Post on 07-Apr-2020
AFGHANISTAN TRADE AND
REVENUE PROJECT FINAL REPORT
February 28, 2018
This publication was produced for review by the United States Agency for International
Development. It was prepared by Chemonics International Inc.
DISCLAIMER
The authors’ views expressed in this publication do not necessarily reflect the views of the United States
Agency for International Development or the United States government.
AFGHANISTAN TRADE AND
REVENUE PROJECT FINAL REPORT
Contract No. AID-OAA-I-12-00035, Task Order No. AID-306-TO-13-00009
Cover photo: Pictured left to right, Minister of Commerce and Industry of Indian Suresh
Prabhu, Chief Executive of Afghanistan H. E. Dr. Abdullah Abdullah, Special Chargé d’Affaires of
the U.S. Embassy in Kabul, Afghanistan H.E. Ambassador Hugo Llorens, and Chargé d’Affaires of
the U.S. Embassy in New Delhi, India MaryKay Carlson cut a ribbon to mark the opening of the
Passage to Prosperity: India-Afghanistan Trade and Investment Show in New Delhi, September
27- 30, 2017. (Credit: Ian Carver, ATAR)
AFGHANISTAN TRADE AND REVENUE PROJECT | i
CONTENTS
Acronyms ................................................................................................................ ii
Executive Summary ............................................................................................... 1
Key Highlights and Achievements by Component ........................................... 3
Component 1: Support Trade Policy Liberalization ............................................................... 3
Component 2: Facilitate Enhanced Access to Regional Markets......................................... 4
Component 3: Improved Customs Administration ................................................................ 5
COMPONENT 1: TRADE POLICY LIBERALIZATION ................................... 7
1. Afghanistan’s WTO Accession Process ................................................................................ 7
2. Supporting Legislative Reforms for accession ...................................................................11
3. Supporting Implementation of WTO Laws and Commitments ...................................14
3.3.A. The WTO Unit ...........................................................................................................20
COMPONENT 2: FACILITATE ENHANCED ACCESS TO REGIONAL
MARKETS ............................................................................................................. 27
1. Cross-cutting activities to enhance regional trade ...........................................................27
2. Country-Specific Initiatives to Enhance Regional Trade .................................................38
2.1 Afghanistan ........................................................................................................................38
2.2. Kyrgyz Republic ...............................................................................................................47
2.3. Tajikistan ...........................................................................................................................49
2.3.A. Customs Support ........................................................................................................49
2.4. Turkmenistan ...................................................................................................................51
2.5. Uzbekistan ........................................................................................................................53
COMPONENT 3: IMPROVED CUSTOMS ADMINISTRATION ................... 55
1. Afghan National Customs Academy ....................................................................................55
2. Modernization and Simplification of Procedures ..............................................................56
3. Modernization of Border Management AND SIMPLIFICATION of Customs
Procedures .....................................................................................................................................63
4. Improved Customs Administration .....................................................................................66
4.2 increasing ties to the wco through diagnostic assessments ...................................69
Collaboration ........................................................................................................ 73
ii AFGHANISTAN TRADE AND REVENUE PROJECT
Links with Relevant Afghan Government Ministries ............................................................73
Links with Other Donor Agencies ...........................................................................................73
Links with Other USAID Projects ............................................................................................74
Challenges and Lessons Learned ........................................................................ 76
Component 1: Support Trade Policy Liberalization .............................................................76
Component 2: Facilitate Enhanced Access to Regional Markets.......................................78
Component 3: IMPROVED CUSTOMS ADMINISTRATION ...........................................82
Annex A. Afghanistan Trade And Revenue Financial Report ......................... 85
Annex B. SUMMARY PERFORMANCE INDICATOR TRACKING TABLE . 87
Annex C. Snapshots ............................................................................................. 90
Afghan Carpets Reach Dubai By Air .................................................................. 91
Afghanistan Signs Arusha Declaration .............................................................. 92
Afghan Exports Reach Southeast Asia............................................................... 93
Businessman Finds Buyers in Dubai ................................................................... 94
Businesswoman Strikes Deals in Dubai ............................................................. 95
Merger Makes Doing Business Easier ................................................................ 96
Annex D. Press Releases ..................................................................................... 97
Annex E. Index of Key Afghanistan Trade and Revenue Project Reports ..... 96
AFGHANISTAN TRADE AND REVENUE PROJECT | ii
ACRONYMS
ABADE Assistance in Building Afghanistan by Developing Enterprises
ABBAT Association of International Transport Operators of Tajikistan
ABP Afghan Border Police
ACAA Afghanistan Civil Aviation Authority
ACBR-IP Afghanistan Central Business Registry-Intellectual Property
ACCI Afghanistan Chamber of Commerce and Industry
ACD Afghan Customs Department
ACE Agricultural Credit Enhancement II project
ADBL Association for Development of Business Logistics
AEC Afghanistan Exporters Club
AEO Authorized Economic Operator
AHD Animal Health Directorate
AISA Afghanistan Investment Support Agency
ANCA Afghanistan National Customs Academy
ANSA Afghanistan National Standards Authority
APTTA Afghanistan Pakistan Transit Trade Agreement
APTTCA Afghanistan-Pakistan-Tajikistan Transit Trade Coordination
Authority
ARD Afghanistan Revenue Department
ASYCUDA Automated System for Customs Data
ATAR Afghanistan Trade and Revenue Project
AWBF Afghanistan Women’s Business Federation
BCCI Balkh Chamber of Commerce and Industries
BCP border crossing point
BMM Border Management Model
BMTF Border Management Task Forces
CAREC Central Asia Regional Economic Cooperation program
CATF Central Asia Trade Forum
CBTA Cross-Border Transport Agreement
CCC Customs Consultative Council
AFGHANISTAN TRADE AND REVENUE PROJECT | iii
CCTF Committee for Trade Facilitation
CHAMP Commercial Horticulture and Agricultural Marketing Program
CITS Comprehensive Integrated Tariff System
CLDP Commercial Law Development Program
CSO Central Statistics Organization
CTA Customs and Tax Academy
CVA Customs Valuation Agreement
DAB Da Afghanistan Bank
EPAA Export Promotion Agency of Afghanistan
E-Pay electronic payment
EU-BOMNAF European Union EU Border Management Northern
Afghanistan
EPZ export processing zone
FAIDA Financial Access for Investing in the Development of
Afghanistan
FAO Food and Agriculture Organization
FICCI Federation of Indian Chamber of Commerce and Industries
FLO FICCI Ladies Organization
FTWZ Free Trade Warehousing Zone
GAIN Global Alliance for Improved Nutrition
GATT General Agreement on Tariffs and Trade
GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit
GPA Government Procurement Agreement
HACCP Hazard Analysis Critical Control Point
HKIA Hamid Karzai International Airport
ICD inland clearance depot
IPPC International Plant Protection Convention
IRU International Road Transport Union
ITA Information Technology Agreement
ITC International Trade Centre
MAA Mutual Assistance Agreement
MAIL Ministry of Agriculture, Irrigation, and Livestock
MEDT Ministry of Economic Development and Trade
AFGHANISTAN TRADE AND REVENUE PROJECT | iv
MOCI Ministry of Commerce and Industries
MOFA Ministry of Foreign Affairs
MOIC Ministry of Information and Culture
MOPH Ministry of Public Health
MOTCA Ministry of Transportation and Civil Aviation
NEAC National Education Agricultural College
NEPA National Environmental Protection Agency
NTFC National Trade Facilitation Committee
OIE World Organisation for Animal Health
OSS one-stop shop
PATTTA Pakistan-Afghanistan-Tajikistan Transit and Trade Agreement
PCA Post Clearance Audit
PCTD Prevention of Customs Transgression Department
PNC-ICC Pakistan National Committee of the International Chamber of
Commerce
PPQD Protection and Quarantine Department
PRA Pest Risk Assessment
RADP-N Regional Agricultural Development Program-North
RADP-S Regional Agricultural Development Program-South
RADP-W Regional Agricultural Development Program-West
REC Regional Economic Cooperation project
RKC Revised Kyoto Convention
SAFTA South Asian Free Trade Area
SAARC South Asian Association for Regional Cooperation
SEZ Special Economic Zone
SPS Sanitary Phytosanitary Measures
TAFA Trade Accession and Facilitation for Afghanistan
TAPI Turkmenistan-Afghanistan-Pakistan-India Pipeline
TBT Technical Barriers to Trade
TFA Trade Facilitation Agreement
TIFA Trade and Investment Framework Agreement
TIR Transports Internationaux Routiers
TPAU Trade Policy Analysis Unit
AFGHANISTAN TRADE AND REVENUE PROJECT | v
TRIPS Trade-Related Aspects of Intellectual Property Rights
UNCTAD United Nations Conference on Trade and Development
UNDP United National Development Program
USPTO United States Patent and Trademark Office
WCO World Customs Organization
WIPO World Intellectual Property Organization
WTO World Trade Organization
AFGHANISTAN TRADE AND REVENUE PROJECT | 1
EXECUTIVE SUMMARY
The Afghanistan Trade and Revenue (ATAR) project started implementation during the
so-called “Transformational Decade” in Afghanistan, when the international military
presence in the country that had been there since 2001 began to decrease substantially,
with a concomitant reduction in international aid. As a result, the Government of the
Islamic Republic of Afghanistan was challenged to spur economic growth, increase
revenues, and improve the quality of services it provides. To this end, from November
2013 to February 2018, ATAR worked to strengthen the business climate of Afghanistan
to enable private investment, enhanced trade, job creation, and fiscal sustainability.
With its partner Economic Integration Forum, Chemonics worked to support
Afghanistan’s continuing recovery from three decades of war and economic devastation
through three primary activities: improving the Afghan government’s capacity to
formulate and implement a liberal policy framework for trade and investment in
accordance with international standards; enhancing integration in the regional and world
economy through the promotion of trade and agreements, enhanced economic
corridors governance, and private-sector linkages throughout South and Central Asia;
and strengthening revenue generation for fiscal sustainability and trade facilitation
through reforms and anti-corruption measures in customs and taxation. In this way, the
ATAR project fostered Afghanistan’s economic growth and greater integration into the
regional and global community.
In the face of political challenges and volatile security, ATAR supported the Afghan
government and private sector to improve the country’s trade environment. Most
significantly, as a result of USAID support under ATAR and the previous Trade
Accession and Facilitation I and II projects, Afghanistan became the 164th member of the
World Trade Organization (WTO) on July 29, 2016. Through its accession to the
WTO, Afghanistan sent a strong signal to investors that it had established a stable,
predictable, and transparent environment with strong protection for investors’ rights,
including intellectual property rights. With ATAR’s support, Afghanistan also ratified the
WTO’s Trade Facilitation Agreement and passed 25 complex trade-related laws that
serve the foundation of any modern, vibrant trading regime.
To increase Afghanistan’s regional ties, ATAR maintained a presence in four Central
Asian countries, as shown in Exhibit 1. This in-country presence allowed ATAR to
promote Afghanistan’s interests in the region and to strengthen trade and transit
relationships with its South and Central Asian neighbors, thereby fostering regional
integration. In addition, by maintaining a regional presence, ATAR supported Central
Asian countries’ progress toward ratification or accession to international agreements,
such as the World Customs Organization (WCO) Revised Kyoto Convention (RKC) or the Transports Internationaux Routiers (TIR) Convention, as well as provide capacity
building support to customs administrations, the private sector, and civil society
organizations.
AFGHANISTAN TRADE AND REVENUE PROJECT | 2
ATAR’s regional
approach also
allowed it to promote
trade and link
businesses
throughout Central
and South Asia.
Afghan traders
negotiated millions of
dollars in business
deals at 16
international trade
events with ATAR
support. The success
of these events culminated in
September 2017 with
the Passage to
Prosperity: India-Afghanistan Trade Show in New Delhi where Afghan and Indian buyers
struck more than $240 million in confirmed and potential deals in the India. As part of
its increased focus on facilitating exports, ATAR demonstrated the viability of air cargo,
supporting traders in exporting $2.7 million worth of goods by air and coordinating with
government and investors to upgrade Afghan airports air cargo capacity.
Finally, to speed the movement of goods across border, ATAR also supported the
Afghan government in implementing customs reforms and promote the principles of the
World Customs Organization Revised Kyoto Convention and Revised Arusha
Declaration. With ATAR’s training and policy support, the Afghanistan Customs
Department increased its ability to tackle corruption, generate customs revenue, and
facilitate trade at borders with Afghanistan’s neighbors and countries farther abroad.
EXHIBIT 1: ATAR’S REGIONAL PRESENCE
AFGHANISTAN TRADE AND REVENUE PROJECT | 3
KEY HIGHLIGHTS
AND ACHIEVEMENTS
BY COMPONENT COMPONENT 1: SUPPORT TRADE POLICY LIBERALIZATION
Component 1 promoted liberalization of Afghanistan’s trade regime by supporting its
accession to the WTO. ATAR provided capacity building and technical assistance within
implementing institutions to conduct negotiations, to draft legislation required for
accession, and to institute required reforms following accession. In addition to
conforming to WTO requirements, these policies, laws, and regulations will attract
investment and enable the private sector to grow. ATAR’s achievements under
Component 1 include:
• After years of work in trade reforms and trade negotiations by the Afghan
government, and with the support of ATAR and TAFA I and II, Afghanistan officially
became the WTO’s 164th member on July 29, 2016. In the days leading to formal
membership, Afghanistan passed 25 of 26 WTO-related pieces of trade legislation.
Following accession, ATAR assisted the Ministry of Commerce and Industries
(MOCI) with developing a post-accession strategy to maximize the benefits of WTO
membership, educate ministries and state bodies on their WTO responsibilities, and
create a structure for a comprehensive WTO Department to handle post-accession
matters.
• On July 29, 2016, President Ashraf Ghani signed the WTO Trade Facilitation
Agreement (TFA), and Afghanistan became the 92nd WTO member to ratify and
notify the TFA (ahead of 72 other members). This contributed to the required
number of WTO member ratifications (108) needed for the TFA agreement to enter into force.
• ATAR assisted in the development of an automated registry for trademarks at
MOCI and an automated registry for border enforcement of intellectual property
rights at Afghanistan Customs Department. This will help to strengthen the
protection of intellectual property rights, a key component of WTO.
• In a major step toward attracting foreign investment, ATAR supported MOCI in
merging the licensing department of the Afghanistan Investment Support Agency into
MOCI’s Afghanistan Central Business Registry-Intellectual Property. As a result,
ACBR-IP issues a single business license instead of the multiple investment and trade
licenses that had been required of companies.
AFGHANISTAN TRADE AND REVENUE PROJECT | 4
• ATAR assisted in preparing Afghanistan’s application for observer status in the
WTO Government Procurement Agreement, which will give Afghanistan, once it
becomes a full member, access to government procurement activities with an annual market of $17 trillion.
COMPONENT 2: FACILITATE ENHANCED ACCESS TO REGIONAL MARKETS
Under Component 2, ATAR facilitated the development and implementation of regional
trade agreements; assisted the government to support measures needed to implement
regional trade agreements; and supported the implementation of transport corridors
and trade facilitating measures by working with countries such as Uzbekistan, Tajikistan,
Kyrgyzstan, and Turkmenistan. ATAR’s achievements under Component 2 include:
• ATAR supported the participation of hundreds of Afghan traders in 16 high-level
international tradeshows where they signed agreements worth more than $60
million. These events included established, sector-specific shows such as Germany’s
carpet show DOMOTEX and Dubai’s food tradeshow Gulfood, as well as ATAR-
organized shows, such as Made in Afghanistan in July 2016 and Exhibition Afghanistan
in December 2016, for a range of products. Together with USAID Afghanistan and
USAID India, ATAR organized the Passage to Prosperity: India-Afghanistan Trade
and Investment Show from September 27-30 in New Delhi, India. More than 1,200
Indian businesses met with approximately 200 Afghan businesses from a variety of
sectors, including fresh fruits and spices, energy, and finance. The event generated
$240 million in reported agreements, including $27 million in signed contracts for
Afghan exports and Indian investments. The event helped to reinvigorate Indian-
Afghan relations and demonstrated Afghanistan’s trade potential to other countries
in the region and beyond.
• In January 2018, a one-stop shop (OSS) for customs clearance was inaugurated at
Hamid Karzai International Airport (HKIA) in Kabul. The OSS launch was the result
of nearly a year of work with multiple stakeholders in both the public and private
sector to facilitate exports by air. The establishment of the OSS is a major step
forward in boosting Afghanistan’s exports, and was complemented by the
establishment of a consolidation warehouse to store goods prior to clearance.
Thanks to the OSS, traders now can benefit from a simplified process for obtaining
approvals and permits from different ministries, agencies, and associations in one
centrally office, located within HKIA premises.
• In the Central Asian Republics, ATAR promoted Afghanistan’s economic interests
and greater regional integration and participation in international trade and transit agreements. With ATAR support, the Kyrgyz Republic ratified the WTO TFA, and
Tajikistan moved closer to ratification. Due in part to ATAR’s efforts, Pakistan and
India became contracting parties to the TIR Convention in 2016 and 2017,
respectively. All South and Central Asian countries are now contracting parties of
the TIR Convention, thanks in part to ATAR’s support. In principle, this will permit
more efficient movement of cargo by road.
AFGHANISTAN TRADE AND REVENUE PROJECT | 5
• In a significant development in U.S.-Uzbek cooperation, ATAR provided the first
USAID-funded support to the Uzbekistan Customs Committee in more than a
decade, training 21 customs officers in May 2015. Additional training followed in 2016 and 2017.
• ATAR helped to reinvigorate the Kyrgyz Republic’s Customs Consultative Council,
which provides a forum for discussion between customs and the trading community
and customs brokers. As a result of ATAR’s efforts, Kyrgyz customs held the first
Customs Consultative Council in late 2014 and held additional meetings throughout
the last three years with ATAR support.
• In 2016, ATAR helped to establish the Afghanistan Exporters Club as part of an
effort to increase local capacity to organize Afghan traders’ participation in future
international tradeshows and to promote air-cargo and other export initiatives. To
date, AEC has recruited 35 members (three carpet businesses, three handicrafts
businesses, four marble and gemstone businesses, 24 dried fruit exporters, and one
organization).
• To facilitate exports by air, ATAR established a logistical system that includes a
consolidation warehouse in Kabul and provides local freight brokerage services and
a Free Trade Warehousing Zone in Dubai. In support of Afghanistan Civil Aviation
Authority (ACAA), ATAR developed plans to convert the current Haj Terminal at
HKIA to a modern air cargo terminal and to facilitate the establishment of export
processing zones (EPZs) in Kabul, Kandahar, Herat, and Mazar-e-Sharif. Since being
launched in early 2017, ATAR’s air cargo incentive program helped Afghan
exporters airlift about $2.7 million worth of goods to markets in North America,
Europe, and the Middle East.
• In mid-2017, ATAR began working with ACAA to develop air corridors between
Afghanistan and its strategic trade partners. As part of HKIA’s Air Cargo Zone,
ATAR developed plans to establish an EPZ, which will be a step towards the
development of a special economic zone (SEZ) in Afghanistan. The EPZ will be
expected to attract investors for sectors with high export potential, including gem
cutting and polishing facilities and carpet finishing facilities.
COMPONENT 3: IMPROVED CUSTOMS ADMINISTRATION
Component 3 was designed to enhance the Afghan government’s capacity, in particular
the Afghanistan Customs Department (ACD), to generate revenue by improving
customs procedures to increase transparency, efficiency, and uniformity in the collection
of revenue, performance of core functions, and facilitation of trade. ATAR’s
achievements under Component 3 include:
• On December 5, 2016, the minister of finance inaugurated the Customs and Tax
Academy (CTA), a modification of the former customs academy that incorporates
the Afghanistan Revenue Department (ARD) training unit. ATAR provided significant
AFGHANISTAN TRADE AND REVENUE PROJECT | 6
assistance to the academy, including preparation of the academy library and a search
and examination bay for practical training. Following the launch, ATAR finalized the
new academy curriculum, covering basic, intermediate, and advanced training
courses.
• On July 16, 2017, Minister of Finance Eklil Hakimi signed a notification of intent to
adopt the WCO Revised Arusha Declaration, marking a commitment to combat
corruption in customs administration. This is the result of significant ATAR support
to anti-corruption efforts within ACD, including the development of an anti-
corruption strategy and code of conduct. With ATAR support, ACD also finalized
an Arusha Declaration implementation plan, which covers strategic and operational
objectives to be completed between 2017 and 2020.
• To modernize and improve how customs-related duties are collected and to bring
more efficiency and transparency in revenue collections made from customs duties,
ATAR continued the work started under the TAFA II project to introduce an e-
payment system for customs. In December 2015, ACD officially launched E-Pay in
Mazar-e-Sharif. With ATAR support, e-payment became operational across
Afghanistan by the end of 2016. This includes all of Afghanistan’s inland customs
depots and customs border crossing points except for customs sites in Khost and
Paktia (due to security concerns).
• In July 2017, ACD completed implementation of one of the WTO TFA
requirements: advance ruling function. ACD posted all advance ruling materials on
its website, together with application templates. By the end of July, ACD received
three applications asking for a binding decision on the tariff classification and
customs valuation. ATAR developed brochures on advance ruling that were used as
part of its traders awareness-raising activities.
AFGHANISTAN TRADE AND REVENUE PROJECT | 7
COMPONENT 1: TRADE POLICY
LIBERALIZATION
On July 29, 2016, Afghanistan became the WTO’s 164th member, signaling to the world
that the country was transforming its trade environment to comply with the
international rules governing global commerce. This accomplishment was the result of
renewed commitment by President Ashraf Ghani’s government to foster Afghanistan’s
growth through integration into the global economy. It also was the result of years of
sustained USAID support to the Afghan government’s accession process through the
ATAR project and its two predecessor programs, the Trade Accession and Facilitation
for Afghanistan (TAFA) I and II projects. ATAR provided extensive support during the
pre-accession phase, helping to reignite the process following the transition to the
Ghani government, and in the post-accession phase to help Afghanistan fulfill its
commitments under the WTO. 1. AFGHANISTAN’S WTO ACCESSION PROCESS
Afghanistan’s WTO accession process started
in 2004, although it was largely dormant until 2009. From 2010 through mid-2014,
Afghanistan made remarkable progress
toward accession. The capacity of ministries
and private-sector actors was built to navigate
the complex process of becoming a WTO
member. Five successful WTO Working Party
meetings were held. The evolution of the
draft Working Party Report from Elements of
the Factual Summary last a little more than
one year; this process has taken four to five
years for other countries. Agricultural
plurilateral negotiations concluded in one
round versus four to five rounds on average.
See Exhibit 2 for the steps in the path to
WTO accession.
BI-LATERAL MARKET ACCESS
AGREEMENTS
The Government of the Islamic Republic of
Afghanistan signed bilateral agreements on
market access for goods and services with
nine WTO members:
1. United States, January 2014
2. Turkey, February 2014
3. Chinese Taipei, February 2014
4. Korea, February 2014
5. European Union, February 2014
6. Norway, December 2013
7. Thailand, December 2013
8. Canada, July 2013*
9. Japan, July 2013*
*Afghanistan signed these during the
TAFA project.
AFGHANISTAN TRADE AND REVENUE PROJECT | 8
EXHIBIT 2. COMPLETING THE PATH TO WTO ACCESSION
During ATAR’s first year, Afghanistan took a major step toward WTO accession by
finalizing bilateral negotiations on market access for goods and services (see box on
previous page) in February 2014.1 Market access refers to the extent to which an
imported good or service can compete in Afghanistan with domestic goods or services.
Bilateral market access negotiations represent about 60 percent of the WTO accession
process and are the most challenging part of the process. Afghanistan launched its
bilateral market access negotiations on services in June 2012 with the support of TAFA
and completed them in January 2014 with the support of ATAR (about 18 months).
Bilateral market access negotiations on goods were launched with TAFA’s support in
December 2012 and concluded in February 2014 with ATAR’s support (slightly more
than one year). It is worth noting that other countries achieve these milestones in an
average of six years. The WTO and its Working Party Members hailed the record-
breaking progress.
Afghanistan was in the final stages of WTO accession at the end of 2014, when the
country’s government underwent a transition following the resolution to the disputed
and protracted presidential elections. With a change in the country’s decision-makers,
the Afghan government put the country’s WTO accession on hold, as President Ghani
directed his government to focus on security. By mid-2015, government officials began
to turn their attention back to accession, in part due to ATAR’s advocacy with
President Ghani, support to MOCI to promote the accession agenda, and awareness-
building activities targeting Afghan officials and the public.
1 A country acceding to the WTO enters into bilateral negotiations with individual WTO members. They
are bilateral because different countries have different trading interests. The negotiations cover tariffs,
specific market access commitments, and other policies in goods and services.
AFGHANISTAN TRADE AND REVENUE PROJECT | 9
ATAR and MOCI met several times with
members of President Ghani’s economic
policy and strategy team. To prepare for
these meetings, ATAR assisted MOCI in
preparing and providing 15 awareness
papers, formal WTO documents, talking
points, and notes on WTO accession. In
early October 2015, MOCI and ATAR met
with President Ghani and his advisors to
discuss WTO commitments, benefits, and
challenges. In particular, the ATAR team
stressed the advantages to Afghanistan’s
accession to the WTO as well as the
mechanisms that would be open to Afghanistan as a WTO member to resolve
disputes, such as longstanding transit
challenges with Pakistan.
By October 2015, following intensive ATAR
and MOCI preparation and awareness
building, President Ghani expressed his
support and agreed to move forward with
concluding WTO accession negotiations.
ATAR then assisted MOCI and the WTO
Secretariat with finalizing Afghanistan’s draft
Working Party Report. The WTO
Secretariat disseminated the report to WTO
Working Party members in October 2015,
along with three other documents of the
accession package: the protocol of accession,
the schedule of concessions and
commitments on goods, and the schedule of
specific commitments on services.
With ATAR support, Afghanistan continued to achieve major WTO milestones
throughout late 2015 and early 2016. First, in November 2015, an Afghan delegation
attended the country’s fifth and final Working Party meeting at WTO headquarters in
Geneva, Switzerland. At this meeting, WTO Working Party members approved
Afghanistan’s accession package. Next, in December 2015, an Afghan delegation
attended the 10th WTO Ministerial Conference in Nairobi, Kenya. At the conference,
the WTO Ministerial Council formally adopted Afghanistan’s accession package. ATAR
further assisted the Afghanistan government with compiling lists of technical assistance
needs, which were circulated at a donors’ roundtable at the Nairobi conference.
AFGHANISTAN’S WTO
MILESTONES
Afghanistan reached major milestones
during the project’s third year, culminating
in the country’s WTO accession:
• On November 11, 2015, an Afghan
delegation attended the country’s fifth
and final Working Party meeting in
Geneva, Switzerland. WTO Working
Party members approved Afghanistan
accession package by consensus, ad
referendum.
• On December 17, 2015, an Afghan
delegation attended the WTO’s 10th
Ministerial Conference in Nairobi,
Kenya. The WTO Ministerial Council
formally adopted Afghanistan’s terms
of accession.
• In January 2016, MOCI submitted the
accession package to the Cabinet of
Ministers for approval.
• In February 2016, the cabinet
approved Afghanistan’s accession
package.
• On June 21, 2016, Afghanistan’s
Parliament ratified the WTO package.
• On June 22, 2016, President Ashraf
Ghani signed the instrument of
acceptance of Afghanistan’s protocol
of accession.
• On June 29, 2016, Afghanistan
formally submitted the instrument of
acceptance to the WTO.
• On July 29, 2016, Afghanistan became the WTO’s 164th member.
• On July 29, 2016, Afghanistan notified
the WTO of its ratification of the
WTO Trade Facilitation Agreement.
AFGHANISTAN TRADE AND REVENUE PROJECT | 10
Following these meetings, ATAR supported MOCI in developing an action plan for
instructing each ministry and state body to undertake priority WTO reforms that
endorsed the plan and disseminated it to ministries. ATAR and MOCI followed up with
the ministries to promote the implementation of action items and provide technical
support.
In January 2016, MOCI submitted the package to the Cabinet of Ministers for approval.
MOCI also provided relevant ministries with a copy of the package for their review. The
accession package was approved in February 2016. In the following months, ATAR
arranged and participated in multiple roundtables with various ministries and
government entities to prioritize and further WTO-related legislative actions.
Finally, on July 29, 2016, Afghanistan became the WTO’s 164th member. On the same
day, in another significant step, the Afghan government ratified the WTO Trade
Facilitation Agreement (TFA) — which presents a framework for promoting regional
reforms to facilitate trade, reduce corruption, improve transparency and private-sector
participation, and strengthen transit rights — and submitted its instrument of
acceptance for the TFA to WTO.
BUILDING AWARENESS AND SUPPORT FOR ACCESSION
ATAR’s WTO awareness-building activities targeted both Afghan government officials — including President
Ghani, the Cabinet, and Parliament — and the general public. For example, to increase support for completing
Afghanistan’s WTO negotiations in the new Afghan administration, ATAR drafted a one-year WTO accession
campaign and public outreach program for MOCI. This included developing presentations on the impact of WTO
accession on Afghanistan and recent new members; the impacts of accession on regional trade and economic
relationships, including trade with Pakistan; and the responsibilities of individual ministries vis-à-vis WTO
commitments. Finally, ATAR supported a series of awareness seminars targeting the Ministry of Justice, MAIL,
MOPH, MOIC, MOF, the Ministry of Foreign Affairs, ACD, ANSA, the Export Promotion Agency of Afghanistan
(EPAA), and others to familiarize stakeholders with WTO agreements, principles, and rules. These seminars also
covered Afghanistan’s status of accession and commitments and the benefits and implications of WTO
membership for Afghanistan’s economic development and integration into the global trading system. Toward the
end of 2016, ATAR partnered with MOCI to broaden the audience of the awareness campaign. ATAR presented
WTO information to 50 students and professors from Kabul University; 15 officials from the media and MOCI,
ACD, and ANSA; and 10 representatives from the private sector. Finally, ATAR supported MOCI with preparing
awareness briefs about the benefits of WTO membership, WTO dispute settlement, and WTO rules and
commitments. This aspect of the project included supporting MOCI in developing comparative graphs that
demonstrated the impact of WTO membership on economic growth and trade, foreign investment, and exports
for 12 least developed countries that are WTO members.
To inform the general public of Afghanistan’s WTO accession, ATAR prepared a two-and-a-half minute video in
English, Dari, and Pashto that incorporated WTO footage taken during Afghanistan’s final Working Party meeting
in Geneva and the WTO’s 10th Ministerial Conference in Nairobi. ATAR also created a 30-second television spot
in Dari and Pashto that aired for several weeks on Tolo and Shamshad, two major Afghan television stations. In
addition, ATAR placed a billboard on WTO accession on the road to Parliament in Kabul.
AFGHANISTAN TRADE AND REVENUE PROJECT | 11
2. SUPPORTING LEGISLATIVE REFORMS FOR ACCESSION
As part of the WTO accession process, the Afghan government was required to pass an
array of legislation to conform to WTO rules. ATAR provided support on the drafting
and passage of 26 key pieces of legislation, covering every aspect of a modern, vibrant
trading regime — including customs reform, trade facilitation, intellectual property
rights, food safety, veterinary (animal health), and standardization. This effort, led by
relevant ministries at each stage, entailed significant capacity building by ATAR through
on-the-job training, capacity building events, working group meetings, and roundtables
and seminars to review trade-related legislation and to educate the public and private
sectors. The lengthy, complex legislative process is presented in simplified form in
Exhibit 3.2 Throughout, ATAR worked with line ministries and the Ministry of Justice
(MOJ) to ensure officials’ thorough understanding of the laws and to incorporate
revisions that aligned with WTO terms. For those laws that reached the level of Council
2 This chart is a greatly simplified illustration of the intricate and lengthy process of drafting and passing a
law. At certain stages, relevant government bodies and private-sector representatives are invited multiple
times to offer input on the draft law, or the draft law is circulated to various committees or departments
within the sponsoring ministry or Ministry of Justice for review and changes.
Photo: USAID ATAR project
His Excellency Mohammad Khan, first deputy chief executive of the Government of the Islamic
Republic of Afghanistan, and WTO Director-General Roberto Azevêdo shake hands at the 10th
WTO Ministerial Conference in Nairobi, Kenya. At the conference, the WTO Ministerial Council
formally adopted Afghanistan’s accession package.
AFGHANISTAN TRADE AND REVENUE PROJECT | 12
of Ministers, Cabinet, and Parliament, ATAR supported MOJ in providing explanations,
clarifications, and feedback.
Due in part to
ATAR’s efforts, WTO
trade-related
legislation advanced
rapidly ahead of
Afghanistan’s
accession in July 2016.
By the end of July
2016, Afghanistan had
passed 23 of the 26
pieces of legislation
supported by ATAR. Prior to accession,
three legislative items
remained pending: the
Procedure on
Customs Valuation,
the Law on Consumer
Protection, and the
Income Tax Law.
Post-accession, ATAR continued to promote the adoption of these three items. The
Law on Consumer Protection and the Law on Income Tax were adopted on December
28, 2016 and March 18, 2017, respectively. The Procedure on Customs Valuation awaits
the minister of finance’s signature. Exhibit 4 lists the reforms passed with ATAR’s
support.
EXHIBIT 4. STATUS OF AFGHANISTAN’S WTO LEGISLATIVE ACTION PLAN
ATAR-SUPPORTED LEGISLATION
No. Legislation Status
Customs Valuation Agreement - Rules of Origin
1 Amendments to the 2005 Customs Law On October 25, 2016, the law was published in the
official gazette.
2
Procedure on Customs Valuation (including
interpretative notes and software and interest
charge valuation)
The procedure is pending the signature of the
minister of finance.
3 Procedure on Advance Ruling on Binding Decisions
(covering advance origin rulings)
In July 2015, the Ministry of Finance approved the
procedure.
Technical Barriers to Trade
4 Law on Standards and Technical Regulations On September 20, 2016, the law was published in
the official gazette.
Sanitary and Phytosanitary Measures
5 Law on Plant Protection and Quarantine On January 21, 2017, the law was published in the
official gazette.
5. Presidential endorsement, or, upon president’s rejection,
passage by two-thirds approval of Lower House of Parliament
4. Review and approval by Lower and Upper House of Parliament
3. Review and approval by Council of Ministers and Cabinet
2. Review and approval by Ministry of Justice
1. Draft initiated and approved by sponsoring ministry or
government entity
EXHIBIT 3. AFGHANISTAN’S LEGISLATIVE PROCESS
AFGHANISTAN TRADE AND REVENUE PROJECT | 13
ATAR-SUPPORTED LEGISLATION
No. Legislation Status
6 Law on Animal Health On October 11, 2016, the law was published in the
official gazette.
7 Law on Food Safety On September 6, 2016, the law was published in the
official gazette.
Trade-Related Aspects of Intellectual Property Rights (TRIPS)
8
Procedure on Customs Control of Intellectual
Property Rights (Intellectual Property Border
Enforcement)
In April 2014, the minister of finance approved this
procedure.
9
Amendments to the Law on Supporting the Rights
of Inventors and Discoverers of 31 April 2009
(Patents Law)
On September 28, 2016, the law was published in
the official gazette.
10 Amendments to the Law on Trademarks of
1 September 2009
On March 16, 2015, the law was published in the
official gazette.
11
Amendments to the Law on Supporting the Right of
Authors, Composers, Artists, and Researchers of
26 July 2008 (Copyrights Law)
On October 15, 2016, the law was published in the
official gazette.
12 Law on Geographical Indications On August 17, 2015, the law was published in the
official gazette.
13 Law on Industrial Designs On August 27, 2016, the law was published in the
official gazette.
14 Draft Amendments to the Commercial Procedure
Code
On September 6, 2016, the law was published in the
official gazette.
15 Law on Protection of Trade and Industry Secrets
(undisclosed information)
On October 22, 2016, the law was published in the
official gazette.
16 Law on Topography of Integrated Circuits On October 22, 2016, the law was published in the
official gazette.
17 Law on Consumer Protection (provisions on Unfair
Competition)
On December 28, 2016, the law was published in
the official gazette.
18 Law on Plant Variety Protection On October 11, 2016, the law was published in the
official gazette.
Transparency
19 Amendments to the Law on Publication and
Enforcement of Legislation of 1998
On February 28, 2017, the law was published in the
official gazette.
20 Amendments to the Regulation on Drafting
Procedure and Processing of Legal Acts
In April 13, 2016, the regulation was published in
the official gazette.
Quantitative Import Restrictions, including Prohibitions, Quotas and Licensing Systems
21 Law on Foreign Trade in Goods On October 22, 2016, the law was published in the
official gazette.
22 Procedure on Import and Export Licensing In July 2016, MOCI adopted the procedure.
23 Procedure on Customs Storage Fees In February 2016, Afghanistan Customs Department
(ACD) adopted the procedure.
24
Regulations of Production and Importation of
Medicines and Medical Equipment of 24 February
2007 (concerning fees)
On August 27, 2016, the regulations were published
in the official gazette.
25 Income Tax Law (concerning unequal treatment of
import tax)
On March 18, 2017, the law was published in the
official gazette.
Anti-Dumping, Countervailing Duties, and Safeguard Regimes
26 Law on Safeguards Measures for Domestic
Protection
On September 28, 2016, the law was published in
the official gazette.
LEGISLATIVE ITEMS NOT PREPARED WITH ATAR'S SUPPORT
AFGHANISTAN TRADE AND REVENUE PROJECT | 14
ATAR-SUPPORTED LEGISLATION
No. Legislation Status
27 Value Added Tax (VAT) On April 13, 2016, the law was published in the
official gazette.
28 Law on Minerals On August 16, 2014, the law was published in the
official gazette.
3. SUPPORTING IMPLEMENTATION OF WTO LAWS AND COMMITMENTS
Following accession, ATAR prepared the Afghan government and the private sector for
implementation of the WTO laws, specifically in the areas of intellectual property,
sanitary and phytosanitary measures, customs, and safeguards. ATAR also guided
ministerial officials in developing procedures and regulations as well as preparing for
institutional reforms to implement WTO laws.
3.1 PROCEDURES AND REGULATIONS IN SUPPORT OF WTO LAWS
At the ministerial level, ATAR regularly trained and assisted stakeholders with
developing regulations and procedures to implement WTO-related trade laws. ATAR
drafted the model regulations and procedures and guided the ministerial working group
in reviewing and revising the legislative items to fit Afghanistan’s specific legal framework
and requirements.
Ministries are responsible for sponsoring and adopting procedures that do not proceed
through a further approval process. Regulations move from the sponsoring ministry to
the MOJ and then to the Council of Ministers for final approval. Exhibit 5 illustrates
ATAR’s work with the relevant ministries on regulations and procedures in support of
the WTO-related trade laws.
EXHIBIT 5. ATAR-SUPPORTED REGULATIONS AND PROCEDURES
ATAR-SUPPORTED REGULATIONS AND PROCEDURES
Legislative Item Ministerial Focal
Point Status
Law on Copyrights
• Regulation on the Copyright Board MOIC Approved by the Cabinet of
Ministers on August 24, 2017
Law on Protection of Trade and Industry Secrets
• Regulation on Trade and Industry Secrets MOI Draft finalized at MOCI and submitted to MOJ
Law on Geographical Indications
• Regulation on Geographical Indications MOCI Approved on May 5, 2017
• Procedure on Geographical Indications MOCI Approved on May 5, 2017
Law on Industrial Designs
• Two Procedures on Industrial Designs MOCI Approved May 20, 2017
Law on Food Safety
• Regulation on Control of Veterinary Drug
Residues
Ministry of Public
Health (MOPH)
Draft finalized; MOPH to send to
MOJ
• Procedure in Support of Regulation
on Control of Veterinary Drug Residues MOPH
Draft finalized; submitted for
approval of MOPH minister
AFGHANISTAN TRADE AND REVENUE PROJECT | 15
ATAR-SUPPORTED REGULATIONS AND PROCEDURES
Legislative Item Ministerial Focal
Point Status
• Regulation on Labeling of Pre-Packaged Food MOPH Draft finalized; MOPH to send to
MOJ
• Regulation on Labeling of Food Additives
Offered for Sale MOPH
Draft finalized; MOPH to send to
MOJ
• Regulation on Pesticide Maximum Residue
Limits MOPH
Draft finalized; MOPH to send to
MOJ
• Procedure in Support of Regulation on
Pesticide Maximum Residue Limits MOPH
Draft finalized; submitted for
approval of MOJ
• Regulation on Labeling of Prepackaged Food MOPH Draft finalized; MOPH to send to
MOJ
• Regulation on Reconditioning of Food MOPH Draft finalized; MOPH to send to
MOJ
• Regulation on Composite Food Safety MOPH Draft finalized; MOPH to send to
MOJ
• 15 Procedures in Support of Composite Food
Safety Regulation MOPH
Draft finalized; submitted for
approval of MOPH minister
• Regulation on the Operation of a National
Food Safety Board MOPH
Draft finalized; MOPH to send to
MOJ
Law on Plant Protection and Quarantine
• Regulation on Plant Protection and Quarantine
Ministry of
Agriculture,
Irrigation and
Livestock (MAIL)
Draft finalized by MOJ Executive
Committee and submitted to the
Council of Ministers for approval
• 20 Procedures in Support of Regulation on
Plant Protection and Quarantine MAIL
Draft finalized and pending MAIL
minister approval
Law on Animal Health
• Regulation on Administration and Organization
of Animal Health Authority MAIL
Draft finalized with Animal
Health Directorate
• Regulation on Animal Health (disease
surveillance, prevention, and control) MAIL
Draft chapter ready for review
by Animal Health Directorate
• Regulation on Import and Export of Animals,
Commodities and Controlled Articles MAIL
Draft finalized with Animal
Health Directorate
• 24 Procedures in Support of Regulation of
Import and Export of Animals, Commodities
and Controlled Articles
MAIL Draft finalized with Animal
Health Directorate
• Regulation on Veterinary Diagnostic
Laboratories and the Food Safety of Primary
Animal Products
MAIL Draft finalized with Animal
Health Directorate
• Regulation on Animal Welfare MAIL Draft chapter ready for review
by Animal Health Directorate
• Regulation on the Practice of Veterinary
Medicine and Surgery MAIL
Draft chapter ready for review
by Animal Health Directorate
• Miscellaneous final clauses MAIL Draft chapter ready for review
by Animal Health Directorate
Law on Safeguards
• Regulation on Safeguards MOCI Draft being reviewed by MOCI
Legal Department
• Procedure in Support of Regulation on
Safeguards MOCI
Draft being reviewed by MOCI
Legal Department
AFGHANISTAN TRADE AND REVENUE PROJECT | 16
3.2. IMPLEMENTATION OF KEY WTO-RELATED LAWS
In addition to assisting with the development of regulations and procedures to support
the gamut of laws adopted as part of the WTO accession process, ATAR provided
specific support to three areas: intellectual property rights, sanitary and phyto-sanitary
measures, and safeguards and countervailing duties. This included supporting
institutional reforms within the Afghan government and educating private-sector
stakeholders about their rights and responsibilities under the new laws. (Note that
customs-related support is described under Component 3.)
3.2.A. INTELLECTUAL PROPERTY RIGHTS
The WTO Trade-Related Intellectual Property Rights (TRIPS) Agreement requires that
WTO members protect intellectual property rights. By bringing laws on intellectual
property up to the standards embodied by the WTO and international agreements,
Afghanistan protects innovators in the country from infringements on trademarks,
patents, copyrights, and geographical indications.
Laws on Trademarks, Patents, Copyrights, and Geographic Indicators
ATAR promoted the process of trademark registration in Afghanistan, following WTO
considerations, intellectual property conventions, and international best practices. In
support of the implementation of the Law on Trademarks, ATAR provided on-the-job
training for MOCI’s Afghanistan Commercial Business Registry for Intellectual Property
(ACBR-IP) in performing trademark functions, including examination, classification, and
trademarks registration. ATAR delivered formal trademark training for ACBR-IP staff
and prepared a guiding document on the automated trademark registry, including the
structure and functions of the database and an operational manual, and assisted ACBR-
IP in developing awareness materials for trademark registration. There are now 18,000
registered trademarks in the MOCI database. In support of implementation of the Law
on Patents, ATAR trained ACBR-IP staff private-sector stakeholders on patents
examination, awareness, and registration. ATAR also provided ACBR-IP with a concept
note on electronic registration of patents and awareness materials on patents.
To foster awareness of the Law on Copyrights, ATAR assisted ACBR-IP with developing
informational materials, including pamphlets that explained copyrights. ATAR also
conducted copyright awareness training in partnership with the MOIC for publishers,
professors, academics, and other government officials. With ATAR’s support and
guidance, MOIC, the Afghanistan Customs Department (ACD), the Ministry of Interior,
and Attorney General’s Office agreed to improve coordination for more effective
enforcement of the Law on Copyrights. ATAR assisted MOIC with finalizing a draft
memorandum of understanding, outlining the duty of each relevant agency in enforcing
the copyright law, to be signed among these entities. ATAR also assisted MOIC’s
copyright office with preparing two forms for copyright registration — one for literary
and scientific works and the other for artistic works. MOIC approved both forms, and
MOIC is expected to start the optional registration of copyrighted works in 2018.
In support of the Law on Geographical Indications, ATAR trained ACBR-IP staff on geographical indications and registrar rules and provided private-sector members with
AFGHANISTAN TRADE AND REVENUE PROJECT | 17
awareness training seminars on geographical indications. As with previous laws, ATAR
supported the development of awareness materials and assisted ACBR-IP with preparing
a document on the organization of the Registrar of Geographical Indications.
Intellectual Property Conventions
As part of WTO membership, Afghanistan is expected to be a party to intellectual
property conventions, including the Berne Convention for the Protection of Literary
and Artistic Works, the Paris Convention for the Protection of Industrial Property, the
Madrid Agreement Concerning the International Registration of Marks, and the
Singapore Treaty on the Law of Trademarks. The World Intellectual Property
Organization (WIPO) administers these conventions. By the end of the project,
Afghanistan had become a member of the Berne Convention, the Paris Convention, the
Madrid Agreement, and the Singapore Treaty. ATAR also began supporting MOIC to
accede to two intellectual property conventions: the WIPO Copyright Treaty and the
WIPO Performances and Phonograms Treaty. MOIC established a committee to review
the treaties. By the end of the project, the committee was working on a preliminary
review of the translations of the WIPO Performances and Phonograms Treaty.
Afghanistan Central Business Registry-Intellectual Property
In a major step toward facilitating business in Afghanistan, the licensing department of
Afghanistan Investment Support Agency (AISA) merged with MOCI’s ACBR-IP in
September 2016 thanks to ATAR support. ATAR worked with taxation authorities to
identify businesses that had not renewed their licenses in the last five years. The project
identified an estimated 95,000 businesses and flagged them in the ACBR-IP system.
ATAR also worked on a new web-based trademark registration system in accordance
with best practices and developed a web-based trademarks registration system for
ACBR-IP. ATAR assisted with developing procedures for trademark registration and
supported ACBR-IP and MOCI in assessing $2 million worth of hardware to be
purchased by World Bank for intellectual property and licensing services.
3.2.B. SANITARY AND PHYTOSANITARY (SPS) MEASURES
The WTO’s Sanitary and Phytosanitary Measures Agreement sets the basic rules for
food safety and animal and plant health regulations. ATAR worked with Afghan officials
to advance three key SPS laws: the Law on Food Safety, the Law on Animal Health and
Veterinary Public Health, and the Law on Plant Protection and Quarantine. ATAR
helped the Ministry of Public Health (MOPH) and the Ministry of Agriculture, Irrigation
and Livestock (MAIL) to establish working groups and build their capacity to advance
these legislative reforms and ensure that stakeholders’ understand the guidelines of the
WTO’s three sister sanitary and phytosanitary (SPS) organizations: the Codex
Alimentarius Commission, focused on food safety and quality; the World Organization
for Animal Health (OIE), focused on animal health; and the International Plant
Protection Convention (IPPC), focused on plant health. In addition, ATAR strengthened
the capacity of government laboratories with SPS-related mandates to prepare them for
international certification.
AFGHANISTAN TRADE AND REVENUE PROJECT | 18
Law on Food Safety
To support implementation of the Law on Food Safety, ATAR performed a needs
assessment that described the necessary actions to establish a Food Safety Control
Authority in MOPH, the organizational structure of such an authority, its units, and their
functions. The assessment served as a general guide to MOPH as it began to create the
authority. ATAR further supported working groups on its establishment.
To supplement its efforts on the Law on Food Safety, ATAR trained MOPH staff on the
Hazard Analysis Critical Control Points (HACCP), a management system in which food
safety is addressed through the analysis and control of biological, chemical, and physical
hazards from raw material production to product consumption. ATAR also trained
MOPH staff on general principles of food hygiene as well as the development of
equivalence agreements regarding food imports and export inspection and certification
systems. Equivalence is an important WTO concept and is designed to simplify trade by
having WTO members accept, where feasible, the technical regulations and conformity
assessment procedures of other trading partners.
Law on Animal Health
ATAR supported MAIL’s Animal Health Directorate in conducting roundtables,
seminars, and training sessions to educate stakeholders on the Law on Animal Health
and Veterinary Public Health; risk analysis and sanitary measures for imported animals
and animal products; and administrative procedures for the veterinary authority, disease
surveillance, and disease prevention and control. ATAR also facilitated a three-day
training for 22 veterinary inspectors from Kabul and the provinces on the WTO’s
Sanitary and Phytosanitary Agreement, the Law on Animal Health, and procedures that
support the Regulation on Import and Export of Animals, Commodities, and Controlled
Articles. Finally, ATAR drafted and submitted to MAIL a 60-page set of guidelines for
establishing and operating small- and medium-scale poultry slaughter facilities.
Law on Plant Protection and Quarantine
ATAR conducted training for MAIL’s Plant Protection and Quarantine Department
(PPQD) on conducting pest risk assessments (PRAs) to support the implementation of
the Law on Plant Protection and Quarantine. PRAs help to identify risks in imported
commodities, thereby guarding against the accidental import of pests harmful to
Afghanistan's agriculture. With ATAR’s assistance, the PPQD developed a final list of
regulated pests during an on-the-job training session. ATAR also drafted an institutional
proposal accepted by the PPQD for establishing three PRA units that support the Law
on Plant Protection and Quarantine. In addition, ATAR worked with the PPQD to
revise standard operating procedures for Afghanistan’s quarantine system in accordance
with standards recommended by the IPPC.
Government Laboratories
ATAR worked with the MOPH Food Safety Laboratory and the MAIL Veterinary
Laboratory to prepare them for eventual International Organization for Standardization
(ISO) 17025 certification, which focuses on the certification of testing and calibration
laboratories. In support of this effort, ATAR prepared a 108-page audit questionnaire
AFGHANISTAN TRADE AND REVENUE PROJECT | 19
for the ministries based on an ISO checklist and translated the document into Dari. The
audit, which is an ISO 17025 requirement, will guide the laboratories through a practice
audit that will help staff identify and resolve deficiencies. ATAR held workshops with lab
staff to demonstrate how to conduct an audit and properly record results. In addition,
ATAR assessed MAIL’s veterinary laboratories and MOPH’s food and pharmaceutical
testing laboratories to help prepare the labs for future accreditation with ISO. ATAR’s
assessment covered lab infrastructure, including working space, power, plumbing,
storage, ventilation, and safety; equipment, including available equipment and equipment
needs; standard operating procedures; and proposed organizational charts with current
and recommended personnel.
3.2.C. ANTI-DUMPING, COUNTERVAILING DUTIES, AND SAFEGUARD
REGIMES
While the WTO offers tremendous opportunities for market access, WTO rules still
allow countries to protect their market in exceptional cases. ATAR worked to build the
government of Afghanistan’s capacity to develop WTO-compliant legislation, including
supporting the establishment of a dedicated safeguards unit within MOCI.
Law on Safeguards
The safeguards law allows Afghanistan to impose temporary protection of its market if a
sudden surge of imports of a product causes serious injury (or an imminent threat of
such injury) to a domestic industry. The WTO requires that safeguards cases be
conducted in strict conformity with rules laid down in the WTO Safeguards Agreement.
Afghanistan has no experience in administering safeguards and no institutions in place to
conduct safeguards investigations or prepare and handle safeguards cases. ATAR trained
MOCI’s WTO Unit, ministerial representatives, and the private sector on how to use
safeguard measures to protect the domestic industry against international import
competition. ATAR assisted MOCI to create safeguard investigative procedures, model
forms, and templates for each stage of safeguards proceedings, such as a safeguards
complaint form, investigative questionnaires, disclosure forms, and non-confidential
summary templates.
To ensure long-term support to safeguards, ATAR also provided a strategy paper on the
establishment of a safeguards unit within MOCI to administer the safeguards law once
adopted. The unit will oversee applying the rights and limits of the WTO Safeguards
Agreement. The paper details administrative and office needs, structure, staff as well as
the job and qualification descriptions for each position. The Afghan Civil Service
approved the establishment of this unit, and MOCI is hiring staff.
Laws on Anti-Dumping and Countervailing Duties
In coordination with MOCI, ATAR drafted and translated a model anti-dumping law and
a countervailing law to facilitate Afghanistan’s drafting of national laws to protect its
industries against unfair international trade policies. ATAR assisted with forming and
guiding a legal drafting working group to write national legislation based on the model
laws and delivered relevant training. MOCI shared the drafts with President Ghani,
whose advisor introduced several amendments. ATAR reviewed the proposed
AFGHANISTAN TRADE AND REVENUE PROJECT | 20
amendments and found that many were not compliant with the WTO and notified
MOCI of the inconsistencies by the end of the project.
3.3. BUILDING GOVERNMENT CAPACITY FOR WTO-RELATED FUNCTIONS
Post-accession is equally, if not more, challenging than accession. Throughout
implementation, ATAR worked with MOCI, its WTO Unit, and other relevant
ministries and agencies to build their capacity to not only accede to the WTO but also
to carry out their post-accession responsibilities.
3.3.A. THE WTO UNIT
The WTO Unit under MOCI monitors and advises the Afghanistan government on
implementing its WTO commitments, assisting with communications and notifications to
the WTO, monitoring compliance of other WTO members, and asserting Afghanistan’s
rights when needed. Throughout implementation, ATAR supported the WTO Unit to
fulfill its functions and to transition from accession preparation to managing its post-
accession functions.
WTO Notifications
The primary instrument for ensuring transparency in the multilateral trading system is
through the filing of notifications made by each WTO member and reviewed by the
relevant bodies of the WTO. WTO agreements require governments to notify other
members, through the WTO Secretariat, of changes in the member country’s foreign
trade regime and proposed measures that may have a significant effect on other
members’ trade and that are
not based on relevant
international standards.
MOCI submitted 12 of 13
notifications required as of the
accession date to the WTO
and two additional notifications
(see box). ATAR provided
guidance on compiling the
information, building on WTO
Secretariat guidelines and
analysis of notifications
prepared by other WTO
members. ATAR, in
partnership with MOCI,
organized training for public-
and private-sector members on
WTO notifications.
The remaining 13th notification
regards changes to duties, taxes, fees, and charges applied
ATAR-Supported WTO Notifications
With ATAR support, MOCI and other relevant ministries
prepared 13 notifications as requested in the WTO accession
package and due on the date of Afghanistan’s WTO accession.
ATAR also supported a 14th notification on agricultural subsidies
that was not required on the date of accession but that
Afghanistan submitted at an earlier-than-expected date.
These notifications included:
1) Notification of state trading enterprises
2) Notification on import licensing procedures
3) Notification on quantitative restriction 4) Notification on rules of origin of Afghanistan
5) Notification of Law on Safeguards
6) Any changes from November 2015 through May 2016 to
duties, taxes, fees, and charges applied to exports from what was
in Afghanistan’s Draft Working Party report
7) New industrial subsidies to be notified pursuant to Article 25
of the WTO Subsidies and Countervailing Measures (reported
before as having none)
8) Notification of existing technical regulations
9) General Agreements on Trade in Services enquiry point
10) Notification of work on standardization activities
11) Notification of existing sanitary and phytosanitary measures
12) Notification of any preferential trade agreements
13) Any updates to the Working Party section on privatization
14) Information to be provided on domestic support and export
subsidies
AFGHANISTAN TRADE AND REVENUE PROJECT | 21
to exports from Afghanistan’s Draft Working Party report. Afghanistan will submit this
notification once it publishes a new schedule of duties in line with its WTO
commitment. To this end, ATAR prepared several scenarios for the Ministry of Finance
and ACD detailing the expected impact of WTO obligations to decrease tariff rates on
certain goods (657 tariff lines). ATAR also prepared scenarios detailing the impact of
potential increased tariff rates to compensate for revenue loss from lowered tariffs on
other goods. ATAR proposed about 1,700 tariff lines for increasing tariff rates. With
ATAR’s support, in October 2016, the Tariff Committee agreed on the new tariff
schedules for import and export duties. Upon the minister of finance’s approval, which
was still pending at the end of ATAR, Afghanistan will publish this new tariff schedule on
official websites and notify the WTO.
WTO Post-Accession Strategy
In September 2016, ATAR assisted with developing a draft post-accession strategy
framework for ministries to discuss and a needs assessment for establishing the Afghan
WTO Representative Office in Geneva. Additionally, ATAR assisted with preparing a
draft resolution for establishing an inter-ministerial trade facilitation commission to
implement the WTO TFA’s Article 3, which concerns a National Trade Facilitation
Committee (NTFC). ATAR also proposed a new structure and staffing for the WTO
Unit to handle post-accession matters, including notifications, market access, dispute
settlement, compliance, coordination, and public relations.
After President Ghani established the WTO Inter-Ministerial Committee in December
2016, it held its first meeting on January 3, 2017, which MOCI organized with support
from ATAR. Meeting attendees discussed fulfilling WTO commitments. After considering comments and recommendations from various ministries, Afghanistan
finalized its WTO post-accession strategy and the High Economic Council approved the
strategy in principle on February 12, 2017. Subsequently, MOCI prepared a consolidated
action plan outlining the ministries’ requirements to implement the strategy.
WTO Trade Facilitation Agreement
ATAR coordinated with the International Trade Centre (ITC) to update and finalize a
WTO TFA compliance assessment to use it as the basis for an action plan and
notifications to the WTO. As a signatory to the WTO TFA, Afghanistan is required to
notify the WTO on certain categories: Category A are TFA provisions with which Afghanistan is already compliant; Category B are TFA provisions with which Afghanistan
is not compliant but can implement on its own; and Category C are TFA provisions with
which Afghanistan is not compliant but requires technical assistance and financial
support from WTO members.
With ATAR support, the WTO Inter-Ministerial Technical Committee and the WTO
Inter-Ministerial Committee met in July 2017 to discuss the WTO TFA and to compile
the country’s notification of commitments under the agreement. More than 20
representatives from entities such as the MOCI, MOPH, ACD, Afghanistan National
Standards Authority (ANSA), and Afghanistan Chamber of Commerce and Industry
(ACCI) reviewed the TFA rules and discussed their implementation. Participants placed
AFGHANISTAN TRADE AND REVENUE PROJECT | 22
21 rules in Category A, 21 in Category B, and 12 in Category C. The Afghan
government has additional time to implement Category B commitments and can request
support and capacity building for Category C commitments. The technical committee
presented the categorization to the WTO Inter-Ministerial Committee, which provided
its endorsement. MOCI will finalize the notification of the categories and send them to
the WTO Secretariat by February 2018.
Enquiry and Notification Points
As part of its accession to the WTO, Afghanistan was obliged to establish national
notification and enquiry points that will enable the country to notify WTO members of
changes in technical barriers to trade (TBT) and SPS measures and to respond to
requests for information on such measures. To support this effort, ATAR prepared and
shared with MOCI WTO-related institutional recommendations for establishing an
enquiry point on services. ATAR’s recommendations covered organizational structure,
staffing, functions, general procedures, and information technology needs for the enquiry
point. In 2014, ATAR supported ANSA in drafting a procedure for coordination and
cooperation between ANSA and other government entities to enable the country to
notify WTO members of changes in measures related to TBT and to respond to
questions from WTO members on Afghan standards, technical regulations, and
conformity assessment procedures. For SPS, ATAR assisted MAIL with designing the
organizational structure for a single SPS enquiry and notification point to inform WTO
members of changes in SPS measures and to respond to requests for information on
such measures. MAIL and MOPH will support the enquiry and notification of all SPS
measures. To support coordination, ATAR drafted a memorandum of understanding,
which MOCI and MOPH signed in October 2016 and MAIL signed in November 2016.
At the third WTO Inter-Ministerial Technical Committee at MOCI in April 2017, ATAR
prepared a concept note detailing the obligations of Afghanistan regarding enquiry points
in the four areas where WTO agreements require members to set up such entities (i.e.,
TBT, SPS, trade in services, and trade facilitation). This includes the interaction between
MOCI and the existing TBT and SPS enquiry points set up at ANSA and MAIL, and the
coordinating role of a national enquiry and notification point to streamline the
preparation and submission of WTO notifications. ATAR presented the WTO
Notifications Manual and explained how to prepare notifications with the use of relevant
formats. The presentations covered the following areas: quantitative restrictions, import
licensing procedures, state trading enterprises, rules of origin, regional trade
agreements, anti-dumping, safeguards, subsidies and countervailing measures, trade in
services, intellectual property, TBT, SPS measures, and privatization. ATAR also
presented a calendar listing the timeframe of Afghanistan’s notifications for the 2017 to
2020 period covering all regular notifications in the areas listed above, as well as the
actions that would trigger ad hoc notifications (e.g., the adoption of a new anti-dumping
law). In addition to explaining the content and formats of the different notifications, the
training highlighted the importance of coordination and cooperation among relevant
ministries and agencies under MOCI’s guidance for the collection of the necessary
information and preparation of the notifications.
AFGHANISTAN TRADE AND REVENUE PROJECT | 23
3.3.B. AFGHAN NATIONAL STANDARDS AUTHORITY
A lack of technical capacity and laboratory facilities capable of testing and certifying
Afghan products in accordance with international standards prevents Afghanistan from
expanding into regional markets. Modernizing and building standards and certification
capacity is crucial for increasing export opportunities and for Afghanistan’s
development. In support of this effort, ATAR worked with ANSA, which is the key
player in developing and implementing standards, to ensure quality goods were
exported from and imported into Afghanistan.
ISO Membership
With the support of TAFA and subsequently ATAR, ANSA became a full-fledged
member of ISO in July 2014. As a new ISO member, Afghanistan gained access to
standards agreed upon by ISO member countries, which represent 90 percent of the
world’s gross national income. ISO standards are recognized worldwide and are so vital
to facilitating global trade that the WTO uses them to set rules among its members.
ATAR also assisted ANSA with establishing five ISO “mirror” committees that will
develop national sector-specific standards based on ISO principles. The mirror
committees were established in the following sectors: petroleum products and
lubricants; food products; textiles; gas cylinders; and concrete, reinforced concrete, and
pre-stressed concrete.
In October 2016, with ATAR support, ANSA submitted its notification of acceptance of
the “Code of Good Practice for the Preparation, Adoption and Application of
Standards” to the joint ISO/ International Electrotechnical Commission Information
Centre. The code is presented in Annex 3 of the WTO’s TBT Agreement and requires
all standardizing bodies that have accepted its terms to publish their work programs at
least once every six months. This code will bring more transparency to Afghan
standards.
Certification
ATAR assisted ANSA with developing a map for establishing a certification unit and with
forming procedures, standard guidelines, and certification schemes. ATAR also
supported ANSA in developing fee procedures and structures for the unit and in
creating a conformity assessment mark. Additionally, ATAR assisted ANSA with
translating relevant ISO manuals and guides for conformity assessment and with
developing conformity assessment documentation based on ISO guidelines. ATAR also
trained ANSA staff on conformity assessment and certification as well as provided
recommendations on training auditors and leading audits.
ATAR’s capacity building through training extended beyond ANSA, as the project held
training sessions for MAIL and MOPH staff on conducting internal audits, recognizing
operational gaps, and becoming acquainted with necessary standard operating
procedures and other essential ISO requirements. ATAR developed the standard
operating procedures along with all the necessary tools to collect data and help
laboratory staff identify challenges and implement solutions.
AFGHANISTAN TRADE AND REVENUE PROJECT | 24
Training and Information Center
In 2014, ATAR supported ANSA to establish a standards training and information
center with the role of building the capacity and awareness of ministries, state bodies,
and the private sector about standardization and certification. ATAR assisted ANSA
with developing a syllabus and training materials and with revising existing training
material for the planned center. Topics included the code of good practice for
development, preparation, and adoption of standards; quality infrastructure for
standardization and conformity assessment; conformity assessment principles; product
certification; management system certification; food management system certification
and procedures; and requirements and procedures for testing laboratories. In addition,
ATAR delivered five seminars to build the capacity of potential trainers and facilitated
participation in a training program in India for two ANSA staff. ATAR also supported
ANSA in its acquisition of 31 international standards.
Laboratory Analysis
ATAR drafted a gap analysis for a food testing laboratory with ANSA. This comprised a
budget and a list of urgent laboratory needs, including the most necessary infrastructure
fixes, essential equipment and supplies, and staff training. ATAR also prepared a
comprehensive list of long-term infrastructure, equipment and supplies, and staff training
requirements.
ATAR also shared a work plan for the ANSA food testing facility that included major
milestones in the ISO accreditation process. The work plan provided organizational
charts for ANSA and the food laboratory, including job descriptions and requirements;
document control for writing and updating standard operating procedures; a description
of how lab work may be subcontracted to other laboratories within Afghanistan or
abroad; and plans for different types of training that may be provided by the food
laboratory. ATAR also drafted standard operating procedures based on international
standards for specific product tests as well as procedures for a quality manual in
accordance with ISO. This documentation is necessary for ISO accreditation of the
laboratory.
At the request of ANSA, ATAR completed a needs assessment for establishing a
National Metrology Institute in Afghanistan in 2015 and prepared a draft model law on
legal metrology that covered legal units of measurement. ATAR shared the package with ANSA for consideration and encouraged the formation of a working group to draft
Afghan legislation based on the model law.
3.3.C. TRADE POLICY ANALYSIS UNIT
MOCI’s Trade Policy Analysis Unit (TPAU) aims to support the deepening and
broadening of Afghanistan’s regional integration as well as the formulation of sound
trade policy through analysis of trade data, such as imports and exports. ATAR assisted
and guided TPAU to prepare an annual trade and tariff policy analysis for 2014 and 2015.
The analysis contained a description of the economic situation, trade with other
countries, and nearly 50 tables with information about imports, exports, and transit by
AFGHANISTAN TRADE AND REVENUE PROJECT | 25
country and product. ATAR supported TPAU in updating MOCI’s database covering the
first half of 2016.
This on-the-job training was complemented by
practical exercises in developing economic
models, as well as 30 interactive lectures on
economic theory, application of trade-related
economic policies, and the impact of sound
policies on economic development. At the end of
each lecture, participants examined case studies
as a practical application of economic policy. To
build further capacity in policy analysis, ATAR
trained TPAU and other MOCI departments that
oversee bilateral and regional trade agreements
to analyze sensitive products and reduce the South Asian Free Trade Area (SAFTA) agreement
sensitive list. Sensitive lists are products of special
interest to SAFTA member countries and are
exempt from low SAFTA tariffs (see Component
2, for further information). ATAR assisted the
TPAU with involving students from Kabul
University, Kardan University, Bakhter University,
and Dunya University as well as the Regional
Strategic Study Center think tank in TPAU’s work. With TPAU, ATAR held 10 trade
policy analysis seminars targeting the four universities, including select professors and
students, and six trade policy review seminars for the Regional Strategic Study Center.
ATAR helped TPAU with designing a general equilibrium model based on an input and
output table for Afghanistan and combining three partial equilibrium models. ATAR
provided training and presentations for the government, students, and the private sector
to demonstrate how they can use economic models to estimate the impact of WTO
accession on Afghanistan’s economy. Other policy research and analysis were provided
by TPAU in support of the GIRoA efforts include analyzing agricultural and industrial
production for the purpose of tariff policy evaluation; analysis of tariff schedules and
tariff rates of neighboring countries; and analyzing the correlation between trade, tariff
and revenue collected by ACD with customs duties and other taxes.
3.3.D. CENTRAL STATISTICS ORGANIZATION
To provide Afghanistan with reliable trade-related data for policy formulation and the
private sector with reliable statistics for making sound business decisions, ATAR
supported ACD and the Central Statistics Organization (CSO) to harmonize trade-
related data between the two organizations. With guidance and support from ATAR,
ACD and CSO signed a memorandum of understanding in March 2014 to promote
cooperation in import and export statistics for Afghanistan. According to the
memorandum, CSO will receive information on import and export statistics from ACD
monthly (within two weeks after the end of each month) and will process this
SIMULATION RESULTS FROM
ATAR-SUPPORTED ECONOMIC
MODELS
Simulation results showed Afghanistan’s
overall economy should strengthen from
WTO accession. The estimated impact of
WTO accession is summarized below.
• Exports will increase by $65 million to
countries not belonging to the South
Asian Free Trade Area within the
next three to five years.
• WTO accession will lead to additional
growth of 1.5 percent in gross
domestic product within the next
three to five years.
• Fiscal revenue resulting from imports
will slightly decline, but introducing
new tariffs on some other goods will compensate for possible revenue loss.
• Employment in export industries is
expected to grow by 10 percent (not
including a multiplier effect) in the
next three to five years.
AFGHANISTAN TRADE AND REVENUE PROJECT | 26
information in accordance with its reporting structure. ATAR provided two computers
and one scanner to CSO to handle ACD data and trained CSO staff on ACD’s data
structure.
This initiative was complemented by ATAR-sponsored roundtables to identify the
causes of data discrepancies and by training to reduce them. Discrepancies in trade
statistics during the project’s first year were reduced from roughly 30 percent to
roughly 15 percent. ATAR also provided ACD staff with on-the-job training in
identifying the top 200 revenue-generating products for inclusion in the customs
valuation database, including products with seasonal effects on revenue. Training
participants also studied revenue gaps for four products (sugar, cooking oil, apples, and
cement). In addition, ATAR, with the participation of a CSO representative, delivered
six seminars to the MAIL statistics team on the introduction of statistics methods.
AFGHANISTAN TRADE AND REVENUE PROJECT | 27
COMPONENT 2: FACILITATE
ENHANCED ACCESS
TO REGIONAL MARKETS
By supporting Afghanistan’s accession to the WTO through Component 1, ATAR
sought to increase the country’s integration into the global economy. Under
Component 2, ATAR worked to increase regional integration through trade
agreements, enhanced economic corridors governance, reformed customs clearance
procedures, and strengthen private sector linkages throughout South and Central Asia.
To this end, the project worked both at the regional level and on country-specific initiatives to increase trade flows.
1. CROSS-CUTTING ACTIVITIES TO ENHANCE REGIONAL TRADE
The need for greater regional cooperation is critical for Afghanistan’s future. To achieve
this objective, ATAR implemented numerous pan-regional activities to strengthen trade
agreements, facilitate Afghan exports, and create linkages between businesses.
1.1. GLOBAL TRADE AND TRANSIT AGREEMENTS
To help create a stable and transparent trading environment, ATAR assisted Afghanistan
and other Central Asian governments to meet international standards in trade, customs,
and transit.
WTO Trade Facilitation Agreement
Afghanistan ratified the WTO TFA immediately upon acceding to the WTO in July 2016.
The TFA presents a framework for promoting regional reforms to facilitate trade,
reduce corruption, improve transparency and private-sector participation, and
strengthen transit rights. By cutting red tape and harmonizing processes and standards,
the TFA is expected to reduce the costs of trade by 14.3 percent on average, with less
developed countries expected to achieve even greater savings. For this reason, ATAR
worked with the two other WTO member states under purview — the Kyrgyz
Republic and Tajikistan — to promote the ratification of the TFA and their adoption of
its provisions. The TFA entered into force in February 2017, following ratification by
two-thirds of the WTO’s member states, including Afghanistan and the Kyrgyz Republic.
In the Kyrgyz Republic, ATAR worked along multiple fronts to promote the ratification
of the WTO TFA, and on December 6, 2016, Kyrgyz Republic’s ambassador to the
WTO submitted the country’s instrument of acceptance to the WTO’s director
general. To reach this milestone, the Kyrgyz Ministry of Economy established a Trade
Facilitation working group with ATAR support. The working group held its first WTO
TFA working group meeting in July 2015. To facilitate the ratification of the WTO TFA, ATAR assisted with translating the WTO TFA into Kyrgyz and Russian. The project sent
AFGHANISTAN TRADE AND REVENUE PROJECT | 28
translations to the TFA working group and the Ministry of Economy, and the agreement
was placed on a Kyrgyz trade information website (http://www.trade.kg). In late 2015,
the TFA working group presented an action plan, prepared with ATAR’s support, to the
Ministry of Economy. The ministry presented the plan to Parliament and requested
ATAR’s assistance in conducting a regulatory reform impact analysis, necessary for
Kyrgyz Republic’s ratification of the TFA, which ATAR completed and translated into
Russian and Kyrgyz.
On November 22, 2016, the Kyrgyz president signed the ratification of the WTO TFA.
Following ratification, ATAR participated in the WTO TFA working group to draft the
WTO TFA Action Plan. ATAR included several points on creating an Authorized
Economic Operator (AEO) program, a key provision of the TFA, and helped to address
disagreements between state bodies and the private sector. After line ministries
approved the action plan, the working group sent the final version for governmental
approval. In addition, the working group completed drafting the Regulation on National Committee on Trade Facilitation (NCTF). Establishing an NCTF to facilitate domestic
coordination among agencies and to implement the TFA is a binding obligation under
the agreement.
In Tajikistan, ATAR worked with the Ministry of Economic Development and Trade
(MEDT) and donors on the draft terms of reference for the establishment of the
Coordinating Committee for Trade Facilitation (CCTF), which will perform the required
WTO TFA functions; a draft legal action plan for the WTO TFA; and a draft action plan
for Revised Kyoto Convention (RKC) compliance. In July 2016, ATAR held a workshop
with MEDT, Tajik customs, other government agencies, private-sector members, and
donors to discuss the objectives and structure for the CCTF, which must be established
to fulfill the WTO TFA.
ATAR held a follow-up workshop in August 2016 to draft rules to attract participation
of enterprises and organizations related to foreign trade and services in the work of
CCTF as well as to propose rotation to ensure representation of sectoral priorities. In
October 2016, ATAR partnered with the International Finance Corporation, Deutsche
Gesellschaft für Internationale Zusammenarbeit (GIZ), and the National Association of
Business Women of Tajikistan on a roundtable in Khujand. The meeting enabled
discussion of CCTF objectives and structure, participation of enterprises and
organizations in the work of CCTF, and the rules of rotation.
WCO Revised Kyoto Convention
The World Customs Organization (WCO) Council adopted the RKC as the blueprint
for modern and efficient customs procedures in the 21st century. The RKC entered
into force in February 2006, and, once implemented widely, it will provide international
commerce with the predictability and efficiency that modern trade requires. The RKC
elaborates several key principles, including transparency and predictability of customs
actions, standardization and simplification of the goods declaration and supporting
documents, simplified procedures for authorized persons, maximum use of information
technology, minimum necessary customs control to ensure compliance with regulations,
AFGHANISTAN TRADE AND REVENUE PROJECT | 29
use of risk management and audit-based controls, and coordinated interventions with
other border agencies There are currently 111 contracting parties to the WCO RKC,
although none of the countries that ATAR worked in have ratified the convention.
Afghanistan hopes to ratify the RKC by June 2018, and ATAR has provided support in
multiple areas to help it reach that goal. The project developed a gap analysis and
strategic plan for accession that was presented to the minister of finance and President
Ghani in July 2017. At the advice of the project, ACD’s director general decided to
establish a formal RKC working group, which started the initial work on the RKC
accession preparation process. Because Afghanistan’s current customs legislation is not
fully compliant with the RKC, ATAR also supported drafting a new law on customs that
would be 100 percent compliant with the RKC and structured in accordance with
international best practices and provide clear guidance to traders and customs officials.
The draft of the new customs law was completed and given to the ACD in November
2017.
In the Kyrgyz Republic, ATAR supported an assessment of the country’s laws and
procedures against the WCO RKC. In 2016, ATAR translated the national Kyrgyz
Customs Code and related customs regulations into English and analyzed Kyrgyz
customs documents to determine if they aligned with the RKC. After the assessment
was completed and translated into Russian, ATAR submitted it to authorities and
promoted resolution of some of the key trade facilitation issues falling within ATAR’s
scope, such as those related to risk management and post-clearance audit. In April 2017,
ATAR participated in a RKC conference held by Asian Development Bank with the
participation of the Ministry of Economy and customs department. The participants
stressed the importance of the RKC for the Kyrgyz Republic and determined the
necessary steps to join the convention.
Tajikistan reconfirmed its commitment to ratify the WCO RKC in October 2015. To do
so would require Tajikistan to improve its customs procedures to achieve compliance.
ATAR conducted several activities with Tajik customs to achieve compliance in risk
management and post clearance audit (PCA) functions, development and awareness of
an AEO concept with customs and the private sector, and a review of the operations
support system model implemented at the border crossing posts. Further details on
ATAR’s work in these areas are provided in Section 2.3 below.
In Turkmenistan, ATAR analyzed the customs code of Turkmenistan for conformity
with WCO RKC and customs-relevant WTO agreements, including the General
Agreement on Tariffs and Trade 1994, customs valuation, and rules of origin in 2014.
Based on available information, ATAR also performed a preliminary conformity
assessment of Turkmenistan’s foreign trade regime with the WTO TFA.
ATAR translated the two assessments and shared the Russian versions with
USAID/Turkmenistan. With the support of ATAR, USAID submitted a cover letter
transmitting the analyses to the Ministry of Foreign Affairs of Turkmenistan with an offer
AFGHANISTAN TRADE AND REVENUE PROJECT | 30
of further assistance to the State Turkmen Customs Service to help it align with the
RKC and WTO customs-related agreements.
Transports Internationaux Routiers Convention
The Convention on International Transport of Goods Under Cover of TIR Carnets (TIR
Convention Transport Internationaux Routiers) is a multilateral treaty designed to
simplify the movement of cargo across borders of member states. Afghanistan, the
Kyrgyz Republic, Tajikistan, and Turkmenistan are all contracting parties to the TIR
convention. Furthermore, ATAR promoted TIR in Pakistan and India and the two
countries became contracting parties to the TIR convention in 2016 and 2017,
respectively. Throughout implementation, ATAR worked to increase understanding and
use of the TIR system, including the TIR carnet, which is a transit document used to
prove the existence of the international guarantee for duties and taxes for goods
transported under the system.
Although Afghanistan became a TIR member in 1975, multiple regime changes and
decades of conflict have prevented its implementation. In September 2013, TIR was
reactivated in Afghanistan. To promote greater awareness of the TIR system in
Afghanistan, ATAR held a National TIR Seminar in 2014, multiple workshops throughout
2015 and 2016, and a National TIR Conference in 2017. These events were attended by
hundreds of participants, including representatives from Ministry of Transportation and
Civil Aviation (MOTCA), ACD, ACCI, the Ministry of Foreign Affairs (MOFA), the
Association of Afghanistan Freight Forwarders Companies, and Afghanistan’s traffic
police, border police, exporters, transport operators, and logistics representatives.
Topics included the TIR system, green lanes/express lanes for TIR operators, benefits to transport operators, and the TIR carnet application procedure, specifically how TIR can
simplify international shipments to Central Asia. ATAR distributed copies of the TIR
Handbook for Drivers, which the project developed and translated into Dari during
many of these events.
With the Afghan government, ATAR worked with the National TIR Technical
Committee to finalize a TIR regulation, which includes duties and responsibilities of each
TIR line organization, such as ACD, MOTCA, and border police, and the TIR National
and Technical Committees. The TIR regulation was approved in December 2016.
As customs plays an important role in verifying TIR documents, ATAR evaluated ACD’s
workflow and information systems to determine its integration and compliance with
TIR. In 2015, ACD finalized its TIR procedure with ATAR’s support. The procedure
included a TIR glossary and duties and responsibilities of departure, en route, and
destination customs houses. With the director of operations and ACD’s legal
department, ATAR revised TIR Customs Transit Procedure to align with the WTO TFA
and RKC. In January 2017, ATAR reviewed and finalized the TIR Procedure. In addition,
ATAR assisted the ACD with developing the Dari version of the TIR carnet guidelines,
which was finalized and sent to ACD’s director of operations.
AFGHANISTAN TRADE AND REVENUE PROJECT | 31
To help facilitate trade between Afghanistan and South Asia, ATAR supported India and
Pakistan’s efforts to accede to the TIR Convention. In November 2014, ATAR
supported the International Road Transport Union (IRU) TIR National Workshops in
Karachi and Islamabad. ATAR sponsored ACD’s head of the Transit Department to
speak at the workshops. These workshops described the TIR reactivation in
Afghanistan, which served as a useful case study for Pakistan given the proximity and
cultural similarity between the two countries. ATAR identified key issues, obstacles, and
counter-measures, as well as offered recommendations on how to build capacity for
transport operators in the event of accession. Throughout 2015, ATAR advised the
Pakistan National Committee of the International Chamber of Commerce (PNC-ICC)
TIR Commission. Based on accession requirements and procedures as well as best
practices and experiences from other countries, ATAR developed an accession roadmap
for the TIR Commission. These efforts led to Pakistan’s formal application to the United
Nations to join the TIR Convention in July 2015. Pakistan became a contracting party to
TIR in January 2016.
In India, ATAR collaborated with IRU to support that country’s accession to TIR. In July
2015, ATAR conducted a fact-finding mission in India, completed an analysis, and sent
the report to IRU. India’s entry means all the countries in South and Central Asia are
now contracting parties of the TIR Convention, thanks in part to ATAR’s support. In
principle, this will permit more efficient movement of cargo by road. Afghanistan can
capitalize on this development and leverage India’s accession to gain more favorable
terms under APTTA. In March 2017, India’s Union Cabinet, chaired by the prime
minister, approved the country’s accession to the TIR Convention.
In Tajikistan, ATAR promoted proper implementation of the TIR Convention to
facilitate transit trade among countries in the region, particularly Afghanistan. ATAR
participated in a regional TIR seminar in May 2015 with representatives from customs
administrations of Azerbaijan, Turkey, and Tajikistan, as well as representatives of
ABBAT, the Tajik national transport association authorized to issue TIR carnets. The
objective of the seminar was to analyze the status of implementation of the TIR
Convention.
On June 28, 2017, ATAR, the International Finance Corporation, and the U.N.
Conference on Trade and Development facilitated a bilateral customs meeting between
the customs authorities of Tajikistan and Afghanistan at the Tajikistan Customs Service
in Dushanbe, Tajikistan. ATAR presented on the concept and implementation of TIR
green lanes, and participants discussed the TIR carnet, TIR green corridor, and bilateral
cooperation in the field of electronic data exchange between the customs authorities of
the two countries. Following the meeting, the Afghan delegation visited the Association
of International Road Carriers in the Republic of Tajikistan, where both parties
acknowledged that visa restriction is a barrier to greater adoption of TIR. The officials
agreed they should work toward a simplified mechanism for visa application and
issuance. ACD also noted that substantial progress in TIR implementation was achieved
after the official re-activation in September 2013. While there have been many inward transit shipments, the number of outward transit movements has been low due to the
AFGHANISTAN TRADE AND REVENUE PROJECT | 32
small number of approved TIR carnet holders in Afghanistan. The creation of TIR green
lanes is expected to encourage more Afghan transport operators to apply for TIR
qualification.
1.2 REGIONAL TRADE AND TRANSIT AGREEMENTS
As a land-locked country, Afghanistan is heavily dependent on its neighbors for
international trade. However, overland transport through these countries is unreliable
and subject to unpredictable trade barriers, security issues, and political motives.
Building on the work of the TAFA project, ATAR sought to reduce trade barriers and
increase the predictability in the trade environment by supporting bilateral, trilateral,
and multilateral trade agreements in Central and South Asia.
Afghanistan Pakistan Transit Trade Agreement
Transit through Pakistan is
critical for Afghan traders
seeking to reach the large
Indian market. However,
Pakistan has closed its
border with Afghanistan
multiple times, sometimes
for more than a month. Even
in normal times, Afghan
companies face difficulties in
cross-border export via
Pakistan, encountering
multiple police checkpoints,
requests for unofficial fees,
and high rates of inspections
and examinations leading to
long dwell times and costly
demurrage charges. To help
address these challenges, the
Afghan and Pakistani
governments signed Afghanistan Pakistan Transit
Trade Agreement (APTTA)
on October 28, 2010, and
the Afghan government
ratified the agreement on
January 7, 2011. APTTA replaced an outdated 1965 transit agreement and updated and
improved the joint transit system to reflect current economic conditions, infrastructure,
technology, and transport practices. The Afghanistan Pakistan Transit Trade
Coordination Authority (APTTCA) was designed to allow the Pakistani and Afghan
governments to resolve issues on APTTA and oversee its implementation.
EXHIBIT 6. MAP OF APTTA ROUTES
AFGHANISTAN TRADE AND REVENUE PROJECT | 33
ATAR supported the Afghan government in APTTA’s implementation, working with
Afghan officials to identify and resolve transit trade problems under the agreement. In
January 2015, ATAR supported the Afghan delegation in the fifth meeting of APTTCA in
Islamabad. Leading up to the meeting, ATAR and MOCI held a policy roundtable on
Afghanistan’s transit and trade issues with Pakistan. ATAR also queried Afghan traders
and business associations on their challenges transiting goods through Pakistan and
prepared briefing papers and talking points for the APTTCA meeting. One of the major
outcomes of the APTTCA meeting was an agreement that Afghan trucks with a letter of
guarantee could transit through Pakistan to Wagah, a border crossing point between
India and Pakistan, and to Pakistani seaports (see Exhibit 6 for map of APTTA routes).
The letter of guarantee, issued by Afghanistan’s MOTCA, would replace costly bank
guarantees required for trucks under APTTA.
ATAR followed up on the APTTCA meeting with MOCI’s director general of planning
and policy and MOTCA officials to discuss technical assistance to issue letters of guarantee. After receiving input from the officials, ATAR designed the letters of
guarantee, printed 200 letters for distribution by MOTCA, and provided training to
MOTCA staff on implementing the letters. Although the mechanism of a letter of
guarantee became operational and honored by Pakistan, most Afghan transport
companies did not find that delivering goods to Wagah profitable, as they could not
transport any Indian goods on the return trip.
The following year, ATAR provided similar support to the Afghan government’s
participation in the sixth APTTCA meeting held in February 2016. ATAR compiled
issues and updated action points and assisted MOCI with drafting a letter that
emphasized that Afghan transit cargo should get national treatment, as agreed in the
previous APTTCA meeting. ATAR also assisted MOCI with preparing draft amendments
to APTTA to consider WTO and the Transports Internationaux Routiers (TIR)
Convention, which entered into force in Pakistan in January 2016. During the meeting,
Pakistani and Afghan officials agreed, in accordance with APTTA’s Article 50, that the
agreement will be amended to facilitate transit trade. In addition, the Pakistani
delegation promised to provide Afghanistan access to Wagah. Pakistan, in turn, would
have access to Tajikistan through Afghanistan.
Despite the promise of these efforts, the complex political and economic relationship
between both countries continues to thwart substantial progress. Pakistan has not
implemented APTTA properly and has failed to deliver on critical measures that were
agreed to in the APTTCA meetings. Furthermore, Pakistan continues to implement
additional restrictive measures at their borders that delay clearance and transit of
Afghan goods. Accordingly, the majority of transit has been diverted via Iran.
Pakistan Afghanistan Tajikistan Transit Trade Agreement
At the request of MOCI, ATAT worked with the ministry to develop a proposal to
extend APTTA to Tajikistan, creating the Pakistan Afghanistan Tajikistan Transit Trade
Agreement (PATTTA). This would provide Pakistan and Afghanistan with access to
Central Asian countries and Tajikistan with access to Pakistan’s seaports by way of
AFGHANISTAN TRADE AND REVENUE PROJECT | 34
Afghanistan. PATTTA also would improve APTTA by facilitating trade and reducing
costs.
In Tajikistan, ATAR worked with the Tajik MEDT both to prepare for PATTTA
negotiations and to build private sector awareness and support for PATTTA through
roundtables. The project translated the combined Afghan and Tajik counterproposal to
Pakistan’s proposed APTTA amendments and provided the document to MEDT in April
2014. In addition, ATAR provided guidance, technical support, and clarifications to
MEDT officials and the Tajikistan ambassador to Pakistan prior to bilateral informal
meetings on PATTTA with Afghanistan and Pakistan. Due to this effort, the spring 2014
bilateral negotiation coordination meetings were successful.
On March 9 and 10, 2015, Tajikistan and Afghanistan held bilateral discussions on
PATTTA in Dushanbe. ATAR participated in the meeting and provided guidance and
clarifications to both parties. Subsequently, ATAR assisted with further changes to the PATTTA counterproposal to support agreed-upon items and additional proposals.
Although the Tajik and the Afghan delegations shared commonality in their response to
the Pakistan proposal, they both submitted individual counterproposals.
With ATAR support, Afghanistan, Pakistan, and Tajikistan held two trilateral meetings,
and Afghanistan and Tajikistan held one bilateral meeting to progress the proposed
agreement. Following the fifth APTTCA meeting in January 2015, ATAR supported
Afghan, Tajik, and Pakistani representatives in Islamabad for their first trilateral meeting
regarding the proposed PATTTA. ATAR helped prepare the Afghan delegation to
advance negotiations and draft an agenda, talking points, and materials. ATAR also
supported bilateral negotiations between Afghanistan and Tajikistan in March 2015,
providing logistical and technical support to the Afghan delegation, and supported post-
meeting revisions to the PATTTA to reflect agreed-upon and new proposals. Finally,
ATAR prepared MOCI’s negotiating team in advance of a second trilateral meeting with
Pakistani and Tajik counterparts in April 2015.
Further discussions on PATTTA are anticipated to continue in 2018. The conclusion of
PATTTA is pending Pakistan’s decision to grant greater access to India for Afghanistan,
which will also benefit Tajikistan and its access to India.
Cross Border Transport Agreement
The Cross-Border Transport Agreement-Corridor 5 between Afghanistan, the Kyrgyz
Republic, and Tajikistan is designed to link East Asia with the Middle East and South Asia
through Corridor 5, which connects East Asia to the Arabian Sea through Central Asia.
The corridor is one of the six transport corridors that traverse the CAREC region, as
shown in Exhibit 7. The main objective of the Cross-Border Transport Agreement
(CBTA) is to ease the movement of people, goods, and vehicles across borders.
Vehicles and goods will be able to cross borders faster due to streamlined customs
inspections and reduced requirements to transfer shipments between vehicles.
AFGHANISTAN TRADE AND REVENUE PROJECT | 35
EXHIBIT 7. MAP OF CAREC CBTA-5
Afghanistan signed the accession protocol to join the CBTA with Tajikistan and
Kyrgyzstan at the 10th Ministerial Conference of the Central Asia Regional Economic
Cooperation program (CAREC) held in Baku, Azerbaijan, in November 2011. However,
there were some discrepancies and grammatical issues in the signed English and Russian
versions of CBTA. The three countries agreed to fix the discrepancies and re-sign the
accession protocol with the previous dates. To this end, ATAR facilitated the approval
by the Afghan government, including the Ministry of Transportation and Civil Aviation
(MOTCA), MOFA, and the Council of Ministers, and the signing of Afghanistan’s
protocol of accession by President Karzai in April 2014. Kyrgyz ratification was to
follow, after which Tajikistan could ratify the agreement.
ATAR facilitated the reactivation of the CBTA ratification process in the Kyrgyz
Republic in 2015. ATAR met with the Kyrgyz government to outline the benefits of
ratifying the Afghanistan protocol, and the Ministry of Transport and Communications
launched the process of inter-ministerial approval (required before submission to the
Cabinet of Ministers for approval) by sending a list of endorsements to several ministries
for signature. Unfortunately, following substantial progress toward gaining Kyrgyz
approval on Afghanistan’s protocol in 2015, changes in the Kyrgyz government
hampered the process in 2016. Border disputes between the Kyrgyz Republic and
Tajikistan also contributed to the Kyrgyz Republic’s reluctance to move forward with
the CBTA. In August 2016, the Kyrgyz Ministry of Transport and Communication
AFGHANISTAN TRADE AND REVENUE PROJECT | 36
informed ATAR that the Kyrgyz government stopped efforts to ratify the Afghan
protocol, stating that the government felt there was insufficient support from other
ministries and agencies in light the border dispute.
South Asian Free Trade Area Agreement
ATAR supported Afghanistan in implementing the South Asian Free Trade Area
(SAFTA) Agreement, a regional free trade agreement between Afghanistan, Bangladesh,
Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. The South Asian nations are
among Afghanistan’s most critical trading partners; Pakistan and India alone account for
more than 50 percent of Afghanistan’s exports. The agreement provides Afghan
producers with greater and more consistent access to SAFTA markets and consumers
with greater access to affordable, imported products. Throughout implementation,
ATAR built the capacity of MOCI’s Trade Policy Analysis Unit in analyzing sensitive list
products of special interest to SAFTA member countries that are exempt from low
SAFTA tariffs. Through on-the-job training, ATAR helped MOCI staff to finalize a
revised sensitive list — reducing sensitive tariff lines from 962 to 844 — with the
concurrence of stakeholders, including MOCI, MAIL, the Export Promotion Agency of
Afghanistan (EPAA), ACD, ACCI, and the private sector. Reducing the number of items
on sensitive lists is a step toward greater trade liberalization.
1.3. TRADE PROMOTION
Afghan Commercial Attaché Activities
To promote trade and investment in Afghanistan from neighboring countries, ATAR
provided mentoring and capacity building to the commercial attaches in Afghanistan’s
embassies in the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan. In Bishkek,
ATAR held several sessions with the first secretary of the Afghan embassy, who is the
official in charge of commercial attaché activities. ATAR presented materials on the
trade potential of the Kyrgyz Republic and Afghanistan as well as materials on trade
promotion techniques. In Dushanbe, ATAR conducted a survey of Afghan entrepreneurs
to identify the challenges of operating in Tajikistan and presented the findings at a
roundtable at the Afghan embassy. In addition, ATAR assisted the Afghan commercial
attaché with two roundtables in August 2016 on trade and investment opportunities in
Afghanistan with the Tajik Chamber of Commerce and Industry and the American
Chamber of Commerce in Tajikistan. ATAR also supported the commercial attaché in
Dushanbe with one-on-one training sessions on trade promotion tools and techniques,
including market analysis and research, identification of trade opportunities, promotion
techniques, participation in trade fairs and exhibitions, promotion of public and private
sector linkages, and servicing Afghan business diaspora. In Tashkent, ATAR advised on
ways to cooperate with Afghan businesses and to identify problems facing traders and
possible solutions. ATAR also advised on trade opportunities between Uzbekistan and
Afghanistan and provided a list of goods and products that can be imported from each
country to the other. Finally, in Dushanbe, ATAR researched customs clearance
procedures for importing food products in 2016 at the attaché’s request, among other
activities.
AFGHANISTAN TRADE AND REVENUE PROJECT | 37
Regional Trade Forums
Regional trade forums provide an opportunity for stakeholders from the public, private,
and civil society sectors to address obstacles to trade and potential solutions, to
advance cross-border trade initiatives, or to explore business ventures. Throughout
implementation, ATAR supported Afghan and regional stakeholders to participate in and
take maximum advantage of regional forums.
In 2014, ATAR participated in the U.S.-Central Asian Republics Trade and Investment
Framework Agreement (TIFA) customs working group meeting held in Bishkek with
customs officials from Afghanistan, Kazakhstan, the Kyrgyz Republic, and Tajikistan.
In June 2015, ATAR participated in the TIFA working group meetings organized by the
U.S. Department of Commerce’s Commercial Law Development Program (CLDP) in
Astana, Kazakhstan, on customs, SPS, and TBT. Participants included officials from
customs authorities, ministries, and standardization agencies from Afghanistan,
Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. ATAR delivered two
presentations and supported CLDP in facilitating working group meetings. ATAR held
many meetings with officials from all six countries and shared best practices and
clarifications on trade issues. In addition, ATAR contributed significantly to the trade
policy conference “Expanding Central and South Asia’s Regional Trade” in July 2014 in
Astana, Kazakhstan, organized by USAID’s Macroeconomic Project. In November 2015,
ATAR participated in the EU Border Management Northern Afghanistan (EU-BOMNAF)
Regional Trade and Cooperation Workshop in Dushanbe, Tajikistan, for Afghan and
Tajik government officials and donor representatives. ATAR delivered three
presentations and moderated workshops at the event. ATAR presentations included “Trade Facilitation: WTO and Regional Cooperation,” “Trade and Investment
Opportunities in Afghanistan,” and “Regional Cooperation with the Focus on Border
Management and Cooperation between Afghanistan and Tajikistan.” ATAR also
moderated two workshops on strengthening the relationship between border guards
and customs officials of Afghanistan and Tajikistan and between the countries’ border
agencies as well as measures to strengthen market access, investment, trade potential,
public-sector advocacy, and the logistics capacity of South and Central Asian countries.
From 2014 to 2016, ATAR facilitated the participation of public and private sector
representatives at the Central Asia Trade Forums (CATF), organized by USAID’s
Regional Economic Cooperation (REC) project in Almaty, Kazakhstan. The CATF is the
region’s largest annual gathering of exporters, government officials, small and medium-
sized enterprises (SMEs), business associations, international organizations, trade
promotion agencies, and industry experts from around the world and is designed to
provide an opportunity to analyze the rapidly changing trade environment in Central
Asia and conclude trade deals. In 2015, ATAR brought 24 Afghan businesses and an
Uzbek customs official to the event. ATAR also organized a study tour for six Afghan
participants to a flour mill and food processing facility and organized meetings between
Pakistani and Afghan businesses. Ahead of the 2016 CATF, ATAR organized a business-
to-business event involving 22 Afghan companies, 40 Kazakh companies, and nine Indian
companies. Afghan trader Mitra LTD signed a memorandum of understanding with
AFGHANISTAN TRADE AND REVENUE PROJECT | 38
Kazakh wheat manufacturer Nur Kaz LTD to import $5 million of wheat from
Kazakhstan. An additional $500,000 in potential contracts for fresh fruit, dry fruit, and
saffron were negotiated. ATAR also coordinated with the Regional Economic
Cooperation (REC) project on the design for a Turkmenistan section in CATF. During
the event, ATAR conducted roundtables on opportunities for trade expansion in
Afghanistan and Pakistan and on transport and logistics development, ATAR also met
with Air Astana to explore the feasibility of exporting and importing products between
Kabul and Almaty and Astana by air and the possibility of Air Astana transporting Afghan
products via a third country such as the United Arab Emirates. Finally, ATAR supported
the participation of Afghan commercial attachés in the 2016 CATF, facilitating discussion
among all four commercial attachés and the first secretary of the Afghan Embassy in the
Kyrgyz Republic.
In all of its events, ATAR sought to include stakeholders from Afghanistan, Central Asia,
and South Asia whenever possible to enable them to build business relationships, explore trade opportunities, and build coalitions to address trade and transit problems.
2. COUNTRY-SPECIFIC INITIATIVES TO ENHANCE REGIONAL TRADE
In addition to its regional efforts to promote trade and integration, ATAR also worked
at the country level to promote Afghanistan’s economic interests, to implement trade-
facilitation measures, and to promote trade opportunities for Afghan and regional
businesses.
2.1 AFGHANISTAN
2.1.A. EXPORT AND TRADE PROMOTION
Support to the Export Promotion Agency of Afghanistan
To support the Afghan government in promoting exports, ATAR built the capacity of
the EPAA, the executive agency of MOCI that serves Afghan exporters and helps them
to expand their markets. Given the importance of export promotion, ATAR provided
assistance along multiple fronts during the project’s first two years. To build the EPAA’s
strategic planning capacity, ATAR assisted EPAA with developing an export promotion
plan for 2014, including actions targeting Central Asia, South Asia, the European Union,
and the United States; its 2015 action plan; and six sector-specific strategies targeting
Indian markets. Building on this work, ATAR facilitated the development of the
“National Export Strategy of Afghanistan,” a roadmap for increasing exports across a
10-year period, with MOCI and the EPAA. ATAR guided the writing process, including
gathering input from various ministries and private-sector associations and drafting the
strategy. The document includes 15 areas that range from removing administrative
barriers, infrastructure improvement priorities, export promotion, and women in trade.
To move from planning to action, ATAR worked with EPAA to organize seminars on
reaching new markets, the challenges and opportunities of promoting Afghan exports in
South Asian markets, and trade logistics, among other topics. In addition, to strengthen
traders’ access to finance, ATAR also facilitated a memorandum of understanding
AFGHANISTAN TRADE AND REVENUE PROJECT | 39
between EPAA and the Afghan Rural Finance Company and the Afghanistan International
Bank in April 2015. Under this arrangement, EPAA recommends exporters to these
financial institutions for export credit on easier terms. Together with EPAA and the
USAID Financial Access for Investing in the Development of Afghanistan project, ATAR
organized roundtables in 2015 and 2016 with the private sector to promote available
trade finance products and services. As a result, businessmen and businesswomen began
working with the Financial Access for Investing in the Development of Afghanistan
(FAIDA) project to prepare loan applications that could help them strengthen their
businesses.
Finally, ATAR integrated EPAA into its trade-promotion efforts, including its
preparations for the Domotex, India Stone Mart, and Gulfood trade shows in 2015,
among others. ATAR assisted EPAA with organizing the Afghan pavilion at Expo Milano,
a six-month international exhibition in Milan, Italy, from May 1 to October 31, 2015, to
promote Afghan exports. ATAR supported EPAA’s planning efforts prior to the event and assisted with organizing and running the Afghan Pavilion at the beginning of the
exhibition. EPAA said the pavilion received an estimated 2,000 visitors each day. The
establishment of the Pavilion and its operations were covered by returns from the sale
of Afghan food at the Pavilion.
2.1.B. SUPPORT TO THE PRIVATE SECTOR IN TRADE
Afghan Exporters Club
To increase the private sector voice in trade policy and
to promote Afghan exporters’ interests abroad, in
September 2016, ATAR began to work with interested
Afghan business leaders to establish the Afghan
Exporters Club (AEC). Following meetings with
business leaders and USAID, ATAR supported the formalization of the association, and
the AEC was formally registered at the MOJ in November 2016.
Since AEC’s formal registration, ATAR has worked with the founding members and an
executive officer to develop guiding principles, an organizational structure, and club
bylaws. ATAR also guided the AEC on sustainability and action plans, attracting and
engaging new members, methods for promoting air cargo, and approaches to sharing responsibilities among board members. The club has also established its website
(www.aec.org.af); its Facebook page (www.facebook.com/Afghanistanexportersclub),
which has nearly 2,000 followers; and introductory leaflets explaining the goals and
objectives of the club. With ATAR support, AEC also organized membership outreach
workshops for the carpet and agricultural sectors, which attracted 33 and 86
participants, respectively, as well as for businesses outside Kabul. To date, AEC has
recruited 35 members (three carpet businesses, three handicrafts businesses, four
marble and gemstone businesses, 24 dried fruit exporters, and one organization).
ATAR also provided several trade-related training sessions to AEC members on topics
such as developing export strategies, planning and conducting business trips, creating
AFGHANISTAN TRADE AND REVENUE PROJECT | 40
business partnerships, market research, networking, communication, bargaining, and
business ethics. AEC members also participated at export-related events in Dubai,
Germany, Malaysia, and India.
Women and Youth in Trade
Beginning in 2014, ATAR worked with MOCI and local nongovernmental organizations
Afghan Women’s Business Federation (AWBF) and Leading Entrepreneurs for
Afghanistan’s Development (LEAD) to introduce hundreds of businesswomen to new
markets and economic opportunities. ATAR-supported businesswomen reported an
estimated $15,633,000 in deals at 15 international tradeshows, such as Gulfood, India
Stone Mart, and Made in Afghanistan, and at sales events organized by ATAR in Kabul
ahead of major local and Western holidays.
Beginning in 2016, ATAR conducted four training sessions on business skills,
opportunities, and challenges to build the capacity of businesswomen to market their
products and develop their businesses. A total of 95 women and 15 men attended these
sessions. The training covered preparing for international trade events, accessing foreign
markets, conducting market research, navigating production and export challenges, and
understanding types of export businesses and international customer expectations.
Photo: USAID ATAR Project
Women workers weave handmade carpets at the Afghan Rug and Carpet Company in Kabul. The
company has created 4,500 jobs, primarily for women weavers, and hopes to employ up to 30,000
weavers by 2023. The company’s strategy for growth is based on exports, especially to the United
States. The company’s president, Sayed Abbas, is a founding member of the Afghan Exporters
Club. “The club is helping Afghan manufacturers to produce more, and more standardized,
products for export,” he said.
AFGHANISTAN TRADE AND REVENUE PROJECT | 41
To increase future professionals’ knowledge of international trade and commerce,
ATAR organized six “Youth and Trade” training sessions for 314 university students,
including 98 women and 216 men, together with MOCI, EPAA, and FAIDA. As part of
these sessions, students learned about the benefits of Afghanistan’s WTO accession and
the country’s membership in SAFTA, the application of economic models, the
importance of products and services standardization, international commercial terms
used in commercial transactions, trade barriers and possible solutions, and marketing
methods and opportunities. ATAR also implemented two six-month internship
programs that aimed to provide youth, especially women, with the experience, skills,
and confidence to operate effectively in a professional work environment. Out of 99
interns hired by ATAR, 55 were women. The interns gained valuable professional
experience supporting economic, legal, and translation departments at MOCI, ACD, and
ATAR’s project office. The interns also attended many of the training workshops
offered to ATAR beneficiaries.
2.1.C. PROMOTING AFGHAN EXPORTS THROUGH TRADE EVENTS
ATAR worked with EPAA and Afghanistan’s private sector to support the participation
of hundreds of Afghan traders and exporters in trade events. The traders signed deals
worth $60,646,667at more than 15 high-level international tradeshows held in the UAE,
India, Italy, Germany, and Kazakhstan.
To boost exports and establish a unique Afghan brand, ATAR also organized its own
tradeshows to present a wide range of Afghan products. In 2016, ATAR organized the
“Made in Afghanistan” conference and exhibition in New Delhi, India, in partnership
Photo: USAID ATAR Project
Kanda Fruits, one of Afghanistan’s largest exporters of dried and fresh fruits, participates in the
“Made in Afghanistan” trade show in New Delhi, India, in 2016.
AFGHANISTAN TRADE AND REVENUE PROJECT | 42
with Federation of Indian Chamber of Commerce and Industries, U.N. Women,
Commercial Horticulture and Agricultural Marketing Program (CHAMP), Regional
Agricultural Development Program-South (RADP-S), and FAIDA. A total of 40 Afghan
businessmen and businesswomen displayed fresh fruit, dried fruit, nuts, saffron, precious
stones, marble, carpets, and handicrafts. A total of 130 Indian companies participated in
the event to explore trade opportunities in Afghanistan. Nearly $6 million in business
resulted. Later that year, ATAR organized “Exhibition Afghanistan” in Dubai, where 70
Afghan traders in the carpet, gemstone, fresh fruit, dried fruit and nuts, spices, apparel,
marble, and handicraft sectors engaged with 90 international buyers. Building on this
experience, in September 2017, ATAR collaborated with CHAMP, RADP-S, and
USAID/India to organize the “Passage to Prosperity: India-Afghanistan Trade and
Investment Show,” a major trade event aimed at advancing regional integration by
strengthening economic ties between Afghanistan and India through partnerships. An
estimated 200 Afghan businesses met with more than 950 Indian businesses from 14
sectors and struck approximately $240 million in deals, including $27 million in confirmed contracts.
To prepare for these tradeshows, ATAR trained traders, prepared marketing and
promotional materials, assisted with exporting traders’ samples and goods, and
organized visas and flights. The events raised awareness of Afghanistan’s exports among
international buyers, built the marketing skills of traders, and led to long-term business
contacts for attendees.3 A complete list of these events is in Exhibit 8.
EXHIBIT 8. LIST OF TRADESHOWS ATTENDED BY ATAR-SUPPORTED TRADERS
EVENT PRODUCT TYPE LOCATION DATE SIGNED
DEALS
Gulfood Produce Dubai, United
Arab Emirates
February 23-
27, 2014 $8,000,000
La'Artiagiano Handicrafts Milan, Italy
November 29-
December 8,
2014
$365,000
DOMOTEX Carpets Hanover, Germany
January 17-20, 2015
India Stone Mart Stone and marble Jaipur, India
January 28-
February 1,
2015
Gulfood Produce Dubai, United
Arab Emirates
February 8-12,
2015 $2,300,000
Aahar Produce New Delhi, India March 10-14,
2015 $3,000,000
Expo Milano Spices Milan, Italy May 1-October
31, 2015
Gulfood Dry fruits, nuts, saffron Dubai, United
Arab Emirates
February 21-
25, 2016 $2,800,000
Made in Afghanistan All sectors New Delhi, India July 19-20,
2016 $5,950,000
Central Asia Trade
Forum
Almaty,
Kazakhstan
September 7-8,
2016
3 Figures are as reported by the Afghan traders attending the events.
AFGHANISTAN TRADE AND REVENUE PROJECT | 43
EVENT PRODUCT TYPE LOCATION DATE SIGNED
DEALS
Jewelry and Gem Fair Jewelry New Delhi, India September 22-
28, 2016 $92,099
India International
Trade Fair
Carpets, Dry fruits, nuts,
fresh pomegranate, handicrafts, and jewelry
India October 14-28,
2016 $5,940,000
Exhibition Afghanistan All sectors Dubai, United
Arab Emirates
December 6-7,
2016
DOMOTEX Carpets Hannover,
Germany
January 14-17,
2017 $351,000
India Stone Mart Marble, stones Jaipur, India February 2-5,
2017
Gulfood Dry fruits, nuts, saffron Dubai, United
Arab Emirates
February 26 –
March 2, 2017 $4,519,160
Afghanistan Malaysia
Business Forum
Dried fruit and nuts,
carpets
Kuala Lumpur,
Malaysia
May 11 -
May12, 2017
Passage to Prosperity:
India Afghanistan Trade
and Investment Show
All sectors New Delhi, India September 27-
30, 2017 $27,168,908
India International
Trade Fair
Carpet, marble, and gem
and jewelry sectors New Delhi, India
November 14-
27, 2017 $160,500
DOMOTEX Hanover,
Germany
January 12-15,
2018
TOTAL $60,646,667
Over the course of five years, ATAR assisted 1,060 Afghan firms in building their
capacity to export, exceeding the LOP target of 850. This assistance included market
research, short-term technical assistance to government and/or private-sector
beneficiaries, study tours and international trade fairs/exhibitions, exporter training
sessions, networking and training supported by ATAR.
2.1.D. SUPPORTING AIR TRANSIT OF AFGHAN EXPORTS
Air Cargo Operations and the One-Stop Shop
Afghanistan’s ability to expand its market access is hampered by its landlocked location
and unstable relationship with Pakistan, through which exports travel to India. Traders
using land and sea transportation often encounter unpredictable trade barriers, poor
security, artificial restrictions, and costly transshipping delays. To overcome these
challenges, and in response to President Ghani’s declaration that improving export
performance at Hamid Karzai International Airport was a national priority, in late 2016,
ATAR began meeting with major airlines to explore opportunities for airlifting Afghan
exports. Simultaneously, ATAR began working with MOCI and the Ministry of Economy
to increase the export capacity Hamid Karzai International Airport (HKIA).
The culmination of ATAR’s efforts to facilitate trade through HKIA was the launch of a
one-stop shop (OSS) at the airport in January 2018. The OSS launch was the result of
nearly a year of work with multiple stakeholders in both the public and private sector.
Given the government’s priority on facilitating exports via HKIA, ATAR conducted an
analysis of the steps a trader had to undergo to export products, identifying 29 steps
requiring troublesome visits to different government agencies to obtain certificates and
AFGHANISTAN TRADE AND REVENUE PROJECT | 44
approvals necessary to export the goods. To simplify this process, ATAR worked with
ACD and other stakeholders to develop a new export process map that reduced the
number of steps for exporting products by air from Afghanistan through HKIA from 29
to 10.
Throughout the spring and early summer of 2017, ATAR coordinated with the HKIA
director of customs and the deputy minister of the Afghanistan Civil Aviation Authority
(ACAA) regarding the establishment of a one-stop shop (OSS) at HKIA Customs Zone.
They proposed a consolidation warehouse to hold pre-customs declaration while
multiple checkpoints and unnecessary steps within the customs would be removed.
Additionally, pre-booking would provide customs and airlines with advance information,
reducing dependency between customs and ministry certification processes. Most
important, traders would be offered a simplified process for obtaining approvals and
permits from different ministries, agencies, and associations in one central office, located
within HKIA premises: the one-stop shop.
On June 5, 2017, ACD’s deputy director and HKIA’s director of customs approved the
flow chart developed by ATAR and the location of the proposed OSS. At ACD’s
request, ATAR developed a detailed action plan and timeline of the development and
implementation of the OSS, which was approved by ACD in July 2017.
AFGHANISTAN TRADE AND REVENUE PROJECT | 45
ATAR met with Olive Group (the airport security provider) about a streamlined
security inspection of goods and with HKIA’s customs director to discuss the OSS
blueprint, which was approved by ACD. In coordination with ATAR, HKIA Customs
submitted a letter to the HKIA civil aviation director to assign engineers to clear the OSS area of underground lines and pipes. ATAR installed IT equipment together with
necessary software for storage of customs declarations and associated trade documents,
certificates, and approvals.
Throughout late 2017, ATAR completed the training needs analysis and followed up
with the development and delivery of a one-week training in January 2018 to the OSS
staff on the procedures, integrity, and storage of documents using library software.
Meanwhile, in the summer of 2017, ATAR visited Kandahar International Airport, Herat
International Airport, and Mazar-e-Sharif International Airport to gauge the possible
extension of the OSS concept to those sites to facilitate the export of Afghan products.
Minister of Agriculture, Irrigation, and Livestock Naseer Ahmad Durani; Minister of Commerce and
Industries Homayoun Rasaw; National Unity Government CEO Abdullah Abdullah; U.S. Ambassador to
Afghanistan John Bass; and USAID Assistant to the Administrator for the Office of Afghanistan and Pakistan
Affairs Gregory Huger cut the ribbon at the opening of the one-stop shop at HKIA on January 25, 2018. At
the event, Afghanistan CEO Abdullah Abdullah said, “The Office of the Chief Executive is pleased and proud
that you have taken initial steps – represented by the opening of this One-Stop Shop – to remove barriers to
trade and to make it easier for exporters to access foreign markets.” U.S. Ambassador John Bass noted that
“the US believes that the steps taken today—the creation of this One-Stop Center— will help not only
generate income and opportunities for Afghan businesses, and employment for Afghans, but it will give the
world a different vision of Afghanistan and its future.”
AFGHANISTAN TRADE AND REVENUE PROJECT | 46
ATAR determined the sites had great potential and, if implemented properly, an OSS
would provide Afghanistan with easier and wider access to international markets.
Air Cargo Shipments
In addition to its efforts to improve air cargo processing at HKIA and other airports,
ATAR supported individual shipments throughout 2017. Altogether, ATAR facilitated
the shipment of $2.7 million of goods to Germany, Dubai, Qatar, Saudi Arabia, the
Netherlands, the United Kingdom, and Canada. Exported goods included carpets,
pomegranate juice, saffron, dried fruit, and nuts. See Exhibit 9 for the Air Cargo
Incentive Mechanism.
In July 2017, ATAR revised its air cargo strategy due to new, more stringent USAID vetting requirements, limited air cargo capacity on the market among airlines, and
challenges experienced by the Afghan government’s Afghanistan-India Air Corridor
initiative. Rather than relying on multiple separate contracts with traders for each
shipment, ATAR signed a contract with a freight forwarder under a blanket purchase
agreement for air freight rates to multiple destinations in the Middle East and Europe.
This was designed to help speed up the procurement process to facilitate air shipments
in a timely manner.
During this time, ATAR also supported the establishment of a consolidation warehouse
near HKIA, as part of the OSS process described above. The warehouse serves as a
central consolidation point where traders’ products are packed and undergo air cargo
pre-planning, (e.g., airway bill preparation and pre-customs declaration). The warehouse
Photo: USAID ATAR Project
Air cargo for export is loaded onto a plane at Hamid Karzai International Airport in Kabul.
AFGHANISTAN TRADE AND REVENUE PROJECT | 47
can hold fresh products in a temperature-controlled environment, thereby reducing the
risk of product spoilage at the airport in the event of delayed or cancelled flights. By the
end of August, the warehouse had received 60 tons of carpets and 31 tons of dried
fruits.
EXHIBIT 9. AIR CARGO INCENTIVE MECHANISM
The value of goods exported through Kabul airport increased significantly over the life
of the project. On average, exports grew by 35 percent annually. During ATAR’s
implementation, the total value of goods cleared at HKIA exceeded 25.495 million Afn
(US$367 million ), or about 14 percent of all official Afghan exports, according to ACD
data. Howver, the quantity of exports through HKIA was marked by more sluggish
growth than the value of exports for most of ATAR’s lifecyle. During the project’s last
year, however, exports increased significantly, both in terms of value (+51 percent) and
quantity (+118 percent) in relation to year prior.
2.2. KYRGYZ REPUBLIC
ATAR supported the Kyrgyz Republic in ratifying the WTO TFA and to move toward
alignment with the WCO RKC. However, an ongoing dispute with Tajikistan over the
border prevented progress on the CBTA for Corridor 5. In addition to these regional
initiatives, ATAR worked to strengthen and modernize customs procedures as part of
its overall efforts to facilitate Afghan trade.
Customs Consultative Council
AFGHANISTAN TRADE AND REVENUE PROJECT | 48
ATAR supported the Kyrgyz Republic’s State Customs Service to facilitate trade
between the country and others in its region, with a focus on Afghanistan. One of
ATAR’s most important successes in its work with the Kyrgyz Republic was the
reinvigoration of the Customs Consultative Council (CCC), which provides a forum for
customs officials, the trading community, and customs brokers. Prior to 2011, Kyrgyz
Republic Customs regularly met with importers, exporters, and brokers. The CCC
provided an opportunity for traders to voice their frustrations and for customs to
articulate regulations. Following meetings with ATAR, the Kyrgyz Ministry of Economy
held a roundtable in November 2014 with the private sector and government agencies
to establish public-private dialogue. At that event, Kyrgyz customs agreed to relaunch
the CCC, and the first of four CCC meetings held during the project tenure began in
December 2014.
Throughout the remainder of the project, ATAR supported CCC meetings by drafting
agendas, facilitating conversation, and following up with private-sector members on their issues. Topics included the methodology for calculating the amount of security for
customs payments; preparing a recommendation on including insurance as one of the
forms of security for customs payments; raising awareness of a new Kyrgyz resolution
on “Approving the Procedure on Advance Notification”; drafting amendments to the
customs code; preparing amendments to the Law on Joint Responsibility for Customs
Violation for Brokers and Owners of the Goods; discussion of veterinary issues after
Kyrgyz meat was prohibited from entering Kazakhstan; and updating participants on the
status of the TFA ratification.
Authorized Economic Operators
As a key WTO TFA provision involves the establishment of an AEO program that
recognizes traders, brokers, consolidators, transporters, and other actors in
international trade as complying with WCO or equivalent supply chain security
standards. ATAR worked with the CCC, the Kyrgyz business community, and Kyrgyz
customs to raise awareness of the concept of AEO and its importance to the modern
trading system. This included presenting the AEO concept to the Kyrgyz business
community, the consultative council, and customs managers. In the second half of 2016,
Kyrgyz customs implemented an AEO program. Following the launch of the AEO
program, ATAR facilitated a meeting with the Kyrgyz Republic’s sole AEO and several
businesses interested in gaining AEO status. During the meeting, ATAR delivered a
presentation on special simplified procedures stipulated by customs legislation and
conditions for being included in the AEO register. ATAR also prepared an analysis on
the application of simplified customs procedures for AEO and sent it to the WTO TFA
working group for inclusion in the WTO TFA Action Plan.
Other Customs support
To help the Kyrgyz Republic improve customs risk management techniques, ATAR
produced a report highlighting available sources of risk management information, the
process for gathering risk information, and recommendations to develop more relevant
risk profiles. ATAR also produced a paper on a methodology for ensuring regular
review and objective analysis of the risk profiles. Finally, ATAR assisted with the
AFGHANISTAN TRADE AND REVENUE PROJECT | 49
development of the Comprehensive Integrated Tariff System (CITS), which would
ensure greater transparency and easy access to information regarding import and
export trade regulations in 2014. ATAR verified data in CITS with relevant Kyrgyz
agencies to ensure updated and comprehensive content.
2.3. TAJIKISTAN
ATAR also provided significant support to the Customs Service under the Government
of the Republic of Tajikistan as part of its efforts to facilitate trade from Afghanistan. The
project’s support encompassed a wide range of customs-related issues, and Tajik
private-sector businesses also were invited to participate in the project’s trade-
promotion activities.
2.3.A. CUSTOMS SUPPORT
Risk Management and Post-Clearance Audits
In 2015, to promote WCO RKC trade facilitation measures as well as the WTO TFA
and CBTA, ATAR developed and installed a risk information database at three customs
stations in Dushanbe: the airport freight office, the railway freight yard, and the
international post office. These stations were selected to receive the database, which
contains information relating to non-compliance and enables users to conduct effective
risk analyses, because they are critical for expanding the flow of information to the risk
management unit. In addition to installing the database, ATAR provided on-the-job
training for customs staff and delivered a paper on identification of information;
mechanisms for collection, analysis, and dissemination; and data collection principles.
ATAR also proposed a structure for centralized risk management, including the
introduction of a risk management committee, developed job descriptions for the risk
management unit, and prepared a proposed training plan for the risk analysts. The
proposals were translated and submitted to the Tajik State Customs Service.
ATAR worked to improve the capacity of Tajik customs to conduct PCAs, by
completing and translating a proposal for dialogue between Tajik customs and private-
sector representatives on the requirements to comply with an order for audit. PCAs
are used to verify the accuracy and authenticity of Customs declarations and facilitate
trade by reducing controls at the border. ATAR conducted a five-day training program
for 13 Tajikistan State Customs Service officers on PCA in September 2015 at the
Customs Institute for Professional Development in Tajikistan and held a roundtable
targeting customs brokers and transport and logistics companies to promote awareness
of how to prepare for and comply with a customs audit.
Advance Rulings
In early 2016, ATAR submitted recommendations to Tajik customs to facilitate the
process of instituting advance rulings, also known as binding decisions, on tariff
classification and/or assessment of origin accorded to particular goods. The
recommendations, which have yet to be adopted, included a draft regulation
complementing the draft standard operating procedures and the existing customs legal
provisions; draft fact sheets for private-sector awareness; and best practices regarding
AFGHANISTAN TRADE AND REVENUE PROJECT | 50
binding decisions. ATAR also submitted the Russian and Tajik translations of templates
for requesting advance rulings regarding tariff classification or origin contained within
WCO guidelines. The translations supported ATAR recommendations to maximize
Tajikistan’s advance rulings facility, particularly in light of the imminent adoption of the
Tajikistan customs nomenclature, which is a list of classifications of commodities for
customs purposes.
Valuation
In November 2016, ATAR delivered a five-day training program for Tajik customs
trainers and practitioners on the principles and correct application of the WTO
Customs Valuation Agreement. The agreement provides an internationally agreed and
consistent method for valuing goods for the purposes of applying custom tariffs.
Participants included customs trainers, customs operational staff, university lecturers,
and customs brokers. This was the first occasion in which Tajik customs shared training
with its primary clients. Customs management decided to use the training materials in
December 2016 for regional customs staff and brokers, and ATAR assisted with the
transition of the materials to Tajik customs’ templates.
Joint Customs Controls
ATAR developed recommendations for establishing the legal basis and strategy for joint
Tajik-Afghan customs controls at the Shir Khan Bandar and Nijni Pyanj border crossing
points. ATAR’s recommendations were built on a feasibility study by USAID’s TAFA
project, considering the Memorandum of Mutual Understanding in Customs Matters
that Afghanistan and Tajikistan signed in March 2014 and the introduction of electronic
data exchange between the two customs administrations. In February 2016, ATAR
translated and submitted the recommendations, incorporating provisions for extra-
territoriality within the Tajik customs code, defining elements needed in a legal
framework for joint customs/border controls, listing major components to be included
in a plan for the establishment of a one-stop border post with Afghan counterparts, and
redrafting the memorandum of understanding for the introduction of such controls. All
these issues are relevant to the provisions of both the CBTA and the WTO TFA.
Authorized Economic Operators
To promote AEO in Tajikistan, in 2016, ATAR developed a model concept for the AEO
program for consideration by Tajikistan customs. The model includes criteria for
participation, benefits, operational aspects, proposed amendments to the customs code,
and a methodology for implementation. ATAR later supplemented the model concept
by providing additional examples of best practices used by other customs
administrations, including AEO programs that focus on export transactions and supply
chain security and examples of AEO programs that encompass certification across other
national regulatory agency programs. To promote awareness of AEO best practices,
criteria, and principles most suitable for adaptation in Tajikistan, ATAR also held two
roundtables for both public and private sector representatives in August 2015. Finally, in
July 2016, ATAR submitted an action plan for the development of an AEO program
specific to Tajikistan. The plan encompasses 18 steps, a list of activities and outputs, and continued testing and refinement of the concept and protocols.
AFGHANISTAN TRADE AND REVENUE PROJECT | 51
Trade Documents/Procedures and Single Window
In 2014, ATAR prepared an analysis of the harmonization of the trade documents
required for border crossing. The study found the six trade documents were
harmonized in accordance with national legislation and international conventions, but a
problem existed in accessing these documents online. The introduction of the single
window system in 2015 solved this problem.
ATAR also supported the advancement of the single window effort, which was led by
the European Union and GIZ. In 2014, ATAR reviewed a test application of the single
window program and offered feedback on legal and procedural issues. Furthermore,
with GIZ, ATAR supported the one-stop concept for border crossing by proposing an
action plan for implementation. ATAR visited Tajikistan’s border crossing point with
Afghanistan at Nizhny Panj and evaluated the one-stop concept in practice. ATAR then
prepared an analysis of all agency border clearance procedures and discussed with the
Ministry of Economic Development and Trade the need for a national strategy, an action
plan, and an inter-agency working group to support coordinated border management.
Veterinary Service Support
To facilitate the introduction of sound veterinary risk analysis and cooperation between
the Afghan and Tajik veterinary services, in 2014 ATAR provided the Tajik State
Veterinary Inspection Service with three primary modes of support. First, ATAR
assisted with developing an “Agreement between the Government of the Republic of
Tajikistan and the Government of the Islamic Republic of Afghanistan on Cooperation
and Mutual Assistance in Veterinary Science Matters” in English, Tajik, and Dari. Second,
ATAR developed a “risk analysis framework” and a presentation for integrating risk
management principles. Finally, ATAR supported roundtables with GIZ on the
implementation of risk management principles and the sharing of risk data with other
border agencies.
2.3.B. TRADE PROMOTION
In July 2015, ATAR collaborated with the Sughd Regional Administration and other
donors on a regional trade fair called “Sughd-2015” in Khujand. The fair brought
together more than 100 exhibitors from Afghanistan, Belarus, Kazakhstan, the Kyrgyz
Republic, Latvia, Poland, Russia, and Turkey from sectors such as agriculture, the light
industry, food production, services, and construction materials. The fair was preceded
by a trade forum discussing ways to facilitate trade and exports of the Sughd region.
ATAR circulated the event invitation to Afghan producers, ACCI, and the Kabul
Chamber of Commerce and Industries and participated in both the forum and the fair,
identifying and meeting with Afghan participants.
2.4. TURKMENISTAN
During the implementation of the ATAR project, the Government of Turkmenistan was
open to only limited support from the project. As described under Section 1 above,
ATAR performed two assessments of Turkmenistan’s compliance and technical
assistance needs vis-à-vis the WTO TFA and WCO RKC. In addition, as part of its
AFGHANISTAN TRADE AND REVENUE PROJECT | 52
support for improved customs facilitation between Afghanistan and Turkmenistan,
ATAR assisted with translating official customs documents for the announcement page
of the State Customs Service website (https://customs.gov.tm/en/announcements). The
documents translated by ATAR along with materials translated by USAID’s
Competitiveness, Trade and Jobs project were submitted to the State Customs Service
in 2017 and were designed to assist local and foreign traders with cross-border trade.
2.4.A. EXPORT PROMOTION
To promote trade between Afghanistan and Turkmenistan, ATAR identified trade
opportunities and facilitated linkages between Turkmen and Afghan businesses in several
sectors. In textiles, ATAR held two meetings with the head of the Department of
Foreign Economic Affairs of the Ministry of Textile Industry of Turkmenistan in 2016. In
the first meeting, ATAR sought to identify the production potential of Turkmen
factories to produce materials for Afghanistan. In the second meeting, the head of the
department provided fabric samples produced by Turkmen factories for Afghan
counterparts. ATAR gave samples of the fabrics produced by the Turkmen factories to
the chairman of Afghanistan’s Balkh Chamber of Commerce and Industry.
To identify the potential to export Afghan agricultural products to Turkmenistan, in
2015 ATAR provided USAID’s Regional Agricultural Development Program-West
(RADP-W) project in Afghanistan with market information on the Turkmen fruit and
vegetable sector. ATAR researched market demand for grapes, tomatoes, and
cucumbers. In addition, ATAR provided Berouge Paints Company in Afghanistan with
Turkmen market information to develop a strategy to enter the Turkmen market. In
both cases, ATAR also facilitated contact with the Turkmen Transportation and Logistics Company, which has trucks on both sides of the border and could support
transit of goods from Afghanistan to Turkmenistan. ATAR also discussed similar
logistical support with Muntaz Petroleum Company.
In the carpet sector, at the request of USAID/Turkmenistan and in response to
governmental interest, ATAR proposed to deliver export development training for
carpet industry representatives and proposed a seminar on export promotion strategies
for the Institute on Research of Commodity Circulation of Turkmenistan’s National
Goods, the Institute of Strategic Planning and Economic Development of Turkmenistan,
and the Chamber of Commerce and Industry of Turkmenistan. ATAR also prepared and
submitted a technical assistance proposal for the State Association Turkmenhaly. ATAR
submitted the proposal to USAID/Turkmenistan, which submitted it to the Ministry of
Foreign Affairs of Turkmenistan. ATAR’s proposed assistance included training for
carpet industry representatives, facilitation of business-to-business matchmaking events
for carpet industry officials to meet potential business partners, preparation of an
export promotion strategy for the Turkmen carpet industry, and facilitation of
Turkmenistan’s participation in the DOMOTEX carpet exhibition in Germany.
2.4.B. TRANSIT SUPPORT
To increase trade in the region, in 2017, ATAR met with representatives of
transportation and logistics companies in Ashgabat to assist with identifying Afghan
AFGHANISTAN TRADE AND REVENUE PROJECT | 53
freight forwarders to transport cargo from Turkmenistan to Afghanistan and from
Turkmenistan to Tajikistan via Afghanistan. In March 2017, ATAR, together with
MOTCA and ACCI, organized a conference call between a Turkmen transportation and
logistics company and an Afghan transport operator to discuss transporting goods from
Turkmenistan’s Caspian Sea port Turkmenbashi to Dushanbe, Tajikistan, via Afghanistan.
In addition, at the request of the Balkh Chamber of Commerce and Industries (BCCI),
ATAR visited the State Production Association “Turkmen Cement” in 2017 to
determine the potential for Turkmen factories to export cement to Aqina, Afghanistan
by railroad. ATAR also met with an Afghan embassy officer in Ashgabat to present a
new government decree on fees for transport operators entering Turkmenistan.
2.5. UZBEKISTAN
In a significant development in U.S.-Uzbek cooperation, ATAR provided the first
USAID-funded support to the Uzbekistan Customs Committee in more than a decade,
training 21 customs officers in May 2015. The program aimed to familiarize Uzbek
customs with modern border management concepts, including risk management and
assessment, advance information, AEOs, supply chain security, information exchange
(customs-to-customs and customs-to-business), and compliance measurement. The
training participants represented a cross-section of customs disciplines, including
inspectors from land crossings and the airport, currency control, valuation, human
resources, the training academy, and the Office of Internal Security.
Additional training workshops followed. In July 2016, ATAR conducted a four-day
training on risk management and e-declarations for Uzbek customs officials. Participants
included 24 customs officers, with seven officers from the regions. In October 2016, ATAR trained 25 customs officers on border management, including about border
control, cargo concealment methods, analyzing cargo documents, cargo examination
techniques, behavioral analysis and observational techniques, equipment for border
control enforcement, non-intrusive inspection, and currency smuggling methods. In April
2017, ATAR delivered a training on customs enforcement of intellectual property rights
for 22 Uzbek customs officers in Tashkent. The training covered the global intellectual
property economy and the impact of counterfeit trade, intellectual property
enforcement standards, intellectual property provisions in the Uzbek customs code, the
role of customs in intellectual property rights enforcement, and other topics. To
complement the training, ATAR developed a guide, titled “Uzbekistan Customs
Intellectual Property Rights Enforcement Guidance for Practice and Implementation,” to
support implementation of intellectual property border provisions in the new customs
code. The guide was provided to Uzbekistan’s Customs Committee in July 2017.
In addition to its efforts to facilitate trade through its support to the Customs
Committee, ATAR worked to address transit challenges. In 2016, ATAR completed a
trade-route mapping study to identify optimal and feasible transport routes available for
Uzbekistan in reaching the Middle East, in particular Dubai and New Delhi. ATAR
collected data from transport operators, logistics and freight forwarding, business
associations, the Afghan and Indian embassies, the World Bank, and the Asian
Development Bank to determine constraints and legal and regulatory challenges along
AFGHANISTAN TRADE AND REVENUE PROJECT | 54
nodes and stretches of selected routes. The Uzbek Chamber of Commerce and
Industries and Association for Development of Business Logistics assisted with data
collection. The study was designed to help support the promotion of a bilateral
agreement on transit and transport between Afghanistan and Uzbekistan and
identification of improvements on the Afghan routes.
To promote trade with Uzbekistan, ATAR supported a BCCI-led delegation of five
Afghan businessmen at the Horticulture Export Promotion and Competition
Development Business Forum and a horticulture exhibition in Samarkand in April 2017.
The event — which drew more than 200 traders and officials from Central Asia,
Europe, and the Middle East — was organized by USAID’s Competitiveness, Trade and
Jobs project and the State Committee of the Republic of Uzbekistan for Assistance to
Privatized Enterprises and Development of Competition. As a result of the business-to-
business meetings on the first day of the forum, the Afghan traders signed five letters of
intent valued at $1,830,000, primarily for Uzbek exports to Afghanistan. One letter of intent was signed with the Uzbek company Sebazor to purchase $30,000 worth of
Afghan saffron.
AFGHANISTAN TRADE AND REVENUE PROJECT | 55
COMPONENT 3: IMPROVED
CUSTOMS ADMINISTRATION
Under its third component, ATAR supported customs reform to facilitate trade, help
Afghanistan fulfill its international commitments, and support the Afghan government’s
capacity to generate revenue through customs revenues mechanisms in a manner that
facilitates sustainable economic growth and trade. To meet this objective, ATAR
supported the ACD to improve monitoring and oversight, enhancing ACD’s ability to 1)
use and sustain modernized customs systems, 2) increase the efficiency and
transparency of customs procedures at border-crossing points and inland customs
depots, and 3) support sustainable capacity building mechanisms.
1. AFGHAN NATIONAL CUSTOMS ACADEMY
To develop capacity at the ACD, during the project’s first year, ATAR assessed training
needs and reviewed basic training materials for customs officers at the Afghan National
Customs Academy (ANCA), the ACD’s training center. ATAR assisted ANCA with
preparing new, improved training materials as part of an advanced customs training
package. This included modifications to the Border Management Task Force’s basic
training course, and the development of five enforcement-related training modules on
risk management, automated targeting, risk profiling, intelligence, and pocket notebook
usage. In addition, ATAR developed 12 training modules covering management, mobile
verification teams, airport training, examination and search techniques, train-the-trainers
techniques, and basic customs training. The modules included trainers’ notes, exercises
for giving and receiving feedback, and training evaluation forms. Furthermore, ATAR
delivered a policy and procedure manual that detailed the administration of the academy
and assisted ANCA with developing standard operating procedures in stock control,
audit of equipment, training plans, and specialist trainers.
New developments and stakeholder needs shifted ATAR’s focus for ANCA in late 2016.
In November ATAR assisted ACD and ANCA management in the preparation for the
formal re-opening of the Customs and Tax Academy (CTA), a modification of ANCA
that incorporated the Afghanistan Revenue Department (ARD) training unit. This
assistance included the preparation of the academy library, a search and examination bay
for practical training, and ensuring that all classrooms were set up and equipped.
On December 5, 2016, the minister of finance inaugurated the CTA. During the
opening, the director general of ACD expressed his appreciation to ATAR for its
assistance in preparing the facility and in organizing the inauguration. Invited guests
received a tour of CTA’s facilities along with a demonstration of cargo examination
using both intrusive and nonintrusive equipment.
AFGHANISTAN TRADE AND REVENUE PROJECT | 56
Following the launch of the CTA, ATAR provided support and oversight in its training
programs. In January 2017 ATAR finalized the new academy curriculum, covering all
basic, intermediate, and advanced training courses, reviewed and systemized all training
materials to ensure training subjects were available in English and Dari. In total, ATAR
create 41 training modules for ANCA and the CTA. ATAR also monitored and
supervised the first and second rounds of ACD’s basic customs training to ensure
appropriate implementation of modules and assisted CTA in completing pre-course
preparation for the second round of basic customs training for 50 provincial and
headquarters employees. In addition, ATAR conducted an orientation session on the
international training facilitation process, the international training policy, and related
forms and formats for the CTA’s international training unit. As a result, in May 2017, the
academy started its first and second basic training course for 50 and 100 officers,
respectively. In the final few months of the project, the ACD approved CTA policies and
procedures developed with ATAR support, and the CTA has settled into a “business as
usual” mode.
2. MODERNIZATION AND SIMPLIFICATION OF PROCEDURES
2.1. CUSTOMS VALUATION
The Customs Valuation Agreement (CVA) is one of the WTO’s most complex agreements. The agreement provides an internationally agreed upon and consistent
method for valuing goods for the purposes of applying custom tariffs. Correct
application of these valuation methods is critical, as incorrect valuation of goods leads to
incorrect tariff fees being applied. Improper customs valuation methods in turn render
trading costs unpredictable and undermine the practical value of mutually negotiated
tariff rates.
Minister of Finance Ekil Hakimi (third from right) and other Afghan and U.S. officials cut the
ribbon at the opening of the Customs and Tax Academy in Kabul in December 2016. The academy
was launched with ATAR support.
AFGHANISTAN TRADE AND REVENUE PROJECT | 57
To support Afghanistan’s efforts toward fulfilling the WTO CVA — as well as improve
the ACD’s valuation practices and procedures — ATAR assisted ACD with the
transition from an old valuation manual into one that was fully WTO compliant. In 2016,
ATAR assisted ACD with establishing a formal body for Customs Valuation Appeals to
ensure systematic analysis and regular communication with traders in case of complaints
related to the goods valuation applied by ACD officials. ATAR reviewed ACD’s
Valuation Department, including its legal framework and procedures, administrative
structure and operational linkages, corporate planning framework, public awareness and
outreach of training opportunities, customs clearance and systems-based control, and
revenue evasion response. In addition, ATAR distributed a training-needs questionnaire
at ACD and regional valuation units, with 31surveys returned for analysis. Based on the
results, ATAR began developing a practical and user-friendly valuation program. ATAR
also arranged for staff of ACD’s valuation department to access WCO e-learning
programming to build knowledge of customs issues.
Meanwhile, ACD implemented the valuation module into Automated System for
Customs Data (ASYCUDA) at major inland customs depots (ICDs) and border crossing
points (BCPs) to enforce usage of unified customs valuation criteria, stored in
ASYCUDA, in all Afghanistan. In late 2016, ATAR developed comprehensive training
materials on the goods valuation methods and together with CTA delivered basic and
advanced valuation training to the 12 customs officials working in the Valuation
Departments in headquarters and provinces. ATAR also developed a training-of-trainers
manual on customs valuation and delivered 22 sessions on customs valuation training to
eight ACD and ANCA officials who have the capacity to train others.
ATAR also assisted ACD with preparing the valuation procedure, which will have direct
impact on the ASYCUDA selectivity to the red, yellow, and green channel based on the
minimum, average, and high value of the declared goods. The final version of the
procedure was handed to ACD in June 2017. ATAR also developed informational
booklets on WTO valuation requirements that is used to raise awareness both at the
ACD and among the trade community. The booklets were provided to the ACD
Technical Directorate and to more than 100 members of the Afghanistan Chamber of
Commerce and Industry.
Finally, in 2017, ATAR supported ACD in organizing a team of officials from Post
Clearance Audit, Risk Management, and the Valuation Unit to collect data to update
ACD’s valuation database. As a pilot, ACD focused on valuation of mobile phones,
cigarettes, cement, and construction steel. With ATAR assistance, ACD updated the
valuation commodities of 140 brands of cigarettes in the database, consisting of 200
tariff specification codes, and cross-matched local market prices with those in the
database.
2.2. E-PAY
To modernize how customs-related duties are collected on behalf of the Ministry of
Finance and to bring more efficiency and transparency in revenue collections made from
customs duties, ATAR continued the work started under TAFA II to introduce an
AFGHANISTAN TRADE AND REVENUE PROJECT | 58
electronic payment (E-Pay) system for
customs. ACD duties and taxes have
traditionally been paid in cash, with a
trader or customs broker making a
payment at the Da Afghanistan Bank
(DAB) branch located inside the customs
location processing the declaration.
DAB, which holds ACD’s customs
revenue account, would then make a
manual update to ACD’s ASYCUDA
system to notify customs agents at ICDs
and BCPs to release goods. To
streamline the process, ATAR worked
with DAB and ACD to develop an E-Pay
system of customs duties that would allow importers to pay customs duties at
any commercial bank in Afghanistan by
facilitating bank transfers to ACD’s
customs revenue account via DAB’s
clearance and settlement system. DAB
would then automatically notify ACD
through the ASYCUDA system to
release goods. The amount traders pay is
determined during the declaration
process after goods are registered in
ASYCUDA by the customs official.
While the e-payment option is designed
to reduce the administrative burden associated with payment of customs duties, as a
payment routing system, it cannot control how goods are valued by traders and
customs agents at the time the ASYCUDA entry is made and before duties are paid.
Customs officials determine the value, origin, Harmonized System code, quality, and
quantity of goods, which is entered into ASYCUDA to automatically calculate the
amount of customs duties owed. In other words, the e-payment system is not designed
to address corrupt practices at the customs clearance stage when the value of goods is
determined before being entered in ASYCUDA. When a figure for customs duties is
generated by ASYCUDA, the trader then brings the receipt to DAB or the commercial
banks for cash or e-payment.
ATAR worked with DAB and ACD to reach agreement on committing to electronic
payment; to determine systems integration needs between ACD, commercial banks, and
DAB; and to develop standard operating procedures for customs to be collected
through commercial banks. These processes were revised over time as ACD and DAB
upgraded systems. ATAR also conducted outreach using fliers, posters, and stand
banners to introduce and encourage the use of e-payment at customs locations. ATAR
supported ACD with the training of its ICD and BCP customs staff, as well as 55
Photo: USAID ATAR Project
The E-Pay system is promoted through posters and
banners at HKIA’s one-stop shop.
AFGHANISTAN TRADE AND REVENUE PROJECT | 59
percent of brokers who manage the customs duty payment process on behalf of traders.
DAB managed the training of commercial banks.
With ATAR’s support, ACD and DAB launched an extended pilot phase of e-payment
of customs duties in May 2015 in HKIA and ICD. Major communication companies such
as Etisalat, Afghan Wireless Communication Company, MTN, and Roshan began using E-
Pay for their customs duties at HKIA. With their imports of expensive, high-tech
equipment and large boxes of pre-paid phone cards, Afghanistan’s five major
telecommunications companies account for half of all the customs duties collected at
HKIA in Kabul.
Following the pilot at HKIA, in December 2015, ACD officially launched E-Pay in Mazar-
e-Sharif. With ATAR support, E-Pay became operational across Afghanistan by the end
of 2016. This includes all of Afghanistan’s ICDs and customs BCPs except for customs
sites in Khost and Paktia, which were inaccessible due to security concerns. However, technical and connectivity preparation have been completed at these sites, and ACD is
prepared to deliver training to staff soon to enable the sites to go live. While the launch
of E-Pay represented a major milestone for the ACD, uptake was lower than anticipated
for several reasons. These included:
• Delays in rollout and implementation of e-payment due to prolonged periods spent
on stakeholder buy-in and readiness during times of leadership turnover, and
divergent priorities at ACD.
• Continued collection of cash payment of customs duties by Da Afghanistan Bank
(DAB, Afghanistan’s Central Bank) at customs sites, therefore maintaining the option
to pay in cash and avoid e-payment through commercial banks.
• Long processing times for e-payments due to commercial bank branches located
outside customs sites and additional manual steps, which incentivizes traders to
continue paying in cash via faster DAB payment process.
• Bank fees and requirements associated with strict anti-money laundering regulations
(absent in current DAB transactions) that deter traders from using commercial
banks and incentivize them to continue paying customs duties in cash directly
through DAB.
• Distrust and lack of familiarity of traders (or brokers) with commercial banks
To help mitigate these challenges, in January 2017, ATAR presented the New E-Payment
Strategy, based on the replacement of the DAB branches in customs with commercial
bank branches to offer traders the possibility of using modern cashless means of
payment. After several months of meetings with different stakeholders, ACD selected
Azizi Bank as a future partner for collecting customs revenue in ICDs. However, this
process suddenly stopped with the appointment of a new customs and revenue deputy
minister. In early 2018, as the project was closing, a new bank selection process was
launched, and three banks partially owned by the state — EmiliBANK, PashtunBank, and
New Kabul Bank — were selected, despite their smaller footprint than Azizi Bank.
AFGHANISTAN TRADE AND REVENUE PROJECT | 60
Despite the challenges to implementation, the potential of the e-payment approach for
customs duty collection is highly promising. This is underscored by the number of
activities under way to resolve key challenges to increasing adoption of E-Pay, including
acceleration of processing times through implementation of a new clearance and
settlement system between commercial banks and DAB and the planned establishment
of commercial bank branches at ICDs and BCPs. According to the ACD, E-Pay
transactions were increasing between June and August 2017, as were customs revenue
compared to the same period in 2016. As of August 2017, more than 2,100 e-payment
transactions have been completed, with a value of more than $32.2 million in customs
duties. At HKIA, 18 percent of payments were made through e-payment from
November 2016 to June 2017. Other government agencies also have begun to express
interest in the system, illustrating the long-term potential for electronic payments.
2.3. IMPLEMENT RISK MANAGEMENT SYSTEMS
Over the past decade, Afghanistan has seen a rise in imports and exports. In the past,
ACD policy required that all imports and exports be subjected to a physical
examination; this caused delays in clearing goods and was an inefficient use of staff
resources. For this reason, ATAR worked throughout implementation to align
Afghanistan to international standards in risk management that would allow it to use
limited resources to identify consignments most likely to pose a risk. Such risks include
revenue loss through undervaluation, misclassification, or smuggling as well as
interdiction of prohibited goods such as narcotics or pre-cursor chemicals. On the
other hand, under risk management, traders and brokers with a documented history of
compliance with ACD’s laws and requirements face minimal to no intervention.
Prior to ATAR, ACD had implemented some risk management measures, beginning in
2012. To determine their effectiveness, ATAR monitored risk management at most
ICDs throughout 2014. While many of the basic principles were followed at a working
level, the project identified areas for further improvement, particularly the configuration
and use of ASYCUDA. ATAR’s discussions with ACD staff and visual inspections of the
system identified a failure to use certain important modules, including the ASYCUDA
Inspection Act, which is used for recording results of examinations; examiners notes,
used for advising an officer on why a consignment was flagged for inspection; and
random selectivity, used for identifying and selecting a random percentage of
consignments for inspection.
During its assessments, ATAR further determined that ACD used tariff code-specific
risk profiles. These profiles, which select consignments purely based on the type of
commodities, do not support trade facilitation. Though a useful and legitimate profiling
technique, when used in isolation this “catch-all” approach does not differentiate
between compliant and non-compliant importers. Therefore, beginning in 2014, ATAR
worked with ACD’s risk management unit to develop profiles that consider infraction
and historical data based on broker, importer, and origin.
With ATAR support, an ACD risk management working group met for the first time in
June 2015. Since then, the working group has met periodically and has agreed on
AFGHANISTAN TRADE AND REVENUE PROJECT | 61
changes to risk management, most notably the reduction of intervention rates at the
Jalalabad ICD. The working group also took steps toward implementing random
selectivity through ASYCUDA. This would allow ACD to select a small percentage of
consignments for intervention that would otherwise not be selected to test the risk,
confirm the assessment of a consignment, or allow ACD to change risk profiles
accordingly.
To allow practitioners to extract appropriate data easily, ATAR developed 13 report
templates that were coded within ASYCUDA. The data was used to inform ATAR’s
assistance to ACD in risk management areas and included intervention percentages,
compliance assessments by location, use of random selectivity, and performance of
regional risk profiles (i.e., those that yield the greatest number of infractions).
To measure progress and inform future risk-management activities, in late 2016, ATAR
completed a gap analysis of the ACD Risk Management Unit and developed specific recommendations for improving risk management operations in ACD. This included a
new structure for the unit and detailed job descriptions for all positions within it.
Furthermore, ATAR supported ACD to develop a new risk management policy. This
policy was approved by the ADC director general in June 2017 and awaits approval
from the minister of finance.
Building on this policy, ATAR helped the ACD to create five multiple-criteria risk
profiles using WCO risk-profiling methodology. Two of the profiles target consignments
through HKIA, and three target consignments at Herat’s ICD. In early 2017, after three
months of implementation, ATAR found that the profiles were still negatively affected by
rules that divert commodities from green lanes to red lanes via a separate valuation risk
profile. As a result, ATAR organized a meeting with the valuation team to review these
rules and recommended that the valuation team be included in the Risk Management
Working Group to avoid parallel risk management efforts at ACD. ATAR also
recommended developing a new standard operating procedure for the creation of
valuation profiles and to include the valuation profile in any multi-criteria risk profiles
developed in the future. The standard operating procedure was finalized in August 2017
and awaits ACD approval.
Throughout the project, ATAR developed and delivered training to ACD staff, including
those at ICDs and BCPs. Subjects included basic and advance risk management as well as
data analysis for the creation of multi-criteria risk profiles.
2.4. ENHANCE THE DEVELOPMENT OF POST CLEARANCE AUDIT
Post clearance audit (PCA) or audit-based controls are defined by the RKC as measures
by which customs will satisfy itself as to the accuracy and authenticity of declarations
through the examination of the relevant books, records, business systems, and
commercial data held by persons concerned. Post-clearance audit is a critical control
methodology for customs and other border regulatory authorities as it enables them to
apply a multi-layered, risk-based control approach by moving from a strictly transaction-
based control environment to a stronger audit-based administration.
AFGHANISTAN TRADE AND REVENUE PROJECT | 62
In 2016, ATAR began working with ACD’s director of operations and the PCA team
manager to prepare a gap analysis to determine the current status of Afghanistan’s PCA
practices and what was needed to comply with WCO and international standards. The
analysis found that about 60 ACD staff in the headquarters and provinces were
performing activities under the umbrella of PCA. However, these activities were more
related to transactional documents verification than to PCA; ACD staff were
undertaking these activities prior to the goods being released instead of doing them
after clearance, in importer premises. Moreover, PCA staff selected and inspected
declaration forms randomly, without any application of risk management principles. If
infractions were found, the inspecting officer wrote the infraction report on the back of
the paper declaration form and did not update ASYCUDA. This resulted in the loss of
information necessary for the future use of risk management tools. ATAR also
determined that customs legislation was insufficient to support a robust PCA approach
for several reasons. The PCA mandate was linked to frontier activities instead of a central compliance-based function. Existing documents were too focused on linking PCA
to high-risk transactions and enforcement-related activities. There were no formal PCA
guidelines and associated working documents or a well-documented, compliance-based
audit plan. Finally, PCA personnel were not trained in audit techniques and worked in
isolation from the risk management and intelligence units.
To address these gaps, ATAR submitted a PCA implementation plan to ACD, detailing
the strategic, operational, and legislative changes that need to be made to comply with
WCO and international standards. In addition, ATAR worked with the legal team to
draft a new PCA Procedure Manual within this new legal framework and ensure
alignment with WCO rules and regulations for PCA. This document was submitted for
ACD and the Ministry of Finance for approval, which was granted in December 2016.
Furthermore, in 2017, ATAR developed a new risk-based PCA structure, with detailed
job descriptions, and set up the provisions for establishing AEO and Traders
Compliance Criteria in compliance with WCO standards, considering the Afghanistan
reality and capacity of the customs service. ATAR also helped to establish a trilateral
committee composed of the PCA, intelligence, and risk management units to facilitate
stronger interdepartmental cooperation that was critical to allowing the PCA team to
identify the most suitable criteria to select companies for audit.
Finally, in 2017, ATAR also developed a compliance model and the PCA unit’s first
annual audit plan based on the 20/80 principle (i.e., 20 percent of traders are responsible
for 80 percent of revenue income). To this end, ACD referred 692 traders to the risk
management committee (comprising PCA, risk management, valuation, and tariff teams)
for application of risk management criteria and selection of the audit targets.
2.5. ADVANCE RULING
In July 2017, ACD completed implementation of one of the WTO TFA requirements:
advance ruling function, which allows compliant traders to request that ACD to issue a
binding decision on goods tariff classification, or their origin, or their customs value for
the future transactions, effective in all customs stations across Afghanistan for the
AFGHANISTAN TRADE AND REVENUE PROJECT | 63
certain period of time. This followed the establishment of the Advance Rulings Unit with
ATAR support in March 2017.
Furthermore, ATAR completed a Manual on Administration of the Binding Decisions
Program with standard operating procedures for ACD’s use.4 The manual covers all
steps required to process an application for a binding decision (e.g., registering an
application, rejecting an application, assigning an application, requesting additional
information, withdrawing an application) as well as all processes required to manage
binding decisions once issued (e.g., extending the expiration date, revoking or annulling a
binding decision, preparing a decision for publication). The manual includes templates for
notifications and forms for these processes, as well as guidelines for protection of
confidential information.
To promote awareness of advance ruling, ATAR developed a brochure for traders in
English, Dari, and Pashto that ACD used for trader awareness sessions at the CTA. ACD also posted all advance ruling materials on the official ACD web page together
with application templates. By the end of July, ACD received three applications asking
for the binding decision on the tariff classification and customs valuation.
3. MODERNIZATION OF BORDER MANAGEMENT AND SIMPLIFICATION OF
CUSTOMS PROCEDURES
3.1. CUSTOMS CLEARANCE PROCESS MAP
At the request of the ACD’s director general, ATAR reviewed the ACD’s customs
“clearance blueprint,” the officially approved process map identifying all the steps during
the customs clearance, and to develop new proposals/processes for BCPs (transit) and
ICDs (goods clearance and release for free circulation). After analyzing the blueprint —
which contained eight and 14 steps for transit and clearance, respectively — ATAR
developed a new process map that streamlined procedures and limited customs
employees’ interactions with traders and brokers. Most importantly, the new blueprint
reflected only steps existing in ASYCUDA and eliminated duplication of manual registers
and unnecessary signatures. This would allow ACD to minimize clearance time and limit
opportunities for corruption.
ATAR decided to propose separate process flows for air and inland traffic to reflect the
differences in their operations. The process flows reflect WCO and EU best practices
and correspond to the ASYCUDA selectivity system. For all operations, ATAR
proposed a significant reduction in steps, as follows:
• For BCP transit, and reduction from eight steps to five.
• For air operations, a reduction from 14 steps for clearance of imported goods to
seven steps for the green channel, nine steps for the yellow channel, and 10 steps
for the red channel.
4 ATAR wrote the manual based on the binding decision program that is described in the draft
amendments to Afghanistan’s Customs Law and the Ministry of Finance’s Procedure on Advance Ruling on
Binding Decisions, which was approved.
AFGHANISTAN TRADE AND REVENUE PROJECT | 64
• For inland operations, a reduction from 14 steps for clearance of imported goods to
six steps for the green channel, eight steps for the yellow channel, and nine steps for
the red channel.
The new blueprint was submitted to ACD for review in spring 2017 and was positively
received by the ACD. However, implementation was postponed until 2018 pending
procurement of required equipment, such as weight bridges, that will be supported by
multiple donors under the newly developed ACD Modernization Plan.
3.2. BORDER MANAGEMENT MODEL
Afghanistan faces the challenge of increasing trade with neighboring countries while
preventing illicit activities such as smuggling. Afghanistan’s Border Management Model
(BMM) establishes clear roles and responsibilities for ACD, which is responsible for
cross-border trade, and the Afghan Border Police (ABP), which is charged with
immigration and national security at the borders. The model encourages information
sharing between the two entities to curtail corruption, smuggling, and other illegal
activities. The aim of the model is also to reduce interaction with other agencies
operating at the border, thereby speeding trade across the border. To gauge the
effectiveness of the BMM, in Year 1, ATAR, ACD, and ABP assessed six sites to
measure their compliance with the BMM. ATAR had originally planned to assess eight
locations, but the project canceled trips to Zaranj and Spin Boldak due to security
concerns. See Exhibit 10 below for an overview of ACD activity locations.
To ensure a standardized approach to gauging compliance, ATAR developed a template
so that assessors identified all relevant aspects of BMM. Working with ACD and ABP,
ATAR traveled to each province and visited each BCP to inspect processes and speak
with key staff such as regional directors, BCP managers, and ABP commissars.
All locations inspected were fully compliant with the provisions of BMM. Furthermore,
ACD and ABP embraced BMM principles. Both parties said the implementation of BMM
standard operating procedures had resulted in a close working relationship. Although
there appeared to be no breaches of compliance with BMM, ATAR recommended that
ACD introduce a formal monitoring program. This compliance assessment, ideally
undertaken on a quarterly basis, would form part of ACD’s overall management checks
and ensure any future noncompliance is identified and reported to the headquarters.
Throughout the project’s second year, ATAR regional staff continued to monitor the
implementation of BMM through weekly reporting. These weekly reports highlighted
examples of best practices as well as any areas of concern that need to be raised with
ACD’s director general.
EXHIBIT 10. OVERVIEW OF ACD ACTIVITY LOCATIONS
AFGHANISTAN TRADE AND REVENUE PROJECT | 65
3.3. CUSTOMS CODE AND CUSTOMS POLICIES
Throughout implementation, ATAR worked with the ACD, in particular its Legislation
Department, to review policies and ensure they complied with relevant laws and
international best practices. Where possible, ATAR streamlined the processes contained
within each policy to minimize barriers to legitimate trade. Activities are listed below.
• In 2015-2016, ATAR prepared an overview of ACD’s powers and responsibilities
regarding currency control and reviewed Afghanistan’s anti-money laundering
legislation and valuation procedures. In support of the overview, ATAR reviewed the
customs code and collected data on customs control over passengers’ baggage.
ATAR worked with ACD on a currency control policy and procedures at HKIA and
other border customs stations.
• In 2016, ATAR assisted ACD with reviewing tax and duties exemption agreements
and with developing a policy regarding the import of gold and jewelry to facilitate
customs clearance.
• In 2016, ATAR worked on the procedure for a customs equipment usage fee to
ensure compliance with the WTO TFA. Customs equipment usage fees cover the costs customs incurs in the procurement and maintenance of the equipment
required to scan, weigh, unload, and reload consignments.
• Also in 2016, ATAR also researched the legally required minimum information for
commercial invoices that traders are required to provide to customs. The research
AFGHANISTAN TRADE AND REVENUE PROJECT | 66
found traders are not complying with the customs technical division. ATAR worked
with ACD to ensure traders are adequately informed of invoice requirements.
• To support compliance and enforcement of customs legislative documents, in 2016
ATAR prepared a handbook on customs administrative penalties. The handbook
provides simple explanations and guidelines for applying relevant penalties outlined
in the customs law.
• In late 2016, ATAR presented to ACD an overview of a multi-stage mechanism for
customs appeals within the WTO TFA, WCO RKC, and Afghanistan’s new customs
law. ACD decided to activate the appeals system.
• In 2017, ATAR reviewed ACD’s draft regulation of customs brokerage, as required
by the Afghan Customs Law. ATAR revised the format and content to ensure
alignment with international standards and national legal requirements and submitted
the brokers’ procedure to ACD for review.
4. IMPROVED CUSTOMS ADMINISTRATION
4.1. ANTI-CORRUPTION MEASURES AND THE ARUSHA DECLARATION
As a public body, the Customs Service must be transparent and trustworthy in its
actions. If citizens believe that they will receive objective and professional services, they
are more likely to obey laws and regulations. However, given low salaries and ample
opportunities for exercising discretion in making decisions that affect traders,
corruption is an issue for customs administrations around the world, including the ACD.
This can reduce much-needed public revenues, affect economic growth, and threaten
public health and safety.
Throughout 2014 and 2015, ATAR worked with the ACD director general to identify a
strategy for tackling internal compliance and staff misconduct. This included drafting
proposals for the development and implementation of two functions: a professional standards unit (PSU) and an internal compliance unit (ICU). Though based at
headquarters, these units would operate nationally and report directly to the ACD
director general. To complement these units, ATAR also proposed reforms to the
ACD’s post-clearance audit unit. Together, these actions formed the basis of a “three-
silo strategy” — based on the separation of functions of PCA, internal audit, and internal
investigations — to reduce corruption and increase compliance. In March 2015, the
ACD agreed with this strategy in principle and requested policy proposals to implement
it.
Internal Compliance and Investigations
Following a change in management in May 2016, the ACD determined to combine the
internal audit and internal investigation functions in one unit: the Prevention of Customs
Transgression Department (PCTD). ACD requested that ATAR develop a gap analysis
to map the current situation and describe the way forward. The analysis revealed
several operational and functional deficiencies in PCTD and reiterated the need for the
ACD to establish a centralized internal audit unit. ATAR also recommended developing
AFGHANISTAN TRADE AND REVENUE PROJECT | 67
a long-term anticorruption strategy and an ACD Code of Conduct. ATAR also
recommended developing policies and procedures for the PCTD for conducting
planned, risk-based compliance inspections and for responding to allegations of
corruption or misconduct.
As a starting point, ATAR developed the Afghan Customs Department Internal
Compliance Unit Policy, which laid the foundation for the internal audit and professional
standards activities of the PCTD. This policy was approved by the ACD’s director
general in April 2017 and the customs and revenue deputy minister of finance in the May
2017. In the period between the development and the final approval of the policy, ATAR
assisted ACD with preparing two detailed procedures manuals to guide customs officers
in how to conduct, evaluate, record, and report internal compliance inspections and
investigations related to alleged misconduct, fraud, and corruption. ATAR also provided
a comprehensive two-week training program on internal audits and internal
investigations to all PCTD staff.
Between June 2017 and the end of the year, the PCTD completed 12 inspections in the
various customs entities. Of these, five were referred for prosecution to the Public
Attorney Office via the Internal Audit and Investigations Department of Ministry of
Finance. As a result, several dozen customs officers, including ICD managers, were
moved to different positions or removed from customs. As some of the cases involved
the evasion of duty payment, the ACD was able to recover at least part of the public
revenue that otherwise would have been lost.
Anti-Corruption Strategy and the Arusha Declaration
In late 2015, ATAR began to develop a long-term anti-corruption strategy for ACD at
the request of the Afghan Revenue Department’s Large Tax-Payer Office, which was
tasked with developing a strategy on behalf of both the ACD and the ARD. ATAR
drafted the ACD portion of the strategy and submitted it to the ARD. The following
year, the ACD’s director general requested that ATAR resume work on both the
strategy and a code of conduct.
ATAR recognized the opportunity to link ACD’s anti-corruption efforts to broader
international efforts to fight corruption in Customs administrations through the WCO
Revised Arusha Declaration. The Arusha Declaration seeks to enhance integrity and
prevent customs corruption through self-assessment, action planning, implementation,
and evaluation by using a series of WCO integrity tools that have been developed over
the course of a decade. To this end, ATAR developed a prepared comprehensive guide
on the Arusha Declaration and the obligations of the ACD following Afghanistan’s
signature of the declaration and presented it to the ACD’s director general.
ATAR submitted the draft anti-corruption strategy to the ACD in January 2017, and
efforts on the strategy continued throughout the first half of 2017. However, the
announcement of the first-ever visit of the WCO secretary general to Kabul sparked
new discussions on the possibility of Afghanistan signing a notification of intent to adopt
the Arusha Declaration to coincide with the secretary general’s visit. ATAR supported
AFGHANISTAN TRADE AND REVENUE PROJECT | 68
the ACD director general to develop a paper and presentation on the Arusha
Declaration for the minister of finance and the president of Afghanistan. As a result,
President Ghani decided that Afghanistan would sign the notification of intent during the
visit.
On July 16, 2017, Minister of Finance Eklil Hakimi signed a notification of intent to adopt
the WCO Revised Arusha Declaration, marking a commitment to combat corruption in
customs administration. The signing took place at the Ministry of Finance and was
attended by WCO Secretary General Kunio Mikuriya and the director of the WCO’s
Regional Office for Capacity Building–Asia Pacific.
Following signing of the declaration ACD established a working group with ATAR
assistance. The working group included the ACD director general; the director of
operations; the technical director; the heads of human resources, legal, internal
compliance; and two ATAR members. Together, the working group developed a
detailed plan for the Arusha Declaration implementation that covers strategic and
operational objectives to be completed between 2017 and 2020 with the responsible
departments. By the decision of the ACD director general, this action plan became the
implementation path of the Anti-Corruption Strategy, which was revised based on the
inputs received from ACD senior management. The strategy now incorporates relevant
sections of the Islamic Republic of Afghanistan Strategy and Policy for Anti-Corruption and Administrative Reform and the Law on Overseeing the Implementation of the Anti-
Administrative Corruption Strategy and the Afghanistan Penal Code. It is also aligned to
Photo: USAID ATAR Project
WCO Secretary General Kunio Mikuriya, center, and Afghan and WCO officials attend the signing
of Afghanistan’s notification of intent to sign the WCO’s Revised Arusha Declaration at the
Ministry of Finance on July 16, 2017. The purpose of the Revised Arusha Declaration is to increase
integrity and reduce corruption in customs administrations worldwide.
AFGHANISTAN TRADE AND REVENUE PROJECT | 69
the ACD Human Resource Reform Policy approved by the Council of Ministers. Both
the implementation plan and the anti-corruption strategy were officially approved, and
activities are ongoing.
Code of Conduct
In late 2016, ATAR began work on the ACD Code of Conduct with the ACD’s human
resources and legal departments. The code of conduct is a comprehensive document
that details the expectations of each customs employee, as well as intolerable behaviors
that will lead to disciplinary actions and possible termination of employment. The code
includes values that are held in high esteem in Afghanistan, such as honor and religion.
To complement the rollout of the code of conduct, ATAR also developed an Integrity
Training Module and trained CTA trainers on the delivery of the training.
The code was formally approved in late 2017. ACD plans to circulate hard copies of the
Code, deliver training, and request all ACD employees to sign acknowledgement form
to be stored in individual employees’ human resources files beginning in early 2018.
4.2 INCREASING TIES TO THE WCO THROUGH DIAGNOSTIC ASSESSMENTS
Afghanistan’s signature of the notification of intent to adopt the WCO Revised Arusha
Declaration is the result of the ACD’s closer working relationship with the WCO,
fostered in part by the ATAR project. This relationship was also strengthened through
the ACD’s participation in a WCO diagnostic assessment conducted in Baku,
Azerbaijan.
In January 2016, ATAR facilitated an ACD request to the WCO to carry out a full
diagnostic assessment of the administration to serve as a baseline for further
modernization, reform and alignment with WTO commitments, including the TFA. The
impetus for the diagnostic was further strengthened with the appointment of a new
Director General in May 2016, who viewed the diagnostic as a key tool in establishing a
forward plan for modernization and reform and in setting a measurable baseline upon
which the performance of future modernization and trade facilitation investments can be
measured. ATAR supported the WCO in coordinating the event, including nominating
participants, supporting travel arrangements, sourcing research documents required by
the WCO, and facilitating a pre-diagnostic analysis with the ACD directors. ATAR held
a workshop with the ACD’s senior management team during which ATAR shared the rationale of the mission and prepared the ACD team to effectively contribute to the
diagnostic assessment. The diagnostic was completed in September 2016, with anti-
corruption, leadership, revenue stability, professional development and organizational
structure emerging as the top issues.
This diagnostic mission represented the WCO’s first significant engagement in
Afghanistan since 2003 opened the door to new avenues of support, including greater
exposure to developing countries’ effective use of WCO instruments and tools and
opportunities for collaboration with key regional actors, such as India. As a follow-up,
ATAR supported a second diagnostic mission to Kampala, Uganda in December 2016
that was tailored to address the ACD’s specific needs. These included the importance of
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long-term strategic management and visioning in driving customs modernization and
reform; the importance of combining political will, partnerships, people management,
and professional development in a customs reform and modernization plan; and realistic
developing country solutions in addressing specific issues of integrity, central
coordination, and informal stakeholder relationships.
4.3. ENHANCING ACD HUMAN RESOURCES DEPARTMENT
Human resources are critical to increasing the quality of ACD’s services. To improve
ACD human resources practices, ATAR reviewed ACD’s policy and procedure
document regarding recruitment and staff appraisals in late 2016. ATAR reviewed the
document with a working group and provided amendments, comments, and additions.
The policy document emphasized that staff would be hired and promoted by merit
rather than directly on the basis of recommendation. ATAR also assisted a working
group led by ACD’s director of support and development with developing two
procedures on recruitment and training.
In addition, ATAR reviewed ACD’s human resources policy and procedures and its
performance appraisal policy to identify areas for improvement. ATAR recommended
changes to the recruitment, remuneration, and rotation policies, which ACD’s director
general and the Ministry of Finance reviewed for final approval. During the review of the
performance appraisal system, ATAR identified the need for ACD to cascade plans to
each division. As a result, ATAR developed action plans that will assist ACD in
determining performance measure and targets.
In early 2017, ATAR finalized the human resources policies after incorporating input from the director general of customs, the director of operations support, and ACD’s
human resource manager to align with the Civil Service Law of Afghanistan. ACD’s
review committee approved the policies, and ATAR completed translation into Dari and
Pashto. After reviewing the policies, ACD’s director general sent the documents to the
minister of finance for approval, which is still pending.
4.4. INCREASE GENDER REPRESENTATION AT ACD
Women comprise roughly 4 percent of ACD staff. ATAR began recruiting for an
internship program in late 2014 to place young university graduates at ACD for six
months to prepare them for a possible career at ACD or to offer them the foundation for a job in the trade sector. While ATAR focused on recruiting mainly women for the
internship program, the vast majority of qualifying resumes were from men.
The internship program in December 2014, with two women and seven men. The
students worked in ACD’s tariff, exemption, PCA, valuation, tariff research and
statistics, and transit departments. ATAR supported the ACD internship program
through regular meetings and daily workplace support. The interns completed their six-
month internships in June 2015. ATAR’s second internship program at ACD began with
the recruitment of two female interns in September 2015 and seven men in October
2015 for the program. Due to the continued gender gap, ATAR delivered a gender
awareness train-the-trainers course in January 2015 to seven trainers from ANCA.
AFGHANISTAN TRADE AND REVENUE PROJECT | 71
With ATAR support, the ANCA trainers then led gender awareness courses later in the
month, with 21 male and 24 female participants. For more on ATAR’s internship
program, see the Women in Trade section under Component 2.
4.5. ENHANCING THE CAPACITY OF ACD MANAGERS
In 2016, ATAR began capacity building sessions with ACD’s new director general, his
advisor, and selected directors. Topics included roles and responsibilities of customs
and an overview of the RKC; international trade terminology and documentation;
revenue evasion in the customs environment; compliance management framework;
tactical enforcement activities; risk management; intelligence; mobile verification teams;
and investigations.
ATAR regional staff also completed content for management standards and a template
for management and site risk profiles. This was part of ATAR’s initiative to support the
capacity of ACD managers through the implementation of management standards,
management profiles, and site profiles, which will allow managers to continually review
their current capabilities against the perceived risk to customs and know how to treat
those risks. ATAR transferred the profiles to ACD and regional customs offices.
In October 2016, to support the WCO agenda of increasing the capacity of customs
officers and managers, ATAR procured a WCO accredited customs development
program for ACD key officials through the Center for Customs and Excise Studies at
the Charles Sturt University (CSU) in Canberra, Australia. Eight ACD employees began
the certificate program in January 2017.
With ATAR support, ACD’s director general and the CTA director took part in a study
tour from January 9 to12, 2017, at CSU. The tour, organized by the Australian Border
Force College, introduced the Afghan officials to modern container examination
equipment and customs operations and offered new perspectives on training, risk
management, and customs administration. Following the tour, ACD and the Ministry of
Finance signed a memorandum of understanding on customs education and training with
the CSU Centre of Customs and Excise Studies. The agreement aimed to establish CTA
as a WCO-accredited regional training center. On April 25, the MOFA approved the
memorandum.
AFGHANISTAN TRADE AND REVENUE PROJECT | 72
Photo: USAID ATAR Project
Afghanistan National Customs Academy Director Nematullah Noor, , second from left, and ACD
Director General Reshad Popal, third from left, participated in a study tour to Charles Sturt
University (CSU) in Canberra, Australia, in January 2017. The study tour was part of ATAR’s
efforts to build management capacity at ACD.
AFGHANISTAN TRADE AND REVENUE PROJECT | 73
COLLABORATION
ATAR’s success depended on its close relationship with the Afghan government,
specifically MOCI, ACD, the Ministry of Justice, and other ministries and government
agencies relevant to Afghanistan’s WTO accession and trade environment.
LINKS WITH RELEVANT AFGHAN GOVERNMENT MINISTRIES
ATAR worked with ACD, MOCI, and other relevant ministries and related entities such
as MAIL, MOPH, and ANSA by conducting meetings, training sessions, and working
groups to ensure that government officials were part of the decision-making process
and had a thorough understanding of topics such as the WTO agriculture agreements,
SPS, and animal health.
ATAR had local staff embedded at ACD and MOCI to work with the entities regularly.
Until late 2016, ATAR’s expatriate staff were unable to embed at ACD due to security
restrictions. The expatriate staff conducted meetings and short visits as possible and
relied on local staff that remained embedded with intermittent restrictions. ATAR began
working with ACAA to coordinate efforts to upgrade HKIA’s air cargo capabilities.
Following the launch of the Afghanistan-India Air Corridor in the spring of 2017, ATAR
began connecting exporters with ACCI to take advantage of the initiative. Towards the
end of the project, ATAR embedded two expatriate staff at ACAA and developed a
close working relationship with ACAA Director.
In March 2015, ATAR worked with EPAA to promote the idea of an Afghan export fund
and presented the concept to Harakat, an Afghan non-profit organization, as well as the
IFC and the U.K.’s Department for International Development. With the exception of
the Passage to Prosperity: India Afghanistan Trade and Investment Show, ATAR worked
with MOCI and EPAA on all trade events to help build its capacity to support exporters.
LINKS WITH OTHER DONOR AGENCIES
In support of the project’s activities in Central Asia, ATAR worked with other donor
agencies such as EU’s Border Management Program in Central Asia, GIZ’s Regional
Trade Facilitation project, IFC, UNDP, United Nations Conference on Trade and Development (UNCTAD), the World Bank, and the Asian Development Bank. For
example, in Tajikistan, ATAR worked with GIZ and Tajik customs to prepare an action
plan for the development of outstanding customs regulations. Also in Tajikistan, ATAR
delivered three presentations and moderated workshops at a regional trade facilitation
conference organized by EU-BOMNAF for Afghan and Tajik government officials and
donor representatives. In 2015, ATAR led discussions during a GIZ-sponsored regional
workshop on the WTO TFA and worked with GIZ to hold a WTO TFA roundtable in
the Kyrgyz Republic. UNCTAD and the United Nations Economic Commission for
Europe also participated in the regional TFA workshop.
In Kabul, ATAR partnered with the Ministry of Women’s Affairs to organize a two-day
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exhibition in June 2016 to help businesswomen increase sales and raise public awareness
of their contribution to the economy. ATAR worked with U.N. Women to support the
participation of Afghan businesswomen in the “Made in Afghanistan” event that took
place in India.
In March 2017, ATAR coordinated with the ITC in finalizing the WTO TFA compliance
assessment conducted by ATAR and as ITC began developing a national export strategy
for Afghanistan.
LINKS WITH OTHER USAID PROJECTS
In preparation for annual tradeshows such as Demote and Gulfood, ATAR worked with
CHAMP and RADP-S in event planning and implementation. ATAR coordinated with
USAID’s FAIDA and USAID’s Assistance in Building Afghanistan by Developing
Enterprises (ABADE) program in preparation for Exhibition Afghanistan in December
2016, with ATAR and FAIDA jointly implementing the business-to-business component
and ABADE managing the business-to-consumer segment of the tradeshow. ATAR also
coordinated with USAID’s Women in Leadership and Development program for the
Women’s Empowerment Fair held April 25 to 26, 2017 in Kabul.
For the Passage to Prosperity: India-Afghanistan Trade and Investment Show, ATAR
played a stronger organizational role in overall event management while coordinating
with CHAMP and RADP-S to identify Afghan agricultural traders able to deliver
significant export deals. For all events, ATAR led logistical matters for traders and
government representatives, identified buyers, and provided communications support
such business directories, website development, pavilion design, and media outreach.
Throughout the project, ATAR worked with other USAID projects to promote Afghan
exports and discuss areas of cooperation and avoid duplication of efforts wherever
possible. In early 2015, ATAR liaised with USAID’s CHAMP, ABADE, RADP-S, and
FAIDA on events and activities such as a Kabul seminar on promoting exports to South
Asia and an agreement between EPAA and two domestic banks on better credit terms
for exporters. ATAR also liaised with CHAMP in researching trade and transit issues
with Pakistan, and worked with FAIDA to hold a trade finance roundtable in 2015. On
March 18, 2017, ATAR and RADP-S met with the first secretary of the Embassy of
Kazakhstan to discuss promoting and increasing agricultural exports to Kazakhstan. In
addition to CHAMP and RADP-S, ATAR coordinated with RADP-N to identify
exporters and consolidate exports for ATAR’s air cargo incentive program throughout
2017. ATAR worked with CHAMP to identify air cargo capacity of Air India and Turkish
Airlines and discuss air freight prices.
At ATAR’s project office in Tashkent, Uzbekistan, ATAR was co-located with USAID’s
Regional Economic Integration Activity with which it coordinated on regional trade
activities, including helping the project identify participants for the annual CATF events.
ATAR provided support to USAID’s Macro Economic Project in organizing the Astana
Trade Policy Conference: Expanding Central and South Asia’s Regional Trade, July 1-2,
2014, where four speakers from ATAR participated. ATAR also coordinated activities
AFGHANISTAN TRADE AND REVENUE PROJECT | 75
with USAID’s REFORMA project in Kyrgyzstan. In Turkmenistan, ATAR researched the
market for Afghan exporters working with USAID’s RADP-W in early 2016. ATAR also
supported the U.S. Department of CLDP in its TIFA working group meetings in 2015.
In 2015, ATAR also supported Afghanistan’s participation in Central Asia Business
Opportunities Conference, which was organized by USAID’s Pakistan Trade Project to
enable Central and South Asian businesses to exchange information, establish
relationships, and meet government officials.
AFGHANISTAN TRADE AND REVENUE PROJECT | 76
CHALLENGES AND LESSONS
LEARNED
The operating environment for any project in Afghanistan presents many challenges due
to the security situation and relatively low levels of capacity in both the public and
private sectors. ATAR faced the added complexity of working in Central Asian
Republics with largely closed and state-led economies, especially Uzbekistan and
Turkmenistan. The decades-old conflict between Pakistan and India, as well as
Afghanistan’s tense relationship with Pakistan, slowed efforts to further regional trade
agreements such as APTTA. Significant security restrictions and the political instability
leading up to and following Afghanistan’s presidential election in April 2014 also impeded
some of ATAR’s efforts with government entities. However, the project found that the following tactics facilitated its work, despite the challenging operating environment:
• Quantifying costs/benefits. Throughout its lifetime, ATAR solidified a reputation for
quantifying the costs/benefits of restrictions to trade and movement and access.
Evidence-based analysis provides a strong foundation for advocacy. ATAR analysis
was used by USAID and the broader donor community to inform and advocate for
change on a wide range of trade and movement issues. This is particularly important
in an environment with many strong, vested interests and few trusted, non-politically
biased sources of information.
• Establishing a close collaborative relationship with USAID/Afghanistan. This relationship,
established from the project’s inception, allowed ATAR to stay abreast of the major
changes occurring within the USAID mission. Close collaboration between USAID
and the ATAR technical team allowed the project to respond efficiently and
effectively to changing conditions.
In addition to these general lessons learned, below ATAR provides an overview of
challenges and lessons learned for each component.
COMPONENT 1: SUPPORT TRADE POLICY LIBERALIZATION
Throughout the project, maintaining government engagement in activities was a consistent
challenge. Political will to enact necessary legislation for WTO accession ebbed and
flowed as senior ministers turned over and the National Unity Government established
itself. Ministers changed their priorities based on more immediate needs and sometimes
delayed implementation of reforms and legislation. This turnover and stop-and-go
approach resulted in delays in Afghanistan’s accession to the WTO and impeded
progress fulfilling post-accession commitments. For example, in 2016 the deputy
minister of commerce and industry was replaced, and MOCI’s director general of
international trade resigned and was not replaced for more than a year. Similarly,
MOCI’s deputy minister of commerce was appointed to the post of Afghanistan’s WTO
ambassador in Geneva and additional effort was required by ATAR to bring his
AFGHANISTAN TRADE AND REVENUE PROJECT | 77
replacement up to speed on WTO post accession activities.
ATAR learned that top-to-bottom training and awareness building at all levels of
counterpart ministries is imperative for continuous project implementation. Capacity
building at the lower levels of government and awareness of the benefits of WTO would
have encouraged new ministers to embrace the process more quickly and helped to
ensure that long-serving ministers didn’t waiver in their support. In addition, ensuring
that all ministry workers are adequately trained and educated on the issues and
processes would facilitate continuous implementation even in times of transition.
Afghanistan needs continued support to meet its post-accession commitments. ATAR was
only able to address at a basic level the management of trade dispute cases, both in
terms of defense and initiation and the related application of remedies to ameliorate
alleged trade abuses. Afghanistan has had almost no experience with trade dispute
litigation, arbitration, and resolution, but it may soon be confronted with complaints and disputes from trading partner nations. These are complex and highly challenging areas of
international law and economics. The MOF, as well as MOCI, need deeper and more
extensive assistance in training staff and in educating policymakers in other line
ministries to support effective coordination of both trade policy actions and litigation
preparation. The efficacy of the WTO’s dispute settlement provisions fueled much of
the argument for Afghanistan’s WTO accession. That efficacy remains essential to
ministries’ abilities to ensure that citizens understand the benefits of trade liberalization
via the world’s multilateral trading system.
In addition to economic growth through trade liberalization, Afghanistan must resolve
the challenges impeding its fulfillment of its WTO post-accession commitments. Most of
these commitments involve politically difficult legislative reforms, and subsequent to
Afghanistan’s WTO accession in July 2016, ATAR assisted relevant government
ministries with preparing legislation and refining arguments in favor of reform. In 2017,
USAID underwent a “re-scoping” of ATAR and requested for the ATAR team to refrain
from further engagement with Afghanistan’s efforts to fulfill its WTO accession
commitments. Afghanistan has agreed to fulfill these commitments before the second
anniversary of its accession (i.e., July 16, 2018), but no other WTO or trade reform
donor interventions are presently active in Afghanistan to support MOF and MOCI if
they encounter challenges in the fragile political landscape surrounding these required
but sometimes divisive reforms. In turn, there is a great risk that the benefits of WTO
accession and the associated goodwill that MOF and MOCI have cultivated with the
parliament and the trading community may be lost.
Although the list of post-accession commitments is long, several salient items are
included in the WTO Trade Facilitation Agreement (TFA), which Afghanistan ratified
contemporaneously with its WTO accession. Generally, this set of commitments
involves provisions for expediting the movement, release, and clearance of goods,
including goods in transit. The TFA also sets measures for effective cooperation
between customs and other appropriate authorities on trade facilitation and customs compliance issues.
AFGHANISTAN TRADE AND REVENUE PROJECT | 78
While ATAR’s work related to the One-Stop Shop, the Revised Kyoto Ascension Plan,
the Arusha Declaration Draft, and risk management all represent progress toward
fulfilling post-accession commitments, a lack of continuity in USAID’s provision of legal
and policy support will ensure that none of ATAR’s customs-related interventions will
have resulted in post-accession commitment legislation by July 2018. WTO member
states that do not honor accession commitments risk diminished benefits of WTO
membership, and repeated, long-term failures to fulfill those commitments can lead to
expulsion and other undesirable consequences for that country.
COMPONENT 2: FACILITATE ENHANCED ACCESS TO REGIONAL MARKETS
Flexibility and persistence is not just a broad goal. It is an essential element of a successful
approach to facilitating regional trade relationships. ATAR navigated constant changes in
Central Asian governments and associated formalities for reintroducing the project’s
activities. ATAR was not officially launched in Turkmenistan and Uzbekistan in Year 1
due to delays in government procedures in accepting ATAR assistance. The Turkmen
and Uzbek governments were open only to very limited activities with very lengthy
bureaucratic procedures. Despite these challenges, regional staff in those countries
continued to work with USAID missions to propose assistance in improving the
countries’ trade environment. In one significant example of a breakthrough, ATAR
delivered training to Uzbek Customs in 2015, the first USAID event of any kind held
directly with Uzbek customs in over a decade.
In 2014, the conflict between the Kyrgyz Republic and Tajikistan regarding the Karamyk
BCP impeded ATAR’s work on customs cooperation. Due to the tense situation at the
border, advancing any effort related to joint border cooperation or framework for
customs cooperation was futile. Therefore, the project worked directly with the
countries’ individual customs administrations to align their procedures with international
best practices. This dispute also prevented further progress on the CBTA between
Tajikistan, Kyrgyzstan, and Afghanistan.
Working in the Kyrgyz Republic became more problematic during the second half of
2015 as the result of its cancellation of the bilateral agreement with the United States.
During the last two years of the project, the Kyrgyz government’s focus on adherence
to the Eurasian Economic Union and continual changes in its government created
obstacles in advancing trade facilitation initiatives. Meanwhile, Turkmenistan’s new
import tariff duties and political uncertainty in Uzbekistan following the death of its long-
time President Islam Karimov in September 2016 posed challenges. In addition, many
key Central Asian officials had chronic, security-driven concerns about cooperation with
Afghanistan.
Air is the best way to ship time-sensitive cargo; many perishables; and high-value, low-volume
goods. Given the significant challenges to land-based transit of goods via Pakistan, air
shipments have grown into an increasingly important alternative means of moving
exports, as they overcome political (border) constraints and help build domestic cargo
capacity, which in turn facilitates further trade. Investors look for a well-established air-
AFGHANISTAN TRADE AND REVENUE PROJECT | 79
cargo capability during their due diligence phase before committing to bringing many
modern industries to Afghanistan. Furthermore, developing air cargo capacity in a land-
locked country is an essential national utility, much like Airline Passenger Service, a
phone network, internet connectivity, electric grid or water supply. It connects Afghan
commerce with the rest of the world in ways that surface transport can only offer
regionally.
Air cargo permits the rapid transport of time-sensitive goods without regard to national
borders, checkpoints or security concerns. At this stage, what Afghanistan ships is not
nearly as important as how it ships (by air) because nothing builds air cargo capacity like
actually establishing air bridges to new markets and regional hubs that offer connectivity
to multi-modal transportation to the rest of the world. Similarly, the short-term
subsidies (investment) being used to facilitate this capacity building are less important
than the long-term strategic objective of building a well-established national airlift
capability (also useful during emergencies where timeliness is critical). Creating this capacity should stimulate production and export of high-value, low-density products that
are ideal for transport by air. This airlift capacity will then become self-sustaining and
subsidies will no longer be required.
To further build the export potential and air lift capacity of Afghanistan, understanding
and designing interventions to address following challenges is critical:
• Promoting Afghan exports is heavily reliant on the commitment of the individual exporters;
most of whom are unwilling or unable to commit to terms and conditions for trade with
buyers across the world. There is little consistency over supply, quality or quantity of
goods that Afghan exporters can guarantee because exporters are not the
producers of goods, and merely act as merchant exporters for 80 percent of the
export commodities coming from Afghanistan. There is no concept of stock and sell,
and accordingly everything is aggregated on a ‘spot basis’ — a very disorganized way
of trading. Since the exporters are merchant exporters and do not have regular
suppliers, the quality differs with every export supply. The consignees on the other
side are based in a very regulated and controlled market and cannot afford such a
disparity.
• Nascent Supply Chain Model. Due to the irregularity in supply and volumes, the
logistical requirements of any given shipment are always determined on an
individualized basis. There are no volume projections or advance planning available
to cater to the shipping solutions required in the region. Furthermore, most of the
global freight forwarders and airlines do not service Afghanistan, making the few
available airfreight services providers less cost competitive. Afghan exporters were
initially skeptical of ATAR’s air cargo incentive program for this reason, and
exporters of fresh and perishable goods were particularly reluctant to participate
because of the cumbersome process for arranging a shipment. ATAR quickly
adapted and revamped the program to one in which goods were shipped with
greater regularity to warehouses in Dubai where they had access to multi-modal
shipment methods. From Dubai, freight forwarders could then take the shipments
AFGHANISTAN TRADE AND REVENUE PROJECT | 80
on to their final destinations via road, sea, or air based on demands from
international buyers.
• Lack of awareness on customs regulations, documentation. The exporters are not
competent in preparing flawless shipment documentation and are not aware of
customs regulations to execute the shipment origin formalities. In the absence of
correct documentation, the consignee on the other end faces significant issues with
customs to clear the shipment. The shipment incurs a lot of extra cost due to
inevitable penalties and customs levies which makes the trade inviable and
uncompetitive for both parties.
• Inadequate infrastructure. Kabul has lack of infrastructure to handle cargo. The Kabul
Airport customs operates in a very small zone with limited facilities or processes for
consolidation. All categories of goods, such as, chemicals, machinery, tobacco, spare
parts, military and safety equipment etc. are being handled from the same premise.
Whereas, most of Afghan export products are edibles (Dry Fruits & Nuts and fresh
fruits), most of these products fail laboratory testing at destination country for this
reason. The temperature-controlled environment is also non-complaint.
• USAID Vetting requirements. All beneficiaries and service providers must be vetted in
advance as per USAID vetting requirements; a process that takes several weeks on
average. Exporters and service providers are typically unable to convince buyers for
extended delivery dates as they await these approvals, which has resulted in a loss of
business to beneficiaries in some cases. ATAR attempted to pre-vet potential
beneficiaries of USAID export assistance when planned shipments were known in
advance. To the extent possible, future programs should strive for proactive
communication and collaboration with USAID’s vetting unit in this regard.
• Low Value commodities. In general, 95% of the Afghan export goods are low value products. Trading of these commodities via air mode of transport is not
commercially viable unless supported by subsidies. Accordingly, focusing on the
smaller portion of high-value goods for air transport is recommended so as not to
subsidize non-sustainable goods shipment models.
Future efforts to further incentivize air corridor development should also be mindful of
several risk factors for freight forwarding service providers.
• No cargo insurance. Beneficiaries (Exporters) do not buy cargo insurance for their
goods. Non-availability of insurance coverage is a potential threat to the service
provider, exporter and all involved parties.
• Security & safety compliance. The existing Airport customs and cargo terminal is not
an IATA approved facility. Most of the global carriers like Emirates do not accept
cargo on their aircraft due this reason.
AFGHANISTAN TRADE AND REVENUE PROJECT | 81
• Screening & Scanning for explosives, drugs and contrabands. Available equipment for
screening & scanning for various trade threats is not in line with the globally
accepted processes. There have been instances of detection of such irregularities at destination countries in past. Therefore, most cargo agents and airlines do not
accept cargo from local exporters. The lack of confidence in exporters and handling
infrastructure is a major risk for service providers.
Diversify support to multiple private sector associations. To maximize impact with limited
resources and taking into consideration the ineligibility for USAID programs to work
directly with the Afghanistan Chamber of Commerce and Industry (ACCI) -- the most
representative organization for the private sector in Afghanistan -- ATAR selected the
Afghan Exporters Club as an entry point to support the private sector. While focusing
on one association did increase impact and effectiveness, the narrow scope may have
limited the ability of the project to have a voice within the wider industry and/or impact
with other players. While the need for focus was clear, and working with the entire
industry of exporters would not have been possible, reducing ATAR’s focus to
essentially one organization, no matter how representative of a given segment, is
constraining. This was not a major challenge but may have implications for future project
design. It is highly recommended that in the future, a solid assessment of the exporters
association’s key strengths and weaknesses, and a targeted intervention plan to address
those issues, should be developed at the beginning of a project, thus assuring the
longevity of chosen activities.
Be prepared for the unique challenges of working with associations. Many Afghan associations
are weak in terms of their institutional structure and their membership base. Many
associations are not able to offer sustainable member services. Project initiatives need
to be tailored to fit the reality of each association and an evaluation of the level of
capacity of each association should be carried out before beginning activities, even if the
associations have been included under previous projects. Early signs of divergent
interests within AEC’s executive leadership signal that representatives of certain sectors
may wish to splinter off from this larger group in the future. For example, a cohort of
agriculture and fruit exporters within the AEC membership have expressed interest in
forming their own association to better represent the needs of their constituents, distinct from those of carpet or jewelry exporters for example. One recommendation
for future projects would be to set up sub-steering committees to widen the reach of
the project as AEC’s membership grows. Including more association members in
meetings and involving them in planning activities at the sub-committee level would
encourage their sense of responsibility for the association’s future. In either case, it is
important to clearly outline project goals and expectations from the beginning, and to
check back throughout implementation to make sure there are no misunderstandings.
Formal agreements with partner organizations are critical and should be established as early as
possible in the project. ATAR avoided many potential difficulties with partners by clearly
defining the roles and responsibilities of each, particularly in the case of our work with
the AEC. Formal agreements, such as a Memorandum of Understanding, were used to
AFGHANISTAN TRADE AND REVENUE PROJECT | 82
secure commitment of partnership as well as detail exactly what each party’s
responsibilities are, and what expectations are from both organizations.
Leveraging other USAID project resources and activities is crucial to project success. ATAR
made considerable impact through supporting Afghan exporters at international trade
events both by organizing multi-sector USAID-hosted tradeshows, and sponsoring
exporters to attend established regional trade events. The most effective way to
leverage scarce project resources and maximize individual project impact is to connect
to other projects, donors, and the private sector. By combining resources to achieve
greater results or through alternate cost sharing arrangements, everyone wins. To
prevent duplication of efforts when multiple projects contribute to hosting such events
in the future, there needs to be close coordination among programs. This should be
undertaken by senior project personnel from all relevant donor projects and should
result in a written agreement that clearly delineates areas of responsibility.
COMPONENT 3: IMPROVED CUSTOMS ADMINISTRATION
Embedding advisors in director’s offices amplifies results. Since the days of TAFA, ATAR has
been embedding its advisors in the offices of senior-level directors of the ACD.
Embedding advisors in this way resulted in day-to-day skills transfer and provided the
directors with an easily accessible technical expert to discuss any issues. Over time,
security concerns regarding ACD in particular prevented the project from embedding
expatriate staff at ACD. Instead, the staff conducted visits and meetings at ACD where
possible and relied as necessary on local ATAR staff who continued to work at ACD
with intermittent security restrictions. ATAR also invited ACD to its compound for
training sessions and meetings. In the future, security conditions permitting, this
approach should be re-instituted at the earliest stages of USAID projects.
Regular reporting and elevating key activities to the MOF is critical. Although ATAR kept
senior officials at the ACD regularly apprised of progress, some messages were not
being communicated to the MOF. As a result, the finance minister was not aware of
many key activities that ATAR was working on in partnership with the ACD. In the
future, USAID implementers working with ACD should confirm that the results of its
robust reporting mechanisms are routinely transmitted to key stakeholders so they
receive regular briefings on project progress. Furthermore, any unjustified delays
caused by government staff should be reported to the director general and MOF at an
early stage. This would ensure that all activities are pushed forward as quickly as
possible while minimizing opportunities for unnecessary delays caused by government
staff.
Information-sharing between ACD, and DAB, and commercial banks is essential to realizing
gains from E-pay. ACD’s reluctance to provide DAB with access to ASYCUDA delayed
the implementation of E-Pay in 2014 and similarly throughout 2016, technical and
communication issues between DAB and licensed commercial banks hampered E-Pay
implementation. ATAR facilitated meetings between ACD and DAB to identify the
challenges and required information technology equipment to improve the system.
Concurrently, ATAR began individual meetings with private banks to encourage E-Pay
AFGHANISTAN TRADE AND REVENUE PROJECT | 83
use. In consultation with key partners, ATAR recommends the following activities
should USAID wish to allocate resources towards e-pay activities in the future:
• Consult with the private sector to identify appropriate incentives for traders to
adopt e-payment;
• Support the transition of commercial banks to DAB’s on-site facilities at customs
locations;
• Support the facilitation of additional commercial bank agreements, like the one made
with Azizi Bank, to provide additional electronic payment methods to attract
traders, including point-of-sale kiosks at customs sites, mobile and web-based payment applications, and pre-loaded customs cards;
• Support e-payment awareness outreach to traders through ACCI and other trade
groups to inform traders about the availability and benefits of e-payment, as well as
the anticipated improvements to commercial banking services, including future
availability of bank branches located inside customs sites;
• Support updated training to brokers on DAB’s latest system upgrade (ICSS), as well
as training for commercial bank branches that have not received orientation on e-payment from their Kabul headquarters;
• Support ACD in developing and prioritizing targeted interventions in the customs
clearance processes where most corruption occurs, before payment slips are
generated by ASYCUDA to initiate the payment process.
Continued needs for capacity building at the ACD. The most important implementation
challenge faced by both ATAR and the ACD was and remains a near-term personnel gap
in qualified mid-career employees. This challenge is made more acute by the fact that
numerous senior officials within the ACD and parliament engage in nepotistic hiring
practices that result in their relatives and friends filling positions in customs without
meeting the basic requirements. Consequently, staff members are being promoted into
senior positions without the usual “time-in-service” that provides needed job
experience and professional skills on the part of those so promoted.
Because trade-related matters are intensely policy-driven and trade regulation is heavily
grounded in international treaty obligations, this deficiency in on-the-job experience of
junior officers is the Ministry’s single most critical institutional challenge. This challenge,
as well as continuing staff development over time, must be addressed by the ACD
through improved internal capacity that has yet to be fully developed. ATAR and other assistance programs have been able to provide professional training at levels that have
created better-informed, more skilled staff across most of the ACD directorates general
and agencies. However, looking forward, this type of professional training must be
provided continually and consistently as new personnel are recruited and existing staff
are promoted.
The work at HKIA’s OSS is not done. As a result of technical assistance from ATAR in the
form of upgrading the HKIAs OSS facility and network, the ACD has a greatly improved
the process and flow of export documentation and increased their staff’s technical
capacity to provide streamlined services. However, this technical capacity needs to be
AFGHANISTAN TRADE AND REVENUE PROJECT | 84
matched by additional and continuing training of the OSS staff members as well as more
extensive training of all ACD professional staff in the use of data/information for routine
work tasks. This need will be evermore critical as international and domestic trade, in all
aspects, continues to be driven by information services and systems.
AFGHANISTAN TRADE AND REVENUE PROJECT | 85
ANNEX A. AFGHANISTAN TRADE AND REVENUE
FINANCIAL REPORT
PROJECT PERIOD OF
PERFORMANCE
CONTRACT
BUDGET
TOTAL INVOICED
THROUGH JAN. 2018
CONTRACT
FUNDS
REMAINING
% OF TOTAL
THROUGH JAN. 2018
INVOICE
Afghanistan Trade and Revenue
Project
November 7, 2013 to
February 28, 2018 $77,754,267 $75,853,097 $1,901,169 98%
ITEM
COMPONENT 1 (SUPPORT TRADE
POLICY
LIBERALIZATION)
COMPONENT 2 (FACILITATE ENHANCED
ACCESS TO REGIONAL
MARKETS)
COMPONENT 3 (IMPROVED CUSTOMS AND
TAX ADMINISTRATION)
COMPONENT 4 (VAT)
INVOICED
THROUGH JAN.
2018*
TIME
U.S. National
Long-Term Technical Experts $1,615,002 $1,709,631 $1,438,290 $0 $4,780,023
Short-Term Technical
Experts/Home Office $2,045,457 $2,398,378 $1,679,312 $0 $6,146,130
Locally Hired Personnel
Third Country Nationals/Long-
Term Technical Experts/Short-
Term Technical Experts
$5,334,570 $5,188,000 $4,623,113 $121,539 $15,267,221
Cooperating County Nationals $ 4,133,233 $4,032,724 $3,680,823 $0 $11,846,780
Subtotal, TIME $13,128,261 $13,328,734 $11,421,537 $121,539 $38,040,155
MATERIALS
Travel/Transport/Per Diem $323,140 $436,775 $291,160 $0 $1,054,630
Allowances $910,165 $1,037,128 $810,294 $0 $2,759,985
AFGHANISTAN TRADE AND REVENUE PROJECT | 86
Security $3,663,267 $3,895,417 $3,241,862 $0 $10,808,468
Equipment/Supplies $109,761 $280,514 $105,523 $0 $495,798
Subcontractors/Consultants $1,421,422 $1,572,216 $1,192,756 $34,452 $4,220,846
Other Direct Costs $4,811,948 $5,154,329 $4,204,787 $0 $14,178,641
Grants Under Contract $0 $0 $0 $0 $0
Indirect Costs $1,459,921 $1,538,547 $1,293,310 $1,723 $4,294,574
Subtotal, MATERIALS $12,699,623 $13,914,927 $11,139,692 $36,175 $37,812,940
Total, Time and Materials
(Invoice through January
2018)
$25,827,885 $27,243,660 $22,561,229 $157,714 $75,853,097
*The ATAR financial report is based on the January 2018 invoice and the data will be updated with the final invoice in the final monthly financial report.
AFGHANISTAN TRADE AND REVENUE PROJECT | 87
ANNEX B. SUMMARY PERFORMANCE INDICATOR
TRACKING TABLE
No. Key Performance Indicators Unit of measure
Source
Base
line
Results and Targets
Results Results in Relation to Targets and Baselines
Y1 Y2 Y3 Y4 Y5 LOP
TOTAL LOP
TARGET Target
achieved
Result in relation
to target
Change from
baseline
Activity Goal: Business climate strengthened to enable private investment, enhanced trade, job creation, and fiscal sustainability through the critical Transition Period and continuing into the Transformational Decade
1 Growth in trade volume (import and exports, excluding transit)
percent ACD 0% 3% -4% 11% 12% 4% 26% 12% Yes 14% 100%
2 Change in World Bank’s Doing Business ranking for trading across borders indicator
global country rank
World Bank 184 184 174 175 175 n/a 175 177 Yes 2 9
IR1: Capacity of Afghan government to formulate and implement liberal policy framework for trade and investment strengthened
Sub IR1.1: WTO accession process finalized
3
Number of instances in which GIRoA requests for trade policy research and analysis can be provided by Trade Policy Analysis Unit (TPAU)
number TPAU 0 n/a n/a 20 2 0 22 8 Yes 14 22
IR2: Regional and global integration enhanced
Sub IR2.1: Enabling environment for enhanced access to regional markets established
4
Number of interactions between businesses (and other relevant groups) with government entities in the region involving policy reform dialogues
number ATAR 0 6 13 9 5 0 33 30 Yes 3 33
5 Business climate indicator (trade)* index value
ACCI/GIZ 19 32 -25.17 -11.38 -1.3 n/a -1.3 35 No -36.3 -20.3
6 Number of proposals accepted to harmonize customs procedures or documents on transit corridors
number ATAR 0 0 12 2 1 0 15 20 No -5 15
Sub IR 2.2: Benefits from enhanced market access expanded
7 Number of firms receiving USG capacity building assistance to export
number ATAR 0 92 212 347 392 17 1,060 850 Yes 210 1,060
8 Estimated self-reported value of new deals by ATAR supported participants in trade events
currency (US$; million)
beneficiaries 0 8.37 5.30 14.78 4.87 0 33.32 25.00 Yes 8.32 33.32
9 Percent of exports increased through air transport
percent ACD 0% 0% 73% 4% 12% 51% 51% 24% Yes 27% 51%
IR3: Revenue generation for fiscal sustainability strengthened through reforms and anti- corruption measures in customs and taxation
10 Growth in customs revenue (overall and per border crossing)
percent ACD 0% 0% -9% 24% 18% 2% 35% 3% Yes 32% 35%
BC Herat percent ACD 0% 0% -15% 31% 16% 7% 39% n/a n/a n/a 39%
AFGHANISTAN TRADE AND REVENUE PROJECT | 88
BC Ningarhar percent ACD 0% 0% 0% 16% 5% 2% 22% n/a n/a n/a 22%
BC Nimrooz percent ACD 0% 0% 22% 27% 25% -13% 60% n/a n/a n/a 60%
BC Balkh percent ACD 0% 0% -12% 12% 66% 5% 72% n/a n/a n/a 72%
BC Kandahar percent ACD 0% 0% 8% 85% 32% -5% 120% n/a n/a n/a 120%
BC Farah percent ACD 0% 0% -9% 68% 13% -5% 66% n/a n/a n/a 66%
BC Andkoi percent ACD 0% 0% -55% -44% -18% 125% 9% n/a n/a n/a 9%
BC Kabul Airport percent ACD 0% 0% -7% 26% 11% -9% 21% n/a n/a n/a 21%
No. Key Performance Indicators Unit of measure
Source
Base
line
Results and Targets
Results Results in Relation to Targets and Baselines
Y1 Y2 Y3 Y4 Y5 LOP
TOTAL LOP
TARGET Target
achieved
Result in relation
to target
Change from
baseline
IR3: Revenue generation for fiscal sustainability strengthened through reforms and anti- corruption measures in customs and taxation
BC Kabul percent ACD 0% 0% 45% -19% -22% 6% 11% n/a n/a n/a 11%
BC Kunduz percent ACD 0% 0% -27% -25% -11% 127% 63% n/a n/a n/a 63%
BC Paktiya percent ACD 0% 0% 62% 65% -28% -48% 50% n/a n/a n/a 50%
BC Khost percent ACD 0% 0% -42% 29% -56% -93% -163% n/a n/a n/a -163%
BC Paktika percent ACD 0% 0% 35% 112% -39% 33% 142% n/a n/a n/a 142%
BC Kunar percent ACD 0% 0% 60% 62% -71% -98% -47% n/a n/a n/a -47%
BC Takhar percent ACD 0% 0% 1% 61% -53% -24% -15% n/a n/a n/a -15%
BC Post Parcel percent ACD 0% 0% -37% 29% 37% 7% 36% n/a n/a n/a 36%
BC Badakhshan percent ACD 0% 0% 76% -28% 65% 66% 179% n/a n/a n/a 179%
11 Rollout of e-pay at all ICDs and BCPs (percent payments processed via e-pay)
percent ACD 0% n/a n/a n/a 18% n/a 18% 75% No -57% 18%
12 Ratio of customs revenue collected to GDP
percent ACD, the World Bank, IMF
2.5% 3.5% 3.2% 4.1% 4.8% 4.3% 4.3% 20% No -15.7% 1.8%
Sub IR 3.1: Customs procedures to increase transparency, efficiency, and uniformity in the collection of revenue, performance of core functions, and facilitation of trade improved
13 Increase in customs duties (absolute) Afn billion ACD 0.00 -2.46 1.94 0.84 2.41 2.41 2.41 2.00 Yes 0.41 2.41
14 Number of declaration forms processed in each ICD’s in Afghanistan
number (thousands)
ACD 379.0 379.0 318.0 359.0 374.0 381** 381.0 386.6 No -5.6 7.6
15 Number of steps reduced or streamlined at border
number ADC, ATAR 0 0 0 2 0 0 2 6 No -4 2
16 Number of customs systems in line with international best practices adopted
number ATAR records
0 3 4 7 5 0 19 15 Yes 4 19
17 Number of risk management procedures adopted at customs depots
number ACD, ATAR 0 0 1 2 7 2 12 10 Yes 2 12
18 Number of training modules developed by ATAR
number ATAR 0 0 18 14 9 5 46 45 Yes 1 46
19 Number of audit cases selected using risk-based criteria
number ATAR 0 0 0 4 1 0 5 9 No -4 5
Cross-cutting and Gender Indicators
20 Share of cases yielding additional assessment (revenue) to cases selected for audit
percent ACD 0% n/a n/a n/a n/a n/a n/a 30% No No No
AFGHANISTAN TRADE AND REVENUE PROJECT | 89
21 Person-days of training of key personnel in trade and customs regulation
person-days
ATAR 0 262 737 436 1,345 7 2,787 213 Yes 2,574 2,787
sex Male person-days
ATAR 0 220 609 371 1,262 7 2,469 n/a n/a n/a n/a
sex Female person-days
ATAR 0 42 128 65 83 0 318 n/a n/a n/a n/a
No. Key Performance Indicators Unit of measure
Source
Base
line
Results and Targets
Results Results in Relation to Targets and Baselines
Y1 Y2 Y3 Y4 Y5 LOP
TOTAL LOP
TARGET Target
achieved
Result in relation
to target
Change from
baseline
Cross-cutting and Gender Indicators
22 Percentage of participants reporting increased knowledge and skills in trade, transit, or customs
percent ATAR 0% n/a n/a n/a n/a n/a n/a 95% No -95% n/a
23
Number of public events held to discuss trade and business policy matters with stakeholders, the public, and the private sector
number ATAR 0 54 103 56 44 2 259 280 No -21 259
24 Number of consultative processes with private sector as a result of U.S. government assistance
number ATAR 0 7 11 6 0 0 24 25 No -1 24
25
Number of permanent professional positions allocated for women within MOCI, ACD, ANSA, MAIL and MOPH
number MOCI, ACD, ANSA, MAIL and MOPH
173 174 175 177 n/a n/a 177 175 Yes 2 4
26 Number of interns completing a six-month internship at GIRoA
number ATAR 0 9 26 32 32 0 99 100 No -1 99
sex Male number ATAR 0 7 13 12 12 0 44 n/a n/a n/a n/a
sex Female number ATAR 0 2 13 20 20 0 55 n/a n/a n/a n/a
27 Percentage of Afghan long-term female staff employed on ATAR
percent ATAR 0% 3% 19% 13% 19% 0% 14% 20% No -6% 14%
28
Percentage of participants reporting increased agreement with the concept that males and females should have equal access to trade and customs [social, economic, and political] opportunities (GNDR 4 F-indicator)
percent ATAR n/a n/a n/a n/a n/a n/a n/a 65% No -100% n/a
29
Percentage of participants reporting increased understanding and knowledge of gender-related issues in trade
percent ATAR n/a n/a n/a n/a n/a n/a n/a 100% No -100% n/a
30
Number of outreach materials developed and disseminated on gender-related issues in trade, transit, or customs
number ATAR 0 1 0 7 0 0 8 6 Yes 2 8
AFGHANISTAN TRADE AND REVENUE PROJECT | 90
ANNEX C. SNAPSHOTS
AFGHANISTAN TRADE AND REVENUE PROJECT | 91
SNAPSHOT
AFGHAN CARPETS REACH
DUBAI BY AIR Afghanistan’s exports
set to rise as traders
see value in exporting
by air.
Afghan products have growing appeal in Europe, India, and the
Middle East. However, Afghanistan’s ability to expand its
market access is hampered by its landlocked location.
Exporters using land and sea transportation often encounter
unpredictable trade barriers, poor security, and costly delays.
In the early hours of September 18, 2017, an IL-76 cargo
plane loaded with 36 tons of carpets and kilims valued at
more than $700,000 departed Kabul for Dubai, United Arab
Emirates, marking the first in a series of large air shipments
aimed at assisting Afghan traders to overcome regional transit
challenges. From Dubai, the carpets will be transshipped to
consumer markets in Germany and Italy.
USAID’s ATAR project organized the shipment and is
providing incentives to Afghan traders with capacity to export
significant volumes of high-valued goods. One such trader is
Abdullah Raman Qul, president of Afghan Bazar Carpets
Manufacturing Company, based in Marzar-e-Sharif.
“We began working with ATAR in June to explore alternative
ways to get our carpets to our customers in a faster and
more secure manner,” said Abdullah Rahman Qul. “Exporting
by air provides a faster delivery time, which gives us an edge
with our customers in Europe. It also has lower insurance
costs and helps us avoid security challenges involved in
transporting goods by road through neighboring countries.”
In addition to incentives, ATAR has established a logistics
system to facilitate air cargo shipments. ATAR has set up a
consolidation warehouse near the Hamid Karzai International
Airport (HKIA) to address limited airline cargo capacity and
help traders avoid storage and security issues at HKIA in the
event flights are delayed or cancelled. “We began bringing our
carpets to the warehouse in mid-August where they were
kept in a secure environment and properly weighed and
labeled before delivery to the airport on September 17,” said
Rahman Qul. “We are planning to export another 40 tons
through this new system.”
ATAR is also working with the Afghan Customs Department
to reduce the number of customs clearance steps at airports.
Together with Afghanistan Civil Aviation Authority, ATAR
has planned to modernize HKIA’s air cargo terminal and
facilitate air corridors between Afghanistan and countries
with growing appetites for Afghan products.
Workers at HKIA’s customs
zones unload bales of carpets
exported by Afghan Bazar
Carpets Manufacturing Company
on September 17, 2017 PHOTO: Ian Carver, ATAR
“Exporting by air provides a faster
delivery time, which gives us an
edge with our customers in
Europe.”
— Abdullah Rahman Qul of
Afghan Bazar
AFGHANISTAN TRADE AND REVENUE PROJECT | 92
SNAPSHOT
AFGHANISTAN SIGNS ARUSHA
DECLARATION
Afghanistan commits
to combatting
corruption by signing
World Customs
Organization Revised
Arusha Declaration.
Achieving good governance and combatting corruption are
important priorities of the Afghan government. This is
especially the case for the country’s customs administration
with its frontline officers operating on the borders of six
neighboring countries. To help improve the situation,
USAID’s ATAR Project has supported the Afghanistan
Customs Department (ACD) to develop a code of conduct,
anti-corruption strategy, and other related policies.
On July 16, Afghanistan took a significant step towards
increasing customs integrity by signing up to the WCO
Revised Arusha Declaration, a non-binding instrument that
provides basic principles to promote integrity and combat
corruption within customs administrations.
Minister of Finance Eklil Hakimi signed the notification of
intent, the official procedure for committing to the
declaration, in the presence of WCO Secretary General
Kunio Mikuriya and the Director of WCO-Regional Office for
Capacity Building–Asia Pacific Kazunari Igarashi, ACD
representatives, and other government officials.
“Accession of Afghanistan to the Arusha Convention will help
us strengthen infrastructure and human resources capacity in
the customs department to develop the economy and collect
nation-al revenue,” said Minister Hakimi. “This is a useful tool
that will promote economic development, employment, and
trade with regional countries.”
The Arusha Declaration was drafted in Arusha, Tanzania, in
1993 and revised in 2003. From then on, it was called the
Revised Arusha Declaration. It states that corruption is the
main obstacle for achieving national goals such as revenue
collection, trade facilitation, and national security. Signatories
commit to principles such as leadership, transparency,
modernization, auditing and investigations, code of conduct,
human resource management, organizational culture, and
private-sector relations.
“The WCO is a house of the world customs departments and
we are interested in sharing our experiences with Afghanistan
in modernizing customs in Afghanistan, capacity building, and
better management of customs,” said WCO Secretary
Mikuriya.
The WCO’s Regional Director for
Capacity Building, WCO
Secretary General, and
Afghanistan’s Director General of
Customs (left to right)
participate in a meeting ahead of
Afghanistan’s signature to
commit to the Revised Arusha
Declaration on July 16, 2017. PHOTO: Aman Sadat, ATAR
“Accession of Afghanistan to the
Arusha Convention will help us
strengthen infrastructure and
human resources capacity in the
customs department to develop
the economy and collect national
revenue.”
— Minister of Finance Eklil
Hakimi
AFGHANISTAN TRADE AND REVENUE PROJECT | 93
SNAPSHOT
AFGHAN EXPORTS REACH
SOUTHEAST ASIA First ever
Afghanistan-
Malaysian business
forum helps Afghan
exporters access new
market.
Afghan exports are gaining a foothold in Southeast Asia after
Afghan businesses negotiated almost $330,000 in deals at the
first Afghanistan-Malaysian Business Forum. The event,
organized with the support of ATAR, was held May 11 and 12
2017 in Kuala Lumpur, Malaysia, to strengthen the trade
relationship between Afghanistan and Malaysia.
Seven members of the Afghanistan Exporters Club, a private-
sector association established in 2016 with ATAR support,
participated in the event. The members struck deals to
export Afghanistan’s dried fruit and nuts and almond oil to
Malaysia and are in the process of finalizing other agreements,
including a $160,000 deal to export carpets to Malaysia.
For AEC member ASHK, a dried fruit and nuts exporter
based in Kabul, the event provided an opportunity to export
and sell as well as to understand local expectations and
market demand for long-term business dealings.
“We made a deal to export a container load of raisins and
apricots that will be sent in early June,” said ASHK’s chief
executive Abdul Shukoor Kushkaky. “In addition to this deal,
the business forum was an excellent opportunity to learn how
to access and take advantage of the huge demand of the
Malaysian market and beyond. The country can serve as a
platform to make connections and market our product to
other countries in Southeast Asia as well.”
The event drew more than 250 participants comprising
business officials, representatives of business associations, and
high-level government officials, including ambassadors from
countries in Europe, the Middle East, and Central Asia.
“This was not just a one-off event; I will be going back to
Malaysia to meet with buyers and to expand on the business
deals and relationships that we made during the event,” said
Mr. Kushkaky.” Being a member of AEC has proved highly
useful, and now it’s time to consolidate our successes from
the event.”
Afghanistan’s Deputy Minister of
Commerce and Industries
Mohammad Qurban Haqjo (left)
and Malaysia’s Deputy Minister of
International Trade and Industry
Datuk Haji Ahmad Maslan (right)
reach for a sample of
Afghanistan’s dried fruit and nuts. PHOTO: Shoukat Khurram, ATAR
“The forum was an excellent
opportunity to learn how to access
and take advantage of the huge
demand of the Malaysian market
and beyond.”
— Chief Executive of ASHK
Abdul Shukoor Kushkaky
AFGHANISTAN TRADE AND REVENUE PROJECT | 94
SNAPSHOT
BUSINESSMAN FINDS BUYERS IN
DUBAI Gulfood Tradeshow
in Dubai convinces
Afghan trader to set
up local office to
increase exports.
Afghanistan’s fresh and dried fruits are gaining popularity in
the region after decades of conflict degraded Afghan
producers’ capacity to compete in international markets.
Despite growing appetite for such goods in countries like
India and the United Arab Emirates, regular supply continues
to be a concern for many importers and retail chains.
To enhance the connection between Afghan traders and
international markets and fill the growing demand, ATAR
supported eight Afghan traders at Dubai’s Gulfood, the
world’s largest annual food and hospitality tradeshow from
February 26 to March 2, 2017. The traders negotiated
$4,519,160 million in deals and $4,386,659 in potential deals
for fresh and dried fruits, nuts, vegetables, saffron, and juice
with more than 40 international buyers from 12 countries.
Fresh and dried fruits trader Abdul Fatah participated in
Gulfood as an exhibitor. His company, Jamshid Ramin Trading,
is well established in northern Afghanistan and has built up
important relations with businesses in Uzbekistan and India.
Abdul understood that his participation at Gulfood would not
only allow him to generate sales, it would help him gain access
to the large Middle East market as well.
“We made over $1,691,000 in deals for apricots, raisins, figs,
licorice and sesame and watermelon seeds with regional
buyers,” said Abdul. “But aside from these sales, this year’s
Gulfood convinced us to set up an office in Dubai to get
closer to customers and buyers in this region. Dubai is a
world trade center and we have already started the
registration process to establish this office.”
As part of USAID’s goal to double Afghan exports by 2020,
the ATAR project is working to increase regional integration.
While much of the focus is on trade and transit agreements
with neighboring countries, the decisions of traders like Abdul
Fatah to expand operations into regional countries to
increase supply and sales gives Afghanistan a human face
abroad and positions the country as a sustainable and reliable
trade partner.
“We secured many deals with Arab and Iranian wholesalers
which will then ship our products to countries as far away as
Vietnam and Europe,” said Abdul. “A branch office will allow
us to have a permanent trade booth in Dubai, where we can
distribute samples, make deals on a regular basis, and easily
transfer money and business back to Afghanistan.”
Jamshid Ramin Trading shows
samples to international buyers
during Gulfood, held on Feb. 26 -
March 2, 2017 in Dubai, United
Arab Emirates. PHOTO: Aman Sadat, ATAR
“This year’s Gulfood convinced us
to set up an office in Dubai to get
closer to customers and buyers in
this region. Dubai is a world trade
center and we have already
started the registration process.”
— Abdul Fatah of Jamshid
Ramin Trading
AFGHANISTAN TRADE AND REVENUE PROJECT | 95
SNAPSHOT
BUSINESSWOMAN STRIKES
DEALS IN DUBAI High profile
tradeshow in Dubai
helps facilitate
exports of top Afghan
products.
Afghanistan has some of the region’s best-quality fresh and
dried fruits, carpets, cashmere, carpets, marble, jewelry,
precious stones, and apparel. Despite the rising popularity of
these products, Afghan traders face significant challenges
competing in international markets.
In response, USAID organized Exhibition Afghanistan from
December 6 to 8, 2016 in Dubai, which is the first of a series
of tradeshows aimed at firmly establishing Afghan exporters’
presence in world markets. Sixty-six Afghan traders
participated in the two-day business-to-business event and
negotiated more than $40 million of potential deals.
Ms. Fouzia Hariri is one of nine women traders who took
part in the exhibition. Her business, Hasti Trading Company,
was set up in 2013 and processes and sells saffron and dried
fruit and nuts. Fouzia has participated in several international
trade events in recent years. She expected Exhibition
Afghanistan would be an opportunity to make immediate sales
as well as long-term business relationships.
“I took part in Exhibition Afghanistan with a view to gain
profit over the long-term by making linkages with UAE and
international buyers. I made deals with two Dubai-based
buyers for 20 kg of saffron and 100 tons of dried fruit, worth
a total of $1,089,300,” said Fouzia.
For Fouzia, the benefits of the exhibition went beyond these
lucrative deals. “I met a buyer who is interested in receiving
100 kg annually. He is willing to provide the investment to
produce and process the saffron if I can provide the land for
cultivation,” she said. “The exhibition opened up a lot of
opportunities and facilitated access to Dubai, which is an
important international market for Afghanistan.”
Prior to the event, USAID provided the exhibitors with
training to understand the requirements of doing business in
Dubai. “The marketing and negotiating skills on how to
present my products and myself at such events were
invaluable,” said Fouzia, adding that she is now focusing on
improving packaging and developing a website to reach
additional buyers.
As part of an effort to make Exhibition Afghanistan a
sustainable brand, in November 2016, USAID helped establish
the Afghanistan Exporters Club, an association of exporters
that is expected to take a lead role in organizing future
Exhibition Afghanistan events.
An international buyer inspects
saffron samples of Hasti Trading
Company during Exhibition
Afghanistan, December 6-8, 2017
in Dubai, United Arab Emirates. PHOTO: Ian Carver, ATAR
“The exhibition opened up a lot of
opportunities and facilitated
access to Dubai, which is an
important international market for
Afghanistan.”
— Ms. Fouzia Hariri, owner of
Hasti Trading Company in
Kabul
AFGHANISTAN TRADE AND REVENUE PROJECT | 96
SNAPSHOT
MERGER MAKES DOING
BUSINESS EASIER Merger Makes Doing
Business Easier
Companies ranging from business startups to corporate
heavy-weights are driving economic growth and creating jobs
in Afghanistan, but obtaining a business license in the country
has been a lengthy and costly process frustrating even
determined investors.
In a major step toward overcoming these challenges, the
Afghan government merged two parallel administrative bodies
to streamline the process. The Ministry of Commerce and
Industries announced on Sept. 28 the business-licensing
department of the Afghanistan and Investment Support
Agency merged into the ministry’s Afghanistan Central
Business Registry-Intellectual Property (ACBR-IP).
ACBR-IP will issue a single business license in place of the
multiple investment and trade licenses previously required.
ACBR-IP will is-sue the license, which is valid for three years,
in Kabul and in 22 offices in the provinces at a cost of 30,000
Afghanis per license. Previously, companies had to renew
multiple licenses annually at a high cost.
“We are at a very crucial point, and we need to take steps to
improve our economy. Fortunately, the distance between the
private sector and the government has been eliminated.” said
Minister of Commerce and Industries Humayoon Rasaw.
“The government is continually trying to encourage
investment, and we are trying to change businesspeople into
investors. This is a good day for the private sec-tor.”
USAID’s Afghanistan Trade and Revenue (ATAR) Project
supported the merger by preparing the merger plan,
modifying software and hardware, and providing on-the-job
training. ACBR-IP will soon make application for licenses
available online as soon as hardware provided by the World
Bank and Hirakata, an Afghan non-profit organization.
“This is one of the most important steps for facilitating
business in Afghanistan,” said Deputy Minister of Commerce
and Industries Mohammad Qurban Haqjo. “We have made
the process simple and easy, and the Ministry of Commerce
and Industries is still trying to do more to facilitate business.”
USAID’s ATAR works with the government and private
sector to improve Afghanistan’s trade environment. With
ATAR support, Afghanistan acceded to the World Trade
Organization last July, solidifying its commitment to ease
trade and adhere to global rules of commerce.
Afghan businessmen and public
officials cut a ribbon on Sept. 28
in Kabul officially launching a
single entity for business
registration in Afghanistan. PHOTO: Ian Carver, ATAR
“This is one of the most important
steps for facilitating business in
Afghanistan.”
— Deputy Minister of
Commerce and Indus-tries
Mohammad Qurban Haqjo
AFGHANISTAN TRADE AND REVENUE PROJECT | 97
ANNEX D. PRESS RELEASES
AFGHANISTAN TRADE AND REVENUE PROJECT | 96
ANNEX E. INDEX OF KEY
AFGHANISTAN TRADE AND REVENUE
PROJECT REPORTS
Work Plans • ATAR Year 1: November 7, 2013-November 6, 2014
• ATAR Year 2: November 7, 2014-November 6, 2015
• ATAR Year 3: November 7, 2015-November 6, 2016
• ATAR Year 4: November 7, 2016-November 6, 2017
• ATAR Extension Period: November 7, 2016-February 28, 2017
M&E Plans
• ATAR Year 1: Submitted as annexes within Annual Work Plans.
• ATAR Year 2: Submitted as annexes within Annual Work Plans.
• ATAR Year 3: Submitted as annexes within Annual Work Plans.
• ATAR Year 4: Submitted as annexes within Annual Work Plans.
Annual Reports
• 2014: ATAR Annual Report
• 2015: ATAR Annual Report
• 2016: ATAR Annual Report
Quarterly Reports
• 2013: (Q1 November-December 2013)
• 2014: (Q2 January- March, Q3 April-June, Q4 July-September)
• 2015: (Q2 January- March, Q3 April-June, Q4 July-September)
• 2016: (Q2 January- March, Q3 April-June, Q4 July-September)
• 2017: (Q2 January- March, Q3 April-June, Q4 July-September)
Monthly Progress Reports
• 2013: November, December
• 2014: January, February, April, May, July, August, October, November
• 2015: January, February, April, May, July, August, October, November
• 2016: January, February, April, May, July, August, October, November
• 2017: January, February, April, May, July, August, October
Monthly Financial Reports
• 2013: November, December
• 2014: January, February, March, April, May, June, July, August, September, October,
November, December
AFGHANISTAN TRADE AND REVENUE PROJECT | 97
• 2015: January, February, March, April, May, June, July, August, September, October,
November, December
• 2016: January, February, March, April, May, June, July, August, September, October,
November, December
• 2017: January, February, March, April, May, June, July, August, September, October,
November, December
Technical Reports
• WTO Post Accession Strategy for Afghanistan
• World Trade Organization (WTO Notifications Manual
• Prospects of Intra-regional and Inter-regional trade in Central and South Asia
• Benefits and Challenges of the Potential Afghanistan-Pakistan-Tajikistan-India Trade
and Transit Agreement (APTITTA)
• Trade Opportunities of Central and South Asia
• WTO Consistent Policy Alternatives to Stimulate Afghan Wheat Production and
Flour Milling
• Afghanistan Transport and Logistics Competitiveness Study
• Boosting the Competitiveness of Afghan Exports: Issues and Recommendations
• Comparing the Competitiveness and Efficiency of Road Transport Operators
between Afghanistan and the Kyrgyz Republic
• WTO Agreement on Trade Facilitation Tajikistan: Compliance Assessment Report
• WTO Agreement on Trade Facilitation Afghanistan: Compliance Assessment Report
• WTO Agreement on Trade Facilitation Kyrgyzstan Compliance Assessment Report
• Assessment of the Effects of Adopting a UPOV-Compatible Plant Variety Protection
System of Afghanistan
• Developing a Risk-based National Food Inspection Strategy
• Needs Assessment for the National Board on International Trade and Safeguard
Measures
• Needs Assessment for Establishing the Afghan Food Safety Control Authority
• Pest Risk Assessment Manual based on IPPC Guidelines: Reference Documents
Framework for Pest Risk Analysis (IPPC/ISPM 2)
• Recommendations for Establishing a Food Safety Information Center
• Comparative Advantage and Trade: Afghanistan, Central Asia, and South Asia
AFGHANISTAN TRADE AND REVENUE PROJECT | 98
Washington, D.C. 20523
Tel.: (202) 712-0000
Fax: (202) 216-3524
www.usaid.gov