France has ordered search engines and other platforms to delist the online retail site Wish, saying it is a source of non-compliant and unsafe products.
The website – which has also been accused of allowing the sale of counterfeit goods – has been investigated by France’s DGCRF, which regulated good and services in France.
The agency carried out test purchases of products including electronic devices, toys and costume jewellery, and determined that 95 per cent of toys did not meet EU standards, and 45 per cent were dangerous to children.
Moreover, 95 per cent of electronic devices were non-compliant, almost all of which (90 per cent) were hazardous, with 62 per cent of costume jewellery also deemed risky to consumers.
The DGCRF also concluded that Wish wasn’t meeting its obligations on carrying out product withdrawals and recalls “as is required by its status as a distributor.” It is the first time that such an action has been taken by an EU member state, according to the regulator.
“This decision aims to protect consumers and fight against unfair competition from economic operators,” said Bruno Le Maire, France’s economy and finance minister.
“These players are flouting product safety regulations,” he added. “The same rules must be applied in physical stores and online stores.”
Last year, the DGCRF said it had conducted a year-long investigation into Wish which found evidence of the sale of counterfeit products falsely claiming to be from major brands.
The investigation came after UK consumer group Which carried out test purchases of a number of items on Wish which turned out to be either fake, illegal, dangerous, never delivered, or arrived too late to be tested properly.
US-headquartered Wish has responded by saying it will challenge what it considers to be “an illegal and disproportionate act” in the courts.
The company says it is under no obligation to carry out controls on the 150 million products sold by the platform – many from suppliers in China – but claims it has invested in measures to weed out quality problems.
As of 18 November 2021, the online version of the 2022 edition of the Harmonized System Nomenclature is available through the WCO Website to all HS users. The HS 2022 edition, as the world’s global standard for classifying goods in international trade, will enter into force on 1 January 2022.
Used by over 200 countries and economic or Customs unions as the basis for their Customs tariffs and for trade statistics, as well as by international organizations such as the United Nations Statistical Division (UNSD) and the World Trade Organization (WTO), the Harmonized System (HS) Convention currently has 160 Contracting Parties, making it the WCO’s most successful instrument to date.
The 2022 edition of the HS Nomenclature includes significant changes with 351 sets of amendments (including some complementary amendments): 77 relating to the agricultural sector; 58 to the chemical sector; 31 to the wood sector; 21 to the textile sector; 27 to the base metal sector; 63 to the machinery sector; 22 to the transport sector and an additional 52 that apply to a variety of other sectors, comprising a total of 1,228 headings identified by a 4-digit code, and 5,612 subheadings identified by a 6-digit code.
These amendments have been made to update the Harmonized System Nomenclature, taking into consideration public health and safety, protection of society and fight against terrorism, goods especially controlled under various conventions, food security and environment protection, technological progress, trade patterns, and clarification of the HS texts.
The digital version of the HS 2022 edition is also available for free on WCO Trade Tools, which is the WCO’s new online database platform that encompasses the last five editions of the HS and functionalities to support all those involved in international trade. The WCO Trade Tools encompasses various free and subscription only tools relating to the classification and valuation of goods, origin determination and the application of preferential rules of origin.
The paper version of the HS 2022 edition can be purchased on WCO’s Bookshop.
The following articlewas published in Supply Lines, Bloomberg
As if the foot soldiers of global trade needed more complications this holiday season, many logistics managers and customs brokers are starting to brace for a mini Y2K moment come Jan. 1.
That’s when changes will take effect to the official nomenclature for hundreds of product groups used to classify imports and exports. So-called Harmonized System numbers — known as HS codes — exist on more than 5,000 product categories developed by the World Customs Organization, an intergovernmental group in Brussels that updates them every five years or so.
In 2022, the biggest changes are coming for electrical machinery and parts, wood, textiles, fish and organic chemicals.
More than 350 global HS codes are getting updated, and some 1,500 harmonized U.S. tariff codes are subject to revisions, according to a recent webinar from Flexport. The categories are important, if a little wonky, because most items of international commerce fall into one and they can determine tariff levels.
Some codes are disappearing. After a respectable run through the 1970s and ‘80s, answering machines are about to lose their HS code. Made obsolete by voicemail, they rank 5,296th among 5,832 U.S. imports this year, according to Flexport data.
Globes — those spinning spheres that taught geography to schoolkids of the 1970s — will have their number (4905.10) retired, too.
“The trade in globes is not quite what it used to be,” Marcus Eeman, a global customs manager with Flexport, lamented about the U.S.’s 4,025th-biggest import.
Some new HS codes will appear, like one for pomace oil, a lower-grade form of olive oil.
Among the more intriguing additions, Flexport says there’ll be a “new code created for petroleum resins and other organic chemical compounds used in the manufacture of chemical weapons.” That should make it easier for authorities to track which countries are importing it and potentially using them illegally.
Other categories are getting renamed. Lamps will no longer fall under “lamps,” they’ll be classified as “luminaires.” There will be new subheadings for popular gadgets like smart phones, high-speed digital cameras and flat panel displays.
Economies preparing for the changes include the U.S., China, the European Union, Canada and Australia. The U.K., meanwhile, is still “finding their footing with Brexit and we expect them to get their act together by the end of the year,” Eeman said.
For all the changes to take effect on Jan. 1 in the U.S., there will need to be a presidential proclamation published in the Federal Register with the required 30 days of advanced notice.
So it’s worth looking out for that in coming days.
“My fear is that Dec. 1 will come and the presidential proclamation will be published and that’s when people will start to scramble,” said Tom Gould, Flexport’s vice president of global customs. “Then Jan. 1 will hit and you’ll have a bunch of people that have products that they need to import but they don’t know the classification, because the code that they’ve used in the past is no longer a valid code.’’
Source: Bloomberg, authored by Brendan Murray, 24 November 2021
The WCO has announced that it has set up a VR training program with the support of CCF-Korea at the WCO Headquarters on 9th November 2021.
This program was developed and first established in RTC Korea last September to support customs officials to learn and understand the basic procedures of physical inspection on containerized cargo at a maritime port.
With the help of VR devices and a cyber master, a trainee is requested to select one of three individual scenarios and detect contraband items such as drugs, counterfeit goods and explosives smuggled in imported cargo.
After selecting one case, documents have to be compared and discrepancies identified. The program will show necessary steps to wear safety gear, inspect the exterior of the container, scan it with ZBV vehicle and study the X-ray black/white and coloured images. In the following step, the container is opened and inspected with tools like a chisel, magnifying glass, scanner, etc., at a bonded area of a dedicated warehouse.
RTC Korea, KCS and WCO Secretariats contributed to the program production and provided materials on drug smuggling cases with pictures, advice on preparatory steps, inspection scenarios taking into account risk indicators from the WCO RM compendium.
The length of one training session is approximately 10 to 15 minutes depending on the trainee‘s progress, and the devices for the VR training are the headset, controller, high-end computer, TV screen and kiosk. The program also developed a screen version that Customs officials can play on their desktop computer and notebook and have the 3D experience.
During the experience session, Dr. Kunio Mikuriya, the Secretary General of the WCO, expressed high interest and called on feedback on future activities from those who experience the program to make it more relevant for Members’ capacity building. In this regard, the immediate task is to prove its effectiveness through regional capacity building activities and WCO meetings.
Dr. Taeil Kang, the Director of Capacity Building Directorate expressed his plans to develop content for other topics including e-commerce transactions, X-ray image screening and uploading on CLiKC and installation in other WCO regions.
For more information, please contact Sungsig Kim, CCF-Korea manager at the Capacity Building Directorate (firstname.lastname@example.org).
U.S. e-commerce grew by 32.4% in 2020—the highest annual growth rate in over two decades. Such rapid growth has resulted in many more goods being imported, leaving America’s western ports completely overwhelmed.
To help you understand the scale of this issue, we’ve visualized the number of containers waiting at sea in relation to the Port of Los Angeles’ daily processing capacity.
Stuck at Sea
As of November 2, 2021, the Port of Los Angeles reported that it had 93 vessels waiting in queue. Altogether, these ships have a maximum carrying capacity of roughly 540,000 containers (commonly measured in twenty-foot equivalent units or TEUs).
On the other side of the equation, the port processed 468,059 import containers in September (the most recent data at the time of writing). Because the port does not operate on Sundays, we can conclude that the port can load roughly 18,000 containers each day.
That capacity seems unlikely to reduce the congestion. Over a two-week timeframe in September, 407,695 containers arrived at the Port of Los Angeles, which averages to around 29,000 containers arriving each day…
The WCO has published the 96th edition of WCO News, the Organization’s magazine aimed at the global Customs community, providing a selection of informative articles that bring the international Customs and trade world to life.
This edition’s “Dossier” focuses on cross-border e-commerce, in other words those “transactions which are effected digitally through a computer network (e.g. the internet), and result in physical goods flows subject to Customs formalities”. We have invited several administrations to share information on the initiatives they are taking to build their capacity for monitoring the compliance of such flows. Despite every country’s situation being unique, we still believe that it is important to share experiences and explain initiatives.
The “Panorama” section addresses a broad variety of topics such as rules or origin, goods classification, training and reforms. It also includes two articles which respectively present, from a Customs perspective, two recent regional Free Trade Agreements: the Regional Comprehensive Economic Partnership (RCEP) and the African Continental Free Trade Area.
The “Focus” section brings together two articles dealing with non-intrusive inspection (NII). In the first one, the WCO Secretariat shows how some Customs administrations and manufacturers manage the decommissioning of NII equipment when it has reached the end of its life. The second article describes the challenges of X-ray image analysis and the value of training.
Lastly, in the “Point of View” section, Dutch Customs explains the structure of the ISO Audit Data Collection Standard and why it supports the Standard’s extension to cover data related to Customs and indirect tax audits, while an attorney from Israel argues that governments should consider waiving taxes on transport costs until we are back to “normal” and the effects of the COVID-19 pandemic are no longer being felt.
The Advance Import Payment (AIP) project is one of Customs’ modernisation initiatives. This project aims to bring together data from SARS, Authorised Dealers and the South African Reserve Bank (SARB) to increase regulatory controls relating to advance foreign exchange payments in order to prevent illicit financial flows and combat customs valuation fraud associated therewith.
Proposed rules under section 120(1)(mC) of the Act have been inserted providing for –
procedures for notifying Commissioner of intention to submit application for advance payment to authorised dealer;
issuing of advance payment notice (APN) reference number;
requirements for authorised dealers; and
· communication through eFiling for purposes of advance payments.
Four economy-wide factors—governance, education, infrastructure, and trade policy—relate closely to more varied and complex exports across countries
As the world’s biggest copper producer, Chile’s shipments of the metal meet around one-third of global demand and represent about half its goods exports.
But beyond mining’s dominance, Chile’s trade flows are more varied and complex than they may appear, with significant exports of vehicles, pharmaceuticals and telecommunications equipment. And according to a recent IMF staff paper, the Andean economy is among those that shine as a role model for diversification policies.
By looking beyond commodities, the research shows that economy-wide policies such as governance and education help foster diverse exports more than narrowly targeted industrial policies, a finding that can better guide nations aiming to expand their international trade.
The examination of 201 countries and territories goes beyond the economic complexity indices that have traditionally been used by economists. Those proxies for the productive capability of a given economic system have strong sensitivity to commodities, which can distort their accuracy.
For a more nuanced read, staff research proposes new ways to gauge diversity and complexity of national exports and suggests how economy-wide policies can foster such variety. Economists call these horizontal policies because they apply broadly across a country instead of targeting single sectors. The approach also takes stock of an economy’s geographic proximity to trade partners, and how it affects exports excluding commodities like metals or oil.
This lens offers policymakers lessons for how they can better support more multifaceted trade, a common objective in emerging and developing economies because it’s associated with less volatile economic output and faster long-term expansion.
Four key factors
The methodology shows a clear a link between the non-commodity exports that aid diversification and complexity and four economy-wide variables that help support them: governance, education, infrastructure, and open trade. Improving those areas helps to diversify by creating conditions that make it possible to boost complex or higher-value-added exports.
This is significant because demonstrating how economy-wide policies do explain diversification challenges the belief that industrial policies, meant to support specific industries, offer the best way to broaden trade.
The analysis shows that, except for abundant copper reserves, Chile’s economic profile, surprisingly, resembles Malaysia’s. The Asian nation has similarly strong education and institutions, but it benefits from being much closer to the major global supply-chain hubs of China, Japan and Korea.
Prominent Asian and European exporters, from Hong Kong and Singapore to Ireland and Denmark, have among the most diverse and complex shipments and the strongest horizontal policies.
Good policies can make a big difference
For governments aspiring to more varied trade flows, the new approach to explaining diversification underscores the need to effectively shorten geographic distance by enhancing connectivity between nations. Better transportation logistics, at seaports for example, effectively shorten distance by reducing transit times for goods. Other helpful policies include easing trade policy barriers, enhancing trade facilitation, fostering the spread of technology through educational exchange programs, and investing in communication technologies such as broadband that support the digital economy.
Strengthening horizontal policies may seem challenging, especially for countries with lower income. However, several countries have much stronger policies than expected for their income levels, including Rwanda for governance; Georgia and Ukraine for educational attainment; Malaysia for infrastructure; and Mauritius and Peru for tariffs. These economies can be role models.
To be sure, that doesn’t deny the potential effectiveness of more targeted support for individual sectors. Industrial policy levers, though, may be less effective or even harmful. Potential drawbacks include diminished fiscal capacity, a race to the bottom in taxation, and eroded multilateralism. Furthermore, there is no cross-country statistical evidence of their effectiveness.
Instead, diversification strategies built around broader policies and connectivity are both less controversial and more supportive of export diversification and complexity.
Source: IMF, article by Gonzalo Salinas, 22 September 2021
The World Bank Group today issued the following statement on the Doing Business report:
“Trust in the research of the World Bank Group is vital. World Bank Group research informs the actions of policymakers, helps countries make better-informed decisions, and allows stakeholders to measure economic and social improvements more accurately. Such research has also been a valuable tool for the private sector, civil society, academia, journalists, and others, broadening understanding of global issues.
After data irregularities on Doing Business 2018 and 2020 were reported internally in June 2020, World Bank management paused the next Doing Business report and initiated a series of reviews and audits of the report and its methodology. In addition, because the internal reports raised ethical matters, including the conduct of former Board officials as well as current and/or former Bank staff, management reported the allegations to the Bank’s appropriate internal accountability mechanisms.
After reviewing all the information available to date on Doing Business, including the findings of past reviews, audits, and the report the Bank released today on behalf of the Board of Executive Directors, World Bank Group management has taken the decision to discontinue the Doing Business report. The World Bank Group remains firmly committed to advancing the role of the private sector in development and providing support to governments to design the regulatory environment that supports this. Going forward, we will be working on a new approach to assessing the business and investment climate. We are deeply grateful to the efforts of the many staff members who have worked diligently to advance the business climate agenda, and we look forward to harnessing their energies and abilities in new ways.”
The WCO has published the 95th edition of WCO News, the Organization’s magazine aimed at the global Customs community, providing a selection of informative articles that bring the international Customs and trade world to life.
This edition’s “Dossier” focuses on “People”, and includes several articles discussing experiences, tools and practices related to Human Resource management and development. We hope this will inspire readers to take action and contribute to creating a work environment which enables people to continue growing professionally and to learn new skills that will benefit their organization, their country and the global community.
In the “Panorama” section, Algeria Customs introduces its advance ruling system for the classification of goods, Belarus Customs explains how its role in border management has developed, and a private company gives an overview of the Electronic Cargo Tracking System launched in Mozambique.
Given that the WCO Secretariat organized the second edition of its Global Origin Conference in March 2021, we decided to dedicate the “Focus” section of the magazine to rules of origin. It opens with an article highlighting the key points made by the Conference speakers and continues with articles on advance rulings, problems associated with non-preferential rules and the joint proposal for the review of Specific Annex K to the Revised Kyoto Convention.
Lastly, in the “Point of View” section, Argentina Customs explains how it has increased its participation in WCO committees and working groups following the move to online meetings, the International Federation of Freight Forwarders Associations presents some of the challenges facing freight forwarders, and a software engineer shares his views on data analytics tools and how to make them work for all.
At its 52nd Session, held from 17 to 19 May 2021, the Technical Committee on Customs Valuation adopted two instruments (Advisory Opinions 4.18 and 24.1) concerning royalties and licence fees under Article 8.1 (c) of the WTO Customs Valuation Agreement (Agreement) and the Customs valuation treatment of imported goods bearing the buyer’s own trademark, respectively.
These two instruments were adopted after a virtual session which extended over three days, having regard to the current circumstances relating to the pandemic. It rewards the efforts constantly being made by the Technical Committee to improve the certainty of the interpretation and uniform application of the provisions of the Agreement in all member countries of the WTO. Practical instruments of this kind help Customs, the private sector and the Members in the fair control of Customs valuation, the facilitation of international trade and the optimization of Customs revenue.
In the first instrument, the Technical Committee gives its opinion on the valuation treatment of income tax deriving from the royalty paid to the country of importation’s tax authorities in accordance with the terms of the licence agreement signed by the importer and the seller, who is also the licence holder.
The second instrument relates to the valuation treatment of the trademark belonging to the buyer and provided free of charge to the seller for use in connection with the production of the imported goods.
These instruments adopted by the Technical Committee, once they have been approved by the WCO Council, will be available on the WCO Publications website and published in the WCO Customs Valuation Compendium.
WCO Secretary General Dr. Kunio Mikuriya stated, “How to achieve equitable distribution of COVID-19 vaccines is critical, and Customs administrations around the world should support global efforts by not only facilitating the cross-border movement of the vaccines themselves, but also by speeding up and facilitating the Customs clearance of the raw materials and components used in the vaccine manufacturing process.” He added that “This will greatly contribute to the efforts to scale up vaccine manufacturing and the 2nd edition of the Secretariat Note highlights the critical role Customs”.
The guidance outlined in the Secretariat Note draws upon relevant WCO instruments and tools, Members’ good practices and insights gathered as a result of the collaboration with other international organizations, the pharmaceutical industry, logistics providers and other relevant private sector entities.
The Secretariat Note is designed to be a living document that will be enhanced with more Members’ practices and further practical guidance as WCO Members and the industry gain experience and share information with the WCO Secretariat on the Customs clearance of COVID-19 vaccines, related supplies, inputs and equipment.
The United Nations Economic Commission for Europe (UNECE) administers the TIR Convention, which was established in 1959 and extensively revised in 1975 and which has, at present, 68 Contracting Parties. The TIR Convention provides for an internationally recognized procedure to facilitate the cross border transportation of goods in transit through the use of a standard, internationally recognized Customs document, the TIR Carnet, which also serves as proof of existence of an internationally valid guarantee.
For many years the TIR Convention proved to be an efficient facilitation tool. However, with the progress in technology, the use of the paper TIR Carnet is increasingly becoming archaic, in particular when it comes to linking it to the electronic procedures applied by national Customs administrations. At each border crossing, Customs officers are faced with additional work of having to key in up to 50 data elements into their national electronic Customs system. In addition, the current situation does not enable Customs authorities to effectively apply risk management procedures based on advance cargo information, as demanded by an increasingly more security-conscious environment.
The eTIR Project
The Contracting Parties to the TIR Convention launched in 2003 the so-called “eTIR Project”, aimed at providing an exchange platform for all actors (Customs authorities, holders, guarantee chains) involved in the TIR system, known as the “eTIR international system”. The eTIR international system aims to ensure the secure exchange of data between national Customs systems related to the international transit of goods, vehicles or containers according to the provisions of the TIR Convention and to allow Customs to manage the data on guarantees, issued by guarantee chains to holders authorized to use the TIR system.
Italian beer brand Birra Peroni has started using EY’s blockchain platform for the purposes of supply chain traceability.
EY has said that the beer company will be using its EY OpsChain Traceability on the public Ethereum blockchain, with each batch having its own non-fungible token (NFT) – a unique, digital certificate of ownership.
Each NFT is recorded on the blockchain, digital ledger distributed around lots of different users instead of held centrally, with each transaction – for example as a product moves through the supply chain or is paid for – time stamped and encrypted to prevent tampering.
In simple terms, it is a technology to store and exchange information within a group in a secure, trustworthy, and efficient manner that doesn’t rely on the use of a database.
NFTs are becoming increasingly used to “tokenise” and confer ownership on physical and virtual goods – including fine art, collectibles and even the first-ever tweet by Twitter founder Jack Dorsey.
However, the technology is also being deployed to protect goods from counterfeiting and as a traceability tool for consumers who are increasingly demanding that the products they buy are made using sustainable and ethical ingredients.
Peroni – part of Japan’s Asahi Group – said using the technology will be a step forward in bringing visibility and transparency to its supply chain, for both consumers and supply chain partners.
“For Birra Peroni, the bond with the agricultural supply chain and the quality of our 100 per cent made-in-Italy malt are fundamental strategic assets,” commented Federico Sannella, the company’s corporate affairs director.
“We believe that sustainability is deeply related to the respect for the raw material, and we wanted to bring this value alive to our consumers, allowing them to follow the journey of the malt from the field to the bottle,” he added.
It’s not the first brewer to take this approach. AB InBev, which sells brands like Budweiser and Stella Artois, is running a blockchain pilot in Europe to give consumers a view of its barley supply chain via a QR code on the packaging.
On 25 May 2021, the WCO Secretary General, Dr. Kunio Mikuriya, welcomed approximately 3,650 registered participants from 160 WCO Member administrations to the 5th WCO Global AEO Conference. The Conference is being hosted by Dubai Customs and the Federal Customs Authority (FCA) of the United Arab Emirates (UAE), with support from the Korea Customs Service.
Under the theme “AEO 2.0: advancing towards new horizons for sustainable and secure trade”,the Conference brings together 80 prominent speakers from Customs administrations, international organizations, academia and the private sector who are engaging virtually to share collaborative input that will help shape the future of Authorized Economic Operator (AEO) programmes. This is the first time that the Global Conference has been organized in the WCO’s North of Africa, Near and Middle East region.
The Conference was opened by His Excellency Sultan Ahmed Bin Sulayem, Chief Executive Officer of DP World and Chairman of the Ports, Customs & Free Zones Corporation, on behalf of His Highness Sheikh Ahmed Bin Saeed-Al Maktoum, President of Dubai Civil Aviation Authority and Chairman and Chief Executive of the Emirates Group. He delivered an inspiring message on the importance of innovation and collaboration among Customs and other government agencies (OGAs) to support resilient recovery for global supply chains. He congratulated the WCO for providing the international community with a discussion platform on topical issues of interest and highlighted the need for renewed trust and commitment to preserving sustainable and secure trade.
In his welcome address, Dr. Mikuriya highlighted that in the 16 years since the SAFE Framework of Standards (FoS) was first adopted, the number of WCO Members implementing AEO programmes had increased substantially, from 45 to 97, while the number of Mutual Recognition Arrangements/Agreements had risen exponentially from 17 to 91. Dr. Mikuriya underlined that this demonstrates not only the success of the SAFE FoS but also the importance of monitoring implementation of AEO programmes.
Secretary General Mikuriya offered food for thought regarding the possible next steps to ensure that AEO programmes more effectively support supply chain recovery as the world moves into a post-COVID-19 pandemic environment. These steps may include ways of inviting more economic operators to take part in AEO programmes, strengthening cooperation between Customs and OGAs, and leveraging disruptive and transformative technologies for the benefit of AEO programmes. Finally, consideration should be given to the role played by training and capacity building in making the AEO concept a key tool at the centre of resilient and sustainable supply chain recovery.
Dr. Mikuriya also commended Dubai Customs and the FCA for their strong commitment and generous support towards making this event an immense success. He further acknowledged the backing provided by regional entities as well as other partners, sponsors and exhibitors, who have all contributed to ensuring that this event will be a remarkable and memorable experience for all.
During his opening remarks, His Excellency Ahmed Mahboob Musabih, Director General of Dubai Customs, said that this Conference provided the UAE with the perfect forum for sharing information on innovative work pushing the boundaries of Customs. He added that it would be an opportunity for everyone to learn more about Dubai’s experience of building up Customs to form one of the pillars of the Emirate’s development and prosperity.
The Conference will continue on 26 and 27 May with discussions on topics including emerging supply chain security threats; the role of technologies in promoting supply chain renewal; risk management; best practices; and partnership and capacity building activities.
More information can be found on the event website