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Implementation of GMS CrossImplementation of GMS Cross--Border Transport Agreement (CBTA) Border Transport Agreement (CBTA)

YushuYushu FengFengSenior Regional Cooperation EconomistSenior Regional Cooperation Economist

Asian Development BankAsian Development Bank27 May 201027 May 2010

yushufeng@adb.rogyushufeng@adb.rog

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ContentsContents

I. What is covered by CBTAI. What is covered by CBTAII. CBTA implmentation: II. CBTA implmentation: Achivements, ChallangesAchivements, Challanges

III. GMS Customs Transit SystemIII. GMS Customs Transit SystemIV.IV. CBTA operation along EWCCBTA operation along EWC

“ If commodities do not cross the border, soldiers will cross the border."

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I. What is covered by CBTA?I. What is covered by CBTA?

No Go No Go ------ To Go:To Go: trucks, drivers and goods could go to any GMS countrytrucks, drivers and goods could go to any GMS countryOpen corridors (exchange traffic rights)Open corridors (exchange traffic rights)Trucks (GMS road transport permit + bilateral permit)Trucks (GMS road transport permit + bilateral permit)Drivers (mutual recognize driverDrivers (mutual recognize driver’’s license) s license) Goods (dangerous goods, perishable goods) Goods (dangerous goods, perishable goods)

TransloadingTransloading ------ Go Through:Go Through: goods with trucks could transit without reloadinggoods with trucks could transit without reloadingCustoms Transit System: harmonized transit documents Customs Transit System: harmonized transit documents Issuing/guaranteeing organizations in operation Issuing/guaranteeing organizations in operation

Long Time Long Time ------ Short Time:Short Time: shorten clearance time at border by facilitatingshorten clearance time at border by facilitatingSingle window inspection (in one country, by CIQ)Single window inspection (in one country, by CIQ)Single stop inspection (two countries, by CIQ)Single stop inspection (two countries, by CIQ)Risk management (by CIQ)Risk management (by CIQ)

Pilot Pilot ------ Full ImplementationFull ImplementationPilot borders implementing CBTA before ratification, after all cPilot borders implementing CBTA before ratification, after all countries ratified,ountries ratified,more borders could implementingmore borders could implementing

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1999-2003CBTA Framework

Agreement –Signed & Ratified 2005-2009

CBTA (Interim) Implementation ArrangementsSigning of CBTA

LAO – Nov. 1999THA – Nov. 1999VIE – Nov. 1999 CAM – Nov. 2001PRC – Nov. 2002MYA – Sept. 2003

Ratification of CBTA by 31 December, 2003

2003-200520 Annexes &

Protocols (A&P) -Negotiation

2012CBTA

Full Implementation Signing of 20 A&P

16 A&P signedsigned by all countries 2007

CBTA Road MapCBTA Road Map

Initial Implementation at key borders- Hekou – Lao Cai commenced- Lao Bao-Dansavanh commenced - Mukdahan-Savannakhet commenced

6 more commenced by 2011 (Mohan-Boten, Houayxay-Chiang Khong, Huu Nghi- Youyiguan)

Ratification of 20 A&P by 2008CAM –PRC –LAO –MYA – n/aTHA – 11 ratifiedVIE – 16 ratifiedAll ratified

All ratifiedAll ratified

All ratified

Customs Transit System

GMS CTS operation and NSC in 2010

• GMS Road Transit Permit• Customs Transit Document for

Goods, Vehicles, and Containers• Guarantee Organization• CTS operation in EWC on 2009

CBTA Institutional MechanismCBTA Institutional MechanismNationalNational SubregionalSubregional

Cambodia NTFCCambodia NTFC

PRC NTFCPRC NTFC

Viet Nam NTFCViet Nam NTFC

Lao PDR NTTFCLao PDR NTTFC

Myanmar NTFCMyanmar NTFC

Thailand NTFCThailand NTFC

ADB RETA ADB RETA SupportSupport

Ministerial Joint Ministerial Joint CommitteeCommittee

TransportTransport CustomsCustoms HealthHealth ImmigrationImmigration

subcommitteessubcommittees

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II. CBTA Implementation: AchievementsII. CBTA Implementation: Achievements CBTA project was rated CBTA project was rated ““successfulsuccessful”” by ADB OED Evaluation Study by ADB OED Evaluation Study

(August 2008)(August 2008)

4 country ratified all annexes and protocols of CBTA4 country ratified all annexes and protocols of CBTA

6 Borders implementing CBTA: 6 Borders implementing CBTA: Lao Lao BaoBao –– DansavanhDansavanh, , MukdahanMukdahan –– SavannakhetSavannakhet, Lao , Lao CaiCai –– HekouHekou

6 more borders are to implement CBTA by 20116 more borders are to implement CBTA by 2011Mohan Mohan –– BotenBoten (negotiated), (negotiated), HuuHuu NghiNghi –– YouyiguanYouyiguan , , HouayxayHouayxay--Chiang Chiang KhongKhong

Public Private Partnership on Operation of GMS Customs Transit Public Private Partnership on Operation of GMS Customs Transit System (CTS) to be establishedSystem (CTS) to be established

Interim Agreement between Customs and Guarantee organizations Interim Agreement between Customs and Guarantee organizations (Viet(Viet--LaoLao--Thai), signed by June 2009; Interim Agreement among Thai), signed by June 2009; Interim Agreement among Guarantee organizations of VietGuarantee organizations of Viet--LaoLao--Thai signed by June 2009Thai signed by June 2009

GMS Road Transport Permit is to operate together with GMS CustomGMS Road Transport Permit is to operate together with GMS Customs Transit s Transit SystemSystem

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CBTA implemented at 6 bordersCBTA implemented at 6 bordersinvolving Thai, Lao, VN and PRCinvolving Thai, Lao, VN and PRC

Single Stop Single Stop ((SingleSingle--Stop inspection be assessed by two Stop inspection be assessed by two countries' border control authorities together conduct onecountries' border control authorities together conduct one--stop stop inspection at the inbound checkpoint inspection at the inbound checkpoint ))

Lao Bao (VN) and Dansavanh (Lao)Lao Bao (VN) and Dansavanh (Lao)

Single Window Single Window ((SingleSingle--window inspection be assessed window inspection be assessed by the extent that all border control authorities in one countryby the extent that all border control authorities in one country are are coco--located to provide onelocated to provide one--stop servicestop service))

Mukdahan (Thai) and Savannakhet (Lao PDR)Mukdahan (Thai) and Savannakhet (Lao PDR)

Single Window Single Window Lao Cai (VN) and Hekou (PRC)Lao Cai (VN) and Hekou (PRC)

“ Devil is in the Detail "

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CBTA Implementation: ChallengesCBTA Implementation: Challenges

Although great progress has been achieved, Much remains to be doAlthough great progress has been achieved, Much remains to be donene

Incorporate CBTA provisions into national law/regulation Incorporate CBTA provisions into national law/regulation

In sufficient In sufficient ““ownershipownership”” of the CBTA by Customs and other of the CBTA by Customs and other government agencies government agencies

Strengthen coordination of NTFC and Joint Committee to monitorinStrengthen coordination of NTFC and Joint Committee to monitoring g CBTA implementationCBTA implementation

““Network EffectNetwork Effect”” hasnhasn’’t been demonstrated due to limited road route t been demonstrated due to limited road route and limited traffic volumeand limited traffic volume

Need active participation of private sector Need active participation of private sector

Significant capacity building for CBTA implementation at centralSignificant capacity building for CBTA implementation at central, , province and border levelprovince and border level

Key Activities Status

Legal Basis: Annexes 6, 8, 14 of CBTA Signed in March 2007

GMS Road Permit (Protocol 3 of CBTA) Signed in March 2007

Customs Transit documents for Goods, Vehicles & Containers

Agreed; July 2007

Country Consultation on the arrangements along East-West, North-South Corridor

Viet Nam, Lao PDR, Thailand & PRC; September – November 2007

Model arrangements designed Agreed in April 2008

Identification of Issue/Guarantee organizations Confirmed in April, and July 2008

• Study on pricing of Customs Transit documents completed in July 2008

Negotiation Meetings for finalization of the GMS Customs Transit System

29 July – 2 August 2008MOU agreed in principal

Negotiation Meetings on EWC Feb. April, May, 2009

Training and Capacity Building (operations manual)Finalizing the CTS documents

Completed by June 2009

CTS in operation along EWC among Viet-Lao-Thai Started on 11 June 2009

III. GMS Customs Transit SystemIII. GMS Customs Transit System

Model of the Proposed GMS Customs Transit System Model of the Proposed GMS Customs Transit System

Thai transport Thai transport operatorsoperators

Lao transport Lao transport operatorsoperators

Viet NamViet Namtransport transport operatorsoperators

Viet NamViet NamCustomsCustoms

LaoLaoCustomsCustoms

ThaiThaiCustomsCustoms

Transit Goods MovementsTransit Goods Movements

Board of TradeBoard of Trade LIFFALIFFA VATAVATA

Bank Guarantee/ Deposit

Bank Guarantee/ Deposit

Bank Guarantee/ Deposit

How GMS CTS Formulated (3 C)How GMS CTS Formulated (3 C) Comprehensive:Comprehensive: Integrated solution to urgent need for TTFIntegrated solution to urgent need for TTF

------ linked with GMS Road Transport Permitlinked with GMS Road Transport Permit

------ covering goods, vehicles, and containerscovering goods, vehicles, and containers

------ customs transitcustoms transit

------ temporary admissiontemporary admission

Compatible Compatible with other similar systemwith other similar system

------ TIR: GMS CTS is a simplified TIR system to meet GMS realityTIR: GMS CTS is a simplified TIR system to meet GMS reality------ Common TransitCommon Transit

Conformity Conformity with international best practice on transport and trade with international best practice on transport and trade facilitation:facilitation: 7 international conventions promoted by UNESCAP7 international conventions promoted by UNESCAP

How GMS CTS Formulated (2 A)How GMS CTS Formulated (2 A)

(Interim) Agreement(Interim) Agreement singed between Customs and singed between Customs and Guarantee OrganizationGuarantee Organization---- Viet Nam Custom with Viet Nam Custom with VViet Nam iet Nam AAutomobile utomobile TTransport ransport AAssociationssociation---- Lao Custom with Lao Custom with LLao ao IInternational nternational FFreight reight FForward orward AAssociationssociation---- Thailand Custom with Thailand Custom with BBorder order oof f TTrade (rade (Thai Chamber Commerce)Thai Chamber Commerce)

(Interim) Agreement(Interim) Agreement signed among Guarantee signed among Guarantee Organizations of VATA, LIFFA and Organizations of VATA, LIFFA and BoTBoT

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CTS Border CTS Border Crossing SupervisorCrossing Supervisor

CTS Border CTS Border Crossing FacilitatorCrossing Facilitator

CustomsCustoms GuaranteeGuaranteeOrganizationsOrganizations

AgreementAgreement

PPP on CTSPPP on CTS

CTS operationCTS operationAt BordersAt Borders

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IV. CBTA Operation along EWC IV. CBTA Operation along EWC

No Go No Go ------ To Go:To Go: trucks, drivers and goods could go to any Viettrucks, drivers and goods could go to any Viet--LaoLao--Thai Thai country along the EWECcountry along the EWEC

Open corridors (exchange traffic rights)Open corridors (exchange traffic rights)Trucks (GMS road transport permit + bilateral permit)Trucks (GMS road transport permit + bilateral permit)Drivers (mutual recognize driverDrivers (mutual recognize driver’’s license) s license)

TransloadingTransloading ------ Go Through:Go Through: goods with trucks could transit without reloadinggoods with trucks could transit without reloadingCustoms Transit System: harmonized transit documents issuedCustoms Transit System: harmonized transit documents issuedIssuing/guaranteeing organizations in operation: VATA, LIFFA, Issuing/guaranteeing organizations in operation: VATA, LIFFA, BoTBoT provide provide

guarantee to transit goods, vehicles, and contguarantee to transit goods, vehicles, and containersainers

Long Time Long Time ------ Short Time:Short Time: shorten clearance time at border by facilitatingshorten clearance time at border by facilitatingSingle window inspection Single window inspection

--------at at MukdahanMukdahan SavannakhetSavannakhet border checking points (in one country)border checking points (in one country)Single stop inspection Single stop inspection

------ at Lao at Lao BaoBao DansavanhDansavanh bordrcheckingbordrchecking points ( by two countries)points ( by two countries)Risk management: 5% for import, near 0% for export at Risk management: 5% for import, near 0% for export at MukdahanMukdahan customscustoms

Showcase Showcase ------ Full ImplementationFull Implementationshowcase could be done at other corridors and CBTA routes,showcase could be done at other corridors and CBTA routes,more borders could implementing CBTAmore borders could implementing CBTA

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Road opened March 2004

Da Nang Port Completed in

2004

Hai Van Tunnel

opened in Jun 2005

completed

2nd Mekong Bridge opened on 20 Dec2006

Widening completed 2007

Road to be opened 2008

CBTA started June 2005

CBTA started on 20 Dec 2006

MOU for IICBTA finalized

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