Improving Customs Transit Systems
In the Islamic Countries
32
The implementation of NCTS brings financial benefits to the public and private sector. The
research29 related to the implementation of the NCTS in the EU showed that the NCTS had
obtained a productivity gain of about 30 minutes. With labor costs gross billed at 30 euros an
hour, the 8,800,000 movements in 2008, the annual cost savings amount to 132 million Euro.
Although labor may cost less for customs brokers in some areas, the cost savings remain
impressive - suggesting that the NCTS investment repays itself annually several times over.
Having the 2008 analysis, in 2017, approximately 500 million messages were exchanged in
CCN/CSI system running on more than 99% availability at an annual cost of 70 million Euros
providing support to the rapid customs processes to support trade and decrease the cost of
trade.
Some of the benefits for business sector besides time and costs for transit operations include
less paperwork, enhanced predictability regarding transit shipments, less pressure because of
inefficient CTR that will not release the guarantee, lower frequency of customs inspection, etc.
In the case of AEO, customs clearance will be made at the operator’s premises. For example,
under the NCTS, an AEO can initiate transit operation at his premises, and also terminate transit
procedure at his premises.
1.9 The role of transit facilitation in regional economic integration
Globalization and the global competition put significant pressure and challenge to national
economies, especially for developing economies with the limited domestic market and intense
global competition. It is crucial for these economies to reduce costs and increase productivity
through better border cooperation and free movement of shipments without interruptions for
customs or other inspections. Expanding regional cooperation and integration through regional
agreements will create more competitive regional markets. In such a way, local companies will
get access to a broader market.
Facilitating CTR as a part of regional economic integration can bring more significant benefits to
the whole region and their member states. As CTR is not implemented by only one country as it
would be for import, regional facilitation of CTR is a much better approach rather than
uncoordinatedmeasures by each state. Standardized and uniformed customs transit procedures
coordinated and implemented at the regional level can remove bottlenecks and enhance the
competitiveness of regional supply chains. The WTO TFA provides a legal framework within
which neighboring countries can regulate and improve their CTR procedures.
The customs union is one of the best examples of regional integration and cooperation. Customs
union is characterized by no customs duties among the countries of the union, and common
29 McLinden, Enrique Fanta, David Widdowson, Tom Doyle; Editors, Border Management Modernization, 2011, The
International Bank for Reconstruction and Development / World Bank, p.259-260