Cambodian Customs Are Catching Up

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B2B Cambodia caught up with Frederic Chan, Country Manager of Cargoteam SL Cambodia, to get his view on the Cambodian customs evolution currently taking place at border entry points around the nation. As a specialist midscale freight forwarder, Cargoteam witnesses Cambodian customs practice, good and bad, on a daily basis.

B2B Cambodia quizzed Frederic on what’s really changed in customs brokerage practice over the last few months when it comes to dealing with border authorities, feet on the ground, during export and import brokerage.

“In just two months, I have noticed that almost everything in regards to customs bureaucracy at Cambodian borders is becoming more precise. Regulations on imports are being strictly enforced, recording systems are being comprehensively used and digitalised, information is becoming more open and available.”

Importantly, the drivers behind these improvements are largely internal. “Major logistics companies, especially the large multinationals among them, already understand how to meet these requirements, and have done so for sometime,” says Chan, stressing that the private sector already conform to these standards in nearly all other international ports of call they encounter.

Instead, the impetus for these changes is a push toward the widespread improvement of education of customs staff, a focus initiated by the Cambodian Government at the end of last year that is now seeing enforcement across the industry. The Cambodia Freight Forwarders Association (CAMFFA), of which Chan and around 80 other Cambodian Logistics company representatives are members, has also been involved in the recent developments, working closely alongside the Ministry of Commerce.

Since late 2014, customs brokerage training has become a compulsory requirement for all Cambodian customs officials. The specialised training program lasts three months and is completed by sitting and passing a final exam. Only if successful in this test is the applicant granted a license to work at the customs office.

Previously, Chan believes a significant skills gap existed in Cambodian customs brokerage, in comparison to international and even regional standards. Brokerage was often a negotiable process at borders. “Now, we must cross the T’s and dot the I’s every single time,” says Frederic, “We can see this change very clearly, even at the more minor policed borders at BaVet and MocBai.”

While Chan notes these changes have come quickly, such professionalism has become necessary: “International firms will not come across Cambodian borders unless standards of customs checking and brokerage compare to the rest of the world.”

A global supply chain firm, Agility, recently released its annual Emerging Markets Logistics Index 2015 (EMLI). In the study, Cambodia fell three places since the year prior to 44th position out of 45 countries. Cambodia’s logistics performance and supply-chain efficiency has thus declined despite notable rises in trade volumes with European and inter-Asian markets.

In reply to this, Chan suggests Cambodia remains a few years away from achieving truly international standards of customs service and policing, and the efficiencies within the logistics industry to support these services. This is especially the case when compared to the current state of European and Japanese logistics efficiencies.

Nevertheless, this process must happen in the way it is currently happening, says Chan: “Logistics professionalism should develop step by step. It takes time for staff to become sufficiently educated and also time for them to put these new skills into practice at the borders. While Cambodian logistics may be developing slower than some other countries, accentuated by a concurrent and continual increase for their services due to increased trade, it is developing sustainably; as the new standards of practice we are seeing now ensure due attention is being paid to skills gaps in the industry. This is a crucial stage and not one to be rushed.”

“In sum,” finishes Chan, “good things take time in emerging logistics markets. But good things are increasingly visible across the Cambodian market, and the industry has clearly realised the necessity of professionalism.”

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