Project Title

Capacity Building and Technical Assistance to Implement Programs on Issuing Advance Rulings - Phase 2 

Project Year

2017   

Project Number

CTI 17 2017A 

Project Session

Session 2   

Project Type

Standard 

Project Status

Project in Implementation   
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Project No.

CTI 17 2017A 

Project Title

Capacity Building and Technical Assistance to Implement Programs on Issuing Advance Rulings - Phase 2 

Project Status

Project in Implementation 

Publication (if any)

 

Fund Account

APEC Support Fund 

Sub-fund

ASF: APEC Supply Chain Connectivity 

Project Year

2017 

Project Session

Session 2 

APEC Funding

100,000 

Co-funding Amount

47,903 

Total Project Value

147,903 

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)

United States 

Co-Sponsoring Economies

Canada; Japan; Malaysia; Viet Nam 

Expected Start Date

01/01/2018 

Expected Completion Date

31/12/2018 

Project Proponent Name 1

Kenneth Schagrin 

Job Title 1

Deputy Assistant US Trade Representative 

Organization 1

US Trade Representative (USTR) 

Postal Address 1

Not Applicable 

Telephone 1

Not Applicable 

Fax 1

Not Applicable 

Email 1

Kenneth_Schagrin@ustr.eop.gov 

Project Proponent Name 2

Ann Katsiak 

Job Title 2

Chief of Party 

Organization 2

US-ATAARI 

Postal Address 2

1777 N Kent Street, 14th Floor, Arlington, VA 22209, USA 

Telephone 2

1-703 5167743 

Fax 2

Not Applicable 

Email 2

akatsiak@nathaninc.com 

Declaration

Kenneth Schagrin and Ann Katsiak 

Project Summary

Advance rulings have a substantial impact on facilitating trade, promoting transparency and consistency in customs operations, while also fostering the participation of small and medium sized enterprises in global commerce. Issuance of advance rulings on tariff classification and the origin of goods in a reasonable, time bound manner will significantly reduce the amount of time, cost, and uncertainty of moving goods and services through the APEC region. This capacity building project will build on technical assistance work, which so far has taken place specifically with Malaysia and Viet Nam, to operationalize and implement technical assistance recommendations from on ground assessments conducted in 2016, in order to fully implement Article 3 of the WTO Trade Facilitation Agreement (TFA).

Relevance

In 2010, APEC Leaders set forth the objective of a 10% improvement, within five years, 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 2013, APEC Leaders recognized that achieving this objective would require robust capacity building efforts. APEC Leaders agreed to accelerate work to achieve the objective, including by advancing the systematic approach to improving supply chain performance. They also instructed officials to develop a capacity building plan and endorsed the inventories of policy recommendations for all eight Supply Chain Connectivity Framework Action Plan (SCAFP) chokepoints to assist economies, particularly developing economies, in overcoming specific obstacles they face to improving supply chain performance. APEC Trade Ministers welcomed this plan in May 2014, alongside of establishing the APEC Alliance for Supply Chain Connectivity (A2C2) - a public private mechanism for stakeholders to formally engage in APEC’s supply chain work.  Since then, five projects are in various stages of development under CTI including advance rulings (AR). Given that APEC economies still fell short on the improvement target and with elements of the TFA remaining to implement for many APEC economies, APEC has finalized Phase Two of Supply-Chain Connectivity Framework Action Plan (SCFAP) 2017-2020, which aims to refocus and deepen work in revised chokepoints where additional improvements can be made on time, cost and uncertainty. In the context of Advance Rulings, the program is aimed at increasing the transparency and uniformity of treatment of goods at the border which creates certainty and predictability for importers. In this regard, this project aims to extend the inventory of policy recommendations for Chokepoint 1-  Lack of Coordinated Border Management and Underdeveloped Border Clearance and Procedures by providing more seamless and uniform border management and clearance of goods, which creates a more transparent and predictable environment in which stakeholders can operate across borders. Thus, a greater ability to operate across borders will enhance supply chains across APEC.

During the period of 2014-2016, the PO has supported three economies under the program – Chile, Malaysia and Viet Nam. Multi-pronged assessments for Chile and Viet Nam were completed in April 2016 and October 2016. This period also included follow up technical assistance to Malaysia, which focused on the development and enhancement of a binding origin rulings program. Results of this program include Malaysia’s implementation of a number of recommendations made by the 2016 assessment report, including completing of a draft legal act to authorize issuance of binding rulings on preferential origin, a draft standing order setting out internal procedures, instructions and forms, and the creation of a rules of origin unit within Malaysia’s customs department.

Looking ahead, the PO will build on the initial success of these economy level projects to support Phase Two of the SCFAP as well as the priorities surrounding implementation of the WTO’s Trade Facilitation Agreement (TFA). With this second phase of technical assistance, the advance rulings project will look to work specifically with Malaysia and Viet Nam at the operational level of their agencies responsible for issuing advance rulings to implement the recommendations presented in the technical assessment reports. In addition, these economy-level technical assistance projects will provide support for proper training and outreach for customs and the trade community to ensure the most effective use and approach to advance rulings programs, both in their utility and implementation, which serves to enhance each economy’s supply chain efficiency and address relevant chokepoint(s) aforementioned above.

This project is directly inline to two Rank 1 criterion: “demonstrate a direct link to promoting regional economic integration via free and open trade and investment”. Specifically, in addition to supporting trade and Investment facilitation, the project focuses on enhancing APEC’s supply chain connectivity and implementation of the SCFAP 2.

Objectives

The objectives of this project are as follows:

1)  Continue supporting volunteer developing economies in operationalizing and implementing technical assistance that establish a reliable and comprehensive Advance Rulings regime. This will involve training government officials in each identified beneficiary economies. Success will be measured through a number of indicators, which might include number of officers trained, processes improved and elements aligned with the WTO TFA. Governments will be equipped to establish AR programs that will provide businesses with greater certainty and consistency of rulings; expediting flow of goods across the region and moving APEC towards 2020.

Align with economies’ potential obligations under (Article 3) WTO TFA particularly in reducing trade costs, and in the area of customs and border management. Trade costs have a direct impact on businesses’ ability to be competitive.

Alignment

Alignment – APEC: In 2014, APEC Leaders agreed in the APEC Connectivity Blueprint for 2015-2025, that: "We will further strengthen the initiatives under the APEC SCFAP by systematically improving supply chain performance through implementing a capacity building plan to assist economies in overcoming specific obstacles within the eight chokepoints of the SCFAP". This was also echoed in the overarching goal of SCFAP Phase Two:  “To reduce trade costs across supply chains and to improve supply chain reliability in supporting the competitiveness of business in the Asia Pacific region”. Trade costs, connectivity and logistics have direct correlation to businesses’ ability to maintain their competitive edge in any economy. This project serves as mechanism to help member economies implement their pending WTO Trade Facilitation Agreement obligations on expediting the movement, release and clearance of goods which are aligned with the SCFAP Chokepoints. 

Alignment – Forum: CTI does not have a strategic plan, but CTI has endorsed the Framework for Phase Two of the Supply Chain Connectivity Framework Action Plan 2017-2020 (SCFAP Phase II)  and is working on action plans to determine how economies will lead on various issues under the framework and which priority issues it will examine.

TILF/ASF Justification

This project will be 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: The second phase of technical assistance will utilize the outputs from the first phase, the assessment reports from Malaysia and Viet Nam, to implement the recommendations developed. One of the main outputs will be a terms of reference (TOR). The TOR will be tailored for each economy’s needs and will include a timeline of activities. The TOR will be based on inputs following status updates from the economies following the assessments and will be based on the economies’ priorities and focus areas moving forward. For example, this could include creating standard operating procedures (SOPs) for staff issuing public guidelines and developing a marketing plan in conjunction with a private sector stakeholder outreach program to promote the use of advance rulings. The TOR will also be based largely on the findings and recommendations from the assessment reports from the first phase in the participating economies. Finally, it will include any relevant data that would be beneficial in establishing a baseline for monitoring and evaluation such as number of rulings issued, number of SOPs, etc. 

Further, the TOR will include any required training and outreach to ensure full implementation of the recommendations in order to enhance each economy’s supply chain efficiency and address relevant chokepoints as previously mentioned. The trainings may involve materials such as workshop reports, tools, and more that would be shared widely through bilateral mechanisms, electronically to other economies, or through APEC forums such as the APEC database, as indicated in a subsequent dissemination section. Examples of the types of trainings are noted above and could also include best practices in AR across other economies, legal frameworks compliant with the WTO TFA, etc. Outreach could include communication materials. Any outcomes or training reports will be developed by project overseers in coordination with the consultant team at the completion of each technical assistance activity. This will be provided 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. 

Outcomes: It is expected that out of the economy-level technical assistance programs- domestic level advance ruling procedures and capacity will either be strengthened as a result of the technical assistance programs in Malaysia and Viet Nam primarily. This will be done specifically through the implementation of the recommendations from Phase 1. Customs and trade officials at the operational level will also be equipped to carry out the recommendations and prepared to effectively utilize the advance rulings programs. If other economies express an interest it will be considered on a case by case basis. 

The overall goal is achieve greater supply chain efficiency and tackle chokepoints. Specifically, outcomes may include changes in legal frameworks to allow Advance rulings on classification and possibly origin and valuation, modifications to procedures in customs and other border agencies to accommodate and apply AR, and increased capacity to apply for an AR by the trade community. Finally, an implemented AR program will increase transparency of customs procedures and classification of goods. Well-implemented advance ruling systems provide certainty to traders and their agents about how their goods will be treated at the time of import, promote consistent application of customs rulings and law, foster trust between customs and trade, and provide a transparent framework that encourages compliance. 

Beneficiaries: Direct beneficiaries will be composed of the specific developing economies who have received TA under this program previously, first and foremost Malaysia and Viet Nam. The project will also be made available to other developing economies at their option. In addition to customs and other government agencies, the project will work with the larger trade community which includes customs brokers, importers, exporters and freight forwarders. Other 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. Those in the business community may especially benefit from the work under this project and thus should be engaged as the work unfolds. The PO will also work with the A2C2 as well as the economy’s customs agency to identify the best mix of counterparts to meet with during the second phase of technical assistance. The PO will take these steps to ensure the proper application of AR in the beneficiary economies.

Dissemination

Gender

Women are becoming increasingly engaged in the international trading system, although there is particularly high concentration of women operating in the informal sector. Challenges experienced at formal border crossings have led many women traders to seek informal routes for cross-border trade. As these women are also consumers and users of public services, it is important to engage women in any changes to Customs in order to understand the impact it can have to women users. 

In this regard, this program will encourage active participation of women in customs reforms to engage in these considerations. The organizers will make a concerted effort to include women who range from experts in customs to government officials to women traders in any technical assistance program designed that includes domestic trainings. Including women traders will be especially crucial to ensure that women’s experiences and challenges are represented in the trainings. Project organizers will aim to have 40% of women as participants in trainings and actively encourage female participation in the nomination process of participants. This target takes into account that women are generally underrepresented in customs professions. 

Project organizers will also 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. This will ensure that the M&E data captures the number of male and female participants. Results will be sex-disaggregated and shared as appropriate.

Work Plan

Project overseers will work with the recipient economies, in close consultation with customs divisions, to develop a detailed terms of reference (TOR). The TOR will be tailored towards the economy’s needs and will include a timeline of activities. The TOR will be based on inputs following status updates from the economies following the assessments and will be based on the economies’ priorities and focus areas moving forward. The TOR will also be based largely on the findings and recommendations from the assessment reports from the first phase. Finally, it will include any relevant data that would be beneficial in establishing a baseline for monitoring and evaluation, including specific indicators. The TOR will take into account the diagnostic reports for relevant chokepoints, the policy inventories as well as the WTO TF Agreement where applicable. 

The TA will be tailored to each economy’s specific needs. The timeline for each TA activity will be determined as part of the TOR and these technical assistance activities will be implemented throughout 2017-2018. Given that these economy level assessments have taken place at least a year or more ago, as an initial step, 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. This will be guided mainly by the specific recommendations for capacity building which were noted in each economy’s technical assessment report. The TOR will be developed based upon these inputs, which should include any relevant data or statistics that will assist in setting a baseline for monitoring and evaluation. It is expected that out of the economy-level technical assistance programs the Project Overseer will implement the capacity building action items planned in the TOR- examples include workshops to provide necessary technical training; conducting outreach for customs and the trade community that can bolster the economy-level use and modernization of advance rulings programs, in their utility and implementation; or modifications to procedures in customs and other border agencies to accommodate and apply AR. 

Illustrative Timeline: 

Time

Tasks

Deliverables

Early 2018

Engage economies and provide status update from the economy on the current AR program and a priority list of focus areas for activity

Status update and priority list

Mid 2018

Development of TOR

Final TOR

Mid-late 2018

Implementation of TOR tasks

Late 2018

Finalize report

Final Report

Risks

The most significant risk to this project would be if the economies that are already involved in Phase 1 (Viet Nam, and Malaysia) lose interest or available resources for their trade and customs government officials to participate and engage in this work. To mediate this, the Project Overseers will take an immediate status check at the start of the project to take stock of what has occurred since the assessments and ensure that the economies are ready to move forward with implementation of the recommendations proposed. In the unlikely chance that targeted volunteering economies are not able to be engaged in this project, this activity will focus on reaching out to other volunteer economies to conduct assessments provided there is sufficient time and budget. Also, given that there have been project delays due to lack of response in implementing action plans, PO will consider setting a deadline of early Q2 whereby no further additional volunteer economies will be engaged. This will be made clear if and when doing outreach to volunteer economies. 

In addition, given the amount of tailoring of capacity programs for the TORs 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. Project organizers will also engage the local government in the beginning stages to ensure they are aware of illustrative timeline to guide the design of the TOR so that the PO can take control of timeline and manage the risk of delays.

Due to the short length of the project, there is a risk that economies do not see the long-term results/impact of strengthening or creating an advanced rulings program. 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. Hopefully this incentive will encourage economies to think critically about what they can do to visibility demonstrate impacts, whether short or long term. In addition, it would be ideal to conduct a post-project evaluation if possible. 

Another risk is that there are other donors doing similar technical assistance for capacity building. The PO will ensure that there is no overlap by reviewing what other donors are doing in this space and looking for any potential areas of coordination or sharing of resources.

Monitoring and Evaluation

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, which includes indicators like “number of US-ATAARI supply chain recommendations implemented by APEC economies”. For trainings of customs and trade officials, organizers will assess the level of knowledge gained by participants by undertaking baseline and end line surveys, if relevant. These will be supplemented by a series of follow-up surveys via email which will be conducted one year after the completion of the trainings. The follow up surveys will serve to evaluate the extent to which participants are able to apply the knowledge, skills, and capabilities gained. The evaluation forms will include information on gender for disaggregating of data for project assessment and will help in evaluation of specific responses of women and men. Surveys will also include indicators that measure the impact of the technical assistance on women such as the number of women activity participating. The results of all data collection efforts will be shared, if relevant.

Further, 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.

Project organizers will aim to have 40% of women as participants in trainings and actively encourage female participation in the nomination process of participants.

Linkages

These activities build on the work implemented in Phase 1 on advanced rulings, specifically on the ground assessments conducted in 2016. Phase 2 will look to implement the recommendations from the assessments. 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 (WCO) as well as the WTO and the private sector. Other stakeholders such as academia and non-governmental organizations who are presently engaged and linked to the Trade Facilitation Agreement will be engaged in these activities. The PO will conduct targeted outreach via email to engage these external stakeholders. The PO will also look to coordinate with other relevant efforts and ensure that activities remain discreet and do not duplicate. 

The PO will also 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. In addition, the PO will continue to leverage the A2C2 to draw on the expertise of supply chain and customs experts from the public and private sectors and the work done under that advisory group. The A2C2 worked with the consultant team from Phase 1 of this work to share findings in August 2017 and the Project Overseers will work to ensure that this communication and collaboration continues under Phase 2.

Sustainability

Phase 2 is in itself very focused on sustainability in that much of the activities will focus on ensuring that officials in each of the developing economies are equipped to carry out the recommendations determined in Phase 1, without further technical assistance needed from APEC. Those officials that will be running the advanced rulings program in their economy will be closely involved in all aspects of this technical assistance so they will be well trained and prepared to implement the program independently. 

In addition, the technical assistance will provide ample resources for the economies to draw on. After project completion, economies will be able to utilize these resources, which might include tools from the WCO and other international organizations as well as within APEC. Further, one way to encourage sustainability of this activity is to emphasize the follow-on surveys that are conducted one year after completion to assess improvements and applicability as a method of creating buy-in to stakeholders. By providing this follow-on survey, the activity can encourage those responsible for improvements to aim to see sustainable results beyond end of project date. 

A final aspect to ensure sustainability is that economies are able to apply for additional supply chain capacity building funding.

Project Overseers

Ms. Katsiak is Chief of Party of the US-APEC Technical Assistance to Advance Regional Integration (US-ATAARI) Project. She has more than 10 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. 

Mr. Kenneth Schagrin is the Deputy Assistant US Trade Representative for APEC Affairs, covering Japan, Korea and APEC Affairs at the Office of the United States Trade Representative (USTR) in the Executive Office of the President. He holds a J.D. from the SUNY Buffalo Law School and an LL.M from American University Washington College of Law.

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.

Project Title

Project Status

Publication (if any)

Fund Account

Sub-fund

Project Year

Project Session

APEC Funding

Co-funding Amount

Total Project Value

Sponsoring Forum

Topics

Committee

Other Fora Involved

Other Non-APEC Stakeholders Involved

Proposing Economy(ies)

Co-Sponsoring Economies

Expected Start Date

Expected Completion Date

Project Proponent Name 1

Job Title 1

Organization 1

Postal Address 1

Telephone 1

Fax 1

Email 1

Project Proponent Name 2

Job Title 2

Organization 2

Postal Address 2

Telephone 2

Fax 2

Email 2

Declaration

Project Summary

Relevance

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?

hdFldAdmin

Project Number

Previous Fora

Secretariat Comments

Reprogramming Notes

Consolidated QAF

Endorsement By Fora

PD Sign Off

Batch

Forum Priority

Committee Ranking Category

Committee Priority

PDM Priority

Priority Within Funding Category

Monitoring Report Received

Completion Report Received

PMU Field 1

PMU Field 2

PMU Field 3

On Behalf Of

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