Unsung hero of Thai trade

Utid Tamwatin is Customs Department director-general

Changes that are now bringing modern, speedy operations to the 135-year-old department are more concerned with facilitating the operations of exporters and importers, encouraging international trade, and helping to give an edge to Thailand's competitiveness in the global marketplace. Asina Pornwasin reports.

It was just 10 years ago when the Customs Department began the overthrow of its old, traditional system that was based on face-to-face dealings, writing everything onto numerous documents, and countless tons of paper.

The old system had been in place for more than a century. It used to take exporters and importers at least 15 days to work their way through the entire customs process.

In 1998, the department began the implementation of electronic data interchange (EDI), a system that promised to cut the old process down to just three days, saving huge amounts of time for companies involved in import and export trading.

However, the EDI system posed a significant challenge to long-established habits and procedures.

Customs Department director-general Utid Tamwatin, who has worked with the department for almost three decades, recalled that in the early days of launching EDI, the department's moves were strongly resisted by shipping companies and firms involved in the customs process, particularly small- and medium-sized businesses.

The EDI system required that they dealt with the department by electronic systems, and that forced them to change their working processes from paper-based documents to electronic ones. In the early stages, the old paper-based document systems ran in parallel with EDI in order to comply with the law, because at that time there were no laws related to electronic documents.

"Large shipping [companies] was not affected too much because they could afford electronic systems. But small- and medium-sized shipping firms resisted strongly because the new system forced them to adopt electronic systems when they didn't have such systems of their own. They had to use service providers, and that incurred extra costs," Utid said.

However, after experiencing the benefits of EDI, they realised that the extra cost of service providers was less than benefits such as reduced time, reduced human error, and reduced rental costs for containers and costs of inventory. In other words, it helped them to increase their competitiveness. Eventually, they were happy with EDI.

In 2004, three years after the Electronic Transactions Act, B.E. 2001, was passed into law, the department again decided to move forward. It planned to transform the customs process from EDI to a Web-based electronic customs system - a fully paperless system.

The main tasks involved redesigning and restructuring the department's in-house system to support the provision of e-customs. It spent Bt228 million to computerise its entire back-office system, including its head office. It also spent Bt78 million to change all customs gates throughout the country to computer operations and link them all back to the head office with Web-based technology.

"We planned in 2004 and developed the system phase-by-phase, until we were able to kick off the first phase of e-customs service in 2007. We were eventually able to provide complete e-customs services in the middle of 2008," Utid said.

Once the entire customs system was computerised, the department was able to cut down the time taken for the provision of customs services from three days to just one hour.

Utid said that once companies completed the customs process at the department, their shipped products could be released immediately from the customs gate, wherever  in the country that was.

"The speedier our customs service is, the more competitive the businesses are. That is the main benefit gained from our e-customs system," Utid said.

The e-customs system has meant that the number of documents and amount of time required for exporting have shrunk significantly, making Thailand one of the easiest countries in the world for cross-border trade.

Thailand is now ranked 13th in a list of countries recognised as the easiest in the world for doing business. Only a year ago, it was rising through the rankings in 19th position.

According to the World Bank Group's Doing Business rankings, the number of documents required to export from Thailand has fallen from nine in 2007 to seven in 2008 and to only four in 2009. The number of documents required for importing has fallen from twelve to nine to three over the same period.

As a result, Thailand's position in Doing Business's Trading across Borders rankings improved from 103rd in 2007 to 50th in 2008 and to 10th in 2009.

Thailand's improved ranking in ease of doing business reflects the improvement in the country's overall competitiveness, Utid said.

However, the department's tasks are not yet finished. Utid said the department was working on many projects that were "added-on" services of the e-customs system, helping to facilitate the country's international trade by creating more e-customs-related services.

For example, an e-tracking service will allow exporters and importers to monitor the customs status of their shipments in real time via the Internet, and an e-draw back service will allow importers to receive faster tax refunds by enabling them to submit all related documents in electronic format.

As well, an e-licensing service will allow businesses to apply for and receive licences issued by many government departments through a one-stop system at the e-customs service.

Utid said his department was currently collaborating with six other departments in the e-licensing service. This number would rise to 10 by the end of this year.

The e-licensing service is a part of the first phase of the National Single Window (NSW) Scheme. The Customs Department was appointed host of the project in 2005.

The second phase of the NSW project, covering 2010 and 2011, will involve expanding the e-licensing service from 10 to 40 government departments and agencies, the establishment of a national logistics network and the creation of links to the 10 Asean member countries under the Asean National Single Window plan.

"All of my department's moves and efforts have been aimed mainly at pushing Thailand to the forefront of global cross-border trade. Many countries have been improving their competitiveness by using technology, and we cannot ignore it. We must continue to put more effort into driving our country's competitiveness. The tasks and the responsibilities are endless," Utid said.