WORLD TRADE  
ORGANIZATION  TN/TF/W/135 
17 July 2006 
 
 (06-3437) 
Negotiating Group on Trade Facilitation Original:   English 
  
 
COMMUNICATION FROM PAKISTAN 
  
 The following communication, dated 14 July 2 006, from the Delegation of Pakistan, is being 
circulated in advance of the Negotiating Group meeting of 24-26 July. 
 
_______________ 
 
CUSTOMS ADMINISTRATIVE REFORMS (CARE):  
PAKISTAN’S EXPERIENCE IN TRADE FACILITATION 
 
 
I. OVERVIEW 
1. The Customs Administrative Reform (CARE) pr oject was initiated by the Central Board of 
Revenue (CBR)
1 in February 2002 with the fundamental  objective of improving the organizational 
efficiency of the Customs department, enhancing c ontrols and to enable it to adapt to emerging 
international initiatives requiring exchange of information among Customs administrations. The 
CARE team has endeavoured to achieve these object ives through: (i) Business process re-engineering, 
to adopt international best practices; (ii) use of latest information technology tools; (iii) use of 
standardized protocols for information excha nge (use of XML and World Customs Organization 
(WCO) Data Model); and (iv) use of au tomated risk management techniques. 
2. The system designed under CARE is called Pakistan Customs Computerized System 
(PACCS). Software application for the system has been developed by a consortium of three software 
companies, namely, Microsoft, PWC Logistics and AOS, selected through the World Bank’s international tendering process. 
II. SCOPE 
3. The scope of the CARE project was to deve lop an end-to-end automated Customs system 
covering all Customs functions. 
4. Due to the very nature of Customs work, th e system transcends its boundaries from Customs 
procedures to other relevant organizations con cerned with clearance of international cargo, and 
various operators involved in th e logistic supply chain, such as banks, carriers, and warehouse 
operators, etc. These include port authorities, te rminal operators, on-line branches of government 
treasury throughout the country, the State Bank of Pakistan, regulatory ministries and departments 
such as the Ministry of Commerce, quota authori ties such as the Sales Tax department or the 
Engineering Development Board, Export Promo tion Bureau, Income Tax departments and CBR 
Headquarter, provincial excise departments, plant and animal quarantine de partments, and other 
regulatory authorities prescribed in various schemes.  
                                                     
 
1 CBR is responsible for collection of seven direct and indirect federal taxes and duties including the 
import and export levies. TN/TF/W/135 
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  5. The Pakistan Customs Computerized System is an integrated system which has the following 
categories of users: 
1. Customs functionaries, at port of entry and port of destination or exit. 
2. Traders (importers and exporters) including or ganizations who may import or export cargo, 
such as Government departments, municipa l bodies, UN organizations, embassies and 
consulates. 
3. Carriers (shipping lines, bonded carriers such as  National Logistics Cell [NLC], Pakistan 
Railways and other authorized carriers). 
4. Ports and Terminal Operators. 
5. Customs Clearing Agents. 
6. Bonded Warehouse Operators. 
7. Ship Chandlers. 
8. Quota authorities, Sales Tax Collectors (for Du ty and Tax Remission for Exports [DTRE] and 
Survey Form). 
9. Regulatory authorities like Ministry of Commerce. 
10. Authorized on-line branches of government treasury. 
11. State Bank of Pakistan. 
12. Federal Bureau of Statistics. 
13. Various other departments. 
 
III. COMPONENTS OF PACCS 
6. PACCS is comprised of four essential components: 
1. TARIP (Tariff and Integrated Policy) 
7. TARIP is the complete picture of regulati ons for import or export of cargo to and from 
Pakistan. It enables the stakeholders to know in advance about import tariff rates, export drawback 
rates, import and export restrictions, exempti ons, documentary and declaration requirements. 
8. TARIP is online and information is always up- to-date (Information is captured at source). 
2. INTRA (Integrated Regulatory Authorities) 
9. INTRA is an online nationwide network connec ting all stakeholders involved in imports, 
exports and movement of cargo within the PACCS. User Interfaces for all stakeholders are provided 
by this component. INTRA provides online regist ers and accounting to monitor quota regimes in 
export and imports. 
3. ECHO (Enhanced Cargo Handling and Port Optimization) 
10. ECHO is an online connectivity between the ca rriers, the PACCS and Terminal Operators / 
Port authorities. ECHO provides the following advantages: 
• One electronic document for the carriers.  
• 
Online inventory and monitoring of ports. No Customs staff at the gates (e-gates). 
• Seamless, Transits and Transhipments without Customs requirements. 
• No requirement by Customs for Export manifest.  
• Risk screening prior to arrival of the vessel, the terminal operator receives cargo handling 
instructions while offloading, increasing his output and efficiency. 
• Instant duty drawbacks with the sail of vessel. 
  TN/TF/W/135 
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  4. ACCESS (Automated Customs Clearance System) 
11. ACCESS is the core Customs system which covers all Customs functioning through an 
automated risk-management based system covering the following: 
• Advanced Carrier declaration. 
• Advanced screening for Risky Cargo. 
• Goods declaration with off line support. 
• Payment Management System. 
• Risk Management System.  
• Assessment Management System. 
• Clearance Management System. 
• Status Reporting System. 
• Law Cell. 
• Adjudications. 
• Auctions. 
• Warehousing. 
• Licensing. 
• Transits and Transhipments. 
 
IV. SALIENT FEATURES OF THE PACCS  
12. The PACCS is a completely paperless one window  system accessible from anywhere in the 
country and only requires PACCS User ID, and intern et connectivity. This highly sophisticated risk 
management system is fully automated and works 24x7 on the basis of self assessment. 
V. FUNCTIONAL MODULES OF THE PACCS 
13. The PACCS Software Application has various modules such as the User Management 
System  (defines access level and authority of each person interacting with the system); Goods 
Declaration System  (defines various procedures for importers  and exporters for Customs clearance) ; 
Risk Management System  (targets various risks in different ar eas and triggers actions according to 
prescribed parameters and procedures); Assessment Management System (performs automated 
computation of all duties and taxes on the basis of pre-defined formulas); Payment Management 
System (online  Connectivity to  auth orized  branches of treasury); Carrier Declaration System 
(facilities to carriers and their agents to file and amend their manifests online and  port clearance to 
incoming and outgoing vessels without physical documents); Clearance Management System  
(Releases or holds import and export cargo on the b asis of pre-defined outcomes of various systems. 
triggers and flags from Risk Management System, assessments, examinations, position of cargo (i.e., 
whether arrived or not), payments of duties and ta xes, furnishing of securities and documents where 
necessary); and Examinations Management System (allocates resources to and records data from, 
Customs activities at port, such as inspections, we ight check, drug check, or laboratory testing). 
14. The other modules include EDI with ports, Adj udications Management System, Refund 
Management System, Duty Drawbacks on Exports , Warehousing Management System, Valuation, 
Post Release Verifications, Classification Co mmittee, Recoveries, Licensing and Transits 
Management System. 
 TN/TF/W/135 
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  VI. IMPLEMENTATION STRATEGY 
15. To launch an extensive multi-organizational syst em of this nature and magnitude, the CBR 
decided to implement it in phases. The CARE Pi lot Project was the first phase through which all 
components of the system have been put in place.  However, it is limited by geography, at the Karachi 
International Container Terminal (KICT) which deal s with about one-third of  import and export cargo 
cleared through Karachi Port. 
16. In terms of functionality, the PACCS covers a ll Customs procedures, all modes of transport, 
i.e., land, air, sea, and multi-modal, and all typ es of cargo, i.e., containerized, LCL, or bulk.  
VII. ACHIEVEMENTS AND TRADE FACILITATION 
17. The PACCS was inaugurated on 18 April 2005. It is successfully achieving and delivering its 
objectives. As can be seen below, Customs e fficiency and port throughput has increased 
phenomenally: 
 Reduction in steps in vessel clearance 
             26 steps – 01 step  
 Reduction in steps in Goods Declaration clearance 
34 signatures and 62 verifications – 01 step el ectronic declaration. All verifications are 
automatic online and from source.  
 Reduction in customs processing time 
             04 days ~ 08 hrs  
 (More than 70% consignments are cleared within 1 hour) 
 
 Reduction in dwell time of cargo at port 
11 days ~ 04 days (Each day reduction saves US D5 million to trade) (Report on National 
Trade Corridor (NTC) by the World Bank). 
 
 Reduction in examinations 
Examination of cargo has come down from 100% to  4% in case of imports and 2% in case of 
exports.  
 Enhanced predictability and transparency 
An integrated tariff has been developed and pl aced on the web; hence the trade is aware in 
advance of all the legal requirements regarding import or export of every commodity to and from Pakistan.   
 Refunds and Rebates 
Export rebates are very facilitative since the G oods Declaration itself is an application for 
rebate, so rebates are now filed in a single st ep and cheques are issued within 48 hours of 
export of goods as compared to 90 days in the conventional process. Similarly refunds are 
online and are given in the same time frame as rebates.  
 No un-receipted expense (Zero corruption)  
There is no contact between the tax payer and the tax collector; there are no groups and HS 
specific appraisers or examiners. All assessments  and examinations are decided by the system 
based on the Risk Management System and are auto allocated to assesso rs and examiners if 
required based on workload. The importer/exporter information is filtered off by the machine 
as such the tax collectors are not aware of the taxpayer’s identity and vice versa.  TN/TF/W/135 
 Page 5 
 
 
   
 Virtual Collectorate 
PACCS is virtual Customs. An importer or expor ter can file his declaration from anywhere in 
the country over the web, pay his duties and taxes in any other city since banks in various cities are online with PACCS; and clear his cargo from the port of arrival. Similarly a 
declaration filed from Peshawar may be assessed by an appraiser, if required, in Karachi 
(1700 Kms away from Peshawar). The system  routes work based on workload without 
consideration for physical location since physical location is immaterial in cyberspace;  this 
makes collusions between taxpayer and taxpayer collector extremely difficult.     
 Standardization and best practice 
PACCS has been built to international sta ndards. The system has been subjected to 
independent evaluation in terms of business processes. Mr. Dietmar Jost, one of the architects of the Customs Data Model at the WCO, as i ndependent evaluator of PACCS in his report 
dated 30 June 2006, concluded that "PACCS has met the twin goals of trade facilitation and 
Customs control".  PACCS is currently being technica lly tested by Microsoft for best 
international practices in terms of software.  
18. The PACCS will be rolled out throug hout the country by June 2007. 
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