The Royal Government of Cambodia (RGC) has pledged to the World Trade Organisation to implement trade facilitation agreements to improve the ease of trading in the country, including reducing the time and cost for traders or businesses to handle import and export procedures. A key issue for businesses is the time spent printing, signing, and processing paper-based documents for Customs clearance, often requiring them to visit multiple departments and offices and submit multiple copies of the same documents.
As a member of the National Committee on Trade Facilitation and the agency responsible for handling import/export procedures at the border, the General Department of Customs and Excise (GDCE) has promoted the modernisation of its infrastructure through its Customs Reform and Modernisation Strategy (2019-2023). As part of this strategy, the GDCE has also expanded the use of ASYCUDA, an electronic Customs clearance system developed by UNCTAD and adopted by the GDCE in 2015. ASYCUDA allows GDCE officials to upload and process export and import documents in digital format submitted by traders.
As of April 2023, ASYCUDA had been installed and implemented at 95 Customs and Excise offices, with 17 functions and modules that can process documents, such as automated Customs declarations or air and cargo manifests. The roll out of the software at Cambodia’s border crossings was intended to speed up the digitalisation of document submission and reduce document processing time for both traders and GDCE officials.
However, despite the adoption of ASYCUDA, the digitalisation of documentation procedures is currently incomplete. This is firstly due to the GDCE using another Customs clearance system in conjunction with ASYCUDA, called the Customs Valuation Declaration System (CVDS). Traders need to obtain a paper-based approval from the CVDS before submitting an electronic declaration on ASYCUDA. Secondly, the GDCE’s internal operational procedures have not been updated to reflect the de jure shift from paper to paperless documentation submission and processing.
Traders and other workers involved in moving goods across the border still report being asked to follow paper-based procedures. For example, Customs brokers – who handle Customs clearance processes on behalf of traders – state that they are still required to print, sign, and submit paper copies of the Single Administrative Document (SAD) to Customs. The SAD is a key document that was intended to be simplified and processed significantly faster through digital uploading and processing by ASYCUDA. Moreover, Customs officials are still required to vet the authenticity of the document in person – a process known as “consignee physical endorsement” – rather than relying on authentication software. Other examples include traders having to process documents through both ASYCUDA and CVDS, or having to pay warehouse fees separately from duties and taxes.
In conclusion, while the GDCE has made progress in implementing ASYCUDA and modernising its Customs infrastructure, there are still gaps in the digitalisation of document submission and processing.
Impact on business
Despite the GDCE embracing digitalisation of Customs clearance processes, the currently incomplete state of said digitalisation brings with it two significant risks.
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, incomplete digitalisation can limit the potential for revenue collection, as manual procedures are less efficient in detecting undervaluation, misclassification, and other Customs violations from users.
- Deepen the digitalisation of Customs procedures
We therefore respectfully recommend that the GDCE deepen the digitalisation of Customs procedures, by streamlining the following requirements:
– Eliminating the requirement for “consignee physical endorsement” of paperwork for all shipments before declaration; we recommend that the GDCE also adopt the use of electronic notifications to inform traders whether they need further clarification on the shipment or need to submit additional documentation;
– Ensuring consignee authorisation letters to be made online and to allow blanket approval;
– Streamlining and combining CVDS with ASYCUDA into the declaration process, without the need for double submission;
– Allowing ASYCUDA to be the primary Customs tool for processing, assessment and release, with no manual paperwork and approvals;
– Ensuring payment of warehouse fees is combined and linked with payment of duties and taxes online;
– Ensuring Customs warehouse releases of goods are linked to ASYCUDA without the need for manual paperwork.
Relatedly, the Royal Government of Cambodia can also consider accelerating the ratification of the UNESCAP Framework Agreement on Paperless Trading, to which it is signatory.
The adoption of digital procedures for Customs clearance in Cambodia is expected to bring several benefits to the economy. It can reduce the time and cost of Customs clearance, increase efficiency and transparency, and improve the country’s competitiveness in the global market. The digitalisation of Customs procedures can also help increase revenue collection, providing additional resources for government investment in public goods and services. Overall, the adoption of digital procedures for Customs clearance can contribute to the modernisation and development of the Cambodian economy.
Royal government of Cambodia
Initiative from Eurocham: EuroCham respectfully recommend the GDCE to deepen the digitalisation of customs procedures, by streamling the requirements through the 2024 edition of the White Book (recommendation No.2).
General Department of Customs and Excise (GDCE)
Mr. Suy Bunthan
Mr. Seng Vichet
Mr. Matthew Owen