Fully paperless customs in Bangladesh by 2028

Bangladesh is advancing towards a fully paperless customs system by 2028 with the move to expand the digital window for the clearance of imports.

Recently, the Chief Adviser's Office instructed the National Board of Revenue (NBR) to include 18 more public and private bodies in the digital platform.

A total of 19 public and private authorities, including the drug administration and the apex exporters' association, are currently interconnected with the Bangladesh Single Window (BSW) portal.

Customs officials say 18 bodies, including the foreign, commerce, and industries ministries; and the apex trade body Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), will come under the BSW by December 2026.

After a three-month journey from July 2 this year, the BSW has started full-fledged operations at all customs ports.

Last month, the interim government celebrated the issuance of half a million customs clearance documents, known as CLPs.

BSW Project Director Jewel Ahmed says the platform has helped cut down the customs processing time by half.

It is connected with 19 major government authorities, where most of the importers previously had to visit in person for customs clearance documents, he says.

Besides, it has reduced the cost of business and will help exporters stay competitive in the global market after the country's graduation from the club of least developed countries (LDC) in 2026, he adds.

However, importers say efforts need to be ramped up to reach the goal as many of the authorities are yet to be interconnected with the customs.

They acknowledge partial simplification, claiming they still need physical visits to obtain certificates, permits, and licences - which takes 15 days to a month in most cases.

Poor efficiency of customs ports is often blamed for Bangladesh's sluggish foreign investment environment compared to that of India, China, Cambodia, Indonesia, Singapore, and Vietnam.

Sakif Shamim, managing director of Labaid Cancer Hospital, says there is a lack of coordination among importers, clearing and forwarding agents, and customs officials.

He notes that real-time value assessment is missing as transaction values are not properly considered during customs evaluation.

Developed countries have already adopted the blockchain technology to ensure real-time value verification, while Bangladesh continues to struggle with manual systems, he adds.

Shamim further points out that underhanded dealings and bribery remain major obstacles to achieving full customs automation.

"We are getting benefits of the BSW regarding the import of finished goods, but much work has to be done for a wider coverage of the digital platform," says Naimul Huda, executive director of finance and accounts at Incepta Pharmaceuticals.

The pharmaceutical industry needs to import huge quantities of chemicals and acids that require more than a year, as well as numerous certificates and permits, to be released from customs ports, he says.

"We expect to bring active pharmaceutical ingredients (APIs) under the BSW to expedite the customs process. Otherwise, this industry cannot survive," he says.

The BSW, a World Bank-funded Tk 5.85 billion project running for eight years, has reduced the customs processing time for issuing clearance documents to within 24 hours.

In 2022, a time release study of the NBR revealed the clearance of import goods needed an average of 11 days from the port to the manufacturing unit.

CLPs are mandatory documents for quality, health safety, and preventing the entry of toxic or harmful goods, thus ensuring national security.

The digital platform also integrates 109 trade-related service providers, including the drug administration, the Department of Narcotics Control, and the Plant Quarantine Wing.

Nusrat Nahid Babi, senior transport and trade logistics specialist at the World Bank, says investors had to make in-person visits to obtain certificates and licences before the BSW's launch, further clogging the congested roads in Bangladesh.

The interim government is extending support to expedite the process, free from bureaucratic delays or external constraints, she says.

"Yet, challenges remain. The customs is not fully paperless, and the sea and land ports, which handle 99 per cent of Bangladesh's international trade, are not yet end-to-end digital," she adds.

Foreign investors in Bangladesh have historically cited customs clearance as a major bottleneck, often alleging hassles and harassment by officials.

At a recent event, Japan External Trade Organisation's (JETRO) Country Representative for Bangladesh Kazuiki Kataoka alleged customs-related hassles as a major bottleneck for Japanese investment in Bangladesh.

Bangladesh is at the final stage of signing the Economic Partnership Agreement (EPA) with Japan.

Customs officials say the BSW move has been expedited by focusing on the upcoming EPA because a complex and lengthy customs process is often alleged by Japanese investors.

The digital shift aligns with Bangladesh's commitment to Article 10.4 of the World Trade Organisation's Trade Facilitation Agreement, which mandates paperless customs processes.

Trade economist Dr M Masrur Reaz says operationalising the BSW in Bangladesh is a welcome and much-awaited move with regard to strengthening the country's trade facilitation efficiency.

"It was a complex project that set up an interoperable system and rules among 38 government agencies," he says.

To derive the intended BSW benefits, Dr Reaz, founder of private think tank Policy Exchange Bangladesh, says agencies should have the necessary technology and human resource capacity, any manual and in-person interaction requirements should be eliminated, and beneficiaries' feedback about the automated system has to be collected.

"It is also critical to include all potential modules that are currently outside the overview of the existing system and implement a risk-based management system," he adds.

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