Customs Reform Project

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• Arab Republic of Egypt
• Ministry of Finance

Customs Reform Project
17-20 April, 2004
Presented by
Adel M. Radwan Director of the Customs Reform Unit
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Presentation Outline
Customs Reform Project Overview of Project
output and activities The Main Achievements The
Next Steps
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Diagnosis Symptoms

• High transaction costs for importers with
  negative effects on external competitiveness
• Imperfect compliance with multilateral agreements
  and international conventions
• Relatively high number of disputes between
  Customs and the trade community
• Limited use of IT in different sites
• Ineffective duties relief schemes and customs
  systems
• Customs administration burdened with bureaucracy

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Diagnosis Causes

• Outdated legislative and regulatory framework
• Cumbersome procedures and high clearance costs
  for importers
• Diversity and complexity of duty relief schemes
• High average tariff rates and complicated tariff
  structure
• Inadequate IT resources and systems
• Outdated organizational structure, training
  strategy and staffing policy

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Our Vision

• Integrate Egypt into the global economic system
  through full compliance with multilateral and
  bilateral agreements
• Create partnership between Customs and the trade
  community
• Enhance private sector external competitiveness
  through reducing transaction costs

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Conceptualization Phase
Reform Principles

• The legislative framework should be clear,
  flexible, and transparent
• Ports should be gates rather than warehouses
• The importer/broker should share responsibility
  with Customs
• Selectivity/risk management techniques should be
  used in document verification and physical
  inspection
• Post-release audit and severe sanctions should
  replace excessive controls
• Customs should operate in a fully automation /
  paperless environment
• Tariffs should be generally non-prohibitive and
  easy to apply

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Project Preparation Phase
Activities
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Project Organizational Structure
Steering Committee
Minister of Finance
Advisory Committee
Customs commissioner
Supreme Committee for law
Project Director
Assistant Director
Financial International Cooperation expert
Technical Secretariat
Legislation
IT
Human Resources
Procedures
IC
Valuation
Tariff Policy
Duties Relief/Exemptions
E- COMMERCE
Infra structures
Anti- Smuggling
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Customs Reform Project Project Cycle
Direct/Indirect Benefits to National Economy
Customs Reform Project spans a period of 3-4
years from late 2002 until 2005/2006.
Post-Project Evaluation
Implementation/Monitoring/Interim Evaluation
Clearance Costs/Benefits to National Economy
Preparation
Conceptualization
Problem Identification
Cost of Clearance
2002
2003
2004
2005
2001
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Customs Reform Project Reform Master Plan
(Living Plan)
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Customs Reform Project
Role of the CRU
IMF
Technical Assistance/Coordination with Other
Donors
Ministry of Finance
Ministry of Foreign Trade
CRU
EU
Ministry of Transportation
Financial/Technical Assistance (TEP-A, TEP-B, and
TEP-C)
Ministry of Industry
Coordinate
Other Ministries and Government Agencies
USAID
Financial/Technical Assistance (Assistance for
Customs and Trade Facilitation (ACTF) Project)
Implement
Trade Community
Monitor
W B
The world Bank
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Concluding Remark
Participation of all Partners and the Support of
the GOE are the Keys to Success
Government of Egypt
Legal Experts/Customs Law Legal Committee
Advisory Committee
Customs Commission /Project Team
Trade Community
Donor Agencies and International Community
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Implementation Phase
Legislation Committee
June 2005
Activities

• New Customs Law
• Customs Code of Ethics
• Explanatory Notes for new law
• Legal references for Procedures manuals
• Review of inconsistencies and simplification of
  customs related regulations

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Implementation Phase
Procedures Committee
June 2005
Activities

• Operate the Customs Office in the MCTC on a pilot
  basis
• Operate the Customs Office at Ein el Sokhna Port
  and test new procedures
• Develop a risk management system
• Develop post-clearance audit
• Develop valuation database
• Centralize cashier functions and develop
  electronic means of payment

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Implementation Phase
Exemptions and Special regimes Committee
June 2005
Activities

• Streamline temporary admission and duty drawback
  procedures
• Issue relevant decrees to enhance duty relief
  schemes
• Examine possible means to rationalize exemptions
• Conduct an analysis of customs systems applicable
  to free zones

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Implementation Phase
Information Technology Committee
Dec. 2005
Activities

• Automate all customs procedures at all ports of
  entry
• Develop regional interfaces to connect all ports
  of entry
• Provide MCTC IT support
• Provide Ein el Sokhna IT support
• Centralize data entry and cashier functions
• Establish call centers, kiosks, and video
  conference facilities
• Launch a dynamic website and EDI systems

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Implementation Phase
Human Resources Committee
Dec. 2005
Activities

• Establish new departments and functions (e.g.,
  risk management unit, post-release unit)
• Review the current structure and consider
  consolidating logically related functions
• Develop new incentives and promotion systems
• Train MCTC staff and regular customs staff on
  new procedures
• Develop the curriculum and facilities of the
  Customs institutes

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Implementation Phase
Tariff Policy Committee
June 2005
Activities

• Examine inconsistencies in the current tariff
  structure
• Design alternative tariff structures
• Study the impact of reducing tariff rates on
  revenues
• Publish the integrated tariff on compact disks

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Implementation Phase
Valuation Committee
June 2005
Activities

• Adherence to the WTO Valuation Agreement
• Valuation database
• Trained customs staff
• Trained Stakeholder

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Implementation Phase
Information Center Committee
Oct. 2005
Activities

• Develop system for Valuation database
• Risk management database
• Customs information available electronically

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Implementation Phase
Anti-Smuggling Committee
June 2005
Activities

• Inspection handbook
• Intelligence gathering methodology
• Redistribution of security resources
• Database of enforcement actions

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The Achievement by the CRU First Year
IT Support to Modernized Ports
Customs Web Site
Customs Encyclopedia
Valuation Manuals
Pre-arrival release
Exemptions Manuals
Risk Management System
Procedures Manuals
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Workshops
Quick Action teams
Training staff in the customs valuation field
Export encyclopedia
Performance and programs balances system in the
Egyptian customs
Participating in developing Damietta
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Interactive Integrated Tariff
MFN Tariff Rates
Preferential Tariff Rates

Insert 10-Digit HTS Code
prices
Laws and regulations
Restrictions and Prohibitions
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Procedures before Reform in the Egyptian Ports
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Importer premises
Registry Record46
E-Data Entry Through

Customs Complexes
Physical Inspection and competent controls
Advanced Center
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3
Payment
NO COORDINATION
General Organization for export import
Control GOEIC
Cashier
Release of Goods
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Procedures at modernized ports
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Data entry by the Importer
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physical inspection and Competent controls
EDI
Front window
port
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Customs
GOEIC
Release of Goods
E-PAYMENT THROUGH THE BANK
One-Stop Shop
EDI Electronic Data Interchange
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Pre-arrival Process
MCTC
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Lodgment of declaration and presentation of
documents
Classification and calculation of duties
Payment and review of release order
Prior to the arrival of goods
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Contact point at port of entry
Arrival of Goods
Release of goods
physical inspection and Competent controls
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(MCTC) Model Customs and Tax Center
Regional Offices
MCTC
Customs Commission
Sales Tax Department
Income Tax Department
Advantages
Test new procedures (e.g., pre-processing of
import documents and risk management techniques)
Coordinate with Sales and Income Tax departments
in post-clearance audits
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Sohkna Port /MCTC Procedures
Damietta Port
Port Said Port
Dekheila Port
Alexandria Port
Cairo Airport
MCTC
Sokhna Port
Operational
Short Term
Medium Term)

• Electronic linkages with the trade community and
  other agencies
• Pre-processing of import documents
• Electronic means of payment

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Customs Web Site
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Next Steps
Publishing of Encyclopedia
Activation of the Customs Web Site
Model Customs Center (One stop shop)
Modernization of Dammitta Port Cairo Cargo
Terminal
Publishing of Manuals
Clients Service
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Thank You