VYTAUTAS MAGNUS UNIVERSITY

AGRICULTURE ACADEMY FACULTY OF

BIOECONOMY DEVELOPMENT
Department of Applied Economics, Finance and Accounting

Tautvydas Plikis

TRADE FACILITATION ISSUES AND THEIR IMPACT ON THE

DEVELOPMENT OF THE TRANSPORT AND LOGISTICS
SECTOR IN LITHUANIA
Studies Final Project of Master's Studies

Customs Process Management study programme, state code 6215LX005

Business study field

Supervisor Dr. Ilona Mishchenko

(Scientific degree, name, surname) (Signature) (Date)

Defended Dr. Dalia Juočiūnienė

(Head of the Department) (Signature) (Date)

Akademija, 2024
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Studies Final Project evaluation committee:

(Approved by the Order No. ŽŪA-2024-06, 26 January 2024)

Chair Assoc. Prof. Dr. E. Besusparienė, Vytautas Magnus University

Members:

1. Prof. Dr. A. Miceikienė, Vytautas Magnus University

2. Prof. Dr. K. Ketners, Ministry of Finance of the Republic of Latvia
3. Assoc. Prof. Dr. M. Vienažindienė, Vytautas Magnus University
4. Enrika Naujokė, Customs Practitioner Association

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 CONTENTS

SUMMARY ........................................................................................................................................ 4
GLOSARY OF KEY TERMS............................................................................................................. 6
INTRODUCTION ............................................................................................................................... 7
1. TRADE FACILITATION ISSUE OF THE TRANSPORT AND LOGISTICS SECTOR IN
LITHUANIA ....................................................................................................................................... 8
1.1. Problems of trade facilitation and business development ................................................... 8
1.2. Trade facilitation problems for Transport and logistic and customs brokerage companies
in Lithuania ...................................................................................................................................... 9
1.3. Correlation between the problems identified at the level of Lithuania and at the level of
the EU .......................................................................................................................................... 11
2. THEORETICAL FRAMEWORK FOR TRADE FACILITATION ......................................... 16
2.1. Understanding the concept of trade facilitation ................................................................. 16
2.2. The importance of efficiency of the Customs clearance process for trade facilitation ..... 19
2.3. Research methodology ...................................................................................................... 20
3. RESEARCH RESULTS AND THE NEED TO IMPROVE TRADE FACILITATION .......... 22
3.1. Trade facilitation and impact on customs efficiency ......................................................... 22
3.2 The need to improve Lithuanian trade facilitation ............................................................ 25
CONCLUSIONS ............................................................................................................................... 28
REFERENCES .................................................................................................................................. 30
ANNEX 1. Interview with UAB “Transekspedicija” company ........................................................ 35
ANNEX 2. Interview with company UAB „Durga“ ......................................................................... 40

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 SUMMARY
Tautvydas PLIKIS

TRADE FACILITATION ISSUES AND THEIR IMPACT ON THE DEVELOPMENT OF

THE TRANSPORT AND LOGISTICS SECTOR IN LITHUANIA

Final work of Master's thesis, 41 pages, 1 figures, 6 tables, 70 references, 2 annexes, in

English.
Key words: Trade Facilitation; Customs; International Trade, Customs Procedures;
Lithuania
Research object – the impact of trade facilitation on business development
Research aim is to analyse main obstacles of trade facilitation in international trade.
The following objectives have been set to achieve the aim:
1. To provide a comprehensive understanding of trade facilitation and its importance for
businesses.
2. To determine the main obstacles of trade facilitation of the transport and logistics sector.
3. To identify the customs efficiency importance for trade facilitation of the transport and
logistics sector.
Research methods employing systematic, comparative, and logical examination of existing
literature related to the subject matter. This analysis relies on techniques such as comparison,
classification, systematization, and generalization. Additionally, the research involves the analysis
of secondary data sources gathered using quantitative method with semi-structured surveys that used
open-ended questionnaire.
In the first part of the work, the study analyzed and presented the specific trade facilitation
challenges encountered by transport and logistics companies and customs brokerage firms in
Lithuania. Through in-depth interviews with UAB "Transekspedicija" and UAB "Durga," the
following key obstacles were identified: Complex Customs Procedures; Extended Clearance Times;
Impact of International Sanctions.
In the second part of work the study analyzed the theoretical grounds of trade facilitation,
defining it as the streamlining and simplification of international trade procedures. This part of the
study explored and analyzed the essential components and benefits of trade facilitation.
In the third part of the work, the study presented, assessed, and estimated the research results
based on a questionnaire survey among five customs experts. This part involved collecting and

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analyzing the practical insights and experiences of these experts: strategic actions; technology
integration; training and development.
The research summarizes those technologies, electronic declarations, and focused training
as the ones which should be prioritized to facilitate trade in Lithuania. These measures are aimed to
modify the customs procedures thus improve the efficiency, accelerate clearances and place Lithuania
on the global market map as the competitor able to withstand the growing competition.
Theoretical Importance: through this work, an insightful theory concerning the contribution
of technology and customs efficiency is provided.
Practical Importance: actually, the study gives recommendations to the policy makers and
businesses that may be followed through for the supply chain of goods smooth and efficient trade
which is the support of economic growth and competitiveness.

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 GLOSARY OF KEY TERMS

Trade Facilitation - The simplification and harmonization of international trade procedures,

including activities, practices, and formalities involved in collecting, presenting, communicating, and
processing data required for the movement of goods in international trade (the WTO definition).
Electronic Declaration - an electronic declaration refers to the submission of customs
documentation and information through digital means rather than traditional paper-based methods
(Abdin, M.J., 2019).
Customs Procedures - Customs procedures are the formalities and processes that must be
completed to import or export goods across international borders (Maltsev, 2019).
International Trade - International trade refers to the exchange of goods, services, and
capital across international borders or territories (Matsuda, T., 2022).
Technology Integration - Technology integration in the context of trade facilitation refers
to the incorporation of advanced technological solutions into the processes of customs clearance,
logistics, and international trade management (Chupina, D., 2019).
Customs Clearance Process - The series of steps that goods must go through when entering
or leaving a country. This includes documentation, payment of duties, inspections, and obtaining
necessary approvals (Abdin, M.J.,2019).
Electronic Data Interchange (EDI) - The communication of information through the use
of electronic media from one firm to the other. EDI therefore is applied in completion of
documentations and custom formalities in trade (T., Hanaoka, 2022)

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 INTRODUCTION

Trade facilitation plays important role in powering global economy by simplifying the trade
process. The European Union (EU) is a significant player in international trade, which adopts a range
of measures and regulations designed to enhance the efficiency of trade activities. The transportation
of goods across the borders powers global success, this is the reason why the global trade exists and
the economies grew. Trade facilitation appears as a group of measures and regulations adopted to
assist smooth international trade.
This research goes into trade facilitation in depth, providing both theoretical underpinnings
and application-oriented studies for both private and public parties. We start by unpacking the
fundamentals of the topic, focusing on the definition, objectives, and microeconomic principles
involved. Taking into consideration theory, the practical case study of the need of improve trade
facilitation in the EU will be analysed, touching on case studies to look at the effects of the trade
facilitation in real world. Using such variation, we can see both the positive and negative impact on
business growth.
We undertake a global comparison of existing trade facilitation measures, assessing strengths and
weaknesses across different geographical regions. Trade facilitation measures are designed to reduce the cost
to businesses of moving goods across borders. This can be done by simplifying customs procedures,
improving infrastructure, and providing better information to businesses.
Research object – the impact of trade facilitation on business development.
Research aim is to analyse main obstacles of trade facilitation in international trade.
The following objectives have been set to achieve the aim:
1. To provide a comprehensive understanding of trade facilitation and its importance for
businesses.
2. To determine the main obstacles of trade facilitation of the transport and logistics sector.
3. To identify the customs efficiency importance for trade facilitation of the transport and
logistics sector.
Research methods employing systematic, comparative, and logical examination of existing
literature was gathered using scientific websites like Francis and Taylor which are related to the
subject matter. Additionally, the research involves the analysis of secondary data sources gathered
using quantitative method with semi-structured surveys that used open-ended questionnaire.

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 1. TRADE FACILITATION ISSUE OF THE TRANSPORT AND
LOGISTICS SECTOR IN LITHUANIA

This section describes the problems of trade facilitation and business development, includes
analysis of Lithuania and EU.

1.1. Problems of trade facilitation and business development

The trade facilitation is at the same time the foundation and the engine of economic growth,
as it accelerates international trade opening the gate to economic expansion. The function of this
factor, beyond reducing transaction prices and accelerating the import and export cycle, is equally
vital to the growth and efficiency of institutions and infrastructure. It does the job of raising the
country's position as a global economic player, providing ways to improve competitiveness and enter
new markets. Facilitation of trade has a lot of benefits, one of which is being the creation of an
atmosphere that the business sector can function with higher confidence. Establishment of unified
customs and transit processes not only deals with hindrances and congestion but creates a sense of
predictability for international trade. This predictability is priceless for those businesses willing to get
more and more international, rendering a good basis for making strategic planning and decision
making.
Besides, the trade facilitation stimulates innovation and business efficiency among private
sector enterprises. Through streamlined and less expensive trade processes, companies are motivated
to expand their market scope, to conduct the product development, and to adopt to modern logistics
services. In this way, not only do these firms get boosted, but broad economic activity and job creation
are taking place, making the virtuous circle that involves growth and development in the country.
Attempts at trade promotion go beyond simple the administrative effectiveness. It is the main factor
which forms a connection between a nation and an international trading systems and this affects its
ability to acquire the foreign direct investments, strengthen export competitiveness, and have an
intractable role in global value chains. Not to add, trade facilitation plays a key role in accomplishing
wider development objectives, and this is done by assisting in eradicating poverty, job creation and
fostering the development of a sustainable economy. Here are main keys why trade facilitation is
crucial for business:
1) Cost reduction: trade facilitation, which involves simplifying customs procedures,
reducing waiting times at the border, and minimizing the need for physical inspections, has been
shown to significantly lower the costs associated with trading goods internationally (Alaamshani,
2022; Abdin, 2019). This is particularly beneficial for developing countries, as it can lead to welfare
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gains and drive growth in production (Maltsev, 2019). However, it is important to note that the
effectiveness of trade facilitation is higher when more countries engage in trade and when those
countries are together participating in trade facilitation (Alaamshani, 2022).
2) Increased efficiency: trade facilitation measures, such as improved marine and land
transport infrastructure, customs clearance environment, and government-governance environment,
can significantly impact the scale of cross-border transactions (Liang, 2021). The efficiency of
document and border procedures, including the introduction of electronic documentation systems,
can further improve trade volume and value (Hiraide, 2022).
3) Economic growth: trade facilitation helps to match trade in volume therefore igniting
economic growth. It not just the one that pushes the volume of a trade but also the one that helps in
job creation through the rising efficiency of a trade. Among the factors needed in facilitating business
climate are simplicity, harmonization, and automation of international trade procedures. Strategic
implementation of trade facilitation elements can boost a country in Ease of Doing Business ranking.
These notions are about the economic value and essential in ensuring that the business environment
is accommodative to the firms (Abdin, 2019).

1.2. Trade facilitation problems for Transport and logistic and customs
brokerage companies in Lithuania

In order to understand and analyse trade facilitation in the present time, we must understand
what the situation in market is one of the most efficient ways to inspect it is to interview business
which meets challenges every day. We conducted an in-depth interview (ANNEX 1) with UAB
"Transekspedicija", a largest transport and logistics company based in Lithuania, to find out whether
they benefit from trade facilitation. The interview reveals intricate aspects of how trade facilitation
impacts business operations of the company, highlighting specific challenges faced due to customs
clearance times and cooperation with customs authorities. These insights draw attention to broader
implications for the EU's trading framework and underline the necessity for robust trade facilitation
mechanisms.
Taking into account the industry where the company operates – transport and logistics – the
interview is focused on two main areas.
1) Border checks and other formalities. Certainly, one of the pivotal factors relating to
trade facilitation is the speed and the predictability of the time needed for the customs clearance
processes. In particular, the company “Transekspedicija” UAB usually faces a quick procedure for
shipment of cargo from third countries to the EU countries despite the fact that customs formalities

9
are mostly complicated. However, when it comes to connecting with countries such as Russia and
Belarus, they often face blockages and restrictions that weaken supply chains linked to geopolitical
campaigns and sanctions. The extensive customs procedures don't only spark extra operation costs
by boosting the warehousing and the administrative factors, but also decrease the likelihood to fulfil
the deliveries on time. It therefore affects the customers' satisfaction and trust. Business shippers feel
the direct impact of customs efficiency, which increases when there are avoidable delays in the
delivery processes, leading to unrealized schedules and increased charges due to the damage along
the supply chain. But in general, trade facilitation measures, which are composed of simplification of
customs procedures, the diminution of trade barriers, positively affect the efficiency of the whole
system and operations, unfortunately, under seemingly because of the overriding challenges.
On behalf of that, the company "Transekspedicija" of the UAB has developed a multilevel
strategy: that prioritizes the market expansion, adapting navigation routes, and engaging with
authorities to deal with the intricacy of the situations. This methodology shows that the collaboration
between business and customs management is a precondition for quickening trade facilitation
operations.
2) Cooperation with Customs Authorities. The partnership between the companies and
custom officials are a guarantee effective work, when both sides can communicate and work together,
UAB “Transekspedicija” considers a proactive stance as the key to success and persistently
emphasizes the company’s active participation in communication and trainings, seeking collaboration
from its partner car companies aimed at facilitating trade. Consequently, both sides struggle with
certain issues which manifest themselves in the problems with excess of customs procedures, the
inconsistency in their upholding across the EU and the extra layer of sanctions compliance. Companie
during interview provided information that in past 2 years they made 15 training session to improve
skills and cooperation with customs authorities, but still, they meet difficulties in cooperation with
custom authorities.
For a more in-depth analysis of the market, you cannot rely on just one company. Therefore,
during this research, we conducted an interview (ANNEX 2), with a second company that works as
customs brokers. Therefore, it is this company that perfectly sees the current situation in the market
and all trade obstacles, because they are intermediaries who cooperate directly with Customs and a
large number of shippers, so they have a good overview of the current market situation. Company
UAB “Durga” provides professional customs brokerage services, in this field they have 27 years of
experience. Interview provided important information about the problems and constraints of trade
operations due to the existing geopolitical and economic circumstances. One of the remarkable
aspects of the interview is the discussion of a range of issue from customs procedures.
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 Considering the industry where the company operates – Custom brokering – the interview
is focused on two main areas.
Extended duration of customs clearance. Customs clearances are one of the main
challenges encountered by UAB „Durga“, as the time taken for clearances has been extended. The
main problem is quite clear, that now we complete the job in 2-3 hours which is longer than we do
before 2023. To add to this, the slower movements may even add to the removals of goods from both
the company and its investors. Lasting congestion in customs clearance may even cause the customers
to be displeased to a point of switching to other customs brokers. Dealing with this issue is of prime
importance to achieving the goal of having both effective processes and to ensure the customers are
satisfaction.
Impact of international sanctions. One other critical issue for UAB „Durga“ concerns
global sanctions, which cause multiple challenges regarding their business operations. The
interviewer gives the fact of a shed in workload and a significant drop in customers because of the
sanctions which means that the company needs to explore other markets to keep its performance up.
Exclusionary rules may have the effect of destroying the existing trade relationships; distort trade
activities; and even create a sense of insecurity in the marketplace. Ensuring a right strategic planning,
market expansion and proactive operations in order to avoid the negative consequences of sanctions
on the company’s profits and output should be considered as the effective measures.
In summary both interviews showed that companies in the EU who is investing a lot of
resources to keep their results in high performance, they still meet challenges in the market of free
movement of goods and services.

1.3. Correlation between the problems identified at the level of Lithuania and at
the level of the EU
Some statistical data was analysed in order to track tendencies in customs procedures time
within the EU.
Table 1. Custom procedures average time in EU (Created by author, source World-
development-indicator 2024)
Indicator of time 2019 2020 2021 2022
Time to import, border compliance (hours) 2,25 2 2 2,15
Time to export, border compliance (hours) 10,37 10,05 9,74 10,15
Time to import, documentary compliance (hours) 0,6 0,51 0,44 0,56
Time to export, documentary compliance (hours) 2,16 2,05 1,82 2,24

Table 1 shows average customs procedure time in EU, this data is very important for trade
because efficient goods movement play crucial role in facilitating the international trade and

11
supporting the economic development. Border and documentary compliance issues all hang in the
balance of comparing economies in the global market based on the time and cost factors they employ.
The Border Compliance Time statistic is an index describing the time needed to finalize customs
clearance as well as other border procedures for imports and exports at the specified location. The
fluctuations evident from this table on the rate of compliance to the border are rather insignificant.
Likewise, the average border compliance time for imports was 2.25 hours in 2019, and 2.15 hours by
2022 which was insignificantly lower than the previous one. And then, the border compliance time
for exports slightly fell from 10.37 hours in 2019 to 10.15 hours in 2022. The term documentary
compliance time includes the time allocated to acquiring, organizing, processing, proving, or
submitting the needed paperwork for import and export operations. The data shows a decreasing trend
in document compliance over the period from 2019 to 2020, but an increase in 2022. Take for
example, the import documentary compliance collected the data between 2019 and 2022 and showed
that time was cut from 0.6 hours in 2019 to 0.56 hours in 2022, while the export documentary
compliance reduced from 2.16 hours in 2021 to 1,82 hours, but in 2022 expanded to 2,24. The
abnormality that is drawn by the analysis of trade logistics metrics from 2019 to 2020 is the regular
and increasing fluctuations in the border compliance time for exports, however, with the decrease in
the behaviour of documentary compliance time would be the slow rate. The general trend of the
compliance efficiency for export goods over the considered period is the improvement which however
is not high enough to overlook the slightly increased border compliance time for exports. These
fluctuations (particularly the increase in the time in 2022) can be explained by the active imposition
of sanctions against Russia and Belarus.
It should be noted that the table gives average times for customs and other formalities for
the EU. It should be kept in mind that customs clearance times may vary from one Member State to
another. For example, customs clearance times within the European Union can vary from 2 hours in
Estonia to 32 hours in Romania.
This discrepancy is unlikely to be due to differences in the sanctions imposed on these
countries. Rather, it is due to different approaches to customs formalities and controls, and different
application of the law. This uneven scenario gives gearshifts to companies in countries where customs
procedures are more bureaucratic because they can limit fair and equal competition between them
and those in countries where customs procedures are more efficient, thus limiting economic
development at the level of the integrated market (European Commission, 2020; Matthews & de
Sousa, 2012). Delays in the customs process is inevitable but they are also critical in sustaining the
advantages that cross-border trade offers as well as promoting equitable trade conditions that
contribute to economic development. Trade facilitation harmonization is not a regional problem but
12
a global one. Besides, regional disparities in customs efficiency underline the need for coordinated
approach to trade facilitation efforts to level the playing field and ensure a trade environment that is
more inclusive.
The data and the facts provided by companies who participated in interview indicate that the
even moderate increases in border compliance times can set-in motion effects such as additional
expenses and schedule disturbances. It is an issue made worse by the fact that the international affairs
dynamics are becoming more complex and the already intricate regulatory frameworks. This proves
that documents have been acknowledged that while the documentary compliance time has decreased,
there remains some difficulties in effective border compliance, thus that the customs process must be
made more streamlined.
Table 2. Efficiency of the clearance process (Created by author, source World-development-
indicator 2024)
Efficiency of the clearance process, score (1=low to 5=high)
Country 2012 2014 2016 2018 2023
Belgium 3,85 3,80 3,83 3,66 3,6
Croatia 3,06 2,95 3,07 2,98 2,74
Czech Republic 2,95 3,24 3,58 3,29 3,09
Denmark 3,93 3,79 3,82 3,92 3,78
Estonia 2,51 3,40 3,41 3,32 3,2
Finland 3,98 3,89 4,01 3,82 4
France 3,64 3,65 3,71 3,59 3,4
Ireland 3,40 3,80 3,47 3,36 3,4
Lithuania 2,73 3,04 3,42 2,85 2,61
Luxembourg 3,54 3,82 3,90 3,53 3,6
Latvia 2,71 3,22 3,11 2,80 2,63
Sweden 3,68 3,75 3,92 4,05 3,98
Spain 3,40 3,63 3,48 3,62 3,6
Portugal 3,19 3,26 3,37 3,17 3,2
Norway 3,46 4,21 3,57 3,52 3,35
Greece 2,38 3,36 2,85 2,84 3,2
Germany 3,87 4,10 4,12 4,09 3,9
Austria 3,77 3,53 3,79 3,71 3,7
Italy 3,34 3,36 3,45 3,47 3,4
Poland 3,30 3,26 3,27 3,25 3,07

Table 2 shows that drop in efficiency of the clearance process of several countries in 2023
suggests the existence of underlying issues in their clearance systems which urges in-depth
investigation to understand the contributing factors causing this undesirable turn of events. Among
these countries are common problems which are regulations, sanctions and strict border checks. These
factors are opponents in the free flow of trade. Excessive formalization, always copy-and-paste of
forms, and obscurity when it comes to adopting regulations are disturbing factors of border clearance.
These, in the end, are the root causes of delays and reduced efficiency.
Lack of distribution of the necessary resources, for instance the adoption of future-orientated

13
customs procedures and improvement of trade facilities appears to be another critical factor failing
the effectiveness. Impediments to customs authorities to manage rising trade volumes efficiently and
speedily include old practice of the tariffs, most manual (human) processes’ systems and
inappropriate technology integration. Without solid IT systems, automated clearance mechanisms
and efficient risk management tools customs operations are stagnating, results in increase of time for
cargo clearance and supporters the existence of bottlenecks.
This observation on geopolitical and global economics influence on efficiency scores is
shared by some countries. When trade disruptions occur, as well as geopolitical tensions, and
exchange patterns change, there is a shift in the trade flows which may lead to the occurrence of
unpredictable clearance delays as well as tighter clearance process. As well as this, we can talk about
the trade policy uncertainties as the changes in tariffs and trade agreements will also give rise to more
challenges for the customs authorities in assuring compliance and facilitating the trade, negatively
impacting efficiency levels.
In conclusion, in this part provided a broader view of the mechanisms and key principles
underlying the aspects of trade promotion. With a focus on the framework of trade facilitation, we
state the importance of the factor in simplifying transactions across borders, minimizing trade costs
and developing economies. Although a wide range of trade facilitation elements, such as streamlined
customs procedures, better infrastructure, and so on, stand for enhancing efficiency, transparency,
and competitiveness in international trade, they prove their significance.
The efficiency of clearance serves to drive operation and outcomes not only among private
entities but also public organizations.
After analysing all the data and the results of the interviews, the following challenges for
trade facilitation were identified:
• Increased Time for Customs Formalities: Prolonging customs procedure due to complex
documentation, formalities delays, which, consequently, result in longer waits and additional
processing costs.
• Sanctions: Sanctions can be varying types in terms of the nature and scope, as a result,
have a major impact on trade, going beyond the target nations and affecting their partners and global
supply chains, creating numerous legal and operational problems that inhibit trade facilitation.
In conclusion, we have rounded up our examination of the major barriers in trade facilitation.
Extensive customs procedures which are characterized by documentation encountering delays is
coupled by inconsistent application of trade facilitation measures and the deep effects of sanctions,
throws up these issues as the most critical challenges. These problems not only slow down the
international shipment of goods but further complicate the costs and legal difficulties that companies
14
must deal with when doing business around the world.
The next chapter will describe in depth the theoretical part of the paper involves analysis of
scientific, methodological and other literature, presents theories with the described obstacles.

15
2. THEORETICAL FRAMEWORK FOR TRADE FACILITATION

In this section the literature analysis was made, and the concept of trade facilitation was
disclosed. Discussed the importance of efficiency of the Customs clearance process for trade
facilitation and presented research methodology.

2.1. Understanding the concept of trade facilitation

Many studies provide the theoretical background to the Trade facilitation. The papers by
Zaki (2010) and (2008) put the actual demonstration of the positive influence of improved trade
facilitation in models under the spotlight. Furthermore, Zaki (2010) brings the concept of the cost of
trade facilitation to the fore. Additionally, the research determines that facilitation of trade has a
bigger influence on trade and certain sectors might be more prone to selected types of trade
facilitation. Nonetheless, the author clearly points out the role of trade facilitation in both developing
countries and economy growing, as well. On the other hand, Mirza (2008) argues that countries with
higher trade volumes are expected to invest more resources in border infrastructures because of the
strategic significance of trade in their economies. The mentioned studies are instrumental in this
manner, by delivering a complete picture of the principles that govern facilitation of trade.
The term "Trade facilitation" according to the WTO covers ease of trade, streamlining of
trade procedures, standardization, and digitization of international trade transactions (Abdin, 2019).
The phenomenon in question is rooted both in the policy restrictiveness and in the issue of
governance, institutional, and transparency factors that piece the puzzle that sets the terms for services
trading (Marel, 2020). As a result of the digital age the trade facilitation procedure has become more
complex and the development of simple and inherent rules are becoming vitally important (Ptashkina,
2018). The concept of technological advancement cannot be ignored as a key factor in generating the
economic momentum in developing nations (Bugbilla, 2019).
Trade facilitation is indeed a significant driver for a global upsurge in overcome of the
various barriers and obstacles that impede flow of goods and services across borders. Possibly, it
(TFA) helps the small and medium-sized enterprises in international trade reduce a lot of red tapes as
well as enhancing transparency. Trade facilitation, as defined by the WTO, aims to simplify,
modernize, and harmonize import and export procedures (Abdin, 2019). Research has consistently
shown that improving customs procedures, reducing paperwork, and bureaucracy can significantly
enhance the efficiency and effectiveness of international trade transactions. (Hiraide, 2022) This is
the case where actions like Improving customs procedures, reducing paperwork and bureaucracy,

16
enhancing coordination between different trade authorities, as well as Implementation of digital
solutions for a Trade Facilitation are taken. Owing to the dynamic and fast evolving environment,
nowadays the importance of trade facilitation is immense. The trade facilitation plays a decisive role
in the development of countries by allowing for the quick non-disruptive trade transactions that
generate more economic growth, job creation and reduction of poverty. Additionally, it is facilitation
of trade that assumes critical importance for the integration of the developing countries into the multi-
lateral trading system and for the promotion of their economic welfare. Research consistently shows
that trade facilitating instruments such as transport infrastructure, logistics services, and institutions
play a crucial role in enhancing market access, business growth, and competitiveness (Sénquiz-Díaz,
2021). It allows for reduction in the costs of trade, better customs procedures, and agreement on the
different matters handled by the various authorities in the states. In addition, custom clearance
emerges as an especially essential instrument for uniting the developing countries into the global
trading community by means of improving their economies. Trade facilitation not only involves many
actors but also has great impact globally on trade and economic development. In the modern world
that faces massive speed of changes, active trade facilitation undoubtedly is one of the crucial aspects.
One of the tasks that it plays is the improvement of international trade through the removal of
bureaucratic roadblocks, and an increase of transparency.

Figure 1. Impact of Trade Facilitation Components on Trade Volume and Environmental

Outcomes (Source: Trade facilitation and environmental quality, 2021)

The diagram illustrates (see fig. 1) the components of trade facilitation and their potential
impacts on the volume of goods traded and environmental outcomes. The left side of the diagram
17
represents the export components, and the right side shows the import components. Both supply into
the central trade facilitation procedures. Export upgrading can lead to environmental improvement,
but the extent of this improvement depends on the combination of global and local linkages (He,
2020). Firms targeting high-income countries are more likely to improve their environmental
outcomes, suggesting that the destination market plays a significant role in this relationship (Blyde,
2021). Conversely, on the import side, similar improvements could lead to an increase in importable
goods. However, the diagram suggests this might have the opposite effect on the environment,
potentially increasing environmental degradation, possibly due to increased consumption and the
associated impacts of transporting and producing a higher volume of goods. The dashed lines indicate
a negative relationship, where improvements in trade facilitation lead to a decrease in the respective
type of goods. For instance, reduced cost, time, and documentation might decrease the volume of
goods because of improved efficiency and less redundancy in trade, which can further contribute to
environmental benefits.
Framework, presented in this process, is very complex and structures multilayered relations
and underlying logic. It understands however, the fact that trade facilitation has an evident impact
over the trade volumes and as a result there are different effects on the environment if the measures
are either targeted at exports or imports. The diagram depicts a scenario where the simplification,
modernization, and harmonization of trade processes may enhance the volume of goods that a country
can trade. This enhancement, however, carries different connotations for exports and imports. On the
export side, improved trade facilitation – characterized by reduced costs, streamlined timeframes, and
simplified documentation – can lead to an expanded capacity for a country to sell goods
internationally. This increase could potentially result in positive environmental implications. For
example, more efficient trade logistics may reduce the number of trips required to transport goods,
thereby decreasing fuel consumption and emissions. Moreover, better trade facilitation may allow for
the quicker and more efficient export of perishable goods, reducing spoilage and waste. On the import
side, while the same improvements in trade facilitation can boost the volume of goods a country
brings in, the environmental implications may be less favourable. An increase in imported goods
could signify greater resource consumption and higher levels of waste and emissions, especially if
the goods are not produced sustainably or are transported over long distances.
The framework suggests philosophy is that such diverse outcomes require for a balanced
way of trade facilitation as well. The trading relation implies simultaneously the trade growth and
improved market access with environmental preservation objectives. Policy makers and trade
authorities, on the other hand, should be looking for a strategy which puts trade into efficiency and at
the same time balances the environmental implications. This implementation would make trades eco-
18
friendly, green logistics practices, and the affordability of trade through sustainable goals.
In conclusion, the policymaking should deal with the mentioned three factors (trade,
environment and development) coordinating them. Not only this but could also be related with the
innovation of technology and methods, and the promotion of trade agreements with just the
observance of the environmental standards. Through combining factors of economic and
environmental impact in trade facilitation approach, countries may reach for a model of sustainable
trade promoting not only financial development of the present moment, but also for long-term
environmental protection.

2.2. The importance of efficiency of the Customs clearance process for trade
facilitation

Trade facilitation has a strong position at the core of the economic growth multinational.
Trade facilitation is crucial for the private and public sectors, with a focus on reducing trade costs
and improving governance, institutions, and transparency (Marel, 2020). Public-private partnerships
are key to the success of trade facilitation, with the macro-environment, micro-environment, and
abilities of the parties being the most influential factors (Campos, 2018). According to trade
facilitation initiatives, border movements of commodities shall be much simplified, trade barriers
must be cut down to the greatest possible, and trade-related processes must be made open. However,
even though trade facilitation is known for its advantages, the way to easier trading enabling
authorities meet a lot of difficulties.
Efficiency in the customs clearance process is crucial for reducing costs and time associated
with foreign trade transactions (Lebid, 2021). This can be achieved through the use of digitalization,
online transactions, and mobile applications, as well as the minimization of personal contacts between
customs officers and clients. A multi-objective optimization approach can further improve the
customs clearance process for imported goods (Yang, 2010). Factors affecting customs clearance
time, such as the use of data mining techniques, should be considered to enhance the process
(Herusantoso, 2020). Many advantages, the boosting of the efficiency of the evaluation process is
also a fundamental influencer of the success and the economy of different countries, particularly at a
global level. Effectiveness of clearance system implies that the goods are fast and easy cleared from
the borders which in return maximizes the speed of the movement of products across the international
borders, the less the delays, bureaucratic obstacles and overall costs are. From the point of view of
the wholesale sector, private sector entities, especially enterprises operating in the international trade,
one of the most important is this effectiveness. The key factors one can name in this area are

19
standardized customs procedures, harmonized regulations, and contemporary infrastructure
improvements that altogether participate in flow of commodities, high flexibility of supply chains,
decrease of stock keeping and timely satisfying needs of customers. The staff of clearance processes
is among the first to be affected by delays resulting in increased operational costs, which is bad for
business. Also, they spend a fortune investing in rush delivery because they know their goods will
have no clearance method, yet their competitors will receive their goods from the international market
sooner and sell them in time, hence putting them in a better position to profit in the market. With
reference to the fact of the impact of trade facilitation not only on the private sector but the public
sector as well, but the ultimate company compliance efficiency is too evident. Efficient trade
facilitation infrastructure that provides for the economic growth, competitiveness, and global
integration are the vital ones that determine how the future of nations merely in a world where all
elements are interconnected.
To improve trade facilitation, we must improve critical points of movement of goods on
borders. In the same light, there is must enable the free movement and good working of customs and
customs procedures. Require mass documents, files, and data transfer. Transformed this field and
various sphere within society as has international trade. Such as Information and Communications
Technology turning into a dominant reason to work on education through development and
experiencing great achievements. Due this we made interview with customs experts how customs
procedures could be improved.

2.3. Research methodology

Based on the previous empirical research of Mangohig (2022) on topic of customs trade
facilitation, researchers used interview with three experts. Other research by Kluger et al. (2021) for
the analysis of maritime supply chain were interviewed eight experts from six organizations using
semi-structured expert interview.
Based on previous research (Kluger et al., 2021; Mangohig, 2022) the present research
exploited primary data, gathered using quantitative method with semi-structured surveys that
employed open-ended questionnaires distributed to a targeted, random group of 5 customs experts
who work in public sector. The survey was made in online method within a month to get quality
information. The survey was begun with a brief information about respondents, the purpose and then
the questions was formed (see table 3). The respondents' particulars such as age, positions held and
work experience, the rest of the questions are based on the respondents’ details.

20
 Table 3. Questions included which been provided the questionnaire (made by author)
Themes Questions Nr. of
questions
Trade Facilitation How do you manage a specific strategy or initiative you've implemented to 3
streamline trade processes and reduce bottlenecks at customs checkpoints?
How do you keep up with the newest international trade regulations and
agreements to prevent any delays at the border for importers and exporters?
Do you collaborate with other government agencies and international
partners to improve customs processes?
Customs Efficiency What methods do you use in your job to increase speed of clearance as well 3
as compliance with the security and trade standards?
What strategies do you use to optimize resource and staff shortage in order
toto improve efficiency of customs department?
How do you measure the effectiveness of your customs efficiency
programmes and which metrics will you use to track progress and identify
problems areas?
Customs Process What is the role of technologies in modernizing customs procedures and 2
Improvement what specific technologies do you think has the most promise for enhancing
efficiency?

What role does training and development play in enhancing customs

efficiency?
Age To determine age of customs experts. 1
Workplace and time of To determine qualification and experience of expert. 1
experience
Impact of How can innovation and technology improve customs service quality? 1
advancements of,
innovative solutions on
perceived service
quality

The questions consist of several blocks, prepared according to the identified problem and
literature review. This approach helps to consistently assess each topic and ensure that survey
questions reflect both a practical and a theoretical perspective. Such structuring allows for in-depth
analysis of key aspects related to improving customs processes and increasing efficiency.

21
3. RESEARCH RESULTS AND THE NEED TO IMPROVE TRADE
FACILITATION

3.1. Trade facilitation and impact on customs efficiency

This section of the paper presents results of 5 customs experts who work in Lithuania
customs offices, questionnaire survey that has been conducted. The major part of the research is based
on the response of the participants to give invaluable information about the subjects being looked
into. Across their answers there was the discovery of their key areas of interest and some innovative
approaches in customs processing.
Between the respondents, work experience varies: two individuals each bring 7 years to the
table, another two have 6 years of experience individually, and one stands out with a solid 12 year
work experience. Respondents work in 2 cities: Marijampolė territorial customs and Kaunas territorial
customs. To have a diverse approach and understanding of processes, representatives of 3 different
positions participated in the survey (Customs procedure supervision inspector, Specialist of the
customs control organization department, Document management specialist of the Customs
Department). Together, these insights paint a diverse picture of professionals’ backgrounds.

Table 4. Respondents outlook about Trade facilitation in customs processes

Theme Trade Facilitation
Questions Main aspects of respondents responses
How do you manage a 1. Respondents explained that in the implementation of trade facilitation strategies
specific strategy or through the prioritization of process streamlining and decongesting of customs
initiative you've bottlenecks, all stakeholders must be onboard and technologies such as
implemented to streamline electronic declaration systems and automated risk assessment should be used.
trade processes and reduce 2. The strategic actions for the simplification of trade processes and reduction of
bottlenecks at customs customs checkpoints is guided by a detailed research and consultations with
checkpoints? different stakeholders; the collection of many information and suggestions
How do you keep up with leads to actions based on the technology implementation, procedure
the newest international simplification, and enhancement of cooperation with the other customs entities.
trade regulations and 3. Lithuania customs choose strategies and initiatives based on a three-step action
agreements to prevent any plan: gain by doing profound assessment of the main procedural barriers,
delays at the border for collaborating with the business community and foreign partners for their
importers and exporters? advice, and then introducing specific actions such as the introduction of
electronic systems and deeper cooperation with other customs institutions.

In table 4 customs agencies implemented several strategies to ensure trade facilitation.

Productivity, efficiency, and quality of service have been driven by the adoption and implementation
of advanced technologies, leading to automation of activities and easier processing. Also, respondents
mentioned that they engaging business community and foreign partners, but from interviews which
been conducted with 2 Lithuania companies was analysed that communication and cooperation with

22
customs authorities sometimes came across difficulties and barriers.

Table 5. Respondents outlook about customs efficiency

Theme Customs Efficiency
Questions Main aspects of respondents responses
What methods do you use 1. Respondents provided information that customs adopt various technical tools such
in your job to increase as Microsoft SharePoint, and e-signature software which can help in the execution
speed of clearance as well of documents with ease and security and legality of the same.
as compliance with the 2. The use of blockchain technology into documentation management will not only
security and trade increase data security and reliability but also make compliant with international data
standards? protection requirements. Smart declaration processing systems that the customs
What strategies do you use possess are the reason for efficient and correct processing of big volumes of data
to optimize resource and which subsequently reduces workers' manual labour.
staff shortage in order toto 3. Main solution for optimization and compensation of human resources in customs is
improve efficiency of automatization of processes.
customs department?

In table 5 customs agencies implemented various strategies and methods to enhance

clearance speed. Technical tools like Microsoft SharePoint, and electronic signature software are
utilized to guarantee easy and secure processing of documents. Blockchain technology integrated into
documentation management, increasing data security and compliance with international data
protection standards. Smart declaration processing systems support the efficient and accurate
managing large data volumes, reducing manual labour. The main approach to addressing resource
and human resources shortages and improving departmental efficiency is the automation of processes,
which streamlines operations and optimizes workforce utilization.
The table 6 presents the answers of respondents regarding to customs process improvement.

Table 6. Respondents outlook about customs process improvement

Theme Customs Process Improvement
Questions Main aspects of respondents responses
What is the role of 1. Respondents answered that technologies make customs procedures much more
technologies in modernized by enabling an increase in efficiency, speed, and reducing
modernizing customs administrative stress. Instruments such as electronic declaration systems and
procedures and what information processing tools are used to ensure customs glitches are minimized
specific technologies do and faster clearance is accomplished.
you think has the most 2. Systems, such as iMDAS for declaration process, and exchange platforms for
promise for enhancing trade data (CargoX, TradeLens) enable information exchange energizing the
efficiency? risk process and this increases procedural efficiency.
What role does training and 3. Automated customs systems, blockchain technology, and advanced security
development play in technologies (X-ray scanners and detectors) are seen as highly promising for
enhancing customs improving efficiency and ensuring compliance with security standards.
efficiency? 4. Role of training and development is a key to take customs efficiency to the next
level, getting customs officials up to date on the newest standards, agreements
and operational systems that come out of consistent and rapid advancements in
technology.

Overall, in Table 6 respondents introduced that the current customs system is very dependent
23
on technology for improving the methods and shortening the processes. Intelligent systems of
customs declarations are a good example of those tech that can be used to accelerate the document
processing, the accuracy of that processing and the result is reduction of the need for manual handling,
and consequently speedy customs clearances. The application of automated risk assessment tools
refers to technologies based on Artificial Intelligence (AI) and data analytics, which are a key to
customize risk profiles efficiently, hence, re-directing all the efforts to where they are needed hence,
optimizing control processes. Furthermore, security devices including X-ray scanners and meters help
meet safety standards by rapidly and reliably detecting any questionable items. Among the most
progressive technologies acknowledged by many experts, blockchain separates from the crowd for
the fact that it provides data high integrity, that enables proving authenticity and tracking goods.
Automated customs management systems help strikes this balance by causing the reduction system
human error and being responsible administrative. In this context, along with training and
development, efficiency of Customs response is a necessity as well. Training and development
programs ensure customs officer are up to date on the new ruling, international arrangements and the
technology development. It is not a matter of only 'practice makes better' but also the learning and
actions taken during cross-border trade issues that are very important for them to operate effectively
and smoothly. In general, the matter of the use of sophisticated technologies and professional
improvements is a major driver for the modern introduction of customs procedures and operations
efficiency. But analyzing responses also from private sector interviews identified that both companies
face a heavy administrative burden due to the extensive customs documentation required, therefore
we can assume that investment in customs processes efficiency are too low or not reach great results.

Table 7. Respondents outlook about Impact of advancements of, innovative solutions on

perceived service quality
Theme Impact of advancements of, innovative solutions on perceived service quality
Questions Main aspects of respondents responses
How can innovation and 1. Respondents answered that implementation of automated systems for
technology improve compiling declarations and processing, operations become much faster and
customs service quality? more accurate.
2. Digital tools and Electronic data interchange (EDI) system can simplify
communication between customs officials and traders. these tools make it
easier to submit documents, resolve queries, and provide traders with real-time
updates on their shipment status and any changes in customs regulations.
3. Advanced security systems and innovations as AI and biometric identification
can improve the capability to detect and deal with unlawful or dangerous
shipments, therefore, creating a safer environment for goods transit and
preventing illegal activities.

In Table 7 respondents agreed that innovation and technology is a key factor for enhancing
the quality of customs services. The implementation of automated systems for compiling declarations
24
and processing operations, making them not only faster but also more accurate. This acceleration and
precision reduce bottlenecks and improve the overall flow of goods across borders. Furthermore,
digital tools and electronic data interchange (EDI) systems facilitate smoother communication
between customs officials and traders. These advancements ease the procedures for the submission
of documents which in turn, improve transparency and efficiency by allowing stakeholders to have
real-time updates on shipment statuses and changes in regulation. Furthermore, the utilization of the
most up-to-date security measures like automated intelligence and biometric identification goes a
long way in adding the capacity of customs to detect and neutralize the threats of unlawful or
dangerous shipments. This achievement not only strengthens international trade, but also provides a
more secure trading environment.
The findings emphasize the importance of innovative technologies like electronic
declaration systems and automated risk assessment tools, which streamline customs processes and
enhance efficiency at checkpoints. Moreover, technologies such as blockchain and electronic data
interchange (EDI) systems are highlighted as key to improving data security and facilitating
transparent, reliable customs procedures. These tools, along with AI and biometric identification, help
customs authorities effectively detect and manage risky or unlawful shipments, ensuring safe and
smooth international trade flows.
Additionally, the survey underscores the value of collaboration. Engaging with the business
community, customs brokers and international partners is crucial for refining and implementing
effective trade facilitation strategies, ensuring that they are practical and aligned with global trade
objectives.
In summary, the study shows that integrating newest technology and fostering cooperation
are essential to advancing trade facilitation, which is fundamental to supporting economic growth by
making global trade more accessible and efficient. Continuous innovation and education in these
areas will be vital for customs administrations to successfully navigate future challenges in
international trade.

3.2 The need to improve Lithuanian trade facilitation

After analysed all 3 interviews, scientific literature, and statistical data at this point in my
opinion the following steps are required to increase trade facilitation and the development of the
transport and logistics sector in Lithuania we must increase efficiency of border crossing points,
summarising all scientific literature and all 3 interviews information which been provided, we came

25
across to main aspects:
1. Lithuanian Customs can adopt more technologies such as AI-powered analytics and
blockchain combining high security and transparency at documentation processes can be applied.
These tools often make it possible to accomplish a series of functions, like automating standard goods
checking, verifying the validity of documents, and tracking shipments faster, that can bring down the
time that goods spend at customs facilities. In this research been revealed that technologies has pivotal
impact for customs efficiency. AI data-driven enabled system that can process a lot of data quickly
to inform which patterns aren't noticed by humans and detect abnormalities. The blockchain creates
an undisputed common transactional record, therefore, serving as an antifraud measure and a trust-
enhancing factor. These transparencies, therefore, support those customs authorities to collaborate in
an easier manner together with private stakeholders. The applying these technologies will expressly
Lithuanian customs leadership in modern customs operations and also can initiate the custom
procedures throughout the region and others. The interview with the company UAB
"Transekspedicija" highlighted the complexity of customs procedures, especially when dealing with
Russia and Belarus. Through the use of AI and blockchain, Lithuania may decrease time of custom
processing period, which makes it a better logistic hub for transit. Such technologies can benefit
Lithuania in many ways, including helping it to comply with the common EU rules and regulations,
and further combine it into the EU and the global trading systems.
2. Expanding Electronic Declaration Systems of electronic declaration systems can
upgrade the process of submitting and managing customs documents. This investment will reduce
paperwork, minimize errors, and speed up the overall customs clearance process. Encouraging more
traders to use this system could be achieved through simplified onboarding processes. The conduct
of the UAB "Durga" interview illustrated the extended custom clearance as a major difficulty. The
increased processing time of processes than in 2022 may reduce the operational efficiency, and
eventually loss of customers to competitors. By increasing an electronic declaration system, Lithuania
should equivalent the best European customs authorities in the market, which will reduce the
clearance times and make it more attractive destination for the goods that are entering the EU from
the East. Implementation of a simple electronic declaration system can also contribute to the increase
in SMEs' engagement in cross-border exchange which will stimulate the economy as a whole.
3. Strengthen Training Programs leads to having the best skilled customs officials who are
regularly and thoroughly trained on this new technology and global best practices as this can enhance
operational efficiency. It may also contain training on handling the technology of enhanced security
systems; the usage of risk assessment tools, and customer service excellence, so that all processes
will run smoothly. Interviews conducted with the "Transekspedicija" and "Durga" UAB underlined
26
the importance of good coordination with customs authorities as well as maintaining constant
communications in order to ensure smooth transportations and timely deliveries. On the other hand,
15 training sessions on capacity building and cooperation improvement took place within the last two
years, however, there are still some barriers because of different customs rule and laws across the EU
member states and the high compliance level of the sanctions. By financing trainings focused on
acquiring knowledge of the latest technologies and a strategic method in their employment into
practice.
Adopting new technologies for facilitation of trade together with the implementation of e-
declaration and the structure training courses are the few of the methods that Lithuania can implement
on to increase the efficiency of the transport and logistic sector and become a successful state. These
mechanisms aim at increasing the quality of border control posts, reducing the waiting times and
establishing Lithuania among the countries of competitive trade points in worldwide markets. The
convergence of these approaches will ultimately result in a well-positioned coordination of customs
activities introducing the possibility of extension of trade and dealing with the input change. There is
the cooperation of the players in business fields, customs officers, and decisionmakers. The objective
is to bring about facilitation and strengthen the economy.

27
CONCLUSIONS

In conclusion, the present study has reached its objectives by giving a wide-ranging
description of the trade facilitation importance to businesses.
1. Trade facilitation involves streamlining and simplifying international trade procedures.
This in return will contribute to the speedy and efficient movement of goods across borders. Ensuring
the promotion of good trade facilitation is of prime importance for businesses as it lowers the prices,
delays, and supply chain management uncertainty. Entrepreneurs lower trade barriers and improve
the efficiency of businesses in the global marketplace; they can better compete in the market, respond
quickly to consumer demand, and reduce the management risk. Technological tools like AI-powered
analytics and blockchain have been instrumental in achieving these goals by simplifying processes,
maintaining the transparency of customs clearance, and speeding up processes. As an instance, AI
can analyse big data to improve the routes and detect the potential issue that caused congestion while
the latter ensures the information in trade documents as the data is secure.
2. One of the main obstacles identified is the complexity of customs procedures. During
the interview with "Transekspedicija", it was highlighted that actively managing customs procedures
is crucial, as they are the primary cause of increased operational costs and delays in shipping goods
on time. This complexity arises that regulations and documentations requirements vary from industry
to industry, with some industries needing more inspection than others. Another problem was indicated
the long period of time customs clearance takes. From what the group has explained, it takes longer
to get documentation done now than, before 2023. It is likely to lead to customers’ dissatisfaction.
Prolonging the custom clearance process delivers disruptions to the logistics system, where
warehousing expenses are raised, and delivery arrangement failures may occur. The seemingly
impenetrable geopolitical landscape, where international sanctions play a significant role, makes trade
facilitation even complicated. In such a circumstance, the firms face an additional regulatory burden,
thus they have no option, but to be thorough with the monitoring and documentation procedures. The
interviews released that sanctions against Russia and Belarus give rise to a trade volume decrease and
additional administrative issues.
3. Implementation of a system with a high-performance customs operation is fundamental
for the removal of the bottle neck points and provision of a continuous movement of goods.
Destinations can adopt border management measures, such as customs procedures that are
streamlined and the deployment of e-declaration systems, that can mostly reduce clearance times,
leading to the overall improvement of supply chain management. Customs performance directly and
adequately determines the velocity of cargo shipping. Effective customs requirements are imperative
28
in order to decrease the possibility of delays which very detrimental to the competitiveness of all
businesses. The utilization of technologies that can speed up the declaration process like automated
risk assessment tools and smart declaration systems focus on fast processing large masses of data.
The effectiveness of customs is not only a matter of just the international trade standards, but also it
directly meets the international trade discipline and rules. The new security tools employing
blockchain and AI such add additional layer of protection from the loopholes aim at reducing errors
that causes frauds and globally enhanced trade norms compliance. Training programs tailored at the
customs officers on the new technologies and well-known best practices must be a continuous process
in order to guarantee high customs level performance.
To address these challenges, the study recommends:
1. Integrating advanced technologies so that the process of customs can be, on the one hand
automated, and, on the other hand, made secure, will certainly lead to a great progress in
efficiency and transparency.
2. Expanding Electronic Declaration Systems: The introduction of a modern, and improved
system, including paperless processes and elimination of errors facilitates the customs
clearance process and its speed.
3. Enhancing Training Programs: To make new technologies and well practices for customs
officials and security personnel work, their training should be revised.
By implementing these strategies, Lithuania can overcome the obstacles to trade facilitation,
increase customs efficiency and, consequently, supporting the growth and international
competitiveness of the transport and logistics sector in Lithuania.

29
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34
ANNEX 1. Interview with UAB “Transekspedicija” company

1) Theme: Customs Clearance Time

Q 1. What is the typical customs clearance time for your shipments and how does this
timeframe affect your operational efficiency?
A 1. Customs clearance usually takes 1-3 hours, except for shipments from Russia, Belarus
and Asian countries. For these countries, customs procedures can take longer.
We are an authorised consignor and consignee and hold an AEO certificate. This gives us a
number of simplifications that customs brokers enjoy. Customs officials are not required for cargo
arriving from third countries with this status. Transit registration and closure are carried out by
customs broker representatives, which takes up to 10 minutes. In addition, the processing of the
declarations themselves is carried out on a first come, first served basis in the customs system.
Thus, customs procedures are usually very short for shipments from EU countries. For
shipments from third countries, customs procedures can take longer, but with an AEO certificate this
time can be significantly reduced.

Q 2. How do long customs procedures affect your delivery times? On average, how much
time do you spend on customs clearance and importing/exporting goods from third countries?
(processing of declarations, border crossing with all checks)
A 2. Import and export times from Belarus, Russia and other Asian countries:
Until February 2022, customs procedures took on average 1-2 hours
Since February 2022, customs clearance times have increased significantly with the
introduction of the European Commission's sanctions regulations for Russia and Belarus.
Currently, customs procedures can take up to 5 days and sometimes longer. (if a sample is
to be taken for the determination of the CN code) customs laboratory
The main reasons for the increase in customs clearance times are:
Physical inspection of all goods exported to Russia and Belarus: This is time-consuming and
increases warehousing costs and downtime.
Requiring customs to provide a lot of additional data and documents: This makes the
processing of declarations more time consuming.
Checking data, documents and the goods themselves: Customs scrutinises all documents and
goods to ensure that they comply with the sanctions regulations.
Different application of sanctions regulations in different EU countries: This can lead to

35
longer customs clearance times for goods moving through several EU countries (each EU country
applies sanctions regulations at its own discretion, there are countries that form the sanctioned goods,
which is why shipments are stopped)
Our company's efforts to reduce customs clearance times:
Instructing drivers and providing all necessary documents and explanations.
Cooperating with customs to ensure the smooth execution of customs procedures.
Problems encountered:
Sometimes border crossings are delayed when there are declarations in the car that have been
made in other EU countries (each EU country has its own sanctioning regulations and there are
countries that form sanctioned goods, which is why the goods are stopped).
Customs can stop the whole machine and send it back if the declaration of one load does not
comply with the sanction regulations.
This results in additional costs for the customer, transport and storage.

2) Theme: Cooperation with Customs Authorities

Q 3. How does your company cooperate with customs authorities to ensure a smoother
operation? Have you established a partnership or dialogue with customs officials to improve
your trade processes?
Our company actively cooperates with customs authorities to ensure smoother operations
and improve trade processes
A 3. Regular communication:
We have regular contact with customs officials (post) to discuss relevant issues and
problems.
We provide customs with all relevant documents and information in a timely and accurate
manner.
We inform customs of any changes in our business activities that may affect customs
procedures.
2. Training and coaching:
We provide training to our employees to familiarise them with customs procedures and
requirements.
We instruct our drivers on the proper preparation and presentation of documents at border
crossings.
3. Cooperation to solve problems with customs
If there are problems or difficulties, we work with customs to resolve them as quickly as
36
possible.
We look for mutually beneficial solutions that allow trade processes to run smoothly.
4. Building partnerships:
We aim to establish long-term partnerships with customs authorities.
We participate in joint initiatives to improve customs procedures and reduce the
administrative burden on business (conferences, training, meetings, etc.)
However, despite our efforts, cooperation with customs authorities can sometimes be
difficult:
Customs procedures can be complex and unclear.
Customs officials may interpret rules and regulations differently. Although the Customs
Department has organised 15 training sessions for customs officials in the last 2 years, there are still
differences in the interpretation of rules and regulations, indicating that the impact of the training is
not sufficient.
Bureaucratic procedures can lead to delays and additional costs.

3) Theme Trade Preference Benefits

Q 4. How do efficient customs procedures increase the benefits of trade preferences for
your company? Do trade preferences have an impact on your business?

A 4. Efficient customs procedures can significantly increase the benefits of trade preferences
for our company:
1. Faster movement of goods:
Reduced customs clearance times allow for faster delivery of goods to customers.
This improves our competitiveness and gives us more flexibility to respond to market
demands.
2. Reduced costs:
Reduced customs clearance costs allow us to reduce the cost of goods.
This increases our profits and allows us to offer our customers more competitive prices.
3. Increased trade volumes:
Easier movement of goods across borders leads to an increase in trade volumes.
This allows us to expand our business and reach new markets.
Trade facilitation has a positive impact on our business:
Reduced customs tariffs and other taxes make our goods more competitive in foreign
markets.
37
 Easier access to new markets allows us to expand our business and diversify our income.
Increased trade volumes have a positive impact on our company's profits and job creation.
Examples:
Thanks to simplified customs procedures, we can halve the time it takes to deliver goods to
European Union countries (AEO certificate, authorised consignee/consignor status).
By using trade preferences, we can save up to 10% on import costs.

4) Theme Impact of sanctions on customs procedures.

Q 5. How have international sanctions affected your business experience with customs
procedures and has this had an impact on the use of trade preferences?
A 5. International sanctions have had a significant impact on our business experience with
customs procedures:
1. Increased level of customs control:
Sanctions have led to stricter customs controls on goods, which are more time-consuming
and costly.
Increased level of customs control:.
Longer movement times of goods across borders.
2. Restrictions on trade preferences:
Sanctions have made some trade preferences unavailable, reducing the competitiveness of
our business.
It is more difficult to obtain permits to export goods to sanctioned countries.
3. Negative impact on business:
Sanctions have reduced our trade with sanctioned countries.
We have had to restructure our business strategy and seek new markets.
Our profits have decreased and we have had to lay off some staff.
Examples:
Delivery times to Russia increased from 3 to 15 days due to stricter customs controls.
We are unable to benefit from trade preferences when exporting to Belarus, which has
increased the price of our goods on this market.
The sanctions have reduced our turnover by 20% and led to 30% redundancies.
Q 6. How has your company adapted its strategies in response to the challenges posed by
the sanctions in relation to trade preferences and how has this affected your overall business
performance?
A 6. In order to overcome the challenges posed by sanctions in relation to trade preferences,
38
we have implemented the following strategies:
1. Market diversification:
We reduced our reliance on sanctioned markets and started to find new customers in other
parts of the world.
We participate in international exhibitions and business forums to establish contacts with
potential customers.
We adjust our goods by taking account of peculiarities of various markets and in this way
we meet demands of each market separately.
2. Diversifying trade routes:
We seek alternative trade routes to bypass sanctioned countries.
We use multimodal transport, combining different modes of transport.
We cooperate with logistics companies with experience in dealing with sanctioned countries.
3. Business model adaptation:
We are refocusing our activities on less sanctioned areas.
We offer our clients alternative products and services that are not sanctioned.
4. Engaging with government authorities:
We participate in government programmes to help businesses overcome the challenges
posed by sanctions.
We seek advice and assistance from government authorities (customs).
We participate in business associations to work together to address the challenges posed by
sanctions.
The implementation of these strategies has helped us to maintain the efficiency of our
business and reduce the negative impact of sanctions:
We have maintained our turnover despite a reduction in trade with sanctioned countries.
We expanded our customer base and entered new markets.
We have increased the resilience of our business to external challenges.
However, despite our efforts, sanctions continue to have a negative impact on our business:
Reduced profitability due to a reduction in trade volumes with sanctioned countries.
Volatility and uncertainty about future sanctions policies.

39
 ANNEX 2. Interview with company UAB „Durga“

Custom brokers company located in Alytus, Lithuania.

Q 1. What is the usual duration of customs clearance for the goods you clear?
A 1. It takes 2-3 hours from the time the driver enters and leaves the customs area. Before
the outbreak of the war and the introduction of sanctions, this time was much shorter.

Q 2. How do complex documentation and delays affect your customs procedures the most?
A 2. Both of these problems increase the length of the customs procedure. Customers who
are dissatisfied start looking for other customs brokerage providers.

Q 3. How does your company cooperate with the customs authorities to ensure smoother
operations?
A 3. We have all the necessary authorisations and statuses in place. In Alytus, we operate as
a freight post without a customs officer. We have earned a reputation as a reliable company, which
makes communication easy. If we did not have this status, our cooperation would not be so smooth,
because even now, with many years of experience, we are still facing obstacles when cooperating
with customs.

Q 4. How do efficient customs procedures increase the benefits of trade facilitation for your
company? Does trade facilitation have an impact on your business?
A 4. Trade facilitation affects volume of trade, trade in market increase and due this we have
more orders and work. Mostly trade facilitation are agreements of countries and they reduce customs
duties. The simplifications we have in place speed up the documentation time, so our customers are
even more satisfied with the service we provide.

Q 5. Impact of sanctions on customs procedures: How have international sanctions affected

your business experience with customs procedures and has this had an impact on the use of trade
facilitation?
A 5. The sanctions have reduced our workload considerably, we have lost some of our
customers and had to start looking for new markets to provide our services.

Q 6. How has your company adapted its strategies in response to the challenges posed by

40
sanctions in relation to trade facilitation and how has this affected your overall business performance?
A 6. Entering new markets. Ukraine, UK and other EU countries. In today's perspective, we
see the eastern direction will disappear completely due to sanctions.

41