rtma quarterly report october december 2017

DISCLAIMER This document was prepared with support from the American people through the United States Agency for International Development (USAID). Its contents are the sole responsibility of the author(s) and do not necessarily reflect the views of USAID or of the Government of

the United States of America. This publication was produced was prepared by Nathan Associates Inc.

RTMA QUARTERLY REPORT

OCTOBER–DECEMBER 2017

CONTRACT No.AID-596-C-13-00001

INSTALLATION OF THE CANOPY AT LA HACHADURA

USAID.GOV RTMA QUARTERLY REPORT, JULY–SEPTEMBER 2017 | 2

CONTENTS

EXECUTIVE SUMMARY 5

COMPONENT 1- INCREASE ACCESS TO REGIONAL VALUE CHAIN MARKETS

FOR CRITICAL AGRICULTURAL PRODUCTS AND ALLIANCES WITH

PRIVATE SECTORS. 6

1.1 MARKET ALLIANCES REPORT 6

1.2 COORDINATING WITH RTFE’S ECONOMIC IMPACT ASSESSMENT IN EL AMATILLO

(HN-SV) 6

COMPONENT 2 - INCREASED TRADE FACILITATION AND IMPROVED

TRADE AND INSTITUTIONAL CAPACITY 7

2.1 REDUCTION OF LOGISTICS COSTS AT THE BORDERS 7

2.1.1 COST AND TIME STATISTICS AT EL SALVADOR’S BORDER CROSSINGS 7

2.1.2 CAPACITY BUILDING FOR ANALYSIS AND REPORTING 17

2.1.3 INTEGRATION OF “CARAVANA” INTO SIECA’S IT SYSTEM 18

2.2 IMPROVEMENT OF ADMINISTRATIVE PROCESSES APPLICABLE TO TRADE 22

2.2.1 STATUS OF RFID INSTALLATION 22

2.2.1.1 INSTALLATION OF RFID INFRASTRUCTURE AT THE BORDERS. 22

2.2.1.2 PROGRESS ON RFID IT PROGRAMMING AT DGA. 25

2.2.1.3 SECURITY ASSESSMENT 27

2.2.1.4 PROGRESS ON USER ENROLLMENT, NORTHERN TRIANGLE ACTIONS. 27

2.2.1.7 INTEGRATION TO RFID SYSTEM OF BORDER CONTROLS BY AGRICULTURE

AND IMMIGRATION. 31

2.2.1.8 INCORPORATING THE NEW RFID PROCESSES INTO NATIONAL

REGULATIONS. 31

2.2.1.9 CAPACITY BUILDING FOR ADMINISTERING RFID AND ENSURING SMOOTH

OPERATIONS AT THE BORDERS. 31

2.2.1.10 CENTRAL AMERICAN RFID OPERATIONAL MANUAL. 32

2.2.1.11 LINKING THE AEO PROGRAM TO THE RFID SYSTEM. 33 2.3 SUPPORTING THE INCORPORATION OF EL SALVADOR TO THE CUSTOMS UNION 33

3 | RTMA QUARTERLY REPORT, JULY–SEPTEMBER 2017 USAID.GOV

ACRONYMS

AEO Authorized Economic Operator

ASYCUDA Automated System for Customs Data (Sistema Aduanero Automatizado)

COP Chief of Party

CTU Cargo Transport Units

DARA Deputy Direction of Customs Revenue

DGA General Directorate of Customs El Salvador (Dirección General de Aduanas de El Salvador)

DGA Directorate General of Customs

DGME General Directorate of Migration and Aliens Affairs

EIA Economic Impact Assessment

EMMP Environmental Mitigation and Monitoring Plan

ES El Salvador

FAUCA Central American Single Customs Form (Formulario Aduanero Único Centroamericano)

FOB Free On Board

FUSADES Salvadoran Foundation for Economic and Social Development (Fundación Salvadoreña para

el Desarrollo Económico y Social)

GD General Director

GoES Government of El Salvador

GT Guatemala

HN Honduras

HQ Headquarters

IDL ID Tech Logistics, S.A. de C.V., RTMA’s vendor

INL U.S. State Department International Bureau on Narcotics Affairs and Law Enforcement

IT Information Technology

ITD International Transit Declaration

MCC Millennium Challenge Corporation

MoA/MAG Ministry of Agriculture

NT Northern Triangle Countries

OIRSA Regional International Agency for Agricultural and Livestock Health (Organismo

Internacional Regional de Sanidad Agropecuaria)

PC Desktop or laptop

PDA Pedro de Alvarado

PERSUAP Pesticide Evaluation Report and Safer Use Action Plan

PPE Pesticide Protective Equipment


RCEI USAID Central America Regional Clean Energy Initiative

RFID Radio Frequency Identification

RTFE USAID’s Regional Trade Facilitation Expansion Activity

RTMA USAID’s Regional Trade and Market Alliances Project

SAT Superintendence of Tax Administration

SIECA Central American Economic Integration Secretariat (Secretaría De Integración Económica

Centroamericana)

SYPRO Suministros y Proyectos S.A. de C.V., RTMA’s vendor

TFMP Trade Facilitation Monitoring Platform

TIM International Transit Shipments (Tránsito Internacional de Mercancías)

VPN Virtual Private Network


EXECUTIVE SUMMARY

During the October – December 2017 reporting period, the RTMA Project continued working at

the La Hachadura and El Amatillo borders of El Salvador on RFID installment and curved roofs (i.e.

canopies). The Project successfully completed the installment of canopies requested by El Salvador

Customs to help improve working conditions at the border inspection points. The shade provided

by the canopies is allowing border authority agents to work more comfortably during the hottest

parts of the day as well as during inclement weather. This, in turn, is resulting in increased

continuity of border operations.

The installation of the RFID system is almost complete. All hardware and infrastructure was

installed at both La Hachadura and El Amatillo by the end of December 2017. Work continues on

programming the software at DGA and SIECA and conducting test runs of the system. The RTMA

Team is aiming to finalize all operational variable test runs, as required by Customs El Salvador, in

the first quarter of 2018, so that the RFID system is operational for International Transit

shipments before the end of the RTMA Project. Unfortunately, due to the lack of staff availability

at SIECA and DGA to work on the necessary IT programming, it will not be possible to have the

Import and Export processes operational in the RFID system before the end of the project. DGA

and SIECA have both committed to undertaking the necessary programming for Imports and

Exports, however future USAID assistance may be needed to complete this work.

The Project has been providing group and one-on-one trainings to build the capacity of DGA

officers to gather and analyze the data they are collecting in their operations to measure the cost

and time of trade. This means that the officers and management of DGA will be able to maximize

the potential of the data gathering abilities of the RFID system and use the information to analyze

transit times and improve border procedures and trade policies for El Salvador and the region

beyond the life of the Project.

Private sector enrollment for the RFID Program has continued at a good pace. During the

reporting period, 375 trucks were enrolled and 4,076 tags distributed, allowing DGA to begin

collecting data on transit cargo. By project end, it is estimated that 1,100 trucks will be enrolled.

Another highlight from the Quarter has been progress on the integration of the CARAVANA tool

into SIECA. This trade facilitation tool, developed by FUNDEVI with funds from an RTMA Grant,

has two modules – Module 1- collection and publication of logistics indicators and Module 2 – a

freight services exchange tool for transporters. RTMA has been working jointly with the RTFE

Project to help SIECA publish logistic indicators on its website by June 2018.

These milestones and other progress updates made between October and December 2017 are

presented in the following pages.


COMPONENT 1- INCREASE ACCESS TO REGIONAL VALUE

CHAIN MARKETS FOR CRITICAL AGRICULTURAL PRODUCTS

AND ALLIANCES WITH PRIVATE SECTORS.

1.1 MARKET ALLIANCES REPORT

RTMA continued finalizing the Market Alliances Report, which covers

• A step by step description of how Component 1 Grant beneficiaries were selected

• Due diligence conducted on prospective grantees

• Description of grantees and their proposals

• Areas of improvement for the grants program and grantees

• The work conducted with the grant funds

• Results achieved

• Lessons learned

The report offers a comprehensive review of Component 1 activities, achievements, and challenges. The

main challenges included delays in being able to select and award grants resulting in grantees receiving

funding later than planned by the project, the lifetime of the grant being an insufficient timeline to

achieve tangible results and weaknesses in the administration and financial management capacities of the

beneficiary associations. The report concludes with how grantees can continue making improvements

needed to take them to the next level of value chain integration.

The Spanish version of the report will be submitted to USAID during the next quarter for review and

comment. An English version will be produced after final edits are incorporated.

1.2 COORDINATING WITH RTFE’S ECONOMIC IMPACT ASSESSMENT IN EL AMATILLO

(HN-SV)

RTMA has been coordinating with USAID’s LPFM buy-in mechanism, the Regional Trade Facilitation

Extension (RTFE) Project in Honduras and Guatemala on the Economic Impact Assessment for La

Hachadura so that the same methodology is used as the study conducted by RTMA in El Amatillo.

RTMA has also supported this initiative by facilitating meetings and gathering information from

Salvadoran stakeholders including private sector entities, the El Salvador Chamber of Trade and

Industry, GoES Ministry of Economy, as well as the local community on the El Salvador side of the El

Amatillo border.


COMPONENT 2 - INCREASED TRADE FACILITATION AND

IMPROVED TRADE AND INSTITUTIONAL CAPACITY

2.1 REDUCTION OF LOGISTICS COSTS AT THE BORDERS

2.1.1 COST AND TIME STATISTICS AT EL SALVADOR’S BORDER CROSSINGS

RTMA is analyzing cross border data at El Amatillo and La Hachadura in order to provide a statistical

picture of: (i) the Cost to Import into El Salvador; (ii) the Cost to Export from El Salvador and (iii) the

Cost for Cargo to Transit through El Salvador.

The Project has been capturing data at these borders through various methods and for varying purposes

since 2013. Since April 2017, the Project has been measuring “Transaction Cost per Ton in border

crossings receiving USG assistance” so as to have a measure of the impact of interventions being

conducted at the borders under Component 2. 1

Transaction Cost per Ton per Kilometer – CTK – is calculated using the following formula:

𝐶𝑇𝐾 = 𝑇𝐶

𝑊 ∗ 𝐾𝑚

Where total costs (TC) = freightage2 + hidden cost + value of the cargo in (FOB), the distance (Km) is

the actual number of kilometers for each corridor being evaluated (Guatemala City – San Salvador, San

Salvador - Tegucigalpa), and the weight (W) is the cargo being transported in tons.3,4

From April 2017, the project expanded its data sources to DGA’s Border Operation logs which

measure times and costs for all shipments going across the PDA/LH and El Amatillo borders. This data

was analyzed alongside the data being gathered by GPS units attached to trucks and allowed for a better

understanding of how much time and cost figures can be attributed to border processes versus other

external factors. For example, one significant external factor that has negatively influenced the times

and costs reported during 2017 at El Amatillo is the expansion of the highway from Tegucigalpa to El

Amatillo and the modernization of the highway at the El Amatillo border point, one of the results of

which will be an additional lane for transit cargo entering Honduras. As these highway improvements

1 Please note, that the figures in RTMA Quarterly, Annual and M&E Reports for C2-1 from 2013 to 2016 reflect

Transaction Cost per Ton In Selected Value Chains receiving USG assistance and should not be compared with the

figures for C2-1 from April 2017 (the first Quarter of Y5 of the Project) onwards. 2 Freightage = Value of the contract issued by the transporter to transport goods from the exporter/seller to the

importer/buyer. 3 The measurement only considers >18 Ton transport units. 4 For imports and exports, the measurement only considers units transporting cargo regionally using the Central

American Single Customs Form (FAUCA).


aim to improve the efficiency of this transport corridor, current construction work is increasing journey

times.

Tables 1 to 3 A-B below show the figures when the CTK methodology described above is applied to

Customs Log data from 2013 to 2017.

In order to better understand the trends in Tables A and B it is necessary to analyze the underlying

trends in the variables that make up the Cost and Time calculations. RTMA did this by evaluating the

DGA Operations Log data on Number of Operations being conducted at each border per year, total

weight of imports being processed at each border throughout the year, and changes in the Freightage

amount being charged by the transporter. This data is captured in Tables C-E for each operation type

below.

IMPORTS

The average cost for importing cargo into El Salvador is calculated using cost data of imports from

Guatemala City, GT and Tegucigalpa, HN, going through La Hachadura SV and El Amatillo SV

respectively.

Cost and Time measurements are taken from the electronic submission of the FAUCA at origin to

clearance of the FAUCA by DGA when clearing the border in El Salvador.

Please see Figure 1 and tables below, which illustrates each step of the Import process and the parts of

this process being measured by RTMA to provide an indicator of time and cost for importing to El

Salvador.

FIGURE 1: PROCESS FOR IMPORTING GOODS INTO EL SALVADOR


Table 1A shows the Annual Average Cost of Importing Cargo into El Salvador between 2013 and 2017.

Table 1B shows the Annual Average Time of Importing Cargo into El Salvador between 2013 and 2017.

The cost indicator for Imports into El Salvador at both La Hachadura and El Amatillo shows an overall

decline in cost since the start of the project. The cost of importing has increased a little within the past

year although not to the levels seen before project interventions. The time statistics for La Hachadura

also show a decline; however, in El Amatillo it now takes longer to import than it did in 2013.

Table 1C shows an increase in import operations being conducted at both La Hachadura and El Amatillo

over the four years being measured.

TABLE 1C. NUMBER OF OPERATIONS BEING IMPORTED BETWEEN GT/SV (LA HACHADURA) AND

HN/SV (EL AMATILLO)

BORDER 2013 2017 % CHANGE

LA HACHADURA 18,897 26,091 +38.1%

EL AMATILLO 3,200 4,916 +53.6%

Table 1D shows an increase in the total weight being imported through La Hachadura and El Amatillo

over the four years being measured.

TABLE 1D. AVERAGE WEIGHT (TM) BEING IMPORTED BETWEEN GT/SV (LA HACHADURA) AND

HN/SV (EL AMATILLO)


LA HACHADURA 446,055 585,830 +31%

EL AMATILLO 78,916 137,165 +74%

TABLE 1A: AVERAGE COST FOR IMPORTING CARGO INTO EL SALVADOR MEASURED IN USD PER

METRIC TON PER KM

BORDER YEAR

2013 2014 2015 2016 Annual Variation

LA

HACHADURA $ 0.089 $ 0.087 $ 0.082 $ 0.081

EL AMATILLO $ 0.108 $ 0.095 $ 0.090 $ 0.086

TABLE 1B. AVERAGE TIME TO IMPORT CARGO INTO EL SALVADOR (DAYS:HOUR:MINS)

BORDER YEAR


LA

HACHADURA 01:18:08 01:15:43 01:15:09 01:12:11

EL AMATILLO 02:17:06 02:10:50 02:20:26 03:10:03

Promedio de Indicador Años

Aduanas 2013 2014 2015 2016 2017 Promedio general Variación anual

05 - TERRESTRE LA HACHADURA 0.089$ 0.087$ 0.082$ 0.081$ 0.083$ 0.084$

09 - TERRESTRE EL AMATILLO 0.108$ 0.095$ 0.090$ 0.086$ 0.091$ 0.093$

Promedio general 0.092$ 0.088$ 0.083$ 0.082$ 0.084$ 0.085$


Table 1E shows a decrease in the amount for Freightage being charged by transporters for imports going

through La Hachadura and El Amatillo over the four years being measured.

TABLE 1E AVERAGE COST OF FREIGHTAGE (USD/TRIP) FOR CARGO BEING IMPORTED THROUGH

LA HACHADURA AND EL AMATILLO.


LA HACHADURA $512 $433 -15%

EL AMATILLO $785 $763 -3%

The decrease in freightage is linked to the increase in weight, as cargo transport units can be more

efficiently utilized if they are filled to capacity.

It can be concluded, therefore, that external factors, most likely the delays due to road construction of

the new highway in Honduras are contributing to the increased times for imports through El Amatillo.

The significant increase in times for imports through El Amatillo, however, have not led to an equal

impact in cost of importing through this border point. It is possible, therefore, that trade facilitation

measures implemented by RTMA have encouraged a greater volume of imports, which has led to more

efficient freightage charges.

EXPORTS

The average cost for exporting cargo out of El Salvador is calculated in a similar way to import costs,

using cost data from DGA’s Operations Log for exports to Guatemala City, GT and Tegucigalpa, HN,

going through La Hachadura SV and El Amatillo SV respectively.

Cost and Time measurements are taken from the point when the operator electronically registered the

export operation in the SICEX5 electronic system for El Salvador’s single window (CIEX)6 to the point

when the FAUCA is cleared by DGA as it exits the country.

Please see Figure 2 and the tables below, which illustrates each step of the Export process and the parts

of this process being measured by RTMA to provide an indicator of time and cost of exporting from El

Salvador.

5 Sistema Integrado de Comercio Exterior. 6 Centro de Trámites de Importaciones y Exportaciones CIEX of the Central Bank.


FIGURE 2: PROCESS FOR EXPORTING GOODS OUT OF EL SALVADOR

Table 2A shows the costs between 2013 and 2017 using CTK to calculate the Annual Average Cost for

exporting cargo out of El Salvador.

Table 2B shows the Annual Average Time of exporting Cargo out of El Salvador between 2013 and

2017.

The cost indicator for exporting from El Salvador shows an increase in costs for both La Hachadura and

El Amatillo since the start of the project. The time indicator for La Hachadura shows an increase in

times to export since 2015, however, in El Amatillo times have decreased since 2014.

Table 2C shows a decrease in export operations being conducted at La Hachadura but an increase in

export operations at El Amatillo between 2013 and 2017.

TABLE 2A: AVERAGE COST FOR EXPORTING CARGO OUT OF EL SALVADOR MEASURED IN USD PER METRIC TON PER KM

BORDER YEAR


LA

HACHADURA $ 0.112 $ 0.113 $ 0.112 $ 0.112

EL AMATILLO $ 0.101 $ 0.099 $ 0.099 $ 0.098

TABLE 2B: AVERAGE TIME TO EXPORT CARGO OUT OF EL SALVADOR (DAYS:HOURS:MINUTES)

BORDER YEAR


LA

HACHADURA 02:20:26 03:02:29 03:03:20 03:07:05

EL AMATILLO 01:11:22 01:13:44 01:10:05 01:08:35

Promedio de Indicador Años

Aduanas 2013 2014 2015 2016 2017 Prom general Variación anual

05 - TERRESTRE LA HACHADURA 0.112$ 0.113$ 0.112$ 0.112$ 0.119$ 0.114$

09 - TERRESTRE EL AMATILLO 0.101$ 0.099$ 0.099$ 0.098$ 0.101$ 0.100$

Prom general 0.108$ 0.107$ 0.107$ 0.106$ 0.111$ 0.108$

Promedio de tiempo (días) Años

Aduanas 2013 2014 2015 2016 2017 Prom general Variación anual

05 - TERRESTRE LA HACHADURA 02:20:26 03:02:29 03:03:20 03:07:05 04:01:39 03:06:52

09 - TERRESTRE EL AMATILLO 01:11:22 01:13:44 01:10:05 01:08:35 01:07:32 01:10:06

Prom general 02:07:14 02:11:05 02:09:34 02:10:23 02:19:25 02:11:36


TABLE 2C. NO. OF EXPORT OPERATIONS TAKING PLACE AT LA HACHADURA AND EL AMATILLO


LA HACHADURA 8,362 7,601 -9.1

EL AMATILLO 5,550 6,405 +15.4

Table 2D shows a small increase in the total weight being exported through La Hachadura and a

significant increase in weight being exported through El Amatillo over the four years being measured.

TABLE 2D. TOTAL WEIGHT OF CARGO BEING EXPORTED THROUGH LA HACHADURA AND EL

AMATILLO.


LA HACHADURA 184,500 193,356 +4.8

EL AMATILLO 138,700 162,900 +17.5

Table 2E shows an increase in the amount for Freightage being charged by transporters for exports

going through La Hachadura and a decrease in Freightage for exports through El Amatillo over the four

years being measured.

TABLE 2E. AVERAGE COST OF FREIGHTAGE FOR CARGO BEING EXPORTED THROUGH LA

HACHADURA AND EL AMATILLO.


LA HACHADURA $529.5 $554.3 +4.6

EL AMATILLO $777 $723 -7%

There has been a small increase in weight being exported through La Hachadura; however, it has not

been significant enough to translate into lower freightage costs. It would appear that there are other

external factors affecting the length of time it takes to export through La Hachadura. For example, in

September and October 2017 the SAT seal inspections and El Salvador’s immigration checks were

moved to a new location to eventually be under the new canopies that were pending installation. It was

thought that by combining more procedures at one checkpoint shipments would be processed quicker.

However, in the case of exports, the time taken has increased by a full day since 2016. This situation is

analyzed further below through the GPS data that the project collected from 1,320 cargo journeys

passing through El Salvador.

At El Amatillo, the Cost to Export has increased but the time to export has decreased. The increase in

costs does not seem to be related to inefficiency of CTUs as freightage costs have decreased as weight

has increased. Time to export at El Amatillo has decreased; therefore, we conclude that the reason

behind the increasing costs must be due to some other external factor, such as power failures, road

construction, poor working conditions (weather, lighting, security). INTERNATIONAL TRANSITS


In the case of international transits operations, time and cost calculations are derived from the point

that a CTU enters El Salvador through one of the two borders of USG intervention (La Hachadura SV

or El Amatillo SV) to the point that the CTU exits the other El Salvador border of USG intervention. A

pro-rata value of the freightage7 registered for these international transit operations is used. Time and

cost is calculated from the point the DGA official logs in the transit into its customs management system

through the time it takes the cargo unit to transit through El Salvador and exit the border, marking the

finalization with the DGA official logging the exit in the customs system. Each international transit

operation has a 24-hour period to initiate and close. Please see Figure 3 below, which illustrates the

points covered in the calculation of the average cost in USD per MT per Km and time for cargo to

transit through El Salvador from the point of import from Honduras to the point of export to Mexico.

FIGURE 3: PROCESS FOR GOODS TRANSITING THROUGH EL SALVADOR FROM HONDURAS TO MEXICO

Table 3A shows the average cost, per the CTK methodology, for transiting cargo across El Salvador

between 2013 and 2017.

7 Proportionate value of the freightage corresponding to the amount of the journey that takes place in El Salvador

compared to the other countries through which the CTU will travel to its final destination.


Table 3B shows the Annual Average Time for Cargo to transit across El Salvador between 2013 and

2017.

The cost for cargo to transit through El Salvador at both La Hachadura and El Amatillo increased

between 2013 and 2014 and only started to decline from 2015 onwards. By the end of 2017, the cost of

transit through La Hachadura had returned to the level it was at in 2013 and the cost to transit through

El Amatillo had dropped below the 2013 cost.

In La Hachadura, the time for transiting goods increased through 2015 but has since seen a gradual

decline, although still above the average time from 2013. Overall, the time for cargo to transit El

Amatillo has reduced by approximately 1hr since 2013 despite some increases experienced in 2015 and

2016.

Table 3C shows a significant decrease in transit operations being conducted at La Hachadura and a slight

increase in transit operations at El Amatillo between 2013 and 2017.

TABLE 3C. NO. OF TRANSIT OPERATIONS TAKING PLACE AT LA HACHADURA AND EL AMATILLO


LA HACHADURA 8,843 7,133 -19.3

EL AMATILLO 26,860 27,558 +2.6

Table 3D shows a large decrease in total weight of transit cargo through La Hachadura and a small

increase in weight of transit cargo through El Amatillo between 2013 and 2017.

TABLE 3D. TOTAL WEIGHT OF TRANSIT CARGO THROUGH LA HACHADURA AND EL AMATILLO.


LA HACHADURA 192,500 154,962 -19.5

EL AMATILLO 590,000 626,300 +6.2

TABLE 3A. AVERAGE COST FOR CARGO TRANSITING THROUGH EL SALVADOR MEASURED IN

USD PER METRIC TON PER KM

BORDER YEAR

2013 2014 2015 2016 2017 Annual Variation

LA

HACHADURA $ 0.102 $ 0.108 $ 0.106 $ 0.106 $ 0.102

EL AMATILLO $ 0.098 $ 0.101 $ 0.100 $ 0.098 $ 0.096

TABLE 3B. AVERAGE TIME FOR CARGO TRANSITING THROUGH EL SALVADOR

(DAYS:HOURS:MINUTES)

BORDER YEAR

2013 2014 2015 2016 2017 Annual Variation

LA

HACHADURA 01:04:32 01:06:54 01:07:01 01:06:33 01:06:02

EL AMATILLO 00:19:09 00:18:31 00:18:00 00:18:48 00:18:17

Aduana de destino 2013 2014 2015 2016 2017 Prom general Variación anual

TERRESTRE LA HACHADURA 0.102$ 0.108$ 0.106$ 0.106$ 0.102$ 0.105$

TERRESTRE EL AMATILLO 0.098$ 0.101$ 0.100$ 0.098$ 0.096$ 0.098$

Prom general 0.099$ 0.103$ 0.101$ 0.100$ 0.097$ 0.100$


Table 3E shows a minimal increase in the pro-rata cost of Freightage for cargo transiting El Salvador

through La Hachadura and a decrease in pro-rata freightage at El Amatillo between 2013 and 2017.

TABLE 3E. AVERAGE PRO RATA FREIGHTAGE COST FOR CARGO TRANSITING THROUGH LA

HACHADURA AND EL AMATILLO.


LA HACHADURA $650 $653 +0.4

EL AMATILLO $693 $641 -7.5%

In La Hachadura, the decline in total weight of transit operations contributed to a slight increase in

Freightage costs and partially explains why there has not been a greater reduction in cost for transit

shipments through La Hachadura. The overall time for transit shipments at La Hachadura has increased

by 1.5hrs since 2013 and is likely the result of external factors. (The GPS data analyzed in the next

section provides some insights about the parts of the journey where the shipment is experiencing

delays.)

In El Amatillo, weight of transit shipments has increased over the period between 2013 and 2017, which

has contributed to a decline in freightage costs. There have been no offsetting counter factors at El

Amatillo, therefore, overall Cost per Metric Ton per Km has also declined and time taken for transit

operations at El Amatillo has been reduced by 1hr since 2013. This decline in costs and time at El

Amatillo would appear to be at least partially attributable to the project’s interventions, such as

facilitation of inter-institutional coordination between El Salvador and Honduras to improve and align

border processes.

RTMA is confident that the downward trajectory for transit costs will continue as the RFID system

becomes operational for Transit operations.

ADDITIONAL GPS DATA MONITORING IN LA HACHADURA

Since February 2016, RTMA has been collecting data from 5km outside of both the Guatemalan and El

Salvador Customs facilities via GPS units installed in several CTUs. This measurement allows the Project

to calculate the time spent in lines formed outside the border and the time spent by authorities clearing

the cargo at the border.

These data results show an 18% increase since February 2016 in the time taken for goods to cross the

border to enter El Salvador, and a 97% increase in time required to cross the border to exit El Salvador.

Please see Figure 4 below.


Figures 5 and 6 below illustrates the time trends for entering and exiting El Salvador at La Hachadura

based on the GPS data.

8:14

5:15

10:01

2:574:01

9:44

0:00

1:12

2:24

3:36

4:48

6:00

7:12

8:24

9:36

10:48

L Í N E A B A S E F E B A J U N 1 6

P E R Í O D O 1J U L A N O V 1 6

P E R Í O D O 2 D I C 1 6 A A B R 1 7

P E R Í O D O 3 M A Y A J U N 1 7

P E R Í O D O 4 J U L A S E P 2 0 1 7

P E R Í O D O 5 O C T A D I C 2 0 1 7

CARGO ENTERING EL SALVADOR

FIGURE 4: AVERAGE TIME FOR CARGO ENTERING AND EXITING EL SALVADOR THROUGH LA HACHADURA SV AND PEDRO DE ALVARADO GT BORDER CROSSING CALCULATED WITH GPS EQUIPMENT IN CARGO TRANSPORT UNIT (HOURS:MINUTES)

FIGURE 5: AVERAGE TIME FOR CARGO ENTERING EL SALVADOR THROUGH LA HACHADURA SV CALCULATED WITH GPS EQUIPMENT IN CARGO TRANSPORT UNIT (HOURS:MINUTES)


2.1.2 CAPACITY BUILDING FOR ANALYSIS AND REPORTING

During this past quarter, RTMA spent a significant amount of time transferring data analysis know-how

to DGA customs officers to be able to generate reports on time and cost of trade according to the type

of border operations. DGA has been proactively capturing data but has struggled to translate the data

into meaningful analysis and policy changes. This is partially due to lack of resources, with only one

official dedicated to this task part-time.

RTMA held meetings with DGA Managers to identify their objectives for data analysis. DGA prioritized

being able to measure and understand International Transit CTUs for two main reasons. The first is

related to the improved design of the export process introduced by DGA going beyond Guatemala and

Honduras. These exports are now able to go through pre-clearance centers in El Salvador (e.g. Metalío

and Santa Ana, Special Processing Zones, specified warehouses, etc.) where DGA processes, clears and

releases the exports. At these pre-clearance centers, DGA supports the operators by initiating their

international transit declarations for the Customs Authorities in the other countries through which they

will pass on their way to their final destination. Covering all of these operations at the pre-clearance

centers means that DGA only has to focus on one operation at the borders - communicating the results

of the risk management process (i.e. directing the operator to the green, red or yellow lanes). In theory,

this allows the CTU to pass through the El Salvador border more quickly to continue its journey to its

final destination. The second reason for focusing on International Transit data is that transits operations

make up the largest trade regime for El Salvador’s customs authority.

RTMA is coordinating with DGA to build the capacity of more officers to conduct data analysis. Training

will continue in March when more DGA officers will be trained by the Project on the RFID process,

enrollment and data analysis.

DGA will be monitoring the time it takes to inspect goods, value of goods, origin, and destination to

help assess and measure the impact of the various trade facilitation measures introduced in previous

quarters by SAT and DGA at La Hachadura and El Amatillo border points such as:

2:29

1:40 1:371:03

1:32

4:53

0:00

1:12

2:24

3:36

4:48

6:00

L Í N E A B A S E F E B A J U N 1 6

P E R Í O D OJ U L A N O V 1 6

P E R Í O D O 2 D I C 1 6 A A B R 1 7

P E R Í O D O 3 M A Y A J U N 1 7

P E R Í O D O 4 J U L A S E P 2 0 1 7

P E R Í O D O 5 O C T A D I C 2 0 1 7

CARGO EXITING EL SALVADOR

FIGURE 6: AVERAGE TIME FOR CARGO EXITING EL SALVADOR THROUGH LA HACHADURA SV CALCULATED WITH GPS EQUIPMENT IN CARGO TRANSPORT UNIT (HOURS:MINUTES)


Custom authorizing the Guatemalan traffic police to manage the traffic at the border agency

entry and exit points in Pedro de Alvarado;

Creating an additional window at La Hachadura for fast processing and final review of cargo

declarations that have been submitted electronically in advance;

Paving parking areas and adapting infrastructure in the Primary Zone of La Hachadura to allow a

wider turn radius for CTUs;

Limiting parking in the primary zone to vehicles with imports.

Assigning specific time periods for the fast passage of empty trucks.

Coordinating immigration checks between El Salvador and Guatemala.

Increasing security presence in the access zones (i.e. roads leading to the border) for the

protection of cargo and drivers.

Additionally, the Guatemalan and El Salvador border control authorities (DGA, SAT and the National

Police from both countries) have implemented the following activities to improve logistics management

at the border and improve the time it takes for cargo to cross the border through Pedro de Alvarado

and La Hachadura:

Improving and adjusting the fumigation area at the border point of La Hachadura.

Allowing for exchange of X-ray images between the DGA and the Anti-Narcotics Division of

the National Civil Police.

Including a fast-pass window for National Civil Police at La Hachadura.

RTMA has also provided direct support in previous quarters through the procurement of signage for the

border primary zones and the RFID system that will become operational in the coming months to help

direct traffic in an orderly fashion.

2.1.3 INTEGRATION OF “CARAVANA” INTO SIECA’S IT SYSTEM

The CARAVANA data collection and freight services exchange platform, produced by FUNDEVI with

funds from an RTMA grant has two modules. Module 1 involves the collection and publication of

logistics indicators. The data for the indicators comes from the TIM system (Customs International

Transit System) through which every operator must submit their Transit declarations. The TIM system

is already managed by SIECA so there is easy access to this system for SIECA and no charge involved in

acquiring the data. Module 2 utilizes the logistics data from Module 1 to provide a freight services

exchange tool for transporters, whereby demand and supply for freight services can be identified.

The CARAVANA platform was officially handed over to SIECA in April 2017 upon the signing of an

MOU between USAID and SIECA. In November 2017, SIECA’s new Director General, Mr. Melvin

Redondo became increasingly interested in integrating CARAVANA Module 1 into SIECA’s main IT

system to maximize the potential of the tool. In December, RTMA developed and presented a roadmap


for technical integration of Module 1. This roadmap laid out the technical expertise and steps required

to allow SIECA to generate an initial set of border crossing indicators to make them publically available

on the SIECA website by March 2018.

8 This is the same indicator as is being used for the RTMA Custom Indicator 2-1 referenced in Section 2.1.1.

RTMA is building capacity of SIECA staff to collect the necessary data and make the relevant calculations for this

Indicator. 9 “Reasonable Time” is defined as the median point having taken the extreme times (lowest and highest) for each

procedure.

TABLE 4. LIST OF CARAVANA PHASE 1 INDICATORS TO BE PUBLISHED ON THE SIECA WEBSITE

1. Cost of Transport per Metric Ton8

2. Average reasonable time9 between registration of International Transits Declarations (ITD) by

shipper and clearance of goods at the first CA Customs border encountered by the shipper.

3. Average reasonable time between entry at first CA Customs check to clearance from final CA

Customs Authority.

4. Average speed in route between countries from initiation point of shipment to conclusion of

international transit operations with any Customs Authority in the CA region.

5. Percentage of international transit shipments completed out of the total number of

international transit operations initiated by Customs on their IT Platform.

6. Percentage of consolidated ITDs registered electronically in the system per month in each of

the CA countries.

7. Percentage of ITDs initiated that involve goods potentially subject to quarantine.

8. Number of international transits, by CA country, for which the deadlines to conclude their

transit expire before the transit is completed.

9. Percentage of ITDs submitted by private operators in advance.

10. Percentage of ITDs registered but not initiating their journeys for more than 10 or 30 days

after registering.

11. Concentration of operations – number of international transit shipments initiated at each

border.


RTMA and RTFE have been working together to help SIECA publish the indicators on their website by

June 2018. This has included providing technical experts to work on the IT integration and transfer

knowledge of the system and indicator calculations to SIECA staff.

Regarding Module 2 - The Freight Services Exchange – SIECA has been receiving conflicting feedback

from the private sector on the exchange concept since the handover of the tool from USAID to SIECA

in April 2017. Truck associations have expressed concerns about making their rates public on the

exchange and the downward pressure that could create for rate quotes to stay competitive. They are

also worried about not receiving payments from client companies, having unregistered carriers on the

exchange, vetting the competence of participating carriers, and how to make the exchange exclusive to

carriers that can ensure a level of quality. SIECA will continue working with the private sector to

address their concerns and attempt to achieve greater buy-in for the tool.

For now, Module 2 will continue to be administered by SIECA free of charge; however, SIECA is

interested in exploring options for outsourcing the administration of the platform to a private third

party. A private third party could introduce some form of fee for the service that would generate

income and make the tool self-sustaining.

2.1.4 CANOPIES INSTALLATION AT LA HACHADURA AND EL AMATILLO BORDER POINT

During this reporting quarter, the project continued working onsite at the La Hachadura and El Amatillo

borders to install the curved roofs (i.e. canopies) requested by El Salvador Customs to help improve

working conditions at the border inspection points. The shade provided by the canopies is allowing

border authority agents to work more comfortably during the hottest parts of the day as well as during

inclement weather. This, in turn, is resulting in increased continuity of border operations.

The RTMA vendor worked on the installation of the canopies while DGA carried out necessary

relocation of utilities at the selected sites (i.e. electricity, telephone and data cables, and adjustments to

sewage pipes). The El Salvador Ministry of Environment inspected the sites and gave the necessary

approvals.

The installation involved the following phases:

(i) Excavations and iron structure foundation work

(ii) Installation of cement pillars

(iii) Installation of the metal curved roofs

12. Concentration of operations – number of international transit shipments concluded at each

border.

13. Concentration by border – average declared weight in kilograms at journey initiation.

14. Concentration by border – average declared weight in kilograms at journey conclusion.

15. Concentration by border – average FOB value declared at journey initiation.

16. Concentration by border – average FOB value declared at journey conclusion.


(iv) Construction of rain channels (i.e. rainfall run-off system)

(v) Electrical work for required indoor lighting inside the canopy

FIGURE 7: INSTALLATION OF THE METAL CURVED ROOF FOR THE CANOPY AT LA HACHADURA

RTMA’s civil engineering expert oversaw the whole installation process at both La Hachadura and El

Amatillo and provided advice and direction to the team and Customs whenever unanticipated challenges

arose.

The project had to coordinate closely with USAID’s Regional Clean Energy (RCE) Project, managed by

Tetratech, to ensure that the energy efficient lighting at the site of the canopies was not compromised

by the construction work or final installation of the canopies. When the project discovered that two of

the RCE lampposts were located inside the proposed site of the canopy at La Hachadura, the RTMA

Team worked with the lighting contractor used by the RCE Project to find a solution. This involved

shortening those particular lampposts so that they could fit under the canopy and still achieve the

objective of illuminating the area. This unanticipated challenge caused a small delay in the final delivery

schedule, meaning that the canopies were completed at the end of the month of December as opposed

to mid-December as originally scheduled. Since then, DGA has been able to conduct operations under

the canopies.

At La Hachadura, the SAT control point has been moved from the exposed area they were working at

by the bridge and are now located under the canopy. The Customs authorities in both El Salvador and

Guatemala are very satisfied with the canopy installed.

Additionally, at La Hachadura, DGME has been able to set up a control point under the canopy. This

means that CTU drivers no longer need to park their units and walk 500ft to the Immigration window


for the required migration checks. With both Migration and Customs officers situated under the canopy,

all checks can be done on a single stop of the CTU.

The canopy has also allowed El Salvador Customs’ to be able to use their portable equipment to

communicate with the ASYCUDA system for international transit operations. Previously, it was difficult

to use this equipment, as the information on the portable screens could not be read very well in the

strong sunlight. The shade provided by the canopy allows the officers to use this equipment more easily

and as originally intended.

At El Amatillo, DGA expects to move its border posts with the help of an MCC project. The timeline

for this project is not yet confirmed, and therefore, at the request of customs and with USAID approval,

RTMA completed the installation of the canopy at the current border post location. An MOU will be

signed between USAID RTMA, DGA, INL and MCC stating that the canopy at El Amatillo can be moved

to a different site if necessary. Any move will take place after the RTMA Project has closed and

USAID/RTMA will not be responsible for funding the move of the canopy at that time.

2.2 IMPROVEMENT OF ADMINISTRATIVE PROCESSES APPLICABLE TO TRADE

2.2.1 STATUS OF RFID INSTALLATION

2.2.1.1 INSTALLATION OF RFID INFRASTRUCTURE AT THE BORDERS.

By the end of December 2017, the entire RFID infrastructure at La Hachadura and El Amatillo was

installed with some electrical work continuing into the following month.

Successful installation of all arches and mounting of scanners, control boxes and other necessary

equipment allowed the Project to move on to developing and installing the application for computers

and display monitors at specified sites at each border (La Hachadura and El Amatillo). The application

allows Customs officers to see, via installed display monitors at these posts, which border operations

have already been carried out (e.g. customs control and selectivity) for trucks that have enrolled in

RFID. Having reliable and timely information made available through RFID allows Customs’ Traffic

Controller to efficiently direct the trucks to the next required border operation (e.g. check-out, case

resolution or X-Ray). A PC and two large display monitors in protective casing were installed at two

sites at each border, as marked by the blue indicators in the aerial map in Figure 8.


FIGURE 8: AERIAL VIEW OF LA HACHADURA AND MONITOR SITES

RTMA successfully programmed the computer at La Hachadura to receive the truck license plate

number, lane processing instructions, declaration number and corresponding customs process (i.e. case

resolution, X-Ray, check-out etc.). This information is then displayed on the monitors at the border (See

Figure 9) to guide border officers on how to direct truck drivers. Several application test runs were

performed and multiple communications tests were conducted between DGA and the monitors at La

Hachadura before confirming successful operation for International Transit shipments.


FIGURE 9: MONITOR DISPLAYING INFORMATION RECEIVED FROM RFID TAG AND INSTRUCTIONS FOR PROCESSING.

One unexpected challenge involved laying down 50 meters of additional cable at the site near the bridge

in La Hachadura to ensure consistent communication between the PC and the monitor. The PC had to

be located at a different position than anticipated as the data flow was inconsistent at the original

position, resulting in an unsteady monitor image. Although the current location for the PC now works

well to receive and transmit the data signals, a more permanent and adequate solution needs to be

found for housing the PC as it is currently housed in a small hut exposed to dirt and weather conditions.

RTMA worked closely with DGA’s Equipment Maintenance Department to ensure knowledge transfer

and understanding of what is required to maintain this equipment for the long term and DGA is working

on finding an acceptable long-term solution for La Hachadura


FIGURE 10: INADEQUATE HOUSING FOR PC AT LA HACHADURA BORDER POINT

Similar testing of communication between PCs and Monitors needs to be done at El Amatillo to confirm

successful transmission of data signals; however, DGA was not able to make any of the necessary staff

available before December to visit the border to work on this installation. Therefore, installation of the

display monitors at El Amatillo has been delayed until the following quarter.

2.2.1.2 PROGRESS ON RFID IT PROGRAMMING AT DGA.

RTMA alongside DGA’s IT staff, were able to run a complete cycle of communications tests between

RFID, SIECA and ASYCUDA World (DGA’s customs management system). Successful data flow was

confirmed between the RFID System and SIECA and between the SIECA and DGA systems with the

complete cycle illustrated in Figure 11.


FIGURE 11: RFID’S FLOW OF INFORMATION

Antena RFID

Nodo remoto SIECA

VPN

VPN

Nodo Central SIECA

Web ServiceAduanas

DIAGRAMA DE FLUJO DE DATOS RFIDDiciembre 2017

Red Local DGAWeb Service

Web Service

VPN

Procesamiento en operaciones de Sydunea World

Mostrar Resultado en Pantalla en

Frontera

The RFID tag number on the truck is read by the antennas installed at the border and sent to SIECA’s

Local Node in El Salvador. From there it is transmitted to SIECA’s Regional Central Node in Guatemala

City. At the SIECA HQ, the Tag ID number is crosschecked against the Regional RFID Enrollment database

and the International Transits Declarations System (TIM). An XML10 file is then automatically generated

with the International Transit Declaration (ITD) number and the license plate number of the truck. SIECA

sends the XML text to DGA, which receives it in ASYCUDA WORLD. DGA validates the information

received and performs the necessary operations (e.g. check-in, customs control, risk selectivity, conclusion

of transits, departure control). The verified IDT number, license plate number of the truck, and results of

any customs operations are then displayed on the monitor at the border point11.

10 XML is a file extension for an Extensible Markup Language file format used to create common information

formats and share both the format and the data through IT systems. 11 Please see flow charts in sections 2.2.1.5 of this Quarterly Report for more details of the process.


Completion of the necessary RFID IT programming is taking longer than anticipated due to limited staff

availability at SIECA to conduct the complete cycle test runs and to fulfil the quality requirements for

different scenarios. To enable successful completion of programming, the systems at every institution

involved must be operating at the same required quality level. Due to the multiple variables of the

import/export/transit process and the software used for RIFD, problems may arise that can only be

addressed by IT experts and those responsible for the implementation of the RFID system at their

institution. If the relevant staff are not available, this can slow down progress on programming.

The RTMA Team is aiming to finalize all operational variable test runs, as required by Customs El

Salvador, in the first quarter of 2018, so that the RFID system is operational for International Transit

shipments before the end of the RTMA Project. Unfortunately, due to the lack of staff availability at

SIECA and DGA to work on the necessary IT programming, it will not be possible to have the Import

and Export processes operational in the RFID system before the end of the project. DGA and SIECA

have both committed to undertaking the necessary programming for Imports and Exports, however

future USAID assistance may be needed.

2.2.1.3 SECURITY ASSESSMENT

To finalize the installation of the RFID system, the Project, as agreed with DGA, contracted an

independent IT consulting firm to identify potential risks or vulnerabilities across the system in both the

network and in the software components. The IT Security firm will analyze the physical and logical

configuration of network devices involved in the RFID system. Objectives include verifying the correct

configuration of network equipment; verifying the Quality Assurance of software components;

identifying if there are any ‘backdoors’ in the software where data can flow through communication

channels other than those that were authorized by DGA and SIECA in agreement with RTMA; verifying

the system’s compliance with security policies and protocols established by DGA, DARA, SAT and

SIECA; identifying redundancies in the network; verifying that the RFID system has no weak spots that

are vulnerable to security attacks and unauthorized access to data; and diagnosing any potential risks and

vulnerabilities in the system hardware and software. The firm will then return to assess the state and

level of security of the system after a set period of time has been given to correct the findings identified

in the original diagnosis.

An RFP for this work was issued in December and a firm had been selected by the Project to begin the

assessment in January. This will involve coordinating with the three Customs Authorities in the Northern

Triangle and SIECA.

2.2.1.4 PROGRESS ON USER ENROLLMENT, NORTHERN TRIANGLE ACTIONS.

The Project continues to work together with the RTFE Project to provide support for the design and

dissemination of the RFID enrollment platform. The platform was originally software based and held

locally on computers at the customs’ offices. (RTMA was able to provide computers dedicated for this

purpose to DGA and DARA.) However, RTMA and the customs agencies agreed, that for improved

security, the platform needed to draw from a Regional Enrollment Database, be web-based, and

administered and supported at a regional level by SIECA. RTFE provided SIECA with technical support

to develop a web-based platform that fulfills the IT and data security standards for each NT Customs

Authority and IT experts from RTFE, RTMA and SIECA are in the process of migrating the local

software platforms for each country into the regional platform.


RTMA trained DGA customs officers on how to register and assign RFID tags to individual Cargo

Transporting Units (CTUs) through the web-based platform; how to identify the trucks that are to

receive tags; how to communicate the objectives of the program to the drivers; and how to physically

attach the tags to the truck windshields. This effort has included training 27 DGA Customs Officers and

4 technicians from the La Hachadura and El Amatillo borders and a Customs Regional Coordinator

located at the San Bartolo Central HQ.

RTMA coordinated with RTFE to deliver tags from the RFID vendors to SAT Guatemala and DARA

Honduras as well as laptops from the projects to facilitate registration at the border and pre-clearance

centers. DARA was able to enroll trucks with RFID tags during this period; Guatemala on the other

hand received training from RTFE on how to use the RFID Regional Enrollment Platform and will start

their enrollment early in January 2018.

As of mid-January 375 CTUs are enrolled in the RFID system; 156 of these records have been validated

and are ready to be migrated into the SIECA Regional Enrollment Database. The project aims to validate

the other 219 records and to have the regional database integrated and functioning with the RFID

system by the end of February.

The joint goal of Customs Authorities across the Northern Triangle is to have 1,100 CTU’s enrolled in

the system by the end of the RTMA project. One of the major challenges to achieving this goal includes

the lack of infrastructure for enrollment. Drivers do not have adequate space at the border to park

their trucks while they complete the registration. The registration space also needs to be where the

Customs Officer has access to a PC and internet connection. During this past quarter, the only spaces

where this could be done were at the International Transits Revisions areas at La Hachadura and El

Amatillo. This process is also taking longer due to the lack of availability of Customs Officers to

conduct the enrollments.

2.2.1.5 PROCESSES AT THE BORDER USING THE RFID CONTROL SYSTEM.

In November, RTMA prepared a procedures model for International Transit cargo incorporating the

new RFID technology and automated operations for La Hachadura and El Amatillo for DGA. These

procedures guides customs officers through the RFID procedures that need to be applied at the border.

The RFID process varies slightly depending on whether transit cargo is passing through a border post

for the first time or whether it has already passed a post and received a container seal from the customs

authority. However, the general process consists of three main parts at La Hachadura and El Amatillo:

RFID verification, inspection, and RFID Verification Post-Inspection.

The table below breaks down the three main processes into sequential steps that occur.


TABLE 5: ENTERING AND EXITING THE BORDER USING THE RFID CONTROL SYSTEM

LEVEL OF AUTOMATION

STEPS CUSTOMS PERSONNEL INVOLVED

LOCATION AT LA HACHADURA

BORDER

PART 1 – RFID VERIFICATION

AUTOMATED

– UTILIZES RFID

1. Verification that physical truck license plate matches what is in the system and on the monitor.

Customs Traffic Controller

Bridge/Canopy Checkpoints

2. Identify Declaration No. in the System and on the monitor.

3. Review results of electronic risk management module’s automated selectivity check and direct to Red, Yellow or Green Lanes accordingly. Unresolved and complex cases are directed to the Alternative Flow Lane.

Alternative Flow Lane cases are usually shipments where the operator is missing a document or payment, which is why the electronic risk management module cannot run the Selectivity Check on the shipment. (i.e. assign to the Red, Yellow or Green Lanes)

4. Verification that physical seal matches what is in the electronic system.

5. Sign off on CTU.


PART 2 – INSPECTION

NON-AUTOMATED

6. Various Operations conducted manually on operators directed to the Red, Yellow or Alternative Flow Lanes as directed by Selectivity Check/Alerts e.g. X-Ray Inspection, Physical Inspection, Case Resolution.

Customs Official/ Administrator/

Verifier

Central Border Zone Area

7. In the Red and Yellow lanes, a Customs Official consults with the operator on errors and determines what is required to resolve the case and make the shipment ready for the Green Lane.

Unresolved and complex cases are directed to the Alternative Flow Lane and handled by the Customs Administrator (senior level). The Administrator verifies the reason for being in the Alternative Flow lane.

8. Customs Official Redirects CTU to Green Lane after necessary manual operations are satisfactorily completed. International Transit with DGA is initiated/concluded.

PART 3 RFID POST - INSPECTION

AUTOMATED

– UTILIZES RFID

9. Verify that physical truck license plate matches what is in the system and on the monitor and linked to the correct International Transit Declaration.

Customs Traffic Controller

Canopy/Bridge Checkpoints

10. Identify Declaration No. in the System and on the monitor.

11. Verify that alerts have been addressed.

12. Verification that physical seal matches what is in the electronic system.

13. Customs release goods at the border.

14. Departure authorized.

15. CTU enters/exits El Salvador.


2.2.1.7 INTEGRATION TO RFID SYSTEM OF BORDER CONTROLS BY AGRICULTURE AND

IMMIGRATION.

RTMA and Customs have prepared several work plans laying out the steps and timeline required to

integrate Ministry of Agriculture and Directorate of Immigration processes, such as quarantine

inspections and driver immigration checks, into the RFID system.

Some progress has been made in developing the necessary software at MoA and DGME to allow their

systems to integrate with the RFID system. Another huge step forward was the agreement between

DGA and Agriculture to share a VPN. This will allow easier communication of data between these two

institutions. A challenge holding up further progress between MoA and Customs is the need to make an

agreed list of products in the ‘International Transit’ category that require quarantine inspections by

Agriculture. MoA have not been able to dedicate the necessary time to put together their priority list

and so further progress on integrating MoA has stalled.

Progress with DGME has also stalled. A VPN connection between DGME and SIECA needs to be

established to allow for easier data sharing. Additionally, SIECA needs to have a dependable regional

database of registered drivers. The regional driver database would be similar to the CTU Regional

Database described in Section 2.1.1.4 but with records of cargo drivers. Each country in Central

America would need to agree to provide SIECA with a list of their registered cargo drivers and this list

would have to be updated on a regular basis. In order to ensure information sharing takes place, there

would need to be a regional agreement amongst Central American countries to make data sharing

obligatory. Until such an agreement is in place, the RFID system will not have a dependable database of

truck drivers to draw from. Consequently, the RFID system will not be able to reliably verify

Immigration or Police Alerts about drivers. Subject to progress on the regional drivers database,

automation of Migration processes will only be possible at the local level.

2.2.1.8 INCORPORATING THE NEW RFID PROCESSES INTO NATIONAL REGULATIONS.

Before the new procedures for RFID can be officially adopted, they must first be drafted into General

Administrative Provisions by the Customs Regulatory Department. DGA has been proactive and

cooperative in this task; by January 2018, a draft version of the revised provisions for International

Transit was issued by the Regulatory Department. These draft, revised provisions will now be brought

into practice by the DGA Operations Department through further test-runs. The Customs Public

Communications Department will then provide notification to the private sector of the live test run for

new procedures for International Transit cargo and allow one week for public comments. Notification

will be provided through the DGA website and emails to subscribed RFID users.

2.2.1.9 CAPACITY BUILDING FOR ADMINISTERING RFID AND ENSURING SMOOTH

OPERATIONS AT THE BORDERS.

In October 2017, ID Tech Logistics, the provider of the RFID Equipment, conducted a full-scale rollout

of the system with DGA. This involved trainings with officers at San Bartolo HQ, the La Hachadura and

El Amatillo borders; installation and configuration of software on the designated computers at the

relevant sites; and validation that all parts of the system, hardware and software, were operational.

Installation, configuration and validation was conducted alongside the officers who will be using the

equipment to allow for maximum opportunity for knowledge transfer. Table 5 provides the full lists of

trainings that were conducted.


TABLE 6. RFID SYSTEM TRAINING

DESCRIPTION OF TRAINING PARTICIPANTS VENUE

Basic Principles of RFID and

Functionality of the RFID

System installed

10 San Bartolo HQ


Administration Software

7 San Bartolo HQ

Installation and Configuration of

the RFID Administration

Software

2 San Bartolo HQ

Installation and Configuration of

the RFID Enrollment software

and RFID Portable Reader

software

1 La Hachadura


Portable reader system

28 San Bartolo HQ, La Hachadura

and El Amatillo borders


enrollment software installed

locally

20 La Hachadura and El Amatillo

borders

Total Number of Attendees

(Note: This is not a cumulative

figure as some attendees

attended more than one

training.)

58

DGA has requested a second training to include more sessions on practical application of the system.

This training will be conducted during the next quarter.

2.2.1.10 CENTRAL AMERICAN RFID OPERATIONAL MANUAL.

In the previous quarter, SIECA requested that a RFID Operational Manual be created. This manual

would support the region’s ministries and customs authorities in understanding how the RFID

implementation will aid economic integration under the Central American Strategy on Trade Facilitation

and Competitiveness. The Manual will also be useful to national authorities in the region as they

integrate the RFID system with their own IT systems to enable increased automation of operations.

SIECA’s trade facilitation team and SIECA’s Secretary General, Mr. Melvin Redondo approved a draft

outline of the Manual in September 2017 and RTMA has been working with RTFE to complete the draft.

The first draft will be submitted to SIECA for review and feedback with the aim of incorporating edits in

the final quarter of the RTMA Project. SIECA will then be responsible for dissemination of the Manual.

The Manual describes the technical, tactical and strategic benefits of the RFID intervention that is being

implemented in the Central American Northern Triangle and the added value that the system brings to

Coordinated Management of Borders in the region, as envisaged in the Central American Strategy for

Trade Facilitation and Competitiveness, approved by COMIECO in October 2015. The Manual follows a

step-by-step methodology, going through the process operation improvements and IT programming

required in order to implement the use of RFID successfully at border points, starting with studies on


flow lines and bottlenecks, time monitoring, economic impact assessments, and then concludes with a

section on lessons learned/challenges faced.

2.2.1.11 LINKING THE AEO PROGRAM TO THE RFID SYSTEM.

The Project has met with the DGA staff assigned to developing an Action Plan for linking RFID CTUs

and drivers to El Salvador’s AEO program, however, the DGA Manager responsible for has not been

available to dedicate time to move this initiative forward. RTMA has therefore suspended this activity

from its work plan.

2.3 SUPPORTING THE INCORPORATION OF EL SALVADOR TO THE CUSTOMS UNION

At the request of USAID, the Project supported the El Salvador Ministry of Economy in their efforts to

join the Customs Union with Honduras and Guatemala. The Project supported through provision of

catering services for 40 to 200 attendees at high-level meetings between MoE, SIECA, and

representatives from the following El Salvador, Guatemala and Honduras agencies: Customs, Ministry of

Finance, Directorate for Immigration, Ministry of Agriculture, Ministry of Health, Ports and Airports

Administration Authority and the Center for Import and Export Procedures (CIEX)12.

Negotiation sessions took place in San Salvador in October where the following topics were discussed:

1) Revision of El Salvador Integration Roadmap and commitments reached in previous session.

2) Observations on legal documents (agreements and administrative resolutions), derived from the

GT- HN customs union, to identify the need for modification or adjustment to these

documents.

3) Agenda for next meeting of trilateral negotiation to be held in February 2018.

Tables were organized for Vice ministers and counterparts to discuss what would be required to

integrate El Salvador into the Customs Union. The Head Table was made up of the Vice ministers of

Trade for El Salvador, Guatemala and Honduras, and expert level tables were set up to discuss Origin,

Tariffs, Domestic Taxes, Sanitary and Phytosanitary, Customs, Migration, IT and Public Works

(Infrastructure).

12 Department within the El Salvador Central Bank responsible for developing and promoting El Salvador’s Single

Window System.


Ministry of Finances -

Directorate General of

Customs

SIECA

Secretary of

Economic

Development

Ministry of

Development,

Industry and Trade

Ministry of Agriculture and

Livestock Ministry of Economy

Revenue

Management

Service

Central Reserve Bank Superintendence of

Tax Administration

National Food and

Agricultural

Health and Safety

Service -SENASA

Ministry of Foreign Affairs Directorate-General

for Migration

Deputy Direction

of Customs

Revenue

Central Reserve Bank - Import

and Export Processing Center

Ministry of Foreign

Affairs

National Migration

Institute

Presidential Commissioner National Civilian

Police

General Directorate of

Migration and Aliens Affairs

Ministry of

Government

Ministry of Finances -

Directorate General of

Domestic Taxes

Ministry of

Agriculture,

Livestock and Food

Private sector associations

National Civilian Police

Ministry of Economy

TABLE 7. AGENCIES REPRESENTED AT THE CUSTOMS UNION MEETINGS

EL SALVADOR GUATEMALA HONDURAS NICARAGUA

rtma quarterly report october december 2017

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