Philippine Bureau of Customs

1. Philippine Bureau of Customs WTO Workshop on Technical Assistance and Capacity Building in Trade Facilitation Geneva May 10 - 11, 2001 Frame 1

2. Philippine Bureau of Customs Our Vision A customs service more responsive to clients’ needs and supportive of government goals, adhering to world’s best practices; one that every Filipino can be truly proud of. Frame 2

3. Philippine Bureau of Customs Our Mission and Objectives The Bureau of Customs, an office under the Department of Finance, is tasked primarily to perform the following functions: a. Assess and collect lawful revenues from imported articles and all other dues, fees, charges, fines and penalties accruing under the Tariff and Customs Laws; b. Prevent and suppress smuggling and frauds upon the Customs; c. Supervise and control the entrance and clearance of vessels and aircraft engaged in foreign trade; d. Enforcement of Tariff and Customs Laws and all other laws, rules and regulations relating to tariff and customs administration; e. Supervision and control over the handling of foreign mails arriving in the Philippines, for the purpose of collecting lawful duty on the dutiable articles thus imported and prevent smuggling through medium of such mails; Frame 3

4. Philippine Bureau of Customs Our Mission and Objectives f. Supervise and control all import and export cargoes, landed or stored in piers, terminal facilities, including container yards and freight stations; and g. Exercise exclusive jurisdiction over seizure and forfeiture cases under the Tariff and Customs laws. Frame 4

5. Philippine Bureau of Customs Philippine Customs Profile for Year 2000 a. Largest revenue collector after Internal Revenue Service; b. Employed and managed 5,258 officers and employees; c. Processed about 600,000 entries (400,000 from consumption and 200,000 from warehousing) and facilitated more than 6 million arriving and departing travelers; d. Surpassed the target collection by 2.0% despite of economic crisis; e. Embarked on some E-commerce initiatives; and f. Implemented the WTO Valuation System. Frame 5

6. Philippine Bureau of Customs Philippine Tax Computerization Project Background Two Contracts: UNCTAD - Development of ASYCUDA++ and Extensions UNISYS - System Integrator Contract Started: 29th June 1994 Contract Ended: 31st December 1999 Frame 6

7. Philippine Bureau of Customs Philippine Tax Computerization Project Scope of Computerization: Eight (8) Sites Office of the Commissioner 3 Metro Manila Ports 4 Outports Frame 7

8. Philippine Bureau of Customs Philippine Tax Computerization Project Implemented by 31st December 1999: Office of the Commissioner 3 Metro Manila Ports 17 Outports Frame 8

9. Port 1. Port of Manila 2. MICP 3. NAIA(w/ 7 satellites) 4. Davao 5. Cebu 6. Cagayan de Oro 7. Subic Date of Implementation January 22, 1996 August 19, 1996 April 21, 1997 October 30, 1997 February 23, 1998 June 26, 1998 March 26, 1998 Philippine Bureau of Customs Sites on ACOS Live Implementation Frame 9

10. 8. General Santos 9. Iligan 10. Mactan 11. Legaspi 12. Batangas 13. San Fernando 14. Zamboanga 15. Surigao November 24, 1998 February 3, 1999 May 13, 1999 August 9, 1999 August 13, 1999 August 16, 1999 September 1, 1999 September 6, 1999 Philippine Bureau of Customs Sites on ACOS Live Implementation Frame 10

11. 16. Iloilo 17. Tacloban 18. Clark (Office Automation only) 19. Baguio 20. CEPZA September 28, 1999 September 29, 1999 October 15, 2000 September 27, 1999 September 30, 1999 Philippine Bureau of Customs Sites on ACOS Live Implementation Frame 11

12. Philippine Bureau of Customs Significant factors contributed for the success of the Computerization Project a. Commitment and political will of the President of the Republic to the Commissioner of Customs in pursuing the project. b. Congenial working relationship between the World Bank and the Philippine Bureau of Customs and contractors (UNCTAD and UNISYS) c. Commitment and seriousness with which the project was pursued by the Bureau personnel in the struggle to elevate the Customs service to world class level. d. Ideal partnership and close working relationship among Customs, its clients and stockholder and Customs allies and supporters. Frame 12

13. Philippine Bureau of Customs Some Strategies Applied 1. The Bureau entered an agreement with the private sector for the establishment of the Entry Encoding Center (EEC) 2. Creation of an ad hoc Risk Management Group 3. Pilot testing of ACOS system (ASYCUDA ++) in one of the major ports before rolling it to other ports 4. Introduction of the Super Green Lane System Frame 13

14. Philippine Bureau of Customs Positive Lessons Learned a. Concrete, visible, unwavering top management support b. Flexible and ingenious strategies c. Involvement of users/stakeholders in all phases of the project d. Hard work, dedication and skills of the major players e. Employed change management programs Frame 14

15. Philippine Bureau of Customs Negative Lessons Learned a. Murphy’s Law - “If anything can go wrong - it will” b. Never be optimistic when it comes to money c. Never be optimistic when it comes to deadlines d. Inflexible work plans e. Slow financial accounting and reporting Frame 15

16. Overall Application Systems Groupings: Object Deconstruction Chart - 5 Year Plan (ISP) --Trade compliance --Import Entry Processing --Customs Valuation Operations Support & Management Systems (OSMS) --Tariff Information Automated Customs Operations Systems (ACOS) --Export Entry Processing --Intelligence Information --Suspense Regimes Monitoring --Revenue Accounting --Passenger Entry Processing --Legal Information CUSTOMS INFOSTRUCTURE --Human Resources Management --Statistical Analysis & Reporting --General Purpose & Ad-hoc Querying --Financial Management --Performance Indicators Monitoring Resources Management & Information Support Systems (RMISS) --General Services Management Management Information & Decision Support Systems (MIDSS) --Projects Monitoring --Issues Monitoring --Records Management --Risk Management RED= priority development Green= on-going development Blue= pending development --Office Automation Frame 16

17. Philippine Bureau of Customs Work Program For 2001 - 2004 Frame 17

18. Philippine Bureau of Customs Work Program For 2001 - 2004 Frame 18

19. Philippine Bureau of Customs Work Program For 2001 - 2004 Frame 19

20. Philippine Bureau of Customs Work Program For 2001 - 2004 Frame 20

21. Philippine Bureau of Customs Technical Assistance from the World Bank was Successful Because... a. Project progress implementation was adequately reported b. Implementation problems were immediately identified, assessed and addressed for resolution c. Sufficient attention was paid to likely development impact, as in the case of document processing and cargo release time d. Advise given to the Bureau were well thought out, while follow-ups on required actions/decisions were consistent e. Loan covenants were enforced and remedies were exercised. An example of this remedy was the creation of working group (e.g. Site Preparations Committee) to assume some of the functions of the undermanned Project Implementation Unit f. The WB showed flexibility in suggesting or approving needed modifications, such as those on the non-computer equipment and roll-out strategy g. The WB and the Bureau had a congenial working relationship Frame 21

22. Philippine Bureau of Customs After the Project Termination • Philippine Tax Computerization Project concluded December 31, 1999 along with the funding assistance from the World Bank loan. • Computerization project of the Bureau will have to sustain itself from funding through the local budget. • Extensive lobbying of additional funds for the maintenance and expansion of the program from the legislative and executive branches of the government. • Maintenance and enhancement of the system handle by BOC internal IT group with some services outsourced to private contractor (e.g. Facility Management). Frame 22

23. Philippine Bureau of Customs What will happen if required budget is insufficient? • Computer systems operation will be limited to six months only; • Progressive shutdown of computerized sites and operations; • Reversion to manual procedures; and • Termination of system development efforts. Frame 23

24. Philippine Bureau of Customs Trade Facilitation Challenge Come up with an effective and speedy customs clearance process for legitimate imports / exports without sacrificing revenue efficiency. Solution . . . • Risk Assessment (Selectivity) • Post-Entry Audit Frame 24

25. Risk Assessment SELECTIVITY Red Physical Documentary Check Yellow Documentary Check Green No Physical and Documentary Check Frame 25

26. Philippine Bureau of Customs Post-Entry Audit System • Accept Face Value of Importation from the Point of Entry • Post-documentary checks of importation • Use as a safety net for recovering “lost” revenue • Deterrent factor for technical smuggling • Back-up for “failures” of the Selectivity Frame 26

27. Philippine Bureau of Customs Other Sources of Funds and Assistance • World Bank • United States Agency for International Development (USAID) • Asian Development Bank (ADB) • Japan International Cooperation Agency (JICA) • Canadian International Development Agency (CIDA) Frame 27

28. Philippine Bureau of Customs Benefits from well-coordinated relationship with donors • More effective and cost efficient implementation of technical assistance project; • Avoidance of duplication of projects/activities; • More transparent working relationship among the donors. • Facilitate project program implementation. Frame 28

29. End of Presentation Frame 29