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Automation of Border Control Systems: Guatemalan Customs

Automation of Border Control Systems: Guatemalan Customs. GUATEMALA. The largest economy in Central America, recent regional FTA with US, AA with Europe and CA Customs Union under negotiation. SAT - SUPERINTENDENCE OF TAX ADMINISTRATION. Internal revenue and Customs Integrated

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Automation of Border Control Systems: Guatemalan Customs

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  1. Automation of Border Control Systems: Guatemalan Customs

  2. GUATEMALA The largest economy in Central America, recent regional FTA with US, AA with Europe and CA Customs Union under negotiation

  3. SAT - SUPERINTENDENCE OF TAX ADMINISTRATION • Internal revenue and Customs Integrated • High degree of autonomy • Board of Directors chaired by the Minister of Finance • Directors appointed by Executive Body, proposed by University Presidents, Deans and Professional Associations • Superintendent with a high independent executive authority • 2% of collections for SAT’s budget • Budget approval by SAT’s Board of Directors • HHRR own regime

  4. CUSTOMS: AT THE BEGINNING 2004 • Tax collection oriented. • General perception of extensive corruption and discretionary practices. • HHRR: No policy, weak training and non reliable. • Procedures were not designed, documented or aligned with institutional objectives. • Weak IT development (systems, telecom, infrastructure & security ) • Operations centered in clearance. • Weak procedures for arrival, security, a posteriori-control and audits. • Manifest arriving with or after goods, and mostly paper based. • Red channel for imports: 70% - 80%. • Non existent control on exports • Inadequate infrastructure and equipment.

  5. Professional and Trained HHRR Ethics, Integrity and Transparency Functional and Adequate infrastructure Strategic Alliances with Stakeholders Management of Customs Procedures through IT applications Customs Security based on new technology SAQB´E: THE NEW WORK PHILOSOPHY SAQB´E in Mayan language means “white road” or “transparent road”. Philosophy based on institutional values, making all our processes effective and transparent.

  6. KEY PERFORMANCE INDICATORS

  7. CUSTOMS COLLECTION AND AVERAGE IMPORT DUTIES 2000 6.0% 1,728.00 1800 4.8% 4.5% 5.0% 1,517.60 1600 4.3% 1400 193.0 4.0% 1,231.60 1200 US $ millions 1,344.7 1,069.7 3.6% 1000 3.0% 3.2% 800 2.0% 600 400 1.0% 200 0 0.0% 2003 2004 2005 2006 2007 Compensatory duties

  8. TAX BURDEN AND VAT EVASION

  9. Customs Agents/Importers/Exporters • Suppliers Registration: Time reduced, 5 minutes (estimated) versus 3 days. • Integrated and available information on Internet (Portal SAT) of import tariffs and prerequisites. • Customs Clearance: Time reduced and rapid movement of goods in Customs. • Sea Carrier Companies • Temporal Admission of containers: Time reduced, 1 hour (estimated) versus 1 day. (Access 24 hours) • File consultation: Permits to keep track of the steps taken by SAT. (Real time) BENEFITS

  10. BENEFITS • Terrestrial transport companies • Reduced Time for leaving ports • Improved efficiency of their resources • Port Authority • Operational Logistics: Better goods flow and more competitive. • Available and trustworthy information for control enforcement. • Customs • Incresed revenues • Better services • Better public image • Improved private sector willignes to cooperate • More room to reform

  11. OBSTACLES • Interest of those benefiting from status quo • Institutional weakness of the General Attorney Office and the Judiciary System • Private sector requested immediate-very specific solutions to their day to day problems. Initial distrust • It is easy to blame customs. • Too many participants in the supply chain • Lack of coordination within SAT divisions • Lack of confidence in employees at the beginning. • Insiders • Lack of communication experience and ability • Security: employees attacked, threats

  12. WHAT HAS WORKED IN OUR SPECIFIC CASE? • Having our own financial source and get TECHNICAL knowledge, information and experience from international SPECIALISTS and OTHER CUSTOMS administrations. WB, OMA, Canada, US, Korea, Taiwan cooperation. • Learning from best custom practices, seeing them • Building the right “challenge team “ • Starting with measures that can be internally controlled, easy to implement with high impact on the service delivery • No big announces of reform at the beginning, let private sector experience initial results BUT SELECT a highly visible action to build credibility and send messages of strength

  13. WHAT HAS WORKED IN OUR SPECIFIC CASE? • Political support from the President and the Minister of Finance is PRECONDITION • Building support from the private sector. Inviting, visiting • Comprehensive, massive interventions • DO NOT STOP

  14. CHALLENGES • Customs Certification • Make good use of the resources • Implementation of the new work philosophy and SAQB´E system in all customs • To continue: • Customs Competitiveness Training Program • “Safe Customs” (Security and Controls) • Guatemala-US Customs cooperation agreement CSI • Speeding up customs procedures • Promoting ethics and integrity • Reduce discretionary actions of customs officials

  15. THANK YOU!

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