Regional Trade, Customs, & Border Management Cooperation
The Regional Trade, Customs, and Border Management Cooperation project aims to improve revenue collection and govern the trade of imports/exports by streamlining customs practices and updating border management procedures between Afghanistan and neighboring countries. Making progress on customs harmonization, border processing reform, and information sharing among cross border customs agencies is targeted to meet the following requisites: reducing revenue leakage, achieving comprehensive efficiency gains, reducing transaction costs, accurately valuating goods, and decreasing the waiting time at major border crossings. In addition to primary border crossing points and border management operations in Afghanistan, the Kabul Customs Yards and the Afghan Customs and Tax Academy in Kabul constitute major focal points of the policy reform agenda for customs harmonization and border management. Afghanistan joined the WTO on 29 July 2016 and is currently negotiating new trade-transit agreements with countries in the wider region.
Current Status
Border management innovation efforts and harmonization of customs procedures are beginning to pay dividends in terms of raising the value of goods traded on one hand, and decreasing the customs clearance of goods in Afghanistan and neighboring countries on the other. While measurable progress has been achieved, there is ample room for improving a efficiency. In the context of efforts to negotiate new transit-trade agreements with neighboring countries, the Government of Afghanistan remains committed to reducing tariffs, standardizing customs procedures, and increasing border management cooperation. In 2016 and 2017 alone Afghanistan has signed or is in the process of signing the following trade and cooperation agreements: Customs Co-operation with Iran and Chinese Customs; electronic information exchange with the Tajikistan Customs Authority; and significant progress made toward the signing of agreements with India, Kazakhstan, Pakistan, Russia, Turkmenistan, and Uzbekistan.
Also in 2016 the Customs Law has been amended and thirteen new procedures implemented to improve facilitation of trade and simplify Customs procedures. These include new procedures for the import and export of goods that reduces the number of steps and requirements for traders. In addition, progress has been made in terms of risk management and analysis that will reduce the number of goods subject to “red lane” examination. The TIR procedure has been finalized and implemented; the guide on Transfer of the Released Consignments was finalized; and the Mutual Assistance Agreement with Tajik Customs was signed, which covers the introduction of the TIR Green Corridors (when implemented fully it will reduce the clearance time for the goods exported from and transiting trough Afghanistan). Finally, Trade Agreements have become available for inspection; amendments to the Customs Law have been promulgated and published in the Government Gazette; and revised procedures have been approved and are available for inspection.
One other tangible example of recent progress includes the automation of customs processes in the form of the new “Automated System for Customs Data” system. This project alone has had a measurable impact at the Afghan Customs Department by markedly reducing revenue leakage from custom duties. In 2015, the total revenue collected by the Customs Department (customs duties, BRT levied at point of import, fixed taxes, and other levies) increased by Afs 10.1 billion from 2014, of which Afs 3.3 billion is attributable to the nominal growth of import value, Afs 4.0 billion to new tax measures, and the remaining Afs 2.8 billion to stronger revenue mobilization efforts. Hence, efforts to augment Regional Trade Customs and Border Management Cooperation serves directly to reinforce the activities and objectives contained in Private Sector Development and Infrastructure and Connectivity Development National Priority Programs.
Furthermore, Afghanistan has ratified the Trade Facilitation Agreement (TFA) of the WTO on July 29, 2016 becoming the 90th WTO member and the 9th LDC member of the WTO in doing so. The TFA contains provisions for expediting the movement, release, and clearance of goods including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. It further contains provisions for technical assistance and capacity building in this area. The agreement entered into force on February 22, 2017 after two-thirds of WTO members completed their domestic ratification process. As part of its efforts under WTO membership, Afghanistan has amended a significant number of laws and regulations in order to be in line with WTO agreements and international standards. This represents major progress on domestic reforms including the strengthening of legal frameworks, thus ensuring a more suitable environment for business and investment in Afghanistan.
As part of the business climate reforms, the Government of Afghanistan has recently amended the Travel and Residence Law for Foreign Nationals in Afghanistan, which now allows visas for businesses and investors upon arrival.
| Budget & Funding Status | Support projects including ASYCUDA, BOMNAF, and ATAR inter alia |
| Institutional Partners | Iran, Kazakhstan, Kyrgyz Republic, Pakistan, Tajikistan, Turkmenistan, Uzbekistan and ADB, UNDP, USAID, World Bank, EU, ITC and UNCTAD |
Recommended Actions by RECCA-VII and Beyond:
- In light of Afghanistan becoming the 164th member of the World Trade Organization, work toward implementation of the post-accession strategy, aimed at maximum utilization of WTO membership for realization of Afghanistan’s economic and trading positions at the regional and global levels, implementation of reforms and modernization of Afghanistan’s business environment, through implementation of WTO agreements and Afghanistan’s commitment under WTO. Maintaining policy approaches and technical capacity-building to achieve WTO standards within Afghanistan (such as standardization and alignment of laws, procedures, and requirements for imports/exports as per WTO agreements), and continue to support neighboring countries in their efforts to achieve WTO standards in support of a more liberal and fairly managed trading system within Central, South, and Southwest Asia.
- Strengthen the Customs Department through Human Resource reforms and investment in facilities and equipment, and in other tangible ways: Developing the Gap report on the infrastructure and facilities at the Customs Points should be completed, followed by the 4 years Modernization Plan slated for presentation to donors; and international financial assistance for securing funds for the modernization should be secured.
- Work in the short term toward achieving prevention of smuggling (including illegitimate re-exporting), an exchange of risk intelligence between Customs and other Law Enforcement Agencies, and a reduction of clearance times, costs, and red tape for traders. In the Medium term achieve joint investigations between partner countries, the establishment of one-stop-shop in order to facilitate trade at all international airports and key border-crossings, and the accession to the Revised Kyoto Convention to ensure standardization and modernization of customs procedures. And in the long term establish an international single window for regional partners.