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
Presentation Outline
Customs Reform Project
Overview of Project output and activities
The Main Achievements
The Next Steps
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
Diagnosis: Causes
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Outdated legislative and regulatory framework
Cumbersome procedures and high clearance costs for
importers
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Diversity and complexity of duty relief schemes
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Inadequate IT resources and systems
High average tariff rates and complicated tariff structure
Outdated organizational structure, training strategy and
staffing policy
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
Conceptualization Phase
Reform Principles
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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
Project Preparation Phase
2002
Activities
Q1
Establish Advisory Committee
Appoint Project Director
Appoint Project Team
Develop Plan of Action
Secure Sources of Fund
Q2
Q3
Q4
Project Organizational Structure
Minister of Finance
Steering
Committee
Advisory Committee
Customs commissioner
Supreme Committee for law
Project Director
Financial & International
Cooperation expert
Assistant Director
Technical
Secretariat
Legislation
Human Resources
IT
Procedures
IC
Tariff Policy
Anti- Smuggling
Duties Relief/Exemptions
E- COMMERCE
Valuation
Infra
structures
Customs Reform Project
Clearance Costs/Benefits to National Economy
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
Preparation
Conceptualization
Problem
Identification
2001
Cost of
Clearance
2002
2003
2004
2005
Customs Reform Project
Reform Master Plan (Living Plan)
Output
New Customs Law
Streamlined/Simplified Procedures
Accurate Implementation of Article VII
Simplified Duties Relief Schemes
Restructured Organization
Full IT Support in all Ports of Entry
New Consolidated Tariff Structure
2002
2003
2004
2005
2006
Customs Reform Project
Role of the CRU
IMF
Ministry of Finance
Technical Assistance/Coordination
with Other Donors
Ministry of Foreign Trade
Ministry of Transportation
CRU
EU
Ministry of Industry
Other Ministries and
Government Agencies
Trade Community
Coordinate
USAID
Implement
Monitor
Financial/Technical Assistance
(TEP-A, TEP-B, and TEP-C)
Financial/Technical Assistance
(Assistance for Customs and Trade
Facilitation (ACTF) Project)
WB
The world Bank
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
Trade Community
Customs Commission
/Project Team
Donor Agencies and
International Community
Implementation Phase
Legislation Committee
2002
2003
2004
2005
June 2005
Activities
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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
Implementation Phase
Procedures Committee
2002
2003
2004
2005
June 2005
Activities
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Operate the Customs Office in the MCTC on a pilot basis
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Operate the Customs Office at Ein el Sokhna Port and test new
procedures
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Develop a risk management system
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Develop post-clearance audit
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Develop valuation database
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Centralize cashier functions and develop electronic means of payment
Implementation Phase
Exemptions and Special regimes Committee
2002
2003
2004
2005
June 2005
Activities
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Streamline temporary admission and duty drawback procedures
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Issue relevant decrees to enhance duty relief schemes
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Examine possible means to rationalize exemptions
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Conduct an analysis of customs systems applicable to free zones
Implementation Phase
Information Technology Committee
2002
2003
2004
2005
Dec. 2005
Activities
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Automate all customs procedures at all ports of entry
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Develop regional interfaces to connect all ports of entry
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Provide MCTC IT support
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Provide Ein el Sokhna IT support
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Centralize data entry and cashier functions
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Establish call centers, kiosks, and video conference facilities
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Launch a dynamic website and EDI systems
Implementation Phase
Human Resources Committee
2002
2003
2004
2005
Dec. 2005
Activities
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Establish new departments and functions (e.g., risk management
unit, post-release unit)
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Review the current structure and consider consolidating logically
related functions
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Develop new incentives and promotion systems
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Train MCTC staff and regular customs staff on new procedures
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Develop the curriculum and facilities of the Customs institutes
Implementation Phase
Tariff Policy Committee
2002
2003
2004
2005
June 2005
Activities
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Examine inconsistencies in the current tariff structure
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Design alternative tariff structures
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Study the impact of reducing tariff rates on revenues
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Publish the integrated tariff on compact disks
Implementation Phase
Valuation Committee
2002
2003
2004
2005
June 2005
Activities
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Adherence to the WTO Valuation Agreement
Valuation database
Trained customs staff
Trained Stakeholder
Implementation Phase
Information Center Committee
2002
2003
2004
2005
Oct. 2005
Activities
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Develop system for Valuation database
Risk management database
Customs information available electronically
Implementation Phase
Anti-Smuggling Committee
2002
2003
2004
2005
June 2005
Activities
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Inspection handbook
Intelligence gathering methodology
Redistribution of security resources
Database of enforcement actions
IT Support to
Modernized Ports
Customs Web Site
Customs Encyclopedia
Valuation Manuals
Pre-arrival release
Risk Management
System
Exemptions
Manuals
Procedures Manuals
Workshops
Quick
Action teams
Training staff in the
customs valuation field
Export
encyclopedia
Participating
in developing
Damietta
Performance and
programs balances
system in the
Egyptian customs
Interactive Integrated Tariff
MFN Tariff Rates
Insert
10-Digit HTS Code
Preferential Tariff Rates
prices
Laws and regulations
Restrictions and Prohibitions
Procedures before Reform
in the Egyptian Ports
1
Importer premises
Registry
Record#46
Customs Complexes
2
Physical
Inspection
and
competent
controls
E-Data
Entry
Through
Advanced Center
3
General Organization
for export & import Control
GOEIC
Payment
Cashier
Release
of Goods
Procedures
at modernized ports
1
Data entry by the Importer
2
physical
inspection
and
Competent
controls
EDI*
Front window
GOEIC
Release
of
Goods
E-PAYMENT
THROUGH
THE BANK
One-Stop Shop
* EDI: Electronic Data Interchange
Customs
port
3
Pre-arrival Process
3
Payment and
review of release
order
2
Classification
and calculation
of duties
4
Arrival of Goods
physical inspection
and Competent
controls
1
Lodgment of
declaration and
presentation of
documents
MCTC
Prior to the
arrival of goods
5
Contact point
at port of entry
Release of
goods
(MCTC)
Model Customs and Tax Center
Regional Offices
MCTC
Customs
Commission
Income Tax
Department
Sales 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
Sohkna Port /MCTC Procedures
Dekheila Alexandria
Port
Port
Damietta
Port
Port Said
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
Customs Web Site
Activation of the Customs
Web Site
Clients Service
Model Customs Center
(One stop shop)
Modernization of
Dammitta Port
& Cairo Cargo
Terminal
Publishing of Encyclopedia
Publishing
of Manuals