Just a month after Prime Minister Hun Sen called for reform in Cambodia's notoriously
corrupt Customs Department, the agency has taken small steps to streamline import
and export processing.
But private sector members and trade experts say trade facilitation in Cambodia is
still far from meeting international standards.
"It's nothing big at this moment, just small steps," said Ken Loo, secretary
general of the Garment Manufacturers Association in Cambodia. "We'll have to
wait and see what happens."
In a speech given August 20 at the seventh Government-Private Sector Forum, Hun Sen
described trade facilitation as a "top priority and urgent matter," highlighting
the importance of changing current customs procedures.
The country cannot progress economically, he said, without promoting trade through
"rationalizing government agencies that impose high costs and delays on private
sector ... particularly the Customs and Excise Department."
As part of the streamlining effort, Hun Sen ordered that Customs and CAMcontrol begin
joint inspections as of September 1, and that agencies associated with imports/exports
take action to reduce paperwork, costs and the number of inspections.
Such changes are necessary for Customs, a department considered one of the most corrupt
in Cambodia. In a 2004 investment climate survey commissioned by the World Bank Group,
Cambodian firms identified corruption as the leading constraint to the country's
economic growth, with Customs and the judiciary viewed the most negatively in terms
of agency integrity.
"Import and export processing, involving a multiplicity of steps, introduce
substantial delays, uncertainty and discretion into the process of trading goods,"
the report said. "On average, firms report imports take 6.5 days to clear customs,
while exports take 4.5 days."
But, business owners say that time can vary greatly depending on how much you're
willing to pay.
"The more you pay, the faster you get it," Loo said.
This hurts Cambodia's economic competitiveness.
"The buyers in the United States and Europe want the process to be as fast as
possible," said Preben Andersen, country manager for MCC Transport-Maersk (Cambodia)
Ltd., which contracts with a third party for shipping. "You can't be standing
around waiting for documentation between the order and selling - it might mean missing
the Christmas sale, or spring opening."
All of the unofficial costs associated with trade also weaken Cambodian businesses.
"The competitiveness of Cambodia compared to the time it takes other countries
to process shipping is still not good," Andersen said. "Without lowered
costs, the country will find it difficult to thrive in international markets."
But changing an entrenched system of fees and paperwork isn't easy.
"Customs wants an extra $200 because of a documentation problem, or goods weren't
reported correctly - they find all kinds of ways to get money out of you," said
one factory owner, who asked not to be named. "Buyers in America don't want
to know about these problems. The attitude is, '*&?# the Customs chief if you
have to, but get the stuff to my store on time.' "
So far, experiences with importing and exporting since September 1 have been mixed.
Business owners report that one measure has definitely been implemented: joint inspections
done by Customs and CAMcontrol. Previously, the two agencies were performing mostly
redundant tasks. Now, they have shortened the process and cut down some on paperwork
While many in the private sector welcomed this change, an expert who has been advising
Customs for the last year said it is only the beginning of reform efforts. He spoke
with the Post on the condition of anonymity.
Last month this expert submitted a list of recommended changes to the Customs department,
strongly suggesting the elimination of superfluous agencies currently involved in
the inspections process. Such agencies - with more related to export than import
- collect fees independently.
"This kind of inspection by other agencies is not done in other countries around
the world, only in Cambodia," the expert said. "Customs does its checks,
then everyone else wants to check too and the importer is informed it's all Customs."
He advised that staffers employed by such agencies be retrained to create new departments
promoting Cambodian trade. He has not yet received a response from Customs.
"Joint inspections is a first step," he said. "We want to move to
the second step."
Aside from the Customs-CAMcontrol collaboration, firms have reported few changes.
This may partly be due to the fact that many businesses use a third party to handle
import/export issues, and it's never clear how much money they're taking off the
"They want money to grease the wheel," said a factory owner. "My middle
man will spin a story to tell me why it's like this and probably 90 percent is untrue."
The somewhat sluggish rate of change may also be due to kinks in implementation.
"Top officials I speak to are very supportive of change and reform," Loo
said. "But it's only been a month, and it's difficult to say whether this sentiment
has trickled down to staff on the ground."
Some business owners claim that size and clout make a difference: Big companies can
use their power as leverage, while small and medium-sized firms are still suffering.
Despite these discrepancies, those who work for companies of all sizes said they
are optimistic. Changes are small, but there have been changes, and in Cambodia that's
"Differences have not yet been fully felt in the industry," said Roger
Tan, second vice-chairman of GMAC. "But I'm hopeful. We wouldn't be fighting
so hard for change if we weren't hopeful."