Customs to downsize NSW trade clearance

A dozen entities may be dropped in trimming the jumbo National Single Window (NSW) mechanism by the revenue authority, but stakeholders feel the desired integrated action for quicker trade clearance may be affected.
Officials say the customs authority under the National Board of Revenue (NBR) has made the move to avert duplication with the Asycuda World (AW) system. The customs has established connectivity with those organizations through AW earlier.
However, economists and trade experts say exclusion of the organisations would disrupt the main motto of the NSW, also known as Bangladesh Single Window (BSW), as integration is the objective of this foreign-aided Tk 5.85-billion project.
AW is an automated system of customs data launched in 1994 with support of the United Nations Conference on Trade and Development (UNCTAD).
NSW or BSW, one of the largest projects of the NBR, launched for establishing interoperability between the agencies involved with clearance of import-export goods which used to be highly time-consuming for the obligation of passing through so many windows.
It is the much-awaited project of both government and private sectors to integrate all of the relevant organizations under a window to reduce goods- clearance time at ports.
A high official of the NBR said the project has been downsized and it might be extended until 2026 next. The project was scheduled to expire in December 2023.
However, cost of the project would remain unchanged despite extension of the tenure.
The government will have to renew the existing loan agreement with the World Bank to extend the project tenure of NSW.
Of the total project cost, the World Bank (WB) is to provide the major part amounting to Tk 5.29 billion while Tk 561 million will be spent from the government coffers.
Officials say overlapping components have been cut down to minimize the project cost.
The customs has sorted out lists of 12 organizations that are already connected with AW. The organizations are: Export Promotion Bureau, Office of the Chief Controller of Imports and Exports, Plant Quarantine, Bangladesh Garment Manufacturers and Exporters Association, Bangladesh Economic Zones Authority, Bangladesh Export Processing Zones Authority (BEPZA), Bangladesh Telecommunication Regulatory Authority (BTRC), Bangladesh Atomic Energy Commission (BAEC), Bangladesh Standard and Testing Institute, Department of Explosives, Bangladesh Energy Regulatory Commission, and the Ministry of Foreign Affairs.
Dr M Masrur Reaz, founder and Chairman of Policy Exchange of Bangladesh, suggests the NBR should reconsider the move for the sake of fulfilling main objective of the NSW project.
"AW and NSW are complementary to each other, not a contradictory system," he says.
The entities that have established interfaces with the AW would be deprived of integration with the NSW if those are excluded, he adds.
"NSW is not a replacement for AW. NSW is a system for ensuring interoperability while AW is data-gathering one to establish interface," he notes.
The entities would be deprived of many of the facilities of interconnectivity if those remained outside of NSW. The NSW aims to establish interconnectivity among the 38 agencies to expedite customs clearance from port, he further says.
Industry-insiders say delay in customs clearance is one of the major reasons for escalation of cost of doing business.
A recent Time Release Study, conducted by the customs authority, found the average time from arrival to release for sea cargo more than 11 days in Bangladesh while it takes seven days for air cargoes and over 10 days for land cargoes.
A field-level customs official, however, says although the NBR signed MoU with 38 organizations, clearance from some of the entities (under the MoU) is required occasionally.
Some two dozen organizations' clearances are regularly required with the customs-clearance processes, he notes.
Automation of customs would not bring the result of NSW if other departments do not digitize simultaneously, he says about the cumbersome process of external trade clearance.
"In many of the cases, customs-assessment process has to wait for other organizations' clearance certificates," he adds.
The officials say the NSW project got pace in recent times and two-stage review completed on October 13, 2022.
The NBR has selected two international firms for software support for the project.
"We have started communication with the ministry of finance and other departments concerned to extend the project tenure of NSW until 2026," the NBR high official said.
The project started on 2019 and scheduled of end on December 2023. It is not possible to end the NSW by then as starting the project work after completion of all procedural formalities would end by March 2023, the official said.
In August 2018, the NBR signed Memorandum of Understanding (MoU) with 38 entities in a bid to implement the NSW project.
On April 25, 2022, the Project Implementation Committee (PIC) in a meeting on NSW discussed rationalization and identification of duplication between NSW and Asycuda World.
In a comparative analysis between AW and NSW, the customs has found some of the proposed modules in NSW already available in AW.
The modules include stakeholder registration, payment, management systems, and data analytics in AW and not required to be incorporated into NSW.
The NSW project aims to benefit 319,000 Bangladeshi traders by reducing time and cost of trading in the fifth year of its operation.
Rizwan Rahman, president of Dhaka Chamber of Commerce and Industry (DCCI), says it is expected that the customs-clearance process will be fully digitalized through NSW.
Once the NSW system is implemented, it will enhance trade operations by eliminating paperwork and reducing time through maintaining up-to-date information, thus ensuring paperless trade at par many developed economies.
"The soaring and irrelevant cost of doing business may be reduced. The average processing time for import is expected to be reduced to 122 hours and for export to 88 hours, benefitting all in the supply-chain process," he says, terming NSW a 'game changer' of foreign-trade growth. Mr Rahman thinks NSW can reduce the customs-related harassment that is escalating day by day.
He feels delay in implementing NSW may cripple country's trade potential and competitiveness.
On AW, he says the system has not been largely operational in all customs houses, which is used currently in 26 houses and off-docks.
He says the release and clearance processes at Chittagong customs house actually rely on reviews of hard copies of documentation due to partial digitization.
He, however, feels if ASYCUDA is fully utilized, it will improve the cross-border trade process and NBR revenue, "easing our economic development".
For this, logistic infrastructures, synchronized engagement of all stakeholders including port, customs and banks, traders are needed.
"A large number of clearing and forwarding agents are not being registered with AW. In the land ports, there is not enough manpower, skills and relevant logistic infrastructure to support the customs automation," he says.
In September 2016, Bangladesh submitted its WTO TFA (World Trade Organization Trade Facilitation Agreement) instrument of ratification. It has committed to implementing 37 measures of facilitating legitimate trade.
The NSW is under Article 10.4, which states: '…members shall endeavour to establish a single window'.

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