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This report places special focus on Catdom’s Customs operational and strategic environment with special focus on the process of modernization and reforms of its customs. The report specifically examines the extent at which the Catdom Customs administration and operation have been aligned with international standards. It also examines issues or problems facing the customs and trade communities in Catdom. In addition, this report will propose solutions and modernization strategies that should be adopted by the Catdom Customs in order to overcome the crucial issues and make it more efficient and effective in revenue collection, citizen protection and provision of trade facilitation (World Customs Organisation 2011).
Background information
Catdom is a small island nation, which for a long period was affected by Civil war. Currently, the nation is now politically stable and peaceful and thus it is experiencing rapid economic growth. The nation’s natural beauty coupled with its climate has made it a definite tourist attraction. In addition, the country’s (Catdom) wealth of the natural resources has also attracted foreign investors, and there is rapid expansion in the manufacturing industry. The country has experienced a dramatic increase in its passenger and cargo entry within a very short period despite the fact that the nation has only one major international airport and two seaports, which are capable of dealing with increased volumes. However, the primary concern raised by the government and most business people is regarding the delay in cargo and passenger clearing. This is because it is bound to affect the country’s future growth negatively and prevent further development and investment (World Customs Organisation 2006).

The aim of this draft strategic plan is, therefore, to advise the government on what needs to be done to ensure that the Catdom Customs Department becomes operational, efficient, effective and capable of competing with other customs departments all over the world. This paper, therefore, highlights the various problems faced by the Catdom customs Department and proposes viable operational and strategic solutions towards such problems. In general, this paper presents an overall modernization process, which will ensure that the customs department achieves its maximum. Indeed, it is a fact that in order to enhance trade facilitation and the general trading environment, then the Catdom government must place great emphasis on both custom reforms and modernization.
As a result, the customs department has been pointed out to be the major cause of these destructive delays. This attributed to the fact that there was little investment and interest in the customs sector during the period of civil war/unrest. As a result, most of the innovations taken up by the Customs departments in other parts of the world have outdone and by-passed the Catdom Customs. In addition, the delays have accrued because of various weaknesses in the Customs department. For instance, they operate using the gatekeeper style of compliance management, have little staff training, low-level corruption allegations, ineffective senior executives, low revenue collections, prevalence of prohibited imports, and lack of expenditure on technology and equipment and the use of manual systems (World Tourism Organization 2012).
Despite the challenges facing the country’s Customs Department, the government is keen and interested in modernizing the operations of this vital department. This is true given the fact that recently, the country became a member of WCO and WTO with a view that soon, it may become a signatory to “The Revised Kyoto Convention”.
This is reflected in the government’s publication of its mission statement, which reveals that the Catdom Custom will strive to become the most efficient, and effective administration in the region. This is by presenting a high level of service while at the same time, protecting revenue and the entire community. Apart from that, the government has listed various priorities, for instance, community protection, revenue collection, border security and trade facilitation (Widdowson 2005).
Strengths of Catdom Customs
Catdom Customs is a contracting party to two main vital international organizations namely the World Trade Organization (WTO) and the World Customs Organization (WCO), which will provide it with many benefits. For instance, the efficiency and effectiveness of the Customs procedures and enhancement of the trade supply chain thus improving international trade. Strength for the Catdom Customs is that it has strong support from the government in terms of financial resources. Being the major front line agency and revenue collector, the success of the Catdom Customs will have a positive impact on the country’s economy through an increase in citizen safety, trade facilitation and revenue collection.
Weaknesses of Catdom Customs
The use of the gatekeeper approach by the Catdom’s Customs based on only one side does not take into consideration the level of compliance by the business community or traders. The fact that the gatekeeper approach lacks information technologies and uses manual processes, facilitation of traders who normally comply with all customs legislations and procedures is reduced drastically. This approach (gatekeeper) affects both the traders and the Catdom Customs because it slows down export and import clearances and it is complicated. The use of outdated procedures and processes that do not conform to internationally recognized standards will not only complicate trade but also the movement of passengers. In order to ensure fast movement of passengers and international traders, then Customs policies and procedures should be uniform and standardized. This implies that the Custom policies and procedures, which apply in Catdom, must also apply in other Customs administrations. The use of outdated practices by the Catdom Customs, therefore, will lead to reduction of efficiency and effectiveness of the customs operations, delays in both passenger and cargo clearance and an increase in costs towards traders.
Quality Human resources can only be developed through effective training in order to enhance employee performance and develop competency. Catdom Custom’s poor performance and productivity are attributed to lack of training among its employees. The organization can reap a lot from training by teaching companies how to achieve a reasonable return on its investment (ROI). This will be greatly beneficial to the project because it will be able to reap profits due to the adoption of an up to date technological system. The lack of training among the Customs Staff, therefore, can affect ability; skills productivity, motivation and knowledge of the Custom staff (David, 2005).
Relevant agencies in the country should be consulted with a view of establishing a program, which will lead to simplification of procedures at the customs department, enhance trade in the nation and towards the establishment of automated infrastructure and customs clearance. These are the efforts, which will ensure the enhancement of a regional trading environment and the strengthening of trade relations among neighboring nations (Hans, 2002).
In order to modernize the Customs department, the Catdom government should adopt a 3-component strategy in order to address the major modernization issues and challenges that the department faces. Therefore, these strategies should be pursued both in parallel and independently. The first strategy should be the simplification of procedures in the customs department. This is because it has been established that non-transparent and complex procedures led to the creation of non-physical trade barriers, and created problems in linking the department with the business community.
Custom procedures should not only be simplified but also harmonized. The government should initiate one stop clearance principle in which entry control points should be established. Such border control points should be established at both frontiers and control points through the development of a standardized system. This will significantly help the freight transport staff to reduce the time since the entire relevant border crossing processes will be completed at one place.
To ensure that Catdom’s Customs department is modernized, a unified payment and security form should be introduced in order to cover all the necessary payments that are related to both transportation and clearance movements. In order to modernize its customs department, the Catdom department should abolish its traditional customs clearance processes and streamline them by reducing time used in the completion of formalities. A new system should be put in the place of the traditional system, adopted to delineate all the physical and documentary aspects of clearance, in order to shorten the time taken for clearance of both cargo and passengers.
The government of Catdom should establish the introduction of Risk management in its Customs departments in order to control the goods either entering or passing through the country. The use of risk management methodologies should not only retain relevant levels of control but should also be able to use limited resources. Risk management processes should be used by the Customs departments in Catdom. This is to ascertain any risks or threats to the custom’s control department, which may emerge during the clearance process, and identify solutions towards the minimization of such threats. In addition, the adoption of the risk management system by the customs department will enable it to develop the necessary techniques and skills, which are needed in evaluating the control of high-risk products the nation. It ensures that it specify the kind of actions, which are required in relation to such services and goods (Luc & José 2005).
Political Will
Catdom Customs has various opportunities, which it can use in order to become profitable. For instance, the presence of a seaport and international airport are important because air transport is a reliable and fastest means of transport for tourists to visit the country and either import or export air cargo internationally. The presence of an international airport makes it possible for Catdom’s cargo and passengers to reach the nation directly without necessarily transiting to other nations. The sea route also plays a major role in international trade, and it comprises of more than 80% of global trade. The peace and political stability of Catdom will not only enhance economic development but also improve security, quality of life and public prosperity. Political stability is one of the major factors that attract Foreign Direct Investment in Catdom.
The prosperity of the nations is highly dependent on the small and medium sized enterprises. The availability of manufacturing industries in Catdom will provide people with job opportunities and increase revenue. The Tourism industry has become a major world trade, which contributes foreign exchange towards various countries and thus Catdom will be capable of taking this advantage to market itself as a safe, tourist attraction country.
• The government of Catdom is in the process of gaining access towards the Revised Kyoto Convention (RKC).
• The government of Catdom is not only ready to comply but also willing to implement the recommended standards, practices and provisions of Safe Frameworks of Standards (SAFE FoS) and of RKC.
• The Catdom Customs still uses manual operations without any electronic or automatic information systems.
ICT Solutions
As part of adopting of new technological innovations and general modernization processes, the Catdom government should install safe TIR systems to enable the electronic and automatic notification about completion of transactions. Computer hardware should be installed at both the country’s headquarters and its regional offices. The installation and implementation of Safe TIR systems will lead to efficient relaying of advance information regarding completion of various transactions. Apart from that, Safe TIR systems will make it possible for issuance of immediate responses towards delays that are unexpected in vehicles crossing borders through the Carnet. Apart from the application of the above methodology, the Catdom government should also establish the “Preferential Customs System Project” which will simplify the custom formalities for the products being transported. Similar to the Safe TIR systems, this system will guarantee the payment of custom taxes and charges and take responsibility for any non-delivery of the products at the designated custom points.
The adoption of modern technologies by the Catdom government will make it possible, for the Customs department to apply international standards, and modern practices in their customs administration and operations. The government should adopt the use of TC-SCAN system, which statically examines and inspects objects being transported to ensure that there is compliance with all the custom requirements though displaying records, registers and processes regarding the objects being transported and further storing and communicating necessary information to the operator. Apart from that, the Catdom government’s customs departments will use the TC-SCAN system in identifying various images and differentiating between metal and organic items by allowing the containers being transported to be inspected without necessarily being opened. In essence, the implementation of this system (TC-SCAN) by the Customs department in Catdom will lead to efficiency in upgrades inspection, detect contraband products, reduce the amount of unregulated cargo delays and enhance the general quality of control at the customs department (Mehrdad, 2009).
The initiation of a simplified custom transport system by the Catdom government will ensure the full cooperation of all relevant stakeholders. For instance, between the business communities, the private sectors and the public, to enforce timely service delivery and border security. In order to access information regarding the goods in being transported and on bilateral trade, the customs departments in Catdom should interact with other enforcement agencies in implementation of national laws. This is necessary since cooperation with custom authorities in other neighboring nations will enable the Catdom nation to access information regarding the goods being transported.
Strategic solutions
In order to overcome any problems or issues in the process of reforming and modernizing Catdom Customs, then various strategic remedies or solutions ought to be adopted by the government. These solutions are divided into three parts namely the electronic System and Technology, Personnel and Process and Process Procedures. These solutions should be based on a 5-year modernization schedule from 2013 to 2017. The implementation of these remedies will be divided into both long and short-term phases.
Electronic System and Technology
The customs department should use Information and Communications Technology (ICT) for customs operations. Technology should also be used in risk management. This is because the use of electronic systems has become a vital measure, in the control of customs, and the facilitation of cargo and passenger movement. The competitiveness of Catdom Customs can be increased by the use of the electronic system by minimizing clearance of passengers and compliance and trade costs.

WCO Initiatives and Columbus Program
In order to achieve great success, the Catdom Customs should build a Custom capacity to reform and modernize the organization through participation of in Capacity building programmes conducted by the WCO. Catdom Customs should adopt and implement all the three programme phases as stipulated by the WCO namely assessment, implementation and monitoring. This will include conducting a diagnostic study regarding a nation’s condition in terms of compliance and development towards SAFE Fos. It is through the help of Columbus program that Catdom Customs will be able to identify relevant capacity building and possible remedies. The Catdom Customs should utilize the Capacity Customs Building strategy initiated by WCO as a clear guideline to enhance capacity building. In addition, it (The Catdom Customs) can also increase the ability, skills and knowledge of its Customs employees especially in the field of auditing and in information technology using capacity building programs, for example, attachment programs, short courses and on the job training. The Catdom Customs will also be capable of fully utilizing the training tools initiated by the WCO, for instance, CLIKC! E-learning courses and scholarship programs. It will also be able to send its senior customs employees to important WCO universities, regional training centers or institutional members. This will help greatly in increasing competence of members and the number of custom experts in the areas (Organisation for Economic Co-operation and Development 1997).
Process and Procedures
Under WCO, compliance measurement strategies should be adopted in order to support risk management. According to the WCO, risk management is defined as the “…systematic application of the management practices and procedures which give Customs the relevant information in order to address consignments or movements which pose a risk...” (WCO, 2011). The Catdom Customs should not only adopt but also implement this risk management method in Customs Control. This is because there may be an impossibility of checking all cargo or passengers to ascertain the legitimacy.
In order to simplify the customs processes, then manual operations at the Catdom’s Customs have to be minimized through the adoption and automation of modernization initiatives. In order to achieve optimum customs administration in Catdom, the government should consider adopting the”Customs Automated information System” or the CAIS, which is a major management tool for administration of customs. The CAIS was developed in 1997, with an aim of automating operations at head offices, regional offices and custom border points. It is capable of automating customs control and clearance procedures, providing management information, which can be used for making decision, collecting and processing statistical data on international trade and the exchange of relevant information with concerned agencies and customs of neighboring nations. The system consists of an information management system and a data transmission network that is corporate in nature. Among its other major functions, the CAIS is capable of exchanging data on both imports and exports, developing corporate television studios and preparing new legal frameworks, which will enable the firm to fill the custom department’s electronic format.
Automation of the Customs in Catdom will enable the country to accelerate or speed up the clearance processes at the customs, simplification of cross-border procedures, collection of prompt custom duties, compilation of authentic and complete custom information and contribution of greater transparency and efficiency services. It will improve the quality of data through the provision of official trade statistics in the country. The major objectives of the government in its endeavor to modernize its customs should include among others, modernization of the technical platform and the system, modernization of the applied software, and implementation of new or current information technologies. It is through the application of such additional components that high quality customs services can be realized.
A sound modernization process for the customs in Catdom should encompass the use of the ALCS (Automated Logistics Control System) which will be installed and eventually put into operation on the main cargo routes within the country. This will enable customs in Catdom to have an efficient customs control and integration of technology, for instance, radiation control and transport tracking, to maximize information reliability and reduce human involvement. Through such a system, it will be easy for it to perform various factions. It will be able have video supervision and recording of containers and vehicles, identification of vehicle number plates, electronic sealing of vehicles and containers, reading, recording, storing and processing of information, tracking and positioning of vehicles and communication of vital data to destination authorities and data acquisition centers among others.
The Catdom government should consider equipping all custom authorities with ALCS. This is to enable it get information regarding the vehicles and goods crossing the country’s border at any given time and to control goods online, using the national territory and customs borders. It will also ensure safe delivery of goods to officials at the customs destination points, avoid potentially false goods and reduce manual intervention in processing of customs control and full utilization of customs employees at crossing points. The adoption of ALCS in the customs departments in Catdom will enable the country’s customs to perform online centralized monitoring of products and vehicles, which are in being transported through the combination of the data from the CAIS. This will reduce the amount of time that is spent in physically examining the goods and will enhance the handling capacity of traffic at various checkpoints within the nation. In addition to that, control will be strengthened over vehicles, which have exceeded the allowed axle loads and prescribed sizes and thus allow the customs to intercept any prohibited imports (World Customs Organisation 1952).
In order to ensure greater investment and quick economic growth, the Catdom government should establish long-term goals. For instance adoption of electronic customs information systems, also known as e-Customs which could comprise of an information environment which is implemented on a uniform level, provision of web-based or internet services to not only clients but other participants as well and electronic declaration of the goods. The adoption of E-customs by the Catdom government will make it easier for the use and subsequent transmission of electronic documents for both registration and clearance. It will also be advantageous because, it will create opportunities for any economic entities within the nation to carry out businesses at any place using free software. It will reduce any barriers towards business operations for both small and medium sized enterprises. It will also lead into reduced time for clearance using a check on site, which allows business owners to integrate with customs and transition efficiently towards a paperless declaration system through the use electronic digital signatures.
In order to simplify custom procedures and reduce processing time through avoiding repetition of any similar operations or processes with two or more borders, the Catdom government should establish joint control border processing through the concentration of various actions at one single point for each of the directions. For instance, Kazakhstan and the Kyrgyz Republic in July 2004 entered into a joint control agreement on a pilot basis. The country should also be willing to create an information platform that can be used in exchanging of customs data in order to initiate bilateral trade.
The Catdom government should consider reforming its revenue administration. Tax laws and tax policies create a good platform for raising tax revenues, and the quality of such revenue administration will greatly influence the development of the private sector, and the investment climate. Various indicators in the Catdom custom department portray that indeed; revenue administration needs to be conducted. Automated human resource management systems and financial management systems should be installed in the Catdom’s customs departments in order to support decision-making. Just like Colombia, Catdom should also perform a systematic study of vital business processes and come out with Corruption Risk Maps to guide it towards procedural changes meant to reduce any chances for corruption. Taxpayers should be restricted towards the taxpayer service platforms, and internal control systems should be strengthened. This is to reduce levels of corruption within Catdom’s customs departments.
Revenue administration should be a serious government undertaking, which should involve numerous costs and efforts, which should be supported by all the relevant stakeholders. There should be adoption of well-rounded institutional development strategies in order to address various institutional weaknesses and achieve long lasting performance enhancements. Given the fact that most of the staff at the Customs departments is not well trained, the management of software in the customs should be left to technical experts who are well conversant with the full operation of the systems to avoid mistakes which can bring losses (World Customs Organisation 2011).
Anti-corruption tools should be used by the Catdom customs, for instance, the “Revised Arusha Declaration,” which addressed the, 10 anti-corruption strategies that need to be adopted by any Customs administration in order to fight corruption. For instance, the Peruvian customs drastically improved because of adopting this declaration. Integrity programs should also be established in order to enhance staff performance. According to the 10 employee standards, Customs Administration should establish integrity programmes in order to enhance its staff. The Catdom Customs is capable of increasing the integrity among its Customs staff by implementing job rotation to tame corruption, introducing integrity programs and pacts and enforcing other disciplinary strategies aimed at the corrupt employees (World Customs Organisation 2008).
Operational Remedies for Catdom
In order to avoid the Gatekeeper style of compliance management, Catdom should adopt and practice good management practices which will help the nation to manage its resources well. The staff must also go for higher training and refresher courses should be conducted in order to equip the staff with up to date knowledge and skills. Punitive actions should also be meted out on corrupt staff and stringent measures adopted to ensure corruption do not occur. Senior executives should also undergo higher training to ensure they are capable of dealing with complex issues that may happen during their course of duty. Revenue collection should be increased by using electronic revenue collection systems so that the staffs do not necessarily handle the hard cash and security systems should be put in place to ensure that prohibited imports do not find their way into the country. Manual systems should be replaced with electronic systems as these will increase efficiency through reduction of time wasting.
The process of modernizing Catdom’s customs and the implementation of the reforms will highly depend on the strong support and interest from the concerned stakeholders like for instance Custom Officers, the government, business communities and the public. The success of the reforms or modernization process will transform the country’s customs, from the one known to be inefficient and ineffective to one that is well administered, and vision stated. The successes of the modernization process will, therefore, eventually lead to direct and indirect benefits, which will not only stimulate the tourism industry but also enhance foreign trade, investment and the tourism industry in Catdom. The process of modernizing Catdom’s customs will make it have the capability and ability to carry out its major duties of citizen protection, customs revenue collection and provision of trade facilitation.




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