The new agreement between the RGC and BIVAC was signed on 28 February 2006 and expected to be into operation on 1 st May 2006 under the PRAKAS dated 1 st April 2006 of the Ministry of Economy and Finance .

PSI Objectives:

The objectives of the introduction of the PSI programme would be:

The expected positive impacts of the services are as follow:

• Reduction of the customs clearance delays (documentation reduction,...);
• Reduction of the costs related to importation transactions (storage, demurrage) and better control and monitoring of the stock/inventory;
• Improvement of Cambodian operator competitiveness;
• The GDCE uses the data provided by BIVAC to improve not only its intervention capacity but also its efficiency, in the areas of duties and taxes collection and risk management by selectivity;
• Better management of human resources, reduction in repetitive tasks using computerization, higher department efficiency, reduction in the number of disputes, improvement in the transparency of customs operations and increase in importer and investor confidence and trust.

PSI should be viewed as a support to the GDCE to help ensure proper administration and collection of trade taxes in light of perceived deficiencies within the GDCE and low levels of trader compliance. The PSI strategy should be aimed at developing the capacity of the GDCE to carry out its role and to reduce reliance on PSI, while ensuring effective revenue collection. Over time a phased withdrawal from comprehensive PSI services should be pursued.

The Need for Continuing PSI:

As with many other developing countries’ customs administrations, the Customs Administration’s needs for PSI have evolved. In recognition of these changing needs, PSI companies are required to reinvent and reengineer their services to include measures to better assist developing countries’ customs services in their efforts to facilitate trade, reduce the costs of customs controls and to collect revenue. They are offering services and assistance to customs in areas such as electronic commerce, developing risk analysis systems, origin verification, valuation reference database services, post clearance verification services, and certification that goods meet international standards. These services are provided to support customs administrations, and not as a replacement for customs functions.

The implementation of an automated system will have a significant impact on the GDCE ’s future requirements for PSI services. As the GDCE becomes better able to manage the clearance and accounting processes and to reduce inconsistencies and inappropriate practices, its requirements for PSI will diminish. In fact, the successful implementation of automation will be a major precondition to the phase-out of PSI.

The GDCE will need a strategy to move from the current program to its eventual assumption of full responsibility for goods inspection, tariff classification and customs valuation functions which have been carried out by PSI companies. Currently, however, the general consensus appears to be that PSI services of some fashion should be retained for the next couple of years due to a number of factors including:

• the perceived lack of capacity in the GDCE to carry out the full range of customs responsibilities, and the continuing need for support and technical assistance;
• the lack of an integrated computerized customs processing system;
• continuing concerns regarding integrity in the Department;
• obligations related to implementation of the WTO Valuation Agreement within the next five years; and
• continuing high levels of customs evasion and fraud, and the critical need to increase customs revenue collection.

PSI Implementation:

PSI Company (BIVAC) performs (a) pre-shipment inspection, (b) price verification, (c) verification of total value of the goods, (d) tariff classification, (e) determination of dutiable value, (f) calculation of duties and taxes payable, (g) compilation of international trade statistics. As part of its contract, BIVAC is expected to offer training and technology transfer program to GDCE in order to support the modernization process of the administration. Training sessions are performed locally and a study trip abroad (Europe and Asia) is organized for department heads. The programs include theoretic and practical modules covering the following areas:

To find information about Goods subject to PSI, Goods Exemption from PSI, Clearance Procedure, Post – Inspection and Clearance Procedures, Inspection Fees, Resolution of Dispute Obligation of Importers and Sellers, Penalties of Non-Compliance, please read REGULATION ON THE IMPLEMENTATION OF PRE-SHIPMENT INSPECTION SERVICES.