In the early 1980s, Morocco's political leaders decided to open their economy to world markets despite the danger of economic vulnerability. They adopted a series of priority measures to attract foreign investors into the country and ensure the safety of their investments. Because Morocco has abundant skilled labor, the government encouraged foreign industrial and financial institutions to invest in major sectors such as textiles, electronics, and automobile accessories. These export promotion efforts not only increased exports substantially but also encouraged export diversification. The Moroccan economy is now open and trade barriers are almost nonexistent.
Modernizing customs administration is an integral part of trade promotion, and Morocco began reform of its customs administration and customs services early on, before reform became an urgent necessity. The country's pragmatic, open-door policy called for three major areas of focus, namely:
* enhancement of customs management quality
* development of an improved tariff schedule
* simplification of customs procedures
After summarizing the factors that led the Administration of Customs and Indirect Taxes (ACIT) to opt for modernization, this chapter describes the process that led to the definition of a strategy, presents the framework for reform implementation, describes the new working environment, and analyzes the results achieved to date.
Several factors facilitated the customs administration reform: clear goals, abundant human and institutional resources, and expert management guidance.
In the early 1990s, to foster economic development and to sustain an infant processing industry, King Hassan II envisaged a series of measures to boost foreign trade. During the implementation of these measures, serious malfunctions were detected in the customs service, for which some high-ranking officials were held accountable. In response to those problems, the minister of finance issued clear-cut directives to his staff to analyze the criticisms leveled at the customs service, assess the existing system, and propose reforms adapted to developments in the international trading environment. Morocco has been a member of the World Customs Organization since the inception of that organization in Page 34 1995 and has adjusted its approach to international trade in accordance with the World Customs Organization's successive conventions and agreements. In this context, it reformed its customs administration to facilitate customs clearance transactions while securing customs revenue.
The customs administration was already disciplined and properly structured, which facilitated the attainment of the reform objectives. Staffers in all positions were able to emerge from a culture of exhaustive controls to lend their full support to trade facilitation measures that were introduced progressively. In addition, representatives of the trading community attended meetings designed to enlist the active participation of customs administration staff members.
Foreign consultants reinforced the contribution of national actors. France provided high-level experts to propose changes in the Ministry of Finance. Experts from the International Monetary Fund contributed to an impartial initial diagnosis and the formulation of recommendations for an efficient strategy attuned to the most innovative international practices. The World Bank consistently supported and backed those initiatives. Specialized private firms applied their experience and skills to specific, highly technical aspects of the reform, including human resource management and the formulation of a master plan for customs computerization.
The customs administration did not limit its analysis and action to tackling immediate problems and constraints. Rather, it developed an ambitious, overarching strategy. Morocco's commitment to a pragmatic approach has translated into implementing technical measures already included in a 1995-96 master plan. More important, the government has focused its energies on delivering better service. The sustained participation and commitment of civil service staff have helped internalize the reform objectives, thereby turning them into a set of commonly shared values.
The first task was to identify what reforms were needed for the customs administration to implement its mandate correctly. On the external front, Morocco needed to honor its commitment to join the community of trading nations and to implement the trade facilitation measures appropriate for an emerging economy-for instance, support for the development of the export processing sectors (textiles, electronics, and so on). On the internal front, it needed to assess its legal framework, reorganize the operations of customs services, reduce customs clearance time and costs, and review personnel and equipment management procedures. This approach allowed the customs authorities to set guidelines for devising a realistic strategy. They constantly analyzed proposed solutions in light of their own and other entities' experiences and adopted relevant suggestions.
With the coherence of the project design assured, the customs authorities provided continuous training to enhance overall efficiency and recruited highly qualified university graduates to provide sophisticated technological expertise and to counter any internal resistance to change. The approach was pragmatic, well thought out, and built in coherent phases. The authorities conducted the entire reform of customs services expertly in terms of both human resources and funding.
An initial assessment of the functioning of the customs administration found four major areas on which the reform process should focus, namely:
information exchange and relations between the private sector and customs staff
organization of services.
Instrumental in the success of the reforms was the revision of the legal and statutory framework within which the customs administration operated; the simplification of procedures; and the introduction of a mode of management that incorporated staff participation, programming of assignments, and improved communication.
In 1996, customs clearance operations were slow, cumbersome, contentious, unpredictable, and Page 35 completely ill-adapted to modern logistical requirements for handling goods. In the port of Casablanca, releasing a container took 18 to 20 days, and half of that time was directly attributable to customs formalities. Customs officers were regarded as having sweeping powers and few traders dared to clash with them.
The main objective of customs administration personnel was to collect revenue. International trade facilitation was not their concern. They imposed exhaustive controls and justified them by the need to enforce the Customs Code, collect correct amounts of customs duties and taxes, and fight customs evasion.
The customs computerization scheme introduced in the early 1990s did not produce sufficient changes in customs procedures and working methods. The management of temporary imports was complex, and many related documents were not processed by the time of the last reexportation.
The reform process solicited the support of operators in searching for practical solutions to the obstacles they confronted.
Improving the ACIT's performance required heavy staff involvement and better use of resources.
Human Resources Modernizing a country's customs service requires active participation by the entire staff as essential agents of change. To that end, the customs administration set out to accomplish the following:
* Promote cooperation between headquarters staff and staff of the regional directorates and the districts in defining realistic objectives and implementation methods. (Note that customs staff members are encouraged to express their views so as to better integrate regional concerns into policy, and the director general's annual policy paper reflects such comments and suggestions.)
* Improve staff training and keep staff members better informed.
* Strengthen employees' motivation to make valuable contributions to the ACIT's mandate, including through bonuses and benefits.
The rigidity of civil service regulations sometimes hampered efforts to strengthen incentives. Thus, the customs administration took steps to improve the regulations as they applied to customs staff. For example, paying bonuses for good work requires a system for grading performance, but the existing evaluation system, which periodically graded staff members on their professional skills, efficiency, output, and conduct on a scale of 0 to 3, was too unsophisticated to permit remuneration based on merit. The system was replaced with semiannual appraisals whereby staff were evaluated on the...