India_USA-3The U.S. and India have reached an agreement that promises to pave the way toward global implementation of the WTO Trade Facilitation Agreement (TFA). The breakthrough agreement between India and the U.S. should now make it possible for member countries to begin implementing the requirements of the agreement, providing potentially significant financial benefits to businesses trading goods around the world as local customs procedures are streamlined. The target date for ratification of the agreement is 31 July 2015. Upon ratification by two-thirds of the membership, the agreement will enter into force for all WTO states. Member state will then begin the process of adopting conforming legislation.

The Trade Facilitation Agreement

Concluded in December 2013, the TFA is intended to streamline, and to some extent harmonize, customs clearance procedures around the world by imposing new multilateral disciplines on customs procedures in all member countries. The agreement imposes basic globally applicable principles for transparency, due process, and reasonableness in the development and implementation of customs clearance requirements across a broad spectrum of activities related to importing, exporting, and transiting of goods.

The U.S.-India agreement

While the specific details of the bilateral agreement are not publicly available at this time, a press release from the Office of the U.S. Trade Representative states that there are two key elements of the deal:

  • the U.S. and India agree that the multilateral TFA should be implemented without conditions, on the basis of a standard legal instrument for implementing new WTO agreements; and
  • the “peace clause” agreed upon by WTO members in December 2013, under which WTO members will refrain from initiating challenges to certain food security programs under the WTO dispute settlement process, will remain in place “until a permanent solution is found.”

Since announcement of the agreement last December, India has raised concerns that developing countries need greater assurances regarding their ability to maintain government agricultural buying programs and other farm subsidies until an agreement could be reached among WTO members on how to bring such programs into conformity with the body’s trade rules. The U.S. and India had previously disagreed on the form such assurances should take.

Under the new bilateral agreement, the U.S. and India will seek a General Council decision on the two key elements outlined above. A General Council decision will require the consensus of all WTO members. Source: Hogan Lovells International Trade Alert

carsBeitbridge border post is experiencing a significant decline in volumes of imported used cars following a 20 percent increase in excise duty which took effect on November 1. “We are processing documents for less than 40 vehicles per day compared to the previous month when we would deal with over 150 cars,” said a ZIMRA official.

Investigations by The Herald indicate that before the new duty regime, ZIMRA was making over $100 000 on car imports at Manica transit shed a day, but the figure has declined to around $30 000. A modest vehicle costs between $3 000 and $4 000 at dealerships on the South African side of the border and attracts import duty of the same amount.

Before the introduction of the new regulations, zimra officials were clearing around 170 vehicle imports a day as dealers rushed to beat the November 1 deadline.

Finance and Economic Development Minister Patrick Chinamasa recently announced an increase in customs duty on single cab vehicles with a payload of more than 800kg from 20 percent to 40 percent. Buses with a 26-passenger carrying capacity and above will pay 40 percent from zero duty, while duty for double cab trucks was reviewed from 40 to 60 percent. Vehicles with an engine capacity below 1 500cc had their duty increased from 25 to 40 percent.

Customs duty for vehicles with engine capacity above 1500cc remains at 86 percent, inclusive of VAT and surtax. The new development has seen the Zimbabwe Revenue Authority processing fewer vehicles at Manica transit shed in Beitbridge. Vehicle dealers at the South African border said they were struggling to sell five cars a day. Major car dealers include Quest Royal, Wright Cars, Car Cade, Murree Motors, Noble Motors and KDG. Cars with small engines such as the Nissan March, Honda Fit, Toyota Vitz, Toyota Corolla, Toyota Raum and FunCargo were on high demand before the new duty regime. Source: The Herald

Worlds Largest Container ship 2Hyundai Heavy Industries Co. in Ulsan, South Korea has just named the new title-holder for the world’s largest container ship; a 19,000 TEU giant for China Shipping Container Lines (CSCL) named CSCL Globe. CSCL Globe measures 400.0 m in length, 58.6 m in width and 30.5 m in-depth, and will be deployed on the Asia-Europe trade loop after being handed over to the owner later this month. The ship was ordered by CSCL back in May 2013 along with four other 19,000 TEU capacity ships for a total cost of $700 million.

The series was originally planned to carry 18,400 TEUs, but were later updated by 600 TEU. For comparison, Maersk’s Triple-E’s have a TEU capacity of 18,000 and measure 400 meters long by 59 meters wide. Maersk Line has ordered a total of 20 of the ships from Daewoo Shipbuilding and Marine Engineering, also in South Korea, to be delivered by 2016.

Upon delivery, CSCL Globe will take over the title of world’s largest container ship from MV Maersk Maersk McKinney Moller and her Triple-E sister vessels, first delivered in July 2013. Before that, the title of was held briefly by MV CMA CMG Marco, a 16,020 TEU capacity container ship delivered to CMA CGM Group in November 2012. Source: gCaptain.com

The second bridge over the Zambezi River in Tete, which is 715 metres long and was built by a consortium of Portuguese companies, was inaugurated Wednesday, after construction began in 2011. The bridge, which connects the city of Tete to the Moatize district, which has the largest deposits of coal in Mozambique, was completed last October.

The new bridge is an integrant part of the National Road EN103, which is the main connection between Mozambique and Zimbabwe, and allows the connection of Malawi and Zambia with the Beira Port. The National Road EN103 assumes itself as the main axis connecting north-south, linking South Africa to Malawi / Zambia.

The bridge as a whole is composed by the bridge itself which crosses the Zambezi riverbed, and an access viaduct to access the bridge from the south side.

The work, costing 105 million euros, was executed by a Portuguese consortium of contractors made up of Mota-Engil, Soares da Costa and Opway and, as well as the bridge, overpass and access roads, included rebuilding 260 kilometres of roads linking Tete to the borders with Malawi and Zimbabwe.

As part of the “New Tete Bridge and Roads” concession the project was designed for movement of heavy vehicles that currently cross the Samora Machel bridge, relieving pressure on the bridge, also on the Zambezi River, which was built over 50 years ago.

The new bridge is named Kassuende in honour of a place in the district of Marávia that between 1968 and 1974 was a logistics base in Mozambique’s armed liberation struggle. Source: Macauhub & Betar.pt

WCO Customs Theme 2015The WCO is dedicating 2015 to promoting Coordinated Border Management (CBM) under the slogan “Coordinated Border Management – An inclusive approach for connecting stakeholders”.

WCO Members will have the opportunity to promote the enhanced coordination practices and mechanisms that they have implemented within their administrations and with other Customs administrations and government agencies, as well as with economic operators involved in cross-border trade.

The term Coordinated Border Management (CBM) refers to a coordinated approach by border control agencies, both at the national and international level, in the context of seeking greater efficiencies over managing trade and travel flows, while maintaining a balance with compliance requirements.

CBM can result in more effective service delivery, less duplication, cost-savings through economies of scale, enhanced risk management with fewer but better targeted interventions, cheaper transport costs, less waiting times, lower infrastructure improvement costs, more wider sharing of information and intelligence, and strengthened connections among all border stakeholders. Source: WCO

 

Campaigners say rising demand in Asia is fuelling the poaching of elephants in Africa and the smuggling of ivory

Campaigners say rising demand in Asia is fuelling the poaching of elephants in Africa and the smuggling of ivory

Officials travelling to Tanzania with Chinese President Xi Jinping went on a buying spree for illegal ivory, an environmental activist group has said.

In a report, the Environmental Investigation Agency cited ivory merchants who said demand from the delegation in 2013 had sent prices soaring.

China denies the allegations, saying it consistently opposes poaching. Read the following blog – Tanzania – Chinese ivory spree during presidential visit. authored by Africa – News and Analysis.

containerThe International Maritime Bureau has been alerted to a fraud involving a shipping container’s weight and size that is atypical of what one might out of a container weight fraud case; the tare weight, or unladen weight of the container itself was unrealistically falsified and much higher than the actual, correct weight of the container.

The IMB reports that the incident concerned a container of aluminium scrap in which the information outside the box was tampered with to show false weight and size. The fraud was uncovered by an IMB member after being notified of a significant weight shortage on the container, which arrived in the Far East from the Middle East.

During the investigation, the IMB member noted that the tare weight of the container, as shown on its door – and used by the shipper – was 3,680kg, while the cube, also shown on the door, was 2,700 cubic feet. While the numbers displayed were entirely acceptable for a 40 foot container, the box in question was a 20 foot one, according to the IMB. The shipper has since confirmed that the correct tare weight for the container should have been 2,200kg, much lower than what was declared.

An examination of the photos taken when the container was loaded revealed that the part of the door on which the figures were displayed was a slightly different color, which leads to the conclusion that the door had been repainted at some point, and the new, false figures were added after that. The IMB notes is not known when this was done and it is unlikely to be an isolated case.

The IMB says it has not come across a case before where a container has been repainted with incorrect weight and size information that in hindsight clearly cannot be correct for a 20 foot container, however it does have knowledge of a case where a label was placed over the container number of a stolen container to disguise the theft. The IMB says that this would be a more logical deception since carriers tend to focus on the container numbers themselves, and rely on the shipper to provide any other information required.

The IMB asks that others who detect similar container information tampering to report it so that it can attempt to establish a pattern that might indicate who is responsible and can issue suitable warnings to the industry if it proves widespread in the future.

Apart from being a fraud, mis-declaring the weight of containers can also pose a danger to the vessel and crew, as mis-declared container weights remains a contributing factor to incidents involving containers lost at sea.

This month, the International Maritime Organization’s Maritime Safety Committee is scheduled to adopt amendments to the International Convention for the Safety of Life at Sea chapter VI to require mandatory verification of the gross mass of containers, either by weighing the packed container or by weighing all packages and cargo items and adding the tare mass, in turn boosting the safety of container ships and crew.

The IMB stresses that in this case, the container owner has denied responsibility and the IMB member doubts its supplier was involved. Source: emaritimeexchange.com

MOL-ComfortMany may recall the shocking pictures of MOL Comfort’s last voyage last year – images of a huge crack in the fully laden container ship on the high sea.

While conducting research for her PhD thesis at the Technical University of Denmark, Ingrid Marie Vincent Andersen, PhD had found clues prior to this incident suggesting the possibility of catastrophic failure was more real than previously thought.

Digging deep into the hydro-elastic structural response of container ships similar to the MOL Comfort, she had discovered some very interesting details.

Clearly, the ship had broken up when the hull girders failed, but what led to that failure was not so obvious. She, like many others, say it very likely had a lot to do with the cargo loading condition of the ship, but the full answer was quite a bit more complicated than that.

Anderson says the MOL Comfort and her sister vessels were simply under engineered by naval architects that didn’t fully account for enormous additional loads which were being placed on the ship.

“It is believed that the hydro-elastic effects and the effect of hull girder flexibility are capable of significantly amplifying the hull girder stresses and thus contribute to fatigue damage as well as to the extreme hull girder loading in container ships,” Andersen notes in her PhD thesis.

In her research, she studied ships in the 8000-9000 TEU range and discovered, “the hull girder vibrations due to hydro-elastic effects is capable of doubling the stress response amidships in some cases – also in the extreme loading cases.” Click here to witness a video of stress experienced on a container ship.

“I don’t think the incident was fatigue-related, but it could be due to under-estimation of the hydro-elastic effects on the wave-induced vertical bending moment at the design stage. The major uncertainty at the design stage is related to estimation of the wave loads,” notes Anderson.

Research published by Lloyd’s Register (LR) engineers Nigel White and Zhenhong Wang support Andersen’s research.

LR notes the principle design challenge inherent to large and ultra-large container ships is the combined effects of whipping, springing and warping/distortion of the hatch openings.

Until recently, Andersen notes that hydro-elastic effects have not been directly taken into account for in the classification societies’ design rules for container ships. In 2014, LR updated their design rules to reflect the discovery of much higher loadings inside the structure of container ships.

Andersen, White and Wang all cite strain data captured aboard a 2006-built CMA CGM 9,600 TEU container ship over a four-year period showing severe spikes in the vertical bending moment as wave strikes on the bow resonate down the ship.

Anderson notes that due to a large uncertainty around sea state conditions a vessel will encounter, maximum wave loading is subsequently uncertain. Wave loading is compounded by container ships that opt for greater cargo space forward, and thus greater bow flare such as on the MOL Comfort and the ultra-large 14,000 TEU+ sized vessels that are currently in operation.

These bending moments, according to their research can be upwards of 300 percent the traditionally calculated wave bending moment using linear ship motion codes – the ones that ships have traditionally been built to. The traditional codes have a realized safety factor of around 200 percent.

Anderson notes that due to a large uncertainty around sea state conditions a vessel will encounter, maximum wave loading is subsequently uncertain. Wave loading is compounded by container ships that opt for greater cargo space forward, and thus greater bow flare such as on the MOL Comfort and the ultra-large 14,000 TEU+ sized vessels that are currently in operation.

“The high strength steel used for the construction of the ship will result in a slightly lower natural frequency and possibly, together with the pronounced bow flare, making the vessel more susceptible to whipping vibrations,” adds Anderson.

Since the MOL Comfort sinking, all of the sister vessels to the MOL Comfort have been retrofitted with additional structural steel, but certainly other ships in that size range have not.

Considering the step changes being made in container ship design, logic would dictate that additional study and consideration be taken when designing and operating such vessels, including the installation of strain gauges to properly measure what is happening inside the ship. Source: gCaptain.com

Trade policy - a balancing actA draft Notice for the rules under section 21A relating to Special Economic Zones has been made available for public comment. The draft rule amendments proposed under section 21A refer to the substitution of Industrial Development Zone (IDZ) for Special Economic Zone (SEZ). The draft rules can be accessed on the SARS website. Stakeholders have until 28 November 2014 to lodge any comments. Source: SARS

Biggest bust of Rhino Horn at a South African airportSARS Customs officers at OR Tambo International Airport (ORTIA) last week intercepted over 41kg of rhino horns – with a total value of over R4.5 million – transiting through the airport. This is the biggest ever seizure of rhino horn by the SARS Customs team at OR Tambo International, Johannesburg.

As a result of profiling two foreign nationals travelling from Maputo to Vietnam via Johannesburg,  their baggage was intercepted during a stop-over at ORTIA. A Customs detector dog “Mimmo” reacted positively to two bags. The tags found on the bags also did not correspond to the tags presented to Customs officials during the initial questioning of the passengers. This is a practice commonly found with narcotics smuggling syndicates.

The bags had a strong garlic and glue smell, (a tactic to distract detector dogs). Further to the plastic wrapped horns, the zips of the bags were also glued in an effort to keep the odour intact and to make the inspection difficult. Subsequent physical inspection of the bags by Customs officials revealed the rhino horn allegedly being smuggled by the two travellers. Source: SARS

General_Administration_of_Customs_of_the_People's_Republic_of_China_logoChina Customs published Customs Interim Measures on Enterprise Credit Management (Interim Measures) on 8 October 2014. It is a part of an effort by the Chinese Government to establish a Social Credit System based on a 2014-2020 plan of the State Council. The new system will replace the existing Customs Compliance Rating Scheme and will come into effect on 1 December 2014.

The Interim Measures require China Customs to establish an enterprise credit management system to collect enterprise information, conduct credit appraisal, supervise enterprises accordingly and disclose the enterprise credit-related information to the public.

According to the Interim Measures, China Customs will place enterprises into one of three categories: the “Certified Enterprise”, the “General Enterprise” and the “Discredited Enterprise”.

A Certified Enterprise obtains China AEO (Authorized Economic Operator) status is further classified into two groups: “General” and “Senior”. Preferential customs treatment will be provided for all Certified Enterprises, this treatment includes a lower customs goods examination rate and a simplified customs review process. For companies that qualify as a Senior Certified Enterprise, China Customs will designate a customs officer to help coordinate between the company and various functions and offices of China Customs. China Customs will publish the detailed standard for the accreditation requirement/ procedure of the Certified Enterprise separately.

While the General Enterprise is a default category, companies should try their best to avoid being categorized as a “Discredited Enterprise”.

A Discredited Enterprise is a company which has been found committing non-compliance activities within the last 12 months. Non-compliance activities include smuggling activities conducted criminally or administratively and other violations being penalized by China Customs for a cumulative amount of more than RMB1million.

A Discredited Enterprise will be subject to a higher customs goods examination rate as well as to tightened review of customs declaration documents and tightened supervision when they conduct/ engage in processing trade activities.

Another key point that companies should notice is that China Customs is going to publicly disclose the enterprise credit system information on its website/ notice board. This will include the enterprise category of a company, as well as its customs penalties that a company has been imposed for the past five years. In particular, customs penalties will also be publicly disclosed via the National Enterprise Credit Information Disclosure System.

The National Enterprise Credit Information Disclosure System is to be established by the State Administration of Industry and Commerce according to the Interim Regulation on Public Disclosure of Enterprise Information which is come into force on 1 October 2014. Based on this regulation, penalties imposed against companies by any government agencies are to be disclosed publicly via this system.

Compliance counts, and it is now even more important with China’s establishment of its Social Credit System. Customs and trade compliance is often an area that a company does not pay much attention to until a major problem appears. Now a company could suffer huge financial and reputational loss. We recommend that companies take the launch of the Interim Measures as a special opportunity to initiate a self-compliance review of its trade activities and establish or upgrade its trade-related internal controls. This will enable the company to achieve a better balance between compliance and efficiency.

The Interim Measures have yet to provide detailed guidance on a number of areas. These include issues such as what are the appraising standard for Certified Enterprise, how will a company’s rating be reconciled between the previous customs system and the new accredited categories, etc. Source: Mayer Brown Consulting (Singapore)

WCO Secretary General Kunio Mikuriya addressing delegates at the high-level opening ceremony of the ConferenceWCO Secretary General Kunio Mikuriya addressed delegates at the high-level opening ceremony of the United Nations Conference in Vienna on 3 November 2014.

The Conference aimed to seek a renewed political commitment to address the special needs of landlocked developing countries (LLDCs) and identify priorities, ways, and means to address them. This was the second Conference after the first one held in Almaty, Kazakhstan in 2003. The Conference takes place only once a decade and is an important milestone for formulating a focused, forward-looking and action-oriented development agenda for LLDCs for the next decade.

Secretary General Mikuriya made a statement together with other heads of international organizations, including Mr. Ban Ki-moon, Secretary-General of the United Nations, and Mr. Roberto Azevêdo, Director General of the World Trade Organization, and several heads of state, including President Heinz Fischer of Austria. In his remarks, he highlighted the importance for Customs administrations to establish an effective and efficient transit regime which is an essential element to promote regional economic integration and ensure economic growth of LLDCs.

He also used his speech to launch the WCO Transit Handbook that the Permanent Technical Committee finalized last week. Secretary General Mikuriya announced that the Transit Handbook would be formally published shortly after further editing and incorporating the outcomes of the Conference. He also described other WCO instruments that facilitate transit, including the Revised Kyoto Convention and the Time Release Study. He gave an assurance of enhanced delivery of technical assistance and capacity building for LLDCs through the Mercator Programme, a tailor-made assistance programme supported by a wealth of instruments and best practices, a network of accredited experts and a comprehensive donor engagement mechanism. Source: WCO

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international%20shipping%20surcharges-resized-600The international trade association that represents the world’s freight forwarders and logistics service providers, FIATA, has called on container shipping lines to provide greater clarity on the ever increasing variety of surcharges that they apply.

Robert Keen, chairman of FIATA’s Multimodal Transport Institute, said in a statement that forwarders were accustomed to currency and fuel surcharges, but needed more transparency for many of the other surcharges, “often with questionable names and purposes”, that are levied on freight forwarders.

“In the past, we have seen administration fees, peak season surcharges, or ISPS-add on surcharges,” Keen said. “Of late, we have had examples of container cleaning fees and container sealing fees, without any evidence of the expense actually being incurred.”

It is a recurring complaint among forwarders and shippers that have long accused the carriers of using surcharges as revenue streams rather than the cost recovery mechanisms for which they are purportedly imposed.

“It is time for freight forwarders to stop accepting at face value opaque and unjustified surcharges,” said Keen, who is also director general of the British International Freight Association (BIFA).

Keen highlighted the congestion that is currently plaguing many ports around the world.

“There have also been recent examples of port congestion surcharges caused by labour unrest; and haulage surcharges resulting from HGV driver shortages, which is difficult to understand as there is no explanation and little justification for an additional charge for a service that the container line is finding difficult to provide,” he said.

The Hong Kong Shippers’ Council has also taken a dim view of the surcharges being levied on shippers using the Kwai Chung container terminals. Willy Lin, chairman of the council, said the port congestion surcharge introduced by shipping lines in the intra-Asia trade on October 19 was “unacceptable and unjustifiable.” Sources: Lloyds and JOC

TripartiteLogoAfrica’s longstanding vision is an integrated, prosperous and united continent. This vision will come closer to reality in December when the largest integrated market covering 26 countries in eastern and southern Africa is established.

Commonly known as the Tripartite Free Trade Area (TFTA), the integrated market will comprise the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC).

The establishment of a single and enlarged market is expected to boost intra-regional trade and deepen regional integration through improved investment flows and enhanced competition.

In fact, this integrated arrangement will create a combined population of some 625 million people covering half of the member states of the African Union (AU) and a Gross Domestic Product of about US$1.2 trillion.

According to a statement released by COMESA, which is spearheading the implementation process as chair of the Tripartite Taskforce, the proposed Grand FTA will be launched in December during a Tripartite Summit to be held in Egypt.

This follows a series of intense consultations and negotiations that have been going on since 2008 when the three regional economic communities made a commitment to jointly work together in regional integration during their historic summit held in Kampala, Uganda.

The commitment shown by the three economic communities has now proved fruitful as the Grand FTA is within sight and becoming a reality. Source: sardc.net

nCEN goes live in BotswanaThe WCO launched its national Customs Enforcement Network (nCEN) application in Botswana in October 2014. Following the pilot projects in Mauritius and Kenya, the nCEN is already operational in Namibia, Swaziland, and the Seychelles, providing these countries crucial opportunities for regional cooperation in the enforcement field.

After an official meeting in Gaborone with the Executive Management Committee as well as with the General Managers of Botswana Unified Revenue Service, the WCO delegation conducted an eight-day nCEN Workshop intended to provide local officers with the necessary knowhow about the nCEN application, with an ultimate goal of improving the operational efficiency and analytical possibilities of their Administration. The workshop also touched upon the other WCO applications, giving valuable insight on the additional data mining and information exchange potential of the CEN suite.

The launch of the nCEN application in the region is financially supported by the Finish government as a component of the WCO project “Building Trade Capacity through Customs Modernization in the East and Southern Africa Region”, aiming at providing Customs Administrations with the necessary hardware and software as well as related knowledge and skills to implement simplified and improved customs procedures with modern customs operational techniques.

The nCEN application consists of three independent databases (a seizure database, a suspect database, and a company database), as well as a communication component. The core database of national seizures and offences comprises data required for analysis, including means of conveyance, routes, and the possibility to view photos depicting exceptional concealment methods. Two supplementary databases contain information on suspected persons and offending business entities, facilitating a structured investigation process.

The nCEN software is a free application for all WCO Members. The costs of the hardware needed to run the nCEN application, the costs associated with the training, and possible costs for modifications to the local IT infrastructure (if applicable), are however the responsibility of the implementing Customs Administration. Source: WCO