TIR Transit System

Global Transit Frameork

ICC-PNC Vision

TIR Convention, 1975

The official policy statement of PNC-ICC on the implementation of TIR Convention in Pakistan.

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For decades Pakistan has been promoting its geographically strategic location but to-date no affirmative measures have been forthcoming as to how to capitalize on its key location at a global scale which would not only benefit the country itself but also utilize the tremendous potential in Pakistan’s services sector and manpower capabilities thereby also enhancing its infrastructure exponentially because of the international traffic which could potentially utilize Pakistan’s geographic access. In order to do this in a internationally compliant manner it is necessary to implement a tried and tested system which is already in effect internationally. The system should be such as to also endemically prevent evasion of Customs duties through a WCO recognized Customs guaranteed transit system. The best available system is the UN TIR Convention overseen by the IRU.

The TIR Convention and transit system is basically a UN Convention adopted in 1959 by members of the UNECE and entered into force in 1960. A subsequent revision led to the TIR Convention of 1975 which has been ratified by 68 countries and is currently operational in 57 of the contracting states. The revision was to cover the technical advances, changing Customs and transport requirements, the emergence of new transport techniques and maritime and in-land container systems.

TIR stands for Transports Internationaux Routiers (International Road Transport). In practice, it is an international Customs transit system for goods carried by road which facilitates international movement of goods across the borders of countries that have ratified the TIR Convention, while offering a high level of security. The TIR System enables door-to-door transport with minimum interference at international borders of contracting parties to the TIR Convention and thus serves, in the best possible way, international trade and the economies of all the countries involved.

Pakistan is a country ideally suited for the TIR system because of its strategic geographic location which can provide access to Central Asian regions, Western China, West Asia and beyond from Far Eastern origins, Middle Eastern origins and conversely West European origins including Russia, Turkey, Iran etc. The TIR Convention is perfectly suited to intermodal transportation and any apprehension in terms of controls are addressed by the TIR’s six essential principles: secure vehicles or containers, international chain of guarantee, TIR Carnet, mutual recognition of Customs controls, controlled access and IT TIR Risk Management tools (Safe TIR and TIR Electronic Pre-Declaration). After strict selection and approbation from national Customs authorities, the TIR Holder is entitled to use a TIR Carnet. This TIR Carnet, representing both the Customs transit declaration and the evidence of an international financial guarantee, is duly completed and stamped by Customs Authorities who seal the load compartment at departure, and thus ensures the integrity of the load to the Customs Authorities at all successive border crossing points, while avoiding time-consuming inspections or bond deposits at each border.

Having mentioned the salient features of the TIR system it is necessary to point out the benefits for Pakistan.

1.            It provides for a barrier free access to the world economy and market so that its competitive trade goods can flow with the minimum transport costs.

2.            Pakistan has land connections with Iran and Afghanistan. Both are TIR contracting parties and are on course of reactivating the TIR system in 2011. Moreover all other ECO countries are activated TIR contracting parties. The ECO itself has endorsed the TIR system as the best available transport system for the ECO region to increase trade amongst ECO countries.

3.            The TIR system in Pakistan will also bring important opportunities for the Pakistan road transport industry and trade; Attracting investments in infrastructure, transport and associated service industries.

4.            The TIR system in conjunction with existing ports in Pakistan and with the planned deep water harbors at Karachi and Gwadar will further enhance and ensure the viability of these capital intensive projects.

5.            The TIR Customs guarantee system will ensure against duty evasions for transit movements because it is secured by a international guarantee chain.

6.            Most importantly the Government of Pakistan itself will earn a transit fee based on a per kilometer charge which will accumulate directly into the government’s account. Once the TIR system is fully in implementation with awareness internationally the transit fees may be comparable if not more than what is earned by access points such as the Suez Canal or the Panama Canal. This in consideration of the potential of Pakistan’s geographic access.

It must be emphasized the TIR transit system is relevant to transport which covers only international movement i.e., cross border. This however does not mean that local transporters will not be benefited. In fact the local transporters will be the biggest beneficiaries as they develop their own international fleets. The TIR Convention is not just restricted to containers and trucks it can also include buses for tourism and railway for freight.

In terms of addressing the apprehensions of Customs matters under the TIR system the advantages are that duties and taxes at risk during international transit are guaranteed up to US $50,000 per vehicle. Furthermore only bonafide transporters are allowed to use TIR carnets thereby enhancing the system’s security. In addition the TIR system significantly reduces the need for physical inspection of transiting goods and dramatically facilitates Customs control and documentation with the use of internal clearance points for exports and imports allowing efficient deployment of Customs officials.

The electronic control system called “Safe TIR” provides Customs through secure connections online validation of the status of the TIR carnet. This Safe TIR system enhances traceability, risk management allowing early detection or potential of any irregularity. In terms of security requirements the TIR system is in compliance to new security requirements established by the WCO “Framework of Standards to Secure and Facilitate Global Trade”. This takes into account increased attention drawn by abuses from criminals looking to cover illicit activities including illegal migration, drug trafficking, Customs and transit frauds and counterfeit goods.

International Road Transport Union (IRU) administers the TIR Convention internationally and its Associate Member in Pakistan is the PNC-ICC which has been designated by the government to be the National Guaranteeing & Issuing Organization for the TIR Carnets in Pakistan. The PNC-ICC has already successfully implemented and is currently administering the Istanbul Convention for ATA Carnets covering exhibitionary materials and professional equipment, which has been in implementation in Pakistan since 2007 making Pakistan a member of the World ATA Carnet Council (WATAC) and the International Customs Guarantee Chain. The PNC-ICC has created the TIR Commission for stakeholder participation.

Tariq M. Rangoonwala, Chair ICC Pakistan

 

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