Challenges and Opportunities of Customs Reform & Trade Facilitation: Jordan’s Experience

Prepared by
Tayseer Younis
Deputy Director of Planning & Organization

Introduction:

Trade facilitation is one of the main factors for the economic development of communities. The term “trade facilitation” may be explained as how can traders get their goods across borders with the minimum of delay and red tape; therfore it links to the simplification and harmonization of international trade procedures regarding documentation, clearance process, payment methods and procedures of non-customs agencies.

The traditional role of customs has been collecting customs duties. But today as greater volume of goods cross borders, Customs plays a very significant role not only in meeting the objectives of the governments, but also in implementing effective and efficient controls which ensure compliance with the national laws and international agreements, secure revenue and protection of the society.

Customs Reform (CRM) mandate was an improved, more efficient and market-oriented customs regime. It’s goal was Streamlining Customs processes for imports and exports. In addition to the implementation of greatly streamlined customs import procedures through WTO-related legal reforms, automation, and improved risk management/risk analysis techniques.

This has been done through considerable training, automation and improved techniques in certain areas such as risk assessment, valuation and overall management, as well as coordination and cooperation between government and the private sector.

CR In fact was largely determined by the Jordanian government’s 1998 decision to accelerate its WTO accession application. In particular, the first priority was Jordan’s adoption and implementation of WTO rules on customs valuation, rules of origin, and border enforcement of intellectual property rights. The second priority was that Customs shall modernize its infrastructure and upgrade its trade enforcement capabilities to help the Department respond more effectively and efficiently to the demands of increased international trade expected to result from integration into the WTO system.

Brief history of Jordanian Customs:

In parallel with the foundation of Trans-Jordan Emirate, the first Customs Department was established in 1992. It was then called the Directorate of Excise and Public Statistic. It was administratively operating under the presidency of the consultants’ council (now the Cabinet).

At that time, the main goal of the Department was to provide the Treasury with revenues. But as a result of the development occurred in the economic, social, and political circumstances, the Department’s tasks have expanded to effectively contribute in supporting the national economy, promoting investment, facilitating trade, combating smuggling, protecting society and the environment from hazardous materials, and controlling the movement of travellers, goods and vehicles crossing the Kingdom’s borders.

Several names were given to the Department since its establishment:

-  From 1926 to 1935, it was called the Directorate of Customs and Excise

-  From 1936 to 1951, it was called the Directorate of Customs, Trade and Industry

-  From 1951 to 1956, it was called the Ministry of Trade/Customs

-  From 1956 to 1983, it was called the Ministry of Finance/Customs

-  Since 1983 till the present, it has been called the Customs Department

A Director General related directly to the Finance Minister heads the Customs Department.

Legislative Background of the Department

The first law to rule the Customs’ work was issued in 1926; it was called the Law of Customs and Excise. The Law has been amended several times in order to cope with the on-going developments at the local and international levels. Precisely, it was amended in 1936, 1949, 1952 and 1959. In 1962 the Law No. (1) was issued and put into force till 1983 when the Provisional Law of Customs No. (16) for the year 1983 was issued.

By virtue of developments that Jordan is witnessing at present, a new law was issued to cope with the modern status. This Law replaces the provisional law and it was passed according to the constitutional requirements in August 1998.

However, the first customs tariff with the exchanged commodity tables and rates of fees was issued in 1963. It was adopted from the list produced by the United Nations League at that time. The Customs commodity tables were amended several times in 1957, 1962 to end up with the Harmonized System (HS) issued by the World Customs Organization and entered into force at the beginning of 1994.

Since its establishment in 1922, the Customs Department expanded by establishing several customs houses. In 1930, the Allenbi Bridge (Now King Hussein Bridge) Customs House was established. This Customs office is located on the Jordan River and aims at facilitating the passage of goods from and to Palestine. There was also the Customs House of Rumtha on the Jordanian-Syrian Borders and Amman Customs House in Ein Ghazal area in Amman at that time.

The number of customs offices increased with the increase of trade movement and the Department’s desire to deliver high quality service. There are about 42 Customs Centers divided into three categories (Clearance Centers, Border Centers, and Post Centers).

Vision of Customs Department.

“To be among the pioneers of the world in providing high quality Customs services to all stakeholders.”

The Department did not have such a written vision in the past years. But due to the customs reform strategy the Dept. specified its vision and wrote it down in its strategic plan. It focuses on the quality of customs services to be delivered by Customs to all stakeholders.

Mission of Customs Department

"Providing an excellent customs service that fulfills the comprehensive growth requirements and copes with the developments at the national and international levels".

This is our mission which indicates the reason for the existence of Jordan Customs. As you can see it concentrates on coping up with the national and international developments through delivering distinguished customs services.

We realized that this mission could be fulfilled by doing the following:

1.  Contribute to the economic and trade growth in the Kingdom.

We had to motivate and protect economic interests of the Hashemite Kingdom of Jordan by sustaining efficient trade systems and focusing on laws governing import/export processes and secure streamlined flow of legal goods.

2.  Continue supplying the Treasury with revenues.

Customs revenues continue to be a source of income for the Treasury. However, this source is being phased out due to Jordan’s commitment with the international agreements especially those of the WTO.

  1. Monitor and organize the movement of passengers, goods and means of transport.

We assure secure borders for the Kingdom while facilitating movement of goods, people, and vehicles as well as providing accurate statistics.

4.  Combat smuggling and illicit trade activities.

We combat smuggling of all kinds whether explicit or implicit. Accordingly, we cooperate with security parties in the Kingdom.

  1. Protect the local community and environment against hazardous and harmful materials.

We contribute to establishing social security by detecting and preventing risks to the local community and environment as well as protecting citizens from terrorism and risky substances.

6. Achieve discipline and accountability of employees.

We shall build up an integrated and efficient administration system that assures implementation of above objectives and we shall assure providing our employees with the essential knowledge and skills so as to carry out their tasks with the highest degree of proficiency.

Essential Values of Customs Department:

Customs service in Jordan is based on long experience, excellence and pride. The following essential values reveal loyalty and belongingness of the Department’s employees:

Integrity: Define good and evil, dos and don’ts, and act in a good manner.

Professionalism: Do work with competence, accurately and full efficiency.

Control and Responsibility: Each employee appraises his/her work and actions taking full responsibility therefore.

Creativity and Learning: It is the ability to innovate new ideas to do our job and disseminate such ideas among employees.

Justice: It connotes a civilized and just action towards all so that our decisions will be balanced, logic and non-biased.

Focus on Results and clients: Final results are the motive for our work.

Good Service: Let’s do our duties professionally and in a sophisticated method within an honest discussion.

Pride: We believe in our mission, we are proud of our long experience and are ready to put an extra effort to maintain that.

Culture of Excellence: we shall always try to make culture of excellence deeply rooted in our performance.

Learning Organization: we will make Customs Dept. a learning institution applying successful strategies for knowledge management.

Purposes of Customs Reform:

Customs administrations are generally advised to carry out a comprehensive reform process in respect of their operations, procedures and systems. This type of reform is certainly necessary and required so as to achieve the main objectives of customs effectively and efficiently. Through achieving its own objectives, the organization will surely be able to play its expected role in the community and therefore contribute in achieving the national goals of the government.

On the other hand, customs administrations are usually exposed to corruption more than any other organization. This corruption may result from the broad powers entitled to customs staff; or it may be caused by the vital role played by customs especially the vast obligations and tasks that are required to be carried out, and in particular at the border customs offices. Therefore Customs should strive to combat such corruption by developing integrity programs, having transparent legislation, code of conduct and penalty & reward regulation.

What are the steps taken by Jordanian Customs

in the context of the reform process:

There is no doubt that Jordan Customs Department occupies a central position in our country in so far international trade process is concerned. Therefore, we have made deliberate efforts to remain relevant in the shifting sands of the new millennium. One of the most important issues is how to face and prepare ourselves in handling both our traditional functions as well as the new responsibilities in the rapidly changing circumstances, and how to execute these functions without hindering the movement of international trade. The reform process in the Jordanian Customs focussed on the following main fields:

  1. Customs legislation and policy.
  2. Optimum use of information technology.
  3. Simplification and harmonization of customs procedures.
  4. Human Resources development and training.
  5. An integrity program.

1.  In the field of Customs legislation and policy.

§  The Department realized the need to review its legislation for the purpose of adjusting itself to the new world system.

§  A new Customs Law No. (20) for the year 1998 replaced the provisional one No. 16/1983.

§  Emphasis has been put on promoting investment; the new amendments provided a lot of tempting facilitation for foreign investors.

§  Transparency had been an important policy of Jordanian Customs. Much information, which used to be monopolized by customs, is nowadays publicized to everybody. This is ensured by regular publications, brochures, website, official Gazette, books, etc.

§  Issuing a value guidebook for the private sector.

§  Launching a plan to modernize the Customs Department in cooperation with AMIR program and participating in making a strategy for this project for three years.

§  Partnership council with the private sector.

§  Signing memos of understanding with governmental and non-governmental parties in the Kingdom.

2.  In the field of the optimum use of information technology.

§  The application of the ASYCUDA (Automated System for Customs Data) is a major achievement in this respect. The system effected a drastic revolution towards more simplification of Customs procedures. In fact, it turned our Department into a pioneer one and a center of attraction among countries of the region.

§  The installation of the V-sat communication network is yet another step in the modernization process that the Department has implemented over the past few years.

§  Implementation of X-ray scanning machines.

§  Modernizing the Department’s website and providing electronic forms for the renewal of foreign cars licenses and licenses of brokers.

§  Adoption of an electronic system for receiving complaints and suggestions. Dealers with the Customs Department can submit their complaints or suggestions through the free phone number (80022999) or through the Internet or fax.

§  Initiating the intranet for customs employees to enable them to achieve paperless work as well as publishing the new regulations and announcements as well as salary slips of the employees.

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3.  In respect of simplification and harmonization of customs procedures.

§  Further coordination and cooperation with governmental departments and institutions that have common operations with Customs especially those parties co-working with customs at the border centers, airports, and the port in order to serve clients.

§  Expanding the number of computerized systems used in the Department and the endeavor to apply more in the Department as well as in the other Customhouses depending on the importance and the availability of resources.

§  Applying value database for goods in Amman Customs Center, Aqaba Customs, Zarka Free Zone Customs Center and Airport Customs Center.

§  Customs had established a partnership council with the private sector. Thus the private sector is no more excluded from the customs process. Regular meetings and workshops are usually held and various points of views are discussed for the purpose of simplifying and modernizing customs operations and procedures, improving the quality of customs services, and reducing red tape.

§  Network technical and intelligence information as well as joining technical courses with other customs departments in the region and the world.

§  Delegation of certain powers to Directors of Directorates and Customs Centres is one of the priorities, so as to achieve decentralization which will simplify and speed the clearance process, and enable Customs Centres concerned to take the necessary decisions without having to refer to the Headquarters.

§  Collection of customs duties by visa cards at Amman Airport Customs as a pilot site. This system will be circulated to other Customs Centres.

§  Customs Department is at the moment working to get the ISO 9001/2000 which is concerned with client service, as well as initiating a TQM directorate aiming to raise high the level of services offered to internal and external clients.

§  Simplification of procedures in light of the revised Kyoto convention.