Customs red tape criticised

http://www.phnompenhpost.com/

via CAAI

Wednesday, 09 March 2011 21:05 Jeremy Mullins

Cambodia’s customs procedures put the country at a disadvantage to its neighbours and require updating to encourage economic development, according to experts.

Domestic infrastructure is improving, but unnecessary regulations in Cambodia were hindering potential investment, said Paul Apthorp, board member of the Greater Mekong Subregion Business Forum.

“Freight cargo is like water – it takes the line of least resistance. If the easiest route is that way, that’s the way you’ll go,” he said.

“Transport has to do with time. If you want to send cargo, you send it [by] the quickest, most efficient route, not the shortest route.”

The Asia Development Bank has organised a two-day symposium in Phnom Penh on attracting investment and promoting growth on its Southern Economic Corridor project, which is envisioned initially as a transport and logistics route through southern Thailand, Cambodia and southern Vietnam.

Minister of Commerce official Cham Prasidh said in an opening speech that the Southern Economic Corridor had strong potential for development, but added this would not happen overnight.

ADB Southeast Asia Department official Arjun Goswami told The Post action had started on building the corridors project, though the SEC lagged behind other similar regional projects.

“I think what we now need is a clear, set timetable, an agreement on indicators and a sequence of steps to get the full implementation going,” he said.

Some infrastructure projects require completion – such as the Neak Leoung bridge spanning the Mekong river on the road between Phnom Penh and Ho Chi Minh City, which is set for a 2015 finish.

Conversations were required to discuss why the Southern Economic Corridor lagged behind other corridor projects in Southeast Asia, he said, adding it could be due to such reasons as incomplete transport links, issues over trade facilitation, or other problems.

Apthorp said the single biggest thing Cambodia can do to improve its transport and logistics industry is to recognise electronic transmission of documents.

“Remove the need for original documents for transit. Yes, have the original document for final clearance,” he said, adding this was commonplace in most countries.

“The law [in Cambodia] has not been updated for the modern trade experience.”

Apthorp – who is also a strategic development official at TNT Express Worldwide (HK) – said he preferred to send Bangkok to Ho Chi Minh freight via Laos as it is quicker than shipping through Cambodia.

He estimates unnecessary paperwork means freight costs 40 to 50 percent higher when shipping in Cambodia than it would if procedures were streamlined.

Although “tea money” payments were commonplace across the developing world, he said it was important to differentiate between tea money – which he likened to a tip at a restaurant – and flat-out bribery to cover illegal operations.

Sok Chheang, executive director the Cambodia Trucking Association, said that he would like to see an agreement in place for Cambodian trucks to cross the border with Thailand, and vice versa.

He claimed customs clearance was not a large problem, though at the Economic Corridor symposium he said he planned to ask the government to reduce time and costs at the border.

Customs officials could not be reached for comment today.