This chapter assesses the progress and challenges faced by Kyrgyzstan in improving trade facilitation. It highlights initiatives to improve public consultation processes, advance rulings, and appeals, contributing to a more predictable trade environment. It also showcases the progress made in developing the Single Window, implementing pre-arrival processing, enhancing perishable goods handling, and improving transparency through online feedback mechanisms to better respond to traders’ needs. Finally, the chapter provides recommendations to overcome challenges, including the lack of domestic and regional border agency co-ordination.
Trade Facilitation in Central Asia
4. Kyrgyzstan
Abstract
Greater involvement of the trade community and better agency co-operation could strengthen trade governance, information and procedures
Kyrgyzstan has improved its overall performance since 2017, especially in appeals procedures, advance rulings, and simplification and harmonisation of trade-related documents (Figure 4.1). Its performance in governance and impartiality, as well as information availability, is noteworthy compared to peers in Central Asia, as are its achievements in governance and impartiality and advance rulings. In contrast, despite some progress in simplifying documentation requirements, Kyrgyzstan lags its neighbours in this area, as well as in streamlining trade processes. Its internal border agency co-operation is the poorest in Central Asia.
Figure 4.1. Kyrgyzstan’s trade facilitation performance since 2017
Note: 2 is the maximum score. Central Asia includes information for Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan.
Legend: A - Information availability, B - Involvement of the trade community, C - Advance rulings, D - Appeal procedures, E - Fees and charges, F - Documents, G - Automation, H - Procedures, I - Internal border agency co-operation, J - External border agency co-operation, K - Governance and impartiality.
Source: OECD TFIs database.
The Info Trade Portal implemented under the Ready4Trade project demonstrates Kyrgyzstan’s progress in predictability and transparency. These are characterised by the development of the Single Window (Box 4.1), implementation of pre-arrival processing, and better perishable goods treatment, inspections and storage processes. The Single Window has been complemented by enhanced user manuals and better information availability, including information on relevant fees, charges, and penalties. Providing online feedback, operating enquiry points, and allowing sufficient time between publication and entry into force of new or adjusted trade-related regulations have boosted transparency. This was supported by guidelines and procedures to govern public consultation processes, the development of a framework for notice-and-comment procedures, efforts to account for public comments made to draft regulations, the development of an advance rulings system and procedural rules governing trade appeals and the time available for lodging an appeal. Recent developments have focused on allowing traders to file documents electronically to multiple trade agencies at one time.
Information availability, fees and charges, automation of border formalities and agency co-operation continue to be challenging areas in Kyrgyzstan. Kyrgyzstan has taken gradual steps towards strengthening inter-agency mechanisms in support of domestic border agency co-operation by co-ordinating data requirements, documentary controls, and inspections, and by holding regular strategy and border agency co-ordination implementation meetings. National legislation now allows for cross-border co-operation, exchange of information and mutual assistance with border authorities in neighbouring economies, though agency co-operation remains limited. As a target country of UNECE’s capacity-building support to implement the World Trade Organisation (WTO) Trade Facilitation Agreement (TFA), Kyrgyzstan has received support in developing its National Trade Facilitation Roadmap 2021-2025, streamlining export-import procedures in the textile and pharmaceutical industries, and building the capacity of local stakeholders. These initiatives have included national trade facilitation council experts and the private sector in implementing TFA and advanced digital trade facilitation measures (UNECE, 2021[1]).
Box 4.1. Kyrgyzstan’s Single Window
The State Enterprise Single Window Centre for Foreign Trade Operations was established through the Government Resolution No. 539 of August 2009 and the Single Window initiated its operations in 2013. The Single Window Trade System (SWTS) was the responsibility of the State Enterprise ‘Single Window Centre’. SWTS ran on a centralised database, with web-based access for government departments and agencies, customs brokers, and traders. It included more than 80% of government agencies which were responsible for issuing import and export-related licenses and permits.
However, the agencies’ business processes had not been re-engineered, and the Single Window was designed to adapt to 11 different business requirements. Each of the 33 forms that the Single Window could process had approximately 30 information fields, of which only 11 were common. This created data redundancy and slowed processing times, ultimately slowing the clearance of goods. The different designs of each of the agency’s application forms, and repeated changes to these forms by the agencies themselves also led to challenges in the effective operation of the Single Window. Finally, the relationship between the SWTS and linked Kyrgyz government agencies was problematic, as SWTS was a standalone system with no operational electronic interface with the agencies’ IT systems. This did not allow the trade Single Window to upload and update information on import and export licensing and permit requirements.
Noteworthy progress has been made with the launch of the modernised Single Window Information System (SWIS) in February 2023. SWIS includes state bodies and other organisations issuing permits and documents required for firms to conduct trade. Notably, SWIS enables traders to file applications for customs clearance online to multiple bodies at the same time, in addition to providing capacity-building services and information. The phased introduction of departments involved in the SWIS will broaden the number of permits and other documents available in electronic format. It also looks to automate processes for agencies involved in the documentation requirements.
Source: OECD TFIs background data repository, (Tulpar System, 2023[2]).
Kyrgyzstan should prioritise knowledge improvement through private-sector inclusion and focus on intensifying agency co-operation
Though it is the best regional performer on information availability, Kyrgyzstan should further expand the information it publishes online on trade-related legislation, appeal procedures, penalty provisions, and judicial decisions. It can support a better understanding of these measures for small and medium-sized enterprises (SMEs) by providing examples of customs classification and cases relating to customs matters. Moreover, the authorities should publish any import, export and transit-related fees and charges imposed by government agencies on relevant agencies' websites and consider creating a dedicated page for traders incorporating all expenses and all relevant public entities. Kyrgyzstan should also consider integrating this information in the Single Window Trade System (SWTS).
Further work is needed to improve consultations with the trade community. The authorities could consider expanding the notice-and-comment procedures to trade and border issues and regulations and gradually integrating more relevant stakeholders in trade-related regulatory consultations. There are likely still opportunities to be realised in the use of the SWTS as a source of import- and export-related information (e.g., providing details of import and export requirements in countries of origin and destination, preferential tariff rates, quotas, etc.), while these consultations can be used iteratively to re-engineer the SWTS to remove duplication of activities and better respond to user needs.
Border agencies can introduce periodic reviews of trade-related documentation requirements. This can help to identify and address requirements that are unduly time-consuming or costly for traders. Increasing the share of documents for which copies instead of originals can be accepted would be a step in the right direction.
As the poorest regional performer in internal border agency co-operation, Kyrgyzstan should harmonise data requirements and documentary controls through better domestic co-ordination among trade agencies. As the country has experienced a jump in trade, including re-exports, since 2022 (RFE/RL, 2023[3]), the government could consider the case of Costa Rica, which has created and implemented a modern border agency co-operation framework to help it prepare for an expected increase in transactions at modernised border posts (Box 4.2). Kyrgyzstan could also look to Kazakhstan to improve its agency collaboration, though broader regional efforts are also warranted to improve cross-border co-operation. The government could consider facilitating electronic pre-arrival submission of information, and processing and mapping of the legal and technical requirements for import and export procedures to allow for electronic processing.
Additionally, the authorities should accelerate the automation of trade processes. Kyrgyzstan could advance the development of separation of release from clearance for all types of goods as well as the development of post-clearance audits. It could move to introduce an automated risk management system for customs and other relevant border agencies to enhance collaboration, as well as further developing interconnected or shared computer systems and real-time availability of pertinent data among domestic agencies involved in the management of cross border trade. All these initiatives can support the continued development of the trade Single Window.
Box 4.2. Domestic border agency co-operation in practice: Costa Rica
Costa Rica embarked upon the modernisation of its main land border crossings to optimise the implementation of its free trade agreements, streamline customs and international trade procedures, improve border efficiency, and promote trade facilitation. Efficient border agency co-operation is an essential part of this endeavour, particularly in view of the expected increase in transactions at the border posts undergoing modernisation. The efforts undertaken to improve co-ordination among agencies with responsibilities for the border process highlight important success factors, such as:
developing sustained political commitment to support inter-agency co-ordination bodies in the beginning, to erase differences in practices between agencies and address particular agencies that are reluctant to relinquish control or adopt the new approaches;
creating a dedicated Secretariat with a reform-oriented inter-agency strategy and working group, co-ordinating research and analysis of key policy issues and monitoring the action plan’s implementation;
training a strong corps of border officials that values trust and collaboration with other border authorities;
defining a legal definition of the structure and tasks of each agency within a collaborative framework, presented in manuals developed by the inter-agency working groups and made available to all staff present at border posts;
setting up an expert group, tasked with addressing legal, technical and operational questions to avoid knowledge gaps;
holding regular meetings and upgraded IT solutions and platforms, establishing not only structured, but also timely communication and information exchanges; and
enacting domestic co-ordination of inspections based on a solid legal framework introducing a control delegation performing a regular monitoring of processes at the border and reporting to the national steering body.
Source: (Moïsé and Sorescu, 2017[4])
References
[4] Moïsé, E. and S. Sorescu (2017), Single Window and Border Agency Co-operation: Expanding Selected OECD Trade Facilitation Indicators, OECD Publishing, https://www.oecd-ilibrary.org/sites/9789264277571-5-en/index.html?itemId=/content/component/9789264277571-5-en.
[3] RFE/RL (2023), Reexports To Russia: How The Ukraine War Made Trade Boom In Kyrgyzstan, https://www.rferl.org/a/ukraine-war-kyrgyzstan-trade-russia/32277438.html (accessed on 3 October 2023).
[2] Tulpar System (2023), Tulpar System, https://www.trade.kg/ (accessed on 22 August 2023).
[1] UNECE (2021), Digital and Sustainable Trade Facilitation, https://unece.org/sites/default/files/2022-01/ECE_TRADE_467E.pdf.