Pre-Arrival Processing REF#7106

Pre-arrival processing (PAP) involves traders or businesses sending information about their shipments ahead of their arrival to the Customs authority of the destination country. This allows the Customs officials to assess which shipments can be released directly upon arrival and which ones must be inspected. The transfer of information regarding each shipment is done electronically between Customs and the trade data provider.

As part of its commitments to improve trading conditions under the WTO Trade Facilitation Agreement (TFA), the Royal Government of Cambodia (RGC) is attempting to implement PAP of shipment data through the relevant authority, the General Department of Customs and Excise (GDCE).

The National Committee on Trade Facilitation, headed by the GDCE, has put together an Action Plan on National Trade Facilitation, which involves developing the country’s PAP capacity by enhancing the electronic interlinkages between the Customs clearance systems of Cambodia and trader systems. The goal is to cut down processing time for Cambodia-bound shipments.

Currently, PAP in Cambodia is not widely implemented and only certain types of traders are entitled to its benefits. This includes, for example, 40 businesses that were awarded by the GDCE the status of “Best Traders” due to their merits in complying with regulations.

The GDCE is also partnering with development organisations and projects to help support its PAP agenda. For example, it is collaborating with the European Union and German partners to strengthen capacity for PAP of sea and express consignments, while doing the same with Swiss partners on postal consignments. These collaborations involve allowing trade data providers to submit electronic cargo information pre-arrival to the GDCE via the newly-developed ASEHUB platform.

Despite these initiatives, however, there are still challenges in Cambodia related to the relatively slow processing times for goods’ declarations, particularly those arriving by sea or land. Most of the time, the GDCE is processing declarations at the moment of or after the goods’ arrival. This raises the question of what should be done to ensure the GDCE fully realises the potential of PAP.

A greater and more effective use of PAP—along with its intended benefits—relies on the availability of both physical infrastructure (e.g., ASYCUDA) and rules, procedures, and operations that enable its use. At the moment, there is a lack of both regulatory and operational frameworks for the GDCE to use PAP effectively. This could be partly due to concerns from the part of businesses and government officials that the use of electronic systems compromises the security of confidential information that is normally exchanged in Customs clearance processes, such as personal signatures and details about company operations or shipments.

The limited adoption of PAP of imported goods’ declarations into Cambodia can pose significant risks to the country’s Customs system. Firstly, it can lead to delays and inefficiencies in Customs clearance, increasing the cost of doing business and reducing the country’s competitiveness in the global market. This can result in a decrease in trade and investment, hindering the country’s economic development. Secondly, the manual processing of Customs declarations can limit the potential for revenue collection, as manual procedures are less efficient in detecting undervaluation, misclassification, and other Customs violations from users. Thirdly, a lack of pre-arrival processing can limit the government’s ability to monitor and regulate trade flows effectively, hindering its ability to detect and prevent the entry of illegal goods and activities.