The external trade practitioner, importer, exporter and logistics operators in South Africa have at least 30 years experience in e-commerce with Customs and other operators in the local supply chain. As far back as the early 1980’s there has existed some form of automated support for trade to interact with Customs. This gradually evolved into more sophisticated processes requiring more than simple tariff data base, duty calculator, and currency conversion worksheet to prepare a customs declaration.

Late in the 1970’s a bunch of customs officers and COBOL programmers set up a makeshift office, overlooking Seapoint, Cape Town developing custom’s first computer system. 1981 saw the introduction of the Customs Automated Processing of Entries (CAPE) system – imports only. There was one primary goal – to eliminate computation errors by trade. In fact, the extent of errors obviated in the first 9 months of operation more than paid for the cost of the system.

Within a year or two, one entrepreneur introduced the first broker system which was embraced enthusiastically by trade practitioners – the clearing and forwarding agents. This would now pose a role-challenge to the ‘entry clerk’ who was used to framing customs declarations ‘by hand’, in seven fold by carbon copy, to satisfy the state’s information requirements. You see photocopy machines were not commercially vialble to be the mainstream copy medium in those days.

Notwithsatnding the fact that automation provided a fraction of the operational functionality of the customs import clearance process; the sheer speed within which tariffs could be validated and duties and taxes calculated was in itself impetus enough for the Commissioner to insist on more functionality. In time, the manual cash register was replaced by a customs revenue accounting process providing more integration within the system. The mid 1990’s saw significant developments on the CAPE system with the introduction of the automated deferment of payment scheme. The log-jamming at customs cash halls had become untenable for trade forcing Customs to undertake a major revamp of its system – it was not uncommon for pay-in clerks to spend two full days waiting to remit monies to the cashier before obtaining release for their consignments.

Over the years the demand for broader access to EDI functionality lead to several more bureaus coming onto the scene. For more than a decade EDI was only an option for medium and large freight forwarding concerns due to cost constraints. Today, there are several companies offering desktop solutions which can be tailored to suite the needs of the customer big and small. It is key to note that these systems are fully-fledged supply chain solutions, not just frontend clearance declaration capturing solutions. The trade has evolved drastically in the last 15 years. In the not too distant past a clearaing agent/broker made profit from framing declarations. Today such organisations must offer a variety of ‘automated’ supply chain options and services including costing, warehousing, inland distribution, consolidation and credit facilities. In the past, most brokers were able to provide all the necessary specialist services such as tariff and valuation appraisal, refunds/drawbacks and trade remedy submissions to ITAC and the DTI. These days, due to the high premium of manitaining such skills, few agents/brokers can offer the full scope of these services. The big audit companies have by-and-large cashed in on this business with good and bad results. The ‘good’ is that such ‘applied customs audit skills’ are available in limited quantity to traders who have recourse to refunds/drawbacks and trade remedies. The ‘bad’ is that not all the audit firms provide the best advice all the time, and charge the earth for their services. I suppose this is not unlike the legal fraternity where truth and justice are not always the prime objective.

Back to Customs – in the mid-1980’s Customs introduced a selectivity module in the clearance system to improve throughput and efficiency. This was the first significant change to impact on the role of the customs checking officer. While the solution worked adequately, the effectiveness of ‘true’ tariff and valuation appraisal went down the tubes. I will discuss this specific matter in detail in a future post.

It was in 1993 that the first discussions around EDI were considered in SARS Customs. The WCO had been making overtures on the subject and shortly released the first version of its ICT Guidelines, later to be published as the Kyoto ICT Guidelines. The concept of EDI was vigorously pushed at the WCO, even though the G7 managed and maintained the the Customs data model. At the time, EDI message standards were anything but standard with only a few administrations adopting UN/EDIFACT. The US and Canada pursued ANSI X-12, and it was mainly Australian Customs who formerly spear-headed the development and use of EDIFACT in the customs domain. January 2002 the result of the G7 initiative to standardise and simplify Customs Data requirements of the G7 countries was handed over to the WCO for maintenance, further development and to address a wider Customs community. The last G7 version became version 1 of the WCO Customs Data Model. In 2003 the WCO published version 1.1 in order to cover the Supply Chain Security requirements. From the list of 27 data elements required to identify high risk consignments only 1 data element was added to version 1 of the WCO Customs Data Model. It is now the de facto standard for all WCO members and is widely used, although predominently its version 1 and 2 releases.

Since the WCO has taken full control over its EDI destiny, the Information Management Sub-committee (IMSC) – a dedicated unit set up to administer manitainance and control over Customs message development. – has since progressed the Customs Data Model into its 3rd generation, which now includes options for both both UN/EDIFACT and XML formats.

SARS Customs took seven years to implement its EDI capability, eventually transacting the first EDI CUSDEC and CUSRES interchanges with trade in 2000. The protracted delays occured as a result of  huge organisational change between 1995 and 1998 leading up to the amalgamation of The Department of Customs & Excise and the Receiver of Revenue into SARS. Having achieved success on imports, SARS’ next challenge was to bring all other modes of clearance – exports, inbond movements and cross border (Customs Union) movements – to an automated state. Talk to you soon.