TIR in Trade Facilitation for the Region

Max EE (BBA Hons, GDipSA, MSc Logistics)Senior Transport Specialist

USAID trade projectAugust, 2014

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Personal Profile

Max EeSingapore

• Senior Transport Specialist, USAID trade project• Ten years of working and operational experience

in the private sector, working in third-party logistics (3PL)

• Ten years of consulting experience for public and private sectors.

• Started work for Asian Development Bank since 2005.

• Worked in Afghanistan, Kazakhstan, Kyrgyz Republic, Mongolia, Pakistan, PRC (Xinjiang), Uzbekistan.

• Focused on transport and trade facilitation project

• Course Convener in Singapore Logistics Association, Director for ASEAN-China Chamber of Commerce 2

Agenda

1 Regional Transit Corridors

2 Regional Trade Flows

3 TIR in Connecting Central and South Asia

4 Road-Map for Implementation

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Regional Transit Corridors

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Transit Routes in Afghanistan

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Uzbekistan-Afghanistan-Pakistan(845 km)Ayratan-Hairatan-Mazari Sharif-Pol e homri-Kabul-Jalalabad-Torkham-Peshawar

Tajikistan-Afghanistan-Pakistan(740 km)Nizhni Panj-Shirkhan Bandar-Kundoz-Pol e homri-Kabul-Jalalabad-Torkham-Peshawar

Transit Routes in Pakistan

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India-Pakistan-Afghanistan(AH-1, 520 km)Wagah-Lahore-Peshawar-Torkham

Pakistan-Afghanistan-Central Asia(AH-2 and AH-14 1,431 km)Karachi-Sukkur-DI Khan-Peshawar-Torkham

Pakistan-Afghanistan(AH-7 1 857 km)Karachi-Khuzdar-Quetta-Chaman-Spin Buldak

Trade Flows

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MachineriesIndustrial Materials

FruitsCement

Cotton Scrap Iron

CAREC Corridor 5CAREC Corridor 5Transit Corridors with Heavy Traffic

Urumqi – Dushanbe

Shirkhan Bandar – Torkham

Hairatan – Torkham

Pakistan’s Potential in the Region

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Central AsiaLand-locked regionEnergy-RichComplicated Border Crossing

Middle EastEnergy-Surplus RegionCapital SurplusU.A.E. just acceded to TIR

East AsiaEconomically VibrantHuge Demand for Energy and ResourcesLarge Demographics

South AsiaFavourable DemogrpahicsAccess to seaports

Connecting Central and South Asia : Global View

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Connecting Central and South Asia : Key Questions

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1. Central Asian Countries are land-locked and do not access to seaports.

2. Why is Central Asia not using South Asia to access seaports?

3. What Pakistan need to provide, invest and improve to attract more transit trade?

Connecting Central and South Asia : TIR’s Role

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1. This transit corridor is the shortest path for Central Asia to access seaports.

2. Only land transport is feasible for this route.

3. Rail transport in Pakistan serves mainly passengers. Commercial and non-commercial cargoes move by roads.

4. Using trucks, TIR can facilitate a more efficient and faster way of moving goods in either direction.

Annual TIR Carnets in Use (Central Asia)

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Countries 2008 2009 2010 2011 2012 2013Iran 48,000 58,000 54,000 78,000 85,000 105,000Kazakhstan 32,150 31,000 30,050 24,500 19,000 25,000Kyrgyz Republic 17,060 15,050 14,050 20,700 17,100 22,200Tajikistan 400 900 700 1,500 2,950 3,500Turkmenistan 1,000 2,000 3,200 4,700 6,000 7,500Uzbekistan 5,000 6,500 9,000 14,100 17,500 7,500

Source : IRU

ObservationsIn most countries, the use of TIR is increasing rapidly, shown by the increased number of TIR Carnets in use. This is especially so for Afghanistan’s neighbours such as Iran, Tajikistan and Turkmenistan. The successful re-activation of TIR in Afghanistan and Pakistan as a Contracting Party will create a new TIR Corridor linking Central and South Asia.

Challenges of TIR Re-Activation in Afghansitan

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Implementation Challenges

Association Companies

Customs Drivers

Very limited number of TIR Carnet Holder(s)

Not ATI

Officers at border unsure about the documentation

Risk of abandoning cargoes in foreign countries

Banks

Only three banks offer cargo insurance

Not conversant with English, French, Russian

Visa Restrictions

Need financing to invest in new secure trucks

Unfamiliar with costing for international shipments

Poor knowledge of geography, border crossing and routes

Weak route planning for international shipments

Rudimentary understanding of TIR

Factors highlight in blue and italic can be partially or fully addressed through capacity building

Implementation Action 1 : International Agreements

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Countries CMR TIRAzerbaijan 2006 1996Kazakhstan 1995 1996Kyrgyz Republic 1998 1998Tajikistan 2002 2002Turkmenistan 1996 1996Uzbekistan 1995 1995

Year of Accession to CMR and TIR

Source : United Nations Economic Commission for Europe (UNECE)(www.unece.org/trans/conventn/agreem_cp.html)

CMR is the Convention for the Contract of International Carriage of Goods by Road. It deals with the various legal issues in road transport. What is especially lacking in Afghanistan is the absence on the carrier liability issues. If goods are lost or damaged in transit, the carrier has no insurance coverage and the consignee or consignor have little recourse. Accession to the CMR Convention is useful for Afghan transport operators in international transit.

Note that many Central Asian countries acceded to both CMR and TIR in the same year. There is a good reason for this. Both Conventions are complementary.

Implementation Action 2 : National Legislation

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• Revision to the Transport Laws Mandatory for international transport operators to have TIR Compliant trucks

• Revision to the Customs Code Recognize mutual customs control

• Third-Party Carrier Liability Develop and incentivise the underwriting of carrier liability insurance

• Green Lanes for TIR Permit faster movement of trucks

Implementation Action 3 : Trucks Specifications

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Implementation Action 4 : Capacity Building

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TIR User Guide

Secure Vehicle and Container

Sheeted Vehicles and

Trailers

Siders

Containers, Tankers and

Small Vehicles

Approval Certificate and

TIR Plate

International Guarantee Chain

Contractual Mechanisms in

TIR System

Dealing with Claims

Mutual Acceptance of

Customs Controls

TIR Transport

Customs Procedures

Termination and Discharge of TIR

Operation

TIR Carnet

The TIR CarnetUsing the TIR

Carnet (Association)

Using the TIR Carnet (Holder)

Using the TIR Carnet

(Customs)

Using the Certified Report

Form

Opening a TIR Carnet

Dealing with Problems En-

Route

Returning a TIR Carnet

Controlled Access

Admission to the TIR System

General Admin Procedures for

Holders

Suspension and Exclusion

SafeTIR

SafeTIR and CUTE-WISE

Anti-Fraud Actions

(Association)

Anti-Fraud Measures (Holder)

Anti-Fraud Measures (Customs)

Overview Administrative Structure

Train the Trainers Framework

Implementation Action 5 : Optimize the Admission Process

18http://www.acci.org.af/services/tir.html

Contacts

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Max Ee

Thank You!

Contact : +93 7958 44845 (Afghanistan)

Email: max.ee@scmigroup.com

Skype : maxkkee