Lebanese Customs Project for Single Window 3 -4

Lebanese Customs Project for Single Window 3 -4 March 2011 UN House, Beirut, Lebanon Organized by ESCWA For your convenience this presentation is equipped with a Snooze timer

LEBANESE CUSTOMS NAJM 1993 -2009 WAY FORWARD: BEYOND 2010 Snooze timer: Slide 2 out of 27

LEBANESE CUSTOMS NAJM 1993 -2009 PRESENTATION OUTLINE I Description of NAJM Customs Reform Project II Political Economy of Reform: Stakeholder Square Model and NAJM III NAJM Time line 1993 -2007 IV NAJM as a balancing act between Trade Facilitation and Customs Enforcement V Key Performance Indicators, Lessons Learned.

LEBANESE CUSTOMS NAJM PRESENTATION OUTLINE A reform project in Lebanese Customs focused on automation, modernization, and streamlining of procedures. A model for management of reform projects based on dynamics of interaction between the different stakeholders. Using the model ; how NAJM attempted to balance Trade Facilitation and Customs Enforcement Lessons learned and outlook for future. Snooze timer: Slide 4 out of 27

POLITICAL ECONOMY OF REFORM: THE STAKEHOLDER SQUARE MODEL Snooze timer: Slide 5 out of 27

Political Economy of Reform : The Stakeholder Square Model - Generic Case Political Authority Political Will and Commitment Executing Agency Capacity Building & Sustainability Reform Agenda: What to do & Why? The Reform Program Resource Provider Funding Modalities Technical Service Provider

Political Economy of Reform : The Stakeholder Square Model - Customs NAJM Project Political Commitment: MOF to secure support for Legislative, Procedural & Organizational Change Political Authority: MOF Customs Management to fully engage in reform process Executing Agency: Customs to mobilize skilled and motivated staff for Project MOF to facilitate trade, enhance control, align procedures with international standards Donor Community to provide financing of technology and infrastructure The Reform Program: NAJM Knowledge Transfer: UNCTAD to rely on local expertise in project management and technology development Reform Agenda: Resource Provider: World Bank, etc … Funding and Financing: Technical Service Provider: UNCTAD MOF Managed Pool Fund: World Bank , IMF, Private Sector , EU Association Support , etc Financing UNCTAD ASYCUDA software and other Local Providers

LEBANESE CUSTOMS NAJM 1993 -2009 Project Timeline Snooze timer: Slide 8 out of 27

Lebanese Customs NAJM Project Timeline Chronology of Reforms 1993 -2009

Lebanese Customs NAJM Project Timeline • International Trade Statistics • UNCTAD ASYCUDA / NAJM • Simplified Harmonized System Tariff • Single Administrative Document SAD • Simplified Clearance Procedure • Risk Management • www. customs. gov. lb Snooze timer: Slide 10 out of 27

Lebanese Customs NAJM • • • Snooze timer: Project Timeline Modern Customs Law Online services NOOR Tax Identification Number TIN Post Clearance Audit NAR Regional Training Center with WCO E-Gov initiatives with MOET, Port Authority, CNSS Slide 11 out of 29

NAJM BALANCING ACT BETWEEN TRADE FACILITATION AND CUSTOMS ENFORCEMENT Snooze timer: Slide 12 out of 27

NAJM Balancing Act Trade Facilitation Customs Enforcement

NAJM Balancing Act Trade Facilitation NOOR II – DTI Self Assessment MANAR (e-MANIFEST) 2005 NOOR I – DTI Data Entry Post Clearance Audit NAR 2001 2003 LITE (Website Services) Common Tax Payer Id with MOF 1999 2002 Green Lane Release Risk Selectivity Criteria 1997 Snooze timer: Customs Enforcement 1997 Slide 14 out of 27

NAJM Balancing Act Trade Facilitation 80% Customs Compliance Economy’s high dependence on Int’l Trade: Trade to GDP ratio 70% 60% 50% 40% 30% 20% 10% 0% 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 International Trade Sector represents 60% of GDP Customs contributes 40% to government revenue

NAJM Balancing Act Trade Facilitation In order to achieve its core mission; NAJM must enable customs to provide trade community with timely information regarding their rights, obligations, and to facilitate their customs clearance operations. Snooze timer: Slide 16 out of 27 Customs Enforcement empower customs for enforcing laws and regulations based on intelligent Risk Management which focuses resources on non compliant practices

NAJM KEY PERFORMANCE INDICATORS: STATISTICAL OUTLOOK 1997 -2009 Snooze timer: Slide 17 out of 27

NAJM key performance indicators: 1997 -2009 Indicator ‘ 97 ‘ 98 ‘ 99 ‘ 00 ‘ 01 ‘ 02 ‘ 03 ‘ 04 ‘ 05 ‘ 06 ‘ 07 ‘ 08 ‘ 09 Green Line (%) 9 29 35 43 61 72 69 69 70 67 64 60 61 Effective tariff rate (%) 15 20 23 20 16 24 24 20 18 17 16 15 19 Clearance days 4. 7 3. 9 3. 7 3. 4 2. 7 3. 0 3. 1 3. 0 3. 7 4. 4 3. 3 3. 6 3. 1 Inspection days 1. 9 1. 3 0. 9 0. 6 0. 4 0. 5 0. 6 0. 5 NOOR declarations NA (%) NA NA 50 60 100 100 100 Snooze timer: Slide 18 out of 27

NAJM key performance indicators: 1997 -2009 Green Line Ratio, Clearance Time and Effective Tariff Rate 5. 00 80% 4. 50 70% 4. 00 60% 3. 50 3. 00 50% 2. 50 40% 2. 00 30% 1. 50 20% 1. 00 0. 50 10% 0. 00 0% % Effective tariff rate 2009 2008 2007 2006 2005 % Green Line 2004 2003 2002 2001 2000 1999 1998 1997 Clearance days

NAJM key performance indicators: 1997 -2009 Decomposing Clearance Time throughout period 5. 0 P A T H 3 - Payment and Release Red: Inspection 3 - Release 3. 0 I N S P E C T Acceptance and Registration of Declaration 1 - 3. 5 Green: Selectivity & Risk Management 2 - 4. 0 P A Y days C L E A R A N C E 4 - 4. 5 Data Entry of 2. 0 1. 5 1. 0 R E G 0. 0 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 Slide 20 out of 27 0. 5 1997 Declaration Snooze timer: 2. 5

THE WAY FORWARD A RATIONAL FOR BUSINESS PROCESS REENGINEERING A simplified Customs Clearance process leveraging Lessons Learned, Available Technology and World. Wide Best Practice NAJM 2. 0 Snooze timer: Slide 21 out of 27

SIMPLIFIED CUSTOMS CLEARNCE PROCESS Snooze timer: Slide 22 out of 27

Simplified Customs Clearance: NAJM 2. 0 Trader Zone Customs Zone Green Prepare your Customs Declaration Online NOOR Assess your Declaration to find out how much you need to pay Secure Other Governmental Approvals online e. GOV e-Pay @ Your bank • Immediate Release Blue • Post Clearance Control Yellow • Documentary check Red • Inspection • Physical / X-Ray Release and Exit Link with Port Auth and T/Os

NEW PROCESS ADVANTAGES Snooze timer: Slide 24 out of 27

New Process Advantages • Electronic end-to-end (No paper Underworld) • Clear segregation between Trader and Customs zone (responsibility for delays) • Self assessment • E-Payment through commercial banks • E-Gov integration • Leveraging Technology of ASYCUDAWORLD • Logistics flow (Inspection and release) Snooze timer: Slide 25 out of 27

Take Home Tips in Simplification People run systems; not the other way Don’t dismiss the obvious: Consult then Propose Change Ownership vs. Change Management Incremental Change: Bite as much as you can chew Instead of “Paper-less” speak of “Less Paper” Instead of “Cash-Less” speak of “Less Cash” . . . Everybody did his homework; Time to work together Snooze timer: Slide 26 out of 27

Thank you for your time Ghassan Nasrallah Acting Chief of Service for Customs Computer Center ghassan. nasrallah@customs. gov. lb