Project Title

Capacity Building and Technical Assistance to Implement Programs on Release of Goods 

Project Year

2014   

Project Number

CTI 14 2014A 

Project Session

Session 2   

Project Type

Standard 

Project Status

Completed Project   
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Project No.

CTI 14 2014A 

Project Title

Capacity Building and Technical Assistance to Implement Programs on Release of Goods 

Project Status

Completed Project 

Publication (if any)

 

Fund Account

APEC Support Fund 

Sub-fund

ASF: APEC Supply Chain Connectivity 

Project Year

2014 

Project Session

Session 2 

APEC Funding

125,000 

Co-funding Amount

125,000 

Total Project Value

250,000 

Sponsoring Forum

Committee on Trade and Investment (CTI) 

Topics

Trade Facilitation 

Committee

Committee on Trade and Investment (CTI) 

Other Fora Involved

 

Other Non-APEC Stakeholders Involved

 

Proposing Economy(ies)

Japan; United States 

Co-Sponsoring Economies

Australia; China; Philippines 

Expected Start Date

01/10/2014 

Expected Completion Date

31/12/2015 

Project Proponent Name 1

Kenneth Schagrin (new PO wef 13 August 2015) and Ann Katsiak 

Job Title 1

Director for APEC Affairs / Deputy Chief of Party 

Organization 1

USTR and US-ATAARI 

Postal Address 1

2101 Wilson Blvd, Arlington, VA 22101 

Telephone 1

1-703 5167700 

Fax 1

Not Applicable 

Email 1

Kenneth_Schagrin@ustr.eop.gov and akatsiak@nathaninc.com 

Project Proponent Name 2

Tadatsugu (Toni) Matsudaira 

Job Title 2

Director for International Affairs, Customs and Tariff Bureau 

Organization 2

Ministry of Finance 

Postal Address 2

Tokyo 100-8940, Japan 

Telephone 2

81-3 35813825 

Fax 2

Not Applicable 

Email 2

mof.apec@mof.go.jp 

Declaration

Kenneth Schagrin, Ann Katsiak and Tadatsugu (Toni) Matsudaira 

Project Summary

Allowing goods to be released prior to the final determination of customs duties, taxes, fees and charges reduces time, cost, and uncertainty of moving goods through the region.  Separating the release of goods from the timing of determination of money owed supports a seamless supply chain and promotes just-in-time delivery.  Traders’ costs are reduced, particularly those related to warehouse fees, insurance, and inventory costs.  Economies participating in this project will receive hands on technical assistance at the operational level of their customs agencies to help them accomplish this objective.

Relevance

In 2010, APEC Leaders set forth the objective of a 10% improvement in supply chain performance in terms of reduction of time, cost, and uncertainty of moving goods and services through the Asia-Pacific region. In Bali in October of last year, APEC Leaders recognized that this objective in terms of reduction of time, cost, and uncertainty of moving goods and services through the Asia-Pacific region would require robust capacity building efforts. Leaders agreed to accelerate work to achieve that objective including by advancing the systematic approach to improving supply chain performance and instructed officials to develop a capacity building plan to assist economies, particularly developing economies in overcoming specific obstacles they face to improving supply chain performance.   In that regard, they established an APEC Sub-Fund on Supply Chain Connectivity and encouraged contributions of necessary resources to execute this capacity building plan.  Also at Bali, CTI completed Stage 1 of the systematic approach, when Ministers endorsed the inventories of policy recommendations for all eight Supply Chain Connectivity Framework Action Plan (SCCFAP) chokepoints.   Lead economies are working hard to complete Stage 2, namely diagnostic reports for these chokepoints based on the inventories, which will identify specific performance improvements economies should make to meet our 2015 objective. Reports will be complete in August and the results of these reports will feed into the design of the release of goods technical assistance activities.

Customs is the foremost agency located at the border. It plays a prominent role in the release of goods. Thus, Customs authorities should strive to reduce the complexity of clearance procedures and to limit their information requirements to those that are really necessary. Modern Customs authorities have recognized that streamlining and simplification of clearance procedures is beneficial to importers, exporters and their national economies. Traditionally, Customs authorities do not release goods until all issues related to the transaction are resolved and duties and taxes due are paid, completing the clearance. However, the final clearance can be delayed for reasons, such as pending decision on classification and valuation, missing documents, or appeal process against decision. Such delays have a negative impact on traders’ supply chains, as the goods are upheld in a customs-controlled facility and are not at the disposal of the trader. Allowing goods to be released prior to the final determination of customs duties, taxes, fees and charges reduces time, cost, and uncertainty of moving goods through the region (not just in the economy where the reforms take place).  Separating the release of goods from the timing of determination of money owed supports a seamless supply chain and promotes just-in-time delivery.  Subsequently, traders’ costs are reduced, particularly those related to warehouse fees, insurance, and inventory costs.  The adoption of these reforms to clearance procedures can allow domestic Customs authorities to improve trade efficiency and advancing regional competition. Thus, to achieve the goal of providing efficient and effective clearance procedures whilst at the same time maintaining their traditional task of revenue collection and enforcement activities, Customs authorities see the need to introduce simplified procedures. In order to ensure that these are applied in an effective manner, the procedures have to be reviewed and updated at regular intervals.

This project directly relates to two rank 1 criteria: trade facilitation and supply chain connectivity and performance improvements.

A focus on release of goods directly links to the SCCFAP List of Policy Inventories for Chokepoint Inventory for Chokepoint 4: Inefficient clearance of goods at the border; Lack of coordination among border agencies, especially relating to clearance of regulated goods ‘at the border’. Policy recommendations 1, 4, 9 and 10. The APEC chokepoint 4 report indicates that fourteen economies report that goods are allowed to be released prior to the final determination of duties, taxes, fees, and other charges.

Objectives

The following are objectives of this project:

1. Assist developing economies in implementing programs that facilitate the release of goods prior to final determination of duties, taxes and fees, expediting flow of goods across the region and moving APEC towards its 2015 goal

2. Align with economies’ potential obligations under the WTO Agreement on Trade Facilitation

3. Reach the 2010 goal of 10% improvement in supply chain performance in terms of reduction of time, cost, and uncertainty of moving goods and services through the Asia-Pacific region.

Alignment

This project responds to the 2010 APEC leader’s objective of a 10% improvement in supply chain performance in terms of time, cost, and uncertainty of moving goods and services through the Asia-Pacific region. In order to optimize legitimate trade facilitation, there should be internationally agreed protocols, guidelines and customs practices harmonized and streamlined to the greatest possible extent. Thus by aligning all this, Customs authorities can act as an enabler of trade facilitation along global supply chains. The project aims to benefit Customs authorities, other governmental agencies and the private sector in finding possible solutions for improvements in clearance and logistical matters.

In addition, this project responds to the Leaders call in October 2013 to:

“accelerate our work to achieve a 10% improvement in supply-chain performance by 2015 in terms of time, cost, and uncertainty, while taking into consideration individual economy’s circumstances, including by advancing the systematic approach to improving supply chain performance; And [we] instruct officials to develop a capacity-building plan to assist economies, particularly developing economies, in overcoming specific obstacles they face in enhancing supply chain performance”.

This project can also serve as a mechanism to help member economies implement their WTO Trade Facilitation Agreement obligations. The activity-level terms of reference (TOR) for each recipient economy will be developed with the parameters of the TF Agreement in mind to ensure coherence.

CTI does not have a strategic plan, but in 2013 CTI adopted a work program organized around five priority areas that contribute to APEC 2013 Priorities under the theme of “Resilient Asia-Pacific, Engine of Global Growth.” One of these areas, directly linked of this project, is promoting connectivity.

TILF/ASF Justification

This project will be partially financed by Supply Chain Connectivity Sub-fund, and it will directly support capacity building efforts of targeted developing economies as the activities in this project will be made up solely of tailored technical assistance activities including customs and other government agencies, as well as the trade community.

Beneficiaries and Outputs

Outputs: 

All economies face different challenges when it comes to implement effective programs on release of goods. Following confirmation that a volunteer economy would like to receive technical assistance, the project overseer will work with that recipient economy to develop a detailed terms of reference (TOR) for that element of the project that would be tailored to that economy’s specific needs in release of goods. The TOR will take into account the diagnostic reports for the policy inventories as well as the WTO TF Agreement where applicable. 

This TOR will be structured to include the following elements: targeted/participating agencies and officials responsible for release of goods in the specific economy, timeline for implementation, proposed expert team, specified deliverables and indicators for measuring impact that would like the project directly to APEC’s overall 10% performance improvement goal. The experts participating in the APEC Alliance for Supply Chain Connectivity (A2C2) will provide advice on the development and delivery of these projects volunteering expertise and resources as appropriate. 

Any outcome(s) or next step(s) reports will be developed by project overseers in coordination with the consultant team at the completion of each technical assistance activity. This will be submitted to the developing economy to continue to guide them in program implementation following the TA program, as well as the CTI for the information of other APEC economies. The terms of reference will also include a deliverable for the recipient economy to make concrete changes in response to the technical assistance recommendations and review. 

Examples of scope of TA include capacity-building and awareness-raising on the benefits of the separation of release from clearance procedures, financial guarantee system and the conditions relating to the new procedure for customs and trade. TA could also include providing legal guidance on the revision of an economy’s Customs law in order to provide necessary authority to implement new release procedures. 

Outcomes:  

It is expected that out of the economy-level technical assistance programs- domestic level procedures and capacity for release of goods will either be developed or strengthened as a result of the technical assistance programs. Economies will be asked to report out on the technical assistance programs at CTI meetings as a result of the capacity building efforts. Each TOR developed for a specific economy activity will include outcomes as well. 

Furthermore, the project will provide avenues for APEC economies to assess and create benchmarks on the time taken for the release of goods and to redress the concerns of trade circles pertaining to delays in Customs clearance. This will in turn assist local Customs authorities in addition to private and public stakeholders to respond to trade requirements whereby the operators need to plan ahead for the movement of goods across borders in order to meet tight production schedules and just-in-time (JIT) inventory systems that require forward planning. 

Specifically, we expect that as a result of the TA programs, outcomes will include changes in legal framework, modifications to procedures in customs and other border agencies to expedite release of goods. 

Beneficiaries:  

The international movement of goods involves not only Customs authorities and other agencies, but also the trading communities which include brokers, forwarding and shipping agents, carriers, banks and other intermediaries. Therefore trade entities, in particular are those who are constantly concerned with measures that ensure precision, predictability and faster clearance of goods. Delay in the release of goods is very often attributed to the procedural and documentary requirements by customs. It is in the interest of Customs authorities in particular and the stakeholders in general, to strive towards improving the situation. The primary beneficiaries and stakeholders of this project will include:  

(1) Public sector participants (officials from government ministries), including customs officials and ministries of trade, as well as other government ministries where relevant.

(2) Private sector representatives (from both large and small and medium sized enterprises) with trading interests at the regional and international level. 

More specifics on target participants of the programs will be detailed in the economy-level TORs with volunteer economies. 

Indirect beneficiaries include the business community at large, civil society and consumers, as studies show that implementing release of goods programs can facilitate trade, thus reducing the cost of goods to market and raising the efficiency of clearance. 

The trade community will include customs brokers, importers, exporters and freight forwarders, and we will work with the A2C2 as well as the economy’s customs agency to identify the best mix of counterparts to meet with during the diagnostic phase.

Dissemination

All materials developed for the purposes of training will be made available via the APEC document database. The CTI as well as the Friends of the Chair (FOTC) on Supply Chain Connectivity will receive regular updates on the implementation of the release of goods technical assistance activities. In addition, all activities will be coordinated closely with the SCCP. Stakeholders include APEC governments, multilateral organizations such as the WCO and WTO, the private sector, academia, and non-governmental organizations who are presently engaged in trade facilitation initiatives in the region, and also via the WTO’s Trade Facilitation Agreement.

Gender

Women will be directly and actively involved in the project. Programs will be directed at both women and men involved in customs reforms. If the technical assistance program designed for an economy includes domestic workshops- the project proponents will ensure that the evaluation forms to be distributed at the end of the workshop will include information on gender for disaggregating of data for project assessment and will help in evaluation of specific responses of women and men.

Work Plan

The timeline for each TA activity will be determined as part of the TOR, as noted above. These technical assistance activities will be implemented beginning through 2015. The goal will be to have two economy level activities in the implementation stage by March 2015. The TOR(s), noted above, will be structured to include the following elements: targeted/participating agencies and officials responsible for release of goods in the specific economy, timeline for implementation, proposed expert team, specified deliverables and indicators for measuring impact that would link the project directly to APEC’s overall ten percent performance improvement goal.

The terms of reference document for each economy will be developed in close consultation with the economy’s customs divisions. As an initial step in the process, the project overseer will ask for a brief status update from the economy on the current advance rulings program and a priority list of focus areas for the activity. The TOR will then be developed with these inputs, which should include any relevant data or statistics that will assist in setting a basement for monitoring and evaluation.

Risks

The most significant risk to this project is that developing economies that would benefit do not volunteer to participate in the capacity building programs. To mediate this, project proponents will reach out directly to eligible economies to discuss opportunities for this program and determine if there is interest. On the other side, if there is extensive interest that exceeds the resources of this project, this could also be a risk because there is a finite amount of resources for the economy level programs.  At this point, project proponents would consider submitting a second project proposal for additional funding from the capacity building fund. Project overseers have already begun to discuss the project with potential recipient economies who have indicated preliminary interest, especially because this will also be a priority area in the TFA. This gives the overseers reasonable confidence that there will be demand for the assistance. 

In addition, given the amount of tailoring of capacity programs that each economy will require, the appropriate experts might not be available at the time of the programs, and may require a complex combination of experts. The project proponents will work with a variety of sources to ensure the appropriate experts for each activity. 

Furthermore, while the activity will be aimed at tailoring capacity programs to each economy’s needs, it will be important to emphasize that project overseers will rely on each economy to exercise flexibility and judgment to choose those parts that are relevant to them to tailor a study for their local circumstances. This will allow the accurate identification of the events that are integral to the local clearance process and establishing the interdependencies between them. Taking the trader’s perspective will further help ensure that relevant events are identified. A way to review clearance procedures is to measure the time taken between the arrival of the goods and their release. This facilitates the identification of both the problem areas and potential corrective actions to increase their efficiency. The use of automation and other sophisticated selectivity methods can allow Customs and other border agencies to improve compliance and at the same time improve facilitation for the majority of goods. 

Finally, as the projects are short term in nature, the risk that economies do not have a long term result/impact of strengthening or creating an expedited shipments program does exist. Economies will be expected to report out on the impact and progress of the programs to CTI and the FOTC on supply chain connectivity incrementally following receipt of the technical assistance. If economies do not show progress, this will also be taken into account in the selection of volunteer economies for other supply chain fund projects, which hopefully will serve as additional incentive for economies to ensure ownership of the reforms following these short term programs. 

On timeline, the project overseers will have consistent contact with the host economy to ensure that timelines are met, with monthly status calls and or email discussions to ensure that time does not pass to allow for significant deviation from agreed upon timeline and deliverables. we are already taking this approach with two current capacity building activities under another APEC project and it is proving to be effective.

Monitoring and Evaluation

We expect 2-4 economies to participate in the project. Project overseers will obtain feedback from the economy- government officials at the completion of the programs to gauge impact of the activities. This will be done in the form of a survey for government officials. Indicators will include number of government officials and private sector trained and number of days of technical assistance provided. In addition, we will work with economies to look at implementing a pre and post indicator, such as, time stamp record or the result of Time Release Survey (TRS) or WCO Time Release Study to measure impact of reforms. TRS act as a diagnostic tool, providing concrete baseline data for identifying any bottlenecks in the clearance process and logistics. Customs authorities and the trading community have a powerful common interest in this regard. Therefore, activities that relate to the calculating and recording of the time needed by Customs to release goods can provide pertinent information to guide any necessary process improvements or identify desirable regulatory changes to ensure the effective facilitation of trade. 

It is not possible to know target training numbers until the scope of the project is determined, however most trainings would be in the range of 20-50 government officials. 

Following confirmation that a volunteer economy would like to receive technical assistance (TA), the project overseer would work with that recipient economy to develop a detailed terms of reference (TOR).  The TOR for assistance in release of goods would be tailored to that economy’s specific needs. The TOR(s) will take into account the diagnostic reports for relevant chokepoints and CTI’s endorsed policy inventories.  In addition, TOR(s) will address commitments to the WTO Trade Facilitation Agreement where applicable. For purposes of this project and to determine how the TA model will work in practice, this project will focus on TOR(s) covering at least 1-2 activities in addition to the separation of physical release from fiscal control, which could then lead to additional TA being developed based on the outcomes of these initial projects. 

Examples of scope of TA include capacity-building and awareness-raising on the benefits of the separation of release from clearance procedures, financial guarantee system and the conditions relating to the new procedure for customs and trade. TA could also include providing legal guidance on the revision of an economy’s Customs law in order to provide necessary authority to implement new release procedures.

Linkages

The activities will be closely implemented with the SCCP, given the customs focus. In addition, results and outcomes as well as plans and schedules of the work will be disseminated to the World Customs Organization as well as the World Trade Organization as it links to the Trade Facilitation Agreement.

We will want to build upon the best practices and lessons learned from other APEC CTI programs to develop future projects in this area, including proposing potential technical assistance activities that could respond to the needs identified during the project. Communication of results will be a key factor to maintaining momentum and ensuring future projects are well coordinated and non-duplicative.     

If economies who volunteer for this project are also active on other supply chain capacity building projects, we will look to coordinate efforts and ensure that activities remain discreet and do not duplicate. Where there is overlap, we will look to coordinate trainings so that recipients, have efficiently implemented programs that demonstrate the linkages between topics. 

Stakeholders include APEC governments, multilateral organizations such as the World Customs Organizations (WCO) and WTO private sector, academia and non-governmental organizations who are presently engaged in trade facilitation initiatives in the region, and also via the WTO’s Trade Facilitation Agreement.

Sustainability

The goal is for economies that currently do not have existing/full-fledged programs for the release of goods, but are open to the possibility of exploring the potential benefits and impacts that come with the implementation of these programs, to receive in depth study and if desired training to help an economy launch and/or expand a program. 

The sustainability of the trade facilitation goals supported by this project will largely depend on how these measures affect corridor efficiency. Thus, it will be important to foster greater corridor efficiency, reduce delays and costs at the border. Thus, local economies will have a role in involving Private sector stakeholders (from both large and small and medium sized enterprises) who stand to gain benefits from the project and without which mobilization for further facilitation initiatives would be made difficult. Capacity building at local Corridor Authorities and effective monitoring and evaluation built in the project will contribute to the effectiveness of the measures taken in line with the TOR. In addition strong participation and involvement of private sector stakeholders in the governing bodies of the corridor authorities is another way to insure momentum and sustainability.     

After project completion, economies will be better able to tap into resources available with the WCO and other international organizations as well as within APEC to continue to expand their programs. For example, an economy could use a time release study methodology for expedited shipments to gauge the impact of such a program and communicate those results to the trade community. 

These economy-level activities will be focused, and there will no doubt be opportunities for further work that economies could take, either via separate APEC projects (for example, possibly applying for additional supply chain capacity building funding). This follow on work would like continue to be technical assistance for government officials and private sector, and not more general reporting or diagnostics. These types of programs are involved and it is likely that to have sustainable programs, economies will need to identify follow on activities to further implement and refine these programs in order to ensure the programs established are expansive and sustainable.

Project Overseers

Ms. Katsiak is deputy chief of party of the US-APEC US – APEC Technical Assistance to Advance Regional Integration and has managed and implemented more than ten APEC workshops over the last three years. She has more than 8 years of experience in trade facilitation and economic development issues, and presently provides program management and technical expertise on ASEAN and APEC programs for USAID. Ms. Katsiak holds an MA in International Affairs from George Washington University. 

Ed Brzytwa: Ed Brzytwa is the Director for APEC Affairs at the Office of the United States Trade Representative (USTR). He has negotiated key trade and investment issues on behalf of the U.S. government at the World Trade Organization (WTO), the Asia Pacific Economic Cooperation forum (APEC), and in numerous bilateral contexts.  He represents the U.S. on trade and investment issues in APEC, is responsible for developing, analyzing, and coordinating policy on APEC matters within USTR and in the U.S. government interagency process, and works closely with private sector stakeholders on APEC trade and investment initiatives.  He served previously at the U.S. Department of Commerce in the International Trade Administration.  As a Fulbright fellow, Ed earned a Master’s degree at the Diplomatic Academy of Vienna in Austria.  He also has a Master’s degree in Commercial Diplomacy from the Monterey Institute of International Studies in California and a Bachelor’s degree in The Classics from the College of the Holy Cross in Worcester, Massachusetts.  

Tadatsugu (Toni) Matsudaira is the Director for International Affairs at the Customs and Tariff Bureau, Japanese Ministry of Finance. He is responsible for Customs and trade facilitation policy matters related to regional cooperation and capacity building (APEC, ASEM and ASEAN) as well as international development financial institutes (World Bank, Asian Development Bank, Inter-american Development Bank and African Development Bank). He represented Japan at the WTO TF work between Doha and Cancun Ministerials.  He served previously at the OECD Trade Directorate, WCO Trade Facilitation Sub-directorate, and World Bank International Trade Department and African Transport Unit. He holds post graduate diploma in Development Economics awarded in Warwrick University in UK.

Cost Efficiency

Not Applicable.

Drawdown Timetable

Not Applicable.

Direct Labour

It is envisioned that this project will engage several subject matter experts for in-economy capacity building activities. These experts will be independent consultants and once the economy terms of reference is refined, will be identified. 

Waivers

Not Applicable.

Are there any supporting document attached?

No 
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Project No.

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Total Project Value

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Topics

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Other Fora Involved

Other Non-APEC Stakeholders Involved

Proposing Economy(ies)

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Expected Start Date

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Declaration

Project Summary

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Objectives

Alignment

TILF/ASF Justification

Beneficiaries and Outputs

Dissemination

Gender

Work Plan

Risks

Monitoring and Evaluation

Linkages

Sustainability

Project Overseers

Cost Efficiency

Drawdown Timetable

Direct Labour

Waivers

Are there any supporting document attached?

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