Regional: South Asia Subregional Economic Cooperation Trade Facilitation Program

Sovereign Project | 45260-001

Summary

The South Asian Sub-regional Economic Cooperation (SASEC) Sub-Regional Trade Facilitation Program supports ADB's regional cooperation strategy for South Asia (2011-2015) and builds on the commitments expressed by the SASEC Trade and Transport Working Group. Its intended impact is to increase intra-regional trade among the SASEC member countries of Bangladesh, Bhutan, and Nepal. India is not included in the program because it is self-financing its trade facilitation reforms and has already taken significant strides ahead of the other countries. It is, notably, the only SASEC member country that has acceded to the Revised Kyoto Convention for the Simplification and Harmonization of Customs Procedures (RKC). This program's expected outcome is efficient, effective, transparent, secure and service-oriented processing of cross-border trade in the sub-region.

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Project Name South Asia Subregional Economic Cooperation Trade Facilitation Program
Project Number 45260-001
Country Regional
Project Status Approved
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Grant 0321-REG: South Asia Subregional Economic Cooperation Trade Facilitation Program
Asian Development Fund US$ 3.33 million
Grant 0322-REG: South Asia Subregional Economic Cooperation Trade Facilitation Program
Asian Development Fund US$ 15.00 million
Loan 2954-REG: South Asia Subregional Economic Cooperation Trade Facilitation Program
Asian Development Fund US$ 21.00 million
Loan 2955-REG: South Asia Subregional Economic Cooperation Trade Facilitation Program
Asian Development Fund US$ 8.34 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Private sector development
Sector / Subsector Industry and trade - Industry and trade sector development
Gender Equity and Mainstreaming No gender elements
Description The South Asian Sub-regional Economic Cooperation (SASEC) Sub-Regional Trade Facilitation Program supports ADB's regional cooperation strategy for South Asia (2011-2015) and builds on the commitments expressed by the SASEC Trade and Transport Working Group. Its intended impact is to increase intra-regional trade among the SASEC member countries of Bangladesh, Bhutan, and Nepal. India is not included in the program because it is self-financing its trade facilitation reforms and has already taken significant strides ahead of the other countries. It is, notably, the only SASEC member country that has acceded to the Revised Kyoto Convention for the Simplification and Harmonization of Customs Procedures (RKC). This program's expected outcome is efficient, effective, transparent, secure and service-oriented processing of cross-border trade in the sub-region. To achieve this outcome, the Program and its associated TA will support activities under three thematic areas: (i) modern and effective customs administration, (ii) streamlined and transparent regulations and procedures, and (iii) improved information and responsiveness to the private sector. The importance of this program is underscored by the realities in South Asia as described below.
Project Rationale and Linkage to Country/Regional Strategy South Asia is among the least integrated regions in the world. Despite South Asia's impressive growth performance in recent years, the region remains one of the least integrated in the world. The passage of the South Asia Free Trade Agreement (SAFTA) in 2006 and related bilateral free trade agreements have yet to show a significant impact in enhancing sub-regional trade. South Asia accounts for only 2% of world trade, and 1.7% of world foreign direct investment. Intra-regional trade is only less than 6% of the region's total trade. In comparison, intra-regional trade as share of total trade for Latin America, Middle East and North Africa, and East Asia are 17%, 8%, and 55% respectively. South Asia's intra-regional trade is lower than that of other regions even after factors such as geographic proximity, income levels, and population are taken into account. At the same time, there are estimates of relatively high levels of informal trade, perhaps as much as 72% of formal trade. In this context, there is enormous potential for intra-regional trade to grow and for the sub-region to benefit from economies of scale, greater competition, and technology spillovers from increased trade. Sub-regional growth and integration will in turn lead to a bigger market and foster greater integration with other regions and with the world economy.
Impact Increased intra-regional trade in the SASEC region.
Project Outcome
Description of Outcome Faster and cheaper processing of cross-border trade in the SASEC region.
Progress Toward Outcome Ongoing
Implementation Progress
Description of Project Outputs

Modernized and more effective customs administration

Streamlined and transparent regulations and procedures

Improved information and responsiveness to the private sector

Status of Implementation Progress (Outputs, Activities, and Issues)

Second and final tranche released.

For Bangladesh, the following have been achieved:

1. Proposed amendment to the Customs Act, 1969 to make it fully compliant with the General Annex of the Revised Kyoto Convention approved by the cabinet.

2. Completed a regulatory impact assessment of proposed amendments to the Customs Act and legislation to make them fully compliant with the General Annex.

3. Issued a directive to establish an authorized economic operators program

4. NBR issued updated standard operating procedures on risk management, post-clearance audit, assessment, physical inspection, and non-intrusive inspection that are compliant with the SAFE Framework.

5. Completed a WCO time release study covering Chittagong Port and Benapole Land Port operations to serve as benchmarks for a performance monitoring system.

6. NBR launched its operations of the Automated System for Customs Data World with a pilot national single window program.

For Bhutan the following have been achieved

1. Submitted to the WCO, Bhutan's instrument of accession to the Revised Kyoto Convention.

2. Finalized a regulatory impact assessment report on the proposed amendments to the Bhutan laws, rules, and regulations, which are required to ensure Bhutan's compliance with the General Annex of the Revised Kyoto Convention

3. Department of Revenue and Customs will have piloted the Customs Management System Component of Revenue Administration Management Information System in accordance with its approved Action Plan.

4. Department of Revenue and Customs, in coordination with the Trade Facilitation Committee, will have piloted the RAMIS-based automation of the application and approval process of trade-related transactions at Bhutan border agencies.

For Nepal, the following have been achieved:

1. Ministry of Finance forwarded to Cabinet a proposal to submit a resolution to the legislature Parliament for Nepal's accession to the Revised Kyoto Convention

2. Completed a Regulatory Impact Assessment of proposed amendments to the Customs Act 2007, and related regulations to make fully compliant with the General Annex of the Revised Kyoto Convention

3. The Cabinet will have issued a directive to establish a National Single Window program that will (i) specify the lead agency and other participating agencies, (ii) outline the roles and responsibilities of participating agencies, and (iii) provide an implementation plan, which includes gender and social inclusion objectives.

4. Established a client service center at the customs border posts at Birgunj, Biratnagar, and Bhairahawa

Geographical Location
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer Ronald Antonio Q. Butiong
Responsible ADB Department South Asia Department
Responsible ADB Division Regional Cooperation and Operations Coordination Div, SARD
Executing Agencies
National Board of RevenueSKARIM1@VERIZON.NET (SYED AMINUL KARIM)Rajashwa Bhaban
Segunbagicha, Dhaka 1000
Bangladesh
Timetable
Concept Clearance 19 Sep 2012
Fact Finding 26 Aug 2012 to 07 Sep 2012
MRM 28 Sep 2012
Approval 29 Nov 2012
Last Review Mission -
Last PDS Update 24 Jun 2015

Grant 0321-REG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
29 Nov 2012 30 Jan 2013 26 Mar 2013 31 Dec 2015 - 26 Mar 2013
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 3.33 Cumulative Contract Awards
ADB 3.33 29 Nov 2012 3.33 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 29 Nov 2012 3.33 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory

Grant 0322-REG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
29 Nov 2012 25 Feb 2013 10 Apr 2013 31 Dec 2015 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 15.00 Cumulative Contract Awards
ADB 15.00 29 Nov 2012 15.00 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 29 Nov 2012 15.00 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory

Loan 2954-REG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
29 Nov 2012 20 Jan 2013 19 Apr 2013 31 Dec 2015 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 21.00 Cumulative Contract Awards
ADB 21.00 29 Nov 2012 20.21 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 29 Nov 2012 20.21 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory

Loan 2955-REG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
29 Nov 2012 30 Jan 2013 26 Mar 2013 31 Dec 2015 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 8.34 Cumulative Contract Awards
ADB 8.34 29 Nov 2012 7.96 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 29 Nov 2012 7.96 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory
Title Document Type Document Date
South Asia Subregional Economic Cooperation Trade Facilitation Program (Second Tranche) - Bhutan: Progress Report on Tranche Release Progress Reports on Tranche Releases Dec 2014
South Asia Subregional Economic Cooperation Trade Facilitation Program (Second Tranche) - Nepal: Progress Report on Tranche Release Progress Reports on Tranche Releases Nov 2014
South Asia Subregional Economic Cooperation Trade Facilitation Program (Second Tranche) - Bangladesh: Progress Report on Tranche Release Progress Reports on Tranche Releases Nov 2014
South Asia Subregional Economic Cooperation Trade Facilitation Program: Project Data Sheet (Dzongkha Translation) Translated PDS Mar 2013
Grant Agreement for South Asia Subregional Economic Cooperation Trade Facilitation Program - Nepal Component Grant Agreement Feb 2013
South Asia Subregional Economic Cooperation Trade Facilitation Program: Project Data Sheet (नेपाली) Translated PDS Feb 2013
দক্ষিণ এশিয়া উপ-আঞ্চলিক অর্থনৈতিক সহযোগিতা বাণিজ্য সুবিধা কর্মসূচি: প্রকল্প তথ্যপত্র Translated PDS Feb 2013
Financing Agreement (Special Operations) for South Asia Subregional Economic Cooperation Trade Facilitation Program (Bhutan Component) Financing Agreement Jan 2013
Loan Agreement (Special Operations) for South Asia Subregional Economic Cooperation Trade Facilitation Program (Bangladesh Component) Loan Agreement (Special Operations) Jan 2013
South Asia Subregional Economic Cooperation Trade Facilitation Program Reports and Recommendations of the President Nov 2012

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