Executive Summary
The participating ASEAN Member States (AMS) of the ASEAN Framework Agreement on Multimodal Transport (AFAMT) have recognized the potential of multimodal transport for increasing the efficiency of movement of goods across ASEAN. Endeavours to implement the AFAMT, which are on-going, could be supported by adoption of Customs transit measures in general and expansion of the ASEAN Customs Transit System (ACTS) in particular. Customs transit is one of the key elements in the facilitation of multimodal transport and this study elaborates the comparative advantages of a potentially expanded ACTS to support effective multimodal transport operations at a harmonized ASEAN level.
Even though the ACTS is presently restricted to Customs transit operations by road transport, the ACTS could be relatively easily expanded from the legal, procedural and ICT perspectives, to support integrated Customs transit movements under multimodal transport arrangements that include all other modes of transport (sea, inland waterway, rail and air).
The national AMS Customs transit provisions remain largely un-harmonized, thus fragmented national AMS Customs transit procedures are disrupting international transport flows. The benefits of ACTS cannot be fully harnessed if there is no high level of legal harmonization between national AMS Customs transit procedures and the ACTS.
The AMS should consider making a decision to expand ACTS in order to support multimodal transport because the full potential of Customs transit in ASEAN could be realized only with a harmonized concept that ACTS provides. The ACTS is a solution that could overcome fragmented national AMS Customs transit procedures, with improved efficiency of clearance at borders (and potentially at ports) and common options for facilitation of Customs transit, including simplifications for door-to-door services.
The ACTS as a concept could support implementation of AFAMT and act as a catalyst to enhance the efficiency of Customs processing of multimodal operations. This could include, for example allowing two country transit (currently disagreed by AMS under AFAFGIT), and an increase in the number of available transit routes and Customs offices. Currently there are differences in AMS capacities to actually implement simplified Customs transit procedures and Authorised Economic Operator (AEO) simplifications, which this proposal could serve to rectify.
The ACTS is a voluntary system, however the AMS may consider making the system compulsory in future, to address the need to effectively facilitate multi-modal transport. In order to proceed with ACTS expansion, it is necessary to have a clear ASEAN level strategy on harmonization of relevant Customs transit procedures in ASEAN. If AMS Customs authorities decide to proceed with harmonization of Customs transit at ASEAN level, then ACTS should not be considered optional but as a mandatory central catalyst for the facilitation of multimodal transport in ASEAN.
This study, which is entirely based on desk research, should be considered as a pre-feasibility study, offering a general analysis of scope and assumptions, as well as identification of directions for expanding the ACTS to support multimodal transport. The study also identifies a range of potential future surveys, studies and activities related to use of ACTS for multimodal transport operations (See list of recommendations below).
Publicly available information on multimodal transport and Customs transit traffic in ASEAN is limited. Therefore, this study recommends organizing a comprehensive survey and modelling study as a follow up activity. Despite the limited available data this study makes following baseline assumptions. It is estimated that multimodal transport in ASEAN represents about 2-3% of overall ASEAN international transport. Total number of national AMS Customs transit declarations is estimated at 1.7 million annually. Potential number of ACTS declarations is projected to reach about 174 thousand annually (at first 5 years of implementation) and about 20 per cent of them could be potential Customs transit operations with multimodal transport under ACTS. Long-term projections of multimodal and Customs transit in ASEAN depend on growth of international transport. However, the key determinant for long-term projection will be the AMS decision on the extent of harmonization of Customs transit on ASEAN level and dealing with implementation issues relevant for AFAMT/ACTS (legal, procedural and ICT).
The AFAMT and national AMS regulations on multimodal transport do not make any references regarding Customs transit. However, the AFAFGIT provides general legal framework that could link multimodal transport and Customs transit on ASEAN level. The AFAFGIT does not make any specific references to multimodal transport, however Protocol 1, Protocol 2 and Protocol 7 are general (not specifically related to road transport) and they could cover Customs transit in multimodal transport. Existing legal framework provided by Protocol 7, is sufficient for implementation of multimodal transport only in limited cases of accompanied Roll on / Roll of (Ro-Ro) transport (e.g. road/sea etc.). Amending Article 22 of the Technical Annex of Protocol 7 is recommended to expand other options for multimodal transport (e.g. unaccompanied Ro-Ro, Lift on / Lift off (Lo-Lo), packages, etc.). Specific procedural guidance for implementation of ACTS that covers multimodal transport has to be developed on ASEAN level and agreed between AMS Customs authorities.
The development of an expanded ACTS system could be organized in phases, for example by starting immediately with road-sea-road (accompanied Ro-Ro) multimodal transport that requires minimal changes of the system and may include Brunei Darussalam, Indonesia and Philippines, and to gradually expand with unaccompanied Ro-Ro and Lo-Lo shipments and other modes of transport (e.g. inland water/ rail / air).
The key elements for successful implementation of scenarios for multimodal transport include seamless organization of transfer from one means of transport to another, in different modes of transport (new role for Customs office of transfer under ACTS to be established) and significant progress in capacities to implement simplified procedures (ATT for transit / AEO for import/export).
The ICT component is a core part of ACTS that enables processing of Customs transit declarations and electronic information exchange of messages in key steps of Customs transit procedure on ASEAN level. The ACTS can presently process road transport only; however, it could be easily extended to support Customs transit in regional multimodal transport and connect with AMS national systems. Multimodal transport operators (MTO), registered as a principal could initiate Customs transit movement by preparing and submitting a Customs transit declaration using ACTS. Key specific data groups (elements) to be added / expanded in the Customs transit declaration, relevant for multimodal transport in ACTS and potential new messages are identified in this study. Estimation of costs for upgrading of ACTS and quantification of numerous ACTS benefits should be done as a follow up activity of this study.
Risk management is a cornerstone of modern and efficient Customs operations that enables appropriate level of Customs control to be conducted and at the same time to facilitate the clearance for compliant traders. The ACTS provides ASEAN level solution for management of risk in Customs transit that could cover multimodal transport as well. The ACTS risk management system (RMS) could complement different national AMS RMSs in use. Due to the modular structure of ACTS RMS, the AMS may decide to create different variations of hybrid RMSs as may be appropriate.
The national AMS Customs legislation substantially differs with regard to requirements for submission of pre-arrival (pre-departure) information and it mainly include traditional entry/exit manifests. This study recommends considering Introduction of new security entry/exit summary declaration (ENS/EXS) in AMS, in harmonized and coordinated manner. Further, more a harmonized ASEAN concept on pre-arrival (pre-departure) processing and use of multilayer risk management could be considered.
The ACTS and ACTS RMS could be potentially expanded to cover security ENS/EXS processing however, the scope of entry/exit control for safety and security goes beyond Customs transit and it may include all imports/exports. Therefore, such expansion of ACTS could be considered beyond the scope of AFAFGIT and Protocol 7. The concept for development of new ACTS functionality for entry/exit control processing should be formally agreed between AMS. The main elements of the concept for development of new ACTS functionality for entry/exit control is elaborated in this study. If the AMS accept this general concept, subsequent comprehensive feasibility study on development of ACTS ENS/EXS module may be conducted in line with the guidance provided by AMS.
The ACTS is compatible with the Coordinated Border Management concept because it provides efficient electronic information exchange on Customs transit among participating AMS Customs authorities from departure to destination. The ACTS implies coordination and cooperation between Customs and transport authorities (e.g. regarding ASEAN Goods Vehicle Cross Border Permit – AGVCBP) and between Customs and Other Government Agencies (OGA) responsible for issuing various certificates/permits for restricted goods.
It is recommended to consider options for automation of interactions between Customs authorities, transport authorities and OGA under ACTS, by developing a new ACTS Transport Management (and Monitoring) Module and/or developing interfaces and linkages between corresponding IT systems of OGA and/or AMS national single widows.
Automation is one of the key factors in any Customs integrity programme. The ACTS is sophisticated automated tool for processing of Customs transit that entirely fulfils all recognized attributes of automation against corruption.
In order to address coordination and communication challenges for involvement of all stakeholder concerned, the AMS Customs authorities (preparing for ACTS implementation and potential expansion of ACTS to include multimodal transport), should endeavour to reach out to large number of relevant participants from business sector, as early as possible. If the ACTS is further expanded to include multimodal transport, additional stakeholders from the private sector will be included (e.g. multimodal transport operators, carriers in maritime/river/air/railway transport, service operators at ports, airports, operators of container terminals, warehouses etc.).
The coordination at national AMS and/or ASEAN level with regard to ACTS (including potential expansion to multimodal transport) may result in various specific activities initiated and agreed such as discussion on concept for expansion of ACTS, awareness and training programmes, improvements in organization of ACTS formalities, introduction of security programmes and wider use of simplifications in ACTS, support in development of interfaces and linkages between ACTS and ICT systems of private sector stakeholders, port community systems etc.
It is recommended to introduce ACTS related performance monitoring system in order to assess the present situation and to evaluate the effects of ACTS implementation (including potential expansion to cover multimodal transport). The AMS are encouraged to use the available tools such as WCO Time Release Study and UN ESCAP Time/Cost Distance methodology to strengthen their performance monitoring mechanisms (in particular with regard to ACTS implementation). The key elements of the concept for introduction of ACTS related performance monitoring system are presented in this study (e.g. defining joint objectives, agreement on detailed Key Performance Indicators (KPI), methodologies and tools to be used, preparation for implementation, and actual implementation of ACTS related performance monitoring system).
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