| Risk-management system makes customs clearer in Georgia
The once arduous journey that a McDonald’s hamburger had to make before ending up on a Tbilisi customer’s plate is getting much easier.
Tamaz Megrelishvili, purchasing manager of McDonald’s Georgian franchises and T&K Restaurants LTD, says McDonald’s shipments, which come from Ukraine and Turkey, used to have to wait at a Georgian customs terminal for two or three days for cargo clearance.
“You could never say which terminal was better or worse. All were the same: a long physical inspection process, poor professionalism, flourishing bribery, and a permanent wasting of time and nerves,” complains Megrelishvili.
All that’s changed now, he says. Over the last two years, with the assistance of the USAID-funded Business Climate Reform project, the Ministry of Finance and the State Revenue Service have launched a series of customs reforms that expedite clearance procedures and promote efficient allocations of State Revenue Service resources. One of the most recent reforms is a risk-management system for clearing goods through customs that replaces 100 percent physical inspections of all freight with an automated, risk-based system to identify suspect cargo.
The Business Climate Reform project has provided extensive technical and material assistance to the Ministry of Finance and the State Revenue Service to support the introduction and implementation of a customs-risk management system. Giorgi Chitaishvili, head of the Risk Management Department of the State Revenue Service, says that instead of 100 percent physical inspections, which used to create long lines and take an average two to three days, 85 percent of all shipments are now cleared within two hours, after only a review of documents. The remaining 15 percent are referred for physical inspection based on a combination of risk criteria programmed into new customs-processing software as well as random selection.
“Automated cargo selection for physical inspection allows us to focus customs resources on sectors with the highest risk, making the process more objective and providing fewer opportunities for corruption,” states Irakli Siradze, deputy head of the State Revenue Service.
The project’s support has included training and mentoring for the State Revenue Services’ new Risk Analysis Department and procurement of the licensed Oracle database software the system runs on. USAID, in collaboration with U.N. Conference for Trade and Development (UNCTAD), also helped to develop the risk criteria that were programmed into the revenue service’s new customs information software, ASYCUDA World.
“We are saving a lot of time,” says Megrelishvili. “When the cargo reaches the terminal, I can fix precisely the timeframe of all operations to be undertaken after the clearance process. Loaders — who use to wait for cargo in the garage for hours, sometimes even for days — can now enjoy a normal work schedule and go home in time.”
The Business Climate Reform project estimates that implementation of the risk-management system will save businesses about $90 million annually. “Businesses love this new risk-management system because it is reducing the time and expense of trading across Georgia's borders," says Giorgi Pertaia, customs specialist of the American Chamber of Commerce.
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