40457
                                   World Bank Technical Team, November 7, 2005



Measures for Ministerial Committee on the Establishment of a
              Palestinian Border Services Agency (PBSA).

This note proposes the immediate adoption of a number of measures that are required
to establish the PBSA.

Overall Recommendations

1.     On October 20, 2005, the Cabinet approved the establishment of a PBSA. The
decision of Cabinet reads as follows:

    "Confirming in principle the establishment of a Palestinian Border Services Agency
and creating a Ministerial Committee for this purpose made up of Ministry of Planning
(as the committee coordinator), Ministry of Interior and National Security, Ministry of
National Economy, Ministry of Civil Affairs, Ministry of Agriculture, Ministry of
Transportation, Ministry of Health, Ministry of Tourism and Antiquities to determine the
mandate and systems and establishment of the agency".

2.   To follow up on the Cabinet decision of October 20, it is proposed that the
Committee of Ministers created for the establishment of the PBSA make the following
recommendations to Cabinet:

    a) That the preliminary mandate of the PBSA be as follows:

           Ø Manage the flow of goods and people at approved ports of entry in
               accordance with national legislation.
           Ø Develop national policies and procedures applicable to the entry and exit
               of travellers and commercial goods at approved ports of entry and apply
               them uniformly at each terminal.
           Ø Collect the taxes and duties owing and enforce the terms of the applicable
               trade agreements.
           Ø Enforce the laws regulations and standards within the jurisdiction of other
               departments in so far as they are applicable at the border.
           Ø Enforce the laws that prohibit or regulate the entry or exit oftravellers or
               goods at ports of entry.


  b) That the PBSA be set up as an authority under the oversight of a board which
  would be composed of representatives from the public and private sectors.

  c) That the PBSA be established by legislation similar to the legislation creating
  the Land, Water, Energy, and Environment Authorities.

  d) That initially the PBSA will be accountable through the Prime Minister who
  will be the Chairman of the Board.

  e) That the head of the border authority be appointed as soon as possible at a
  ministerial level.

  f) That the head of the authority be mandated to develop and submit to the
  committee for its approval an implementation plan within two months of his/her
  appointment and that such an implementation plan include:

    Ø ahumanresourceplan.
    Ø funding mechanisms supported by the Department of Finance and the donors
        community.
    Ø a comprehensive role for the border authority with clear relationships to the other
        departments.
    Ø a clear understanding of the contributions expected from the international
        community to the establishment of a comprehensive border management regime.

   g) The unified border organization be referred to as the "Palestinian
   Border Services Agency".

Background

3.   Until now the role of the PNA at border crossings has been limited to facilitating the
flow of goods and people between the Territories and Israel. Since the Territories are not
an independent state and because there is a customs union between the parties those
border crossings are effectively security check points by Israel and are not performing the
functions of international border crossings.

4.    An international crossing control is an important exercise in sovereignty and a key
tool to collect revenues, administer trade agreements and protect society against threats to
the health or security of the residents, threats to the health of the animals or plants or
threats against the environment.

5.    As the stated goal of the PNA is to assume full responsibility for the management of
the border crossing with Egypt as well as full responsibility for the border controls at the
airport and the seaport in the near future and eventually at the border crossings with
Jordan and Israel it is imperative that preparations start immediately.

6.    It takes a lot of preparations to run a national system of border crossings. Some of
the issues to be addressed include legislation, regulations, policies procedures,
organizational structure, human resources, financial systems, information technology
systems, physical assets, equipment and relationships with partners and clients. The PNA
has done some preparation to open the border crossing for pedestrians at Rafah with the
assistance of the EU but much more needs to be done if the PNA wants to develop the



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capacity to process the importation of goods at Rafah as well as exercise full border
controls at the airport and seaport.

7.    On October 2 the World Bank shared with the PNA a concept note prepared by the
Bank technical team where the Bank recommended the creation of a unified Palestinian
border management agency. The note (a copy is attached) outlines the benefits that would
be derived from the creation of such an agency.

8.       The creation of that agency was recommended as a necessary first step in
developing an adequate border management capacity. Once the Agency is in place it will
serve as a key partner with whom the donors (the EU, the World Bank, the US, Canada
and the IMF) will plan and implement their assistance programs. Without such a unified
agency that assistance will not be as effective or efficient and will certainly not be as
timely.

Issues

9.    In order to proceed with the establishment of the PBSA a number of issues have to
be addressed which include:

   Ø Governance
   Ø Humanresourcespolicy
   Ø Development of implementation plan
   Ø Budget
   Ø Donorsassistance
   Ø Headofborderorganization
   Ø Mandate

10.    Governance: The organization in charge of borders could either be an agency or
an authority. An agency would be headed by a senior bureaucrat at the deputy minister
level who would report to a minister. It would be clear in the legislation creating the
agency that the head of the agency is responsible for the day to day operations of the
agency while the minister is accountable for the overall performance of the agency.
An authority would be headed by a senior bureaucrat at the ministerial level who would
report to a board of trustees composed of members from both the public and the private
sectors. The manner of selecting the board members would be set in legislation.

11.     It is recommended that given the importance that the agency will assume in
asserting the sovereignty of the state and its contribution to the national economy it
is recommended that it be headed by a bureaucrat at the Ministerial level. Also
because the border organization will interact closely with many departments and the
private sector the supervision of the agency by a board with appropriate representation
from both the public and private sectors is advisable. It is therefore recommended that the
PBSA be created by legislation on the model of the legislation establishing the Land,
Water, Energy and Environmental Authorities. It is further recommended that initially the
PBSA be accountable through the Prime Minister who would also be the Chairman of the



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Board.

12.     Human resources policy: At present the PNA does not have an organization
responsible for international border crossings since all international crossings are
managed by the Government of Israel. The PNA has a customs department as a part of
the Department of Finance but that department is not active at international borders and
most of its activities are devoted to tax administration (with the exception of the current
developments at Rafah). The PNA also has a number of services that assist the movement
of goods at the Israeli security check points between GWB and Israel. Those services
however do not perform the functions of international border crossings.
A border management organization normally focuses most of its attention on imports:
collection of taxes and duties; administration of trade agreements; protection of its
citizens, animals, plants and its environment against health and security threats;
enforcement of a myriad of regulations and standards which include regulations related to
road safety amongst others. The border management organization also has to manage
exports in the manner provided by law.
It is important to develop a good cadre of professional border managers who will perform
all the functions mentioned above in close cooperation with the other departments and the
private sector.

13.       It is recommended that a human resource policy for the staffing of the
organization and the training of its employees be developed for the approval of the
ministers.

14.      Development of implementation plan: To bring the border organization into
being in an orderly fashion it will be necessary to develop a plan of action to deal with
the following issues:
    Ø Definetheexactroleoftheborderorganization,
    Ø Corporate legislation,
    Ø Programlegislation,policies,proceduresandprocesses,
    Ø Corporatestructureandorganization,
    Ø Humanresources,
    Ø Financialresources,
    Ø Systemsand
    Ø Local border crossing management structure.

15.      In developing the implementation plan it will be necessary to factor in the
coordinated input of the donors. It will also be necessary to ensure that the immediate
measures that need to be taken in respect of Rafah will be implemented in parallel with
the establishment of the border organization.

15. It is recommended to develop an implementation plan as soon as possible for the
approval of the ministers.

16.       Budget: This project will only be successful if it is properly funded. It is
recommended that early discussions should be initiated with the Department of



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Finance and the donors to ensure that the implementation plan is realistic and will
be funded.

17.      Donors assistance: Many donors, including the EU, the US, Canada, the World
Bank and the IMF have indicated a willingness to assist the PNA establish a professional
cadre of border managers who are well equipped to credibly assume responsibility for
Palestine external borders.

18.      It is recommended that the PNA should work with the donors community to
ensure that the technical assistance is well coordinated.

19.       Appointments: If a taskforce is appointed to establish the PBNA a lot of
knowledge and expertise will be lost when the responsibilities to manage the border
organization are transferred to the permanent staff. It is much preferable to appoint the
head of the agency as soon as possible and task him/her to develop an implementation
plan and carry that plan through.

20.    It is recommended to recommend to Cabinet to appoint the head of the PBNA
as soon as possible.

21.    Mandate: The purpose of creating a single national agency is to ensure a uniform
application of all the laws and regulations applicable to the movement of goods and
people at approved border crossings. A single management structure allows for the most
efficient flow of information to the front line officers to assist them in their efforts to
identify and intercept high risk goods and people. Also having only one management
structure provides clear line of accountability for the management of borders. Finally the
PBSA will provide a single window for the business community on border issues.
The objective of border officers is to establish the right balance between security and
facilitation. As such they should be part of a civilian organization devoted to free and
secure trade.

22.     The PBSA should not be responsible for the protection of the border between the
approved border crossings. The protection of the land border or the coast line, other than
at the approved points of entry (land border crossings, airports or seaports) is more akin
to police work and should be the responsibility of the appropriate security organization.
Moreover the PBSA will rely on the assistance of the appropriate security organization to
protect its officers and its facilities as required. Also the PBSA will have the power to
arrest people and seize goods at the border but it will turn over the prisoners and
prohibited goods to the appropriate security authority for prosecution.

23.       It is recommended that The PBSA should be fully responsible for the
management of the movement of goods and people at all the               approved border
crossings including the airport and the seaport but it should not develop the internal
capacity to do police work, rather it should get police support when required from
the police of the appropriate jurisdiction.




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Timing

24.    The PNA intends to start operating Rafah, the airport and the seaport as soon as
possible. The establishment of the PBSA and the development of an integrated border
management work program in cooperation with the donor community at this time will
ensure that the PNA develops the capacity to assume the responsibility of the
management of its border crossings at an early date. Any delay will adversely affect the
credibility of the PNA with regards to its ability to ensure the security of its citizens
and of its environment.




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