## _wp12259

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### Purpose and methodology
- Aim: take stock of changes introduced in customs administration in francophone countries in sub-Saharan Africa since 1995, identify challenges, and initiate reflection on solutions.
- Geographic coverage: Benin, Burkina Faso, Burundi, Cameroon, Central African Republic (CAR), Chad, Union of Comoros, Democratic Republic of the Congo (DRC), Republic of Congo, Côte d’Ivoire, Gabon, Guinea, Madagascar, Mali, Mauritania, Niger, Senegal, and Togo.
- Data sources and basis:
  - Findings and conclusions of technical assistance (TA) carried out by the IMF’s Fiscal Affairs Department (FAD) and the IMF regional technical assistance centers AFRITAC West and AFRITAC Centre.
  - Supplemented by data from international surveys and IMF area departments.

### Basic profile and macro trade context
- Population and economic weight:
  - 2010 population: 244 million.
  - Accounted for 10.1 percent of Africa’s GDP in 2008, and 19 percent of sub-Saharan Africa’s GDP.
  - Share in world trade in 2009: less than 1 percent (3.2 percent for Africa).
- Development and poverty:
  - Twelve of the 18 countries are low-income.
  - Seven FSSACs are among the last 10 listed in the UNDP Human Development Index; Gabon ranks 103 out of 182.
  - Headcount poverty rate: 33 percent in Gabon to 71 percent in the DRC.
- Trade structure and constraints:
  - Little economic diversification, small manufacturing sector, pervasive informal sector, generally low tax compliance.
  - Exports: agricultural goods, timber, minerals, crude oil; imports: mainly staple commodities.
  - Landlocked or largely landlocked: Burkina Faso, Burundi, CAR, Chad, Mali, Niger (landlocked); DRC largely landlocked.
  - Transit flows increase transport times, costs, and fraud risks; port and transport infrastructure generally deficient.

### Revenue trends and customs performance indicators (1996–2009)
- Aggregate regional figures:
  - Imports of goods reached 25.4 percent of GDP in 2009.
  - Trade taxes (customs and other import duties) have grown faster than GDP since 2000.
  - Customs and other import duties accounted for 3 percent of regional GDP in 2009, compared with 3.9 percent in 1996.
  - Customs and other import duties remained almost stable: 2.4 percent of GDP in 2009 against 2.55 percent of GDP in 1996 (regional statement).
  - An alternative regional statement: revenue collected from customs and other import duties represented 2.4 percent of GDP in 2009 compared with 1.9 percent in 1996.
- Collected customs tariff rate:
  - Fell from 19.5 percent to 11.1 percent (1996–2009) with a marked decrease in 2000 related to tariff reform.
  - Simple average (Table 2): Imports 17.6 → 25.2; Collected tariff rate 15.6 → 12.0; Customs (% GDP) 2.4 → 2.6.
- Country-level selected highlights (imports % GDP; collected tariff rate; customs % GDP; variation in customs % GDP):
  - Benin: 12.9 → 14.8; 14.7 → 15.4; 2.0 → 4.0; Variation 100.0 (collected tariff rate) and 56.0 (customs share of total tax revenue).
  - Burkina Faso: 17.1 → 17.9; 4.7 → 17.7; 3.0 → 2.3; Variation -23.3 (customs % GDP).
  - DRC: 14.0 → 44.5; 8.4 → 7.9; 1.2 → 3.5; Variation 191.7 (customs % GDP).
  - Chad: 15.1 → 37.1; 13.7 → 2.5; 2.1 → 0.9; Variation -57.1 (customs % GDP).
  - Senegal: 24.9 → 33.2; 20.6 → 8.2; 5.1 → 2.7; Variation -47.1 (customs % GDP).
  - Togo: 35.1 → 32.6; 5.6 → 9.3; 2.0 → 3.0; Variation 50.0 (customs % GDP).
- Table 2 summary: collected duties as a percentage of GDP varied considerably by country, ranging from a 57 percent fall in Chad to a 192 percent increase in the DRC.
- Analytical caveats:
  - Customs administration is only one factor determining trade revenue; assessment requires country-level analysis of import structure, nontaxed imports share, and tariff policy.
  - Few national performance instruments; international surveys and IMF data used as proxies.

### Exemptions, revenue forgone, and valuation issues
- Exemptions:
  - Exemptions and conditional relief arrangements significantly impacted the collected customs tariff rate; available data partial but indicate exemptions’ weight is obvious.
  - Exemption data do not include temporary admission of goods on which duties are suspended.
- Revenue forgone (Table 3, percent of GDP) — selected excerpts:
  - Benin: 2004 1.20; 2006 0.85; 2008 0.60; 2009 1.44.
  - Burundi: 2003 1.19; 2004 3.72; 2005 4.48; 2006 2.47; 2007 5.19; 2008 7.00; 2009 4.17.
  - Chad: 2005 4.96; 2006 2.60; 2007 2.15; 2008 2.00; 2009 2.04.
  - Rep. of Congo: 1996 3.08; 2003 2.69; 2004 2.82; 2005 2.26; 2008 5.74; 2009 6.15.
  - Guinea: 2005 3.00; 2006 2.44; 2007 3.49; 2008 3.16.
  - Mali: 1995 0.89.
  - Niger: 1995 1.73; 1996 1.11; 1997 1.48; 2005 0.93.
  - Senegal: 2009 3.42.
  - Togo: 2004 0.75; 2005 0.77.
  - Note: Table 3 data on foregone revenue includes customs and other import duties, VAT, and other domestic levies on imports.
- Valuation and data consistency:
  - Table 4 comparisons of imports recorded in FSSACs against exports from the world apply a customary 10 percent adjustment for freight and insurance to free on-board exports.
  - Two-thirds of countries show import and export data close to each other; for landlocked countries the 10 percent adjustment might be insufficient.
  - Example differences (percent of exports from the world): Benin 1999 -28.9; Benin 2009 -0.1; Madagascar 1999 -51.2; Madagascar 2009 +3.2; Guinea 1999 -25.5; Guinea 2009 +79.5; DRC 1999 -0.7; DRC 2009 +9.9.
  - In-depth analyses including comparisons between trading countries needed to assess valuation decisions.

### Customs contribution to total tax revenue and the tax transition
- Table 5 findings:
  - Share of customs and other import duties in total tax revenue decreased in ten countries between 1996 and 2009.
  - In countries where total tax revenue significantly increased (11–12 countries), customs was not the exclusive nor major contributor.
  - Among eight countries where customs and other import duties decreased as a percentage of GDP, six compensated lost revenue on the domestic side.
- Selected Table 5 figures:
  - Benin: Total tax revenue 12.6 → 16.1; Customs 2.0 → 4.0; Customs (% total tax revenue) 15.9 → 24.8; Variation 56.0.
  - Burkina Faso: Total tax revenue 11.5 → 12.5; Customs 3.0 → 2.3; Customs (% total tax revenue) 26.1 → 18.4; Variation -29.5.
  - DRC: Total tax revenue 6.0 → 12.4; Customs 1.2 → 3.5; Customs (% total tax revenue) 20.0 → 28.2; Variation 41.0.
  - Senegal: Total tax revenue 15.0 → 18.0; Customs 5.1 → 2.7; Customs (% total tax revenue) 34.0 → 15.0; Variation -55.9.
  - Niger: Total tax revenue 7.1 → 13.8; Customs 1.9 → 3.7; Customs (% total tax revenue) 26.8 → 26.8; Variation 0.0.

### Trade facilitation, logistics, and customs efficiency
- International indicators:
  - Doing Business “Trading Across Borders” average classification for FSSACs: 147 out of 183.
  - Average FSSACs’ ranking on “Ease of Doing Business” general index: 166.
  - World Bank LPI: average time to clear imports in FSSACs: 2 days without physical inspection and 5 days with physical inspection.
  - Sub-Saharan Africa average: importing requires 8.7 documents.
  - Average import cost per container in sub-Saharan Africa: US$2,492.
  - CEMAC average import cost per container: US$5,069.
- Doing Business selected indicators (2006 → 2011):
  - Benin: Documents to import 7 → 7; Time to import 38 → 32 days; Cost to import US$1,202 → US$1,400.
  - WAEMU average: Documents to import 10 → 8.4; Time to import 47.5 → 36.3 days; Cost to import US$2,203 → US$2,503.
  - CEMAC average: Documents to import 11.8 → 11.6; Time to import 61 → 54.6 days; Cost to import US$3,083 → US$5,069.
  - Total average: Documents to import 10.4 → 9.7; Time to import 50.9 → 43.3 days; Cost to import US$2,545 → US$3,134.
- Clearance times (Table 10, days; Without Physical Inspection / With Physical Inspection):
  - Burkina Faso: 2.00 / 3.00
  - Cameroon: 2.64 / 3.31
  - Chad: 1.00 / 15.00
  - Gabon: 5.89 / 9.12
  - Mali: 2.00 / 3.00
  - Mauritania: 0.50 / 1.00
  - Senegal: 1.73 / 3.16
  - Togo: 0.71 / 2.45
  - Region (selected countries): Francophone Sub-Saharan Africa 2.06 / 5.05; Sub-Saharan Africa 2.83 / 4.94; East Asia and Pacific 1.55 / 3.36; Europe and Central Asia 1.48 / 1.89; Latin America and Caribbean 1.62 / 3.41; Middle East and North Africa 1.78 / 2.91; South Asia 2.17 / 3.20; High income countries 0.83 / 1.83.
- Logistics and control findings:
  - Cargo scanning is widespread; scanners effective for undeclared goods in homogeneous cargoes but limited for unit value, origin, or tariff classification.
  - Physical inspection rates vary (Table 11, percent of import shipments physically inspected):
    - Burkina Faso 75; Cameroon 12; CAR 50; Chad 18; Gabon 55; Mali 75; Mauritania 50; Senegal 18; Togo 9.
  - Postclearance audits are limited; risk analysis functions underused or rudimentary.
  - Seven of 13 administrations assessed in 2007 and 2010 showed progress: Benin, Burkina Faso, Madagascar, Niger, Senegal, Chad, and Togo.

### Modernization actions, computerization, and ASYCUDA adoption
- Main modernization actions (1995–2010):
  - Computerization of customs operations; simplified import/export procedures; strengthened valuation; control of duty exemptions; tariff reforms; trade facilitation; risk management; cooperation with tax departments; combating organized fraud; HR management; budget and equipment strengthening; organizational modernization.
- Computerization and ASYCUDA:
  - Nearly all FSSACs chose ASYCUDA++ (UNCTAD); ASYCUDA World adopted by Côte d’Ivoire in 2009; preparations in Mali in 2010 and Republic of Congo in 2011; Senegal uses GAINDÉ.
  - Common outcomes: basic automated modules used; underused functions include control selectivity, transit management, management indicators.
  - Limitations: installation delays due to financing and expert team composition; linking offices to a single server and remote access still in progress; many posts unequipped or unconnected.
  - Despite limits, about 85–90 percent of international trade and revenue processed electronically where trade concentrated in a few ports.
- Phases and additional IT developments:
  - ASYCUDA++ functional additions: direct trader input, broker internet submission, risk management, transit monitoring.
  - Further IT goals: integration into electronic single windows, automation of risk management, regional interconnection, contribution to tariff harmonization via regional integrated tariff.

### Valuation, exemptions control, and tariff harmonization
- Valuation and WTO ACV implementation:
  - FSSACs amended legislation to incorporate the WTO Agreement on Customs Valuation, but implementation slow and incomplete.
  - Shortfalls: weak risk management, limited prescribed information requests, underdeveloped postclearance audits, administered values still applied to some commodities.
  - IMF TA advice: establish transparent administrative arrangements, build customs capacity to detect abnormal declared values, implement postclearance audits combined with risk management.
- Control of duty exemptions:
  - IMF TA recommendations: increase MoF control over exemptions; require preimport authorization; abolish discretionary exemptions; strengthen verification of end use; associate customs in legislation assessment; annual review of tax expenditures.
  - Country actions: Côte d’Ivoire and Gabon took initial steps; Senegal started comprehensive identification and quantification of tax expenditures in 2009.
  - Limitation: exemptions largely a tax policy issue that administrative improvements can only marginally contain.
- Regional tariff reforms and harmonization:
  - WAEMU CET bands instituted: 0, 5, 10, and 20 percent. ECOWAS-wide CET envisaged with a fifth band at 35 percent.
  - Historical regional moves: CEMAC CET streamlined 1994–1998; WAEMU internal tariff removal from 1996 and four-band CET in 2000.
  - Implementation issues: deviations from CET rates (additional fees/surcharges), nonharmonized exemptions, valuation gaps, risk of discrepancies when community tariffs left to national computerization.
  - Legal frameworks: Community Customs Codes adopted by CEMAC and WAEMU in 2001; national law revisions underway in several countries.

### Transit, origin control, and regional coordination
- Transit management:
  - Existing transit systems (ECOWAS TRIE; CEMAC TIPAC) ineffective without internationally valid guarantees and customs coordination.
  - TA advice: modernize transit management with electronic data exchange; use ASYCUDA for information sharing; GPS tracking on corridors; develop regional interconnection with EU participation.
  - Complementary needs: renew vehicles, increase containerization, ensure freight security, halt harassment of truckers, create infrastructure.
  - World Bank corridor projects (selected):
    - Transport-Transit Facilitation Project of CEMAC (2007–15).
    - West Africa Transport and Transit Facilitation Project for Africa (2008–14).
    - Abidjan-Lagos Trade and Transport Facilitation Project (ALTTFP, 2010–16).
- Origin control and EPAs:
  - Low priority historically; EPAs with the EU will increase risks of origin and tariff classification fraud and require capacity building.
  - Recommendations: develop trade flow monitoring, augment detection capacity, establish mutual administrative assistance, harmonize and simplify origin rules.

### Customs enforcement, fraud, and cooperation with tax administrations
- Enforcement and control selectivity:
  - Reporting weaknesses: insufficient reporting of disputed cases and inconsistent data; IMF TA recommended automation for reporting customs offences.
  - Results of customs controls (Table 6) indicate number of avoided revenues small in most cases, indicating limited impact of inspections and audits and need for selectivity.
- Combating organized fraud and illicit trade:
  - Capacity remains weak for intelligence, investigation, antismuggling, and mutual assistance.
  - Maritime surveillance almost nonexistent; criminal prosecutions rare.
  - Concerns: counterfeit/substandard products and increased drug trafficking in West Africa.
  - Recommendation: reach equivalent level of customs control at all borders to limit circumvention.
- Cooperation with tax department:
  - By 2010, all FSSACs had introduced import VAT except the DRC and the Union of the Comoros (DRC VAT introduced January 2012).
  - Import VAT accounts, on average, for 45 to 65 percent of gross VAT in the FSSACs.
  - Most customs now use TINs issued by tax directorates; updating and electronic access gaps persist.
  - Sharing intelligence and joint audits remain rare; customs’ contribution to natural resource export control insufficient.

### Human resources, organization, governance, and reform implementation
- Human resource management weaknesses:
  - Recruitment by civil service ministries without sufficient consultation; external interference and transfers of unskilled personnel.
  - Training inadequate; shortage of specialists; frequent reassignment nullifies training gains.
  - Staffing often adequate or excessive but poorly distributed; concentration in capitals; excessive rotation; lack of career and promotion planning.
  - Remuneration: low basic pay with substantial supplementary bonuses favoring frontline positions and creating transparency issues.
- Organization and management:
  - IMF TA recommended strategic and operational planning, monitoring tools, internal audit programs, and stronger head office functions.
  - Examples: Burundi integrated tax and customs into the Burundi Revenue Office in 2009; DRC restored customs as MoF directorate.
  - Monitoring and reporting tools widely lacking; few administrations use performance charts and indicators effectively (Cameroon most advanced).
- Governance and reform factors:
  - Reform obstacles: coherence of objectives, shortage of experienced staff, lack of full-time reform teams, insufficient stakeholder involvement, frequent turnover of leadership, and political instability (11 of 18 countries experienced instability; four endured internal conflicts).
  - Financing constraints: no earmarked budget funds for modernization; partial financing from external/national sources; delayed major expenditures.
  - Wider governance weaknesses limited progress on postclearance audits, investigations, internal audits, and transparency measures.

### Modernization strategy, sequencing, and recommendations
- IMF TA–supported objectives and sequencing:
  - Adopt coherent trade/tariff policies with supporting legislation; implement modern, simple procedures; enhance control approaches with risk management and postclearance audits; align structures, incentives, and ethics; implement computerization after process streamlining.
  - Recommended medium-term reform plans (generally three- to five-year) with pilot projects at major revenue offices, head offices, and key border posts.
  - Priority revenue functions: (i) strengthening valuation of imports, (ii) improving exemption management, (iii) cargo reporting in ports, (iv) monitoring transit and conditional relief arrangements.
- Use of private preshipment inspection services:
  - 16 of 18 governments contracted private inspection companies; policy: maximize use of contracts while developing domestic capacity for autonomy.
- Reform management and TA coordination:
  - Single country reform strategy and program to coordinate TA and financing; ministerial-level steering, reform steering committee, project management with dedicated staff; advisory committees for private sector and staff consultation.
  - TA should shift to medium- to longer-term programmatic, result-based projects; regional TA where customs unions exist.
- Technical and operational model suggestions:
  - Consolidate automation gains, strengthen fundamentals (valuation, origin, tariff classification), adopt trader/customer segmentation and AEO programs, expand intelligence and predictive risk analysis, integrate customs with tax administration and single-window initiatives, and pursue regional interconnection and data exchange.
  - Balance best practices with local context (preclearance vs postclearance emphasis depending on compliance environment).
- Governance and resource management recommendations:
  - Radical changes in HR and budget policies to promote integrity, performance, and long-term projects.
  - Consider semiautonomous revenue authority model or performance contracts linking budgets and incentives to performance.
  - Authorities must coordinate trade-related reforms, ensure financing and skilled personnel are secured before adopting modernization programs, and address exemptions policy as a fiscal choice.

### TA provided, partners, and achievements (1995–2010)
- IMF FAD TA missions: total 63 missions (1995–2010).
  - 1995–2002: 22 missions (three exclusively customs).
  - 2003–2010: 41 missions (12 exclusively customs).
- AFRITAC modalities: short missions (generally two weeks) by resident advisors or international experts; long-term expertise rarely used.
- Other partners and roles:
  - UNCTAD: ASYCUDA installation and support (all FSSACs except Senegal).
  - EU and World Bank: funding for hardware and ASYCUDA installations.
  - WCO: Columbus Program missions, regional office in Abidjan, training centers in Ouagadougou and Brazzaville.
  - Bilateral donors: France, Canada (Benin program 2004–08), USA (Senegal and Benin), Japan (JSA-funded IMF TA), AfDB, UNDP.
- TA mission annual counts (Table 12): example years — 1995: 4; 2003: 6; 2006: 7; 2009: 7; 2010: 6.
- Country-level FAD/RA mission counts (Table 13): Benin 5; Burkina Faso 5; Burundi 4; Cameroon 5; Comoros 2; Rep. of Congo 3; Côte d’Ivoire 5; Gabon 1; Guinea 2; Madagascar 4; Mali 3; Mauritania 3; Niger 5; CAR 2; DRC 5; Senegal 2; Chad 3; Togo 4.

### Achievements, gaps, and continuing priorities
- Achievements:
  - Automation of import/export operations; streamlined clearance and collection procedures; progress since 2003 with ASYCUDA++ expansion, IMF TA, WCO Columbus Program, and donor projects.
  - Trade facilitation improvements noted in international surveys; in many cases operations handled end-to-end within 24–48 hours.
- Persistent gaps:
  - Capacity to fight fraud and corruption remains underdeveloped.
  - Operational resource adequacy and modernization of management policies lag.
  - Incomplete application of international standards (WTO ACV, transit procedures).
  - Exemptions remain high and not minimized; origin control and regional cooperation need strengthening.
  - Human resources, training, integrity measures, and internal audit remain priorities.
- Overall observation:
  - Despite trade liberalization, revenue from customs duties declined only slightly; modernization requires sustained political commitment, coordinated financing, stronger governance, and programmatic TA.

*Source: _wp12259 - References; Boxes 1–3; Appendix III; selected tables and figures as presented in the source document_*

### References .............................................................................................................

### _wp12259 - References .............................................................................................................

### Purpose and methodology
- Aim: take stock of changes introduced in customs administration in francophone countries in sub-Saharan Africa since 1995, identify challenges, and initiate reflection on solutions.
- Geographic coverage: Benin, Burkina Faso, Burundi, Cameroon, Central African Republic (CAR), Chad, Union of Comoros, Democratic Republic of the Congo (DRC), Republic of Congo, Côte d’Ivoire, Gabon, Guinea, Madagascar, Mali, Mauritania, Niger, Senegal, and Togo.
- Data sources and basis:
  - Findings and conclusions of technical assistance (TA) carried out by the IMF’s Fiscal Affairs Department (FAD) and the IMF regional technical assistance centers AFRITAC West and AFRITAC Centre (together serving 16 of the 18 countries reviewed).
  - Supplemented by data from international surveys and IMF area departments.

### Basic profile of the Francophone Sub-Saharan African countries (FSSACs)
- Population and economic weight:
  - 2010 population: 244 million (a quarter of Africa’s population).
  - Accounted for 10.1 percent of Africa’s GDP in 2008, and 19 percent of sub-Saharan Africa’s GDP.
  - Share in world trade in 2009: less than 1 percent (3.2 percent for Africa).
- Development status and poverty:
  - Twelve of the 18 countries belong to the group of low-income countries (see Table 1).
  - Seven FSSACs are among the last 10 listed in the UNDP Human Development Index; Gabon ranks 103 out of 182.
  - Headcount poverty rate ranges from 33 percent in Gabon to 71 percent in the DRC (IMF data).
- Economic structure and trade:
  - Little diversification of the economy, small manufacturing sector, pervasive informal sector, generally low tax compliance.
  - Many countries import mainly staple commodities and export mainly agricultural goods, timber, minerals, and crude oil.
  - Trade partners: primarily Europe, with a considerable increase in trade with Asia in recent years.
- Mineral resources and fiscal implications:
  - Oil production concentrated in central Africa and the Gulf of Guinea.
  - CAR, Gabon, Guinea, Mali, Mauritania, and Niger derive over 10 percent of their fiscal revenue from mining.
- Geographic and infrastructure constraints:
  - Landlocked or largely landlocked: Burkina Faso, Burundi, CAR, Chad, Mali, Niger are landlocked; DRC is largely landlocked.
  - Transit flows for these countries increase transport times, costs, and fraud risks.
  - Port and transport infrastructure generally deficient across the region.
- Regional integration and governance:
  - All FSSACs have signed at least one regional trade agreement; such agreements can promote customs modernization but also complicate customs administration.
  - More than half of the countries experienced severe political crises over the study period, a context unconducive to reforms and donor involvement in customs modernization.

### Revenue trends and indicators of customs performance
- Aggregate trends (1996–2009):
  - Revenue generated by customs and other import duties, as a percentage of total GDP of FSSACs, declined slightly from 3.06 percent to 2.82 percent of GDP.
  - The collected customs tariff rate fell from 19.5 percent to 11.1 percent during the same period.
  - Imports of goods increased from 15.7 percent of GDP in 1996 to [text truncated in source — no additional figure provided].
- Analytical caveats:
  - Customs administration is only one factor determining trade revenue.
  - Detailed country analysis is required to assess contributing factors such as structure of imports, share of fully or partially nontaxed imports, and tariff policy.
  - Few national instruments exist for assessing customs administration performance; international surveys and IMF data are used as proxies.

### Notable tables, figures, and appendixes referenced (content inventory in source)
- Tables and figures cited include breakdowns by income (Table 1), imports and customs duties trends (Tables 2, 4, Figures 1–4), revenue forgone from customs exemptions (Table 3), customs procedures and clearance times (Tables 9–11), and IMF/FAD TA mission listings (Tables 12–13).
- Appendixes include regional trends in imports and customs duties, descriptions of customs international conventions and standards, and listings of TA provided in customs administration in FSSACs (1995–2010).

_Italic: Source: _wp12259 - References ............................................................................................................._

### 25.4 percent of GDP in 2009. They have grown faster than GDP since 2000.

### _wp12259 - 25.4 percent of GDP in 2009. They have grown faster than GDP since 2000.

### Trends in Trade and Trade Taxes
- Imports of goods in francophone sub-Saharan Africa reached 25.4 percent of GDP in 2009.
- Trade taxes (customs and other import duties) have grown faster than GDP since 2000.
- Customs and other import duties accounted for 3 percent of regional GDP in 2009, compared with 3.9 percent in 1996.
- Customs and other import duties remained almost stable over the period: 2.4 percent of GDP in 2009 against 2.55 percent of GDP in 1996 (regional statement), and revenue collected from customs and other import duties represented 2.4 percent of GDP in 2009 compared with 1.9 percent in 1996 (another regional statement).

### Collected Customs Tariff Rate and Country Variations
- A marked decrease in the collected customs tariff rate in 2000 is related to the principal phase of the tariff reform (Chapter IV), followed by a slight downward trend.
- In 2001–02, CEMAC francophone countries experienced a reduction in the 1996–2009 collected customs tariff rate, followed by a recovery attributed to a temporary surge in exempted imports.
- Table 2 country highlights (1996 to 2009) — imports of goods as a percentage of GDP, collected customs tariff rate (customs and other import duties as a percentage of imports of goods), and customs duties as a percentage of GDP:
  - Benin: Imports 12.9 → 14.8; Collected tariff rate 14.7 → 15.4; Customs (% GDP) 2.0 → 4.0; Variation 100.0 (collected tariff rate) and 56.0 (customs share of total tax revenue)
  - Burkina Faso: Imports 17.1 → 17.9; Collected tariff rate 4.7 → 17.7; Customs (% GDP) 3.0 → 2.3; Variation -23.3 (customs % GDP)
  - Burundi: Imports 11.5 → 20.2; Collected tariff rate 19.6 → 13.1; Customs (% GDP) 2.3 → 2.7; Variation 17.4 (customs % GDP)
  - Cameroon: Imports 11.6 → 19.9; Collected tariff rate 11.0 → 11.0; Customs (% GDP) 1.3 → 2.7; Variation 107.7 (customs % GDP)
  - CAR: Imports 14.2 → 12.9; Collected tariff rate 23.1 → 10.5; Customs (% GDP) 1.9 → 1.4; Variation -26.3 (customs % GDP)
  - Chad: Imports 15.1 → 37.1; Collected tariff rate 13.7 → 2.5; Customs (% GDP) 2.1 → 0.9; Variation -57.1 (customs % GDP)
  - Comoros: Imports 21.3 → 31.9; Collected tariff rate 14.1 → 11.8; Customs (% GDP) 3.0 → 3.8; Variation 26.7 (customs % GDP)
  - DRC: Imports 14.0 → 44.5; Collected tariff rate 8.4 → 7.9; Customs (% GDP) 1.2 → 3.5; Variation 191.7 (customs % GDP)
  - Rep. of Congo: Imports 11.8 → 12.1; Collected tariff rate 24.6 → 12.2; Customs (% GDP) 2.9 → 1.5; Variation -48.3 (customs % GDP)
  - Côte d’Ivoire: Imports 10.6 → 12.1 (1997 data); Collected tariff rate 43.1 → 11.7; Customs (% GDP) 4.5 → 3.1; Variation -31.1 (customs % GDP)
  - Gabon: Imports 16.9 → 16.8; Collected tariff rate 13.0 → 19.1; Customs (% GDP) 2.2 → 3.2; Variation 45.5 (customs % GDP)
  - Guinea: Imports 15.1 → 26.4; Collected tariff rate 9.6 → 10.6; Customs (% GDP) 1.4 → 2.8; Variation 100.0 (customs % GDP)
  - Madagascar: Imports 16.1 → 28.3; Collected tariff rate 11.3 → 15.4; Customs (% GDP) 1.8 → 1.0; Variation -44.4 (customs % GDP)
  - Mali: Imports 19.1 → 24.9; Collected tariff rate 10.7 → 11.4; Customs (% GDP) 2.0 → 2.8; Variation 40.0 (customs % GDP)
  - Mauritania: Imports 31.2 → 47.2; Collected tariff rate 9.1 → 3.1; Customs (% GDP) 2.9 → 1.5; Variation -48.3 (customs % GDP)
  - Niger: Imports 18.7 → 20.4; Collected tariff rate 10.2 → 18.1; Customs (% GDP) 1.9 → 3.7; Variation 94.7 (customs % GDP)
  - Senegal: Imports 24.9 → 33.2; Collected tariff rate 20.6 → 8.2; Customs (% GDP) 5.1 → 2.7; Variation -47.1 (customs % GDP)
  - Togo: Imports 35.1 → 32.6; Collected tariff rate 5.6 → 9.3; Customs (% GDP) 2.0 → 3.0; Variation 50.0 (customs % GDP)
  - Simple average: Imports 17.6 → 25.2; Collected tariff rate 15.6 → 12.0; Customs (% GDP) 2.4 → 2.6; Variation 8.3 (customs % GDP)

- Table 2 summary: collected duties as a percentage of GDP varied considerably by country, ranging from a 57 percent fall in Chad to a 192 percent increase in the DRC.

### Exemptions and Revenue Forgone
- Exemptions and conditional relief arrangements significantly impacted the collected customs tariff rate; available data is partial and insufficient to imply a general trend, but exemption’s weight is obvious and there is no clear indication that it is decreasing.
- Exemption data does not include temporary admission of goods on which duties are suspended (commonly used to grant exemptions).
- Table 3 (excerpted values, percent of GDP) highlights revenue forgone from customs exemptions in selected countries and years:
  - Benin: 2004 1.20; 2006 0.85; 2008 0.60; 2009 1.44 (among other intermittent entries)
  - Burundi: 2003 1.19; 2006 2.47; 2007 5.19; 2008 7.00; 2009 4.17; 2005 4.48; 2004 3.72
  - Chad: 2005 4.96; 2006 2.60; 2007 2.15; 2008 2.00; 2009 2.04
  - Rep. of Congo: 1996 3.08; 2003 2.69; 2004 2.82; 2005 2.26; 2008 5.74; 2009 6.15
  - Côte d’Ivoire: 1996 0.50; 2005 2.33; 2006 2.13
  - Guinea: 2005 3.00; 2006 2.44; 2007 3.49; 2008 3.16
  - Mali: 1995 0.89
  - Niger: 1995 1.73; 1996 1.11; 1997 1.48; 2005 0.93
  - Senegal: 2009 3.42
  - Togo: 2004 0.75; 2005 0.77
- Table 3 source: Customs administrations’ data; GDP data from IMF African Department.
- Note: Table 3 data on foregone revenue includes customs and other import duties, VAT, and other domestic levies on imports.

### Valuation, Data Consistency, and Trade Statistics
- Table 4 compares imports recorded in the FSSACs against exports from the world to these countries (IMF Statistics Department), applying a customary 10 percent adjustment for freight and insurance to free on-board exports.
- Two-thirds of countries show import and export data close to each other; however, the 10 percent adjustment might be insufficient for landlocked sub-Saharan countries.
- Example country entries from Table 4 (Exports from the World; Imports; Difference (Percent of Exports from the World)):
  - Benin 1999: Exports 1,185.6; Imports 843.3; Difference -28.9. Benin 2009: Exports 6,000.8; Imports 6,002.2; Difference -0.1.
  - Madagascar 1999: Exports 774.5; Imports 378.0; Difference -51.2. Madagascar 2009: Exports 3,031.3; Imports 3,127.5; Difference +3.2.
  - Guinea 1999: Exports 749.8; Imports 558.2; Difference -25.5. Guinea 2009: Exports 2,042.8; Imports 3,667.2; Difference +79.5.
  - DRC 1999: Exports 652.3; Imports 647.6; Difference -0.7. DRC 2009: Exports 3,281.7; Imports 3,607.7; Difference +9.9.
- In-depth analyses, including comparisons between trading countries, would be needed to assess customs’ decisions on valuation of external trade.

### Customs’ Contribution to Total Tax Revenue and the Tax Transition
- Table 5 compares total tax revenue and customs duties in 1996 and 2009.
- The share of customs and other import duties in total tax revenue decreased in ten countries between 1996 and 2009.
- In countries where total tax revenue significantly increased (11–12 countries), customs was not the exclusive nor the major contributor.
- Among eight countries where customs and other import duties decreased as a percentage of GDP, six compensated lost revenue on the domestic side, suggesting improved effectiveness in recovering revenue lost from trade liberalization.
- Selected Table 5 figures (Total Tax Revenue % of GDP; Customs % of GDP; Customs % of Total Tax Revenue):
  - Benin: Total tax revenue 12.6 → 16.1; Customs 2.0 → 4.0; Customs (% total tax revenue) 15.9 → 24.8; Variation 56.0
  - Burkina Faso: Total tax revenue 11.5 → 12.5; Customs 3.0 → 2.3; Customs (% total tax revenue) 26.1 → 18.4; Variation -29.5
  - DRC: Total tax revenue 6.0 → 12.4; Customs 1.2 → 3.5; Customs (% total tax revenue) 20.0 → 28.2; Variation 41.0
  - Senegal: Total tax revenue 15.0 → 18.0; Customs 5.1 → 2.7; Customs (% total tax revenue) 34.0 → 15.0; Variation -55.9
  - Niger: Total tax revenue 7.1 → 13.8; Customs 1.9 → 3.7; Customs (% total tax revenue) 26.8 → 26.8; Variation 0.0

### Customs Enforcement Results and Control Selectivity
- Table 6 (results of customs controls from TA reports; country identities masked) shows:
  - Reporting weaknesses: insufficient reporting of disputed cases by customs field offices to HQ and inconsistent data among countries.
  - IMF TA recommended automation for comprehensive and timely reporting of customs offences by customs units.
  - Based on provided data, number of avoided revenues recorded is small in most cases, indicating limited impact of customs inspections and audits and a need for control selectivity.
- Example Table 6 entries (Number of Cases; Fines and Avoided Duty and Fees as Percent of Collected Revenue):
  - Country 1: Years 2000–2005 Cases 3,036; 2,359; 674; 1,165; 1,703; Fines/Avoided: 1.52; 2.13; 1.58; 1.27; 1.28
  - Country 2: Years 2008–2009 Cases N.A.; N.A.; Fines/Avoided: 0.83; 0.33
  - Country 6: Year 2005 Cases 272; Fines/Avoided 8.23
  - Country 9: Years 2008–2009 Cases 132; 82; Fines/Avoided 3.68; 10.89
- Source: TA reports based on customs administrations’ data.

### Trade Facilitation, Customs Efficiency, and Logistics Performance
- Doing Business “Trading Across Borders” average classification for FSSACs is 147 out of 183 (1 being highest).
- Average FSSACs’ ranking on “Ease of Doing Business” general index is 166.
- World Bank Logistics Performance Index (LPI) findings:
  - In FSSACs, average time to clear imports: 2 days without physical inspection and 5 days with physical inspection.
  - In sub-Saharan African countries, importing requires 8.7 documents on average; Benin, Senegal, and Togo fall below this number.
  - Average import cost per container in sub-Saharan Africa is US$2,492.
  - CEMAC average import cost per container: US$5,069.
- Table 7 selected Doing Business indicators (2006 → 2011):
  - Benin: Documents to import 7 → 7; Time to import 38 → 32 days; Cost to import US$1,202 → US$1,400; Documents to export 7 → 7; Time to export 34 → 30 days; Cost to export US$1,167 → US$1,251.
  - WAEMU average: Documents to import 10 → 8.4; Time to import 47.5 → 36.3 days; Cost to import US$2,203 → US$2,503; Documents to export 9 → 7.7; Time to export 37 → 30.8 days; Cost to export US$1,575 → US$1,917.
  - CEMAC average: Documents to import 11.8 → 11.6; Time to import 61 → 54.6 days; Cost to import US$3,083 → US$5,069; Documents to export 8.2 → 8.8; Time to export 48.6 → 44.4 days; Cost to export US$2,761 → US$3,707.
  - Total average: Documents to import 10.4 → 9.7; Time to import 50.9 → 43.3 days; Cost to import US$2,545 → US$3,134; Documents to export 8.6 → 8.2; Time to export 41.8 → 36.3 days; Cost to export US$2,053 → US$2,381.
- LPI and Doing Business assessments indicate modest but positive trends; seven out of 13 customs administrations assessed in 2007 and 2010 made progress: Benin, Burkina Faso, Madagascar, Niger, Senegal, Chad, and Togo.
- Enabling Trade Index (World Economic Forum, 2010) assessed efficiency of customs administration for 10 FSSACs ranked between 86 (Senegal) and 124 (Chad).

### Challenges in the Late 1990s and Reform Agenda
- Customs administrations’ three main missions: (1) revenue collection; (2) implementation of trade and tariff policy; (3) protection (health, security, intellectual property, combating drug trafficking and terrorism).
- Key challenges in the late 1990s:
  - Complex customs tariffs: large number of taxes and tax rates; wide differentials between rates; massive use of quasi-tariff instruments; various levies and fees; multiple exemptions.
  - Low level of traders’ compliance with rules, evidenced by many invalid commercial documents and numerous reassessments.
  - Need to correct declarations while increasing compliance sustainably.
  - Pressure to facilitate trade, reduce administrative charges and wait times to attract investment and promote exports.
  - Increased customs workload with trade growth and regional trade agreements requiring tariff reforms and harmonization.
  - Rise in fraud, illegal trade, organized crime, and the terrorist threat (as of 2001), raising priority of the protection mission.
- Customs administrations tended to believe underinvoicing and challenges in monitoring unit prices generally led to revenue losses; conversely, some imports may be overvalued due to administrative values, incomplete application of WTO procedures, or transfer-pricing by traders.
- Reform priorities implied by the analysis:
  - Improve monitoring and reporting of disputed cases and customs offences (automation recommended).
  - Strengthen cargo monitoring in main ports and verification of declared values.
  - Assess impacts of transit trade and temporary admissions on collected tariff rates, especially for landlocked countries.
  - Balance revenue collection objectives with trade facilitation and compliance strategies.
  - Pursue tax transition: reduce share of tariff revenue and compensate with indirect domestic and direct taxes.

*Source: _wp12259 - 25.4 percent of GDP in 2009. They have grown faster than GDP since 2000.*

### Box 1. Main Modernization Actions Engaged in FSSACs’ Customs Administrations,

### Box 1. Main Modernization Actions Engaged in FSSACs’ Customs Administrations, 1995–2010

### Main modernization actions implemented
- Computerization of customs operations
- Implementation of simple and reliable import and export procedures
- Strengthening of procedures for the valuation of goods
- Strengthening control of duty exemptions
- Implementation of tariff reforms and contribution to regional integration
- Trade facilitation and development of service to traders
- Improved effectiveness of inspections and audits through modern control and risk management techniques
- Cooperation with the tax department to mobilize domestic revenue
- Combating organized fraud and illicit trade more efficiently
- Improved human resource management
- Strengthening of budget resources and equipment
- Modernization of the organization and management of the customs department

### Context and constraints
- Customs administrations in the FSSACs faced the challenge to modernize and improve performance despite low levels of revenue, development, and governance.
- Customs administration reform must account for the international customs framework established by the World Customs Organization (WCO) conventions and WTO obligations.
- All FSSACs joined the WCO. All FSSACs were members of the WTO in 1997, except for the Union of the Comoros, which gained observer status in 2007.

### IMF TA–supported modernization objectives and priorities
- Adopt coherent trade and tariff policies and establish the appropriate supporting legislation.
  - Emphasis on simple, well-designed legislation within a transparent framework; streamline taxation, exemptions, and obligations of traders.
- Adopt modern, simple procedures.
  - Reduce costs and administrative red tape; streamline procedures before computerization.
- Enhance customs control approach and methods.
  - Introduce risk management techniques, suitable distribution of controls, and develop postclearance audits; require staff specialization and coherent compliance and enforcement strategies.
- Ensure administrative structures, management practices, and incentives promote effectiveness and good ethical conduct.
  - Align missions, organization, management procedures, and resources to serve interests across the board, limit corruption and fraud, and strengthen national institutions and governance.
- Implement computerization across the board.
  - Modernize existing systems, expand functionally and geographically, and increase use by customs officers and traders.

### Implementation strategy and sequencing
- IMF TA recommended medium-term (in general, three- to five-year) reform plans with fleshed out action plans.
- Pilot projects were introduced at the few offices that collected the bulk of customs revenue (on average, three or four customs offices per country), at head offices, and later at border posts managing transit of goods.
- Computerization was given high priority, but only after establishing new, streamlined processes.
- Priority functions for revenue collection:
  - (i) strengthening the valuation of imports,
  - (ii) improving exemption management,
  - (iii) cargo reporting in ports,
  - (iv) better monitoring of transit and conditional relief arrangements.
- Standalone measures with immediate revenue effects (e.g., enforced collection of arrears from relief procedures and customs transit) were associated with reform projects.
- Sequencing of customs enforcement reforms:
  - (i) enhancing in-office inspections;
  - (ii) strengthening risk analysis and post-clearance audits, and cooperation with the tax administration;
  - (iii) beefing up actions against fraud and border control.

### Use of private preshipment inspection services
- To mitigate weaknesses, 16 of the 18 countries’ governments contracted private companies to carry out inspection programs.
- Service providers inspected goods in countries of provenance and provided opinions on customs issues, particularly price of goods.
- Policy: maximize use of ongoing contracts while developing domestic capacities so customs administrations could become autonomous over time.

### Reform management frameworks
- IMF TA recommended establishing reform management frameworks adjusted to administration capacity and size, comprising at least a steering committee and implementation framework.

### Achievements and remaining issues
- Good progress:
  - Automation of import and export operations.
  - Improved streamlining and reliability of customs clearance and collection procedures.
  - Greater progress since 2003 with enhanced UNCTAD support for ASYCUDA++, increased IMF TA, establishment of the WCO 2006 Columbus Program, and new donor projects.
- Slower progress or gaps:
  - Developing capacity to fight fraud and corruption.
  - Ensuring adequacy of operational resources.
  - Modernization of management policies and practices.
  - Incomplete application of important international standards, such as the WTO Agreement on Customs Valuation (ACV) and procedures for the international transit of goods.
  - Number of countries contracting private valuation services has remained the same.
  - Procedures for checking entitlement of imports to tax exemption improved, but the number and impact of exemptions were not minimized (mostly a policy issue).
  - Spotty progress in implementing regional trade agreements and cooperating with tax departments.
  - In trade facilitation, a number of FSSACs have improved since the late 2000s, as noted in international surveys.
- Despite trade liberalization, revenue from customs duties has declined only slightly.

### Computerization outcomes and limitations
- Nearly all FSSACs chose the ASYCUDA++ software package developed by UNCTAD; UNCTAD provided key installation and implementation support.
- Installation delays occurred due to gaps in financing, composition of computer expert teams, or late arrivals (example noted: Mauritania adopted it in July 2010).
- Linking offices with a single server and traders’ remote access is still under way in several administrations, limiting the system’s current value added.
- Many posts far from major business centers are neither equipped nor connected because of cost and technical issues.
- Despite issues, all FSSACs now have an effective system to clear goods.
- Because imports and exports are concentrated at a few ports, about 85–90 percent of international trade and revenue figures are processed electronically.

*Source: Box 1. Main Modernization Actions Engaged in FSSACs’ Customs Administrations, 1995–2010*

### Box 2. Phases of Computerization of the Customs Administrations in Francophone

### Box 2. Phases of Computerization of the Customs Administrations in Francophone Sub-Saharan Africa

### Phases and adoption of ASYCUDA
- UNCTAD developed and implemented the first version of ASYCUDA in three West African countries in the 1980s to compile foreign trade statistics.
- Mid-1990s: customs administrations of francophone Africa began using ASYCUDA version 2.7, which allows automation of customs clearance processes, including declaration, manifest, cash and accounting, and warehousing.
- The third version, ASYCUDA++, is currently in use by most administrations.
  - Cameroon replaced its national system (PAGODE) with ASYCUDA++ in 2007.
  - ASYCUDA++ functional additions include direct trader input, submission of declarations by customs brokers via the internet, risk management, and transit monitoring.
- Côte d’Ivoire used its own system (SIMBA) until 2009, then adopted ASYCUDA World.
  - ASYCUDA World increases ASYCUDA++ capacities related to trade facilitation, customs controls, accounting, and statistical data, and introduces WCO and WTO standards; linkages enable the establishment of a single window.
  - Preparations for ASYCUDA World began in Mali in 2010, and in 2011 in the Republic of Congo.
- Senegal has developed its own system, GAINDÉ.
- Footnote: ASYCUDA software is provided by UNCTAD without charge; ASYCUDA is installed at the request of developing countries’ governments with the assistance of UNCTAD experts, the countries being responsible for funding the projects.

### Current use, gaps, and further IT developments
- Basic automated modules (registration of goods, declarations, payments, and revenue recording) are generally being used appropriately.
- Underused functions: control selectivity, management of transit goods, provision of performance charts, and indicators for data analysis.
- Paperless transition requirements:
  - Customs personnel must take full ownership of the data processing tool.
  - Customs legislation needs updating.
  - Interministerial initiatives must be started.
- Security risks: Cases of fraud confirm need for customs to ensure security of system and data as computerization expands.
- Additional applications under development or piloting:
  - Processing exemptions (Côte d’Ivoire, Mali).
  - Interface between customs and inspection company systems (first steps in Burkina Faso, Mali, Togo).
  - Establishment of management information systems (Cameroon, Côte d’Ivoire).
- Perspectives for broader IT developments:
  - Integration of customs procedures into electronic single windows.
  - Automation of risk management.
  - Regional interconnection of customs services.
  - Contribution to tariff harmonization via a regional integrated tariff.

### Import and export procedures and self-assessment
- Procedures introduced aimed to meet criteria consistent with the Revised Kyoto Convention (see Appendix II):
  - (i) Self-assessment: separation of roles between trader and customs officer (importer/exporter declares and pays duty; customs officer checks).
  - (ii) High level of compliance: all goods recorded and assigned a customs status (regime).
  - (iii) Simplicity and predictability: reduce trade costs.
- Progress facilitated by computerization:
  - Self-assessment is now standard for presentation of goods (input of cargo manifest data by shipper or representative) and assignment of customs regime (input of declaration data by customs broker).
- Standard and sanitary administrations generally mandate customs to carry out main inspections and collections applicable to imports and exports (except certain levies and apart from the DRC).
- Computerization effects:
  - Automated discharge of each step makes customs clearance procedure more secure.
  - Many customs have computerized emergency procedures.
  - Deferred payments are better monitored.
  - Customs is connected to the public accounting department of the Ministry of Finance (MoF) to report duty assessments and collections.
  - In several countries collection remains done by the public accounting department; acceptable if automated chain from cargo reporting to release of goods is not broken.
- Organizational and procedural shortcomings:
  - Need streamlined organization in clearance offices to preclude redundant inspections.
  - Inspection companies’ processes should be integrated with customs’ processes.
  - Customs officers must rigorously monitor traders’ commitments and conditional relief procedures (in-bond warehousing, temporary admission) which represent high revenue risk.
  - Precustoms clearance administrative formalities imposed by ministries or agencies often fail to exploit automated customs system data and complicate importing/exporting.
  - Number of required documents could be significantly reduced.

### Burden of Customs Procedures — selected survey results (2010)
- World Economic Forum, The Global Enabling Trade Report 2010 — Score from 7 (Highly Efficient) to 1 (Highly Inefficient); Rank (Number of Rated Countries or Economies: 139)
  - Senegal: 4.4 — 43
  - Mauritania: 4.0 — 61
  - Burkina Faso: 3.8 — 76
  - Mali: 3.7 — 80
  - Madagascar: 3.6 — 86
  - Côte d’Ivoire: 3.3 — 98
  - Cameroon: 3.2 — 102
  - Burundi: 3.0 — 109
  - Chad: 2.3 — 124

### Single windows, TradeNet, and electronic facilitation
- Several ports (e.g., Douala, Matadi) have physical single windows grouping port, customs, banking, and other services.
- Challenge: establish virtual electronic single windows allowing single submission of standardized information, remote formalities, and bank transfer payments.
- Lomé (Togo) and Cotonou (Benin) are implementing electronic single windows.
  - November 2010: Government of Benin assigned two joint private companies to establish and operate the single window for foreign trade at the port of Cotonou.
- Madagascar: TradeNet operational since 2009 in large customs offices; TradeNet networked public and private parties for international trade operations.
  - In 2006, contract with preshipment inspection company replaced by a contract providing services upon arrival; Malagasy firm GasyNet formed (70 percent of shares held by a private company and 30 percent by the Malagasy government) to manage these services.
- Senegal: with new version of GAINDÉ, developed ORBUS (foreign trade procedures) and CORUS (telepayment) to facilitate electronic single window implementation.

### Valuation of goods and WTO Agreement implementation
- WTO Agreement on Customs Valuation bases valuation on transaction value (actual price paid).
  - Previous method: Brussels Definition of Value.
- FSSACs amended legislation to incorporate the Agreement, but implementation has been slow and incomplete.
- Shortfalls:
  - Risk management, prescribed requests for information from importers, and development of postclearance audits have not been implemented.
  - Doubtful alignment of values applied by customs officers with transactional values or authorized alternatives.
  - Administered values are applied to a number of commodities.
  - Unreliability of invoices and commercial documents causes verification problems and heavy administrative burden.
- Practices:
  - Concern for revenue targets leads customs to check all import value declarations and authorities to request opinions on import prices from inspection companies.
  - Cooperation between customs and inspection companies limited; coverage of high-stake products incomplete; some companies’ opinions were validly questioned.
- IMF TA expert advice for modernization of valuation control:
  - (1) Establish administrative arrangements to guarantee transparency and equity in decision making and prevent distortions from arbitrary valuations.
  - (2) Build customs capacity to detect abnormal declared values and evaluate goods accurately, consistent with WTO requirements and customs law.
  - Implementation measures include use of postclearance audits combined with risk management and control selectivity.

### Control of duty exemptions
- Large revenue forgone from exemptions led to strengthening management to address abuse.
- IMF TA recommendations:
  - Increase Ministry of Finance control over tax exemptions (which mostly stem from nontax legislation: investment codes, oil and mining codes, ad hoc agreements, donor requirements).
  - Require systematic preimport authorization of the Minister of Finance or the Director General of customs for exemptions.
  - Abolish discretionary exemptions to reduce rent seeking and corruption.
  - Strengthen verification of end use of exempted goods.
  - Associate customs administrations with assessment of current legislation to repeal provisions that cannot be monitored or encourage rule breaches.
- Country actions: Côte d’Ivoire and Gabon took initial steps; Senegal started comprehensive identification and quantification of tax expenditures in 2009.
- Limitations:
  - Administrative improvements can only marginally contain exemptions; duty exemption is mainly a tax policy issue.
  - Harmonization of exemptions would limit tax competition among countries.
  - Annual review of tax expenditures recommended through budget procedure.

### Tariff reforms, harmonization, and regional integration
- Regional integration agreement components: common external and preferential tariffs; harmonization of customs legislation, procedures and practices; facilitation of transit; cooperation among customs administrations.
- Historical actions:
  - 1994: CEMAC introduced a streamlined common external tariff (CET) and a preferential tariff; completed in 1998; replaced quantitative import barriers with temporary import surcharges.
  - WAEMU gradually removed internal tariffs from 1996 and instituted a four-band CET in 2000 after reductions of maximum duty rate from 1998.
    - WAEMU tariff bands are: 0, 5, 10, and 20 percent.
    - ECOWAS-wide CET envisaged with a fifth band at a 35 percent rate to expand WAEMU CET to ECOWAS region.
- Evaluations and issues:
  - Doe (2006) reviewed CET implementations: overall compliance with CEMAC and WAEMU rates but numerous deviations existed, especially additional fees and surcharges.
  - Discrepancies between actual tariff band and CET for a number of commodities.
  - Nonharmonization of exemptions at regional level and gaps in customs valuation are major impediments to tariff harmonization.
  - Leaving computerization of community tariff solely to national administrations increases risk of implementation discrepancies; regional IT modules should be developed.
- Legal frameworks:
  - CEMAC and WAEMU adopted a Community Customs Code in 2001.
  - East African Community adopted Customs Management Act in 2004.
  - Member states’ customs laws broadly consistent with community codes on procedures, but community and national legislation need full incorporation of modern customs standards (e.g., prearrival reporting, electronic submission).
  - Some countries engaged in customs law review: Benin, Mauritania, DRC, Togo; Madagascar and Burundi adopted revised customs codes in 2006 and 2007, respectively.

### Transit management and regional coordination
- Efficient regional customs transit procedures protect revenue and facilitate trade and integration.
- Existing transit systems (ECOWAS TRIE; CEMAC TIPAC) were ineffective without internationally valid guarantees and customs coordination.
- TA advice: modernize transit management with electronic data exchange.
- Recent steps:
  - Use of ASYCUDA for information sharing among customs offices (Burkina Faso).
  - Use of GPS for vehicle location on major corridors (Cameroon).
  - CEMAC and ECOWAS initiatives, with EU participation, to develop interconnection of customs offices in crossed countries.
- Comprehensive programs for transit improvements should include:
  - Renewing vehicles and increasing containerization rate.
  - Ensuring freight security.
  - Halting law enforcement harassment of truckers.
  - Creating new infrastructure.
- World Bank corridor projects in sub-Saharan francophone Africa (selected examples with dates and objectives):
  - Transport-Transit Facilitation Project of CEMAC (2007–15): facilitate regional trade among member states; improve CAR’s, Cameroon's, and Chad's access to world markets.
  - West Africa Transport and Transit Facilitation Project for Africa (2008–14): facilitate trade within subregion; improve access to world markets for Burkina Faso and Mali.
  - Abidjan-Lagos Trade and Transport Facilitation Project (ALTTFP, 2010–16): reduce trade and transport barriers in ports and on roads along Abidjan-Lagos corridor in Ghana, Togo, and Benin.

### Origin control, preferential agreements, and capacity needs
- Proper imposition of customs duty requires implementation of rules establishing goods’ countries of origin for preferential arrangements and antidumping/countervailing duties.
- FSSACs have granted low priority to origin procedures due largely to limited intraregional trade.
- Emerging challenges:
  - Economic Partnership Agreements (EPAs) under negotiation with the European Union will increase risks of origin and tariff classification fraud and will require capacity building.
- Recommended actions for origin control:
  - Develop programs to address origin fraud via detailed trade flow monitoring.
  - Augment capacity to detect doubtful declarations and documents.
  - Establish effective mutual administrative assistance with partner countries.
  - Harmonize and simplify origin rules to facilitate enforcement.

*Source: IMF TA reports and UNCTAD.*

### Box 3 shows the principal existing regional integration agreements of the FSSACs, either

### _wp12259 - Box 3 shows the principal existing regional integration agreements of the FSSACs, either

### Principal regional integration agreements (Box 3)
- Agreements identified as either customs unions (CEMAC, EAC, WAEMU) or free trade areas intended to become customs unions (COMESA, ECOWAS, SADC).
- Box 3 membership listings (Francophone countries studied and other parties) preserved exactly as presented:
  - Central African Economic and Monetary Community (CEMAC): Cameroon, CAR, Chad, Gabon, Republic of Congo; Other party: Equatorial Guinea.
  - Common Market of Eastern and Southern Africa (COMESA): Burundi, Comoros, DRC, Madagascar; Other parties: Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, Zimbabwe.
  - East African Community (EAC): Burundi; Other parties: Kenya, Rwanda, Tanzania, Uganda.
  - Economic Community of West African States (ECOWAS): Benin, Burkina Faso, Côte d’Ivoire, Guinea, Mali, Niger, Senegal, Togo; Other parties: Cape Verde, Gambia, Ghana, Guinea-Bissau, Liberia, Nigeria, Sierra Leone.
  - Southern Africa Development Community (SADC): DRC, Madagascar; Other parties: Angola, Botswana, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia, Zimbabwe.
  - West African Economic and Monetary Union (WAEMU): Benin, Burkina Faso, Côte d’Ivoire, Mali, Niger, Senegal, Togo; Other party: Guinea-Bissau.
- Observations:
  - The number and overlap of agreements create competing rules and complicate customs work, particularly determination of origin of goods and procedural standardization.
  - Customs formalities remain in effect at internal borders of these regional groupings.
  - Proposed approach (based on EU experience): importers might be allowed to pay customs duties separately from domestic taxes (at the external border or inland following a transit procedure), granting goods a “community status”; domestic taxes would be paid in the final destination country only.
  - Juxtaposed customs offices at internal borders have limited advantages unless goods are checked once, quickly, by a joint binational team—a challenging option not envisaged so far.
- Intraregional trade shares (during the 2000s, in percent of total trade):
  - CEMAC: 2 percent
  - COMESA: 4 percent
  - ECOWAS: 9 percent
  - SADC: 9 percent
  - WAEMU: 11 percent

### Trade facilitation and service
- Findings:
  - Over 1995–2010, awareness increased of customs’ need to facilitate trade, especially where governments emphasized business climate improvements and in major seaports.
  - Customs trade facilitation measures were rarely part of specific action plans; they typically addressed operator-raised problems.
  - Improvements noted by international surveys include increased customs efficiency and fewer documents to import and export.
  - Operations handled solely by customs officers, from capture of declarations to authorization to remove goods, were reported to take no more than 24–48 hours in many cases.
  - Ongoing monitoring of clearance procedures is generally absent (Cameroon a notable exception); predictability of operations is not yet guaranteed.
  - Consultation frameworks exist (periodic meetings, “Partners’ Day” at Pointe-Noire, post to observe clearance speed at Abidjan port, directorate of “Facilitation and Partnership with Enterprises” in Senegal), but implementation and formalization are weak, increasing discretionary decision risks.
  - Simplified clearance procedures for licensed operators are limited to most advanced FSSACs and are not widespread programmatically.
  - Customs regimes to encourage manufacturing (inward processing, duty drawback) exist but are used moderately except in more industrialized countries and free-zone countries (Togo, Madagascar).
  - Additional fees and levies on imports/exports remain significant impediments:
    - Most often, the statistics fee is 1 percent of c.i.f. value of goods.
    - The inspection fee is a minimum of 0.7 percent of c.i.f. value of goods.
  - Precustoms clearance issuance of certificates and authorizations generate considerable expense.
  - Online customs sites and dissemination efforts have improved access but are not comprehensive nor regularly updated.
- Table 10 — Clearance Times in Selected Francophone Sub-Saharan African Countries and by Region, 2010 (Clearance Times in Days)
  - Without Physical Inspection / With Physical Inspection
  - Country:
    - Burkina Faso: 2.00 / 3.00
    - Cameroon: 2.64 / 3.31
    - Chad: 1.00 / 15.00
    - Gabon: 5.89 / 9.12
    - Mali: 2.00 / 3.00
    - Mauritania: 0.50 / 1.00
    - Senegal: 1.73 / 3.16
    - Togo: 0.71 / 2.45
  - Region:
    - Francophone Sub-Saharan Africa (selected countries): 2.06 / 5.05
    - Sub-Saharan Africa: 2.83 / 4.94
    - East Asia and Pacific: 1.55 / 3.36
    - Europe and Central Asia: 1.48 / 1.89
    - Latin America and Caribbean: 1.62 / 3.41
    - Middle East and North Africa: 1.78 / 2.91
    - South Asia: 2.17 / 3.20
  - Income classification:
    - High income countries: 0.83 / 1.83

### Customs control and risk management
- Findings:
  - Two reform challenges: short-term capacity building at entry/exit points; longer-term restructuring via risk management, selectivity, and effective postclearance audits.
  - Reporting of containers and cargo has improved; cargo scanning has become commonplace over the past five years.
  - Scanners are effective for detecting undeclared goods in homogeneous cargoes but have limited utility for unit value, country of origin, or tariff classification.
  - Scanners reveal few offenses but likely have a deterrent effect.
  - Physical inspection patterns (Table 11) show variability among FSSACs; LPI notes physical inspection is more common in countries with low logistical performance.
- Table 11 — Physical Inspections of Goods in Selected Francophone Sub-Saharan African Countries, 2010 (Percent)
  - Physical Inspection (Percent of Import Shipments) / Multiple Physical Inspections (Percent of Shipments Physically Inspected)
  - Burkina Faso: 75 / 35
  - Cameroon: 12 / 4
  - Central African Republic: 50 / N.A.
  - Chad: 18 / 18
  - Gabon: 55 / 3
  - Mali: 75 / 3
  - Mauritania: 50 / 1
  - Senegal: 18 / 1
  - Togo: 9 / 18
- Observations on postclearance audits and selectivity:
  - Postclearance controls occupy a limited place; many FSSACs lack operational postclearance desk audit units.
  - Field audit units exist but their programs, methods, and resources are insufficient for controlling multinational enterprises and large informal-sector traders.
  - Inspectors and auditors often lack adequate training and professional documentation.
  - Preference remains for border inspections where goods serve as guarantee of duty payment.
  - Automated customs systems are being used to improve control selectivity, but lack of proper risk analysis functions has kept selectivity rudimentary and predictable.
  - Burkina Faso, Côte d’Ivoire, Mali, and Senegal launched projects in 2009 to automate risk analysis with AFRITAC support.
  - Licensed customs broker profession remains poorly monitored and heterogeneous; some brokers facilitate noncompliance.

### Cooperation with the Tax Department to mobilize domestic revenue
- Findings and progress:
  - IMF TA recommended use of TINs by customs, cooperation for VAT, excise, tax withholdings, routine information sharing, and joint audits.
  - By 2010, all FSSACs had introduced import VAT except the DRC and the Union of the Comoros. (Footnote: In the DRC, the VAT was introduced January 2012.)
  - Import VAT accounts, on average, for 45 to 65 percent of gross VAT in the FSSACs.
  - Most customs administrations now identify importers and exporters using TINs issued by tax directorates.
  - Comorian customs administration provides an example of good practices for trader registration in the port of Moroni.
- Remaining weaknesses:
  - Updating of TIN databases by tax administrations is weak.
  - Customs’ excessive use of generic numbers for operations wrongly accepted as noncommercial impedes tax audits and customs’ postclearance audits.
  - Electronic access to customs systems for tax departments is not implemented everywhere.
  - Sharing of intelligence on fraud and joint customs/tax interventions remain rare.
  - Customs’ contribution to control of natural resource exports and data provision is insufficient; shortage of customs officers specialized in natural resources.
  - Examples of initiatives:
    - Côte d’Ivoire’s customs reporting on mineral oils to an Oil Committee and inclusion of petroleum operations in modernization program.
    - Gabon’s customs has a specialized team for application of administrative values to exported timber.

### Combating organized fraud and illicit trade
- Findings:
  - IMF TA focused on building capacity in intelligence, investigation, antismuggling, and mutual administrative assistance among customs administrations.
  - Priority on duty collection relegated fraud-fighting missions; setting up rapid-intervention teams, intelligence units, and command centers is costly and intricate.
  - Capacity to combat organized fraud, smuggling, and illicit trafficking remains weak despite some progress in staff qualifications and detection equipment.
  - Mobile border surveillance, targeting illegal products, and sharing fraud information with foreign customs are below required operational levels.
  - Maritime surveillance is almost nonexistent (Senegal plans action).
  - Criminal prosecutions are rare, weakening deterrence even for serious fraud cases.
  - Concerns include massive importing of counterfeit and substandard products and increased drug trafficking, especially in West Africa.
  - A few customs have achieved some success in drug seizures.
- Recommendation:
  - Reach a satisfactory equivalent level of customs control at all borders to limit circumvention of main customs offices and protect tax policy from smuggling.

### Human resource management, training, and integrity
- TA recommendations emphasized urgent adjustments in:
  - Initial and refresher training for customs officers.
  - Training of specialists.
  - Prevention and repression of corruption.
  - Better incentives.
  - (Text truncated at end of provided excerpt; recommendations continue beyond excerpt.)

*Source: IMF staff compilation from the referenced unit of the IMF document.*

### introduction of manpower planning and management tools.

### introduction of manpower planning and management tools.

### Human resource management: persistent weaknesses
- In most of the FSSACs, the civil service ministry is responsible for recruiting new customs officers, generally without sufficient prior consultation with customs administrations, preventing consideration of qualifications and staffing needs.
- External interference and transfers of unskilled personnel from other ministries affect recruitment and assignment practices.
- Managerial structure is often poorly defined; many personnel assuming management responsibilities have only partial mastery of core functions such as planning, control, and evaluation.
- Recent TA: From 2010, AFRITAC West delivered TA on human resource management in several countries (Guinea, Mauritania, and Senegal).

### Training and specialist capacity
- Training for customs officers is still inadequate; many countries wish to establish a customs school or training center but lack infrastructure, competent personnel, and budget capacity.
- Clear shortage of specialists in all areas; modern customs administration allows little interchangeability.
- Specialist training remains occasional and meets only a small portion of actual needs; training obtained from development partners and inspection companies is often not integrated into a curriculum or modern HR policies.
- Frequent reassignment of officers and failure to account for competency profiles and acquired qualifications often nullify training efforts.
- Customs administrations generally rely on experienced managers (often trained abroad) but face serious problems with mid-level and beginner staff.

### Staffing distribution and management tools
- FSSACs’ customs departments’ staffing is generally adequate, or excessive in a number of countries, but poorly distributed.
- Principal staffing problems noted:
  - staff concentration in capitals and large cities despite border control needs;
  - functional assignments favor frontline positions;
  - excessive rotation of customs officers between posts;
  - excessive administrative personnel and generalist officers;40
  - appointment of managers who have been given no personnel supervision tasks.
- No early recruitment planning, neither career nor promotion planning.
- Management tools, for example specific data processing applications, are barely developed except in a few countries.

### Corruption, ethics, and automation measures
- Corruption in customs remains a major issue, widely documented.
- FSSACs have adopted and disseminated codes of conduct/ethics in line with the revised Arusha Declaration (see Appendix II), but codes are not strictly enforced and infringements are rarely punished with appropriate disciplinary measures.
- Automation has been used to limit corruption and fraud by including security measures in procedures, reducing face-to-face contact, tracking past operations, and facilitating operational surveillance.
- Examples:
  - Cameroon has efficiently used ASYCUDA++ for internal operational control of office personnel, traders, and customs brokers (with World Bank and France TA).
  - Through the Ministry of Finance, Mauritania tested comprehensive reconciliation of inspection company and customs offices data.
- Recommendation from footnote: To benefit from investment in specialized training while limiting corruption risks, it is generally recommended that staff members hold their positions for about three years.40

### Remuneration policies
- Remuneration policies vary considerably across countries: basic remuneration is generally quite low, with substantial supplementary remuneration added as various bonuses.
- This bonus system favors positions of direct contact with traders and incentivizes officers to prioritize immediate benefit.
- Supplements are often ill founded, raising issues of redistribution equity and lack of transparency.
- All FSSACs need to develop sound and comprehensive remuneration policies for customs employees, integrated with all other aspects of HR management.

### Budget, equipment, and resource management
- Notorious weaknesses in budget and material resources persist: unequal, uncertain, and chronically insufficient government budget appropriations.
- Customs administrations use alternative financing sources (a fraction of data processing/statistical fees collected or a fraction of penalties), which are limited and partially earmarked for personnel remuneration.
- Essential needs often unmet: electricity for automated systems, telecommunications networks, renovation of staff premises, computer hardware, vehicles, fuel, and detection equipment.
- Recommendation: centralize all resources and expenses to support strategic decisions, investment planning, and transparency — this has not been implemented to date.
- TA experts stressed improving planning and execution of expenditures and giving administrations greater autonomy.

### Organization and management of customs departments
- IMF TA emphasized introduction of modern management methods: strategic and operational planning, monitoring tools for activities and outcomes, and internal audit and inspection programs; also advised adjusting organizational structures and strengthening head office role.
- Customs administrations are typically departments within the Ministry of Finance (MoF) or Ministry of Economy (Gabon); exceptions:
  - From 2009, Burundi customs and tax administrations were integrated into the Burundi Revenue Office with greater managerial autonomy (supported by TA from DfiD and Belgium).
  - The DRC’s customs administration was reestablished as an MoF directorate after having been a semiautonomous agency in the 1980s.
- Kidd and Crandall (2006) conclusion (from questionnaire and literature): the revenue authority model offers advantages in autonomy and accountability but requires serious commitment to reform to improve revenue effectiveness and taxpayer compliance.
- Organizational reforms undertaken:
  - Head office structures largely meet recommended functional organization but need better reflection of modern functions (risk management, service to traders) and assignment of specialists to emerging functions.
  - Structures should reflect concerns with large “customers” (importers and exporters accounting for most revenues and exemptions) and key economic sectors including natural resources.
  - Separation between headquarters’ missions (design, management, evaluation) and operational functions should be more pronounced, even while allowing trade-offs in small organizations.
  - Customs clearance offices are well located to control trade flows; internal structures are being streamlined along with computerization.
  - Border posts far from economic centers suffer isolation and poor working conditions; Central African Republic plans a full-fledged border office on the Douala–Bangui corridor to reduce trade revenue evasion.
- Awareness of international standards is high thanks to WCO activities, but few management tools are used to disseminate objectives and prepare action plans at unit level; staff objectives and operations remain geared toward short-term revenue collection.
- Monitoring and reporting of operations are widely lacking; performance charts and indicators are of little use even though data exist in systems. Tools have been introduced in a few customs, Cameroon’s being the most advanced.42
- Internal auditing and inspection are little valued and rarely used; MoF general inspectorates examine customs in some countries (e.g., Burkina Faso, Madagascar), but external auditing of customs’ procedures, systems, and budgets is uncommon.

### Factors affecting the course of the reforms

- Reform objectives
  - Authorities and customs management identified weaknesses and generally succeeded in high-level reform planning, aided by diagnostic reviews and TA.
  - Coherency of objectives assigned to customs is a primary issue: modern customs’ core mission is to manage foreign trade neutrally and predictably while mobilizing revenue within that framework.
  - In practice, revenue outcome has remained the exclusive objective and sole criterion for judging progress, providing little incentive to modernize in areas not immediately generating revenue (e.g., WTO Agreement on Customs Valuation).
  - Lack of objectives for harmonization of procedures, common practices, and mutual cooperation has hindered regional integration progress.
  - Widespread tax exemptions, often inadequately justified socioeconomically, conflicted with the revenue maximization objective and diverted resources.

- Reform implementation
  - Project-based action plans were formulated in most countries with TA (especially AFRITAC), but implementation was hampered by shortage of experienced professional staff.
  - Project heads and teams were often not assigned full-time or incorporated into a structure responsible for carrying out the reform.
  - Lack of tools for measuring resources, activities, processes, and performance other than revenue receipts hindered reform conduct.43
  - Modernization conflicted with immediate priorities: without separation between operations and change management and without additional resources, quick fixes often prevailed over structural reforms, especially during revenue decline or stagnation.
  - Involvement of stakeholders was suboptimal: private sector insufficiently engaged; ministries and agencies dealing with external trade and logistics often not consistent with customs reform objectives; customs staff were not adequately involved and did not adhere to changes.
  - Regional organizations’ role beyond legislative harmonization proved limited.
  - Frequent turnover of Directors General and Ministers of Finance undermined reform continuity; frequent reassignment of personnel disrupted reform programs.
  - Between 1995 and 2010, 11 of the 18 countries covered by the study experienced forms of political instability, and four endured internal conflicts (Burundi, Congo, the DRC, and Côte d’Ivoire); conflicts led to infrastructure deterioration, fragmentation of customs territories, problems in militarized border areas, and unwarranted movement of customs personnel. Reform programs were suspended and budgets for reforms and TA often interrupted (examples: Guinea, Madagascar, Mauritania, Niger).

- Reform financing
  - Typically, no budget funds were earmarked for modernization programs; partial financing was obtained as projects proceeded.
  - Financing from external and national sources paid for computerization services from UNCTAD and installation of cargo scanners under service contracts.44
  - Lack of budgeted funds delayed major expenditures (communications systems, infrastructure upgrading, border control reorganization, detection equipment).
  - Smaller reforms (e.g., training) suffered from lack of synchronization between fund provision and action plan implementation and from lack of flexibility for urgent expenditures, resulting in unsteady progress.

- Governance environment
  - Limited progress in customs administration reforms cannot be explained only by technical problems or insufficient financing/TA; weak governance in the FSSACs hindered projects such as targeted postclearance audits, strengthening investigations, internal audits, and inspections.
  - Weak governance affected upgrading of the customs brokers profession (no license termination in event of fraud), limitation of exemptions/waivers/surcharges allocated to various agencies, and actions to improve transparency (e.g., reconciliation of customs and inspection companies’ data, which has almost never been implemented).
  - Worldwide Governance Indicators and related literature document limited progress since the late 1990s.

- Logistics and compliance environment
  - Customs are part of international trade logistics; efficiency of other stakeholders (port and airport authorities, shipping companies, banks, ministries, agencies issuing authorizations and certificates) significantly affects customs efficiency.
  - In the least developed francophone African countries, counterparts have been barely automated and modernized, except for large formal-sector operators.
  - Infrastructure deficits, limited containerized land transport development, poor state of utility vehicles, and narrow use of rail transport disincentivize modernization of customs procedures, particularly transit.45
  - Customs performance in landlocked countries has been especially negatively impacted, as observed in the Logistics Performance Index.
  - The customs environment is marked by a low average level of spontaneous compliance with rules.

*Source: _wp12259 - introduction of manpower planning and management tools.*

### introduction of new procedures based on confidence in the trader. Examples are provided by

### _wp12259 - introduction of new procedures based on confidence in the trader. Examples are provided by

### Operational measures, examples, and challenges
- "Green channel" procedures: authorizing customs clearance without control of declarations deemed to be of low risk; customs clearance of goods at the importer’s premises.
- Such procedures are common in more advanced customs administrations but "could be implemented only selectively in the FSSACs."
- Imports by companies and individuals in the informal sector create continual problems regarding identification and valuation of miscellaneous goods; in Mauritania, in 2010, customs estimated miscellaneous items imported by traders of the informal sector to be "25–30 percent of total import value."
- Modern infrastructure (example: the electronically managed container terminal of the Abidjan Port) "facilitates customs intervention modalities."

### Technical assistance (TA) and private-sector services
- Few TA projects by donors have supported full programs of customs administration reforms in francophone sub-Saharan Africa (FSSACs); uncertainties related to conflicts and governance likely affected donor decisions.
- FAD TA (from IMF headquarters and through the AFRITACs) was "neither intended for the implementation of such projects, nor endowed with resources for that purpose."
- States had limited expertise in designing and proposing comprehensive reform projects; without adequate TA, modernization took the form of "sectorized initiatives," contributing to piecemeal progress.
- Use of input from inspection companies has been extensive, but contracts "were not geared toward supporting reforms" and "contributed little to customs modernization." Contracts focused mainly on valuation information and cross-checking to fight corruption implicitly; supplementary services (materials, training) were "marginal and of limited application."
- Inspection companies are proposing technological support services (cargo scanners, GPS location of cargoes in transit, marking of oil products, establishment of single-windows). "Subject to the assessment of needs for proper integration into reform projects, those services can contribute to the modernization of customs administrations."
- Note from literature: Dequiedt, Geourjon, and Rota-Graziosi (2009) found that implementing services to verify importation and modernize customs administration is inconsistent; if both are envisaged, "they should not fall within the purview of a single provider, as they are conflicting."

### Lessons and suggestions for future steps (summary of strategic recommendations)
- Modernization requires deeper changes: "Sustainable and higher performance needs new operating methods and management procedures."
- No "one size fits all"; reforms should apply modern customs concepts while accounting for international frameworks and country context.
- Political commitment and high-level support are critical:
  - Authorities should set direction, establish objectives and incentives, reconcile revenue targets with multilateral/regional commitments, trade and tariff policy, business-friendly environment, and integrity/capacity building.
  - Authorities should coordinate all trade-related reforms and ensure consistency with the customs modernization program.
  - Policies and legislation should facilitate and reduce administrative costs, simplify import/export procedures, eliminate waivers, and streamline tax exemptions.
  - Authorities should be involved in sociopolitically challenging reforms: tackling customs fraud and corruption, uniform rule enforcement, transparency, and human resource policies.
  - Modernization programs should be adopted once financing, skilled personnel, and TA needs are determined and secured; authorities should consider reorienting budgets and private services toward capacity building and modernization.
- Resource management and governance:
  - Radical changes needed in human resource and budget policies and management; new rules should promote common interest, integrity, performance, and long-term projects with the right incentives.
  - Current institutional and budgeting frameworks offer little room to isolate outside interferences, allocate resources flexibly, and hold personnel accountable.
  - The semiautonomous agency model (cf. Chapter V) can enhance autonomy and accountability; performance contracts between the MoF and directorates (example: Senegal) linking budgets and incentives to performance are another option.
  - Debate on merging tax and customs administrations should consider differences in processes, expansion of nonfiscal customs missions, and advantages of computer-enabled exchanges; these factors "favor keeping the organizations separate."

### Reform management, TA coordination, and performance monitoring
- Each country should formulate a single customs administration reform strategy and program with consensus among authorities, customs management, and technical/financial partners; this should be the sole framework for TA coordination and reform financing.
- Customs reform programs should be articulated with related projects: port modernization, trade facilitation on corridors, and civil service reforms. Current operations and short-term revenue-enhancing measures should be excluded from the reform program.
- Establishment of reform management structures is critical: ministerial-level committee for strategy/supervision, reform steering committee, and project management structure with dedicated staff.
- Advisory committees should enable regular consultation with private sector, customs staff representatives, and ministries/agencies handling international trade.
- Implementation processes should be flexible to adapt to volatile contexts while maintaining continuity in modernization objectives.
- Carefully selected indicators should monitor reform progress and customs performance; installing a revenue analysis function within customs is appropriate to identify revenue gaps and support decision making.
- TA should shift from dispersed initiatives to medium- to longer-term programmatic, result-based projects adequately coordinated within the single reform frame; TA at the regional level is also necessary where customs unions exist.
- The IMF has recently engaged in a programmatic, result-based approach to TA with donor funding, but "large TA donor projects remain critical to progress."

### Technical options and operational model for next reform phase
- Risk of reform reversal is high in fragile countries; priority should be consolidating achieved progress, especially automation anchored through personnel and expanded IT use for management and to fight fraud and corruption.
- FSSACs need to strengthen customs fundamentals: valuation of goods, determination of origin, and tariff classification.
- Proposed new business model: customer/trader-based administration rather than transaction/declaration-based administration, using extensive risk management, selectivity, and complementary controls in line with the Revised Kyoto Convention.
  - Balance best practices with local context adjustments; e.g., postclearance control should reflect country-specific risks; some contexts require stronger preclearance inspections due to general lack of compliance.
  - New technologies and equipment should be integrated into business processes.
- Trader segmentation recommended: separate administration for large, medium-sized, and small importers/exporters; include "authorized economic operators" (AEO) programs per the WCO Framework of Standards; establish segment(s) for high-risk traders and traders from the informal sector.
- Customs should develop predictive capacity via intelligence and risk analysis to identify and mitigate operational risks and apply knowledge at strategic and management levels (WCO guidance).
- Integration and cooperation needs:
  - Heightened cooperation with the tax administration.
  - Integrated border management with customs leading single-window projects.
  - Development of mutually beneficial partnerships with the private sector.
  - Strengthened operational interactions among customs administrations implementing regional trade agreements.
  - Regular data exchanges between export-country and import-country customs as a step toward globally networked customs.

### International conventions and standards (brief descriptions cited)
- Harmonized System (HS): multipurpose international product nomenclature developed by the WCO; used by more than 190 countries.
- WTO Agreement on Customs Value (ACV): method of determining customs values; transaction value is generally the price actually paid or payable plus adjustments; WTO acceding countries are required to apply ACV provisions.
- Revised Kyoto Convention: WCO-supervised agreement to harmonize customs methods and procedures; updated in June 1999; entered into force in February 2006.
- Arusha Declaration on Customs Integrity (revised 2003): reference point for addressing customs corruption and integrity programs.
- WCO Framework of Standards to Secure and Facilitate Global Trade (SAFE): contains 17 standards focusing on (i) advanced electronic manifest information, (ii) common risk management approach, (iii) inspection of high-risk cargo at port of origin, and (iv) enhanced facilitation for AEOs; supported by the WCO Columbus Program (launched January 2006).

*Source: _wp12259 - introduction of new procedures based on confidence in the trader. Examples are provided by (PDF)*

### Appendix III. TA Provided in Customs Administration in Francophone Sub-Saharan

### Appendix III. TA Provided in Customs Administration in Francophone Sub-Saharan Africa, 1995–2010

### IMF Technical Assistance (TA) in Customs Administration: scope and timing
- Between 1995 and 2010, the IMF undertook 63 revenue administration missions from its headquarters.
- Two periods distinguished:
  - 1995–2002: 22 missions were undertaken, including three exclusively in customs administration.
  - Starting in 2003: 41 missions (65 percent of the total) were organized; 12 of these dealt exclusively with customs administration.
- The opening of AFRITAC West (in 2003) and the AFRITAC Centre (in 2007), together with an increase in FAD expert missions, led to a large increase in IMF TA.
- AFRITAC modalities:
  - Provided TA in the form of short missions (generally two weeks).
  - Missions carried out by either resident advisors or international experts recruited for that purpose.
  - Long-term expertise has rarely been used in customs administration.

### Contributions from other development partners and regional organizations
- UNCTAD:
  - All FSSACs, except Senegal, have received technical support from UNCTAD for the installation of ASYCUDA and its upgraded versions.
- European Union and World Bank:
  - The EU, notably the European Development Fund (EDF), and the World Bank contributed considerable funds for procurement of computer hardware and facilities necessary for the installation of ASYCUDA.
- World Customs Organization (WCO):
  - Within the framework of the 2006 Columbus Program, carried out missions in most FSSACs to assess customs administrations.
  - In some countries launched phase 2: specialized workshops and short-term training.
  - Opened a regional office for capacity building in Abidjan (serving Western and Central Africa) and two regional training centers in Ouagadougou and Brazzaville.
- Bilateral and multilateral donors and programs:
  - France: appointed resident technical advisors to customs administrations, provided training and short-term TA, and granted funding.
  - Canadian International Development Agency (CIDA): multiyear (2004–08) program for reform of Benin’s customs administration.
  - United States (USAID, Millennium Challenge Corporation, U.S. Customs): financed numerous activities, specifically in Senegal and Benin.
  - Japan: financed short-term IMF TA missions in five countries through the Japan-administered account for Selected IMF Activities (JSA) program.
  - African Development Bank (AfDB) and UNDP: provided funding for customs modernization activities.

### Key quantitative summary from Table 12 (IMF FAD TA missions in customs administration, 1995–2010)
- Total missions (1995–2010): 63
- Annual counts by year as reported in the table:
  - 1995: 4
  - 1996: 3
  - 1997: 1
  - 1998: 4
  - 1999: 3
  - 2000: 3
  - 2001: 2
  - 2002: 2
  - 2003: 6
  - 2004: 3
  - 2005: 5
  - 2006: 7
  - 2007: 2
  - 2008: 5
  - 2009: 7
  - 2010: 6
- Legend from table:
  - R: Revenue (tax and customs) administration mission.
  - C: Customs administration only.

### Country-level counts and partners (summary of Table 13)
- Number of FAD/RA Missions reported per country:
  - Benin: 5
  - Burkina Faso: 5
  - Burundi: 4
  - Cameroon: 5
  - Comoros: 2
  - Rep. of Congo: 3
  - Côte d’Ivoire: 5
  - Gabon: 1
  - Guinea: 2
  - Madagascar: 4
  - Mali: 3
  - Mauritania: 3
  - Niger: 5
  - CAR: 2
  - DRC: 5
  - Senegal: 2
  - Chad: 3
  - Togo: 4
- Main development partners (as reported in the table, by country or region):
  - Benin: Canada, France, USAID
  - Burkina Faso: France, IFC, WB
  - Burundi: Belgium, EU, France, UK
  - Cameroon: Japan, WB
  - Comoros: France, WCO
  - Rep. of Congo: France, EU, WCO
  - Côte d’Ivoire: France, EU, Japan
  - Gabon: Japan
  - Guinea: AfDB, France
  - Madagascar: Japan, WCO
  - Mali: France, IFC
  - Mauritania: EU, France, Japan, WB
  - Niger: EU, France
  - CAR: EU, France, Japan, WB
  - DRC: Belgium, EU
  - Senegal: EU, France, IFC, USAID, WB
  - Chad: EU, France, WB
  - Togo: WB
- Cross-cutting notes from Table 13:
  - All countries except Senegal: installation of ASYCUDA, migration to ASYCUDA++ and ASYCUDA World (Côte d’Ivoire).
  - Diagnostic studies of Customs administrations during phase 1 of the Columbus Program.
  - Funding of reform projects/actions by UNCTAD, EU, EDF, WB.
  - WCO listed as partner and capacity-builder regionally.
  - FAD provided extensive TA to support WAEMU’s economic integration objective between 1998 and 2001 (13 missions).

*Source: Appendix III. TA Provided in Customs Administration in Francophone Sub-Saharan Africa, 1995–2010.*

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