is undoubtedly a positive move to support customs operations. The AW system facilitates information lodging, minimizes input mistakes, and makes information more consistent.

With the help of international players, the OECS customs offices have been working to improve their performance. Notably, the region has benefited from initiatives such as the Caribbean Regional Technical Assistance Center (CARTAC) for more than eight years, and recently the Supporting Economic Management for the Caribbean (SEMCAR) program launched by the International Monetary Fund (IMF) and the World Bank. The program aims to streamline tax, customs, and public financial management in the region.

The work of the CARTAC and SEMCAR customs offices points to two priority areas: strategic thinking and the adoption of risk management systems.

In the area of strategic thinking, the SEMCAR program has produced a Strategic Management Framework (SMF). At the core of this framework are efforts to help modern customs offices play the role of trade facilitator. The SMF allows for a participatory process, whereby customs offices interact with key players to deal effectively with issues as complex and politically sensitive as overtime practices, thus making it possible to find solutions supported by political will and resources.

On the side of risk management, the SEMCAR program has produced a Risk Management Framework (RMF). This framework promotes the adoption of risk management practices based on risk profiling of authorized operators and agile trade facilitation. One OECS country has piloted the RMF by setting up an information solution that enables data exchanges between the revenue agency and the customs office, to build up and update risk profiles of authorized operators. This approach to RMF is compatible with the existing core customs information system.

# _What else can be done to streamline OECS customs?_

The implementation of integrated systems and the initial adoption of the SMF and RMF are positive steps toward building modern customs in the OECS, but these steps are only the beginning. Changing the idea that customs processes are means for fee collection is a difficult challenge to overcome. Dealing with distorting incentives that perpetuate and deepen inefficiencies in trade facilitation is another big challenge. For the OECS, critical next steps include:

- a) _Removing the practice of overtime_ . This implies that the basic salary is the only compensation for customs inspectors. But this might give rise to corruption to compensate for the loss of overtime compensation.

- b) _Introducing a fee for customs services to be paid by the private sector_ . To be effective this fee must not be linked to physical examinations and should contribute to an overall compensation fund. Since the private sector is already paying the cost of overtime, this should not be a problem for them.

- c) _Revising salary scales and incentives for customs officers._ This action might have important fiscal implications and should be implemented with a reform program oriented toward converting customs offices in the Caribbean into performance-oriented entities.

_Source:_ Prepared by José Eduardo Gutierrez Ossio, based on Gutierrez Ossio and others (2013) and on Briceño-Garmendia and others (2013).

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