Project/Service

A. General Information

1. Title

Central Asia Regional Economic Cooperation (CAREC) Advanced Transit System (CATS) and Information Common Exchange (ICE) Pilot

2. Status of the project/service
Memorandum of Understanding under negotiations
3. Implementation period of the project/service:
From
2019
To
2021
5. Geographical coverage
3 Countries in Central Asia – Azerbaijan, Georgia, and Kazakhstan
6. Participating agencies/entities of the project/service:
a. Development stage
Lead agencies/entities
Azerbaijan: General Department of Management of Customs Control and Trade Facilitation Georgia: Customs Control Implementation Division, Customs Department, Georgia Revenue Service Kazakhstan: Customs Methodology Division, State Revenue Committee
Other participating agencies/entities
Insurance agencies and freight forwarders in the 3 countries
b. Operational stage
Lead agencies/entities
Azerbaijan: General Department of Management of Customs Control and Trade Facilitation Georgia: Customs Control Implementation Division, Customs Department, Georgia Revenue Service Kazakhstan: Customs Methodology Division, State Revenue Committee
Other participating agencies/entities
Insurance agencies and freight forwarders in the 3 countries
7. Main stakeholders/beneficiaries of the project/services
Traders (big enterprises)
Traders (SMEs)
Transport
Customs brokers
Customs
Other Government Agencies (OGAs)
8. Business process category of the project/service
Commercial Transactions
Forwarding and cargo handling
Transport
Insurance
Regulatory/official control
Payment
Regional Transit

B. Lessons Learned

9. Summary description of the project/service
a. Objective(s)

CATS 

The overall objectives of the CATS are to (i) enhance the security of the supply chain across the CAREC region, (ii) help trade flow more smoothly and efficiently across the borders, and (iii) reduce the overall cost of trade. It aims to streamline and harmonize transit documentation, replace manual processes with a single electronic messaging system, and provide a modern, risk-based affordable guarantee mechanism. It will also provide compatibility with existing transit systems including the European Union’s New Computerized Transit System. 

b. Business need for the project/service (background)
  • Road and Rail Infrastructure Development 

  • Georgia: East-West Highway (E-60) funded by ADB, EIB, JICA and World Bank. 

  • Baku-Tbilisi-Kars Railway provides link between Georgia, Azerbaijan, Turkey and European rail networks. 

  • Links to European Union. Georgia has Association Agreement and Deep and Comprehensive Free Trade Agreement with EU and free trade agreement with People’s Republic of China (PRC). Links to National Computerised Transit System (NCTS network). 

  • Silk Road developments through the 3 pilot countries. Shortest route between PRC and Europe and focal point for US $40 billion of Chinese infrastructure development. 

  • IT Systems with well-developed systems in place in all 3 countries 

c. Business process covered*

There are three fundamental pillars to the CATS, the first being the development of a single regional electronic transit document. This document will contain all the information that is necessary for completing the formalities for the transit of goods.  

 

The second pillar is the authorized economic operators (AEOs) in the countries undertaking transit movements where no financial guarantees are required. Transit movements are instead guaranteed by the AEO and agreed standards and safeguards for the revenue are set by the Customs authorities.  

 

The third pillar is the single/comprehensive guarantees. A single guarantee would be calculated based on the highest rate of duty applicable to the goods in the country of departure. A comprehensive guarantee would cover a certain number of transit operations up to one year. To use this facility, the trader would be required to fulfill certain common criteria set by Customs. The level of guarantee will be set as a percentage of the duties and taxes at risk. This pillar will replace the existing flat rate charge on transit movements with a risk-based insurance mechanism to cover the transit movement of goods. 

d. Overall architecture and functionalities*

CATS is proposed to facilitate transport of goods along the CAREC Trade Corridors:  

 

The key ideas on the structure are:  

i. a single electronic document across multiple countries for the duration of the journey 

ii.. the mutual recognition of trusted traders by all customs for faster border clearance 

iii the implementation of comprehensive Customs and cargo insurance that covers the entire consignment for the duration of the journey. 

e. Relevant document/figure
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10. Documents and data exchanged via the project/service
  • Conveyance reference number 

  • Mode/type of means of transport crossing the border 

  • Equipment identification number, size and type 

  • Transport equipment loaded status 

  • Transport document number,  

  • Types of packages identification 

  • Description of Goods 

  • Total Gross Weight 

  • Shipping Marks 

  • Place of Discharge 

  • Itinerary Arrival Date and Time 

  • Office of Declaration 

11. Data models/databases, proprietary solutions, hybrid approaches
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12. Main challenges faced during the project/service

Ongoing (to be defined) 

13. Lessons learned from the project/service

Ongoing (to be defined) 

14. Main benefit(s) of the project/service
Enhanced regulatory compliance*
Transaction Cost savings*
Transaction Time savings
Simplified process
Increased trade flow
14A. Elaborations/detailed description on benefits gained:

There is significant scope for the enhancement of existing CAREC transit procedures taking into account international best practice (WTO TFA/WCO). 

Importantly, CATS will assist in:  

  • Aligning CAREC transit procedures with other regional transit systems procedures 

  • Building customs-to-customs and customs-to-business partnerships 

  • Enhancing Customs-to-Customs information exchange; and  

  • Supporting advanced Customs risk assessment of transit movements to enhance the security of the supply chain. 

15. Technical/financial/capacity building/other assistance
16. Future plan for expansion of the project and service

The key steps include:  

  • Signing of the Memorandum of Agreement to pilot test CATS prototype 

  • Reactivation of the CATS working groups 

  • In-country visits to agree work plans  

  • April 2019 workshop for the Customs IT Departments on the IT interface and technical specifications of the prototype 

  • Implementation of CATS pilot  

17. Other information or relevant references on the project and service
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18. Relevant document regarding the project/service
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C. Relevant Standards

20. Electronic message standard
20A. Electronic message standard supporting the project/service:
XML:
- WCO Data Model
20B. Type of standard for electronic message applied for the project/service
Technical recommendations from international body(ies)
21. Technical communication standard
21A. Technical communication standard supporting the project/service
RESTful Web Services
21B. Type of technical communication standard applied for the project/service
International standard
22. Security-related standards*
22A. Security-related standard supporting the project/service
Proprietary but used in typical IT projects.
22B. Type of security-related standard applied for the project/service
Proprietary solution
 
Proprietary solution was applied because:
- It is a pilot project.
23. Other Technical Information
23A. Interface developed for data exchange with an internal system
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23B. Other technical implementation information
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