‘Scaling Up Customs Digital Transformation by Embracing a Data Culture and Building a Data Ecosystem’

TEXT: We are living in the age of information technology. This has led to the digital transformation affecting every facet of life interalia public and private sector entities, businesses and enterprises. Modern international trade being no exception has also undergone massive changes and seen greater advances.

It has enormously grown over the years besides becoming highly scientific and competitive requiring compliance with the wide range of standards and rules. Changes in technology and supply chain have placed pressure on government institutions to catch up especially in efficient management of cross-border trade. It is believed that adherence to digital transformation is now the only way out for both governments and businesses alike to stimulate and enable trade-led growth which has been recognized as a driver of global sustainable growth and jobs.

In the above backdrop, Pakistan Customs has to play very proactive and dynamic role since it is the premier agency of the government to tackle the international trade including exports, imports and transit cargo. On one hand, the Customs has to ensure the smooth and un-interrupted flow of the goods in consonance with the principles of ease of doing business, trade facilitation in a transparent manner and on the other, it has to endeavour to achieve that only legitimate cargo enters into and goes out of the international borders viz air, land and sea. Achieving these two objectives requires that Customs adopts digital transformation and embraces a data culture and data ecosystem. The obstruction in ever increasing trade in goods is highly undesirable as it affects the global supply chain besides escalating the cost of goods rendering them incompetitive in international markets. Pakistan Customs through the adoption of these tools can become more practical and efficient than ever before to conduct international business.

It is understandable that the automation and digitization of business processes involved in clearance of the goods along with the ancillary functions such as seizures, contraventions, auctions, warehousing and other related areas cannot afford to be manually processed in today's world whereby trade cannot continue to be conducted along primitive lines. The active co-ordination and integration between entire agencies and stakeholders involved from production to final delivery of the goods along with transportation and port clearances can only deliver the goods. Naturally, harmonized and predictable Customs rules and procedures are essential to smooth trade flows. The availability of databases and eco systems can provide traders with transparent, predictable and speedy clearance of goods, reduce administrative burden through paperless work, and more importantly to combat frauds, crimes. It may also improve governance, reduce corruption, reinforce customs legal reforms and simplify the procedures involved in customs work. The proper databases of traders enable the Customs to examine the containers on the basis of selectivity criteria. Likewise, the valuation database can help assess the goods with proper levy of duty and taxes.

The Customs valuation databases serve as a helpful risk assessment tool for Customs administrations. In the same way, the detailed information regarding Classification, Customs Tariff, Import/Export regulations, Rules of Origin, can guide the traders to predictable and smooth trade. Thus, proper deployment of data culture and data eco system being relevant and practical tools can increase the efficiency and effectiveness of the department. These tools can also be helpful in prevention, detection, and thwarting of customs crimes through the consolidated gathered data besides data sharing and inter-connectivity between cross border regulatory agencies that can ensure proper enforcement and customs controls. The deviations of any kind may have a major negative effect on global trade and economic growth.

The clearance of the goods also requires compliance with the trade regulations and meeting conditionalities of other government departments. Besides, stakeholders such as port authorities, terminal operators, shipping companies, banks and other entities have also a role to play which can hinder in the clearance of cargo. Integration and data sharing such as container data base, electronic cargo tracking system, data portals and online platforms among different agencies working on ports, especially logistics and shipping companies can improve over all trading environment.

Pakistan Customs in the realm of automation and digitization of business processes has done a better job and achieved a moderate success but the replacement of one customs system of clearance with WEBOC System is not sufficient due to the fact that trade in the country specially exports are likely to grow in big volumes in near future.The lack of data bases and absence of data eco system in addition to missing Information Communication Technology (ICT) based coordination and decision making among various regulatory authorities and Customs has only added to the undue costs, time and complications for effecting smooth cross border trade in Pakistan. This necessitates the proper linkages and data exchanges of Customs with shipping companies, border agencies, other tax authorities, though integration of various electronic interfaces &portals. The WCO is therefore pressing hard and placing special emphasis on Customs administration across the globe for co-ordination in the field of data bases and data eco system. It has been observed that Pakistan lags in ease of doing business in trading across border due to large number of regulatory authorities working in silos and relying on paper-based processing resulting in overall inefficiency.

Keeping this in mind, FBR has introduced a major reform initiative in the shape of Pakistan Single Window (PSW) which will provide single platform to traders and to remove the obstacles in management of imports, exports & transit trade and cross border trade regimes and regulatory requirements. Its implementation will enable Pakistan to achieve compliance with WTO’s Trade Facilitation Agreement besides helping to unlock its potential in becoming a hub for trade and transit. It is a significant step towards digital transformation of Pakistan’s cross border trade ecosystem. This program through an ICT based platform envisages creation of simplified and automated regulatory processes related to cross border trade besides establishing Port Community System to facilitate logistics, e-Commerce and adoption of Integrated Risk Management to enhance government’s controls.It will reduce cost and time involved in trading across borders while at the same time enhances accountability and government's control measures and improve collaboration among government agencies and the trade community. Few of the prominent features of PSW includes Unified registration and e-Payment system ; Integrated Risk Management System; Pakistan Trade Portal; Automation of Licenses, Permits, Certificates &Other documents; PCS coverage to major ports, inland ports & land border stations;B2B transactions for trade & logistics; E-Commerce integration etc.

Moreover, in the times of COVID-19 pandemic, it has become critical that Customs establishes the processes and Modules which allow trade transactions to take place without physical interaction among various stakeholders through co-ordination and proactive approach for continued facilitation of the global supply chain. These challenges are possible to be addressed through the digital data bases and solutions.

The Collectorate of Customs, Gwadar realizing the need and importance has already dispensed with the manual system by introducing WeBOC system for clearance at Gabd border. It has also been rolled out at Gwadar Port and Gwadar Free Zone. This initiative has been appreciated by the trade and industry of the region. Efforts are underway to replicate the system at Mand and Panjgur to ensure online clearance of the goods. TIR station at Reemdan adjoining Gabd is also in final stages of approval giving way for transit cargo. In the end, it is hoped that the FBR and Pakistan Customs will resolve to implement the slogan of WCO by scaling up the digital transformation of all the business processes as use of maximum right mix of technology and deployment of tools such as data integration, analysis and data mining along with integrated digital platforms can only assist in handling of large volumes of international trade with minimum cost and time.

Ch Muhammad Jawaid

Collector of Customs, Gwadar

Copyright Business Recorder, 2022