ADVOCACY: A new dawn for business across borders in Saudi Arabia
G20 Issue

ADVOCACY: A new dawn for business across borders in Saudi Arabia

Targeted efforts by Saudi Customs have seen the Kingdom of Saudi Arabia revolutionise its logistics sector and rapidly climb international rankings – and there’s the promise of even faster, more streamlined trade to come

As Saudi Arabia works towards achieving the goals of Saudi Vision 2030, the Kingdom has made tremendous leaps in economic growth and development. The changes that have taken place within the country have occurred at an unprecedented rate, and all aim for the same objectives: a vibrant society, a thriving economy and an ambitious nation.

Inspired by the roadmap to 2030, Saudi Customs has worked in tandem to meet several major milestones and drive momentum in various crucial business sectors. Expansion in sectors such as trade and logistics has contributed significantly to the rapid economic diversification evident across Saudi Arabia. Saudi Customs facilitates trade across borders and has forged collaborative, mutually beneficial partnerships with organisations beyond Saudi Arabia’s borders.

The long-term goal of Saudi Customs is to transform the Kingdom into a globally competitive logistics hub that contributes to its prosperous economy. Situated between Asia, Europe and Africa, Saudi Arabia is well positioned to maximise gains from the trade and logistics sector. And with targeted efforts in reforms, new initiatives and an integrated strategy for digital development and transformation, the work has already borne fruit: the Kingdom has advanced 72 places in the ‘Trading Across Borders’ index. Saudi Customs’ efforts in improving efficiency and processes, value chain and digitalisation were instrumental in this achievement.

Streamlined logistics

Broadly, logistics in the country have been stripped back and streamlined. Better trade facilitation has been implemented to support economic growth while ensuring a fair, competitive trade environment, with clearance processes simplified and automated to cut down time and cost. For companies importing goods into Saudi Arabia, clearance time has been reduced from five days in 2017 to 17.2 hours by the end of 2019, while the number of documents required for import and export, previously 12 and nine documents, respectively, has been reduced to just two for each. Elsewhere, the introduction of bonded and re-export zones and warehouses offers benefits for foreign companies. This in turn helps to attract investment and strengthens partnerships with the private sector.

Significant progress has been made in reducing the time between shipment arrival to full clearance for all shipments. Saudi Customs is currently working towards a two-hour clearance target in 2021, achieved through concentrated efforts in regulatory reform, process enhancement and automation, as well as close collaboration with the entire trade ecosystem.

big strides forward

Major developments include implementing the Authorized Economic Operator programme, which has 175 members, of the World Customs Organization and the TIR Convention to facilitate the movement of goods for highly compliant traders and the launch of FASAH, the unified national single window online platform for all import and export activities in the Kingdom. The system enables entities to submit the required data for import and export procedures electronically and pass it electronically to the relevant government entity, which reduces the time and cost of processing documents and fast-tracking customs clearance. Signing and activating such agreements positions the Kingdom at the forefront of the global logistics race.

Then there is the launch of the second phase of the electronic system of the Customs Targeting Center. The goal is to reduce manual inspection by 20%, and we could reach up to 50%. For Saudi Customs’ partners, this means a better experience, with a balance between the objectives of facilitating trade and expediting movement of goods on one hand, and maintaining security and protecting the community and the economy on the other.

We also worked to transform our internal operating model. This means that all clearance transactions are dealt with through a centralised platform that feeds into the Customs Operations Center, which operates round the clock to ensure the expedition and refinement of the export and import clearance processes.

For our customers, this has resulted in an all-round improved experience that weighs the interests of all stakeholders, which aligns with our corporate strategy of enhanced customer experience.

The COVID response

To help facilitate trade and support the private sector during the global COVID-19 pandemic, we postponed the collection of customs duties up to 30 days after clearance. The initiative seeks to mitigate the impact of the pandemic on the private sector, helping it to maintain liquidity.

Looking ahead, we have set several objectives for 2021. We will fully activate the Customs Targeting Center and FASAH, which will cut clearance time to two hours for declarations submitted prior to arrival. With the full activation of the Customs Targeting Center, manual inspection will be reduced to only 10% of shipments and passengers. This will not only facilitate trade and expedite the movement of goods, but it will also help to maintain security and protect the community and the economy through smart targeting that combines lower inspection rates and higher targeting accuracy.

Combined, this work is translating the vision and strategy of Saudi Customs into tangible, transformative outcomes that are cementing its standing as a pivotal entity within the Kingdom.