Conceptual approach
The Time Release Study (TRS) is a valuable instrument developed by the World Customs Organization (WCO) to measure the "real" time required for the release and/or clearance of merchandise, from the moment of arrival of the cargo to customs territory until its release.
Objectives
Its main objectives are: (i) the identification of bottlenecks or obstructions that affect the smooth dispatch of goods; (ii) the evaluation of the implementation of new procedures and (iii) the generation of an estimate of the comparative position of the country in relation to its peers.
Specifically, it allows measuring the average time of the complete sequence of the import/export process, the time required for each intermediate event between arrival/departure, and the release of the goods.
This diagnostic tool allows monitoring and improving operational processes related to cargo flow.
Origin and development
In 1994, the Permanent Technical Committee (PTC) of the WCO adopted the Manual on the Study of the Time Required for the Release of Goods, based on similar initiatives implemented in Japan and the United States, in order to guide administrations interested in implementing a Dispatch Time Study (DTS). Very few WCO members implemented this study due to its complexity, so in 1997 work began on a simpler method.
The original TRS Guide, in the format we now know it as, was launched by the WCO in 2001 to provide advice to Customs administrations wishing to measure and compare their clearance times.
By March 2010, WCO members shared the view that there was scope for updating the original TRS Guide and decided to begin work on that in response to the procedures and practices then in place in many countries. As a result, the TRS Guide was updated and re-released in October 2011 as Version 2 of the WCO TRS Guide.
In 2013, the World Trade Organization approved the Trade Facilitation Agreement (TFA), which in its article 7.6 includes this figure and encourages its implementation worldwide.
Let us recall that the AFC entered into force on February 27, 2017 and that the Argentine Republic adhered without raising any reservations regarding this article, and is therefore obliged to comply with it under the terms agreed therein:
ARTICLE 7: LIFTING AND DISPATCH OF GOODS
6.- Establishment and publication of average lifting times
6.1.- Members are encouraged to calculate and publish the average time required for the release of goods periodically and uniformly, using tools such as, inter alia, the World Customs Organization (herein referred to as the “WCO”) Study on Time Required for Release.
6.2.- Members are encouraged to share their experiences in the calculation of average release times with the Committee, in particular the methods used, the pitfalls identified and the effects they may have on efficiency.
In 2018, the WCO published the third updated version of the TRS Guide, which, with its new features, is aimed at providing comprehensive support to Customs Administrations, other relevant government agencies and private sector stakeholders in their collective quest to measure border clearance/release time and take corresponding policy and operational measures to further enhance trade facilitation.
Among the innovations of this version is detailed information on the use of TRS in the implementation, monitoring and evaluation of the TFA. The Guide sets out a concrete approach, including in the context of strategic planning to encourage the implementation of TFA measures by National Committees on Trade Facilitation (NCTFs).
It also provides an explanation of the possibility of carrying out, as a first step, a simplified TRS, mapping only that part of the clearance process that relates directly to Customs, and suggests appropriate measures to quickly resolve the deficiencies.
It also contains illustrations of different approaches to conducting TRS (e.g., consecutive or simultaneous TRS at all identified border points), and detailed information on the use of modern technologies in data collection and analysis to improve the TRS process (e.g., electronic processing systems, Single Window, and GPS-enabled tracking).
This approach seeks to exploit the increasing use of ICT by Customs, other government agencies and private sector stakeholders. It also provides guidance on business process planning and on performance measurement of entry/exit points and related trade routes, including the development of model business processes with associated flows, providing a forward-looking approach to conducting a joint TRS in a bilateral and multilateral context, and practical guidance on conducting a TRS for performance management of regional trade corridors.
In its 2019/2020 Annual Report, the WCO reports that approximately 42% of member Customs Administrations use TRS.
Benefits
This instrument generates benefits from various perspectives, initially for national governments as it improves the efficiency of customs administrations and other government areas involved in the process of importing, exporting or transiting goods.
It also allows them to explore synergies and work together to address national obstacles that represent a source of delay or problems in the movement of cargo.
Furthermore, it creates better conditions for accelerating the international movement of cargo, reducing costs for importers/exporters and encouraging local and foreign investment; optimizes opportunities for the expansion of national productivity, leading to the improvement of the country's international competitiveness in the global market; and supports the government's macroeconomic initiatives through growth and development by strengthening the efficiency and effectiveness of cross-border agencies.
In turn, it generates benefits from the perspective of processes and their internal regulatory legislation, by allowing their specific efficiency to be diagnosed based on specific data and, consequently, taking measures to improve their execution, simplification, and automation, as well as to modify the relevant customs legislation.
TRS also improves transparency and predictability for the business community regarding the clearing process, leading to better inventory management and just-in-time deliveries and enabling private terminal and warehouse operators, freight forwarders and others to operate and improve their businesses in a dynamically efficient environment.
Alternative developments
However, the study of clearance times is not only addressed by the WCO, but other international organizations such as the World Bank have generated tools or instruments of this type, as is the case of “Doing Business”, which analyzes the regulations that apply to companies in an economy during their life cycle, including start-up, operations, cross-border trade and tax payments.
In the area of cross-border trade, “Doing Business” records the time and cost associated with the logistics process of exporting and importing goods, measuring the total time and cost (excluding tariffs) associated with three sets of procedures in the export and import process: documentation, cross-border controls and domestic transport.
In this regard, Yotaro Okazaki, an expert from the WCO Research Unit, points out that the main problem with this instrument is that “Doing Business” collects information from taxpayers through “surveys”, data that is not reliable enough to be used in the ranking and classification exercises of economies, presented in the annual report.[1], taking into account that the only information collected depends exclusively on that provided by importers and exporters[2], hence the current methodology of “Doing Business” across borders (available online)[3] It makes no specific reference to how each contributor can obtain experimental figures.
In contrast, the TRS Guide sets out more effective methods to achieve its measurement-related objective, for example, it states that sampling should be used in cases where it is difficult to capture all relevant transactions in a defined period, and also establishes that measurements of specific operations should be carried out through four phases: 1. Study preparation; 2. Data collection and recording; 3. Data analysis and conclusions; and 4. Monitoring and evaluation. In this way, it is guaranteed that the data collected does not only depend on a primary source such as the person carrying out the transaction, but also involves actors such as the customs authority.
In order to reduce the disparities in methodologies and results presented by each of these tools, in February 2018, the World Bank and the WCO initiated discussions on “Doing Business”. Both organizations addressed issues such as quality improvement, data sources, methodology, including how best to communicate information on changes in processes; measurement of the use of means of transport by different means (land, sea and air); the treatment of products (agricultural and industrial); and the impact of intra-member trade by Customs Unions. The WCO committed to provide points of contact through which the problems and comments that its members have on “Doing Business” can be raised.[4] and recommended that Members look beyond the ranking generated by such a report and study the impact of their modernization programmes on the underlying score, since such programmes often result in improved performance that is not necessarily reflected in the comparative ranking.
Some regional experiences
Brazil
On 02/07/2020, in the midst of the Covid 19 pandemic, the Brazilian Federal Revenue Secretariat (Receita Federal do Brasil) implemented the Tax Release Time Study (TRS) nationwide.
The study shows an average measured time of 7,5 days considering the modes of transport by air (5,8 days), sea (9,7 days) and road (2,3 days). The customs clearance stage represents less than 10% of the total time measured, while these actions under the responsibility of private agents represent more than half of the total time spent in all the flows analysed.
Central America
During the month of May 2021, the Customs Administrations of Costa Rica, El Salvador, Honduras, Guatemala, Nicaragua and Panama launched the pilot plan for the Dispatch Time Study in Central America.
The implementation - currently underway - includes several phases: study preparation, data collection and recording, data analysis, monitoring, as well as evaluation and preparation of an action plan.
The situation in the Argentine Republic
As previously mentioned, at the time of its accession to the TFA, Argentina reported that provision 7.6 was classified in category “A”, that is, it would be fulfilled when the agreement entered into force, which occurred on February 27, 2017.
In this regard, we must mention that historically, in the management plan of the Argentine Customs, the measurement of clearance times was used as a performance indicator, based on which the result was periodically discussed with the operational areas.
This methodology did not correspond to international standards and did not include some stages of the clearance process, in particular those that were not the responsibility of Customs.
In 2018, the Argentine Customs requested Technical Assistance from the World Customs Organization within the framework of the MERCATOR Program, which is an instrument specifically developed by the WCO to contribute to the proper implementation of the TFA through assistance missions by experts accredited to the organization, who proceed in a technical and professional manner to carry out evaluation and diagnosis tasks, suggesting the relevant recommendations.
These experts visited the country in December 2018 and, in particular, in relation to point 7.6 of the AFC, recommended developing the necessary tools to carry out the implementation of the Study of Release Times, a circumstance that has not occurred to date.
[1] Doing Business ranking of economies: http://espanol.doingbusiness.org/es/rankings
[2] WCO Research Paper No. 44. Doing Business and its Customs-related Challenges: A Study of Trade Across Borders Indicators (May 2018). English version available at: http://www.wcoomd.org/-/media/wco/public/global/pdf/topics/research/research-paper-series/44_doing_business_en.pdf?la=fr
[3] Available at: https://espanol.doingbusiness.org/
[4] WCO visits World Bank for discussions on “Doing Business”. English version http://www.wcoomd.org/en/media/newsroom/2018/february/wco-visits-world-bank-for-discussions-on-doing-business.aspx
The author is a Member (Judge) of the National Tax Court. University Professor. Specialized in Higher Education Teaching (UCC). Professor at the National University of Córdoba (UNC), Blas Pascal University (UBP), Austral University and Universidad del Rosario (Colombia). Professor and member of the Academic Committee of the Specialization in Customs Law at the National University of La Plata (UNLP). Member of the Drafting Group of the MERCOSUR Customs Code. Author of the book: "The World Customs Organization. Past, present and future.". Tirant Lo Blanch Publishing House, Valencia City, Spain. Year 2021 - Email: [email protected]
