Survey on Customs Clearance Procedures
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1 Survey on Customs Clearance Procedures IFC Georgia Tax Simplification Project LOGO LOGO LOGO
2 Survey Summary Survey was conducted from January 30 to February 6, 2012 at Customs Clearance Zones (CCZ) in Tbilisi, Batumi and Poti. 515 respondents were interviewed representatives of legal entities that visited CCZ for import-export clearance. CCZ Number of Respondents Importers Including Exporters Tbilisi Poti Batumi Total
3 Most of the shipments cleared is imported and exported by Road Transport Modes of Transport used for Import (%) Modes of Transport used for Export (%) Total Total Batumi Batumi Poti Poti Tbilisi Tbilisi Road Sea Rail Air Road Sea Rail Air 3
4 Slightly More than half of the Shipments is Containerized Share of Containerized Cargo (%) Tbilisi Poti Batumi Total Import Export 4
5 Majority of Respondents do Customs Clearance Quite Often Number of Declarations Cleared During a Year Import Export 1-5 Declarations 5.9% 13.1% 5-10 Declarations 21.4% 15.5% Over % 71.4% Median (Number of declarations for an average respondent) Average number of declarations per respondent
6 Degree of Satisfaction of Respondents with the CCZ Services is Extremely High. Nobody is Dissatisfied Satisfaction with CCZ Services (%) Very satisfied 82.3 Quite satisfied 16.3 Neutral Quite dissatisfied Very dissatisfied
7 Clearance Procedures Got Very Simplified with the Launch of CCZs Did the import-export registration procedures get simplified or complicated with the launch of CCZs? (%) Got extremely streamlined 89.6 Got streamlined at certain extent 10.4 Remained nearly the same Got complicated at certain extent Got very complicated
8 CCZs Extremely Reduced Clearance Time Did clearance time for import and export increase or decline with the launch of CCZs? (%) Declined extremely 87.6 Declined at certain extent 11.8 Remained nearly the same Increased at certain extent Increased extremely
9 However, for a Small Part of Respondents (Some Importers) Clearance Costs Increased Did clearance costs increase or decline with the launch of CCZs? (%) Declined extremely 37.4 Declined at certain extent 32.7 Remained nearly the same 21.3 Increased at certain extent 7.8 Increased extremely 0.8 9
10 Majority of Respondents Says that more than 2 Documents are Required for Clearance (lack of communication?) 30 Number of Documents required for Import Clearance (%) Number of Documents required for Export Clearance (%)
11 However, preparation of Documents does not Require Much Time: 1 Day or less for the Vast Majority Time for Document Preparation (Number of Respondents) Days Import Export Total
12 Most Frequently Named Documents (%) For Import Waybill / transport document 76.8 TIR- book 18.4 Bill of lading 25.7 Airway bill 5.0 Railway bill 6.6 Invoice 98.3 Packing List 62.3 Certificate of origin 49.1 Phyto-Sanitary Certificate 8.7 Veterinary Certificate 5.6 For Export Waybill / transport document 80.0 TIR- book 36.5 Bill of lading 23.5 Airway bill 4.7 Railway bill 18.8 Invoice 97.6 Packing List 62.4 Certificate of origin 61.2 License - Insurance Company 15.3 Certificate of Compliance 5.9 Export Declaration 5.9 Expert s report
13 Shipments Rarely End up in a Red Corridor Half of the respondents says that their shipments never end up in a red corridor Frequency of Cargo's Ending up in a Red Corridor (%) Often Rarely Almost never Never 13
14 Vast Majority of Shipments Gets Registered in a Green Corridor within Less than Half an Hour Clearance Time with Green Corridor (%) Over 60 minutes 0 1 From 30 to 60 minutes From 15 to 30 minutes Export Import From 0 to 15 minutes
15 In Case of a Red Corridor Clearance Time Increases (Maximum 24 Hours for Import), however More than Half of the Respondents Need 1 Hour or Less Clearance Time in Case of a Red Corridor (Hours) Import Export Median (for an average respondent) Average Standard error Minimum Maximum Number of Respondents
16 In Case of Ending up in a Red Corridor Expenses often Increase as well Increase in Expenses in case of a Red Corridor (%) Import Export 10 0 Increase Do not increase Respondent does not know 16
17 Expenses Increase by GEL (on average) depending on the Location of Shipment Increase in Expenses in case of a Red Corridor (GEL), if cargo is at CCZ or Customs Warehouse CCZ Import Customs Warehouse CCZ Export Customs Warehouse Median (for an average respondent) Average growth Standard error Minimum Maximum Number of respondents
18 Costs of Some Respondents will Decrease if they avoid Entering the CCZ 60 Cost Reduction in case of not Entering the CCZ (%) Will decline Will not decline Respondent does not know 18
19 Costs will Decrease by GEL (on average) Depending to where (from where) the Shipment Goes Reduction of Expenses (in GEL) by avoiding entering the CCZ for those respondents whose expenses decrease due to not entering the CCZ Median (for an average respondent) To Customs Warehouse Import To Office From Customs Warehouse Export From Office Average reduction Standard error Minimum Maximum Number of respondents
20 More than 3/4 of Importers Pays GEL 400 Fee for Registration Fee for Import Clearance of Typical Shipments (in GEL) Percentage Number of Respondents Number of Respondents Fee for Export Clearance of Typical Chipments (in GEL) Percentage Number of Respondents Number of Respondents 78 78
21 Vast Majority of Importers Thinks that Clearance Fee is Adequate to the Quality of Service Adequacy of Import Registration Fee with respect to Service Adequate; 90% Inadequate; 7% Does not know; 3% 21
22 Only 29% Uses Advance Declaration Service Approximately ¼ of the other respondents does not even know about advance declaration service Reasons why the Advance Declaration is not used (%) Other 24 Does not suit the respondent 41 Plans to use it in the future 10 Does not know about advance declaration
23 According to Respondents None of Separate Import Components is a Problem or may represent a minor problem Problematic Character of Import Components (%) Request for entrance of a cargo into EZR Penalties at customs Warehousing Complexity of ascertaining product codes Completion of import declaration Processing in the port and terminal Registration at EZR and technical control Preparation of documents Delivery from the border to the place of destination Delivery from EZR to the place of destination Transportation from a border to EZR Transportation of cargo to border
24 The Same can be Said about the Export Problematic Character of Export Components (%) Request for entrance of the cargo into EZR Penalties at customs Warehousing Complexity of ascertaining product codes Processing at the port and terminal Transportation from the border to the recipient Transportation from the point of loading to the border Transportation from EZR to the border Transportation from the point of loading to EZR Export registration at EZR and technical control Completion declaration Preparation of documents
25 Other Issues Corruption has been practically eliminated: Only 2 respondents out of 515 (0.4%) interviewed mentioned that they had to pay bribes in relations with the CCZ (Both respondents were interviewed in Poti). Only 6% of respondent companies uses the service of independent brokers. Clearance is mainly done by company employees and not by independent brokers: Only 7 respondents (1.4%) out of the 515 interviewed were independent brokers, and the others were employees of importingexporting companies. 25
26 Summary Degree of satisfaction with the CCZ services is very high. With the launch of CCZs quality of service is improved, procedures are simplified and clearance time is reduced. For a significant part of importers and exporters expenses declined, however for some of them expenses increased. Vast majority thinks that the clearance fee corresponds to the quality service. Presumably importers and exporters are to be better informed and communication with them is required. Is it possible to further reduce costs and improve services? 26
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