The Pakistan Single Window (PSW) will be fully functional by June 2022 in compliance with the requirements of the World Trade Organization (WTO) and the Financial Action Task Force (FATF).
With the Pakistan Single Window Facility, Pakistani exporters will save up to $500 million in export facilitation and fast processing. This was stated by the first CEO of the PSW Company, Syed Aftab Haider, in an exclusive talk with ProPakistani.
The PSW Company is registered with the Securities & Exchange Commission of Pakistan (SECP) under the Companies Act, and was established with an act of the parliament through the PSW Act, 2021.
ProPakistani discussed the objectives and purpose of the PSW and had a candid discussion about the future of Pakistan’s trade under one digitized platform of the PSW. Here is what CEO Haider had to say about the PSW:
Pakistan is a unique country. Its trade is conducted through some traditional means, and hence, in terms of trade facilitation and the quick processing of import or export operations, Pakistan’s scorecard is very low even among the South Asian countries.
For example, if someone wants to export from Pakistan, a single container will cost around $400 to $500 on administrative and other regulatory affairs, and ground clearing takes almost 200 hours to get the container out of the seaport.
This ranking for export facilitation is creating a supply chain bottleneck in Pakistan’s international trade operations. It was for this reason that Pakistan started working on bringing and consolidating all trade operations onto one platform as per the WTO’s guidelines and obligations. The federal government had initiated the project, and with the change of the government and spearheading by many Ministers of Finance, the PSW is ready to be launched by June 2022.
The PSW is a digital space that will bring all regulatory and operational mechanisms onto one platform where Pakistan’s inward and outward trade will be regulated and facilitated. The purpose of this single window is to prevent importers and exporters from physically having to go to various government offices, and to allow them access to the systems of PSW, all regulatory requirements could be fulfilled within the portal and all line agencies and departments will have access to the central information of all the trade happening at various ports of Pakistan. Intending importers or exporters need to get logins, and all their documentation can be processed digitally.
The PSW had significantly improved its standing in ease of doing business as per a study by the World Bank but there have been a lot of hurdles and bottlenecks in facilitating importers and exporters of late. Trading across border indicators was bad, and with Pakistan Customs being a lead agency, the PSW analyzed that the issues are with other clearing agencies, like plant protection, animal quarantine department, and Pakistan Standards; and many other line departments are not paperless. If a container is cleared by Customs, it remains at the port because of the long processes at the port.
This necessitated the digitization of all the processes. Hence, the PSW project was launched.
Pakistan Customs is the lead agency, and it is a national project, governance, and operating model. All its departments are represented in this project. When it will be rolled out fully, 77 different other government departments, public and private sector banks, and the State Bank of Pakistan (SBP) will be enrolled in this setup.
The scope of the PSW was recently expanded by enabling online subscriptions and customs registrations of Free Tax Number (FTN) holders that include federal and provincial government departments, diplomatic missions, non-governmental organizations, public hospitals, universities, and research institutes, etc.
FTN holders are no longer required to visit Customs offices to obtain WeBOC User IDs, which are now issued electronically through the PSW platform. The new system reduces the average time of customs registration from 10 days to a few minutes, and is integrated with the NADRA, the FBR, and other government databases for electronic validations and verifications.
Integration of Banks
The PSW recently achieved another milestone before its launch with the introduction of a subscription mechanism and the integration of banks into its system. The introduction of these two new modules will significantly help in the ease of doing business in Pakistan.
The subscription module lets users subscribe and access the PSW’s services in a matter of minutes and removes multiple obstacles and unnecessary regulatory requirements in getting a user ID for customs and other regulatory clearances. The integration of the banking module will allow users to conduct their financial transactions in a seamless manner by eliminating the SBP-mandated Electronic Import Forms (EIF) and Electronic Form for Exports (EFE) forms.
The PSW launched the crossborder trade-related Trade Information Portal of Pakistan (TIPP) in November. The PSW team has achieved another milestone by validating the regulatory content of 22 OGAs (Other Government Agencies) as listed in the PSW Act, 2021, with the active contribution of all trade regulators. The TIPP serves as a single online repository for all crossborder trade-related information, including updated trade regulations, processes procedures, statistics, forms, information requirements, and fee structure, etc. It will be fully operational by March 2022.
This trade validation process has brought in organizations that regulate 80 percent of the trade quantum in Pakistan. For the first time, the TIPP will have immediate and most recent trade statistics related to the imports and exports from Pakistan.
The TIPP is another step to facilitate Pakistan’s international trade by improving transparency and access to information. With the TIPP under the PSW portal, 100 percent content validation of different departments was completed, including that of the Drug Regulatory Authority of Pakistan, the Pakistan Nuclear Regulatory Authority, the Ministry of Interior, the Pakistan Tobacco Board, the Alternative Energy Development Board, the Ozone Unit and International Cooperation (IC) wings of the Ministry of Climate Change, EPA Punjab and Pak EPA, the Pakistan Telecommunication Authority, the Pakistan Stone Development Company, and the Pakistan Electronic Media Regulatory Authority.
The PSW has also completed the content validations for the Narcotics Control Division, the Ministry of Foreign Affairs, the Wildlife Department of Khyber Pakhtunkhwa, the Ministry of Commerce, and the Aviation Division. Furthermore, the validation included the Federal Seeds Certification and Registration Department under the Ministry of National Food Security & Research. These also included PSQCA, the Animal Quarantine Department, and the Department for Plant Protection. Additionally, partial validation was conducted by the Ministry of Defense Production.
New content is being created for the Department of Explosives, and new information was received from the Engineering Development Board and the Marine Fisheries Department.
The PSW has triggered a huge reform process and data security, data access, and cyber and information security protocols that are in place to safeguard this data by ensuring real-time access to the information by all the key stakeholders.
The portal will also facilitate common citizens, small and medium enterprises, and overseas Pakistanis. For example, if a Pakistani is returning home and shifts his household, he will be guided by this portal regarding the documentation he requires, how much time it will take, and the fees and duties to be paid; and all this will be done in a paperless environment. Additionally, with the trade information portal, real-time information will be processed. The PSW law ensures that if any changes are made in processes or taxes or duties, that information will be updated in the portal in real-time.
The PSW is rolling out initiatives with the SECP, the NADRA, the SBP, and Pakistan Customs. It is rolling out biometric verifications at NADRA kiosks, and this will soon be done through mobile biometric functionality.
The fees for any exporter to access the portal has also been reduced from Rs. 5000 to Rs. 500. A study conducted by the International Finance Corporation (IFC) showed that, on average, traders pay $500 million each year in various heads of accounts due to old systems and bottlenecks. However, when the PSW will be rolled out fully, Pakistan will not only become an efficient trading partner of the world but will also save $500 million. Hence, the supply line will be secured and let the world know that Pakistan is a responsible supplier.
One of the PSW’s achievements is that it advises Sri Lanka about the establishment of the Single Window facility. The PSW is also seen internationally as a center of excellence in the border management model being picked up as a model. Pakistani businessmen, chambers, trade bodies, and other export-oriented sectors are very keen and they are adapting to new technologies, and the PSW’s teams conduct awareness sessions regularly.
The platform will make Pakistan competitive, and the cost and time (previously 200 hours) of exporting one container will be reduced.
A landmark initiative being taken up by the PSW is its signing of the IBM’s landmark software Trade Lens in partnership with the world’s leading shipping company, Maersk. This agreement will enable the PSW to get all container information and will help overcome misdeclarations, under and over-invoicing issues, and will also overcome trade-based money laundering. All FATF-related offenses will be checked through this software. With this agreement, every line agency will have detailed information about each container coming to Pakistani ports and departing from Pakistan.
The PSW is also working on emerging technologies like blockchain, big data, and artificial intelligence; and a trained workforce is produced on its platform.
The PSW is in consultation with JICA to process big data as a huge flow of information will be available on the PSW portal. It is integrating the Wagah, Chaman, and Torkham borders, and ultimately, human intervention will be minimal at all the border crossings. Pakistan Customs is implementing this with financial assistance from the Asian Development Bank Integrated Transit Trade Management System at all the three border crossings for Afghan Transit Trade.
Pakistan Customs will manage the physical infrastructure while the software that will manage the trade will be the PSW portal. Pakistan wants smooth connectivity to Central Asian States (CAS), and this integrated system will streamline its trade with the Central Asian States, and particularly with Tajikistan and Uzbekistan.
The PSW enables parties involved in trade and transport to register standard information and documents with a single-entry point, and thereby, fulfills all import, export, and transit-related regulatory requirements. Traders were previously required to get approvals from a variety of government offices, besides duplicating efforts and paperwork, which led to increased costs and delays. Today’s announcement rolled out the Subscription and Customs Registration system alongside the Commercial Bank integration module, which are the first steps in helping to reduce these costs and delays, and which will benefit consumers and businesses alike.
The PSW is an initiative of Pakistan’s federal government with a focus on transforming the trade and industry ecosystem. It encompasses multiple endeavors related to business processes re-engineering, integrated risk management, ports community systems, the introduction of new technology for trade management, data standardization and harmonization, and integrated tariff management system.