Imagine a scenario where imported and exported goods no longer face prolonged delays at borders but instead swiftly and securely enter designated areas for storage or processing. The World Customs Organization (WCO) is actively promoting such trade facilitation measures globally. Recently, the WCO provided crucial support to Palestinian Customs to help establish and improve its bonded warehouse management system.
Project Background
Palestinian Customs is implementing a new reform initiative to establish a bonded warehouse system, aiming to enhance risk management capabilities and strengthen coordinated border management. By consolidating all government agencies involved in customs clearance at a single location, Palestinian Customs seeks to better comply with Articles 7.5 and 8 of the World Trade Organization's (WTO) Trade Facilitation Agreement (TFA). To facilitate this, the WCO organized a study visit for Palestinian Customs to learn from Morocco's experience in bonded warehouse establishment and management.
Learning from Morocco's Experience
From November 20 to 25, 2017, a small project team from Palestinian Customs visited Casablanca and Rabat in Morocco. The focus of the study tour was Morocco's practical expertise in establishing and managing bonded warehouses. With its well-developed system and operational model, Moroccan Customs provided valuable insights for Palestinian officials. During the visit, the Palestinian delegation gained in-depth knowledge about warehouse types, operational procedures, regulatory mechanisms, and the role of customs. Moroccan experts shared best practices and addressed questions from the delegation, offering a comprehensive understanding of bonded warehouse management.
Combining Theory and Practice
The study tour included technical presentations by Moroccan Customs and field visits to the Port of Casablanca and two major bonded warehouses. During the presentations, Moroccan experts explained the definition, benefits, types, processes, and customs oversight responsibilities related to bonded warehouses. They also shared lessons learned from Morocco's experience. The field visits allowed the Palestinian delegation to observe warehouse operations firsthand, including storage, management, and clearance processes. Discussions with warehouse managers provided insights into daily challenges and solutions. This blended learning approach deepened the delegation's understanding.
Multilateral Support for the Project
The study visit was part of customized support provided to Palestinian Customs under the "Mercator" program, a collaborative initiative involving the UK's HM Revenue & Customs (HMRC), WCO, and the United Nations Conference on Trade and Development (UNCTAD). The program aims to help Palestine implement trade facilitation measures to boost economic development. Funding for the visit was provided by the UK government through HMRC. This multilateral cooperation has strengthened Palestinian Customs' capacity in bonded warehouse management.
Benefits of Bonded Warehouses
Bonded warehouses, approved by customs for storing goods without immediate duty or tax payments, offer multiple advantages:
- Enhanced risk management: Strict oversight helps identify and control risks, preventing smuggling and violations.
- Improved border coordination: Co-locating clearance agencies reduces processing times and trade costs.
- WTO TFA compliance: Aligns with Articles 7.5 and 8, supporting Palestine's integration into global trade.
- Trade facilitation: Flexible storage solutions lower business costs and increase competitiveness.
- Foreign investment attraction: A robust system creates a favorable environment for international investors.
Challenges and Opportunities
Palestinian Customs faces several challenges in establishing its bonded warehouse system:
- Infrastructure gaps: Existing facilities require upgrades.
- Technical limitations: Staff need further training.
- Regulatory gaps: Laws governing bonded warehouses need refinement.
Despite these hurdles, opportunities abound. By leveraging international expertise and partnerships, Palestinian Customs can develop an efficient system to support economic growth.
WCO's Ongoing Commitment
As a global leader in customs affairs, the WCO remains committed to advancing trade facilitation worldwide. Through technical assistance, capacity building, and knowledge sharing, it helps customs administrations improve operations. The support for Palestinian Customs reflects this mission, with plans for continued collaboration to strengthen Palestine's customs framework.
Looking Ahead
The study visit has equipped Palestinian Customs with clearer insights for establishing an effective bonded warehouse system. With sustained international support, Palestine can overcome challenges and contribute more significantly to regional and global trade. The development of this system represents both a capacity-building necessity and a strategic step toward economic integration.