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February 2018 | n° 85 | www.wcoomd.org
WCO news
A secure business environment
for economic development
World Customs Organization
WCO news N° 85 February 2018
Content
04 Flash Info
27
06 Dossier 21 Australia and New
48 Panorama A method for measuring Zealand test new border
trade facilitation clearance process for mail
58 Point Of View
62 Events
30 36
Combating Air passenger controls
overvaluation in Malawi in Brazil
DOSSIER: A SECURE BUSINESS ENVIRONMENT PANORAMA EVENTS
07 The WCO Secretary General shares his thoughts 48 France returns 62 Fourth Global
on the theme for 2018 Egyptian antiquities Canine Forum spurs
lively discussions
10 National experience: China’s AEO Programme / 48 Jordan adopts
India’s National Committee on Trade Facilitation / Peru renewable energy 63 Round-up of the
and Chile’s first joint integrated border control centres solutions 2017 Technology &
Innovation Forum
18 Performance measurement: Revisiting the 50 Customs systems
“Trading Across Borders” category of the Doing interconnectivity in
Business index / Developing a method for measuring the SACU region
the quality of trade facilitation
54 A journey on the
24 E-commerce: UPU postal-rail project / Australia- “SMIPRP train” in
New Zealand new border clearance process for mail Japan
30 Data analysis: Malawi’s efforts to combat IFFs / 56 Monitoring
Identifying irregularities in Peru / Customs
Processing international travellers in Brazil modernization in
West and Central
40 Partnership: Taking Customs and air cargo
Africa
industry modernization forward
44 Security and development: Supporting
borderland economies and addressing wealth
circulation
Editor-in-Chief Advertising Editorial note Copyright © World Customs Organization
Grant Busby WCO News is distributed free of charge in English All rights reserved. Requests and enquiries concerning
and in French to Customs administrations, international translation, reproduction and adaptation rights should be
Writer / Editor organizations, non-governmental organizations, the addressed to copyright@wcoomd.org.
Laure Tempier Bernard Bessis business community and other interested readers. Opinions
bernard.bessis@bb-communication.com expressed in WCO News are those of the contributors and Acknowledgements: The Editorial Team wishes to express its
Editorial Assistant do not necessarily reflect the official views of the World sincere thanks to all who contributed to this publication.
Sylvie Degryse Publisher Customs Organization. Contributions in English or
World Customs Organization French are welcome but should be submitted no later than Illustrations: Our thanks also extend to all who provided
Online subscriptions Rue du Marché, 30 15 April 2018 for consideration. The WCO reserves the right photos, logos and drawings to illustrate this issue.
http://www.wcoomd.org/en/media/wco- B-1210 Brussels to publish, not to publish, or to edit articles to ensure their
news-magazine/subscriptions.aspx Belgium conformity with the magazine’s editorial policy and style. Photo cover: © Xu Yu / XINHUA
The WCO Communications Service is available to answer
Tel.: +32 (0)2 209 94 41 all requests for subscriptions, submission of contributions, Design: www.inextremis.be - mp5744
Fax: +32 (0)2 209 92 62 and any other enquiries relating to WCO News. Please email
communication@wcoomd.org communication@wcoomd.org.
www.wcoomd.org
3
FLASH INFO
Save the date!
© fotolia.com
WCO Conference on Illicit
Financial Flows and Trade
Mis-invoicing
23 May 2018, Brussels, Belgium
THE CONFERENCE IS being organized by
the WCO at its Headquarters, bringing
together Members of the WCO and
other relevant stakeholders to share
their experiences and to discuss how
they can cooperate and work in tandem
to counter illicit financial flows (IFFs)
and trade mis-invoicing.
The morning session will focus on the
assessment of both phenomena and on
methods of detection, with a particular
focus on unit price analysis and mirror
data analysis, while the afternoon
session will be devoted to presentations
by Customs administrations on their
practical experiences in dealing with
IFFs and trade mis-invoicing.
Par ticipants w i l l look at lessons
Potent ia l a reas for i nter-agenc y 2018 WCO IT Conference & learnt from the latest pilot projects
collaboration among intergovernmental Exhibition and initiatives deploying advanced
organizations, such as the WCO, the “Building a reliable digital technologies, including data analytics,
Financial Action Task Force (FATF), landscape to boost cross-border artificial intelligence, and machine
t he Orga n i s at ion for E conom ic trade” learning. They will also focus on the
Co-operation and Development (OECD) 6-8 June 2018, Lima, Peru following questions: How can blockchain
and the G20, will also be explored. technology increase trust between the
THE WCO THEME for 2018 calls on the private sector and governments? What
Financial support for the Conference is Organization’s membership to explore kinds of clouds do we know about and
being provided by the Korea Customs how Customs can contribute to better how much security do they provide?
Service. securing the business environment and, What is the Internet of Everything and
in so doing, boost economic prosperity. how can it support both the private
More information This premier WCO IT event aims to sector and governments? How can
www.wcoomd.org/en/events.aspx explore how information technologies international standards such as the
can support such a process by enhancing WCO Data Model help?
the capacity of Customs administrations
to identify high-risk goods, and how More information
border management may appear in the www.wcoomd.org/en/events.aspx
Latest accessions future.
to WCO instruments There are various technologies – some
emerging and some already well-
Revised Kyoto Convention established – that authorities can benefit
from in performing their tasks. However,
there are uncertainties regarding their
Republic of the Congo capabilities and limitations in the border
Date of accession: 14 December 2017 management environment, and anxieties
113th Contracting Party around potential data security and
protection issues. Cyber-attacks today
More information are more frequent and more extensive,
communication@wcoomd.org with hackers becoming increasingly
skillful at intruding into IT systems.
4
WCO news N° 85 February 2018
© Fotolia.com
International Conference
“Respect for IP – Growing from
the Tip of Africa”
23-25 October 2018, Sandton,
South Africa
T H IS CON F E R E NCE IS b ei ng joi nt ly
organized by the Companies and
Intellectual Property Commission of
South Africa (CIPC), INTERPOL, the
WCO, the World Intellectual Property
Organization (WIPO) and the World
Trade Organization (WTO) to foster
a dialogue on building respect for WCO to launch an e-learning portal
intellectual property (IP).
for the private sector
It aims to strengthen international
cooperation and build greater IP
awareness while coming up with ON 1 MAY 2018, the WCO will launch the It is now making specific courses
strategies for better IP enforcement “WCO Academy,” an online platform available to private sector professionals,
in the region. Among the many topics where representatives from the private which have been suitably adjusted to
to be discussed at the Conference will sector will be able to access e-learning meet their needs.
be the question of how to destroy courses, webinars, books and news.
IP-infringing seized goods and Aimed at building the Customs skills
WIPO will present a report on the The WCO has already developed 23 of trade professionals as well as further
environmentally safe destruction of Customs-focused e-learning courses enhancing their work performance,
counterfeit goods. covering more than 500 hours of the WCO Academy will be the ideal
e-training on major international platform for the private sector to gain
More information instruments, topics and concepts that in-depth knowledge and specialized
www.wipo.int contribute to enhancing the work of information from the WCO.
Customs officers from across the globe,
directly at their work place. More information
academy@wcoomd.org
Tel. +32 2 209 9392
WCO to place a spotlight on “disruptive
technologies” in April 2018
A WHOLE DAY will be devoted to “disruptive technologies” at Group gathers representatives from Customs, the private
the meeting of the WCO’s Permanent Technical Committee sector, international organizations and academia, with a
(PTC) that is scheduled to take place from 16 to 20 April mandate to carry out exploratory work and research on
2018. Delegates will discuss, in detail, the potential benefits, disruptive technologies.
risks and impact of technologies such as blockchain, artificial
intelligence, machine learning, virtual reality, the Internet This is the first time that a whole day is being dedicated to
of Things, robotics and biometrics, on the work of Customs. this topic by the PTC, and discussions promise to be intense.
Moreover, they will examine a Study Report compiling Mark the date in your calendar!
all relevant work already done on these topics under the
auspices of the WCO Virtual Working Group on the Future More information
of Customs. Created in 2015 following intense discussions www.wcoomd.org
by the PTC on the future of Customs, the Virtual Working
5
DOSSIER
Dossier: A secure business
environment for economic
development
6
© Xu Yu / XINHUA
WCO news N° 85 February 2018
A few words about
the theme of the
year
By Kunio Mikuriya,
SECRETARY GENERAL, WCO
EACH YEAR, THE WCO Secretariat chooses a theme that is relevant
to the international Customs community. The slogan chosen
for 2018 is “A secure business environment for economic
development.” Under this banner, Members of the WCO are
encouraged to look at how they can create an environment for
businesses that will foster their participation in cross-border
trade, and, ultimately, how they can best serve their people and
empower their entrepreneurs.
Not only is it important for governments to support specific
interventions for businesses to flourish, it is equally important
to look at the external environment in which businesses operate.
By “secure,” we mean an environment that is enabling, safe, fair
and sustainable, all wrapped into one. Such an environment
will help businesses, especially micro, small and medium-sized
enterprises (MSMEs), to expand their activities, create incentives
for them to participate more fully in international trade, and
encourage them to innovate, generate employment and invest
in human resources, thereby boosting economic growth and
raising living standards.
Following my introduction, it would be opportune for me, at
this juncture, to develop further the idea of a secure business
environment, especially its key elements: “enabling,” “safe,” and
“fair and sustainable.”
Evidence-based research, recognized internationally, clearly
shows that Customs can contribute to making the business
environment more “enabling,” or in other words, more stable and
predictable by, for example, streamlining procedures, tackling
corruption, enhancing integrity, and facilitating the cross-border
movement of goods, conveyances and people in general.
7
DOSSIER
Ensuring safety is also critical. Legitimate This year’s theme also echoes the Several articles touch on how to manage
businesses require a secure supply cu r rent Customs focus on t rade the growth in international mail due, in
chain to prosper, but some threats facilitation, created by the entry into particular, to the exponential growth in
come from within the trade itself, such force of the World Trade Organization’s e-commerce transactions. The Universal
as the shipment of illicit goods that Trade Facilitation Agreement (TFA). Postal Union introduces the work done
could endanger peoples’ health, safety In this edition of the magazine, India to speed up the clearance of postal items
and security. Combating cross-border Customs explains how it handled one being transported by rail between China
crime, including the illicit funding of of the TFA’s provisions, namely the and Europe, while Australia and New
international terrorism through trade establishment of a National Committee Zealand Customs explain how they
activities, is our responsibility, and one on Trade Facilitation (NCTF), and how try to leverage the use of mail data for
that Customs takes seriously in its efforts it has structured its NCTF, all guided risk assessment, targeting and border
to ensure a “safe” environment. by a vision to transform India’s trade clearance purposes, and what they would
ecosystem by reducing the time and need to do to redesign their operational
Last, but not least, Customs must strive cost of doing business. processes in their international mail
to build an environment that is “fair facilities to integrate the use of mail data.
and sustainable.” The importation of Inter-agency cooperation, both at
illegal goods, such as goods that infringe the international and national levels, On this very topic, I would like to remind
intellectual property rights (IPR), or to ensure mutual understanding and readers that the WCO is currently
legal goods which, for example, are coordinated actions, is, of course, developing a “Framework of Standards
smuggled into a country to avoid the key to facilitating trade. Peru and on Cross-Border E-Commerce,” which
payment of duty or whose value has Chile recently opened their first joint should be ready in the coming months
been misreported, can do immense integrated border control centres, for adoption by the WCO Council in
harm to a country’s economy. It is not and Peru Customs k ind ly agreed June 2018. This new WCO tool is aimed
only a question of financial losses for to explain how the centres work to at assisting Customs in developing
both legitimate traders and governments, facilitate the movement of people, strategic and operational e-commerce
such activities can also affect governance, baggage and motor vehicles, which frameworks. It will be equally useful for
the economy, development and human is a good example of the practical those who are seeking to enhance existing
security across the globe. i m p l e m e nt a t i o n o f t h e WC O ’s frameworks in order to effectively meet the
coord i nated border ma nagement requirements of new and evolving business
To take our annual theme forward, for the (CBM) concept. models. The Framework of Standards
dossier of this edition, we invited various will be supported by an implementation
people to share information on initiatives The question of how to measure our strategy and an action plan, as well as a
and related projects that contribute performance is also addressed in the robust capacity building mechanism to
to creating a secure environment for magazine. Procomex, an a lliance ensure its harmonized and expeditious
businesses. The idea is, as always, to of Brazilian companies and private implementation.
highlight any challenges faced, to sector organizations which support
showcase those projects that will inspire Customs modernization, explains Data analysis is another topic of great
others, and, of course, to communicate why it decided to replicate the survey importance to the WCO. Two articles in
best practices. used by the World Bank to evaluate this dossier deal with the collection and
the performance of the country when analysis of data to fight fraud. Malawi
The dossier starts with an article by it comes to the ease of trading across Customs highlights its efforts to combat
China Customs on a pan-governmental borders, and what the exercise revealed. illicit financial f lows out of Malawi
initiative called the AEO Joint Incentive In another article, researchers Andrew through the undervaluation of exports
programme under which Chinese Grainger and Duncan R. Shaw suggest and the overvaluation of imports, while
authorized economic operators will be a method for measuring the quality of Customs researchers explain how they
entitled to enjoy as many as 49 facilitation trade facilitation, as it is the quality have been leveraging data analysis to
measures provided by Customs and other of implementation that will deliver identify irregularities at the border
government departments in China. economic benefits. between Peru and Ecuador.
8
WCO news N° 85 February 2018
An example of the use of data mining sub-Saharan Africa since 2000 and The WCO is currently
tools and technologies is provided by anthropological research conducted in
Brazil Customs. The administration seven border areas that can be considered developing a “Framework
explains how it managed to achieve as “fragile,” the article argues that the of Standards on Cross-
vital leaps in efficiencies when it came development of a strategy focusing on
to the processing of international borderlands should also look at how to Border E-Commerce,”
travellers through the use, firstly, of support cross-border trade activities. which will be supported by
a risk assessment system that enables
advanced passenger information (API) T h is la st a r t icle a nd t he ot hers an implementation strategy
and passenger name records (PNR) to remind us that building a secure and an action plan, as
be processed, and the use, secondly, of a business environment is an ambitious
passenger facial recognition system. project, and that even with the best well as a robust capacity
intentions, we can sometimes easily building mechanism to
Engaging with sta keholders, fail to understand all the subtleties of
including the implementation of open how this complex reality works. But ensure its harmonized
communication, effective collaboration through the sharing of knowledge and and expeditious
and meaningful consultation, with the information, supported by in-depth
goal of promoting compliance as well as research and good communication, implementation.
effective and efficient implementation we can hopefully achieve our aim:
of change, is another policy advocated a secure business environment for
by the WCO. To illustrate this aspect, economic development.
the dossier includes an article by the
Secretary General of TIACA, who In wrapping up, I would like to sincerely
explains how similar the concerns and thank all the contributors to this dossier,
objectives of the air cargo industry and as well as all the other contributors to
Customs administrations are, and how the magazine who took the time to share
important it is not to operate in isolation. with us their experiences on various
Customs and trade related issues. It has
The dossier ends with an article which been our pleasure to produce another
questions the way we link security and edition of the WCO’s magazine, and we
development. Inspired by experience trust that you will enjoy reading all the
gained in field studies undertaken in insightful articles.
9
DOSSIER
Chinese Customs officers check the operations of an AEO company in Guangdong
China’s AEO Joint Incentive
Programme
By CHEN Jianping, and Reform Commission (NDRC) to companies requiring intellectual
AEO PROGRAMME, GENERAL ADMINISTRATION OF
CHINA CUSTOMS
and the Council for the Promotion of property protection related services,
International Trade (CCPIT), as well as such as patent application, trademark
IN OCTOBER 2016, a pan-governmental agencies in charge of taxation, finance, registration and litigation rights
initiative called the AEO Joint Incentive environmental protection, market protection);
(AJI) Programme was launched in China. supervision and banking supervision.
Under the new scheme, companies which • Category 4 - “Simplified Procedure”
have met pre-determined standards Facilitation measures (comprises measures reducing the
under the existing AEO programme and The AJI Programme comprises 49 number of documents required
have been certified by China Customs facilitation measures, which can be by participating agencies to the
as “Advanced Certified Enterprises” divided into six major categories: minimum);
(ACE) will be entitled to enjoy as many
as 49 facilitation measures provided by • Category 1 - “Green Lane” (includes • Categor y 5 - “Major Reference
China Customs and other government measures for expedited licensing, Benchmark ” (includes measures
departments. At present, there are about registration, and release of goods: for aimed at ensuring that the accredited
3,000 ACEs, accounting for about 33.1% example, the tax authority has set up AEO status of a company is taken
of national import and export volumes a green channel for AEOs to expedite into account when inspected by other
in China. formalities such as duty declaration); participating AJI agencies);
The AJI Programme involves some 40 • Categor y 2 - “Less Inspection” • Category 6 - “Pilot Reform Project”
government departments. These include (includes provisions to carry out fewer (includes measures giving priority
border agencies such as Customs, inspections at ports); rights to AJI companies to participate
quarantine, civil aviation and port in pilot projects implemented by
authorities, and non-border agencies • Category 3 - “Priority Treatment” Customs and other government
such as the National Development (includes measures giving priority departments).
10© China Customs
WCO news N° 85 February 2018
Social Credit System of supervision and saves administrative
All the authorities conduct
The AJI Programme is an important resources. If an enterprise is found to
part of the Chinese government’s have engaged in illegal or dishonest dynamic supervision
Social Credit System that is planned to activities, or not to have respected its
be launched in 2020, and which aims security and compliance obligations,
and monitoring of AEOs
at rating and ranking the behaviour the information is immediately sent to to ensure that supply
of citizens and legal persons (which China Customs, which will suspend or
includes every company or other entity) revoke the AEO status of the enterprise.
chain security rules are
in China as part of a wider vision to respected. Inspection
build a secure, compliant and credible The Social Credit System allows for close
society. collaboration between agencies. The
results are shared, which
AJI Programme removes many of the decreases the duplication
China’s State Council has established administrative barriers which previously
an inter-departmental joint conference existed among China’s government
of supervision and saves
mechanism to carry out research on departments, thereby creating a more administrative resources.
crucial issues in constructing the unified approach.
Social Credit System, and to organize
If an enterprise is found
joint certification and monitoring Border authorities’ control is more to have engaged in illegal
programmes such as the AJI Programme. harmonized. Based on the mutual
The mechanism includes almost all recognition of different security and
or dishonest activities, or
government departments. It is under compliance programmes, such as not to have respected its
this umbrella that the 40 government mutual recognition of credit certificates,
departments collectively designed the the AJI Programme ref lects mutual
security and compliance
AJI Programme, specifying its main trust among border authorities, and obligations, the information
features and the benefits to be provided enables the different programmes and
to participants. control measures to be coordinated,
is immediately sent to
thereby making border clearance more China Customs, which will
Information-sharing and exchange streamlined and efficient.
At the heart of the Social Credit
suspend or revoke the AEO
System lies massive data collection Increased attractiveness status of the enterprise.
on company activities by government As the AJI Programme is rather new, it
a genc ie s a nd aut hor i z e d r at i ng is still being perfected. But companies
entities. China Customs exchanges are already getting benefits. For example,
and shares information on AEOs some have reduced transaction operating
with other government departments times and saved trading costs. The
by connecting its AEO management overall time for export tax rebates in the
system to a national platform for credit tax department has decreased from 15
information-sharing established by the days to five days, which cuts about 70%
State Council as part of the System. of the time for a tax refund. Moreover,
China Customs sends real-time data because of enhanced credit ratings, an
on about 3,000 AEOs a day on average. AEO’s proportion of direct financing
Other government departments also based on the line of credit from banks
share and exchange information on increased from 60% in 2015 to 90% in
the platform, and this contributes to 2017.
the elimination of credit information
silos, while making supervision more As more benefits are offered to Advanced
intelligent and efficient. Certified Enterprises, more and more
companies are applying for AEO
Dynamic regulatory mechanism certification and strengthening their
All the authorities conduct dynamic security standards and compliance
supervision and monitoring of AEOs to management.
ensure that supply chain security rules
are respected. Inspection results are More information
shared, which decreases the duplication chenjianping@customs.gov.cn
11DOSSIER
India pursues a broader trade
facilitation agenda
By Hardeep Batra, Agreement reads: “Each Member shall
ADDITIONAL COMMISSIONER, WCO CELL, CENTRAL establish and/or maintain a national
BOARD OF EXCISE AND CUSTOMS, INDIA
committee on trade facilitation or
designate an existing mechanism to
Countries have to establish a National Committee on facilitate both domestic coordination and
implementation of the provisions of this
Trade Facilitation (NCTF) in terms of their commitment Agreement.”
to implementing the Trade Facilitation Agreement Some countries had already gone ahead
and established such committees or similar
(TFA) that was concluded by the members of the World ones, often with mandates going beyond the
requirements of the TFA, prior to ratifying
Trade Organization (WTO). In this article, India the Agreement. But others still had to
establish one. India is one such country,
explains its NCTF implementation journey and how establishing its NCTF on 11 August 2016,
soon after ratifying the TFA.
it has structured its NCTF, all guided by its vision to
India committed to applying portions
transform India’s trade ecosystem by reducing the time of the TFA from the date it took effect,
reporting these provisions under
and cost of doing business. “Category A,” and has listed a number of
provisions under “Category B,” meaning
THE TFA CAME into force on 22 February its provisions deals with the creation in that it will implement them after a
2017 after having been ratified by two- each WTO member country of a NCTF. transitional period following the entry
thirds of the WTO’s membership. One of More precisely, Article 23.2 of the TFA into force of the TFA. But the country
12© Lensnmatter
WCO news N° 85 February 2018
principles underpin the design of India’s Agriculture, Home Affairs, Shipping,
NCTF structure: Health, the Chairman of the Central
Board of Excise and Customs, the
• Wide representation, as effective Chairman of the Railway Board, and
implementation of the TFA requires the Director General of Foreign Trade.
multiple stakeholders to come
together, for example, to build Pr ivate sec tor delegates i nclude
and implement a national trade representatives from major trade
facilitation plan; associations such as the Confederation
of Indian Industries, the Federation of
• C oord i nat ion a mong va r iou s Indian Chambers of Commerce and
agencies to achieve these goals; Industry, and the Federation of Indian
Exporters Organization.
• Flow of information for effective
knowledge-sharing and smooth The total membership of the NCTF
inter-agency functioning; stands at 22 and it can co-opt any
government representatives on relevant
• Decision-making authority that will issues as it goes about its work monitoring
enable the structure to facilitate the TFA implementation progress, ensuring
process; actions are coordinated, and, when
required, proposing corrective measures
• Public and private “ownership,” based on internal deliberations and
which encourages sta keholder feedback received through various
does not intend to limit itself to the buy-in. outreach programmes.
implementation of the TFA. It is pursuing
a broader trade facilitation agenda that Three tier structure The technical provisions of the TFA – in
exceeds the TFA’s requirements. Guided by its five working principles, particular, Section I (Articles 1 to 12) –
India established an NCTF with a three are substantially Customs-related, with
Working principles tier structure consisting of the NCTF 98% of the provisions fully or partially to
While working on the NCTF constitution (tier 1), a Steering Committee (tier 2) be implemented by Customs, placing it
and the definition of its terms of reference, and Working Groups (tier 3), to meet at the centre of national implementation
India took into account the “three P” its needs and take its broader trade efforts.
approach adopted by the WCO when facilitation agenda forward.
it comes to reform and modernization, Consequently, Customs has a prominent
wherein political will, partnerships and National Committee on Trade role to play in the NCTF, where it can
people play a crucial role in the successful Facilitation share its vast experience in interacting
working of an NCTF. All stakeholders have a seat on the with multiple government and business
NCTF. It is the policy making body that stakeholders, including promoting
Partnership is of course central here. The ensures all projects adopted by the NCTF coordinated border management (CBM),
cross sectoral nature of trade facilitation receive political support. The NCTF is inter-agency cooperation, and Customs-
calls for close co-ordination between chaired by the Cabinet Secretary, the business partnerships.
trade operators, service providers and Government’s most senior civil servant
government agencies including Customs. and the head of the civil service. The Secretariat of the NCTF is housed at
Therefore, the composition of India’s Indian Customs’ headquarters, and the
NCTF draws on the active participation Among government representatives are National Committee is also responsible
of all these stakeholders, with successful the “Secretaries” (administrative heads) for monitoring the work of the Steering
engagement among all of them being the of all key departments involved in trade Committee (tier 2) and the activities of
fundamental approach. The following issues such as Revenue, Commerce, the Working Groups (tier 3).
13DOSSIER
NCTF Structure
National Committee on Trade Facilitation (NCTF) to be chaired
by the Cabinet Secretary
Steering Committee
The Steering Committee is made
up of a core group of 16 public and
private representatives. Together, they Steering Committee
compile the action plan, monitor its
implementation, and report the results
to the NCTF to which they can turn Ad-hoc Working Groups to asssist with specific provisions
to when seeking guidance. They also
undertake gap analyses to assess the
degree of compliance of concerned WG on
departments and agencies with regard WG on Legislative WG on Time
WG on Outreach Infrastructure
Changes Release Study
to the implementation of each provision Upgrading
of the TFA.
The Committee identifies the nature goods. A TRS is being undertaken The Action Plan lists 76 goals divided
of change required for achieving full for both import and export cargo according to the timeframe associated
compliance with the TFA, and keeps a at all ports, air cargo complexes, with their development (short term,
watch on the estimated time required inland container depots and land medium term and long term), and
to carry out the changes. It receives Customs stations in a time-bound identifies the lead agency responsible for
periodic inputs from all concerned manner, with a view to fixing well- delivering each of those goals. Activities
departments and agencies, deliberates defined timelines for each involved in the Plan have been mapped with TFA
on them, and accordingly provides the stakeholder. articles. Some refer to TFA articles that
NCTF with recommendations. India notified under “Category A,”
4. T h e W o r k i n g G r o u p o n i.e., provisions that India would have
Working Groups Infrastructure Upgrading, which already implemented by the time the
These small groups of experts from looks at the needs pertaining to TFA entered into force. The idea here
relevant institutions work on a specific i nf rast r uc t u re ex pa nsion a nd was to improve existing procedures and
trade facilitation measure or project. As renewal at land borders, sea ports mechanisms related to those “Category
of now, four working groups have been and airports, as well as the rail A” standards.
set up: network. A first analysis of the
needs of major ports has already India aims not only to meet the
1. The Working Group on Outreach, been done, and areas which require requirements of the TFA, but also to
which orga nizes sensitization i m me d i ate ac t ion h ave b e en become a global manufacturing hub by
wor k s ho p s a nd i n for m at ion identified. improving the ease of doing business.
campaigns that target Customs Many of the goals listed in the Action
officers at all levels as well as other Two meetings of the NCTF and three Plan go beyond the TFA provisions, and
partner government agencies and meetings of the Steering Committee have are known as “TFA plus.” The idea is to
various stakeholders in the supply taken place so far. Policy directions were bring down the overall cargo release
chain. Some of its activities have given, various initiatives were monitored time for imports and exports as follows:
been organized in collaboration with and, most importantly, coordination
international organizations like the among all players in the supply chain • For imports – within three days for
World Bank. was achieved. sea cargo, within two days for air
cargo and inland container depots,
2. The Working Group on Legislative Road map and on the same day for land
Changes, which conducts gap The NCTF has drawn up a National Customs stations.
analyses and develops concrete Trade Facilitation Action Plan (2017-
proposals for changes to primary 2020), which was released by India’s • For exports – within two days for sea
legislation as well as to procedural Hon. Minister of Finance on 20 July 2017. cargo, and on the same day for air
instructions. It has already done It is a road map that aims to facilitate cargo, inland container depots, and
extensive work in identif y ing trade by transforming the cross- land Customs stations.
gaps in all relevant acts, rules and border clearance ecosystem through
procedures, and recommended efficient, transparent, digital, and Since infrastructure and technology
appropriate changes. technology driven procedures, which are are prime enablers for trade facilitation,
supported by state-of-the-art sea ports, and more so in India, many activities
3. The Working Group on Time Release airports, rail, road and other logistics listed in the Action Plan directly relate
Study (TRS), which aims to identify infrastructure. The Plan was conceived to these fields. One of its objectives is to
bottlenecks, take steps to reduce after considering recommendations develop a world class infrastructure at
dwell times, and measure and from the Working Groups as well as ports, airports and dry ports as well as
publish the average release time of inputs from the private sector. for roads. Ongoing projects include:
14WCO news N° 85 February 2018
• the development of a RFID system • the deployment of a direct port India aims not only to meet
by the Ministry of Shipping to enable delivery (DPD) scheme that allows
container tracking; i mpor ters/consig nees to ta ke the requirements of the
delivery of containers directly from TFA, but also to become
• the installation of weighbridges and port terminals and haul them to
cranes at all ports; factories without first having to take a global manufacturing
them to container freight stations. hub by improving the ease
• the construction of road networks
a rou nd t he p or t s to re duc e India’s vision is to transform the trade of doing business. Many
congestion; ecosystem by reducing the time and of the goals listed in the
cost of doing business. Traditionally,
• the issuing of electronic delivery government bodies in the country are Action Plan go beyond the
orders by shipping lines; seen as regulators, but now the need TFA provisions, and are
at the moment is for them to act as
• the setting up of laboratories at all facilitators. Meaningful engagement known as “TFA plus.”
major ports; with the private sector, and a structured
and comprehensive approach to trade
• the improvement of rail networks facilitation is being adopted to realize
at important locations to enhance India’s vision.
connectivity;
More information
hardeep.batra@icegate.gov.in
Efficient management of supplier declarations and
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www.mic-cust.com 15DOSSIER
Integrated border control between
Peru and Chile
By Jesus Cordova Cruzada, covering issues such as jurisdiction
GENERAL DIRECTORATE OF THE CUSTOMS AND TAX
ADMINISTRATION OF PERU
and competence, or the operational
aspects that are necessary for the good
After six years of intensive efforts, on 16 August 2017, functioning of the Centres, not covered
by other agreements or conventions in
Peru and Chile opened their first joint integrated border force between the two countries.
control centres. This new system aims to facilitate the In the six years that have elapsed since
the framework agreement was signed,
movement of people, baggage and motor vehicles, and several bilateral coordination meetings
have been held in order to examine legal
is an example of the practical implementation of the and technical issues as well as questions
related to infrastructure and logistics,
coordinated border management concept promoted by with the aim of widening the scope of
the competences of each authority in the
the WCO and other international organizations such as other country, and in order to carry out
pilots and practical exercises, allowing
the World Bank and the Inter-American Development both parties to finalize the operational
de t a i l s a nd g u a r a nte e ef fe c t ive
Bank. coordination between all governmental
agencies at the border, once the Centres
become fully functional.
ON 19 JA N UA RY 2011, a “Fra mework of Peru” was signed. The Agreement
Agreement for the Implementation of sets the standards for the operation The set-up of a Bilateral Coordination
Integrated Control and Cooperation of these Integrated Border Control Committee (BCC) played a key role in
Systems for the Facilitation of Movement Centres (IBCC) at the border posts of this respect. Mandated to be the supreme
at Operational Border Crossings between Santa Rosa in Peru and Chacalluta in decision-making body and chaired by
the Republic of Chile and the Republic Chile, and includes legal provisions the authorities present at the border
DOCUMENTS
1 MIGRATION
2 VEHICLE
3 BAGGAGE
INTEGRATED TO BE PROVIDED CONTROL INSPECTION CONTROL
BORDER MIGRATION CUSTOMS CUSTOMS/ANIMAL
& AGRICULTURE
CONTROL 1. Valid identity or travel document
2. Passenger form
1. Passenger form
2. Proof of ownership,
1. Passenger form
(driver)
registration certificate 2. Joint sworn
EXIT FROM 3. Andean migration card or e-tourist card ENTRY INTO
(only by the owner or his/her Customs/SAG declaration
(if applicable)
PERU representative) CHILE
4. Judicial, notarial or consular authorization for
Single stop at minors under 18 travelling unaccompanied or 3. Notarized power
CHACALLUTA of attorney
with one of the parents
PERU CHILE
MIGRATION CUSTOMS CUSTOMS/ANIMAL
& AGRICULTURE
1. Valid identity or travel document 1. Passenger form 1. Passenger form
(driver)
2. Passenger form 2. Proof of ownership,
registration certificate 2. Sworn cash or
3. Andean migration card or e-tourist card
EXIT FROM (only by the owner or his/her dutiable baggage ENTRY INTO
(if appropriate) declaration
CHILE representative) PERU
4. Minors under 18
Single stop at a) family booklet or birth certificate 3. Notarized power of attorney
SANTA ROSA duly apostilled
b) travel authorization unaccompanied
or with one of the parents.
Judicial, notarial or consular authorization
16WCO news N° 85 February 2018
© SUNAT
posts of Santa Rosa and Chacalluta, At present, inspections only focus facilitate flows at the border and promote
with the support of their respective on private motor vehicles as well as a secure, expedited and transparent
foreign affairs ministries, the BCC met vehicles used for the transport of commercial/business environment.
once a month alternately in Peru and in passengers (cars and public service
Chile. The agreements reached during buses for cross-border transport by Other centres could be set up in the
the course of these meetings have road). In 2017, some six million people future. Peru Customs’ approach is to
legal status according to international and more than a million cars crossed use integrated border control as a tool to
law. This met hodolog y aimed to the border. In the future, the integrated streamline the flow of goods and people
create a cooperation and coordination border control system between Peru at all its border posts, and in this regard,
mechanism between Customs and the and Chile will also process cargo – a contact has been taken up with Bolivia,
migration agencies from both countries, feasibility study is being carried out by Ecuador and Brazil in order to discuss
ensuring that progress was made in the both countries to this effect. the implementation of this new mode of
shortest time possible. operation with them as well.
Results
Integrated border control The implementation of an integrated Conclusion
Integrated border control is a type border control system between Peru The successful implementation of the
of control involving the migration and Chile has reduced the crossing time first IBCCs at the borders between
ser vices (Peru’s Superintendencia for tourists and visitors at the border by Chile and Peru is first and foremost the
Nacional de Migraciones and Chile’s more than 50%, as they only need to stop result of a political agreement between
Policía de Investigaciones or PDI), once. The project has also facilitated the the Presidents of both countries, whose
the Customs administrations (Peru’s movement of vehicles and people in the enlightened decision has benefited
Superintendencia Nacional de Aduanas region, contributing to trade facilitation, travellers and passenger transportation
y de Administración Tributaria or especially in the cities of Tacna in Peru companies alike, but which will also
SUNAT and Chile’s Servicio Nacional and Arica in Chile, and, more generally, benefit cross-border traders in the
de Aduanas), and the animal and to an increase in tourism between the future.
agricultural health agencies (Peru’s two countries.
SENASA and Chile’s SAG) of both It is also the result of an unprecedented
cou nt ries in t he f ra mework of a Outstanding issues collaboration effort between the Peruvian
juxtaposed border post. Some issues are still pending, among and Chilean Customs authorities. More
w h ic h a re t h e i mpl e m e nt at ion generally, it is a concrete example of the
These different bodies carry out joint of a paperless env ironment a nd commitment taken by Latin American
controls, in pairs, some of which the dematerialization of required Customs administrations in favour of
involve both countries, on a one-stop documents. The ability to submit an two of the WCO’s top priority areas,
border post basis. Users need only electronic passenger list will need to be namely the integration of borders and
stop once, at the centre in the territory further explored. Technologies will have trade facilitation.
they are entering. In other words, each to be deployed for automated number
country carries out controls upon plate recognition, for example, or for a More information
entry into its territory following a joint risk-based selection of motor vehicles for jcordovac@sunat.gob.pe
control model between the competent inspection, according to the WCO SAFE www.sunat.gob.pe
authorities of both countries. Framework of Standards, in order to
17DOSSIER
Revisiting the “Trading Across Borders” category
of the World Bank’s Doing Business index
By John Edwin Mein,
EXECUTIVE COORDINATOR OF THE PROCOMEX Business index, promoted by the World process of exporting or importing a
ALLIANCE INSTITUTE, AND CURRENT CHAIR OF THE Bank, is considered a reference on such shipment of goods” (Doing Business
WCO PRIVATE SECTOR CONSULTATIVE GROUP
matters by policymakers and investors 2017).
from around the world.
Procomex is an alliance The import and export case studies use
The Doing Business project, which different products as a reference. For
of Brazilian companies has wide international credibility and the evaluation of export procedures,
serves as a marker for governments to Doing Business considers the product
and private sector attract foreign investment and business of greatest comparative advantage
opportunities, gauges 190 countries in each country, and in the case of
organizations which aims on 10 topics, each consisting of several evaluating import procedures, a single
indicators. Under the “Trading Across very common manufactured product,
to support the Customs Borders” category, the indicator registers, automotive parts, is used as a reference
among others, the time and costs for all countries. The most frequent
modernization process. associated with the logistics processes modes of transport, as well as the port,
for exporting and importing goods. airport, or land border used to trade
In this article, Procomex The data on trading across borders is those goods, and the most important
gathered by way of a questionnaire trading partner for the products being
explains why it decided to administered by trade service providers. studied are identified for each country.
replicate the survey used In the 2017 edition of the index, Brazil The assumption is that a shipment
ranked 149 th in the “Trading Across travels from a warehouse in the largest
by the World Bank to Borders” category among the 190 “export business” city to a warehouse
countries surveyed. Despite efforts to in the largest importing economy.
evaluate the performance modernize its foreign trade, the country In the Brazilian case, as in 10 other
has not managed to improve its ranking economies, data is also collected on the
of the country when it over the last few years. Was the world second largest city of business. Thus, the
moving faster than Brazil or was the samples from São Paulo (61%) and Rio
comes to ease of trading information used on Brazil “noisy”? de Janeiro (39%) are both evaluated and
To answer that question, Procomex weighted.
across borders, and what took up the challenge, in 2016, to
replicate the World Bank survey when In the evaluation of Brazil’s import
the exercise revealed. it comes to Brazil’s foreign trade, and processes, the World Bank identified
then investigate whether the Bank was Argentina as the economy from which
WHAT MAKES AN economy internationally measuring indicators correctly and if the country imports the highest value
competitive? There are a number those responding to the questionnaire (defined by the price multiplied by the
of responses out there. The World were the best positioned to do so, quantity) of automotive parts. To assess
Economic Forum, for example, defines i.e., whether they had the practical exports, the Bank identified soya beans,
competitiveness as the institutions, knowledge to provide the correct classified within Chapter 12 of the
policies and factors that determine answers. Harmonized System (HS) international
a country’s level of productivity – goods nomenclature, as the product
productivity which is supposed to Doing Business methodology with the largest comparative advantage
impact on the well-being of its people. To evaluate the capacity of a country to (defined by the highest export income),
process international trade operations and China as the largest purchasing
Competitiveness can be evaluated by efficiently, Doing Business records economy of the product.
comparing how different countries the time and cost associated with the
handle identical processes, or put in logistics process of exporting and First exercise
place measures that are seen as critical importing goods. Since 2016, it has Procomex first replicated the survey
factors for companies to start operating evaluated “the accumulated time and in 2016. Actual traders that import or
or to grow, the objective being to know cost (excluding tariffs) associated with export the products targeted in the
what countries do best and how efficient the three procedures – document World Bank survey were asked to fill
they are in comparison with one another. compliance, border compliance and in the questionnaire used by the Bank.
In the trading environment, the Doing domestic transport – within the total Based on the responses, Procomex set
18WCO news N° 85 February 2018
© Brandi Redd
out to analyse foreign trade processes
in detail, and identified a significant
nu mber of issues rega rd i ng t he
methodology, the questionnaire, and
the selection of sectors (products) and
trading partners made by the Bank.
It is worth mentioning that obtaining
the information was a challenge. Since
2004, Procomex has been working
with companies and private sector
organizations on the modernization of
Customs processes, making proposals
for changes in procedures to the
government that resulted in substantially
improving the “lead time” of Brazilian
companies.
Over the years, Procomex has built up
a network of companies with whom it
works closely and with whom it has built
a significant level of trust. However, many
of the companies that were approached
during the survey refused to respond
to the questionnaire, considering the
information commercially sensitive,
even though the confidentiality of the
data was assured. It took many calls
to convince them to participate in the
survey, and lots of time clarifying the
questions asked in order to obtain a
significant level of response.
Second exercise
In 2017, Procomex repeated the exercise second-largest export product, namely origin for goods of HS 87.08 (8% of
with two of its top professionals working automobiles (HS 87) – an industrial Brazilian imports). Another issue is that
part-time over three months. Instead of product, instead of the country’s largest relating to the means of transport used
focusing only on the products, sectors export product, namely residues and as a reference in the survey; the study
and regions selected by the World waste from food industries (HS 23) – an focused on the Port of Santos, although
Bank, Procomex decided to introduce agricultural product. This choice alone only 1% of imports of automotive parts
new ones which were considered more improves Argentina’s position in the from Argentina were made through this
meaningful in evaluating Brazil’s ease ranking. port. To obtain an accurate picture of
of doing business in the trade facilitation the import process of automotive parts,
area. The survey methodology proposed With respect to imports, although the study should have focused on road
by the Bank was strictly followed, but Argentina is used in the World Bank transportation through the São Borja
with a new set of data. study as Brazil’s main country of origin border with Argentina.
for goods of HS 87.08, over the last few
For exports, the Procomex survey results years, Germany has been the main Countries of origin and means of
suggest that the choice of reference exporter of automotive parts to Brazil, transport used are two important factors
sectors (products) has a significant representing about 11% of the parts that should be taken into account when
impact on countries’ final scores. In imported into Brazil and surpassing trying to accurately calculate the time
the case of Argentina, for instance, the by a considerable margin Argentina, and costs associated with imports of
World Bank chose to use the country’s which is the fifth largest economy of automotive parts into Brazil. The choice
19DOSSIER
of reference countries used in the to the clarity of the questions presented Moreover, directly asking importing
analysis of imports is also important as by the World Bank in its questionnaire. and exporting companies to answer the
they define the modalities, boundaries, survey, instead of surveying only trade
a nd d i f ferent i ate d pr a c t ic e s of Applying the same questionnaire service providers, enabled Procomex
Customs clearance, including required on a global scale raises a number of to get better information about the
documentation. Moreover, depending challenges, among them is the issue operations, problems, times and costs
on the means of transport and the of language, and how to guarantee the relating to Brazilian imports and
place of entry, different border agencies comparability of responses. Generic exports. In fact, direct communication
are involved and different controls are questions, not specifically adapted with companies leads to information of
applied to a shipment. In all the tests to the Brazilian reality, generated a better quality.
performed, the results obtained in this ambiguous interpretations. Many survey
study suggest that Brazil’s international participants corrected their answers as Based on the experience gained during
position is underestimated in the World soon as the questions were clarified. both exercises, the Procomex Alliance
Bank's calculations. Deciding when an activity began and Institute would strongly recommend
ended is, for example, not very clear, that Customs authorities identify an
Other lessons learned and some respondents had doubts about independent organization in their
The answers obtained by Procomex how to calculate the time spent on each country, such as a university or a
demonstrated that companies face activity. What about calculating the time research institute, and undertake a
different realities, which are dependent spent on performing activities that occur similar study. Should they decide to do
on their location, the most used border simultaneously? The preparation of so, they can count on the assistance of
post, their commercial partner, and the documentation and border procedures the Institute.
transacted product. Participants in the are accounted for separately, although
Procomex survey gave very different they may occur simultaneously, thus More information
answers and the level of inconsistencies increasing the total time used for the http://www.procomex.org.br/relatorios_
suggests that attention needs to be given operation as a whole. procomex
Customs Studies in Australia
Study in Australia in 2018
Centre for Customs and Excise Studies
Charles Sturt University
Port Macquarie Campus
BACHELOR DEGREES | POSTGRADUATE DEGREES | DOCTORATES
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AN I
A
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R R A - AU ST R
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