Finance Minister has launched two new IT Initiatives – ICEDASH and ATITHI for improved monitoring and pace of Customs clearance of imported goods and facilitating arriving international passengers.
ICEDASH is an Ease of Doing Business (EoDB) monitoring dashboard of the Indian Customs helping the public see the daily Customs clearance times of import cargo at various ports and airports.
With ICEDASH, Indian Customs has taken a lead globally to provide an effective tool that helps businesses compare clearance times across ports and plan their logistics accordingly.
The dashboard has been developed by CBIC in collaboration with NIC. ICEDASH can be accessed through the CBIC website.
With ATITHI, CBIC has introduced an easy to use mobile app for international travelers to file the Customs declaration in advance.
Passengers can use this app to file a declaration of dutiable items and currency with the Indian Customs even before boarding the flight to India. ATITHI is available on both, iOS and Android.
Key-Benefits of the Initiative
Improving Global Ranking – the reform carried out by the CBIC will increase India’s global ranking in the Trading Across Border.
Increase Transparency – both ICEDASH and ATITHI would be key drivers for further improvement especially as they reduce interface and increase the transparency of Customs functioning.
Encouraging Tourism – ATITHI would, in particular, create a tech-savvy image of India Customs and would encourage tourism and business travel to India.
Better International Tourist Experience – the ATITHI app will facilitate hassle-free and faster clearance by Customs at the airports and enhance the experience of international tourists and other visitors at our airports.
Source: Press Information Bureau Government of India Ministry of Finance, 4 November 2019
SARS Customs clearance has operated under a Customs Procedure Code (CPC) regime for almost 10 years now. To commemorate the 10-year anniversary, the accompanying CPC Chart and External User Guideline is intended for expert users and newcomers to Customs clearance, alike. In particular, it is important for cross-border traders to understand that the CPC combinations cannot be used indiscriminately; but, have specific meanings and associations with various other Customs rules for the electronic processing of goods for import, transit and export. Attempts to ‘fudge’ a CPC for any particular purpose or reason, may lead to a negative result downstream. Accuracy in the use and application of CPCs results in improved trade compliance, more accurate trade statistical data and fewer declaration amendments hence less penalties and lost time. Over the last decade, it is certain that most international freight forwarders and tertiary Customs training institutes and universities have introduced some or other CPC methodology into their curricula. Feel free to use this guide in support of such curricula. I do however, request that in so doing, the attached material – made freely available to you – will be delivered ‘intact’ in the form as compiled and presented here.
A Tutorial and Self Assessment Guide on the application and use of Customs Procedures Codes, for external stakeholders involved in the clearance of goods in South Africa, will shortly be uploaded to this site.
The stakeholders – from various business associations and Customs umbrella bodies – were very positive after the engagement and were open to form part of an AEO Working Group going forward. The idea is to have representatives from the public and private sectors who would discuss and examine the various issues related to the design and roll-out of the future AEO programme.
An engagement with various key Customs stakeholders was held on 25 September to share Customs’ plans to introduce an Authorised Economic Operator (AEO) programme in South Africa.
The AEO programme follows in the footsteps of Customs’ Preferred Trader programme which offers various benefits to compliant Customs clients. The SARS’ Preferred Trader programme, which was officially launched in May 2017, currently has 105 accredited clients who have been awarded Preferred Trader status.
The AEO programme – based on the World Customs Organisation’s SAFE Framework of Standards – requires an extra level of safety and security compliance from traders and offers additional benefits, compared to the Preferred Trader programme. It is also open to the entire Customs value-chain, as opposed to only local importers and exporters.
SARS Customs intends to pilot the AEO programme in South Africa before the end of 2019. Clients in the motor vehicle manufacturing industry – representing big businesses have been earmarked to participate in the pilot, as well as SMMEs in the Clothing and Textile Industry. SARS is also in the planning stage of engagements with its major trading partners within BRICS and the EU for the purpose of establishing Mutual Recognition Agreements (MRAs) for its AEO Programme and intends to commence engagements within Africa as well.
At the recent stakeholder engagement session, Customs and Excise Group Executive, Rae Vivier, indicated that the AEO programme was being designed for Customs to partner with the private and public sector to improve voluntary compliance and trade facilitation in the country. She mentioned a few key points that SARS was looking at when it came to AEO, including Mutual Recognition Agreements with SACU/SADC trading partners, close cooperation with Other Government Agencies (OGAs) in South Africa to ensure the programme is recognised by all government departments, exploring modern technology such as block chain and augmenting AEO benefits in order to design a programme that would be beneficial for trade.
She also mentioned that C&E Trade Services would soon be sending a survey to Customs traders to find out what clients’ requirements are, from a trade facilitation point of view. “We need to collaborate with each other to ensure we design something for the future,” she said.
The expansion of Free Zones has been mainly driven by political decisions closely affiliated with national economic development strategies. In some countries Customs is the primary governmental authority that regulates and governs Free Zones, while in others Free Zones are governed by other authorities, with less involvement from Customs. Depending on the institutional set-up, the scope and degree of Customs control in Free Zones and the economic operations carried out there varies considerably from one Free Zone to another.
Existing literature reveals that Free Zones attract not only legitimate business but also illicit trade or other illicit activities that take advantage of the regulatory exemptions of Free Zones.
Numerous papers have outlined the risks associated with Free Zones, along with economic benefits. Most of them deal with the legality of Free Zones policies, particularly in relation to export subsidies as governed by the WTO Agreement. Several other papers have dealt with illicit activities that have been perpetrated by exploiting characteristics of Free Zones. Such illicit activities include money laundering, tax-evasion and trade in counterfeit goods or other illicit goods.
The WCO research paper deals with Customs-related aspects of Free Zones, considering both the associated benefits and risks. The risks primarily concern illicit trade that exploits key aspects of Free Zones.
Literature that focuses on risks associated with Free Zones, particularly illicit trade or other illicit activities, have several things in common. They tend to highlight the fact that supervision over cargoes/companies in Free Zones is somewhat relaxed in comparison with other parts of the national territory. The following factors have been pointed out or quoted, although details are rarely provided due to the technical nature of the topic.
Relaxed controls inside Free Zones
Insufficient Customs’ involvement in the operation of Free Zones
Ease in setting up companies inside Free Zones
Insufficient integration of Information Technology(IT) systems by governmental agencies inside Free Zones
The WCO research paper’s key observations fall in line with those outlined above. It describes the low-level involvement of Customs in monitoring cargo movement and companies’ activities inside Free Zones. This includes Customs’ low-level involvement at the establishment phase of Free Zones, at the approving companies permitted to operate in Free Zones pahse, and during the day-to-day monitoring of cargoes in Free Zones. Limited Customs’ authority inside Free Zones is also mentioned. This paper touches upon relaxed Customs procedures/controls related to Free Zones and observes that they stem from Customs’ limited involvement and limited authority inside Free Zones. These limitations, combined with insufficient integration and utilization of IT, result in a lack of the requisite data concerning cargoes inside Free Zones, and render Customs’ risk-management-based controls – conducted for the purpose of preserving security and compliance without hindering legitimate cargo flows – virtually useless.
The research paper considers the concept of ‘extraterritoriality’ concerning Free Zones, stemming from a misinterpretation of the definition of Free Zones contained in the WCO Revised Kyoto Convention (RKC), to be behind the aforementioned limited involvement by and limited authority of Customs. The definition within Annex D, Chapter 2 of the RKC does not state that Free Zones are geographically outside the Customs territory. The definition means that the Free Zone itself falls within the Customs territory. ‘Goods’ located in Free Zones are considered as being outside the Customs territory for duty/tax purposes only.
In August of 2019, both the United States and Thailand announced their plans to test blockchain applications for tracking and managing shipments. The U.S. Customs and Border Protection (CBP) is planning to test a blockchain application against their current system to determine how distributed ledger technology (DLT) can improve its existing processes. Thailand, on the other hand, plans to use IBM’s blockchain-based logistics platform Tradelens to improve customs processes such as data sharing.
Originally developed in a joint venture between IBM and logistics giant Maersk, Tradelens seeks to streamline processes in the global shipping industry by making the flow of information occur in real-time. The blockchain platform is reported to currently process about half of the world’s shipping data.
These moves highlight countries’ increasing interest in employing blockchain technology in their customs and border operations. The Tradelens website says its ecosystem comprises over 100 different organizations including carriers, ports, terminal operators, third-party logistics firms, and freight forwarders. More specifically, a map on the Tradelens website suggests that about 60 ports and terminals worldwide are directly integrated with TradeLens.
Elsewhere, the Directorate-General for Taxation and Customs Union (TAXUD), which develops policies and operational systems for the European Customs Union, explored the applicability of blockchain in customs and taxation with a focus on utilizing blockchain as a notarization service.
The Union is looking into using blockchain to digitize ATA Carnet, an international customs document used in 87 countries for temporarily admitting goods duty-free. A pilot project conducted in collaboration with the International Chamber of Commerce World Chambers Federation (ICC WCF), was successfully tested in 2018.
The ICC WCF, a body of the ICC that helps facilitate mutually beneficial partnerships between ICC members, has been working with different customs authorities to develop solutions for converting ATA Carnets into electronic documents.
About 80 countries around the world have developed authorized economic operator (AEO) programs and signed a mutual recognition agreement (MRA), all in an effort to streamline cargo security. Under such arrangements, individual countries identify and approve trustworthy logistics operators that pose a low risk in security and share the approval information with participating countries.
This allows countries to piggyback on the security checks of other countries to make customs operations more efficient. However, a few problems have arisen with the program.
There are information leakage risks associated with the conventional way of sharing AEO data by email. While a sender’s email server may be encrypted, there is no guarantee that the receiver’s is as well, and vice versa.
Data sharing is not real-time, but monthly or at an agreed-upon interval. This limits the speed at which information on new or suspended AEOs can reach all participants.
To avoid the aforementioned problems as well as achieve additional time and cost savings on security procedures, customs administrations in Mexico, Peru and Costa Rica are working with the Inter-American Development Bank to develop a blockchain application called Cadena.
The move by governments around the world to employ blockchain to improve cross-border trade marks a step toward paperless customs processes, which originally began with the digitization of information flows by making trade-related data and documents available and exchangeable electronically. For all the improvements they’ve brought to paper-heavy processes, traditional electronic data exchange systems still face the challenges of authenticity and the unavailability of real-time data exchange.
For instance, the Netherlands and China launched a five-year project in 2010 to test the applicability of electronic sanitary and phytosanitary (SPS) certificates. A World Economic Forum white paper titled “Paperless Trading: How Does It Impact the Trade System?” noted that concerns around the authenticity of the electronic documents arose. This necessitated the adoption of electronic signature systems and a whole new legal framework that recognized the electronic signature.
Still, the entire process requires longer procedures and the introduction of new types of intermediaries — e-signature providers, for instance. Moreover, low-income countries, the trade costs of which remain high compared to high-income countries as according to World Bank data, may not have the budget to implement several new systems for data and document digitization. They still need to invest in better customs infrastructure.
Blockchain, on the other hand, if implemented in border protection, will ensure real-time availability and immutability of customs documents while saving considerable costs on excessive paperwork.
Researchers in France have shown that genuine Bordeaux wines can be distinguished from fakes by testing the minute quantities of lead in their composition.
Wines and indeed other foods and beverages tend to have low levels of lead, resulting from environmental contamination from natural or man-made sources that is taken up into plants.
Scientists have discovered that the amounts and ratios of elemental lead and lead isotopes can serve as a “fingerprint” that can determine the geographic origin of a wine – and be used to tell a genuine vintage from a knock-off.
Levels of lead in the atmosphere have been falling dramatically in recent decades since the use of lead as an additive in fuel has been banned. It’s been known for many years that lead isotope ratios can be used to identify the origin of wines as well as other foodstuffs such as milk powder.
The latest study puts the technique through its paces for a specific task – distinguishing genuine Bordeaux wines produced by prestigious vineyards over the last 50 years from wines bottled in China between 1998 and 2009.
The researchers took 43 authentic red and white Bordeaux wines from the winemaking estates of Médoc, Graves and Libourne, and ran a comparison with 17 red wines sourced from China, including 14 labeled as ‘Bordeaux’ as well as three genuine Chinese brands. The suspect bottles were selected because they either had spelling mistakes in the names of the known wineries or claimed to be from non-existing producers.
They found that the levels of lead in the genuine French wines reflected the reduction in environmental lead seen since 1969 – the date of the earliest bottle tested – and all fell within recognised safe levels.
The suspect wines had levels that overlapped with those from the French group, but tended to have isotopes suggesting more of the lead came from man-made sources such as leaded gasoline than natural, background sources.
Moreover, a subgroup analysis for four suspicious samples said to be produced in Pauillac in 2004, 2005, 2006 and 2007 were compared directly with genuine wines from that period and found to have different isotopic profiles.
“Despite of limited number of genuine and suspicious samples, this test give a particularly compelling example of [lead] isotopes application to authenticity issues,” write the authors.
There’s an obvious limitation to the approach of course.
“If suspicious wines … would be produced in the same region as authentic, a clear identification by lead isotopes alone may be significantly hampered or even impossible,” they note.
Reuters reports that Britain has agreed a deal with six southern African countries including South Africa, the continent’s most developed economy, that will ensure continuity of trade conditions after Brexit, the British High Commission in South Africa said on Wednesday.
Political turmoil in the United Kingdom has generated uncertainty over how, when and even if the country will withdraw from the European Union. Its current exit date is set for Oct. 31.
But while the situation has left the future trade relationship between Britain and the EU in doubt, London has been working to minimise the impact of Brexit on other trading partners.
Britain initialled an Economic Partnership Agreement with the Southern African Customs Union (SACU) – comprising South Africa, Botswana, Lesotho, Namibia, and eSwatini (formerly known as Swaziland) – and Mozambique on Tuesday.
“This trade agreement, once it is signed and takes effect, will allow businesses to keep trading after Brexit without any additional barriers,” Britain’s International Trade Secretary Liz Truss said in a statement.
The agreement is still subject to final checks. But once signed formally, it will mirror the trade conditions the southern African nations currently enjoy with the EU.
Trade between Britain and the six countries was worth 9.7 billion pounds ($12 billion) last year, with machinery and motor vehicles topping British exports to the region. The UK meanwhile imported some 547 million pounds worth of edible fruit and nuts.
Britain has already signed trade continuity agreements with countries accounting for 89 billion pounds of its external trade.
Prime Minister Boris Johnson says Britain must leave the EU on Oct. 31, but parliament has passed a law compelling him to ask Brussels to delay Brexit until 2020 unless he can strike a divorce deal. Johnson says he will not request an extension.
Source: Reporting by Joe Bavier, edited by Gareth Jones, Reuters Business News, 2019.09.11.
As unrecognisable as the building is, the same can be said for the world of Customs today. Few contemplated a ‘Customs’ parallel at the time; but, when the Department of Homeland Security was launched, the emergence of US Customs and Border Protection (USCBP) ushered in a new way of doing business. The world of Customs was literally ‘turned on its head’. Bilateral overtures seeking agreements on ‘container security’, ‘port security’ as well as an industry focussed ‘Customs and Trade Partnership Against Terrorism’ (C-TPAT) forced the World Customs Organisation (WCO) into swift action. After years of deliberation and negotiation several guidelines were released, later to be packaged as the WCO SAFE Framework of Standards. It seemed that the recent Revised Kyoto Convention (RKC) on simplification and harmonisation of Customs procedures was already ‘dated’. Customs as a proud solo entity was gone for ever, as country after country seemed compelled to address border security through wholesale transformation and upheaval of their border frontier policies and structures. Thus was born ‘border security’ and ‘cooperative border management’. In a manner of speaking, 9/11 put Customs onto the global map. Along with WCO developments, the tech industries brought about several innovations for risk management and other streamlined and efficient service offerings. Prior to 9/11, only the wealthy countries could afford non-intrusive inspection capabilities. One key aspect of the SAFE Framework’s was to include a pillar on Capacity Building. Through this, the WCO and business partners are able to offer tailor-made assistance to developing countries, to uplift their Customs and border capabilities. In particular, countries in Africa now are now in a position to consider ‘automated’ capabilities in the area of Customs-2-Customs information exchange as well as establishment of national Preferred Trader and Authorised Economic Operator (AEO) schemes. At the same time a parallel industry of ‘Customs Experts’ is being developed in conjunction with the private sector. The end result is the availability of ‘standards’, ‘policies’ and ‘guidelines’ fit for Customs and Border operations, focussed on eliminating incompatibilities and barriers to trade. Where these exist, they are largely attributed to poor interpretation and application of these principles. With closer cooperation amongst various border authorities still a challenge for many countries, there are no doubt remedies available to address these needs. In gratitude, let us remember the thousands of public servants and civilians who lost their lives that we can benefit today.
It is not common for a person within a Revenue Authority to work in both the Customs and Tax disciplines. It is even more rare for such a person to excel in both. I am glad and most fortunate to know and have worked for such a person – who under duress and fortitude has scaled great heights in her career.
Just recently she was nominated and included to celebrate the achievements of women of the past and present who have contributed to and shaped the future of women working in international tax across the profession. The Woman of IFA Network (WIN) representatives of the International Fiscal Association (IFA) UK branch called upon the global WIN network to identify and recognise the leading women in their regions and local branches. A profile book and the photo montage, which it supports, was prepared in September 2019 to mark this occasion and to celebrate the contribution of women to international tax discourse and policy development in all fields of the profession. Refer to page 61 for Varsha’s profile.
Deputy Head of the Global Relations and Development Division, OECD, South Africa.
Recognised for her contribution to international tax discourse through advocacy and encouragement of developing countries perspectives in the development and implementation of global tax policy.
Varsha Singh is the Deputy Head of the Global Relations and Development Division at the OECD Centre for Tax Policy and Administration. Her primary role is to encourage developing countries perspectives in the development and implementation of OECD standards and guidelines in the tax area, and to provide assistance to developing countries to strengthen their tax systems. Ms Singh also oversees the multilateral Global Relations Programme, which delivers over 50 seminars annually through six Multilateral Tax Centres.
Before joining the OECD, Varsha worked at the South African Revenue Service (SARS) for over 22 years and has extensive experience in a range of Tax, Customs and IT matters. She previously occupied the position of Head of International Relations at SARS. In that capacity, Varsha played a pivotal role in the establishment of the African Tax Administration Forum (ATAF)and as the head of the interim secretariat of ATAF, also worked closely with other Regional and International Organisations, particularly in the area of capacity building. Varsha holds Masters degrees in Business Administration, International Customs Law and Administration and completed the Women in Leadership Programme with Henley Business School.
The following article featured in BusinessLive (eEdition) on 25 July 2019. It is authored by John Grobler. The article was compiled with the financial support of Journalismfund.eu’s Money Trail grant programme.
Chinese ‘lying money’, or fei qian, is an ancient form of value exchange. But its modern incarnation is blamed for stripping Africa of its resources.
The secret of Chinese commercial success in Africa, as suggested by an 18-month investigation into the drugs-for-abalone and rosewood trade and a major Namibian tax fraud case, is an ancient system that not only allows African countries to be robbed of taxes, but also plays a part in financing the global $270bn-a-year wildlife contraband trade.
Fei qian, or “flying money”, dates back about 1,200 years, to the Tang Dynasty in China. In its simplest modern incarnation, it is a low-cost and trusted method of remitting money, much like the Islamic hawala system. For example, a person who wants to send funds to a recipient in Africa will pay a fei qian broker in China. For a commission, the broker will arrange that a counterpart in Africa pays the recipient, again for a commission. The two fei qian brokers later settle their account through, for example, the transfer of commodities of equivalent value — but also sometimes through less salubrious methods such as transfer mispricing or invoice manipulation.
In practice, the system relies on the systematic underinvoicing of Chinese imports into Africa and a seamless chain of payments system in which accounts are settled through the transfer of high-end — and often illicit — goods such as abalone, rosewood, rhino horn and ivory. In brief: goods are undervalued on their import documentation; they are then sold for cash; and that undeclared cash is subsequently channelled into high-end commodities that are remitted to China to balance the fei qian books.
“The trick behind fei qian is that the money never actually leaves China,” says a former Singaporean finance expert, speaking on condition of anonymity. “It’s just the commodities that get moved around” as part of a longer payment chain among the Chinese diaspora.
Unlike barter trade, fei qian is not a straight swap; it is an exchange in stored value that leaves no paper trail, except in the books of the fei qian operators themselves. What makes the system even more impenetrable, the investigation has found, is that these operators mostly seem to be older, well-established women working in a closed network of mutually trusted contacts.
This nexus, and lack of paper trail, means fei qian is largely invisible. But it occasionally appears as a gaping hole in a country’s balance of payments account with China – as Namibia has discovered in an ongoing import-tax fraud investigation.
Jack Huang, a business associate of President Hage Geingob, and Laurentius Julius, a former Walvis Bay customs official and now a customs clearing agent, are among eight suspects facing 3,215 charges of fraud and money laundering in the Windhoek high court. Continue reading →
This Monday, July 22, 2019, photo released by National Parks Board shows ivory tusks in Singapore. Singapore has seized nearly 10 tons of elephant ivory and about 12 tons of pangolin scales belonging to around 2,000 of the endangered mammals. (National Parks Board via AP)
Authorities in Singapore have stopped a shipment of almost 9 tonnes (9.9 US tons) of ivory, the largest seizure of its kind in the nation’s history. The 8.8-tonne (9.7-US ton) haul was passing through Singapore on its way from the Democratic Republic of Congo to Vietnam, according to a joint statement from the Singapore Customs, Immigration & Checkpoints Authority (ICA) and the National Parks Board released Tuesday.
There were also 11.9 tonnes (13.1 US tons) of pangolin scales among the illicit cargo, the third such shipment to be intercepted in Singapore this year.Three containers said to contain timber were inspected as they passed through Singapore on July 21, revealing the huge illegal cache.
Authorities say the ivory, with tusks from nearly 300 elephants, is worth $12.9 million; the pangolin scales, estimated to have been taken from around 2,000 Giant Ground Pangolins, would fetch around $35.7 million.
Pangolins are solitary animals that have an armor of scales, which are coveted for “cultural and ethno-medicinal purposes,” according to the statement. They are also hunted for their meat.
The seizure takes the total weight of pangolin scales stopped in Singapore to 37.5 tonnes (41.3 US tons) in 2019 alone. Singapore previously seized 177 kilograms (390 pounds) of ivory in April.
In Africa, poachers kill tens of thousands of elephants a year for their tusks. Much of the demand for elephant tusks comes from China, where ivory is still seen by some as a symbol of luxury and wealth.
“Around 55 African elephants are killed for their ivory a day, their tusks turned into carvings and trinkets,” Tanya Steele, chief executive at World Wildlife Fund, said in a statement.
Fifty-five pieces of rhino horn were found hidden inside shipments of plaster at Hanoi International Airport, Vietnam’s state media reported Saturday.
Customs officers broke open plaster molds from 14 shipments to uncover the illegally trafficked horns, which weighed 125 kilograms (275 pounds) in total, according to the Vietnam News Agency.
Vietnam has the world’s largest market for illegal rhino horn, according to the World Wildlife Fund. A single horn can fetch $100,000 in Asian countries such as China and Vietnam, where buyers believe it can cure health problems from hangovers to cancer, and use it as a lifestyle drug. The global market is thought to be worth about $500 million.
The seizure in the Vietnamese capital came after Hanoi police arrested a man accused of running a wildlife trafficking ring on July 23.
That arrest followed the discovery of seven frozen tigers in a car parked in the basement of a Hanoi skyscraper.
Source: CNN, Helen Reagan and Angus Watson, 29 July 2019