Operational Guide

A PresentationBY

Presenation for NBR,2009

Bonded Warehouse Management: Possible IT

Initiative

DR. MD. MATIUR RAHMANADDITIONAL DIRECTOR GENERAL

Customs, Excise & VAT Training AcademySagorika Road, Chittagong.

Phone: +880-31-751940e-mail: [email protected]

[email protected]

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Presentation AgendaObjective , Current System, Automated System

Proposed Modules for Total Automation Project

Risk management – avoiding failure

Q & A






Objective Objective • The main objectives of the Customs Bond

Commissionerate are as follows:• Help and facilitate the export business• Ensure proper collection of revenue• Control misuse of bond facilities through risk

management• Preserve and record various data





Current System..1• Now the bond commisiionerate manages bond related

activities in traditional ways . Present system has lack of transparency and also has scope of avoiding responsibilities. Major disadvantages of present system are as follows:-

• There is no proper control over the system of issuing license to the bonders. So always there has opportunity to make the system corrupt which ultimately may create indiscipline in the bond Commissionerate.

• Lots of physical file handling with maximum risk• License day to day process (Renewal, Audit, Intra bond

transfer etc.) taking so many steps• Corresponding with lien banks taking much time





Current System..2

• No proper controlling of Utilization Declaration (UD)• Smoggy passbook management system • No proper justification over Utilization Permission (UP)• No proper justification of Import Entitlement/Quota• Control less flow and less synchronized audit function• Unaligned monitoring system over updated DEDO co-efficient• Claim duty & taxes for expired bonding goods taking much

time with lots of error• Demand adjustment bugs occurred while calculating





Proposed System…1

• The automated bond network will enable to supervise and oversee all bond related activities electronically. It is believed that after introducing automated system, the efficiencies and cost savings will greatly improve by delivery services in time.

• The automation will save time and ensure accountability• Successful implementation of the automation process would

change the mindset of all stakeholders.• Import-export will take place more smoothly and cost of trade

will be reduced.





Proposed System…2

• According to the project outline, clearance procedures will be reduced to minimum stages from the lengthy and flat steps

• Companies can be benefited by using automated filing, reduced paperwork, personnel, and administrative costs, participating in the initial development, and filing all data at a central filing point

• Next section would derive the overall procedures & functionalities of Bond Commissionerate with the existing system as well as current problems by running the operations & would also derive the precise solution what we are going to naming “Bond Commissionerate Automation”




Presentation for NBR,2009

Proposed Automation Proposed Automation Project…1 Project…1 • 1. License 1.1 Bond License Issue (Initial Step)• 1.2 Bond License process (day to day business as when &

required) • 1.2.1Renewal of Bond License• 1.2.2 Extension of bonded period• 1.2.3 Cancellation/ Suspension of bond license• 1.2.4 Addition/Subtraction of raw materials at the bond license• 1.2.5 Temporary/Permanent Intra-Bond Transfer of Raw Materials• 1.2.6 Change of Ownership of Bond License and management of Irregularities • 1.2.7 Transfer/Extension of Factory & Management of related Irregularities• 1.2.8 Import Entitlement Approval/Enhancement &Management• 1.2.9 Permission for Releasing Bank Guarantee • 1.2.10 Temporary/Permanent Intra-Bond Transfer of Raw Materials (EPZ)• 1.2.11 Addition / Modification & Interface with Lien Bank• 1.2.12 General Bond Acceptance• 1.2.13 Approval for opening part file





Proposed Automation Proposed Automation Project…2 Project…2 Electronic Bond Register

2.1 In Bond Management2.2 Ex Bond Management2.3 UP Management2.4 Consumption certificate/declaration/input-output co-efficient2.5 Consumption certificate for supervise bond2.6 BE Submission for home consumption2.7 Lien Bank





Proposed Automation Proposed Automation Project…3 Project…3 Electronic Pass Book

2.7 UD Management 2.8 Consumption certificate/declaration/input-output co-efficient2.9 Lien Bank2.10 Bill of Entry2.11 Bill of Export





Proposed Automation Proposed Automation Project…4 Project…4 • 3. Audit Information Management• 4. Treasury Management• 5. C&F License Management• 6. DEDO Interface Synchronization• 7. Demand/ Irregularities• 7.1Claim Duty & Taxes for Expired Bonding Goods• 7.2emand Adjustment or installment fixation for outstanding

revenue





Proposed Automation Proposed Automation Project…5 Project…5 • 7.3Permission for raw materials importation against bank

guarantee or duty taxes• 7.4Appointment of Inspector for Investigating Various Type of

Irregularities• 8. Writ Management• 9. Human Resource Management• 10. Lien Bank module• 11. EPZ Module• 12. Risk Management & Bond Commissionerate Confidential

Report Generation• 13. Data Migration





License Information Management System




17

License Issue Process (15 Steps) Before Automation

Application received in the dispatch center with check listed documents

Application for License given by the bonder

Send letter for Inquiry from JC

Bond License seen by Commissioner & send via DC, JC, AD

Officer will check documents & take step for inquiry

File put up with relevant document giving direction regarding inquiry & send to respective officer

Commissioner

Inquiry officer will prepare report on the basis of investigation including all documents & will submit for approval from JC, AD, and Commissioner

After approval of inspection report annual allotment letter for raw materials is issued which is included in the inspection report

After approval Bond License form is provided to the applicant for fill-up and after fill-up he then return it back to the Bond Office

any

File goes to the computer section for verification of Associate License if any & irregularity related to applicant’s other bond licenses if any

Put up to JC for Inquiry permission

After approval bonder will submit General bond, license fees and treasury challan & will sign in the license sheet

File put up with all document for signing by the JC, AD, Commissioner

Final license issued to the Bonder from the License Section of Customs Bond office

Dispatch License Issue Information to the relevant stakeholders by regular mail




Verify application with documents & Central Database, send online notification to the applicants.

Online License Application Submission & Submit Necessary Documents (Scan & Hard Copy) to the Pouch Center & get a license tracking ID

Handle the file with new concept “e-File Movement”

Online Approval/ Rejection with Status & Notification publication process to relevant stakeholders

License Issue Process (4 Steps) After Automation




License Module

Extension of bonded period

Bond License Issue

Renewal of Bond License Cancellation/ Suspension of

bond license

Addition/Subtraction of raw materials at the bond license

Temporary/Permanent Intra-Bond Transfer of Raw Materials

Change of Ownership of Bond License and management of Irregularities

Transfer/Extension of Factory & Management of related Irregularities

Import Entitlement Approval/Enhancement &Management

Permission for Releasing Bank Guarantee

Temporary/Permanent Intra-Bond Transfer of Raw Materials for EPZ

Addition / Modification & Interface with Lien Bank

General Bond Acceptance

Approval for opening part file

Bond License Day to Day Business




Applicants/Organization

License Application for 100% Garments Exporter Bond

License Application for Deemed Exporter Bond

License Application for Home Consumption Bond BOND

COMMISSIONERATE Income Tax

Lien Bank

NBR

Ministry of Foreign Affairs

Trade License City Corp./Local Govt.

VAT

Fire License

Joint Stock

EPZ Bond

Environment

Board of Investment

Stakeholder identification related to license module

Legend

Service Seeker

Authority

Defined Process

Future Plan

All Partner Organizations

BGMEABKMEABTMA

BCCAMEABPGMALFMEAB




Clearance/BOE/Assessment Authority

Controls

Lien BankMaster L/C

BB L/CBank Guarantee

PI

Consumption Sheet

Electronic Bond Register

(In-Bond)

CTG Custom House

DHK Custom House

Benapole Custom House Deemed

100% GMTS

H.Consumption

UD (BGMEA/BKMEA/IP for

EPZ)

Import Entitlement

BC Eye

Deemed

100% GMTS

ion

H.Consumption

IMPORT EXPORT

Lien BankMaster L/C

BB L/CBank

GuaranteePRCPI

Consumption Sheet

Electronic Bond

Register (Ex-Bond)

UD(BGMEA/BKMEA/EP for EPZ)

UP

BC Eye

Calculate Balance

Audit

n

BE Submission for Home Consumption

NBR

Mongla Custom House

Others…………….

NBR

Bangladesh Bank

Stakeholder identification related to Import & Export With flowchart




Electronic Pass Book





Manual checking system for imported goods (i.e. Maximum import permission/ Import permission at a time)

Import declaration

Manual checking with Lien Bank if

necessary

BGMEA/BKMEA

For 100% Export Garments, manual checking with UD provided by BGMEA/BKMEA

Entry on “PASS BOOK REGISTER (in)”

Export Process

Manual Checking with UD

For EPZ Import permission or in other form from BEPZA. IP/EP manual checking system

Manual Checking with Lien Bank

Manual Checking with Bill of Export

Entry on “PASS BOOK REGISTER (ex)”

Pass Book Registry Process (16 Steps) Before Automation

Bill of Entry Approval Manual checking with Bond License

Status

Submission of Bill of Export

Manual checking with License Status

Calculate Balance (Manual)




Online Customs RegistrySystem will automatically get the bonded tagged dataSystems will automatically cross-check with the license, BGMEA, BKMEA for UD, IP/EP for EPZ.

Import (Tag Imported BL/AWBL No. as that for Bond)

Bond Commissionerate Online Approvals if necessary

Update Registry Entry as per approval/rejection

Pass Book Registry Process (6 Steps) After Automation

While Export Check with Lien Bank, UD, EP as well as Bangladesh Bank

Calculate Balance





Electronic Bond Register




Manual checking with License Status

Submission of Bill of Entry

Final assessment & Release Order

Manual UD CheckManual UP Application

Manual Consumption Sheet Check

Dispatch BondPut entry in-bond register

Application/ Note Sheet verification by Inspector

Waiting for approvalIf Approved then entry to bond register by area bond officer

Bond Register Process (16 Steps) Before Automation

Manual BB L/C , PI Check

Manual Calculation/Deduction/Balance

Manual checking L/C, LCA,PI, BL etc

Send 3rd copy BOE manually to Bond Commissionerate

Bond Office will check the documents & goods & inspect ware house if necessary




Online Customs Registry System will automatically get the bonded tagged data Systems will automatically cross-check with the license, BGMEA, BKMEA for UD, IP/EP for EPZ.

Online Application for UP, after application submission auto cross check with the UD, L/C, Consumption sheet

Auto Cross check with the Import Entitlement

Online Entry In-Bond Register

Electronic Bond Register Process (6 Steps) After Automation

Online Approval/Rejection

Auto Generate Balance




Start

server.

Tag Bond related consignment BL/AWBL no. into the automation

server.

Approved?

Cross Check from Multi Dimension

Checking with UD.UD Module (BGMEA/BKMEA) will provide the asking data

Checking with License for irregularities, previous

administrative actions, License Expiry etc

Checking with Lien Bank for UD

declared LC, BB LC PI…others

Request for amendment

No Yes

Bill of EntryRelease order from portDispatch Bond

Checking with IP/ for EPZ

Auto Deduction & Balance

In -Bond Management for SBW & EPZ

Saved in Bond Register




Start

Approved?

Cross Check for Fake/Duplicate

Entry



declared LC, BB LC,…others

Request for amendment No Yes

Submission of Bill of export


Ex -Bond Management for SBW & EPZ

Checking with EP for EPZ



View approval inform and input of actual garments quantity by

P.O on board





Start

Tag Bond related consignment BL/AWBL no. into the automation

server.

Approved?

Cross Check from Multi Dimension




declared LC, BB LC PI…others

Request for amendment

No Yes

Bill of EntryRelease order from portDispatch Bond

Checking with IP/ for EPZ



In -Bond Management for GBW

Checking with Entitlement




Start

Approved?

Cross Check for Fake/Duplicate

Entry



declared LC, BB LC,PI, others

Request for amendment No Yes

Submission of UP


Ex -Bond Management for GBW

Checking with EP for EPZ







UD Module Diagram






Validate with UD Data

Calculate Consumption Qty

(Style Data multiply by consumption Data)

CNF submit Bill of Entry with UD No.

P/O (Custom) Confirm the C & F Data

Deduct

Cross match Style Data with UD

Generate In Bond Report

Receive UD format in Xml format

UD Module Graphical Diagram

Update UD data with Database

Display Error Message; B/E Not Valid

Re-calculate Consumption EntryIn-Bond Data

Generate Ex bond Report

CNF Submit Style Data

CNF submit Bill of Export with

UD No.

Yes

No

If Yes, Add

Online ud sub Bgmea crs chk with lic/lien bank Online publication

Checking withLicense

Checking with Lien Bank

Generate Balance




Lien Bank





UD No. & Date

Query for Export/Import Statement

Query for Master L/C (Export L/C)

Query for Back to Back L/C (Import L/C)

Custom Bond Commissionerate verify documents with lien bank

Justification for Proceeds realization certificate

Query for Proforma Invoice





Receive Export L/C / Master L/C

Foreign B 2 B Opened

Scrutiny of Export L/C Valid Clauses (all necessary doc)

Valid Shipment DateValid Clauses (all necessary doc)

Goods Imporetd against L/C & Kept in Bond

Export made (After completion of all sort of work by the bonder)

Proceed Realization Certificate

No. date, amount, applicant, Qty, PI, Packing List, Bill of Exchange

QtyNo. date, amount, applicant, Qty

B 2 B doc recvd. - Which doc, How much, What Qty?-Which Export L/C,Full or Partial-Foreign Document Bills of Purchase- Funded facility through packing credit and export credit

Query for Proforma Invoice:- If goods imported is above 200,000 then PI should require credit report.- If above 500,000 then Indent is requires & credit report of supplier is obtained.

Business Flow: Current System - Export





Business Flow: Current System - Import

B2B L/C opened/Any sort of import L/C

Doc received against B2B L/C

Entry in Lodgment Register

Retirement/Payment (Either Sight Payment or Deferred Payment)

If B2B is Sight Payment then it is made immediately creating a Force Loan (SOD Exp) in the name of the Bonder. If B2B is Deferred/Usance then Bank informs the maturity date & on maturity payment is effected.




Performance Register

Performance Register includes the following: Information related to Ex L/C, Master L/C Information related to B2B L/C Information related to Export (for verification) Export Quantity Shipment Date ELC Contract Expiry Date BTB Entitle in FC BTB L/C No. BTB Bill No. L/C amount Bill amount in FC Imported Item Bill maturity date Type of investment – PC, ECC, SOD Export LD No. Disbursement amount in Tk. Outstanding amount in Tk LD Expiry date Export status Doc. Lodgment type – FDBC (Foreign doc Bill sent on Collection) FDBP (Foreign Doc. Bill of Purchase), Amount in FC Outstanding balance in FCBPAR




Audit & Risk Management





Consignment wise export/import statement

UP Value Addition

H.S Code wise partial report generating with certain time span to identify/compare the actual unit price of the goods.

Consumption sheet or Markup Report

Confidential report for Bond Commissionerate

UD Value Addition

Auto Yearly Audit Report





Approval of Yearly Audit Report

Investigation by internal audit team & report

submission to JC/ADC

Yes/No

Audit Report

NotPermitted

Yes

No

End

Further investigation by JC/Additional commissioner

Application to commissioner with required documents

Getting report from automated system as Imp/Exp Statement report with bank synchronization




EPZ Module




EPZ Module (In-Bond)

Submit Successful Bill of Entry

Enter In-Bond Information against particular B/E Submitted

Final Submit to Custom EPZ Bond

Assign Bond No. by Custom EPZ Bond Personel

Entry

Update Needed For Those Entry

Yes

NoSubmit Amendment Request to Custom EPZ Bond

Amendment App by Custom Personal

Update the Entry and Send the Final Amendment Request

Final Amendment App by Custom Personal

Submit IP/EP to BEPZA

BEPZA approval/ amendment

Cross check with license

Online publication

Cross check with Lien Bank

Submit Successful Bill of Export

Enter the Infor. Abt Ex-Bond against B/E & Bond No. for a Particular Item

Send request for Approval to Custom EPZ Bond

Send request for Approval to Custom EPZ Bond Personel

Generate Balance Sheet




Infrastructural Diagram








Avoiding Failure





Avoiding Failure:

Develop a full scale IT Strategy Have a total project control

Have a Project Management Team Have a Project Development team Have a Project Maintenance team

IT Domain Members Infrastructure with Hardware/ Software and Network team

Participation among stake-holders Making sure that all the stakeholders participate Making roles for all in a defines format Involve them in all activities In project Definition Phase

Training phase User acceptance Phase Execution phase




Change Management

The truth about any IT initiative is “ Change “ and change is always unavoidable It is the change management strategy that shall determine the true success of the Project In change Management - the stakeholders must be involved and be convinced

Building and Maintaining Infrastructure

The infrastructure has to be world-class The system must be maintained to cater the future need Must have right mix of people process and Technology ( PPT - the infrastructure).

Having the right Audit Practices for three processes:

Value governance IT portfolio management IT investment Management




Financial Summary






Software Module wise costingSoftware Modules Estimated Cost

Electronic Bond Register 2,418,000.00

UP, UD 1,755,500.00

Bond License Day-to-Day Business 1,930,500.00

Digital File Archiving 507,400.00

PMIS 994,000.00

Demand Irregularities 967,400.00

Writ Management 794,900.00

Treasury Management 1,024,900.00

Audit Management 852,400.00

Lien Bank Module 679,900.00

e-File Movement 564,900.00

Bond License Issue 1,405,500.00

Total for software 13,895,300.00




Hardware specification derived from state of art technology

Item Description Quantity

Database Server With on-line UPS(Store All Module Generated Data)Linux Server 2003, 200832-bit and 64-bit (x64) supported, My SQL Server 5.0IBM recommendedX3500 IBM 8GB RAM 2 Processor Dual Core

1

Back-up/Storage Server

SAN ICM 2 Slot 2 Terabyte Hard diskIncluding all SAN related software

1

Application Server Apache LinuxLinux Brand ServerIBM RecommendedX3500 IBM 8GB RAM 2 Processor Dual CoreWith on-line UPS(Store All Module Generated Data)

1




Load Balancing Server

Previous version of X3500 IBM 1

Personal Computer Latest PC (IBM LENOVO Core2 Duo) · Intel® Xeon W3505 2.53 4MB/1066 DC CPU · Genuine Windows Vista® Business 32-bit with downgrade to

Windows® XP Professional custom installed· HP 2GB (2x1GB) DDR3-1333 ECC RAM · NVIDIA Quadro FX380 256MB Graphics · HP 250GB SATA 7200 1st HDD · HP 16X DVD+-RW SuperMulti SATA 1st Drive

100

Printer:Network

In-line laser printing technology, direct-to-page printing, Up to 600 x 600 dpi, Microsoft Windows 98 SE and Me (driver only); Microsoft Windows 2000, XP 32-Bit, Server 2003;

(HP 40105N)

3




Cooling System 2 Tons (2 for data center) 3

Aireon-Auto Change over

DC humidifier

Fire Fighting System FM 200 3

Power Generator Power Generator for ultimate back up

UPS For PC’s (50 approx) 100

(For Un-Interruptible Power Supply)

NewTech -UPS, 600 VA, Input 230V / Output 230V,




Barcode Reader LS 9208, USB kit: Scanner, USB cable, stand, & product reference guide. Color: white/black

100

Furniture Required furniture for Personal Computers 100 sets

Bandwidth (1Mbps) 12

(For Mission/Outside from Ministry Building Uses) months

CISCO Router CISCO 2811-HSEC/KG 2

Router Manageable Switch CISCO 2960 4

Server Rack D-Link 42 U with Assential Accessories 2

Networking 10 coils

CCTV Model: DB-N348E Name: Dome Camera IMAGE SENSOR: 1/3”SONY Exview HAD CCD

10

RESOLUTION: 480 TV Line

MINIMUM ILLUMINATION: 0.3 Lux F1.2 / Lux F1.2 (IR On)

SCANNING SYSTEM: NTSC: 525 lines, 60 fields/sec PAL: 625 lines, 50 fields/sec

TOTAL PIXELS: NTSC: 537 (H) x505 (V) PAL: 537 (H) X 597 (V) (For Monitoring Activities)

(Falco)




Engagement Model






Option 1: Fixed cost model for Bond Automation

Cost of Bond Automation Project

Items Year 1 Year 2 Year 3 Year 4 Year 5Total Cost in 5

years

Software Develepment Cost 13,895,300 0 0 0 0 13,895,300

Hardware Cost 42,658,000 0 0 25,594,800 0 68,252,800

Reccaring Expance 3,720,000 4,032,000 4,375,200 4,752,720 5,167,992 22,047,912

Total 104,196,012





Option 2: Implementation through PPP Model – For UP

Per UD: 100 taka Per UD

Per UP: 300 taka per UP

Per license: 5000 taka per license (1 time)1500 per license per year ( renewal charge)

Note: All Charges shall be realized for 5 years from the date of official financial launching of the project.

All future prices shall be subject to 10% increase every year




Q/A



