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The Emergency Customs Modernization and Trade Facilitation Project (US$31 million Credit) is supporting Afghanistan’s efforts to increase customs revenue, reduce transport-related trade costs, stimulate trade, reduce corruption, and streamline border procedures. The project focuses on the development of physical infrastructure at border crossing stations, inland clearance depots, including the Kabul Inland Customs Depot (ICD), transit checkpoints, and the customs facilities at Kabul airport. It will also support policy changes, strengthen the government’s administration of the customs and transit systems, including communications and the introduction of computerization, provide technical advice on trade and transit agreements, and assist in the establishment of Authority to set the environment for Standard, Metrology, Testing and Quality in Afghanistan.

Kabul Customs officials use ASYCUDA system in Kabul.

Implementation of the ASYCUDA Transit Module has been a major highlight of the project, and has been rolled out successfully along Torkham-Jalalabad- Kabul axis and Islamqala-Herat-Kabul while an accelerated roll out along Towrghundi, Qilatenazar, Mazar, Hairatan is underway. The full customs clearance module will be piloted at Kabul Customs House in January 2007 and will be closely followed by Jalalabad and Herat customs houses. As a result, more than 100,000 electronic customs transit declarations have been lodged by trucks coming into Afghanistan through the two key transit axis since May of 2006 which has also brought down the number of unaccounted vehicles transiting goods to zero. Additionally the electronic system has netted US$2 million to customs in electronic processing fees alone. At the same time, this fee which is US$20 per truck is a fifth of the earlier fees being levied per truck, which was not being captured by the state treasury. Extensive training related to the use of ASYCUDA has been imparted to customs officials, brokers and traders. All customs locations have been equipped with radio equipment for use in enforcement activities and improving communications. Vehicle registration link with borders for Kabul and Heart Traffic Police have also been established.

The Regional Customs Advisory Unit (CAR) established earlier, is primarily focusing on rapid implementation of the Customs Code through framing of sub-legislation and standard operating procedures (SOPs) and has developed more than 30 different procedures and regulations, as well as 20 forms and reporting formats. A Training Coordination Unit (TCU) has also been established to manage and coordinate the vital need for ACD’s capacity building. The TCU has established the Customs Training Institute and has initiated the Fast Track training project through which the first cohorts of Customs officers were sent for training to regional countries. An Afghan Customs Department website has been developed on which the customs tariff, code, procedures and clarifications are available.

Progress on infrastructure delivery has also been satisfactory with more than 56 facilities repaired/constructed and functionally improved. Currently work on the Kabul Customs Headquarters Building is in full swing. Work is also underway for the rehabilitation and improvement of the Kabul and Jalalabad Inland Clearing Depots (ICD). Initiatives under the Trade Facilitation improvement include carrying out of a census of freight forwarders, which assisted in the formation of AFCO (the national Afghan Freight Forwarders Association) and in its gaining membership of FIATA on September 15, 2005. The Association had a general meeting in May, 2006 and elected a board, and an Afghan Freight Forwarders Directory has been compiled. The zero draft of the Afghanistan Memorandum of Foreign Trade Regime is under preparation. Under the project UNCTAD is developing training courses for freight forwarders in order to ensure that this service sector develops into a professional reliable sector that can compete with International freight forwarders and that Afghan Freight Forwarders become parties that are solely responsible for goods in transit. Assistance is also being provided through UNCTAD to AFCO in determining a legislative framework to work within. Preparations for the re-negotiation of the 1965 Afghan Transit Trade Agreement (ATTA) with Pakistan are underway. UNCTAD has reviewed the ATTA and other transit trade agreements with neighboring countries and submitted recommendations for improvement, especially to enable proper implementation.

Afghan National Standards Authority (ANSA) was established through a Presidential Decree. The project has supported in recruiting 17 staff members for ANSA. Metrology and Quality Trainings of staff is ongoing in Kabul. The Standards Law for Afghanistan has been discussed and drafted. Procurement of Mobile Metrology and Petroleum Oil and Lubricants (POL laboratories is in process. ANSA has trained and identified surveyors, and conducted the first sampling, for the Product Baseline Study, at Herat, Hairatan, Torkham, Kandahar and Kabul (all critical import entry points). Sampling and baseline testing of Cement, Reinforcing steel, Foods stuffs, and Pharmaceuticals is underway. ANSA has been accepted as a correspondence member of ISO (the International Standards Organization), giving it international recognition and access to information, tools, standards, and the international network of National Standards Bodies and other Quality-related institutions and experts.