Cross-border trade is the main driver of the economic progress of a country. The World Trade Organisation Trade Facilitation Agreement (WTO TFA) has set standards to facilitate global trade. Bangladesh ratified the TFA in 2016, and risk management is a unique measure of it.

Risk management in import and export is a science-based and data-driven goods clearance system that assesses risk, identifies high-risk consignments, and channels those for physical inspection, and if required, for sample withdrawal and laboratory testing. Simultaneously, it ensures faster clearance for low-risk consignments without physical inspection or with minimum intervention.

Each WTO member state will have to concentrate on high-risk consignments and expedite the release of low-risk ones for customs controls and other border controls.

This means, there shall be no arbitrary intervention without assessing risk, and no same treatment for both high-risk and low-risk consignments. Rather, the compliant parties will benefit more through faster clearance.

However, some misconceptions among regulatory agencies and stakeholders regarding risk management are delaying and hindering its implementation. If not resolved, this unique facilitation measure may not bring the expected results.

One of the misconceptions is whether risk management ignores risks. No, it does not. Rather, it follows a science-based and data-driven method suggested by the WCO and the WTO and it has been adopted by almost all countries. India has been implementing it for a long time.

As a scientific approach is applied to addressing revenue, compliance, and security risks before or after the arrival at ports, the cargo is cleared addressing various types and levels of risks.

Another misperception is risk management is a customs function alone. All cross-border trade agencies have responsibilities within their scope.

The role of customs and other border-related controls are clearly mentioned in the TFA. There are about 70 regulatory agencies in the overall process of import and export in Bangladesh.

Suppose a plant product consignment is identified as "not risky" from the customs' point of view. Then, customs will not conduct a physical inspection. But can it release the consignment? The reply is "never".

The customs will have to wait until the Plant Quarantine Wing (PQW) issues a release order. If the PQW does not follow risk management, the release will be delayed. Therefore, the risk management of the customs is not sufficient alone for the speedy release of goods. All other agencies will have to follow it.

Risk management allows deploying more human resources and logistics in risky consignments to establish overall control. Simultaneously, the post-clearance audit (PCA) provision empowers agencies to audit traders' functions even after the clearance of goods. So, implementing risk management will empower agencies to exercise their legal and institutional authority, instead of undermining their power.

The concept of waiving risk management for plants, fish, animals, and related products or foodstuffs is not correct. No such waiver is referred to in the TFA.

As agencies create risk profiles, it is their sole mandate to select high-risk consignments. As a result, stakeholders will not have the opportunity to exert pressure. Moreover, transparency will be in place when the entire process is automated.

The notification sent by Bangladesh to the WTO mentions the deadline for the risk management implementation is June 2026. During these two years, a lot of things need to be done, including inserting risk management and PCA provisions in the regulatory agencies' legislation.

At present, only the Customs Act contains it and amendments to numerous legislations are a lengthy process.

Another option could be to enact an overarching umbrella like the "Trade Facilitation Act", incorporating all facilitation measures and without amending agency-wise separate legislations.

The author is a senior technical adviser of the USDA-funded Bangladesh Trade Facilitation Project. He can be reached at [email protected].