Customs modernisation for efficiency, security, and prosperity

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Globally, the mandate of customs includes revenue collection, trade facilitation, security, and protection of society. Prioritization within this mandate is based on each country’s development goals and its operational environment. In Pakistan, the operational environment still prioritizes the role of customs in revenue collection to address the unrealized revenue gap, which is critical for the country. Pakistan is still striving to increase its tax-to-GDP ratio to an equitable level. Amidst this operational environment, it becomes difficult for Customs to strike a balance between trade facilitation and strict compliance. Operational policy often conflicts between increasing convenience measures and achieving strict compliance goals.

It goes without saying that trade and industry (business) are the driving forces behind a country’s prosperity. The World Bank states in its Business Readiness Report 2024 that: “Today, the private sector generates about 90 percent of employment, 75 percent of investment, more than 70 percent of output and more than 80 percent of government revenue in developing economies.” The report further emphasizes: “A vibrant private sector is central to efforts to end extreme poverty and promote shared prosperity on a sustainable planet. When it works well, private sector innovation and Birth of entrepreneurship It can open up economic opportunities for those who need them most. It can drive more efficient and sustainable use of natural resources.

The aforementioned economic strategies, as described by the World Bank, have enabled many countries to lift people out of poverty, generate state revenue and generate national prosperity. Customs administrations around the world, with their core mandates of revenue collection, trade facilitation, security, and protection of society, play an important role in promoting a business-friendly operational environment. By reducing the cost of doing business, facilitating regulatory compliance and building confidence in trade and industry, customs can accelerate economic growth. This, in turn, increases trade volume, tax collection, job creation, innovation and national prosperity.

To achieve these goals, Pakistan Customs is constantly advancing its reforms and automation processes, leveraging advanced technologies to increase efficiency. The first major step was taken in 2006 with the implementation of the Pakistan Automated Computerized Clearance System (PACCS), incorporating international best practices and World Customs Organization (WCO) standards, which Customs Considered as the “Bible” of Modernization This progress continued in 2011 when Pakistan Customs indigenously developed the web-based One Customs (WebOC) system to speed up the clearance process and front-line checks in post-consignment clearance audits. shifted to

For the first time, in 2018-2020, with the support of experts from the World Bank and the WCO, a compliance management system known as a Risk Management System (RMS) with artificial intelligence (AI) and machine learning will be introduced. (ML) was enhanced with tools such as These technological interventions significantly benefited trade and industry by reducing dwell times for clearance of goods at ports and eliminating human interaction in the process. At the same time, these tools have helped the customs administration by improving compliance levels, detecting tax evasion, assisting in selective physical inspections, generating additional revenues for the state, and preventing prohibited items from entering the country. Strengthened.

Pakistan Customs has introduced several new modules to modernize the customs process, reduce dwell times and increase convenience. Pre-clearance and virtual assessment modules enable traders to clear shipments before they reach ports, helping industries achieve zero inventory management. Additionally, a computerized evaluation system was implemented to further eliminate human interaction and increase efficiency. RMS-based clearance, blue channel for scanning to reduce red channel clearance, Authorized Economic Operator (AEO) program, e-commerce module, smart examination for on-site examination reports, and other technology-based There are significantly more significant interventions in the measures. Better efficiency These measures have reduced the residence time from 3-4 days, less than 24 hours 74% of import and export containers are cleared in less than 24 hours. Recently, the introduction of faceless assessment system aims to make the process more transparent and efficient.

Recently, WCO launched “The Smart Customs Project” with a home study mission on AI/ML experiences in China. Lin Wei, director general of the Risk Management Department of China Customs, highlighted the role of digitization and intelligent customs system transformation in enhancing customs efficiency and global trade security. The project focused on identifying high-risk enterprises through relational network visualization, smart non-intrusive inspection (NII) image analysis, intelligent document examination, smart port development, and AI applications in a single-window environment. has gone

The government’s current strategic roadmap emphasizes three key components: people, processes and technology. This approach seeks to harness the power of technology for revenue collection, trade facilitation, and social protection.

AI integration can deliver tangible benefits, such as risk management accuracy, faster clearance times, and improved consistency in decision-making, helping to meet international customs commitments: efficiency, security and prosperity. However, achieving these goals requires specialized expertise, advanced computational resources, robust data analytics infrastructure, well-defined policies, and leadership to transform the operational environment to achieve desired outcomes. It requires constant investment of commitment.

The author is currently working as Director Customs Reforms and Automation (Digitalization), Karachi.