28 June 2014, Brussels, Belgium
In the Strategy and Work Programs on Reform and Modernization of Cambodia Customs (2009-2013), under Strategic Objective 3, Cambodia Customs has set an important plan to modernize customs system, procedures and technique in order to maximize trade facilitation by becoming a contracting party to the Revised Kyoto Convention (RKC).
After more than two years of hard works and well-planned preparations, Cambodia finally became 94th member of the RKC when Dr. Pen Siman, Delegate of the Royal Government in Charge of the General Department of Customs and Excise deposited the Instrument of Accession with the Secretary General of the WCO during the 123rd/124th Sessions of the Customs Co-operation Council on 28th June 2014.
Cambodia acceded to the convention through article 3, which means the acceptance of the body and the general annex. Furthermore, Cambodia decided to accept, without reservations, Chapter 2 of Specific Annex A, Chapter 1 of Specific Annex B and Chapter 1 of Specific Annex C under Appendix III. In accordance with the provision of the RKC, the said Convention will come into force for Cambodia 3 months after the deposit of the Instrument of Accession.
Becoming contracting party of RKC requires a number of important tasks to fufill such as the assessment of national legislation, identification of the legislation and regulations needing to be amended and developed, and establishment of management and expert team for the preparation. The main process are summarized in the below table.
|Step 1: Establish a project team
||Step 2: Conduct gap analysis (with support of the WCO and ROCB A/P)
Step 3: adopt new regulations on Advanced Ruling, Authorized Economic Operator…
- Translation into national language
Step 4: Ministry of Economy and Finance requested PM for approval in principle, 24 December 2013
- Prime Minister approval, 29 December 2013
- Review and decision on specific annexes and/or chapters to be accepted
Step 5: Preparation of the accession documents and approval process:
- Discussion at the Council of Ministers by Legal Committee
- Council of Ministers’ approval, 18 April 2014
- Parliament adoption, 20 May 2014
- Senate approval, 29 May 2014
- His Majesty the King promulgation, 14 June 2014
- Instrument of Accession singed, 24 June 2014
|28 June 2014
||Step 6: Deposit the Instrument of Accession with the Secretary General of the WCO
As shown in the table, administrative endorsement and legal approval process is recognized the most challenging step as it needs to go through several rigorous discussions and reviews by relevant Committees of the Council of Ministers, National Assembly and the Senate respectively before passing to their plenary sessions for formal approval. According to the timetable above, Cambodia spent more than 1 year to go through the administrative endorsement and legal approvals.
Cambodia’s accession to and the implementation of RKC will benefit all players from business, customs and country as whole in term of improving trade competiveness, increase revenue collection, reducing the transaction cost, improving business climate, attracting foreign direct investment, promoting trade and sustainable economic development.
The accession to RKC is an important historical event for the country, especially for the business community because this convention is the only compact documents of customs procedures, international standards and best practices of over 500 standards. The provisions of this convention will be a foundation for reform and modernization of Cambodia customs. The accession to the Convention also sends a positive message to the world business community about the government commitment for improving trade facilitation and customs reform and modernization. Moreover, it reflects that government service for the international trade, business transaction, investment climate in Cambodia is being carried out on the rule-based environment and using international standards.
In accordance with the World Bank’s Report, Cambodia LPI ranking has risen spectacularly by 46 places, to 83 in 2014 out of 160 countries, from 129th in 2010. This improvement can be linked to the time to clear customs which felt from 5.9 days in 2010 to only 1.4 day in 2014. The GDP growth was maintained at average of 7% in the same period. The volume of international trade has increased from USD10 billions in 2010 to about USD20 billions in 2013, which resulted in more revenue collection by customs. The World Bank also reported that the poverty rate in Cambodia felt from 45% in 2007 to about 20% in 2011.
It is expected that further improvement of investment climate and trade facilitation which contribute to sustainable economic development will be repeated after Cambodia accession to the RKC.