Public Disclosure Copy The World Bank Implementation Status & Results Report Lao PDR Customs and Trade Facilitation Project (P101750) Lao PDR Customs and Trade Facilitation Project (P101750) EAST ASIA AND PACIFIC | Lao People's Democratic Republic | Trade & Competitiveness Global Practice | IBRD/IDA | Specific Investment Loan | FY 2008 | Seq No: 15 | ARCHIVED on 26-Jun-2017 | ISR28363 | Implementing Agencies: Customs Department, Ministry of Finance, Ministry of Finance Key Dates Key Project Dates Bank Approval Date:17-Jun-2008 Effectiveness Date:20-Oct-2008 Planned Mid Term Review Date:21-Jan-2013 Actual Mid-Term Review Date:28-Jan-2013 Original Closing Date:31-Dec-2013 Revised Closing Date:30-Jun-2017 Project Development Objectives 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 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  Moderately Satisfactory  Satisfactory Overall Implementation Progress (IP)  Moderately Satisfactory  Moderately Satisfactory Overall Risk Rating  Low  Low 6/26/2017 Page 1 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Lao PDR Customs and Trade Facilitation Project (P101750) Implementation Status and Key Decisions In aggregate, the project has achieved the Project Development Objective and the result indicators. With support of the project, the ASYCUDA World system now runs live, stable and secure in 24 customs checkpoints in early 2017 covering more than 90-95 percent of formal trade in Lao PDR. For the efficiency of customs administration, LCD has made significant progress in reducing customs clearance times at major border crossing points, with average clearance times falling from 11:24 hours in 2012 to 6:30 hours in 2016, representing a 43% reduction. Likewise, median clearance time has fallen from 3:10 hours in 2012 to 2:50 hours in 2016, representing an 11% decrease. These encouraging results build on an earlier 36% reduction achieved from 2009 – 2012 during the earlier phase of CTFP. The improvement of the clearance time has resulted from significant reforms in the customs clearance procedures and documentation since 2008, the beginning of the CTFP. Lao Customs introduced ASEAN Customs Declaration Document on June 17, 2010 that harmonizes the Lao PDR's customs declaration form with ASEAN version of Single Administrative Document (SAD) and it also standardizes and simplifies Lao customs declaration forms and documentation. Following the adoption of the ACDD, Lao Customs adopted a new customs clearance procedure on July 5, 2012 to reduce the steps to clear imports from 9 to 5 and export from 7 to 4. Further effort was taken in 2017 by reducing the steps to clear imports from 5 to 4 and exports from 4 to 3. These efforts were to removes the unnecessary and redundant steps in customs clearance in synchronization with utilization of the automated customs system--ASYCUDA World. Likewise, Lao Customs also made good progress in improving the effectiveness of customs administration. Measuring the success of customs effectiveness is more challenging as the required data are often not available and reliable. In the case of measuring customs detection ration as an indicator of customs effectiveness, the required data are not retrievable due to only manual records of inspection results and resolution measures. To address this shortfall, a proxy measurement of risk management capacity is used to report the effectiveness of customs operation at the borders. LCD has used risk management since 2013 to facilitate low risk cargos but target high risk ones across borders. The selectivity data of the risk management has shown that customs declarations that are subject to full physical inspections have declined to 46 percent in end December 2016 from 50 in 2015, 60 in 2013 and 100 in 2012 at time the ASYCUDA was piloted. This has demonstrated some gradual improvements over time in relation to customs effectiveness of profiling and targeting risks. Based on LPI reports, Lao Customs has made gradual progress by improving the subset score of client perception on customs performance and integrity, as a result indicator, from 2.08 in 2007 in the scale between 1 and 5 to 2.17 in 2010, 2.38 in 2012 and 2.45 in 2014 indicating better client perception; however, the score was lower at 1.85 in 2016. While there is no LPI report in 2017, the team has attempted to use the Enabling Trade Index (ETI) published by OECD in November 2016 as a proxy to measure and capture the progress of this indicator. As measured by ETI, Lao PDR improved 7 points in ranks on the indicator of “Efficiency and Transparency of Border Administration” from 100 in 2014 to 93 in November 2016. Likewise, this measure is also in line with the firm perception in the 2016 World Bank Enterprise Survey for Lao PDR reporting that there is only 7.6 percent of firms in 2016, dropped by 4.8 percentage point from 12.4 percent in 2012, identifying customs and trade regulations as a major constraint. 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 Technical Design of Project or Program  --  Moderate  Moderate Institutional Capacity for Implementation and Sustainability  --  Low  Moderate Fiduciary  --  Moderate  Moderate Environment and Social  --  Low  Low 6/26/2017 Page 2 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Lao PDR Customs and Trade Facilitation Project (P101750) 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) Baseline Actual (Previous) Actual (Current) End Target 6.5 (Hours in the 2016 6.5 (Hours in the 2016 Value 17.9 (Hours) 7.40 TRS data) TRS data) Date 22-Mar-2010 27-Mar-2017 20-Jun-2017 30-Jun-2017 PHINDPDOTBL  Customs Efficiency: Reduction in number of steps to clear commercial shipments (import / export). (Text, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 9 / 7 (Import / Export) 4/3 4/3 4/3 Date 22-Mar-2010 27-Mar-2017 20-Jun-2017 30-Jun-2017 PHINDPDOTBL  Customs Effectiveness: Increase in the ratio of detections / inspections by customs. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target While pending for LCD LCD was not able to to provide the relevant provide reliable data, the data, In the case of the team has used the proxy data may not be made indicator on risk profiling available, the team will to capture the progress use the proxy indicator of this indicator. on risk profiling to Customs declarations capture the progress of that are subject to full 1.2 (at the additional Value this indicator. Customs physical inspection has 2.90 financing) declarations that are declined from 50 percent subject to full physical in 2015 to 46 percent in inspection has declined ending December from 50 percent in 2016.during this period 2015 to 46 percent in of ISR, showing that ending December there are some 2016.during this period improvements in relation of ISR, showing that to customs effectiveness 6/26/2017 Page 3 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Lao PDR Customs and Trade Facilitation Project (P101750) there are some of managing and improvements in targeting risks. relation to customs effectiveness of managing and targeting risks. Date 26-Apr-2013 27-Mar-2017 20-Jun-2017 30-Jun-2017 PHINDPDOTBL  Customs Effectiveness: Increase in the perceptions of customs performance and integrity by clients. (Text, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Given there is no new Given there is no new LPI data that will be LPI data that will be available during the available during the reporting period, the reporting period, the Enabling Trade Index Enabling Trade Index (ETI) published by (ETI) published by World World Economic Forum Economic Forum (WEF) (WEF) in November in November 2016 was 2016 was used to used to measure this measure this indicator. indicator. As measured As measured by ETI, by ETI, Lao PDR Lao PDR improved 7 improved 7 points in points in ranks on the ranks on the indicator of indicator of “Efficiency “Efficiency and and Transparency of Transparency of Border Border Administration” Value 2.08 (LPI 2007) Administration” from 100 2.80 from 100 in 2014 to 93 in 2014 to 93 in in November 2016. November 2016. Likewise, this measure Likewise, this measure is also in line with the is also in line with the perception perception measurement under measurement under the the 2016 World Bank 2016 World Bank Enterprise Survey Enterprise Survey showing that there is showing that there is only 7.6 percent of only 7.6 percent of firms firms in 2016, dropping in 2016, dropping from from 12.4 percent in 12.4 percent in 2012, 2012, that identified that identified customs customs and trade and trade regulations as regulations as a major a major constraints. constraints. Date 30-Jun-2007 27-Mar-2017 20-Jun-2017 30-Jun-2017 Overall Comments Intermediate Results Indicators 6/26/2017 Page 4 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Lao PDR Customs and Trade Facilitation Project (P101750) PHINDIRITBL  Full acceptance of electronic data submission for customs declaration procedures by the end of 2013 (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target As April 19, 2017 the geographical rollout included three additional checkpoints including Savan Logistics Park in Savannakhet province, The geographical Vientiane Logistics Yard Completed for rollout was completed. warehouse and the additional Electronic data Friendship Bridge 1 in 12 customs submission is partially Vientiane Capital and checkpoints accepted in the Value Not initiated this has exceeded the that the ASYCUDA system but target of planned rollout ASYCUDA partially it faces legal for only 12 customs System is being constraint in respect of checkpoints. Electronic rolled out in face-vetting data submission is 2015. requirement. partially accepted in the ASYCUDA system but partially it faces legal constraint in respect of face-vetting requirement. Date 30-Jun-2009 27-Mar-2017 19-Apr-2017 30-Jun-2017 PHINDIRITBL  Prototype developed and accepted by government (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Not initiated Completed. Completed. Completed Date 30-Jun-2009 31-Dec-2011 31-Dec-2011 31-Dec-2010 PHINDIRITBL  Accepted prototype validated at the pilot site (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Completed. The Completed. The prototype was prototype was accepted Value Not initiated accepted by the by the Government at Completed Government at the pilot the pilot site in April site in April 2012. 2012. Date 30-Jun-2009 30-Apr-2012 30-Apr-2012 30-Dec-2011 6/26/2017 Page 5 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Lao PDR Customs and Trade Facilitation Project (P101750) PHINDIRITBL  Prototype replicated at the remaining checkpoint sites (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target As April 19, 2017 the geographical rollout included three additional checkpoints including Savan Logistics Park in Completed 10 out of 12 Savannakhet province, planned checkpoints. Vientiane Logistics Yard Completed for Two checkpoints, warehouse and the Luangprabang Friendship Bridge 1 in geographical Value Not initiated International Airport Vientiane Capital and rollout of and Pake International this has exceeded the additional 12 Airport were not rolled target of planned rollout customs out due to limited for only 12 customs checkpoints volume of trade. checkpoints. Both Luang Prabang and Pakse Airport were not installed of the ASYCUDA World System due to limited volume of trade. Date 30-Jun-2009 07-Aug-2015 19-Apr-2017 30-Jun-2017 PHINDIRITBL  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) Baseline Actual (Previous) Actual (Current) End Target Completed and the full operation of the Completed and the full ASYCUDA System for operation of the 11 international ASYCUDA System for customs checkpoints 11 international customs financed by the original checkpoints financed by grant in December the original grant in Value Not initiated 2013. Additional rollout December 2013. Completed of the system to Additional rollout of the another 12 system to another 12 international customs international customs checkpoints through checkpoints through Additional Financing Additional Financing will will be implemented in be implemented in 2015. 2015. Date 30-Jun-2009 25-Apr-2014 25-Apr-2014 31-Dec-2014 6/26/2017 Page 6 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Lao PDR Customs and Trade Facilitation Project (P101750) PHINDIRITBL  Appropriate front line staff and affected traders trained in advance of pilot testing and pre nationwide rollout (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Completed in Completed in December December 2012. 2012. Additional Additional trainings trainings have been Completed Value Not initiated have been provided to provided to staff for (2011) staff for additional 12 additional 12 customs customs checkpoints in checkpoints in 2014. 2014. Date 30-Jun-2009 25-Apr-2014 25-Apr-2014 30-Dec-2011 Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P101750 IDA-H4030 Closed XDR 3.70 3.68 0.02 3.68 0.00 100% P101750 IDA-H8430 Effective XDR 4.40 4.40 0.00 3.33 1.07 76% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P101750 IDA-H4030 Closed 17-Jun-2008 25-Jul-2008 20-Oct-2008 31-Dec-2013 31-Dec-2013 P101750 IDA-H8430 Effective 28-May-2013 14-Jun-2013 11-Jul-2013 30-Jun-2017 30-Jun-2017 Cumulative Disbursements 6/26/2017 Page 7 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Lao PDR Customs and Trade Facilitation Project (P101750) Restructuring History There has been no restructuring to date. Related Project(s) P144992-Lao PDR Customs and Trade Facilitation Project - Additional Financing 6/26/2017 Page 8 of 8 Public Disclosure Copy