Reform and modernisation of Bangladesh Customs

Bangladesh acceded to Revised Kyoto Convention (RKC) in February 2013. It is obligated to implement the provisions of RKC by 2016. It is also obligated to implement the provisions of the recently signed WTO Trade Facilitation Agreement (TFA) within the stipulated time.
Balancing the annual revenue target and gradually adopting the provisions of RKC in the present Customs procedure during the transition period is a challenge of the highest magnitude. The National Board of Revenue (NBR) prepared the Strategic Action Plan 2013-2016 at the beginning of 2013. It was updated in November 02, 2014. The Strategic Action Plan 2014-2017 has been prepared with 10 major reform areas.
The Customs wing started working on the legislative amendments of 'The Customs Act, 1969' with the target of incorporating the provisions of the General Annex of RKC. Customs Modernisation Cell was formed in NBR on November 06, 2013. The following activities were undertaken till date:
(1) Legislative review
--- Gap Analysis
--- Regulatory Impact Assessment
--- Draft of new Customs Act, 2014 was prepared (incorporating      
Provisions of General Annex of RKC, SAFE Framework of Standards  
(SAFE FoS) and several provisions of WTO, TFA).
The Draft Customs Act, 2014 (written in Bengali), was approved by the Cabinet on September 15, 2014 in principle and is waiting to be placed in Parliament soon. The new Customs Act, 2014 is expected to come into effect in July, 2016. Formulation of Rules under the new Act is going on.
(2) Formation of standard operating procedures
Five policy-level Standard Operating Procedures (SOPs) were formed and approved by the Finance Minister on June 04, 2014. These have been distributed to field offices for implementation. Teams of officials are working on development of the five operational SOPs of
l Risk Management
l Assessment
l Non Intrusive Inspection
l Physical Inspection and
l Post Clearance Audit
The proposal of forming the Central Risk Management (RM) Technical Unit was approved by the Finance Minister on December 08, 2014. Training of the Intelligence Analysts is continuing. RM Implementation Action Plan has been prepared. Preparation of operational SoP for RM Unit is ongoing. The RM Unit will hopefully become fully functional by the end of this year.
National Valuation Team has been formed and training is ongoing. National Valuation workshops are being conducted by the National Valuation Team. Valuation Implementation Plan has been finalised.
Operational SOPs of NI Inspection and Physical Inspection have been drafted and are waiting to be finalised soon. Needs assessment of four major ports for implementation of NI Inspection has been conducted.
With the technical assistance of the donors, operational SOP of PCA and establishment of PCA Unit are ongoing. Capacity assessment and gap analysis is being carried out. Drafting of Audit Manual is ongoing. Fund for capacity building of human resources of PCA Unit will be negotiated with donors soon.
(3) AEO (authorised economic operators)
Directives were issued on December 09, 2013 for the implementation of AEO Programme. Targeting this, an AEO Unit has been established in NBR. AEO Programme implementation Action Plan has been drafted. Initial training of the officials and representatives of trade bodies have been completed. One international expert on AEO is attached with the AEO Unit for the preparation of the Piloting of the AEO Programme in Bangladesh. Fund for capacity building will be negotiated with donors.
(4) Time Release Study (TRS) of Chittagong Port and Benapole Land Port was conducted in 2013 and 2014 and the two reports are hosted and published in NBR website www.nbr.gov.bd. Implementation of the recommendations of TRS is ongoing. TRS of two other priority ports (Customs House Dhaka and ICD Kamalapur) are ongoing.
(5) ASYCUDA World was implemented with interfacing with the Container Management System (CTMS) of Chittagong Port, thus Pilot National Single Window (NSW) was initiated. Gradually interfacing with other related stakeholders will be carried out. Rolling out of ASYCUDA World to six priority LCSs has been completed. Replicating the same to other LCSs is ongoing. Establishing Connectivity with Central Bank is also underway.
(6) Establishment of National Trade Portal (NTP): Pilot auto-generation of online IRC and ERC was conducted by the Ministry of Commerce in October 2014. NBR, being the major stakeholder, will be connected with NTP soon. The work of establishment of NTP is scheduled to be completed within this year. On-line Licensing Module Guide for NTP has been finalised.
(7) Implementation Status of WTO TFA
l Working Group for Establishment of NSW has been formed. Capacity assessment of important OGAs is ongoing. Funding for gradual integration of important OGAs with ASYCUDA World are being negotiated with donors for NSW.
l Working Group has been formed for establishment of Advance Ruling Unit.
l Establishment of National Enquiry Point (NEP) and for this establishment of an interactive NBR website is ongoing with donor's assistance.
l National Trade Facilitation Committee (NTFC) was formed in May 2013 under the leadership of NBR with Ministry of Commerce as the co-chair. Four Working Groups are working on the followings:
---- Capacity assessment for implementation of WTO, TFA.
---- Identifying bottle necks in the Customs Business Process.
---- Reduction of documents and stock taking of forms and fees.
---- Capacity assessments of OGAs.
(8) Ongoing Modernisation Activities under SASEC (South Asia Sub-regional Economic Cooperation) is ongoing.  
The full implementation of the reforms of the Strategic Action Plan requires allocation of huge fund, political commitment and consensus of all the stakeholders. Commitment of NBR officials is also a major key factor in this regard. Reform brings change in the old ways and there will always be some resistance to change.
NBR held several stakeholder consultation meetings regarding the legislative changes in the new Customs Act, implementation of Risk management, PCA and AEO Programme. From all of these meetings it was evident that stakeholders are not at all aware of all these international best practices and how these could benefit them. In these meetings the trade community agreed on almost all the reform components and emphasised on the implementation of Risk Management as soon as possible since this will make the business process transparent and predictable. NBR needs to hold many more consultation meetings with the external stakeholders to convince them that the AEO Programme will bring about such changes to the Customs business process and entire supply chain that the traders, who want to do business transparently, will benefit from it. There are many exporters of this country for whom the AEO programme could bring about a new era and provide a big advantage in lead time.
The writer is First secretary, Customs Modernisation and Project Management, National Board of Revenue.