Creating

TRADING ACROSS BORDERS 57
documents are processed electronically: the certificate
for external trade, the customs declaration and technical
control sheets. The payment of customs and port duties
is also electronic and takes one hour. Before the reform it
took a full day.
In another 50 countries there have been partial
advances. In Botswana, Brazil and Russia customs declarations
are submitted through the Internet, but other
documents are required in hard copy—hardly practical.
Delays are reduced but not by much (figure 9.4).
Use a risk assessment policy for inspections
In Africa and South Asia almost 70% of imported cargo
containers are opened and inspected when clearing customs
(figure 9.5). Every container is opened in Burkina
Faso, Kenya, Malawi and Mali. The same is true in Nepal,
Pakistan and Sri Lanka. In the Middle East more than
60% are opened and inspected. Contrast this with OECD
countries, where 5% of imports undergo inspection.
The difference is explained by the risk assessment
policy used in OECD countries. It works like this. When
a customs officer receives the cargo documents, she
runs them through the computer. A software program
calculates the probability that the shipment should be
inspected. The probability is based on the profiles of the
business and the freight forwarders and on the nature
of the goods and their destination. In some countries
the containers are scanned for weight and the shapes of
objects inside. If nothing suspicious arises, the container
gets a green light and sails through customs. Above a
certain risk threshold a yellow light comes on and the
documentation is thoroughly checked. The container
remains sealed. At a still-higher threshold a red light
blinks and the container is opened for inspection. This
system has allowed Mexico to limit inspections to 10%
of shipments, Thailand to 15%, and Latvia to 20%. It has
also increased the detection of smuggled goods.
Risk analysis can reduce delays. Ten years ago shipments
took nearly 20 days to clear customs in Peru. 6 By
2000 the introduction of risk analysis meant that green
channel goods were cleared in 90 minutes, and even
those in the red channel were cleared overnight. By law,
only 15% of cargo can go through the red channel.
But risk analysis is only as useful as the data on
which it is based. Even the most sophisticated risk
analysis software will not help if there is no information
TABLE 9.4
Who makes importing easy—and who makes it difficult?
Days
Fewest
Most
Denmark 5 Niger 89
Germany 6 Rwanda 92
Sweden 6 Afghanistan 97
Finland 7 Chad 111
Norway 7 Sudan 111
Netherlands 8 Central African Republic 122
Singapore 8 Burundi 124
Austria 9 Kyrgyz Republic 127
Belgium 9 Iraq 135
United States 9 Uzbekistan 139
Documents
Fewest
Most
Denmark 3 Azerbaijan 18
Finland 3 Kazakhstan 18
Sweden 3 Kyrgyz Republic 18
Germany 4 Syria 18
Ireland 4 Uzbekistan 18
Netherlands 4 Burundi 19
Norway 4 Iraq 19
United Kingdom 4 Niger 19
Austria 5 Rwanda 19
United States 5 Zambia 19
Signatures
Fewest
Most
Canada 1 Congo, Rep. 51
Denmark 1 Niger 52
Finland 1 Azerbaijan 55
Germany 1 Burundi 55
Netherlands 1 Afghanistan 57
Sweden 1 Mali 60
Belgium 2 Nigeria 71
Iceland 2 Central African Republic 75
New Zealand 2 Iraq 75
Singapore 2 Congo, Dem. Rep. 80
Source: Doing Business database.