Ministry of Commerce And Supplies - Enhanced Integrated ...

N T I S2010In the 2005 Trade Facilitation Survey, 4 the private sector ranked inspection and release of goods as the mostproblematic area in conducting trade. The private sector goes on to rank customs valuation of goods and tariffclassification as the next two most important trade facilitation issues to address in Nepal. The need to improvetechnical and sanitary requirements is also cited by exporters. However, if we look specifically at the DoingBusiness survey we see that the time it takes to clear goods through customs (4 days) in Nepal is close to theregional average. A one off-time release study conducted for this strategy found the average clearance timefor ICD Birgunj to be three hours and 41 minutes, with 18 per cent being cleared in less than two hours. So,there appears to be a potential contradiction here; while the private sector considers inspection and releaseof goods to be the weakest area, estimates suggest Nepal is not significantly worse than other countriesin the region in this dimension of customs control. There is an obvious need to collect and report on theperformance indicators of the customs stations as part of a management information system to have a clearpicture on inspection and release times.Taken together, these indicators suggest that priority should be given to addressing trade facilitation issuesin Nepal. They also suggest that, whilst the efficiency and extent of customs services should continue to beaddressed, the biggest gains could be in relation to the substantive time delays and costs associated withinland transportation and handling and document preparation.6.3 Customs Modernization and ReformNepal has made good progress in modernizing its customs regime since the 2003 Trade and CompetitivenessStudy. 5 The number of days required to export and import has fallen by 3 days since 2005 (Table 6.3. Thereare opportunities for Nepal to develop a more effective trade facilitation regime. The Department of Customs(DoC) has recently prepared a new modernization plan. The actions identified in the Modernization Plan2009-13 build on many of the reforms started under the previous 2006-09 plan. The 2009-13 plan is a goodroadmap for making the transition to a more efficient trade facilitation regime. Importantly, the DoC hasestablished a reform and modernization section within the department to oversee the reform efforts. Whatis important is that the modernization plan be implemented and efforts are sustained over a period of time sothat Nepal takes full advantage of the significant time and cost savings that are offered by improved customsprocedures.Table 6.3Decrease in the Number of Days Required for Exports andImports, 2005, 2007, 2009No. of Days RequiredExportsImports2005 2007 2009 2005 2007 200944 43 41 38 35 35Source: World Bank, Doing Business, 2006, 2008 and 20104Author? 2005 Trade Facilitation Survey5Ministry of Industry, Commerce and Supplies, 2003 Trade and Competitiveness StudyNEPAL TRADE INTEGRATION STRATEGY 2010BACKGROUND REPORT163