Pakistan Custom’s integrated management with new partners: Opportunities and Challenges

Dr Muhammad Nadeem Memon, Director Customs Intelligence-Quetta

Customs is a specialized and professional organization across the globe its dimension and working has evolved gradually in a sophisticated way from manual working to fully automated end to end systems. There was time when Customs implementing national legislations and statutes in isolation without being in direct contact with concerned stakeholder or relevant authority. That’s not in vogue anymore. Customs has to be in contact with all stake holders both governmental as well private entities/organizations both local as well as international hence the challenge was met with automation as technology reduced the distances and increased interface contact with each other as day to day routine.

Modern customs essentially need to have institutional and professional foundations to meet the growing challenges of trade facilitation and control of flow of illicit trade i.e smuggling from across the borders. To achieve these objectives both in short and long term sustained Political Commitment at the highest levels is a key element in the success of customs modernization. The government need to make customs modernization program in consistent governmental policies, priorities, and decisions and that the evolving regulatory environment does not conflict with customs modernization objectives.

Still at some places customs is assigned the main role of revenue collection and less attention is paid to other aspects of customs’ mandate such as border protection, security, and trade facilitation. The coordination in this regard with all other relevant ministries such as the Interior, Industry, Public Health, Agriculture, Transport, Public Safety/Homeland Security etc on the priorities for customs is a gigantic task which has been resolved by customs administrations with the development of electronic single - window solutions where ever required.

Modern customs administrations need to align programs to national fiscal, economic, social protection, and security objectives. Regarding Coordinated Border Management the Cooperation of government agencies, LEAs international, and private - sector collaboration are fundamental to effective border management. Effective relationships with key national regulatory authorities who also have an interest in the border (for example, public health, safety, veterinary, phyto-sanitary, intellectual property, technical standards, environment protection) are critical to deliver efficient and effective services. This is also crucial for matters relating to national security and other related matters. Smuggling through borders is also a bigger challenge to tackle with. In order to address all these issues all OGAs are to be brought to one single electronics platform to be created, established and managed by customs for beeter border control and management.

A modern customs administration to achieve government`s strategic objectives requires a clear policy, legal, and regulatory framework aligned with national legislation; bilateral, regional, and multilateral agreements; and international standards, such as the WCO Revised Kyoto Convention on the Simplification and Harmonization of Customs Procedures and the WTO TFA. This framework should be supported by transparent and predictable customs procedures. In that context, customs administrations worldwide are developing risk management, single- window, advance rulings, authorized economic operators (AEOs), and post- clearance audit programs for their countries to achieve both long-term and short term objectives of the organizations.

In order to achieve these objectives the Customs officials need to have specific knowledge, skills, and behaviors. The customs profession has unique and varied roles, only some of which include customs inspector, customs service officer, import and supply chain security specialist, post-control/clearance auditor, risk targeting officer, intelligence officer, and customs investigator. Senior management is required to address this issue by ensuring recruitment of qualified work force and their proper trainings both before and during job to make them effective and efficient in discharge of their duties in line with both national and international requirements.

Pakistan Customs when analyzed with reference to above theoretical frame work and international best practices has achieved a reasonably well progress in some areas and still a lot more to be done in few areas to stand shoulder to shoulder with other world customs administrations. It started its journey from manual clearances to initially partial computerization and thereafter indigenously developed, web-based computerized clearance system (WeBOC), providing end to end automated customs clearance of import and export goods. The system was developed jointly by the Pakistan Customs and PRAL. Presently WEBOC has over 45,000 registered users i.e. businesses, government departments (Anti-Narcotic Force, Engineering Development Board, State Bank of Pakistan, Ministry of Climate Change, Railways, Income Tax Department, Provincial Motor Registering Authorities, Commercial Banks etc).

Presently, both import as well as exports consignments are cleared through AI based Risk Management System under WeBOC where more than 48% of import and more than 69% of export consignments are cleared immediately through Green Channel (without any intervention), rest are cleared under yellow and red channels depending upon system driven risk profiling with no manual intervention. It is completely paper less system with online manifest filing and online payments modules, working on 24/7 basis,operations based on home developed Risk Management system (RMS) (Green, yellow and Red Channels), ensures Transparency (No surprises for trade, Less interaction with the Customs). All customs processes performed online by customs staff, Communication with the custodians of goods/port authorities through EDI, Online communication with traders and clearing agents, Importer’s representative / clearing agent presence not required, Assessment based on examination reports and images, First-in, First-out (FIFO) based assessment scheme, Online adjudication process, Stricter controls and checks (complete log of all activities) and Less demurrages, less clearing/handling charges.

Its modules include Goods Declaration, Warehousing and module to handle Break-bulk, modules to handle Commercial Transit cargo for Afghanistan, Manufacturing Bonds, Reverse Transit and Clearances from Border Customs Stations. Examination of goods reduced from 100% to 30%.

The new additions to the existing WeBOC system are modules for Anti-Smuggling, E-Auction at sea ports, TIR automation as per international requirements and Carnet de passage which are great value addition towards fully automated computerized clearances.

In line with international commitments Pakistan has ratified the WTO’s Agreement of Trade Facilitation in the year 2015 and therefore under its article 10.4 committed to the establishment of trade related National Single Window (NSW). Pakistan Customs was entrusted as the lead agency which took the challenge with utmost care and responsibility. Pakistan Single Window (PSW) is the logical corollary to fulfill this international commitment. PSW is an integrated digital platform that allows parties involved to trade by lodging standardized information and documents with a single entry point to fulfill all import, export and transit related regulatory requirements. Its main aim is to reduce time and cost of doing business by digitalizing Pakistan’s cross border trade and eliminating paper based manual process. Due to online connectivity with NADRA, PTA and FBR it has done away with 22 documents required for KYC of traders which is now done in an automated environment, so for 53,064 traders are registered at this platform and the number is increasing rapidly. 1.5 Million documents issued by various banks for EIF and EEF per year have been seamlessly replaced with automated issuance of these documents and the trader is no more required to visit bank for this purpose. The registration process with PSW can be done in just 30 minutes. There are more than 74 OGAs registered with PSW. Information requirement of Many OGAs have been simplified and harmonized. Payments of dues of all OGAs have been made possible with online banking transaction as a result both cost and time of doing business has been reduced significantly. Due to these efforts Pakistan has managed to improve its place by 31 spots on the Trading across Border Index as the ranking jumped from 142nd to 111th, a major achievement towards ensuring ease of doing business.

When it comes to anti smuggling Pakistan Customs has also fared well especially during last year. Possible national crises of shortage of essential commodities like sugar, wheat, wheat flour and urea was averted due to strict anti smuggling drive in bordering provinces of Baluchistan and KPK. Other Law Enforcement Agencies (LEAs) were taken on board and joint check posts were established with all required logistical and human resource. Resultantly both inward and outward smuggling was checked effectively with stoppage/reduction in flow of illegal trade of goods and contrabands across the borders. This directly resulted in significant increase in legal trade in the country especially in bordering provinces hence there has great increase in revenue collection at customs station in these provinces.

In addition to above and to meet the challenges of modern times legal and administrative structures have been built by creating separate formations to deal with issues relating to Intellectual property Rights (IPR), Marine, National Nuclear Detection Architecture, IOCO and Post Clearance Audit (PCA) etc to meet future challenges. Customs Academy of Pakistan (CAP) has transformed itself to a world class training facility where training programs are conducted for fresh recruits both officers and officials and refresher courses for the already available work force.

Despite above progress in various fields Customs faces numerous challenges of developing further Risk Management system, fully automated system for auctions, Law & prosecution, development of robust PCA, shortage of required human resources, trainings both local and international for available human resource,budgetary constraints, shortage of investment in IT both hardware & soft wares etc.

Pakistan customs has always risen to the clarion call of the occasion and met the challenges whenever confronted with and is fully capable of doing so in future also to carry the mettle further with its new and traditional partners to play its due role amongst the customs fraternity across the globe.

Copyright Business Recorder, 2024