Market Talk: Streamlining the customs process

24 February 2019
Saudi Customs is determined to improve trade across borders
Q&A with HE Ahmed Alhakbani, governor of the General Customs Authority

What are the key objectives of Saudi Customs as part of the Vision 2030 strategy?

Saudi Customs is committed to achieving the goals set out in Saudi Arabia’s Vision 2030, which aims to diversify the kingdom’s economy, attract international investment and drive overall growth through the adoption of groundbreaking technologies and innovative practices.

Through the application of efficiency-boosting procedures, Saudi Customs is committed to elevating the quality of customs services provided across its network of more than 35 ports, while working to establish the kingdom as one of the world’s premier logistics hubs, supporting the growth and diversification of the country’s economy.

What goals does Saudi Customs expect to meet in the next five years?

Our goal is to establish Saudi Arabia as a global logistics hub and the premier destination for international logistics service providers serving the Middle East and North Africa (Mena) region.

Saudi Arabia’s geographic advantages, large population and sophisticated transport infrastructure make it an ideal location for the region’s most important trade and logistics hub.

Driven by this vision, Saudi Customs is steadily moving forward with a strategy based on three main pillars: trade facilitation, revenue realisation and ensuring domestic security and the integrity of borders. The strategy comprises more than 41 initiatives and involves consultation with a broad spectrum of public and private stakeholders.

The private sector has a hugely important role to play in helping us realise our vision for Saudi Arabia’s logistics industry and also, more broadly, helping to diversify the economy away from oil.

How is Saudi Customs supporting the improvement of the kingdom’s logistics performance?

Initiatives launched by Saudi Customs, such as the 24 hours clearance programme, are supporting Saudi Arabia’s reputation internationally and positioning the kingdom as one of the world’s most vibrant, open and dynamic economies.

The authority’s efforts to streamline clearance processes has ensured that 80 per cent of imported goods clear customs within 24 hours, a significant improvement on previous years.

A new customs clearance guide for brokers has also been issued, authorising companies to issue a customs clearance licence.

In an effort to encourage the development of public-private partnerships and support existing initiatives, Saudi Customs launched the Authorised Economic Operator Programme. Private-sector partners receive numerous benefits under the scheme, from lower costs to faster clearance processes.

Additionally, Saudi Customs has launched an initiative to develop bonding and re-export zones across the kingdom.

How does Saudi Customs expect to make use of technology in achieving its broader goals?

The depth and scope of Saudi Customs’ new roadmap reflects our commitment to accelerating change across all facets of our operations through the implementation of new technologies designed to simplify and automate customs procedures and deliver the best services to clients.

Saudi Customs recently inaugurated a Customs Targeting Centre in order to shift its risk-management focus from quantitative targeting to smart, qualitative targeting through the analysis of incoming cargo data and information.

This facility will assist in overcoming operational obstacles and finding technical solutions to enhance the speed and flexibility of import flows while reducing the level of illegal smuggling. This will improve the effectiveness of Saudi Customs’ risk targeting and management systems throughout all its land, sea and air ports.

The single-window platform, Fasah, which was launched as a joint effort by 25 government entities, aims to further automate cross-border trade procedures; build a unified, integrated electronic data interchange portal; and increase customs clearance transparency within import and export operations.

It has contributed to achieving positive outcomes in regard to clearance procedures by enabling companies to track and complete their clearance procedures electronically.

What is the potential for blockchain in customs arrangements?

Blockchain offers huge potential in creating a certified peer-to-peer business ecosystem for the benefit of all stakeholders in the logistics sector. Its key benefit is that as a distributed ledger, it provides a platform for the sharing and recording of information among multiple parties and cannot be changed or updated without the approval of all stakeholders.

This means complex arrangements relating to trade and logistics services can be made more efficiently and easily for all stakeholders .

As an early adopter of blockchain, Saudi Customs is delivering the very best solution with its private-sector partners.

As part of our blockchain pilot programme, and in conjunction with our IT partner Tabadul, Saudi Customs recently oversaw the integration of the single-window platform Fasah with TradeLens, a blockchain-enabled global shipping solution jointly developed by Maersk and IBM.

The pilot aimed to link Fasah with TradeLens for selected services to ensure immutability, traceability, reduced reconciliation, auditability and compliance.

How will Saudi Customs assist with the implementation of the National Industrial Development and Logistics Programme (NIDLP)?

The NIDLP represents one of the most important programmes launched as part of Vision 2030, which aims to transform the kingdom into an industrial hub and a global leader in logistics services.

Under the programme, Saudi Customs has signed four memorandums of understanding to develop and establish bonding and re-export zones at strategic industrial locations across the country, including Jizan Economic City, Ras al-Khair Industrial City and King Salman Energy Park in cooperation with Abu Dhabi National Energy Company (Taqa).

It has also signed an agreement with Saudia Cargo to develop customs procedures at air cargo facilities and customs zones located at the kingdom’s international airports.

Taking advantage of Saudi Arabia’s strategic location as a hub connecting Africa, Asia and Europe, Saudi Customs will develop a regional distribution platform providing enhanced logistics services. This plan aims to increase Saudi Arabia’s re-export capacity to more than SR500bn ($133.3bn) by 2030.

What steps needs to be taken in terms of customs harmonisation to facilitate the GCC rail network?

GCC countries want to work together to further develop customs services in the region. So far, Gulf customs authorities, represented by the Gulf Customs General Authority, have accomplished much in this regard – most notably the adoption of a unified customs tariff, unified Gulf customs law, unified GCC customs procedures manual and the comprehensive automation of customs duties.

We are confident that the efforts of the GCC Customs Union over the next phase will lead to further achievements, especially with the follow-up of measures aimed at increasing customs information exchange. This will facilitate the movement of passengers and goods through customs ports and will enhance cooperation with the private sector through privatisation contracts, including public-private partnership and build-operate-transfer agreements.

Finally, by joining the TIR (International Road Transport) agreement, customs procedures will be unified and simplified, while enhancing security protocols governing goods shipments. This will further boost the growth of trade and transit movement among and between member countries.


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