Public Disclosure Copy

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1 Public Disclosure Authorized EAST ASIA AND PACIFIC Lao People's Democratic Republic Trade & Competitiveness Global Practice IBRD/IDA Specific Investment Loan FY 2008 Seq No: 11 ARCHIVED on 08-Sep-2015 ISR19282 Implementing Agencies: Customs Department, Ministry of Finance Public Disclosure Authorized Key Dates Key Project Dates Board Approval date:17-jun-2008 Planned Mid Term Review Date:21-Jan-2013 Original Closing Date:31-Dec-2013 Project Development Objectives Effectiveness Date:20-Oct-2008 Actual Mid-Term Review Date:28-Jan-2013 Revised Closing Date:30-Jun-2017 Public Disclosure Authorized Project Development Objective (from Project Appraisal Document) The development objective of the project is to facilitate trade by improving the efficiency and effectiveness of customs administration. The project will simplify customs procedures, eliminate duplication and redundancy, reduce transaction costs and time to cleargoods, and increase transparency and accountability. Has the Project Development Objective been changed since Board Approval of the Project Objective? Yes Board Approved Revised Project Development Objective (If project is formally restructured)phrpdodel The objective of the project is to facilitate trade by improving the efficiency and effectiveness of customs administration and simplifying customs procedures to eliminate duplication and redundancy, reduce transactions costs and time to clear goods, and increasetransparencyand accountability. Components Public Disclosure Authorized Name Automation Support (including Implementation of ASYCUDA World):(Cost $6.60 M) Organizational Development (including Customs Modernization Support):(Cost $5.60 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Low Low 9/8/2015 Page 1 of 9

2 Implementation Status and Key Decisions The project has progressed well and on track to achieve the Project Development Objective. The project implementation remains broadly on track in delivering key outputs and results. The proejct aims at improving customs efficiency and effectiveness of customs administrations by simplifying the customs procedure that reduces time and cost for customs clearance including reduction of the share of goods being subject to (lengthy) physical inspection with the risk-based approach. As of August 2015, the project has contributed to some modest improvements in reducing the share of physical inspections in customs control through the use of the ASYCUDA World selectivity module. Also, the 2014 Logistics Performance Index (LPI) by the World Bank Group has already shown that client perception of Lao customs performance and integrity increased from 2.38 (2012) to 2.45 (2014) in a scale of scores from 1 to 5. As a results of the project interventions, Lao Customs has performed slightly better with some improvements in efficiency of customs clearance processes by having faster, simpler and more predictable formalities for clearing imports, exports and transits. While no latest data available from Time Release Study (TRS), the mission also confirmed during the field visits that the ASYCUDA World system has been successfully rolled out and in live operation in deployed checkpoints. Lao PDR Customs Department (LCD) will conduct the third TRS by the end of Lao PDR Customs has also made some favorable progress in risk management capacity through the application of the selectivity module in ASYCUDA World. The automated selectivity system is in live operation now in all 21 locations. Based on the latest selectivity data from ASYCUDA World for September 2013-July 2015, Lao PDR customs clearance is getting improved by being able to reduce the percentage share of customs declarations that are subject to full physical inspection (red channel) by a 2 percentage point from 52 percent in September There have been also some adjustments in routing more customs declarations through the yellow channel for full document check while and decreasing those that route through the blue channel for goods subject to post clearance audit. This is a reasonable action to reduce redundancy in the customs clearance process. It means that more goods subject to post clearance audit are now routed straight away to the yellow channel for full document check without first routing through the blue channel and then rerouting to the yellow channel. Overall, an increase in customs declarations routed through the green channel has demonstrated a good sign of improvement in the efficiency of Lao PDR s customs clearance. 9/8/2015 Page 2 of 9

3 Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance -- Moderate Moderate Macroeconomic -- Moderate Moderate Sector Strategies and Policies -- Low Low 9/8/2015 Page 3 of 9

4 Technical Design of Project or Program -- Low Low Institutional Capacity for Implementation and Sustainability -- Low Low Fiduciary -- Moderate Moderate Environment and Social -- Low Low Stakeholders -- Low Low Other -- Moderate Moderate Overall -- Low Low Results Project Development Objective Indicators PHINDPDOTBL Customs Efficiency: Reduction in mean import, export, and transit clearance times. (Text, Custom) 17.9 (Hours) No data is available for this period. The Time Release Study (TRS) will be launched in February Date 22-Mar Nov Aug Jun-2017 Unit: Hours. No latest data available in The upcoming third TRS will provide us with the latest data. The contract of the next TRS should be completed by the end of PHINDPDOTBL Customs Efficiency: Reduction in number of steps to clear commercial shipments (import / export). (Text, Custom Breakdown) 9 / 7 (Import / Export) 5, 4 5 / 4 4 / 3 Date 22-Mar Nov Aug Jun-2017 PHINDPDOTBL Customs Effectiveness: Increase in the ratio of detections / inspections by customs. (Text, Custom) 1.2 (at AF) No data /8/2015 Page 4 of 9

5 PHINDIRITBL Date Nov Aug Jun-2017 The ratio is calculated based on the selectivity / inspection data from the checkpoints. PHINDPDOTBL Customs Effectiveness: Increase in the perceptions of customs performance and integrity by clients. (Text, Custom Breakdown) 2.08 (LPI 2007) 2.45 No new data available. Next LPI will be published in Date 30-Jun Nov Aug Jun-2017 Overall The progress on performance indicators are well on truck. Although the latest data is not available, the mission has confirmed on sites that the interventions on both ICT and organization components have already brought positive changes in improving customs clearance procedure. The mission identified a couple of issues that can be further improved (i.e. payment of the ASYCUDA fee et al,. would be also paid by Smart Tax so that traders further can reduce time to handle clearance process. Intermediate Results Indicators Full acceptance of electronic data submission for customs declaration procedures by the end of 2013 (Text, Custom) Partially completed. The full rollout of electronic data submission for 11 customs checkpoints was completed by the end of The geographical rollout of the electronic data submission for additional 12 customs checkpoints began in early Partially completed with 10 additional checkpoints. The pilot of the geographical rollout of the electronic data submission would start by January Completed for the additional 12 customs checkpoints that the ASYCUDA System is being rolled out in Date 30-Jun Dec Aug Jun-2017 AF originally planned to finance additional 12 checkpoints. But, the remaining 2 checkpoints would be dropped from the rollout of ASYCUDA dues to very little volume traded. LCD will reconsider these two checkpoints. 9/8/2015 Page 5 of 9

6 PHINDIRITBL PHINDIRITBL PHINDIRITBL Prototype developed and accepted by government (Text, Custom) Completed. The prototype was achieved by the end of Completed. Completed Date 30-Jun Dec Dec Dec-2010 This task was completed before AF was approved in Accepted prototype validated at the pilot site (Text, Custom) Completed. The prototype was accepted by the Government at the pilot site in April Completed. The prototype was accepted by the Government at the pilot site in April Completed Date 30-Jun Apr Apr Dec-2011 Prototype replicated at the remaining checkpoint sites (Text, Custom) Completed for the 11 international customs checkpoints financed by the original grant in December Additional 12 international checkpoints financed by the Additional Financing are being rolled out and expected to complete in Completed 10 out of 12 planned checkpoints. Completed for the geographical rollout of additional 12 customs checkpoints Date 30-Jun Apr Aug Jun /8/2015 Page 6 of 9

7 PHINDIRITBL PHINDIRITBL Completed for the 11 international customs checkpoints financed by the original grant in December Additional 12 international checkpoints financed by the Additional Financing are being rolled out and expected to complete in out of 12 checkpoints financed by AF have been completed as of August 7, The remaining two checkpoints would be reconsidered and dropped from the ASYCUDA rollout due to little volume traded. Integrated IT system is in place by 2011, pilot completed and reviewed by 2012, and fully operational in all implementation sites by 2014 (Text, Custom) Completed and the full operation of the ASYCUDA System for 11 international customs checkpoints financed by the original grant in December Additional rollout of the system to another 12 international customs checkpoints through Additional Financing will be implemented in Completed and the full operation of the ASYCUDA System for 11 international customs checkpoints financed by the original grant in December Additional rollout of the system to another 12 international customs checkpoints through Additional Financing will be implemented in Completed Date 30-Jun Apr Apr Dec out of 12 checkpoints financed by AF have been completed as of August 7, The remaining two checkpoints, Luang Prabang International Airport and Pakse International Airport, would be dropped from the ASYCUDA rollout. LCD decided to deploy the ASYCUDA at Thadeua traditional Customs Checkpoint bordering with Thailand and cover the expansion of International Wattay Airport Customs Checkpoint. With the additional rollout, ASYCUDA World covers almost 99 percent of formal trade. LCD anticipates its own resources to roll out the system additional small traditional and border crossing checkpoints of about 40 in the future. Appropriate front line staff and affected traders trained in advance of pilot testing and pre nationwide rollout (Text, Custom) Completed in December Additional trainings have been provided to staff for additional 12 customs checkpoints in Completed in December Additional trainings have been provided to staff for additional 12 customs checkpoints in Completed (2011) 9/8/2015 Page 7 of 9

8 Date 30-Jun Apr Apr Dec-2011 Overall Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P IDA-H4030 Closed XDR % P IDA-H8430 Effective XDR % Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P IDA-H4030 Closed 17-Jun Jul Oct Dec Dec-2013 P IDA-H8430 Effective 28-May Jun Jul Jun Jun-2017 Cumulative Disbursements 9/8/2015 Page 8 of 9

9 Restructuring History There has been no restructuring to date. Related Project(s) P Lao PDR Customs and Trade Facilitation Project - Additional Financing 9/8/2015 Page 9 of 9