Traders in Colombia save over USD 8M thanks to improved import processes

Global Alliance for Trade Facilitation completes first project aimed at making trade simpler, faster and more cost-effective.

Businesses that import food and beverages saved USD 8.8M between March 2018 and September 2019 thanks to new modern border processes introduced by the country’s National Food and Drug Surveillance Institute (Invima) working alongside business and the Global Alliance for Trade Facilitation.

The reforms involved developing and introducing a risk management system, IVC SOA Puertos®, which uses mathematical methods to assess the risk level of imports and exports and determines whether a physical or documentary inspection is necessary.

The impact for government, businesses and consumers is significant. In its first 18 months of operation the system enabled Invima to cut its rate of physical inspections of food and beverages from 100% to 70%. Invima inspectors can now focus their resources on high-risk shipments and work more efficiently without jeopardising safety or security in public health.

Now, goods that only require a documentary inspection can obtain the sanitary inspection certificate (CIS) they need to be cleared by Invima in just three hours rather than the two days (16 working hours) taken when physical inspection is involved.

Cutting the time taken to clear goods is making trade more cost-effective for business. When goods are physically inspected, traders must pay for container handling and storage and could face demurrage and detention fees. A container that undergoes only a documentary inspection by Invima costs business on average USD 379 less to move than a container that is physically inspected – that adds up to USD 8.8M in savings in the past 18 months for importers alone. During this period Invima inspectors conducted 23,203 documentary inspections.

The project also introduced a similar system for medicines and medical devices which is allowing Invima to strengthen its protection of public health in Colombia while ensuring smooth trade for compliant traders.

Julio Cesar Aldana Bula, Director of Invima, said: “This work is helping to fulfil the national government’s agenda of facilitating trade and increasing Colombia’s competitiveness. The reforms will help Colombian businesses connect to international markets, as well as help Colombia to become more attractive for investment and deliver inclusive growth that can benefit all.”

He added “Although this model aims to improve process efficiency through risk management, under no circumstances will public health be compromised. On the contrary, the improvements will strengthen inspection, surveillance and control.”

This is the first in a portfolio of trade facilitation projects led by the Global Alliance for Trade Facilitation to reach completion. The Alliance is a collaboration of international organisations, governments and businesses that aims to help developing and least developed countries implement the World Trade Organization’s Trade Facilitation Agreement. The Alliance is funded by the governments of the United States, Canada, United Kingdom, Australia, Germany and Denmark.

Philippe Isler, Director of the Global Alliance for Trade Facilitation, said: “After the Trade Facilitation Agreement was signed in 2015, there was a recognition that governments and businesses have to work together to implement it and unlock its full potential benefits. We set out to help build trusted working relationships between the two sectors, and demonstrate how governments, aid organisations and businesses can work together to get more done, faster and with better value for money for the public purse. The results we have seen in Colombia show that this approach works.”

The project has been designed and delivered with business efficiency – it took just one year to assess the functional and technical gaps, propose recommendations, pilot the system for food and beverages at Bogotá International Airport and Buenaventura Port, and scale it up to 13 points of entry. Business has worked alongside Invima, actively contributing its resources and industry expertise to the value of 50% of the project budget.

Many Colombian businesses have been involved in steering the project including the National Business Association of Colombia (ANDI), National Association of Foreign Trade (ANALDEX), Colombian-American Chamber of Commerce (AMCHAM), Latin American Association of Express Delivery Companies (CLADEC), ICC Colombia, Bogotá Chamber of Commerce, Council of American Enterprises (CEA), Colombian Federation of Customs and Logistics Brokers (FITAC), and Business Alliance for Secure Commerce (BASC).

Both Invima and business have found the open public-private dialogue that underpinned the project has helped to build trust and understanding between the two sectors.

Mr Isler concluded: “Invima’s drive to instil a culture within its entire operation that understands the value of risk management, both to smooth the process for business and to help agency staff focus control and supervision efforts, has been crucial. They are leading the way in trade facilitation in Colombia and we are encouraged to see other agencies both in Colombia and elsewhere express an interest in learning from this project.”

 

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