Why seaport reforms must begin at the customs house
The ongoing debate over seaport reforms in Bangladesh is largely centred on the long-term leasing of terminals to foreign operators to modernise port infrastructure. However, high-tech docks and foreign management can only do so much if the "brain" of the operation, the customs clearance process, remains bottlenecked by partial digitalisation.
During the period of 2009-2024, the Digital Bangladesh campaign successfully introduced bespoke software and automated platforms to nearly every government office. But nowhere was early digitalisation as critical as at Customs House, Chattogram (CCH), the country's premier tax collection gateway.
For all latest news, follow The Daily Star's Google News channel. CCH, which supports the Chittagong Port, accounts for 70-80 percent of total customs revenue and serves nearly 700 shipping agents, 1,000 freight forwarders, and 4,000 clearing and forwarding (C&F) agents. On average, CCH processes 7,000 to 8,000 bills of entry (BEs) for exports and imports daily. In the first five months of the current fiscal year, CCH collected Tk 31,602 crore in revenue. In FY 2024-2025, its collection was Tk 75,432 crore, which is eight times the amount it collected in FY 2003-2004.
Since its introduction in 1993, CCH upgraded the UNCTAD Automated System for Customs Data (ASYCUDA)—an integrated customs management system for international trade—several times. Currently, it is using ASYCUDA World, which was intended to reduce the time, cost, and physical visits required to process thousands of BEs manually. However, there are debates among business communities about the system's data accuracy and reliability, and it is often alleged that it leads to significant clearance delays.
The initial payoff of automation and subsequent upgrades were clear: in the 2012-13 fiscal year, CCH attained 90 percent of its revenue target, and by 2016-17, it hit 100 percent. Yet, by 2022-23, this figure dropped back to 82 percent. The current fiscal year's revenue collection for the first five months was 13 percent below the target. End-to-end automation remains elusive. While the core system is digital, several critical checkpoints remain manual. Currently, only 39 percent of submitted BEs (documents filed by importers for tax/duties/legal compliance/clearance assessment) are processed on the same day, while 19 percent take more than four days. Alarmingly, only five percent of imports are processed before arrival, often due to a lack of coordination with port authorities regarding the auction of unclaimed containers.
While ASYCUDA is designed to scrutinise only up to 10 percent of BEs through risk-based inspection, allowing the remaining 90 percent to receive clearance based on documentary checks, this is rarely the case in practice. Inspections of weight and nature of goods remain manual, as do many certification processes. Furthermore, ASYCUDA lacks interoperability. Customs officials are still compelled to rely on physical paperwork because various certifying entities do not work within an integrated system.
These so-called non-tariff barriers are compounded by the "Time, Cost, and Visit" (TCV) burden associated with outside agencies. Obtaining a simple No Objection Certificate (NOC) from the Bangladesh Council of Scientific and Industrial Research (BCSIR) or Bangladesh Standards and Testing Institution (BSTI) can take over a week. Frequent changes in import/export policies by the commerce ministry and adjustments to the Tariff's First Schedule by the finance ministry create further challenges in the process.
According to representatives of the Chittagong Customs Agents Association, the server struggles to take the load when thousands of agents log into the ASYCUDA modules simultaneously. Moreover, the lack of interoperability—where an importer shares bank documents with a C&F agent who then manually enters the data into ASYCUDA World—creates a "broken link" in the digital chain. This backlog wrongly places the blame on CCH officials, though the root cause often lies in "broken cross-project connectivity."
In addition, the internet connection at CCH is frequently disrupted, despite being provided by the state-owned Bangladesh Telecommunications Company Limited (BTCL), the country's largest Nationwide Telecommunication Transmission Network (NTTN) entity. BTCL management is often slow to respond to queries, and because CCH lacks access to Network Management System (NMS) data, monitoring rests solely with the National Board of Revenue's central IT office in Dhaka.
To partly circumvent this "BTCL conundrum," CCH relies on a private ISP for its primary ASYCUDA services. While this private vendor is functional and responsive, it highlights a hidden vulnerability: the lifeblood of our national trade is indirectly dependent on a private vendor and the country's NTTN duopoly (Fibre@Home and Summit hold NTTN licence, operating a network spanning around 50,000 kilometres and 40,000 km of optical fibre). The main reason for the vulnerability is the erratic service of state-run primary source—BTCL.
This strategic interdependence calls for an immediate intervention. Beyond BTCL's questionable balance sheet, the actual damage is the TCV loss incurred by key strategic fiscal entities like CCH. This legacy of the Digital Bangladesh campaign—where software and hardware issues in public offices are left unaddressed—has paradoxically slowed down service delivery and day-to-day operations, creating new hidden costs for taxpayers.
However, some issues stem from the ASYCUDA software itself, including technical glitches during system upgrades that stall customs clearance and leave import/export items idle at the port. This strains the relationship between customs officials and trade agents, damaging the credibility of CCH. C&F agents have noted that software complexity occasionally "scrambles" critical data—such as product types and weights—from the BEs.
The reality is that CCH is between a rock and a hard place. The Anti-Corruption Commission frequently examines allegations of revenue evasion via forged documents but often limits investigations mostly to CCH officers, while the business community accuses CCH of harassment through arbitrary duties and inaccurate valuations. Both of these undermine the morale of CCH officials. Correct and timely examination of the customs database is the only way to minimise both corruption and trade losses.
There is, however, room for optimism. Recent steps toward disciplining officials, changes in top leadership at CCH, a functional National Single Window platform, the Bond Management Automation project, and the introduction of E-Auctions, E-Tenders, and E-Payments are beginning to pay dividends. CCH's revenue achievement target is improving. To consolidate these gains, the NBR must invest in strengthening the governance of CCH, including the ability to implement regular software upgrades without system shutdowns, rather than phasing out the ASYCUDA system altogether.
Furthermore, NBR should introduce a TCV measurement tool for all port authorities to identify inefficiencies from a citizen-centred perspective. Also, lobbying for lucrative CCH postings must be stamped out to stabilise the CCH's core administrative workforce.
Lastly, the number of sanctioned posts needs to increase alongside actual appointments to cope with rising demands for timely and proper examination of the custom consignments and the BEs.
Let's not forget that as Bangladesh eyes a trillion-dollar economy by 2030, modernised seaports are only half the equation. We need a fully automated customs authority backed by a responsive governance system that ensures technology facilitates trade rather than obstructing it.
M Niaz Asadullah is a development economist, the head of ICT White Paper Committee, and a member of the Telecom White Paper Committee, under the Ministry of Posts, Telecommunications and Information Technology.
Views expressed in this article are the author's own.
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