59835 investment climate April 2010 IN PRACTICE trade logistics no. 11 Developing a Single Window to Facilitate Trade in Senegal In 1995 a reform group headed by Senegal's Ministry of Trade ibrahima diagne introduced a single window system for electronic trade facilitation Ibrahima Diagne is the as part of a reform agenda to improve the country's business Managing Director of GIE environment. Launched in 2004, the system transformed customs GAINDE 2000, the public- private partnership company clearance, streamlining the process through transparent, electronic created in 2002 to set up and transactions initiated by a single request from the importer or operate Senegal's single win- dow electronic trade facilitation exporter. Traders could collect and process the necessary documents system. Previously he was and authorizations prior to customs declaration in about half responsible for the imple- a day rather than the four days required before the system was mentation of Senegal's single window at Trade Point Senegal. implemented. With its real-time data, government agencies could better monitor and control transactions, contributing to more This note is one in a series developed by the Trade secure transactions and revenues. This note highlights key issues in Logistics team of the World Senegal's decision to develop a customized system and offers lessons Bank Group's Investment Climate Advisory Services. for governments in managing diverse stakeholder requirements and The series focuses on expectations. implementation aspects of recent trade reform initiatives and risk management issues. The idea to use a single window for customs 1 implement reforms designed to foster growth The Trade Logistics team clearance in Senegal emerged during the and development by reducing the government's advises governments in mid-1990s when the Department of Foreign role in the economy, improving public sector developing and transition Trade, a division of the Ministry of Trade, sought management, and enhancing incentives for the economies on improving to improve the overall trading environment and private sector. their import, export, and risk promote trade and foreign investment. Stagnating growth in the early 1990s had led the government At the time, trade-related regulatory requirements management systems and to undertake ambitious economic programs, and customs clearance procedures were onerous and procedures to increase their starting with a 50 percent devaluation of Senegal's time-consuming--and often not transparent. potential for trade and currency in 1994. Supported by the International Traders had to file separate requests with every investment. Monetary Fund, the World Bank, and other public and private agency involved in the clearance multilateral agencies, the government began to process. They typically needed more than four days to collect all the required documents, which recommendation, the government established Trade then had to be attached to their import declarations Point Senegal (TPS) in 1996 as an independent for inspection by the customs administration. body to facilitate trade broadly and implement a single window for customs clearance that would A meat importer, for example, was required to file also provide commercial information to support an import declaration form with the inspection export initiatives. body, along with the invoice, then go to his bank Engaging both the to obtain the payment terms.2 At the bank, the Senegal's single window was designed in three public and private importer provided an exchange permit to pay stages: import fees to the consignor. He obtained an sectors was essential insurance policy, then visited the livestock Deciding on a model. department with his certificate of origin to obtain a Developing consensus among stakeholders. to improving trade phytosanitary certificate and a food product Developing the technical parameters for the importation permit from the department responsible system. facilitation. for quality control. Deciding on a model These requirements helped ensure that traders The first step was to decide on a virtual single complied with various customs-related rules and window system. A virtual window would eliminate regulations--including those aimed at protecting red tape and ensure that the service would be human, plant, and animal health--and that the available nationwide. In opting for a virtual single government collected all relevant duties, taxes, and window, the authorities sought to simplify charges applied to exports and imports. But it procedures (through a single file request), reduce became increasingly clear to policymakers in the processing times (requests would be processed in Ministry of Trade that customs clearance procedures real time), and lower costs (traders would not need were too cumbersome and that other countries, to visit multiple offices). such as Singapore, had succeeded in implementing information technology solutions to streamline Developing consensus among stakeholders processes without compromising health and safety. The second step was to consult with all stakeholders and secure agreement on the operational model. A key trigger for trade reform occurred in 1995 This step was a lengthy process because stakeholders when a delegation from the Department of Foreign expressed a broad range of preferences. Trade participated in a symposium sponsored by the United Nations Conference on Trade and Streamlining procedures and standardizing data Development. Once back in Senegal, the head of and documents were not addressed at the the Senegalese trade delegation launched a formal beginning; these were considered thorny issues initiative to improve trade facilitation, with the that might create an impasse between businesses support and assistance of Senegal's Ministry of Trade eager to speed up the process and public agencies and the United Nations' Trade Point Program.3 inclined to maintain the status quo. The most important objective was to get a consensus on trade facilitation through the use of information Designing the system technology. Through interviews with the end users of the single window, TPS conducted an The Ministry of Trade realized at the outset that assessment to gather information about the needs engaging both the public and private sectors was and expectations of traders, insurance companies, essential to improving trade facilitation. In 1995 the port officials, clearing agents, and customs ministry created the Association pour l'Efficacité representatives in both the public and private Commerciale (AEC) as a think tank to develop sectors. Workshops, seminars, and meetings were ways to facilitate trade. AEC was comprised of held to update stakeholders on a regular basis. representatives from key private sector associations Feedback from these events was addressed and involved in trade--including groups for importers suggestions deemed essential and technically and exporters, shipping companies, and banks--as feasible were integrated into the plan. The approach well as customs and other government agencies used during the assessment phase was effective involved in customs clearance. Based on AEC's because it involved all stakeholders, and as a result, iN Practice TRAdE logIsTICs 2 it helped TPS understand and address their needs Figure 1: Stakeholder Contacts Enabled by in developing the system. Senegal's Single Window System During this process the need to bolster stakeholder capacity (in terms of equipment and training) became apparent. As a result, the initial phase of Customs implementation included free training sessions for stakeholders and users, a six-month pilot phase with coaching for high-volume users, a help desk for users during the pilot phase (which is still Importers/ operational), and the establishment of a facilitation Treasury Exporters center for low-volume, occasional users who cannot connect directly to the system. ORBUS Developing the technical features of the system To identify the most suitable model for Senegal, a TPS team visited a number of countries that had Clearing automated their border control systems. The team Banks agents visited Singapore in 1996, which at the time was operating the only single window model in the world. Impressed with the high level of organization Public and coordination at Singapore Network Services, agencies the TPS team first considered replicating Singapore's system. But it soon became clear that Singapore's system would not be suitable for implementation in In its rst stage, Senegal's single window system provided a technology platform and Senegal for two reasons. First, the government in a set of services to enable transactions among more than 300 key players in the Senegal was at a very early stage of using information trading community. e second stage will enable access to the port authority and technology; customs and the public agencies operated other transport service providers. in a much less automated environment than their counterparts in Singapore. Second, legal and organizational constraints in Senegal prevented the use of automated processes in certain trade-related The system was designed to enable trade transactions procedures at that time. through electronic exchanges between stakeholders (Figure 1). Its main objectives were to bring The TPS team decided that it was best to develop a stakeholders of foreign trade into closer contact; customized system. In 1996 TPS launched a study improve working conditions; simplify and harmonize to identify the needs of all members of the trading procedures; reduce the costs and time to trade; and community as the basis for a customized, single introduce new technologies in the administration and window solution. A workshop was held to bring among the trade community. together key private and public entities to unveil the study's recommendations. The single window system replaced numerous trade documents and applications previously required for trade pre-clearance with a single form submitted Senegal's virtual electronically by the trader. Through its web-based single window interface, the system automatically dispatches the single form to the various public and private bodies Senegal's single window system, ORBUS,4 was involved in the transaction. launched in 2004. The implementing organization, GIE GAINDE 2000, was founded as a partnership After the trader submits his initial request, the system between public and private sector organizations5 tells him which electronic documents are required in Senegal to develop and implement the single for the requested transaction, and the request is window system. automatically sent to the appropriate stakeholders iN Practice TRAdE logIsTICs 3 involved in the transaction, such as the banks, times and formalities-related costs for traders, insurance company, and inspection service. Similarly, improved the quality of the service offered to clients, a separate, web-based interface for the customs and nearly eliminated paperwork. authority and other agencies connected to the system enables them to receive and process trade requests. Among the most evident benefits were that traders Through built-in functions, processing officers needed less time to clear customs and to collect validate the requests, ask for modifications, or reject the necessary documents and authorizations prior the applications (Figure 2). to customs declaration--a process cut from more than four days to half a day, or less. After the system's launch, processing of trade declarations Quantifying the benefits became more efficient over time. of senegal's single window system More efficient trade processes resulted in increased customs revenues (from around $625 Senegal's single window system for customs million in 2005 to more than $1 billion in 2008).6 declarations, now handling nearly all of the country's After fees associated with trade transactions were imports and exports, has streamlined the process collected through the single window and transferred for stakeholders in the public and private sectors, to the relevant agencies, these agencies reported vastly simplifying trade transactions in Senegal increases in revenues from streamlined and (Box 1). The system has reduced pre-clearance centralized fee collections. Figure 2: Senegal's Single Window Public agencies (Stakeholders) Process and Banks Process and return return Request Process and transmission return Inspection ORBUS Trader service Reply Process and Switch return Insurance Routing to the company stakeholders concerned Source: GIE GAINDE 2000 A trader using Senegal's single window system submits an electronic request that the system then routes to the appropriate parties for processing. iN Practice TRAdE logIsTICs 4 Cost savings directly resulting from the single window Box 1: Key Benefits of Senegal's Single system are difficult to quantify, but several company Window System costs were eliminated, including those incurred when traders conducted individual transactions The single window system has streamlined trading processes for stakeholders in with various government agencies, inquired on the status of files, and paid their employees to complete both the public and private sectors, helping to improve the investment climate numerous documents. and position Senegal as the "business friendly" location envisioned by its leaders nearly two decades ago. The single window system: The single window was implemented at a total cost of slightly more than $6 million between 1996 and Offers traders the convenience of a single form, submitted electronically, 2004. Operating and maintenance costs for the replacing numerous steps and procedures. system totaled about $1.75 million per year. The company implementing and operating the single Reduces customs document collection and clearance times and costs as manual window system reports that the system has been processes, document handling, and signatures are replaced by automatic financially self-sustaining since its launch in 2004, electronic processes. covering all its operational, research, and development costs. The customs administration pays a large portion Reduces corruption in customs clearance procedures by eliminating of the system's maintenance costs because its central human interactions, allowing files to be traced and performance standards servers are hosted and shared by customs. instituted. Improves the efficiency of government revenue collection due to Lessons in managing increased duty and tax payment compliance among traders and decreased stakeholder inputs corruption. and involvement Provides clear and accurate trade data for policymaking. Secure high-level support from both Increases the use of information technology at public agencies. the public and private sectors Improves the trade and investment environment as transactions become Garnering high-level support for customs reform required meeting with relevant ministries, more efficient, transparent, and predictable. departments, and businesspeople before and during the design of the single window. TPS delivered a clear, consistent message to all stakeholders: the collaboration with stakeholders at the managerial government had decided to automate border control and operational levels to avert possible hitches-- systems, and their involvement and support were critical was critical because procedures and staff within the to achieving that goal. Some private sector entities key organizations were constantly changing. resisted initially because they perceived the effort as a government project, but the private sector came Promote broad ownership of the project to see the potential benefits of automation and Several government agencies took the position ultimately played a central role in the development that the single window would erode their standing and implementation of the system. in the trade process by eliminating the need for people to give or refuse some authorizations. Thus Identify and address stakeholder needs it was important for TPS to develop consensus and expectations among agencies, emphasizing that the project was During the customs reform process, the TPS team a national initiative intended to benefit the spent a great deal of time systematically consulting country as a whole. with critical stakeholders: traders, insurance companies, port stakeholders, clearing agents, the Ensure the support and involvement customs administration, and other government of the customs administration agencies. A broad range of preferences were sought Any effort to automate border control systems and expressed through the assessment interviews, would have been virtually impossible without the workshops, seminars, and meetings. Each step in support and leadership of the customs authority, the system's design was validated with the affected the central agency enforcing trade-related regulation stakeholders before an application or feature at the borders. The objectives of Senegal's customs was adopted. "Proximity management"--close administration in terms of automation and technology iN Practice TRAdE logIsTICs 5 Box 2: Planned Single Window Initiatives The government aims to sustain Senegal's reform in Senegal momentum and continues to enhance Senegal's competitiveness in regional and global trade. The Senegal plans to further develop its single window system through several "Accelerated Growth Strategy"--led by the High Investment Council chaired by Senegalese President projects and upgrades, including: Abdoulaye Wade--prioritizes foreign investment and economic integration at the regional and Data exchange pilot projects with Europe and Asia international levels, including the harmonization Extension of the single window scope to logistic services and modernization of customs. Paperless Trade Project The government is working to adapt the single Electronic payment services window to the changing needs of stakeholders and is addressing remaining bottlenecks in the customs Upgrade of the platform (architecture, technologies, and hardware) area. The single window will be integrated with Improvement of functionalities other trade systems at customs, the ports, and the Treasury Department, which have been mandated to move to paperless transactions and 24-hour operation adoption were explicitly prioritized to help secure at the Port of Dakar. An upgrading of the customs customs' support for the single window project. pre-clearance and clearance platforms is central to Customs eventually became the agency tasked with these initiatives, as well as to pilot projects that will processing all documents collected through the link Senegalese trading systems to selected platforms single window system. internationally (Box 2). For more information, contact Uma Subramanian, Global Product Leader, Convince employees that their jobs Trade Logistics (usubramanian@worldbank.org). are not at risk Automation of administrative procedures simplifies manual procedures, and staff in the agencies involved may fear that jobs will be lost. This concern was compounded in Senegal by the inability of some managers, in 1996, to envision their staffs working in electronic exchanges. To manage and address these issues, constant communication was maintained with staff at affected agencies to keep them informed about organizational changes resulting from the reforms, and staff were trained in computer-related tasks that replaced the manual procedures. Managers in the affected agencies were also invited to accompany the 1996 international tour of single window systems in other countries. Conclusion and outlook The introduction of a single window system for customs clearance in Senegal tested the government's ability to satisfy disparate stakeholder interests in realizing its vision of enhanced competitiveness in international trade and commerce. While customs reform occurred in the context of broad efforts to better integrate Senegal into the world economy, the design and development of the system ultimately relied on committed leadership and keenly involved stakeholders. iN Practice TRAdE logIsTICs 6 Endnotes trade facilitation based on information IN PRACTICE communications technology. Senegal adopted 1 A "single window" system for trade goods the initiative in 1995. The Investment Climate IN clearance allows traders to lodge information 4 ORBUS refers to the pre-clearance, single PRACTICE note series is published with a single body to fulfill all import- and window customs declaration system. GIE export-related regulatory requirements. GAINDE 2000 is the company created to by the Investment Climate Advisory This "entrance" is managed by one agency, operate ORBUS. TRADE X is the international Services of the World Bank Group. It which informs all the appropriate agencies name for the customs management system discusses practical considerations and directs combined controls. currently used in Senegal; its local name is and approaches for implementing 2 Cotecna Inspection SA of Switzerland operates GAINDE. CORUS is the electronic payment reforms that aim to improve the a liaison office in Senegal under a three-year system connected to the other systems. business environment. The findings, contract to provide import verification services 5 Eighty percent of capital is held by the on behalf of the government of Senegal. The Committee for the Management of Customs interpretations, and conclusions Multilateral Investment Guarantee Agency Automation Services, a joint body comprising included in this note are those of the of the World Bank Group issued a guarantee public (customs, treasury) and private author and do not necessarily reflect covering the project investment. (port stakeholders, professional trade unions) the views of the Executive Directors 3 The United Nations Trade Point program entities. The remaining 20 percent is held by of the World Bank or the is an UNCTAD initiative launched in 1994 private computer firms. governments they represent. to help small and medium-size enterprises 6 Customs revenues grew from CFA327 billion access trade opportunities and benefit from in 2005 to CFA467 billion in 2008. about the Investment Climate Advisory Services The Investment Climate Advisory Services of the World Bank Group helps governments implement reforms to improve their business environments and encourage and retain investment, thus fostering competitive markets, growth, and job creation. Funding is provided by the World Bank Group (IFC, MIGA, and the World Bank) and over 15 donor partners working through the multidonor FIAS platform. iN Practice TRAdE logIsTICs 7 International Finance Corporation World Bank Group WWW.WBgINvESTmENTCLImATE.oRg