The World Bank (WB) has expressed interest to help the National Board of Revenue (NBR) modernise its customs procedure for promoting regional trade and investments, officials said on Tuesday.
The WB has assured Bangladesh of providing assistance worth US$170 million for upgrading the cross-border and regional trade facilitation works, said an official of the Economic Relations Division (ERD).
Meanwhile, the ERD, on behalf of the NBR, requested the Washington-based lender for bankrolling the customs modernisation project.
"We've requested the WB. It has responded positively. We are hopeful of discussing with the global lender soon to finalise the support," said the ERD official.
He added that they are hopeful of getting financial and technical supports from the WB shortly.
Bangladesh's customs modernisation is very crucial for trade facilitation by lowering trade cost, reducing trade time, and enhancing efficiency of supply chains.
The customs procedure here is very complex, as it takes a lot of documents and time before clearing any import or export product.
According to the UNESCAP-WB International Trade Cost data, the intra-regional trade costs of Bangladesh, Bhutan, and Nepal amount to 186 per cent tariff equivalent, which is the highest among the selected countries in other sub-regions of the Asia-Pacific region.
The overall cost of trading goods among the three largest European Union (EU) economies is equivalent to a 43 percent average tariff on the value of goods traded.
China, Korea, and Japan come closest to matching the low intra-EU trade costs, with average trade cost among themselves amounting to a 51 per cent tariff equivalent, followed by the middle-income members of the Association of Southeast Asian Nations (ASEAN), whose intra-regional trade costs stand at 76 per cent tariff equivalent.
An official of the NBR said the proposed WB-supported project will help the government to make the National Single Window (NSW) functioning in a bid to ensure (completion of) all the foreign trade-related customs procedures through a single window.
Bangladesh ratified the World Trade Organization's (WTO) Trade Facilitation Agreement (TFA) in September 2016, which contains provisions for expediting movement, release and clearance of goods, including goods of transit.
It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. It became effective on 22 February 2017 following ratification by two-thirds of the WTO members.
To date, the NBR has published all rules, regulations and statutory regulatory orders (SROs) on trade facilitation on its website. But the NSW is yet to be functional.
The NSW is a facility that allows parties involved in trade and transport to lodge standardised information and documents with a single entry point to fulfill all import, export, and transit-related regulatory requirements.
The senior ERD official told the FE that when the WB will come forward with its support to modernise the customs procedure, the country's trade and investment facilities will be enhanced and regional trade will also be boosted.
The NBR will spend Tk 16.18 billion for the WB support-assured customs modernisation project. The NBR has sought Tk 14.29 billion ($170 million) from the WB, while the rest amount will be provided from internal resources.
The Washington-based lender is interested to finance the project, as it has already responded positively to the government, the ERD official said.
As per the NBR's plan, it will set up an Integrated Targeting and Operations Centre (ITOC) based on the principles of coordinated border management.
The WB support will also help to build capacity of the customs officials, so that they can make the NSW functional for trade, which includes multiple border clearing agencies.
The NBR has plans to modernise the Chittagong and Benpole customs houses, and the Customs, Excise and VAT Training Academy.
The agency will also work for trade enhancing tariff system and developing capacity for tariff policy formulation. This will help export expansion and diversification for achieving development goals, the officials said.