Given the export-led development vision of Bangladesh, priorities outlined in the systematic country diagnostic and Bangladesh country partnership framework as well as the underlying issues causing market failures, the project will focus on reforms of critical trade policies, and improvement in trade facilitation through selected initiatives. The project will have two components: Trade Policy Reform and Enhanced Trade Facilitation. Component 1: Trade Policy Reform 1. Tariff Rationalization: Tariff serves the dual purpose of revenue and protection. In an era of progressive trade liberalization, finding that balance is a challenge since all direct and indirect taxes are expected to be designed as such that it ensures maximum revenue mobilization and keeps the business incentive high. To this end, the project will support NBR to develop and implement sector-based roadmap/ timetable for tariff rationalization. 2. Expansion of the Bonded Warehouse Facility to non-RMG exporting sectors: Bangladesh’s customs bonded warehouse regime permits licensed manufacturers to import duty-free parts and materials required for their export production purposes. The project will support NBR to bring necessary regulatory and procedural changes and capacity to offer equitable bonded warehouse access to selected non-RMG priority sectors. Component 2: Enhanced Trade Facilitation 1. Implementation support for the New Customs Act: NBR is currently in the process of revising Customs Act 1969 in light of the Revised Kyoto Convention (RKC). The project will support NBR in drafting selected set of rules and regulations, e.g. risk management, valuation etc. The project will conduct awareness program on the new Act and regulations amongst the traders. 2. Policy and operational strategies for National Single Window for Trade: As Bangladesh aims to have a trade single window, the project will support NBR to secure consensus amongst the key stakeholders, it will help NBR to have a blue-print document covering the key aspects of the single window implementation and to draft the NSW Law, which will be necessary for effective implementation and sustainability of the system. 3. Risk based Customs Control: Customs administrations are increasingly adopting risk management techniques to determine where the greatest areas of exposure to risk exist and how to effectively allocate scarce resources to manage these risks. The project will work closely with the NBR to prepare necessary strategic document for establishment of a dedicated Risk Management Directorate with its own organogram and HR policies, develop the specifications for the RM software along with capacity building of key risk management officials and develop the SRO and SOP on risk-based customs control. 4. Implementation support for TRS-based reforms: The project will support NBR to develop a prioritization document which identifies and highlights the reforms and recommendations to reduce time and cost to trade at the four Customs Houses as per TRS. The project will also assist NBR to develop the SOP for System-based TRS for continuous improvement at Customs. 5. WTO Trade Facilitation Agreement Implementation Support: The WTO Trade Facilitation Agreement suggests measures that require compliance by all border clearance agencies and necessary policy reform reflecting on their commitment and practice. Therefore, the project will support the Ministry of Commerce, the ministry responsible for trade, to develop a WTO TFA Implementation Action Plan with clear roles and responsibilities identified for all key implementation agencies. The project will also provide support to implement selected measures to reduce time and cost of trading and to NBR to develop a Customs Modernization Strategic Action Plan and an HR strategy to support the modernization initiatives to align with the WTO TFA.