The WCO Performance Measurement Mechanism (WCO PMM)
The WCO has developed many self-assessment tools, enabling Customs administrations to determine where they stand with respect to the adoption of WCO standards and recommended practices, and to monitor how Customs clearance is being carried out, as well as to measure the impact of reforms on border processes.
Although evaluation has been at the centre of discussions among donors and WCO Members for decades, there was until recently no tool to assess Customs efficiency and effectiveness in a comprehensive manner. To remedy the situation, in 2019 the WCO set up a Working Group on Performance Measurement (WGPM) and, in 2023, the WCO Performance Measurement Mechanism (WCO PMM) for Customs was adopted.
For a Customs administration taking its first steps into performance measurement, the WCO PMM provides an excellent starting point. It examines four strategic Customs objectives: Trade Facilitation and Economic Competitiveness; Revenue Collection; Enforcement, Security and Protection of Society; and Organizational Development. Each is divided into expected outcomes, with corresponding Key Performance Indicators (KPIs). A progressive approach has been taken regarding the development process for the KPIs, and the first version of the WCO PMM (PMM v.1) includes only a limited set of 23 expected outcomes with the corresponding KPIs (51 in total).
Many administrations already have a national performance measurement system in place and therefore just need to add those KPIs that are not yet included in their respective systems. Customs administrations can choose not to use a KPI if it cannot be measured due to specific national conditions.
A Performance Measurement Mechanism Project Team (PMMPT) has been set up by the WCO to ensure the uptake of this mechanism, which forms the cornerstone of our collective efforts to measure and guarantee Customs effectiveness, responsiveness and impact. Measurement indicators must be carefully chosen to ensure that useful insights are obtained, and the Team will make certain that measures are properly chosen and developed. I encourage all WCO Members to join the effort.
Following the development stage, we have now moved into the implementation phase of the PMM, while taking into account the practical needs and capacities of Customs administrations. Moreover, at the end of 2023, WCO Members were invited to participate in the first phase of the WCO PMM by submitting data via the initiative’s online platform. We should be able to present the results of this first phase in autumn of this year.
The PMM should also be used by the Secretariat for the assessment of capacity-building activities. The WCO Capacity Building Committee recognized the potential of the PMM to become a data-driven and evidence-based enabler not only for policymaking but also for the identification of specific capacity-building needs. To be more precise, during the first cycle of the PMM assessment it should be possible to identify performance gaps as the difference between existing operational results and regional or global benchmarks. The identification of these gaps could, in turn, serve as a basis for capacity-building assistance. Starting from the second cycle of the PMM assessment, tracking the progression or regression of identified capacity gaps should also be possible, thereby giving an indication of the impact of the capacity-building activities carried out.
Much has been said about the WCO Time Release Study (TRS). This instrument was developed in the early 1990s and has been progressively enhanced since then to become an internationally accepted strategic tool for measuring the actual time taken for the release and/or clearance of goods, as well as the effectiveness and efficiency of border procedures relating to imports, exports and transit movements of goods.
Some countries are conducting TRS regularly and some have even automated time release measurement in alignment with the WCO TRS methodology, but many are still lagging behind. I would strongly encourage Members that haven’t yet pursued such efforts to consider conducting a TRS periodically, in close collaboration with other relevant government agencies and private sector stakeholders.
Without valid problem identification, appropriately targeted improvement measures cannot be devised. Statistics generated by a TRS can be used to improve processes, inform policy changes and drive discussions with trade stakeholders. The impact of policy interventions can in turn be assessed in subsequent TRS.
Conducting a TRS is also recommended under Article 7.6.1 of the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA), which stipulates that “Members are encouraged to measure and publish their average release time of goods periodically and in a consistent manner, using tools such as, inter alia, the Time Release Study of the World Customs Organization.”
To support Customs administrations in conducting a TRS, the WCO has developed a TRS Guide as well as an e-learning module available on its CLiKC! platform. The Guide is updated regularly, and the upcoming version will cover pre-clearance processes as well as providing more practical information.
In this edition of the magazine, we asked several Customs administrations to explain how they measure their performance in various areas. They shared not only findings, but also the methodology they used and the lessons they learned, in order to inspire and guide others.
Measurement is common in most Customs administrations but can be an instrument pursued for basic accountability reasons or for reaching a limited set of objectives. In the first article in this Dossier, the Eswatini Revenue Service explains how it enhanced its performance measurement system by integrating 31 WCO PMM KPIs into it. The Service highlights that working on KPIs shed light on process flaws and on the need to adjust the way data are available and extracted from IT systems. I hope this article will encourage other administrations to observe, explore and ultimately implement the PMM KPIs and also develop their data management capacities, so as to ensure their regular participation in the PMM.
Three articles on the use of the TRS follow: one by a “TRS veteran”, the India Central Board of Indirect Taxes & Customs; another one by a “TRS first-timer”, the Namibia Revenue Agency; and a third one by the Eswatini and South African Revenue Services, two Services with limited experience in conducting a TRS that decided to join forces and examine the clearance process on both sides of their shared land border.
In India, initial efforts to measure average release times on a regular basis started in 2013 at a port level and have since progressed to include four seaports, six air cargo complexes, three Inland Container Depots (ICDs) and two Integrated Check Posts (ICPs), spread across the country and collectively accounting for approximately 80% of the bills of entry submitted in the country. India’s experience affirms the utility of TRS as a tool for evidence-based policy, facilitating macro-level policy formulations and micro-level administrative changes to promote trade facilitation.
The Namibia Revenue Agency conducted its first TRS at the Walvis Bay Port in 2023, with the support of the WCO Secretariat and with the participation of various government bodies, as well as representatives from the Walvis Bay Port Users Association. The project was designed to build the capacities of all participants, and the Agency is now confident in its ability to conduct TRS with minimal technical assistance at various border posts and at regular intervals to allow for continuous performance measurement.
The Eswatini and South African Revenue Services decided to conduct a joint TRS at the border post connecting the towns of Oshoek in South Africa and Ngwenya in Eswatini. Here as well, these Services were able to build their in-house capacities with the support of the WCO and subsequently decided not only to conduct a joint TRS regularly but also to expand it to other ports of entry.
The fifth article is by Beijing Re-code Trade Security and Facilitation Research Centre, an independent not-for-profit research institute that has been evaluating trade facilitation progress made in China since 2016. It presents the methodology of this annual evaluation and the changes observed from 2019 to 2024, as well as the four measures which have been identified as having had a major impact on China’s trade facilitation performance.
Next comes an article introducing the WCO Customs Integrity Perception Survey (CIPS) and its implementation in El Salvador and Mozambique. The Survey makes it possible to check how a Customs administration is perceived in the areas of promoting integrity and combating corruption by its own staff and by individuals who engage with them. Thus, the CIPS is an instrument that can help improve the capacity of Customs administrations to measure their performance in these areas.
The CIPS is one of the many WCO instruments that Customs administrations can use to assess performance in the area of integrity. As I noted previously, the WCO has developed many diagnostic tools, enabling Customs administrations to determine where they stand with respect to the adoption of WCO standards and recommended practices. The qualitative diagnostics undertaken as early as 2005 based on the WCO’s Customs Capacity Building Diagnostic Framework included over 90 questions in the area of good governance and integrity. Moreover, in 2010, working jointly with the World Bank, the WCO assisted Cameroon Customs to introduce a system of performance contracts for appraising its staff, using statistical data, together with various indicators. Findings from this exercise were incorporated in a new guidance tool for WCO Members: the Why and How of Performance Measurement Contracts. Lastly, the WCO’s Integrity Development Guide (IDG), revised in 2014, expands on the Diagnostic Framework and includes a self-assessment tool comprising over 245 questions aimed at assessing the current integrity situation in a Customs administration.
The following article is by United States Customs and Border Protection. It explains the main types of oversight conducted on the Customs-Trade Partnership Against Terrorism (CTPAT), the United States’ Authorized Economic Operator (AEO) programme. It highlights how crucial accountability by diverse and independent parties is to the success of AEO programmes. Audits, surveys and assessments make it possible to discover opportunities to improve on deficiencies or gaps that AEO managers may not otherwise have been able to identify themselves.
Finally, the Dossier offers a snapshot of a forthcoming academic that examines and proposes an explanation for the levels of utilization of preferential tariffs by importers in the European Union. It reminds us that assessing how trade policy instruments are used by economic operators is essential to ensure we respond to their needs, and that consulting and cooperating with researchers can be of great value.
In closing, I would like to end by conveying my sincere thanks to all those who have contributed to this edition of our magazine. They demonstrate the dynamism within the world of Customs and how committed Customs and their stakeholders are to improving for the betterment and security of international trade.
