WTO Trade Facilitation Symposium 8-9 Nov 2011

Customs-Related Trade Facilitation in ASEAN

Lee Tiow Yong
Chair, ASEAN Customs Procedures & Trade Facilitation Working Group

Outline
I. II. III.

IV. V.

Overview of ASEAN ASEAN Economic Community Comparison of WTO TF Agreement and ASEAN TF Measures Updates on Key ASEAN Customs-related TF Initiatives Conclusion

Growth in ASEAN Trade

Sources: ASEAN Finance and Macroeconomic Surveillance Database and IMF-World Economic Outlook April 2010, ASEAN Trade Statistics Database as of September 2010

Basic Data of ASEAN Member States

Country Brunei Darussalam Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam ASEAN Land area (sq km) 5,765 181,035 1,860,360 236,800 330,252 676,577 300,000 710 513,120 331,051 4,435,670 Population (thousand) 406 14,958 231,370 6,128 28,307 59,534 92,227 4,988 66,903 86,025 590,844 GDP per capita (US$) 26,486 693 2,364 910 6,822 419 1,750 36,631 3,951 1,120 2,533 (PPP$) 49,411 1,801 4,180 2,350 13,594 1,093 3,525 49,766 8,072 3,111 4,840 Total Trade (US$ million) 9,568 8,887 213,339 2,962 280,221 10,191 83,869 515,617 286,267 125,922 1,536,843

Diversity does not stop ASEAN from pursuing trade facilitation

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Becoming Easier to Trade

Rankings for Trading Across Borders
Country
Brunei Darussalam Cambodia Indonesia Malaysia Philippines Viet Nam Lao PDR Singapore Thailand Myanmar

 2012
35 120 39 29 51 68 168 1 17 -

2010
48 127 45 35 68 74 168 1 12 -

Improvement in rankings for Trading Across Borders in World Bank Doing Business 2012 report Out of the 9 countries surveyed, 6 have improved in their rankings

Source: Doing Business 2012: Doing Business in a More Transparent World, The World Bank, , published on Oct 20, 2011

ASEAN Economic Community



The Declaration of ASEAN Concord II (signed by ASEAN Leaders in Bali, Indonesia, 7 Oct 03) mandated the establishment of an ASEAN Community with 3 pillars: the ASEAN Security Community, the ASEAN Economic Community (AEC) and the ASEAN Socio-Cultural Community The end goal of the AEC is to create a stable, prosperous and highly competitive ASEAN economic region in which there is a free flow of goods, services, investment, skilled labour and a freer flow of capital, equitable economic development and reduced poverty and socioeconomic disparities by 2015 (original date was 2020; subsequently brought forward to 2015) Declaration on the AEC Blueprint was signed by ASEAN Leaders in Singapore on 20 Nov 07 AEC is not a customs union
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ASEAN Economic Community

 

The AEC Blueprint outlines economic integration measures to be implemented by ASEAN Member States The AEC has 4 key characteristics: (i) (ii) (iii) (iv) single market & production base; a highly competitive economic region; a region of equitable economic development; and a region fully integrated into the global economy

Strategic Schedule details the implementation timelines for the measures To monitor compliance, an AEC Scorecard has been developed; detailing timelines, implementation bodies (the ASEAN sectoral committees) and tracking implementation status (at ASEAN-level and national-level)
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AEC Blueprint
Single market and production base 5 core elements  Free flow of goods  Free flow of services  Free flow of investment  Freer flow of capital  Free flow of skilled labour
Key Components o Elimination of Tariffs o Elimination of Non-Tariff Barriers o Rules of Origin o Trade facilitation o Customs Integration o ASEAN Single Window o Standards and Technical Barriers to Trade

In addition, the single market and production base also include two important components, i.e. the priority integration sectors, and food, agriculture and forestry.
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Comparison of WTO TF Agreement and ASEAN TF Measures

WTO TF Agreement Article 1: Publication And Availability of Information ASEAN TF Measures Articles 12 (Publication and Administration of Trade Regulations), 65 (Transparency) and 66 (Enquiry Points) of ASEAN Trade in Goods Agreement (ATIGA) Article 48 (Availability of Information) of ASEAN Agreement on Customs (AAC) (to be signed) Article 62 (Advance Rulings) of ATIGA Article 34 (Advance Rulings) of AAC Article 69 (Review and Appeal) of ATIGA Article 52 (Right of Review and Appeal) of AAC Article 7 (Fees and Charges Connected with Importation and Exportation) of ATIGA Article 55 (Pre-arrival Documentation) of ATIGA Article 10 (Lodging and Registering of the Goods Declaration) of AAC Articles 16 (Release of Goods) and 23 (Customs Duties and Taxes) of AAC
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Article 3: Advance Rulings Article 4: Appeal/Review Procedures Article 6: Disciplines on Fees And Charges Article 7.1: Pre-arrival Processing Article 7.2: Separation of Release from Final Determination and Payment of Customs Duties, Taxes, Fees and Charges

Comparison of WTO TF Agreement and ASEAN TF Measures

WTO TF Agreement Article 7.3: Risk Management Article 7.4: Post-clearance Audit ASEAN TF Measures Article 56 (Risk Management) of ATIGA Article 27 (Risk Management) of AAC Article 61 (Post Clearance Audit) of ATIGA Article 28 (Post Clearance Audit) of AAC

Article 7.6: Authorized Operators Article 59(Authorised Economic Operators) of ATIGA Article 35 (Authorised Economic Operators) of AAC Article 7.7: Expedited Shipments Article 9: Border Agency Cooperation Articles 10.1/10.2: Review, Reduction of Formalities and Documentation Requirements Article 36 (Express Consignments) of AAC Articles 46 (Partnership with Other Governmental Agencies for Coordinated Border Management) and 47 (Joint and Coordinated Border Control) of AAC Article 54 (Customs Procedures and Control) of ATIGA Article 6 (Customs Procedures) of AAC

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Comparison of WTO TF Agreement and ASEAN TF Measures

WTO TF Agreement Article 10.3: Use of International Standards Article 10.4: Single Window ASEAN TF Measures Articles 9 (Goods Declaration) and 38 (Data and Information Parameters) of AAC Agreement to Establish and Implement the ASEAN Single Window (ASW) Protocol to Establish and Implement the ASW Memorandum of Understanding on the Implementation of the ASW Pilot Project Article 32 (Temporary Admission of Goods) of AAC

Article 10.10: Temporary Admission of Goods/Inward and Outward Processing Article 11: Freedom of Transit Article 12: Customs Cooperation

ASEAN Framework Agreement on the Facilitation of Goods in Transit Article 85 (Co-operation) of ATIGA Articles 43 (Areas of Cooperation) and 44 (Mechanisms for Cooperation) of AAC Article 50 (Implementation Arrangement) of ATIGA
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Article 14: National Committee on Trade Facilitation

Structures for Customs Cooperation

ASEAN Finance Ministers Meeting ASEAN Economic Ministers Meeting

ASEAN Directors-General of Customs Coordinating Committee On Customs

Senior Economic Officials Meeting

Customs Procedures & Trade Facilitation Working Group

Customs Enforcement & Compliance Working Group

Customs Capacity Building Working Group

ASW Steering Committee

ASW Technical Working Group

ASW Legal Working Group

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Strategic Plan of Customs Development

Strategic Plan of Customs Development (SPCD) under the Customs Procedures and Trade Facilitation Working Group
       

SPCD 1 SPCD 2 SPCD 3 SPCD 4 SPCD 5 SPCD 6 SPCD 7 SPCD 8

Tariff Classification Customs Valuation Origin Determination ASEAN e-Customs & ICT Customs Applications Customs Clearance Customs Transit Partnership with Businesses and the Trading Community Authorised Economic Operator Programme

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Examples of ASEAN TF Measures

   

ASEAN Harmonized Tariff Nomenclature ASEAN Customs Transit System ASEAN Self-Certification ASEAN Single Window

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ASEAN Harmonized Tariff Nomenclature

Implementation of the AHTN 2007  Implemented by all Member States  Number of tariff lines reduced from 10,689 to 8,300  CEPT and MFN lines included in the AHTN 2007  Supplementary Explanatory Notes to the AHTN also strengthened Review of the AHTN 2007  AHTN Task Force Meetings convened to review AHTN 2007  Develop AHTN 2012 (in line with WCO HS 2012 amendments)  Agreed to use AHTN for intra-ASEAN and extra-ASEAN trade

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ASEAN Customs Transit System

Based on 5 key elements:
1. Fully computerised: electronic messages used for (i) communications between traders and Customs for the lodgement of transit declarations and the discharge of completed transit movements; and (ii) the exchange of transit movement data between customs authorities 2. System open to all "suitable" traders irrespective of their type of business based on an assessment by the Competent Authorities according to minimum agreed criteria based on international best practice 3. Risk profiling scheme: To allow reliable traders "simplifications or exemptions from a range of standard requirements 4. One guarantee valid in all countries to cover the goods throughout the entire journey 5. Single regional customs document for transit
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ASEAN Self-Certification of Origin



23rd AFTA Council in Aug 2009 endorsed the work plan towards the operationalisation of self-certification in ASEAN Exporters able to self-certify that the goods meet the rules of origin criteria and enjoy the preferential treatment Promote utilisation of the ASEAN rules of origin and facilitate trade by reducing the upfront administrative burden of applying for the conventional certificate of origin Form D MOU to implement pilot project signed by participating AEM in August 2010 (Brunei, Malaysia and Singapore) Pilot project commenced 1 Nov 2010

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ASEAN Single Window



Definition of ASW under the ASW Agreement



the environment where National Single Windows (NSW) of Member Countries operate and integrate ASEAN-6 by 2008 ASEAN-4 by 2012 ASEAN-6 in varying phases of implementation: basic system in place, expand to more ports, increase no. of government agencies connected to NSW, add new functionalities, etc ASEAN-4 (CLMV) in the preparatory stages of NSW development: steering committees formed

ASW Agreement Timeline for Implementation of NSW

 

Implementation status of NSW:



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ASEAN Single Window



ASW Pilot Project



Component 1: Study the establishment of the most feasible network architecture; does not involve a central server Component 2: Set up the network infrastructure to implement the Pilot Project Component 3: Evaluation of outcomes of the Pilot Project and formulate recommendations for the eventual ASW 7 AMS as participants, 3 AMS as observers Use of test data for exchanging ASEAN Customs Declaration Document Certificate of Origin Form D

 

 

Development of legal framework agreement for ASW Alignment of ASEAN Data Model to WCO Data Model

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Examples of Technical Assistance from Dialogue Partners

TA Provider:
ASEAN- EU Programme for Regional Integration Support Programme (APRIS)

Areas:
ASEAN Customs Transit System ASEAN Enhanced Air Cargo Processing Model Self-certification of origin Training Needs Analysis Implementation of ASEAN Customs Declaration Document Development of Risk Management Framework ASW Pilot Project Review of AHTN 2007 for the establishment of AHTN 2012 Training course on Risk Management for CLMV Training course on Customs Reform and Modernization for CLMV Regional survey of customs procedures and customs Clearance Capacity building to strengthen implementation of the preferential ROOs ASEAN Cargo Processing Model Various capacity building workshops for customs officials

USAID ASEAN-China Cooperation Fund (ACCF)

Japan-ASEAN Integration Fund (JAIF)

Australia Korea

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Conclusion
 

Strong commitments and clear mandates from Leaders Striking a balance between flexibilities in implementation and achieving uniformity Role of technical assistance Need to progress from capacity building to actual implementation proper follow through from regional commitments to national level implementation Take into account different state of readiness of AMS pilot project approach, differentiated timeline, etc Need strong institutional capacity (ASEAN Secretariat) to support implementation of TF measures

 

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Thank You

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