Improving Customs Transit Systems
In the Islamic Countries
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3.2.6.1 Achievements, challenges, barriers
The legal framework related to CTR is in place in all OIC MS; however, according to the TFI
database, their efficiency in challenging regulations is still belowwhat is required for an efficient
CTR.
Also, there is the existence of bilateral and regional agreements covering topics related to
customs transit, but it is evident that regional cooperation on paper is not enough to achieve the
goals in trade facilitation and development of an effective CTR. As result from the analysis that
integration within certain regional and international arrangements and agreements alone does
not guarantee the low trade costs between specific countries. For example, Egypt has much
higher average trade costs when trading within COMESA and CEN-SAD than the country’s
average trade costs. However, on the other side, it has much lower average trade costs when
trading within GAFTA. This shows the importance of transportation links, which are better with
the Gulf States and nearby Arab countries, than with distant and poorly connected COMESA
partners. Overland road and rail links fromEgypt southwards work approximately to Khartoum,
Sudan, whereas further overland transport is not feasible due to cost, poor infrastructure, or
inexistent links (rail). The only alternatives are air transport, which is too expensive for most
cargoes, and sea transport, which is sporadic and underdeveloped. Another specific issue is the
lack of return cargoes from COMESA countries, which increases the costs further and delays the
return of containers.
Tariff related costs are very small compared with other costs participating in the overall trade
costs for countries in UN ESCAP database. Many OIC MS are not yet a part of the Customs
Convention on the International Transport of Goods under Cover of TIR Carnets (TIR
Convention) as the only universal and one of the most important transit-related conventions.
Also, there are many MS that could achieve improvements by ratifying and implementing the
International Convention on the Harmonization of Frontier Controls of Goods, ATA Carnet
system, and Customs Convention on Containers.
Technical Barriers to Trade (TBT) and SPS (Sanitary and Phytosanitary) measures could also be
an obstacle to trade and transit. WTO, in cooperation with the UN and the International Trade
Center (ITC), has created an electronic database of TBT and SPS alerts ),
which greatly simplifies communication and diffusion of knowledge in this area.
Almost in all cases, more transit countries between the two trading countries mean higher trade
costs of doing business. Many of the MS have to undertake considerable efforts related to the full
implementation of the TFA provisions. For example, 11 МС are still in the transitional period
and capacity-building stage for provisions 11.5 related to the availability of physically separate
infrastructure such as lanes, berths, and similar for traffic in transit. Also, the similar situation