- Declaration application (TIR- EPD); - Load compartments (vehicles or containers) must be approved for transport under Customs seals, approval certificates provide the benefits of mutual recognition by all TIR Contracting Parties. - Each Contracting Party organises its own security and risk management mechanism; - Exchange of data is organised between the Contracting Parties, however no international agreed standards are applied; - Some requirements are imposed to ensure security of trucks. Page 20 © International Road Transport Union (IRU) 2013

Descriptions Cost (USD) under TIR Carnet Cost (USD) under Arab Transit Manifest LEBANON Formalities and expenses (Including TIR Carnet) $220$300 Customs Guarantee0 33,000 $/yearly for all operations Time needed2 Days3 Days Exit fees at border0$20 Example I: Transport operation from LEBANON to JORDAN (via Syria) (under TIR System and under Arab Transit Manifest) Page 21 © International Road Transport Union (IRU) 2013

Descriptions Cost (USD) under TIR Carnet Cost (USD) under Arab Transit Manifest SYRIA Formalities fees$30$80 Customs Guarantee 0 50,000 USD/yearly for all operations plus 6 trailers model 2009 should be owned by the transit company and USD 10,000 per each additional branch related to the same transit company. Time needed1 Hour3-4 Hours Example I: Transport operation from LEBANON to JORDAN (via Syria) (under TIR System and under Arab Transit Manifest) Page 22 © International Road Transport Union (IRU) 2013

Descriptions Cost (USD) under TIR Carnet Cost (USD) under Arab Transit Manifest JORDAN (Jaber Customs Office) Formalities fees0$22 Customs Guarantee0 Min 60,000 USD /limited and provided by the transit company. Example I: Transport operation from LEBANON to JORDAN (via Syria) (under TIR System and under Arab Transit Manifest) Costs (guarantees and formalities) 250 USD 422 USD + deposit of guarantees Time2,5 Days4 Days Results: Page 23 © International Road Transport Union (IRU) 2013

Example II: Transport operation from LEBANON to TURKEY (via Syria) (under TIR System and under Arab Transit Manifest) Descriptions Cost (USD) under TIR Carnet Cost (USD) under Arab Transit Manifest LEBANON Formalities and expenses (Including TIR Carnet)$220$300 Customs Guarantee 0 34,000 $/yearly for all operations Time needed2 Days3 Days Exit fees at border0$20 Page 24 © International Road Transport Union (IRU) 2013

Descriptions Cost (USD) under TIR Carnet Cost (USD) under Arab Transit Manifest SYRIA Formalities fees$30$80 Customs Guarantee 0 50,000 USD/yearly for all operations plus 6 trailers model 2009 should be owned by the transit company and USD 10,000 per each additional branch related to the same transit company. Time needed1 Hour3-4 Hours Example II: Transport operation from LEBANON to TURKEY (via Syria) (under TIR System and under Arab Transit Manifest) Page 25 © International Road Transport Union (IRU) 2013

Descriptions Cost (USD) under TIR Carnet Cost (USD) under Arab Transit Manifest TURKEY Formalities fees0$450 Customs Guarantee0 350 USD / TRUCK escorting instead of guarantee. Time needed1 Hour1-2 Days Example II: Transport operation from LEBANON to TURKEY (via Syria) (under TIR System and under Arab Transit Manifest) Results: Costs (guarantees and formalities) 250 USD 1,200 USD + deposit of guarantees Time2,25 Days5,5 Days Page 26 © International Road Transport Union (IRU) 2013

Conclusion W When comparing an international transport undertaken under the TIR procedure or under the Agreement organising Transit Transport, the costs and the time needed for the same transport are almost divided by two when TIR is used, compared to the costs and time incurred under the Transit Transport Agreement. Page 27 © International Road Transport Union (IRU) 2013

Advantages of the TIR System   Reduces the normal requirements of national transit procedures and guarantees;   Goods travel across national frontiers with a minimum of interference and delays;   Enables significant economies to be made in transport costs. Page 28 © International Road Transport Union (IRU) 2013

Secure Transport & Trade Facilitation = Page 29 © International Road Transport Union (IRU) 2013

How to access the TIR Convention - Easy - Simple - Open to all States Members of UN Page 30 © International Road Transport Union (IRU) 2013

VI: Proposed Action Plan for the activation of the TIR System in the LAS Region The Study recommends the implementation of TIR Activation Action Plan summarising the main steps to be undertaken at country level to facilitate the adhesion procedure to the TIR Convention and its implementation. Public-Private Partnership 13 basic steps Collaborative actions State Customs / Transport Minister National Association IRU Page 31 © International Road Transport Union (IRU) 2013

VII: Conclusion & Recommendation Global UN Trade and Road Transport Facilitation Agreements and Conventions should be considered by LAS countries as a primary means to: 1. Eliminate the nonphysical barriers and the high transportation costs across the Arab countries. 2. Connect the Arab markets to the global world economy. 3. Benefit from the facilitations and security offered by the TIR System. Page 32 © International Road Transport Union (IRU) 2013

Towards a Trade & Road Transport Facilitation Strategy for the LAS Page 33 © International Road Transport Union (IRU) 2013

© International Road Transport Union (IRU) 2013