Timor-Leste Trade Facilitation Challenges for Women Traders and Freight Forwarders Survey findings and recommendations D I S C LA I ME R This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. RI G H T S A N D P E R MI S S I O NS The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsid- iary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org PHOTO I N FO R MAT I O N All photos are credited throughout the publication. Cover photos: A view of hills and sky, Timor © Joao dos Santos/World Bank (top), Container ship crossing Pacific waters © Jose Matheus/Shutterstock (left), Bernadete Bian, a leading female entrepreneur in Timor-Leste, and her family © Sarah Wiles (right). Acknowledgements This report presents the results of a survey undertaken in Timor-Leste from February to March 2020 with the intention to identify specific challenges cross-border traders are facing related to trade facilitation at the firm level. This survey work was led by the World Bank Group (WBG) and funded by the Trade Facilitation Support Program.1 Tebbutt Research was selected through a competitive process to support the team with the implementation of the survey on the ground in Timor-Leste. The WBG team would like to recognize the Government of Timor-Leste for its invaluable contribution to the project, including through the provision of trader data. 1 The Trade Facilitation Support Program is funded by Australia, Canada, the European Union, the Netherlands, Norway, Sweden, Switzerland, the United Kingdom, and the United States of America. 1 Timor-Leste Key recommendations based on survey findings: Initial findings demonstrate an opportunity for the Government of Timor-Leste to improve the design of Number of active cross-border trading trade facilitation interventions to better address traders’ firms (2018): 9392 needs (women in particular), e.g. by: Capital city: Dili Reducing time to release goods Region: East Asia & Pacific by implementing recommen- Income category: Lower-middle income3 dations from recent Time Population (2018): 1,267,972 Release Study (TRS) GDP (current US$ millions, 2018): 1,568.614 Est. GNI per capita women/men (2018 based on 2011 PPP$): $5,389 / $9,6195 Publishing the recent TRS study Labor force participation rate to increase transparency and (% ages 15 and older, 2018) women/men: predictability for traders  62.1 / 72.9 Merchandise exports and imports (% of GDP): 36 Main exports: Strengthening the roles of the Coffee, candle nut, aluminum6 National Trade Facilitation Main imports: Committee (NTFC) and the Mineral fuels, vehicles (other than railway or tramway National Trade Consultative Forum rolling stock) and parts thereof, paper and paper- board, electrical machinery and equipment and parts thereof machinery and mechanical applianc- Improving availability of es/parts thereof, beverages/spirits/vinegar, cereals, information on official border textiles, plastics, iron or steel articles7 processes and procedures, WTO Trade Facilitation Agreement including through a Trade ratification date: Not yet acceded to the WTO Information Portal Raising awareness among private sector stakeholders, 2 This number is based on a list of firms provided by the Directorate General of Customs and reflects initial efforts to exclude duplicates, and women in particular, government entities, etc. that would not be eligible for the survey. of consultation mechanisms Some ineligible firms may still be included in this number, which further remediation work subsequently identified. 3 Based on WBG fiscal year 2020 (calendar year 2018) data calculation: lower-middle income is GNI per capita between Strengthening the roll-out $1,026 and $3,995. of automation among all 4 World Development Indicators database. border agencies through a 5 Human Development Report, UNDP. one-stop shop 6 General Directorate of Statistics, External Trade Statistics, 2018. 7 Ibid. 2 Table of contents 1 Executive summary 4 2 Description of the sample and methodology 8 3 Survey findings 10 General trader and freight forwarder findings 11 Trade faciliation-specific findings 17 4 Recommendations based on survey responses 26 Annex 1 Methodology 30 3 More women-led firms import agriculture products in Timor-Leste © Tom Hill 1 Executive summary Trade is widely recognized to be an engine of growth that ters in the world.12 These challenges increase trade costs and creates jobs, reduces poverty, and increases economic make it difficult for the Pacific Island countries to trade effec- opportunity. Generally speaking, trade facilitation measures tively and competitively. To overcome the challenges of size are non-discriminatory and apply to all traders in their de- and isolation, trade capacity should be increased so that the sign; however, these measures may not necessarily impact countries can more effectively integrate into the global trad- or benefit all traders in similar ways. There is a global lack of ing system and thus improve their economic opportunities.13 data on how trade facilitation interventions impact traders by One way to do this is through the implementation of trade gender at the firm level.8,9 There is also a global vacuum of facilitation measures that lower time and cost to trade for knowledge of the exact proportion of cross-border traders both men and women-led firms. that are women. Few countries, if any, can easily confirm the number of women that undertake cross-border trade in their respective countries. Survey respondents include: Firms that engage in cross-border trade of goods Designing interventions that are inclusive—benefiting women (disaggregated by the gender of the firms’ owner as well as men—is difficult without accurate data on the gen- or manager) der of those who participate actively in cross-border trade. Freight forwarders (not disaggregated by gender Without this knowledge and that of the exact challenges due to the small sample population) faced by both genders, it is also hard to tell how much any subset of the economy would be impacted by any interven- tion. This lack of data may also reinforce the bias against This note presents findings of the survey work in Timor-Leste.14 women in trade policy making. Timor-Leste is a small island country within the Malay Archi- pelago. It includes the enclave of Oecussi-Ambeno, situated To help fill the data gap with an aim to better inform future on the Western (Indonesian) part of the island and the islands design and implementation of trade facilitation projects, the of Ataúro and Jaco.15 There are ports on Oecusse and Atauro World Bank Group (WBG) has collected data – through a sur- Island that provide domestic ferry traffic, and Dili Port oper- vey – on cross-border trade challenges faced by both women ates as the only international port for Timor-Leste.16 Indonesia and men at the firm level in the Pacific Islands region.10,11 is Timor-Leste’s biggest trading partner.17 Countries in the Pacific Islands region face unique develop- The survey in Timor-Leste was launched prior to the outbreak ment challenges: they are physically detached from major of COVID-19 in the region. The pandemic has demonstrated markets, tend to have high levels of inequality in many areas, that women are particularly vulnerable and disproportionate- and confront the worst impacts of climate change, making ly affected during a pandemic due to their multiple roles in them some of the most vulnerable countries to natural disas- society.18 Maintaining trade flows as much as possible during 8 Higgins, Gender Dimensions of Trade Facilitation and Logistics: A Guidance 12 World Bank, 2019. Note, 2012. 13 Pacific Islands Forum Secretariat, A strategy to support development in the 9 In this note, “traders” is used interchangeably with “firms” but should be un- Pacific, 2013. derstood to represent registered firms undertaking cross-border trade and not individual, private traders. 14 Timor-Leste is on the fiscal year 2020 list of fragile and conflict-affected sit- uations (FCS) released annually by the World Bank Group. FCS have high levels 10 Target countries for the project in the Pacific region are Fiji, Papua New of institutional and social fragility and/or are affected by violent conflict. This Guinea, Samoa, Timor-Leste, and Vanuatu. “Women-led” versus “men-led” is classification is used as a tool to help the WBG adapt its approaches, policies, used in the report when a firm is either owned and/or managed by a woman or and instruments in difficult and complex environments. man. A firm is “woman owned” if (1a) ≥ 51% of the shares are owned by a woman or (1b) ≥ 20% is owned by a woman; (2) it has ≥ 1 woman as CEO/COO/Presi- 15 Government of Timor-Leste (Online: http://timor-leste.gov.tl/?p=547&lang=en). dent/Vice President; and, (3) has ≥ 30% of the board of directors composed of women (where a board exists). “Managed” refers to the highest management 16 Asian Development Bank, Country Partnership Strategy: Timor-Leste 2016- individual in the firm. 2020, 2016. 11 The survey questionnaire focuses on main areas of the WTO Trade Facilita- 17 General Directorate of Statistics, External Trade Statistics, 2018. tion Agreement. The WTO TFA came into force on February 22, 2017, and con- tains provisions for expediting the movement, release and clearance of goods, 18 WBG, Policy Note: Gender dimensions of the COVID-19 pandemic, 2020; including goods in transit. It also sets out measures for effective cooperation Tralac, Blog: COVID-19 and its implications for women, 2020. between Customs and other appropriate authorities on trade facilitation and customs compliance issues. 5 a pandemic is crucial as trade has a direct impact on pub- Women-led firms surveyed experience greater challenges lic health through the finance, provision, and distribution of in many cross-border trade activities compared to men-led health-related goods, services, and people.19 Continued ac- counterparts, including for example: cess to essential food and medical items through trade will limit the negative impacts of the pandemic both in the short Very few traders and freight forwarders, especially term and in the recovery process. The pandemic has high- women traders, are members of industry/trade asso- lighted the urgent need for trade facilitation reforms, such ciations. as paperless and automated systems, to keep critical goods flowing through borders. The survey findings, though studied Fewer women traders are regularly consulted on prior to the pandemic, should be viewed in this context and changes to official border processes and procedures. used to raise awareness around the importance of trade fa- cilitation in expediting the movement, release, and clearance There is an information gap in that fewer women of goods. traders are likely to be aware that import/export decla- rations can be submitted electronically, fewer women The survey confirmed that both men and women traders traders know that customs allows the pre-declaration are content in many areas, including with the consistency of shipments, and fewer women traders know that offi- of the implementation of border processes and proce- cial fees and charges can be paid electronically. dures, and the ease of finding and understanding informa- tion on official border regulations. Some of the key findings Slightly more women traders have had their goods on the trade facilitation challenges that surveyed traders detained without being promptly informed, and around at the firm level face in Timor-Leste, regardless of the half of the traders believe grievance procedures do not gender, include: exist for when shipments are withheld. Around three-quarters of traders and freight for- The survey has highlighted several areas that could warders20 report that their imported goods require 10 or be addressed by the Government of Timor-Leste to more days for release from customs. improve the trade facilitation environment in the coun- try for all traders. Recommendations are provided to Around half of the traders and the majority of freight address these challenges, and specific emphasis is forwarders need to go to more than one source for in- also placed on addressing asymmetric gender barriers formation on official border processes and procedures. that occur in cross-border trade (see section 4 of this report). A large majority of traders and freight forwarders do not know of the National Trade Facilitation Commit- tee’s existence. Around a quarter of traders, and over half of the freight forwarders, do not believe their feedback is tak- en into consideration when consulted on official border processes and procedures. Most traders and freight forwarders rely on bank transfers to pay official fees and charges because an e-payment system has not been fully implemented. Around a quarter of traders paid unofficial fees in the last year to speed up the processing of their shipments. 19 Smith R. D., Trade and public health: facing the challenges of globalization. 20 In this note, a freight forwarder is a firm that arranges the imports and Journal of epidemiology and community health, 2006. exports of goods for other companies. 6 Bernadete runs a successful bakery wholesale business © Sarah Wiles 7 Cargo ship © Lee Yiu Tung/ Shutterstock 2 Description of the sample and methodology Efforts to identify the universe of traders in Timor-Leste pre- by men and 46 are led by women traders working with differ- ceded the survey. Based on data from the ASYCUDA World ent sized firms and sectors in Timor-Leste.27 All traders sur- System provided by the Directorate General of Customs in veyed are importing goods, and 4 percent reported that they Timor-Leste, there were 939 trading firms in 2018.21 Remedia- both export and import goods. None of the traders surveyed tion of the list reduced the number of firms eligible to partici- exclusively export goods. pate in the survey because some of the entries were either (1) agents and not traders, (2) further duplicates, or (3) missing Out of the 19 freight forwarders identified in Timor-Leste, valid contact. On-the-ground approaches by the field team 11 were surveyed in the same time frame using a simplified were undertaken to identify additional possible candidates for version of the trader questionnaire. Based on the number of the survey, bringing the total number of firms with contact freight forwarders that were identified and eligible to partic- information for the survey to 296.22 A list of 19 freight forward- ipate, a high response rate of 61 percent was achieved (see ing firms was compiled using online sources.23 Table 1 for breakdown of survey respondents). A questionnaire that was designed to collect data in the Pa- The survey was limited to identifying constraints that existing cific Islands region was translated into the local Tetum and traders face. Therefore, it may suffer from a selection bias in Portuguese languages for use in Timor-Leste in addition to that it did not explore obstacles to engaging in trade among English. All active cross-border trading firms with valid con- women firms who currently only trade domestically (possibly tact information were contacted to participate in the survey. as a result of barriers to cross-border trade). Exploring the A total of 186 women and men traders were interviewed in reasons of non-engagement in cross-border trade would re- Timor-Leste over the telephone between 20th February to quire a deeper assessment of why non-trading women firms 31st March 2020.24,25 Based on the total number of traders do not trade, which goes beyond the scope of this survey and with a valid contact telephone number, a 69 percent response likely also the WTO Trade Facilitation Agreement (additional rate was achieved.26 Of the 186 firms interviewed, 140 are led details of the sampling strategy and survey methodology are provided in Annex 1). Table 1. Breakdown of Trader Survey Respondents by Gender and Size of Firms Given that 96 percent of survey re- spondents exclusively import, the survey findings in Timor-Leste do Traders Freight forwarders not distinguish between import- Women Men Total Women Men Total ers and exporters unless other- Micro (1-5 employees) 11 42 53 0 4 4 wise specified. This, however, may Small (6-19 employees) 21 54 75 0 5 5 be possible in other countries and could provide additional insights Medium (20-99 employees) 11 35 46 0 2 2 once the survey is rolled out in Large (100 employees and above) 3 9 12 0 0 0 other regions. Total 46 140 186 0 11 11 21 Work to compile the population list for the sample frame began in 2019, and 26 The response rate excludes from the denominator phone numbers that at that time, 2018 information was the latest available. The survey, undertaken have been disconnected. Because the numbers are disconnected, it is not pos- between February and March 2020, confirmed the traders that were still active sible to determine whether these firms are still an operation; and thus, whether in 2020. they were eligible to participate in the survey. 22 To validate and identify additional trading firms, door-to-door visits on the 27 The eligibility criteria for the survey included firms of any size engaged in ground were made. cross-border trade (import and/or export), as well as whether the respondent owns/manages the firm. State-owned enterprises were excluded. In addition 23 Tools used to validate and identify additional freight forwarding firms were to gender, sectors were analysed using the Harmonized Schedule as such: HS www.cargoyellowpages.com, https://www.easttimor-timorleste.com/Shipping Sections 1-4 (animal, vegetable products, beverages, tobacco), HS sections _Import_Export_East_Timor_Dili.htm, and the Online East Timor-Accommo- 5-10 (minerals, chemicals, rubber, leather, wood, paper products), HS sections dation and Business register. 11-12 (textile, footwear), HS sections 13-15 (stone, glass, precious stones, met- als), HS sections 16-19 (machinery, transport equipment, medical instruments, 24 Interviews were administered by phone and responses recorded via a ammunitions), and HS sections 20-21 (artwork/collectors’ pieces/antiques and Computer Assisted Telephone Interviewing (CATI) system in English as well miscellaneous manufactured articles). In addition, the World Bank Enterprise as in the local languages. Survey’s definition of firm sizes is used: micro (1-4 employees), small (5-19 em- ployees), medium (20-99 employees), and large (100 employees and above). 25 The survey results have been analysed and synthesized to identify key Annex 1 provides additional details on the survey methodology and rollout. takeaways. Survey participants are not identified in the report in order to pre- serve confidentiality. 9 Woman trader in Timor Leste @World Bank 3 Survey findings General trader of secondary school level education. Both women and men traders have similar levels of university level education and above (46 percent for women and 49 percent for men). and freight Of the freight forwarders in Timor-Leste, 81 percent (9 out forwarder findings of 11) are under 46 years of age. All freight fowarders have a minimum of secondary school education, with 46 percent having a university level education or above. A majority of surveyed traders and freight forwarding firms are led by men. Overall, only 25 percent of the traders Traders that have been engaged in cross-border for a surveyed in Timor-Leste are led by women. Of the 11 freight longer period tend to lead larger firms. Fourteen percent forwarders interviewed, all are led by men. of traders have been engaged in cross-border trade for four years or less, 30 percent for 5-9 years, 25 percent for 10-14 More men than women traders lead micro-sized firms, years, and 31 percent for 15 years or more. Minimal gender which differs from the regional pattern of more women being differences are seen in the survey results. There are, however, represented in micro-sized firms. Among the women traders, some differences when comparing firm sizes. Thirty percent of 24 percent lead micro firms, 46 percent lead small firms, 24 traders leading micro-sized firms have engaged in cross-bor- percent lead medium firms, and 7 percent lead large firms. der trade for four years or less, while no traders of large firms Among the men traders, in comparison, 30 percent lead mi- have been engaged in cross-border trade for the same short cro firms, 39 percent lead small firms, 25 percent lead medium duration of time. Overall, large firms tend to be led by traders firms, and 6 percent lead large firms. that have 15 years or more of cross-border trade experience. Figure 1. Firm Size by Gender Imports and Exports 100% More women-led firms import agriculture products 90% than men-led firms.28 Women traders (33 percent) import 80% goods within HS section 1-4 (animal and vegetable products, beverages) compared to men traders (16 percent). Around 70% half of the men (54 percent) and women (48 percent) traders 60% also import goods within HS section 16-19 (machinery, vehi- 50% cles, arms).29 The spread of traders importing in each product 46% 39% category aligns with national data in which the top imports 40% include mineral fuels, vehicles (other than railway or tramway 30% 30% rolling stock) and parts thereof, paper and paperboard, elec- 24% 24% 25% trical machinery and equipment and parts thereof, machinery 20% and mechanical appliances/parts thereof, beverages/spirits/ 10% 7% 6% vinegar, cereals, textiles, plastics, iron or steel articles. 0% Micro Small Medium Large Very few traders in Timor-Leste export goods. The sur- Women traders Men traders vey identified no women traders in Timor-Leste that export goods. Only 6 percent (8 out of 140) of men traders reported that they export goods. For the few traders that do export, Women traders tend to be younger, with 78 percent un- they export within HS sections 1-4 (animal and vegetable der the age of 46 years compared to 59 percent of men trad- products, beverages) and HS sections 5-10 (mineral, plastic ers. Forty-one percent of men traders are older than 46 years and rubber products). This aligns with national data trend old compared to 22 percent of women traders over that age. wherein Timor-Leste has had a negative trade balance be- Ninety-two percent of traders have undertaken a minimum tween 2014 and 2018.30 28 Refers to number of firms surveyed that import within this HS category, not 29 See HS Nomenclature 2017 edition for details on the types of products volume imported within this HS category. that fall into each HS category (Online: http://www.wcoomd.org/en/topics/ nomenclature/instrument-and-tools/hs-nomenclature-2017-edition/hs- nomenclature-2017-edition.aspx). 30 General Directorate of Statistics, External Trade Statistics, 2018. 11 Figure 2. Main Products Imported by Gender 100% 90% 80% 70% 60% 54% 48% 50% 40% 33% 28% 30% 20% 20% 16% 17% 11% 11% 11% 8% 10% 7% 0% Animal, vegetable Minerals, chemicals, Textile, footwear Stone, glass, precious Machinery, transport Artwork/collectors´ products, beverages, rubber, leather, wood, (HS Sections 11-12) stones, metals equipment, medical pieces/antiques and tobacco paper products (HS Sections 13-15) instruments, miscellaneous (HS Sections 1-4) (HS Sections 5-10) ammunitions manufactured articles (HS Sections 16-19) (HS Sections 20-21) Women Traders Men Traders Note: Traders can nominate more than one import category, so totals add to more than 100 percent. Frequency of Trade Caretaking The frequency of trading for men and women traders Regardless of gender, traders reported that caretaking in Timor-Leste is low, with 72 percent of firms trading four responsibilities for children or elderly in their household times a year or less. The difference in frequency of trading by do not affect their ability to trade across borders. How- men and women is minimal, with 70 percent of women trad- ever, there are some traders with the burden of double duty ing four times a year or less compared to 73 percent of men; (having both household and professional work responsibili- 17 percent of women trading once every month compared to ties) with 9 percent of women and 4 percent of men trad- 16 percent of men; and only 13 percent of women trade more ers stating they have caretaking responsibilities that impact than once a month compared to 11 percent for men. their ability to trade across borders. Seventy-three percent of traders stated that their caretaking responsibilities are The frequency of trading differs by firm size. The ma- only in the mornings and evenings, so their ability to trade is jority of micro firms (77 percent) and small firms (76 percent) not impacted. stated they trade four times a year or less while 65 percent of medium firms and 50 percent of large firms trade in the same frequency. Medium to large-sized firms generally trade more frequently, with 17 percent of medium firms and 25 percent of large firms trading more than once a month compared to 9 percent of micro and 7 percent of small firms trading just as frequently. Around 90 percent of women and men traders indicated that they work full time in the firm. Four percent of traders reported that they work in the business seasonally. 12 Figure 3. Time Spent on Family Care Obligations Figure 4. Sources of Financing by Gender 100% 100% 89% 90% 90% 83% 80% 80% 72% 73% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 14% 13% 9% 9% 9% 11% 10% 7% 10% 7% 4% 4% 0% 1% 0% 2% 0% 0% No, I have No, I only No, I have Yes, Personal Official Other loans/ Relatives/ Any no significant spend morning/ help at home caretaking savings bank loan grants/ friends other caretaking evening with these responsibilities microcredit responsibilities on these responsibilities impact my Women Traders Men Traders responsibilities ability to trade Women Traders Men Traders Financing The majority of traders use personal savings to finance their businesses. Eighty-nine percent of women and 83 percent of men traders use personal savings to finance their businesses. Ninety-one percent of micro, 83 percent of small, and 85 percent of medium firms reported that they use per- sonal savings. In comparison, 67 percent of traders that lead large firms use personal savings as a main source of financ- ing. Only 8 percent of the traders stated that they use official bank loans to finance their businesses, with large firms using official bank loans more than the other firm sizes. Local market in Dili © World Bank 13 Figure 5. Sources of Financing by Firm Size 100% 91% 90% 85% 83% 80% 70% 67% 60% 50% 40% 33% 30% 20% 17% 12% 9% 10% 6% 7% 7% 4% 4% 0% 1% 0% 0% 0% 1% 0% 0% Personal savings Office bank loan Other loans/grants/ Relatives/friends Any other microcredits Micro (1-5 employees) Small (6-19 employees) Medium (20-99 employees) Large (100+ employees) Moving Goods and Use of Intermediaries More men than women traders regularly visit the Eight of the 11 freight forwarders surveyed reported that border31 to undertake trade. Forty-one percent of women the main services they provided to traders were customs traders visit the border regularly compared to 73 percent of documentation and transport services. men. Regardless of gender, more traders of large (75 per- cent) and medium-sized (72 percent) firms regularly visit the One-third of all traders reported that they use freight border than traders of micro (64 percent) and small (60 per- forwarders to avoid safety issues at the border. Another cent) firms. main benefit highlighted by traders from using freight for- warders is speeding up the process (70 percent) in addition The majority of traders use freight forwarders and to them handling all the paperwork (73 percent). Only 12 customs brokers and agents. Over 90 percent of both men percent of women traders, compared to 34 percent of men and women traders use freight forwarders to handle paper- traders, reported that it is mandatory by law to use a freight work, with 67 percent and 47 percent handling transport and forwarder. In addition, 67 percent of large firms believe it is shipping, respectively. Only 10 percent of traders stated that mandatory by law to use a freight forwarder compared to 31 they use freight forwarders to handle warehousing. percent for micro, 19 percent for small, and 29 percent of medium-sized firms. 31 “Borders” refers to seaports, airports, and in the case of Timor-Leste, it may also include usage of the land border it shares with Indonesia on Timor Island. 14 Figure 6. Reasons for Using Freight Forwarders and Customs Brokers and Agents 100% 96% 88% 90% 80% 76% 70% 64% 60% 52% 50% 45% 40% 30% 20% 14% 9% 10% 0% Handle Handle Handle Handle shipping transport warehousing paperwork Women Traders Men Traders Figure 7. Reasons for Using Freight Forwarder/ Customs Broker/Agent 100% 90% 79% 80% 71% 70% 72% 70% 60% 50% 40% 34% 31% 33% 30% 20% 12% 10% 2% 1% 0% It is They speed To avoid They handle Other mandatory up the safety all the paper- by law process issues at work border Women Traders Men Traders 15 Cargo ship © World Bank 16 Trade facilitation- of men traders stated that official regulations and procedures are consistently implemented by border officials. A further 20 specific findings percent of women traders and 28 percent of men traders be- lieve there is consistent implementation of border processes and procedures most of the time. Regardless of gender, large i. Port Opening Hours firms (82 percent) are more likely to report that official regula- tions and procedures are consistently implemented by border Restrictive port opening hours can have a negative impact officials than micro (67 percent), small (69 percent), and medi- on international trade and on supply chains. If goods are de- um-sized (71 percent) firms. layed at ports awaiting physical inspection and clearance, the increased time to clear goods at ports will adversely affect The majority of freight forwarders (9 out of 11) reported that the cost of doing business and increase trade costs. Longer official regulations and procedures are consistently imple- clearance times, as a result of restrictive hours or inefficient mented by border officials, with the remainder being unsure. border processes, have been found to significantly increase the cost of trading, and therefore, reduce international trade. iii. Time to Release Goods Global supply chains can be affected when restrictive port opening hours delay the intermediate goods required as in- Unnecessary delays at borders – including long wait times to puts for production. Additionally, there can be an increased release goods by border officials – increase trade costs and risk of theft and spoilage if goods are not adequately secured can also erode the competitiveness of traders.32 Transparent, or stored while waiting for border clearance. efficient, and predictable trade can lead to significant reduc- tion in trade costs, particularly allowing traders the benefit of Related survey finding(s): just-in-time services and reduced inventory costs.33 Know- ing the average time it takes to clear goods at the border Opening hours of ports do not impose a hindrance for helps businesses make important decisions such as planning conducting cross-border trade for a majority of traders. stock levels. Regardless of gender, around 95 percent of traders do not see airport or seaport opening hours restricting their ability to Related survey finding(s): trade. All freight forwarders surveyed reported that opening hours are not restrictive. Surveyed traders reported to have very few insp- ections of their goods at the border. Ninety-one percent ii. Consistency in Implementation of Border Procedures of women and 88 percent of men traders stated that their goods are never inspected at the border. Only 5 percent of The consistent application of border procedures provides traders indicated that their goods are inspected all of the time, predictability and certainty for businesses engaging in 5 percent have their goods inspected around 50 percent of cross-border trade. If border procedures are inconsistently the time, and 1 percent have their goods inspected 25 percent implemented, traders may face additional costs of complying of the time or less. Generally, trade in agricultural products with regulations and thereby contributing to increased time entails SPS and biosecurity concerns; however, in the case of and costs of international trade. Timor-Leste, a significant 92 percent of firms that import prod- ucts within HS section 1-4 (animal, vegetable products, bev- Related survey finding(s): erages) indicated their goods are never inspected. The survey findings in this aspect are different from those of the TRS un- Many of traders believe that border processes and dertaken in 2019 that found 57 percent of single administrative procedures are consistently implemented by border offi- documents (SADs)34 in the first six months of 2019 were direct- cials either always or most of the time. Of traders that inter- ed through the red channel and only 31 percent through the act with border officials, 75 percent of women and 68 percent green channel.35 32 World Customs Organization, World Customs Organization and Manage- 34 Single administrative documents are customs declarations. ment System Handbook: strategic and practical information, 2007. 35 Red channel means the shipment will undergo physical control. 33 International Trade Centre, Faster customs, faster trade: Using technology Green channel means the shipment will not undergo control. for trade facilitation, 2018; World Bank Group, Contribution and Effectiveness of Trade Facilitation Measures, 2018. 17 Traders reported that a considerable amount of time Around 70 percent (8 out of 11) of the freight forwarders is taken to release imported goods after submission of surveyed indicated that it takes 10 days or more to release customs declaration, with 78 percent stating that it takes 10 imported goods. days or more. This finding was similar among men and wom- en traders (74 percent of women traders and 79 percent of men traders reported that goods are released in 10 days or more). By firm size, 77 percent of micro firms, 76 percent of small firms, 76 percent of medium, and 100 percent of large firms report it requires 10 days or more for the release of im- ported goods. Figure 8. Time Taken to Release Imported Goods by Gender 100% 90% 80% 70% 65% 61% 60% 50% 40% 30% 20% 20% 16% 13% 14% 10% 2% 4% 4% 1% 0% 1% 0% Not sure < 0.5 day 1 day 3 days 10 days > 10 days Women Traders Men Traders Figure 9. Time to Release Imported Goods by Firm Size 100% 92% 90% 80% 70% 65% 64% 59% 60% 50% 40% 30% 21% 20% 17% 17% 13% 13% 11% 10% 7% 8% 2% 2% 2% 4% 3% 0% 0% 0% 0% 0% 0% 0% 0% Not sure < 0.5 day 1 day 3 days 10 days > 10 days Micro (1-5 employees) Small (6-19 employees) Medium (20-99 employees) Large (100+ employees) 18 Many Timorese women work in the agriculture sector @ Jen Hardy 19 iv. Access to and Understanding of Official Border stand all the time, with the remainder indicating the infor- Regulations and Procedures mation is sometimes easy to understand. Accessing and understanding official regulations and pro- More freight forwarders than traders have to use mul- cedures is important for transparency, compliance, and tiple sources for information on changes to official reg- predictability of the trading environment. The publication ulations. Forty-eight percent of women and 56 percent of and dissemination of changes to relevant laws and reg- men traders that require information on changes to official ulations must be done with sufficient advance notice and border regulations and procedures generally have to go to in easy-to-understand language. If traders are unaware of more than one source. Eighty-two percent (9 out of 11) of new customs rules and regulations, or if they cannot under- freight forwarders stated that they generally have to go to stand them, they may face additional compliance burdens more than one source for information on changes to official and costs, or even face penalties for not properly meeting border regulations and procedures. requirements. For traders, freight forwarders/agents (88 percent) are Related survey finding(s): reported as the most popular avenue to find information on changes to official regulations and procedures related to the The majority of traders reported it easy to find infor- traders’ cross-border trade activities. Minimal use was re- mation on border regulations and procedures. Ninety ported for government sources and for the internet. These percent of both men and women traders respectively re- findings are consistent across genders. For freight forward- ported that information on official border regulations and ers, the more popular source is government officials at the procedures is easy to find. Only 10 percent of women and border/enquiry points (64 percent). men traders that seek information on official border regu- lations and procedures stated that information is difficult to Figure 10. Traders’ Sources of Information on find. Eight percent of all traders in the overall survey sample Official Border Regulations and Procedures stated they do not need to search for information, and the 100% majority of traders that stated they do not need to search for information do not visit the border. 90% 81% 81% 80% Fewer women traders use online sources as source of 70% information compared to men traders. For those that can find information easily, the main source of information on 60% official border regulations and procedures is border officials 50% (81 percent). Women traders (17 percent) reported a greater 40% reliance on government offices compared to men traders (3 percent). Men traders (21 percent) use online sources much 30% 21% more than women traders (6 percent). 17% 20% Seventy-three percent (8 out of 11) of the freight for- 10% 6% 6% 6% 3% 3% 3% warders surveyed indicated information on official border 0% regulations and procedures is easy to find. Border officials From From From Online Other border information government (websites, (63 percent) and online resources (50 percent) are the main officials boards at offices including sources of information for freight forwarders. the port/ trade portal) airport Information on official regulations and processes is Women Traders Men Traders generally easy to understand. The majority (78 percent) of traders that need to find information said that it is easy to understand (83 percent of women and 76 percent of men traders). Another 18 percent of women and 22 percent of men traders find the information sometimes easy to under- stand. Around 55 percent (6 out of 11) of freight forwarders report- ed that official regulations and processes are easy to under- 20 Figure 11. Top Four Sources of Information on for micro firms. Eighteen percent (2 out of 11) of freight Changes to Official Border Regulations and Procedures forwarders stated that they are members of a trade/industry 100% association. 90% 88% 90% vi. Consultation Mechanisms 80% 70% A mechanism whereby stakeholders are consulted on any changes to official border processes and procedures can al- 60% leviate misinformation regarding planned changes related to 50% their cross- border trade activities and can improve compli- 40% ance. Equally important is a consultation mechanism that takes into consideration the feedback provided by stake- 30% holders before any changes are implemented. 20% Related survey finding(s): 10% 7% 4% 7% 3% 0% 0% 0% Women traders are less likely to be consulted on Official Government Personal Freight government official at the networks/ forwarders/ changes to official trade processes and procedures than offices not at border/ enquiry other traders agents men. Forty-eight percent of women and 65 percent of men border (e.g. points traders stated that their businesses are regularly consult- gazette/ email) ed on changes to official trade processes and procedures. Women Traders Men Traders The biggest gap is with small firms, where more men traders (63 percent) are regularly consulted than women traders (33 percent). Seventy-four percent of firms that are consulted v. The National Trade Facilitation Committee (NTFC) stated that consultation is via government entities, with only and Membership in Trade/Industry Associations 5 percent consulted by trade/industry associations. The NTFC’s role is to streamline procedures and implement Figure 12. Regularly Consulted on Changes to Official trade facilitation measures at the national level. It is also an Trade Processes and Procedures important mechanism for domestic coordination and stake- 100% 100% holder (public and private) engagement on trade facilitation. 90% The Government of Timor-Leste approved the creation of 80% 78% the National Trade Facilitation Committee in 2016.36 71% 70% 64% 63% Related survey finding(s): 60% 57% 50% 46% Hardly any traders or freight forwarders are aware 40% of the NTFC’s existence in Timor-Leste. Ninety-eight per- 33% cent of traders and 9 out of 11 freight forwarders are not 30% aware of the committee. 20% Very few traders and freight forwarders reported to 10% be members of business or trade/industry associa- 0% tions. Only 9 percent (2 percent of women and 11 percent Micro Small Medium Large (1-5 (6-19 (20-99 (100+ of men traders) reported that they are a member of busi- employees) employees) employees) employees) ness or trade/industry association, with membership higher for firms of large-sized (25 percent) compared to 4 percent Women Traders Men Traders for medium firms, 9 percent for small firms, and 8 percent Traders’ feedback is taken into consideration. Of trad- ers that reported that they are consulted on changes to of- 36 República Democrática De Timor – Leste, Resolução Do Governo N.o 6/2016: ficial trade processes and procedures, 73 percent of women Cria A Comissão Nacional Para Facilitação Do Comércio (CONFAC), 2016. and 79 percent of men believe that their feedback is taken 21 into consideration. A lower 43 percent (3 out of 7) of freight hassles at the border. Firms of large size are more likely to forwarders that are consulted believed that their feedback state that the electronic declaration system simplifies trad- is considered. ing procedures (88 percent) than firms of other sizes; how- ever, no large firm indicated it saves money or helps to avoid vii. Electronic Import/Export Declarations hassles at the border while the firms of other sizes reported saving money (12-21 percent) or avoiding hassle (3-9 per- Aimed at facilitating and reducing the cost of trade, the cent) to some degree. ability to submit import and export declarations through an electronic system reduces time to comply with docu- Figure 13. Usage of Electronic Import/Export mentary requirements by functioning as a single point of Declarations System entry/exit for all regulatory documentation for internation- 100% ally traded goods. Benefits to traders include faster clear- ance times, transparent and predictable processes, and less 90% bureaucracy. 80% 70% Timor-Leste has an automated customs system (ASYCUDA World). However, there is no one-stop-shop connecting the 60% key border agencies (and the quarantine authority uses an 50% entirely manual system). 38% 40% 36% Related survey finding(s): 30% 26% 24% 20% More men than women traders are aware of the pos- sibility to submit import/export declarations electroni- 10% 4% 2% cally (i.e., through electronic Single Window systems or 0% other electronic systems). Fifty-four percent of women 100% of the time 50% of the time I do not use it and 76 percent of men traders reported that it is possible to Women Traders Men Traders submit declarations electronically. The other half of women traders either believe electronic declarations is not possible Figure 14. Benefits of Submitting Declarations or simply do not know whether it is possible. Electronically 100% More men than women traders reported that they use 91% an electronic declaration system. Seventy-four percent of 90% 87% men traders submit electronic declarations at least half the 80% time compared to 50 percent of women that submit elec- 70% tronic declarations in the same frequency.37 61% 60% All freight forwarders surveyed reported that it is possi- 50% 45% ble to submit import/export declarations electronically. Fif- 40% ty-five percent (6 out of 11) of the freight forwarders use the system 100 percent of the time and the remaining five use it 30% 22% 50 percent of the time. 20% 15% The majority of traders find electronic submissions 10% 7% 4% 0% 1% has helped to reduce paperwork. Women traders that use 0% the electronic declaration system reported that it assists Simplified Reduced Saved Helped me Made no trading paperwork money avoid hassles difference their business by reducing paperwork (91 percent), simpli- procedures at the border fying trading procedures (61 percent), and saving money (22 Women Traders Men Traders percent). Four percent of women stated that it helps to avoid 37 All imports in Dili must be cleared online through ASYCUDA World (AW), but a paper copy is also made. Without access to AW, a trader cannot lodge his/ her own declaration. 22 viii. Pre-Declaration of Goods ix. Electronic Payments and Other Payments Pre-declaration of goods allows traders to notify border au- In 2018, Timor-Leste introduced a mandatory e-payment thorities of future arrival of goods and enables traders to save system using TPA/POS for customs duties, fees and charges time if done correctly. at Dili Airport Customs and the Central Services Office.38 Gen- erally speaking, in the absence of an electronic payments Related survey finding(s): system, using cash for payment may carry risks such as theft and threats to personal safety and may increase the likelihood More men than women traders stated that customs of corruption and the payment of “speed money”. In addi- allows pre-declaration of shipments prior to arrival at the tion, clearance times for checks and money orders may tie up seaport or airport. Awareness of whether pre-declaration of working capital, which can pose constraints on smaller firms. shipments is possible is higher among men (73 percent) than women (59 percent) traders. Twenty-four percent of women Related survey finding(s): traders reported that they do not know whether pre-decla- ration of shipments prior to arrival at the seaport or airport Women traders are less likely to report that official is allowed compared to 13 percent of men. The biggest gen- fees associated with cross- border trade can be paid elec- der gap by size of firm on whether pre-declaration of ship- tronically. Fifty-two percent of women and 65 percent of ments is possible is among micro firms, where 55 percent of men traders indicated that all or some official fees associated women and 79 percent of men traders stated customs allows with cross-border trade can be paid electronically. Regardless pre-declaration of shipments prior to arrival at the seaport of gender, large firms (83 percent) are more likely to report or airport. that official fees associated with cross-border trade can be paid electronically. This is compared to 60 percent for micro, More men than women traders pre-declare shipments 61 percent for small, and 59 percent for medium traders. prior to arrival. Sixty-nine percent of men and 54 percent of women traders stated that their business pre-declares The most frequent method of payment for official fees shipments to customs prior to arrival at the seaport or airport. and charges relating to goods for traders is bank/telegraphic Thirty-seven percent of women traders make pre-declara- transfer (91 percent). Eighteen percent of men and 17 percent tions all the time compared to 44 percent of men traders. A of women traders also use cash. further 15 percent and 23 percent of women and men traders respectively indicated that they pre-declare 50 percent of the Only 18 percent (2 out of 11) of freight forwarders reported time. Of the firms that pre-declare, 75 percent of large-sized that all official fees associated with cross-border trade can be firms state that they pre-declare all the time compared to 49 paid electronically, with 36 percent (4 out of 11) indicating that percent of micro; 32 percent of small, and 43 percent of me- some official fees can be paid electronically. Almost all freight dium-sized firms. The highest incidence for pre-declaring all forwarders surveyed use bank/telegraphic transfer as their the time is among traders importing products within HS sec- payment method. tions 5-10 (mineral, plastic and rubber products) (46 percent), HS sections 16-19 (machinery, vehicles) (46 percent), and HS Almost all traders and freight forwarders reported that they sections 13-15 (stone, glass and metals) (41 percent). receive receipts for all fees and charges that are paid either every time or half the time. More than half of the freight forwarders (64 percent or 7 out of 11) reported that Timor-Leste Customs allows pre-decla- Smaller firms seem to pay more unofficial fees to fa- ration of shipments prior to arrival at the seaport or airport. cilitate the processing of shipments than larger ones.39 Thirty-six percent (4 out of 11) and 27 percent (3 out of 11) Twenty-eight percent of women and 23 percent of men trad- of all freight forwarders surveyed make pre-declarations 100 ers reported that they had paid speed money or unofficial fees percent and 50 percent of the time respectively. to facilitate the processing of shipments in the last year, with 5 percent of men and 9 percent of women traders declining to The two traders that do not pre-declare either do not find answer the question. Smaller-sized firms have slightly higher any benefit to it or do not find instructions to be clear. incidences of having paid speed money in the last year than 38 Fiscal Reform Commission, Customs Authority Public Notice (Online: 39 All responses in the survey, including on unofficial fees, https://www.mof.gov.tl/wp-content/uploads/2018/07/CA-Public-Notice-1_- are perception based. Electronic-Payment_ENG.pdf). 23 the larger firms (23 percent of micro firms, 28 percent small, their goods detained up to 25 percent of the time. Traders 22 percent medium, and 17 percent large paid speed money). importing animal and vegetable products (35 percent) and Nine percent of all traders surveyed reported that these pay- textiles and footwear (25 percent) are more likely to have ments were made every time, with a further 12 percent stating their goods detained. that it was paid 50 percent of the time. As a percentage of the value of the business’ goods, 15 percent of traders estimate xi. Official Grievance Procedures that the payments cost 5-10 percent, with a further 9 percent indicating that the payments cost less than 5 percent. An official grievances mechanism is important to enable traders to contest and appeal against border agencies’ de- No freight forwarders reported that they paid speed mon- cisions regarding a detained shipment or non-compliance. ey or unofficial fees to facilitate the processing of shipments, with a few refusing to answer. Timor-Leste has published the official process for mounting an appeal against a decision to seize goods.40 Figure 15. Methods of Payment for Official Fees and Charges Figure 16. Traders’ Awareness of the Existence of Official Grievance Procedures 100% 92% 100% 89% 90% 90% 80% 83% 80% 70% 73% 70% 60% 60% 57% 50% 52% 50% 40% 40% 30% 30% 29% 30% 20% 17% 18% 23% 20% 17% 10% 2% 1% 2% 0% 10% 0% 4% Electronically Cash Check/ Banks/ 0% 0% (internet money order telegraphic Yes, and Yes, but Yes, but No, it Don’t banking) transfer (TT) it leads to unofficial nothing doesn’t know if it reforms/ methods are changes exist exists Women Traders Men Traders changes faster (e.g., pay speed x. Detention of Goods money) Women Traders Men Traders Customs has the power to search imports and exports and exclude, detain and/or seize, and destroy counterfeit and in- Note: The percentages for the first four categories are based on the sample population subset that responded “yes, there are formal complaint/grievance fringing products. To avoid time and financial loss to traders, procedures in place” (i.e., N=26 for men traders and N=6 for women traders). best practice is for customs to promptly inform traders that The percentages for the remaining two categories are based on the overall goods have been detained for inspection. sample population (i.e., N=140 for men traders and N=46 for women traders) as a proportion of all traders that either believe the procedures do not exist or Related survey finding(s): do not know whether they exist. Based on survey data, agriculture products, textiles Related survey finding(s): and footwear are more likely to be detained. Twenty per- cent of women and 14 percent of men traders reported that The majority of traders and freight forwarders are not they have had their goods detained without being prompt- aware of the existence of any formal grievance proce- ly informed. Overall, 8 percent of traders reported that they dures or believe it does not exist. Fifty-seven percent of had goods detained between 50 percent and 100 percent women and 52 percent of men traders stated that there is of the time, with another 8 percent of traders having had no formal grievance procedure in Timor-Leste for consign- ments that are withheld. In addition around 30 percent of 40 Timor-Leste Ministry of Finance: Appealing the Decision to Seize Goods (Online: https://www.mof.gov.tl/customs/seizure-of-goods/appealing-the- decision-to-seize-goods/?lang=en). both men and women traders do not know whether formal men traders feel unsafe to varying degrees (from sometimes grievance procedure is available. to every time). Women traders that have felt unsafe attribute it to the border being too crowded while men attribute it to lack Though the sub-sample is small, a majority of traders of clear organization. No freight forwarder that visit borders that are aware of the existence of grievance procedures (e.g. airport or seaport) reported that they have felt unsafe. view the procedures favorably. Seventy-three percent of men traders and 83 percent of women traders reported that Of the traders that undertake processes at airport or sea- formal grievance procedures exist, and it leads to reform port, 98 percent reported that they have experienced no ha- and changes. Twenty-two percent of traders believe that rassment at the border. unofficial methods are faster than using the formal griev- ance procedures. Traders that visit borders reported that officials are gener- ally identifiable either by their uniform (83 percent) or visible Eighteen percent (2 out of 11) of freight forwarders report- ID (82 percent). ed that formal complaint/ grievance procedures are in place if consignments are withheld, with 46 percent (5 out of 11) Traders reported that the range of facilities available stating that there is no grievance process and 36 percent (4 at the seaport/airport that they most frequently use are out of 11) indicating that they do not know. Of the two freight limited. Staff waiting rooms (24 percent), uninterrupted elec- forwarders that know about the grievance procedures, both tric power (13 percent), enquiry offices (12 percent), and a believe it leads to reform and changes. complaint mechanism (1 percent) are identified by a minori- ty of traders. Seventy percent of traders stated that separate xii. Safety and Security at the Border men/women toilets are available, and 53 percent noted the presence of CCTV cameras. Safety and security issues at the border can arise from un- welcome attention, requests for favors, and other verbal or Both men and women traders support improvements physical conduct by both officials and non-officials. These in a range of facilities at seaport/airports to make them behaviors create and foster hostile or offensive environments feel safer and more comfortable. Regardless of gender, that may impact a trader’s ability or desire to undertake trade. traders indicated that they would feel safer and comfortable if the seaport/airport had more staff waiting rooms (78 per- Related survey finding(s): cent), more separate men/women toilets (88 percent), more CCTV/security camera (96 percent), and fewer electric power More women than men feel unsafe at the border. Nine- interruptions (88 percent). Women (49 percent) are more likely ty-six percent of the traders reported that they go to the sea- than men (27 percent) traders to report they would feel safer if port or airport themselves. Of those that go to the border, 11 more complaint mechanisms (e.g. hotline, mailbox) available. percent (5 out of 46) of women and 4 percent (5 out of 140) of Figure 17. Traders Would Feel Safer/More Comfortable if the Seaport/Airport Had More 100% 95% 96% 88% 89% 90% 86% 84% 80% 80% 70% 70% 60% 49% 50% 40% 28% 30% 30% 27% 20% 10% 5% 2% 0% Enquiry Staffed Separate CCTV/ Uninterrupted Complaint No, none of offices waiting male/female security electric power mechanism these would rooms toilets cameras (e.g. hotline, make me feel Women Traders Men Traders mailbox) safer at the border 25 Coffee grower – a key export from the island © Tom Perry 4 Recommendations based on survey responses The survey has highlighted several areas that could be ad- Remove import/export paper declarations and en- dressed to improve the trade facilitation environment in courage traders to submit documentation via electron- Timor-Leste. The following recommendations relate to the ic platforms. trade facilitation quality and experience of traders and freight forwarders when importing or exporting goods. Specific Strengthen and publicize the roll out of automation emphasis in the recommendations has been made to ad- among all border agencies with a longer-term goal of dress some asymmetric gender barriers that occur in cross- fully implementing a one-stop-shop for information of border trade.41 border processes and procedures. An overarching recommendation for Timor-Leste is to priori- Introduce universal pre-declarations whereby goods tize accession to the WTO. The WTO principles of transparency can be risk-assessed and released immediately upon and non-discrimination provide good foundations for trade arrival. facilitation. Meanwhile, Timor-Leste could model any reforms on the Trade Facilitation Agreement in support of future Further investigate the discrepancy between the WTO accession. survey finding and the TRS finding on the level of in- spections (for instance, by reviewing the rate of inspec- 1. Reduce the time to release goods. tions and risk-profiling). The time to release goods at the borders was found to be 10 Provide information and training for border officials days or more for most traders and freight forwarders, with on expediting the release of certain small and low value more than two-thirds of those firms being micro and small consignments using Immediate Release Guidelines and traders. Clearing customs efficiently and expediting the re- applying de minimis regimes.44 lease of goods at the border reduces time and trade costs and increases trade volumes. Efficient release of imported goods Administer regular training and capacity building for is critical for perishable goods especially because the produc- Customs and other border agency staff, which is im- tivity of most agricultural activities in Timor-Leste is very low. portant for the implementation of standards, proce- Delays in the clearance of food imports may cause the goods dures, and regulations. This can mitigate any inconsis- to spoilage, further worsening the food deficit in the country.42 tencies in implementation and reduce average times to Training and education in trade facilitation for border officials clear customs. is an important avenue for ensuring an efficient border cross- ing process as well as for the implementation of trade facili- 2. Strengthen the role of the NTFC and the National tation measures.43 Trade Consultative Forum, and improve the quality of trade/industry associations, while ensuring that Recommendations for reducing the time required to release membership increases, and women are equally goods include: targeted and represented. Make use of data from recent Time Release Studies Given the importance of the NTFC for planning and imple- to identify bottlenecks and inefficiencies in the border menting trade facilitation reforms, priority should be given processes. This is particularly important to address the to convening and operationalizing the committee. Full use significant delays faced by micro and small traders. In should be made of other available consultation mechanisms, addition, further investigation is necessary to identify such as the National Trade Consultative Forum and Port User why micro and small traders are experiencing these Groups. Raising awareness among private sector stakehold- delays. The TRS should be made public as it is a useful ers of the various consultation mechanisms is critical. tool for traders as it supports increased predictability of release times. 41 The survey results indicate that women traders are more likely to be trad- 43 Doing Business 2019. Training for Reform (Online: https://www.doing ing in goods with high tariffs (e.g., food and agricultural products). There is an business.org/content/dam/doingBusiness/media/Annual-Reports/English/ opportunity to reduce tariffs to increase women’s income (see WBG and WTO, DB2019-report_web-version.pdf). Women and Trade: The Role of Trade in Promoting Women’s Equality, 2020), but specific recommendations related tariffs are not included in this report be- 44 WCO Immediate Release Guidelines (Online: http://www.wcoomd.org/-/ cause tariffs fall outside the scope of the WTO TFA. media/wco/public/global/pdf/topics/facilitation/instruments-and-tools/ tools/immediate-release-guidelines/immediate-release-guidelines.pdf? 42 World Bank, Timor-Leste Systematic Country Diagnostic: Pathways for a db=web). New Economy and Sustainable Livelihoods, 2018. 27 At the same time, private sector representative organizations At the same time, to address any disadvantages facing should be strengthened through advocacy training. Current- women traders during consultation processes, promoting ly, trader and freight forwarder membership of trade/indus- more women representation on trade/industry associations try associations, regardless of gender, appears to be low in and in the NTFC would ensure that any information gaps Timor-Leste and should be increased. between men and women are narrowed. Recommendations should focus on the following: 4. Improve the availability of information on official border procedures. Steps should be made towards implementing a ful- ly functioning NTFC, including ensuring that trade and While most traders found that official regulations and pro- industry associations are well-represented so that the cedures are consistently implemented, there is room for im- trade facilitation needs of traders and freight forward- provement particularly for micro, small and medium-sized ers are taken into consideration when reforms are pro- firms. The survey respondents also indicated some confu- posed. Particular attention should be paid to ensure sions as to whether the use of a freight forwarder/broker is that women-led entities are represented in the body. required by law. Support trade/industry associations and the local Recommendations include (i) publicizing any changes to chambers of commerce by providing advocacy training procedures at the border posts, making sure all information to strengthen their ability to raise industry concerns. is published in layperson’s terms and in local languages; (ii) Promote and raise awareness of the NTFC and its im- informing trader associations promptly of changes, or pro- portant role in trade facilitation to its members. Ensure posed changes, to official regulations and circulating this to men, and especially, women traders are targeted. members, (iii) creating a Trade Information Portal. Support trade associations in increasing member- Based on the survey findings, most traders in Timor-Les- ship, including for example, by: te do not use online sources for information on changes to regulations and procedures and rather rely on border offi- - organizing and hosting workshops and events for cials to be kept up to date. This might be linked to the low the business community; percentage of internet usage in the country (27%).45 While traders and freight forwarders should be encouraged to in- - advertising in local media and in industry publica- crease the use of online resources, it is also critical that offi- tions highlighting the benefits of membership; cials at the borders are fully informed of processes and pro- cedures so that they can effectively pass the information on - having regular membership drives with existing to traders and freight forwarders since many of them still members recruiting from their networks; and rely on border officials for information. This should be sup- plemented with improved availability of information through - ensuring the association has an up-to-date and TV, radio, trade associations, and other relevant networks. functioning website with contact information. Official websites and other communications material should include detailed information on the trading process, regu- 3. Introduce and/or strengthen formal trade consulta- lations, fees, etc. and be kept up to date, including contact tions between customs and representatives of trading information for various border agencies. In the longer term, communities to consider the needs of the it is recommended that a Trade Information Portal is created business community. to consolidate all the information on trade processes into one place online. While a large proportion of men traders are regularly con- sulted on changes to official trade processes and proce- dures, many women traders are reportedly not. This points to a need for strengthening or introducing formal trade con- sultations between customs and traders directly through meetings with representatives via trade/industry associa- tions. This can be achieved through a formal consultative 45 International Telecommunication Union, World Telecommunication/ICT De- mechanism such as the National Trade Consultative Fo- velopment Report and database (Online: https://data.worldbank.org/indicator/ rum, representing all parties involved in cross-border trade. IT.NET.USER.ZS?locations=TL). 28 5. Publicize the official grievance procedure.46 7. Strengthen the electronic payments system and en- courage traders to pay online. Awareness of an official grievance procedure is low among traders and freight forwarders. While the information on the A longer-term goal should be to ensure that the required process to appeal against the detention of a consignment laws and infrastructure are in place for electronic banking. are available online, the survey has confirmed that traders don’t use online sources to a high degree to gather informa- In principle, the ASYCUDA World system allows for electron- tion related to border processes and procedures.47 ic payment of customs duties and fees. However, in prac- tice most traders reportedly use bank/telegraphic transfer Recommendations involve: and a small proportion use cash. Reviewing the official grievance procedures to en- With approximately one-quarter of traders surveyed hav- sure that they are operationalized as touted to the pub- ing paid speed money and unofficial fees, encouraging the lic to raise traders’ good faith in the system. use of and improving information on online payments could help reduce the incidences of paying speed money and un- Publicizing the appeals process through customs official fees. This is especially important for micro and small brokers and trader associations and ensuring that an traders and for women traders. appeals system meets the implementation guide set out under the Revised Kyoto Convention. 6. Increase awareness of electronic import/export declarations and fully implement the pre-declaration of goods, especially among women traders. Increasing the use of pre-declarations and ensuring that traders and freight forwarders are informed of customs au- tomation will assist Timor-Leste to reduce the time required to release goods once at the border. Although Timor-Leste has implemented ASYCUDA World and overall many traders are aware of an electronic decla- ration system, a much smaller proportion of women traders, compared to men, are aware or make use of it. At the same time, more than two-thirds of traders are aware of the ability to submit pre-arrival declarations, but women traders are less aware of this than men. A larger gap was found between women and men leading micro firms. Accordingly, a key recommendation includes increas- ing awareness of the availability of pre-declaration sub- missions. It would be constructive for the Government of Timor-Leste to communicate the time saving benefits to the trading community through trade associations, radio, TV and/or government and trade related websites (e.g. Trade- Invest Timor-Leste).48 46 See UN Trade Facilitation Implementation Guide: Appeals in Customs 47 Timor-Leste Ministry of Finance: Appealing the Decision of Seize Goods Matters (Online: http://tfig.unece.org/contents/appeals.htm) for further in- (Online: https://www.mof.gov.tl/customs/seizure-of-goods/appealing-the- formation and guidance on the implementation and establishment of an decision-to-seize-goods/?lang=en). appeals system. 48 TradeInvest Timor-Leste: Investment and Export Promotion Agency (Online: https://www.tradeinvest.tl). 29 Local farmers © Jen Hardy Annex 1 Methodology Questionnaire Table 2. Usable Listings for Survey Feedback from Focus Group Discussions in Malawi, Zambia, Fiji, and Vietnam with women and men traders, and meetings Initial list supplied 939 with government stakeholders, civil society organizations and Less removals private sectors representatives helped the team in devel- Agents / not traders 24 oping the survey questionnaire. The trader survey rolled out in the Pacific Island region contains 52 questions, is divided Duplicates 11 into eight sections, and is largely focused on areas related No valid contact 5 to the WTO Trade Facilitation Agreement, including, but not Total removals 40 limited to access to information, electronic payments, seizure of goods, pre-declaration, and the National Trade Facilitation Usable listings 293 Committee. Some questions outside the scope of the WTO Supplemental list exercise 3 TFA – such as on safety at border posts – are included in the Final field list 296 survey to better understand the cross-border trading envi- ronment in each of the countries. A simplified questionnaire (with 46 questions) is used for freight forwarders. Sampling Strategy Master List All active cross-border traders with valid contact information A master list of trading firms was created for the survey based were contacted to participate in the survey in Timor-Leste. on the complete list of active traders in 2018 that was pro- Interviews were undertaken using computerized aided tele- vided by the Directorate General of Customs of Timor-Les- phone interviewing (CATI), where traders were selected on a te. NGOs and diplomats were removed from the list. The list random basis and contacted by enumerators. The enumera- contained the company name, address, landline number or tors used a call schedule protocol that enabled a wide range mobile phone, and email address. A large number of entries, of times of day and days of week to call firms, maximizing the however, were missing a phone number or email address. A chances of reaching respondents. Each phone number was field team conducted phone calls to verify and complete the attempted three times a day for the period of the survey be- missing data, such as the name of director, the major share- fore treating the number as “not available”. holder, and his or her gender. A total of 296 firms were contacted by phone with 186 firms The master list of traders contained a total of 939 firms of successfully interviewed (140 men and 46 women led firms). which a large portion was pre- screened and deemed ineligi- Interviews were conducted in English, Tetum and Portuguese ble to participate in the survey. Further remediation work was by telephone. There were 39 interview refusals, 46 no call undertaken to identify further duplicates and remove entries answers, 11 disconnected numbers, five wrong phone num- that were individuals importing/exporting (i.e., not business- bers, and nine not eligible for the study because the business es) – see table 2 for details. The list was supplemented by neither imports nor exports. Table 1 provides a breakdown of the Tebbutt Research field team on the ground in Timor-Les- trader interviewees by gender and firm size. te who conducted door-to-door visits, which identified three more firms to participate in the survey. Ultimately, a list of 296 To compare the survey results between women and men-led firms was produced for the survey. firms, the percentages for women and men responses are calculated independent of each other. Unless otherwise A list of 19 freight forwarders using the online sources specified, percentages reflecting women trader responses www.cargoyellowpages.com, https://www.easttimor-timorleste are N=46 and percentages reflecting men trader responses .com/Shipping_Import_Export_East_Timor_Dili.htm, and are N=140. Online East Timor-Accommodation and Business Register was constructed. All 19 freight forwarders contained on the list were contacted, and 11 were interviewed. There were three interview refusals, four no answers, and one duplicate listing. 31 Supported by: Wichtiger HINWEIS ! Innerhalb der Schutzzone (hellblauer Rahmen) darf kein anderes Element platziert werden! Ebenso darf der Abstand zu Format- resp. Papierrand die Schutzzone nicht verletzen! Hellblauen Rahmen der Schutzzone nie drucken! Siehe auch Handbuch „Corporate Design der Schweizerischen Bundesverwaltung“ Kapitel „Grundlagen“, 1.5 / Schutzzone www. cdbund.admin.ch