A view on developments affecting Global Customs & Trade
Author /Mike Poverello
Posts by Mike Poverello
I have spent the best part of 28 years in the service of South African Customs, and a further 5 years as a free-lance consultant to the customs industry as well as an advisor on several customs systems modernisation programmes with international ICT and consulting firms between 1998 and 2002. Like many of my peers and numerous colleagues worldwide, "customs" is not another government department, but an institution which has as much a 'corporate identity' as it is an arm of government. Perhaps, I'm guilty of nostalgia at times gone by, but it nevertheless concerns me what is happening to so many customs administrations. First, many have by government decree merged into what is otherwise known as a 'Revenue Authority', with some success - as is the case with Customs in South Africa. A more recent development sees the customs being removed from its traditional 'treasury' base into 'Border Security Agencies'. Some fortunate administrations appear to have retained their independance which makes the organisational mandate and objectives more focussed and attainable. Through this 'blog' I wish to share my experiences and encourage those of you of like mind to collaborate.
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
The fire on board the X-Press Pearl is reported under control at an anchorage off the coast of Colombo, Sri Lanka, but fire-fighting efforts are continuing, according to the vessel’s operator.
The Sri Lankan Navy continued its response to the incident over the weekend with three tugs from the Sri Lankan Ports Authority on site conducting cooling operations on containers near the fire. At times, the fire flared up with visible flames (see photo below) coming from containers above deck, the Navy said over the weekend.
The fire on board the X-Press Pearl was first reported Thursday as the ship was awaiting entry to Colombo harbor at an offshore anchorage.
The Navy said the ship is carrying 1,486 containers, including 25 tons of Nitric Acid and other chemicals which it had loaded at the port of Hazira, India on May 15. Preliminary investigations indicate the fire started due to a chemical reaction of the hazardous cargo.
All 25 crew members are reported safe, the ship’s operator reported Monday. Meanwhile a salvage team from SMIT has boarded the vessel for an assessment.
“Fire/smoke still remain on board the vessel but is currently under control. More firefighting tugs have been deployed and they will continue to fight the fire. The salvage team with fire experts and firefighters are already on board the vessel and are carrying out the risk assessment. They have already taken steps to stop the spreading of fire into other areas,” X-Press Feeders said in its update.
“We have been advised that special firefighting equipment will arrive tomorrow. We therefore remain hopeful that the fire will be put out by the salvage team at the soonest time possible,” it added.
Trade solutions multinational DP World has completed the first transit import through the DP World Maputo port, in Mozambique, to DP World Komatipoort, in South Africa.
This is a significant milestone as it demonstrates that the Maputo port can be seamlessly used as a gateway to South Africa, the company says.
International container imports landed in the Maputo port and destined for the South African hinterland can be moved under bond to Komatipoort where full customs clearance can be provided and made ready for delivery across South Africa.
“The Komatipoort facility as a bonded container depot is a game changer for the Maputo Corridor. The success of the trial brings DP World a step closer to enabling a more cost effective, seamless and efficient user experience for our local customers and enhances trade linkages for countries in the Southern African region,” DP World Maputo CEO Christian Roeder says.
Currently, in South Africa, 69% of maritime imports are transported through the Port of Durban. Local customers now have the option to consider using the Maputo port as a gateway to transport their international freight to Komatipoort where it can be cleared more easily and efficiently for customers based in and around Gauteng.
DP World Komatipoort has a full-service offering and links via the Maputo Corridor to DP World Maputo’s modern and efficient container terminal where there is no vessel and port congestion, as well as fixed berthing windows available to major shipping lines, which provides customers with transport savings and avoids delays for consignees in Mpumalanga, Limpopo and Gauteng.
Once a shipment is retrieved at the DP World Maputo port, the organisation handles the entire supply chain process from there to Komatipoort without delay and beyond to various areas in the hinterland. While the cost of this service varies per user, the service is estimated to be equivalent in costs or cheaper compared to traditional routing through Durban.
However, it is more efficient, especially for the northern areas of the country, DP World note.
MSC Mediterranean Shipping Company, a global leader in container shipping and logistics, is officially introducing the electronic bill of lading (eBL) for its customers around the world, following a successful pilot phase, using a solution on an independent blockchain platform WAVE BL. The eBL enables shippers and other key supply chain stakeholders to receive and transmit the bill of lading document electronically, without any change or disruption to day-to-day business operations.
WAVE BL is a blockchain-based system that uses distributed ledger technology to ensure that all parties involved in a cargo shipment booking can issue, transfer, endorse and manage documents through a secure, decentralised network. Users can issue all originals, negotiable or non-negotiable, and exchange them via a direct, encrypted, peer-to-peer transmission. It’s also possible for users to amend documents. WAVE BL’s communication protocol is approved by the International Group of Protection & Indemnity Clubs, and meets the highest industry standards for security and privacy.
“MSC has chosen WAVE BL because it is the only solution that mirrors the traditional paper-based process that the shipping and cargo transportation industry is used to,” says André Simha, Global Chief Digital & Information Officer at MSC. “It provides a digital alternative to all the possibilities available with traditional print documents, just much faster and more secure.”
The WAVE BL platform can be used free of charge throughout 2021 for exporters, importers and traders. Users only pay for issuing the original documents, and they do not need to invest in any IT infrastructure or make operational changes in order to use the service. They can simply sign up via MSC’s website: www.msc.com/eBL.
The European Union makes it a top priority to ensure the security of its citizens and single market. Every year trillions of Euros worth of goods are imported into EU, with the EU-27 now accounting for around 15 % of the world’s trade in goods. The European Union is implementing a new customs pre-arrival security and safety programme, underpinned by a large-scale advance cargo information system – Import Control System 2 (ICS2). The programme is one of the main contributors towards establishing an integrated EU approach to reinforce customs risk management under the common risk management framework (CRMF).
The pre-arrival security and safety programme will support effective risk-based customs controls whilst facilitating free flow of legitimate trade across the EU external borders. It represents the first line of defence in terms of protection of the EU internal market and the EU consumers. The new programme will remodel the existing process in terms of IT, legal, customs risk management/controls and trade operational perspectives.
The EU’s new advance cargo information system ICS2 supports implementation of this new customs safety and security regulatory regime aimed to better protect single market and EU citizens. It will collect data about all goods entering the EU prior to their arrival. Economic Operators (EOs) will have to declare safety and security data to ICS2, through the Entry Summary Declaration (ENS). The obligation to start filing such declarations will not be the same for all EOs. It will depend on the type of services that they provide in the international movement of goods and is linked to the three release dates of ICS2 (15 March 2021, 1 March 2023, and 1 March 2024).
Advance cargo information and risk analysis will enable early identification of threats and help customs authorities to intervene at the most appropriate point in the supply chain.
ICS2 introduces more efficient and effective EU customs security and safety capabilities that will:
Increase protection of EU citizens and the internal market against security and safety threats;
Allow EU Customs authorities to better identify high-risk consignments and intervene at the most appropriate point in supply chain;
Support proportionate, targeted customs measures at the external borders in crisis response scenarios;
Facilitate cross-border clearance for the legitimate trade;
Simplify the exchange of information between Economic Operators (EOs) and EU Customs Authorities.
For more information on the ICS2 programme, refer to the EU Webpage here!
Following a public consultation, which ran from December 2019 to March 2020, the strategy sets out six objectives. These include to: develop ethical principles that guide responsible use of AI; remove barriers to innovation; improve collaboration between government, the private sector and researchers; develop AI skills; promote investment in technologies; and advance Brazilian tech overseas.
Since Canada became the first country to adopt a national AI strategy in 2017, other governments have raced to develop policies that will reap the benefits of AI while curbing its harms. The OECD now tracks over 60 countries’ AI policy frameworks.
Brazil’s strategy notes that the state needs to encourage entrepreneurship in the sector. “In 2019, while the US invested US$224 million in AI startups, and China US$45 million, Brazil invested only $1 million,” it said.
Trust and ethics
Brazil has adopted the OECD’s five principles for responsible AI: inclusive growth, sustainable development and wellbeing; human-centered values and equity; transparency and responsible disclosure; robustness, security and safety; and accountability.
The strategy is organised into nine pillars or axes. The first pillar – “legislation, regulation, and ethical use” – is thematic and ensures that human rights are safeguarded and that strong regulatory frameworks are established. This includes a commitment to build ethical requirements into tenders for AI-driven solutions.
Another pillar – “qualifications for a digital future” – aims to “prepare current and future generations to cope with the changes and impacts of AI”. The strategy proposes a national digital literacy programme for students, and tech training for teachers, for example.
And a third pillar focuses on how AI can be applied to government for the benefit of citizens, including a commitment to implement AI in at least 12 of Brazil’s federal public services by 2022.
The strategy is also ambitious about the possible commercial benefits of doubling down on AI.
One pillar of the strategy, for example, aims to identify productive sectors — such as financial services and the law — and applications, where AI would benefit to industry. It proposes fostering links between AI start-ups and SMEs.
And another pillar – “research, development, innovation and entrepreneurship” – points out that Brazil has a good national distribution of AI experts and practitioners, but that they mostly work in academia or the public sector, rather than in private tech firms.
The Tanzania Revenue Authority (TRA) in Kilimanjaro Region is now using a mobile phone application to confirm the genuineness of Electronic Tax Stamps (ETS) on spirits that are sold in some bars.
The application provides information on whether the ETS on the drink product was genuine or fake.
This follows a recent request by residents of Kilimanjaro and Arusha, asking the taxman to work with other state agencies to investigate the presence of fake tax stamps in the market.
The TRA regional manager for Kilimanjaro, Mr Gabriel Mwangosi, said yesterday the fake stamps will soon become a thing of the past because the ‘special devices’ have the capacity to verify the fake and genuine ones. “Some traders are buying these stamps from the streets without knowing if they are genuine or not,” he said.
Adding: “We have found some of them buying ETS stamps, which are not recognised by the TRA system. This is a major reason for us to come up with a tool that can help curb fakes,” he noted.
The taxman is friendly with traders because the two depend on each other, cautioning that those using the fake stamps will face the law.
“We provide them (traders) with education to ensure that they fulfil their responsibilities of paying appropriate taxes and on time in order to avoid unnecessary penalties,” said Mr Mwangosi.
He stressed the ETS are mandatory for all traders, cautioning them to refrain from cheating.
“With these verifying devices, I can assure you (traders) and the resi-dents that no one will use fake stamps,” he noted.
Recently, TRA in Kilimanjaro Region reported to have arrested a man, Mr Kimario, in a deliberate effort to dismantle the network of individuals who engage in the distribution of fake ETS.
“He was arrested at his home. He would pocket Sh10,000 on every 100 fake stamps he sold to manufacturers. At times, he would issue a Sh2,000 discount and sell at Sh8,000. This is sabotage of our economy and revenue collec-tion efforts,” said Mr Mwangosi last Wednesday.
The government announced plans to adopt the ETS system in June 2018 and the first phase was conducted on January 15, 2019 whereby stamps were installed on 19 companies that produce alcohol, wine and spirits.
ETS seeks to boost transparency in the collection of excise duty, value-added tax (Vat) and corporate tax from manufacturers.
The ETS system enables the government to use modern technology to obtain production data on a timely basis (real time) from manufacturers.
New investment in track and trace systems, rising excise taxes and wider commercial applications will drive tax stamp growth in the next five years, according to a new report published by Reconnaissance International.
The third edition of the ‘Tax Stamps & Traceability: A Market Analysis and Technical Update’ identifies cannabis and vaping products as new markets for tax stamps to tap into, at a time when the continued trade in illicit tobacco and alcohol sees revenue agencies using the devices as effective weapons in the fight against counterfeiters and criminals.
The report also points to the fact that by 2023, tobacco products in at least 60 countries will need to have track and trace systems in place to comply with the WHO FCTC Protocol to Eliminate Illicit Trade in Tobacco Products. This could open up additional tax stamp markets and more commercial opportunity for an established product.
More than a 120 billion tax stamps are used annually, the report says, to secure tobacco and liquor excise revenues, or as part of product authentication and secure tax and trace programmes. However, it adds that while the number of countries adopting tax stamps continues to rise, the market for cigarettes and spirits is falling in the face of declining global tobacco consumption and a marginal increase in the sale of spirits.
Coming against the backdrop of WHO’s framework designed to curb the illicit trade in tobacco products, the report is the only one of its kind to cover the global alcohol and tobacco tax stamp market, and considers both the current and future tax stamp and traceability environment in specific countries and regions.
Cannabis and fuel marking among other products are identified as emerging markets for tax stamps and tax marks, where they can be used effectively to protect against the threat of counterfeiting and secure taxes lost to criminals and other nefarious activity.
The question of why paper-based tax stamps, as opposed to digital alternatives, continue to provide the best protection against acts of non-compliance and illicit trade is considered as part of a section looking at the current landscape, the evolution of tax stamp programmes and what’s compelling some countries to extend take-up while others will not consider using them.
Further sections examine the practical steps involved in creating tax stamp and traceability programmes and feature a quantitative analysis of current and future volumes based on consumption data obtained from GlobalData. Information on the different types of tax stamps and systems being deployed across the globe with an assessment of their impact and effectiveness, are also included.
‘Tax Stamps & Traceability: A Market Analysis and Technical Update’ looks to the future with insight and opinion on questions around the viability of paper-based tax stamps and the impact of the WHO FCTC Protocol on tobacco track and trace systems which use tax stamps. It also asks what the common characteristics of these systems are that successfully increase tax revenues and reduce illicit trade.
Nicola Sudan of Reconnaissance International is the report’s editor. She said: “This is an important strategic report, offering insight, analysis and to those with a vested interest in tax stamps, the knowledge needed to progress with their own plans in this burgeoning sector.
“Tax stamps offer a cost-effective way to secure excise revenue, while the authentication benefits provided cannot be overstated. It is why they will continue to be highly regarded and used by revenue authorities around the world well into the future.
“So whether your country, state or jurisdiction currently uses a tax stamp scheme, or is considering investing in such a scheme, it would be beneficial to find out what a modern programme can deliver and why now is the right time to introduce them or expand your current scheme. This report will aid in making the right decisions and choices.”
In a statement, the IMO said the ‘Single Window for Facilitation of Trade (SWiFT) Project’ will develop a system in a pilot port to allow electronic submission, through one single portal, of all information required by various government agencies when a ship calls at a port.
The SWiFT project will be implemented by IMO in partnership with Singapore, the body said.
Regulations in IMO’s Facilitation Convention require electronic exchange of data, to ensure the efficient clearance of ships and the single window concept is recommended, to avoid duplication of effort.
Individual data elements should only be submitted once, electronically through a single point of entry, to the relevant regulatory agencies and other parties.
According to the IMO, the COVID-19 pandemic has emphasised the value of digitalisation and electronic exchange of required data is speedier, more reliable, efficient and COVID-secure than manual processes.
Under the pilot project, the selected country will be advised on the necessary legal, policy and institutional requirements for the MSW system. The port will then be provided with functional MSW software, hardware and/or IT services, configured to the country’s needs.
The pilot will be supported by Singapore via in-kind contributions and by IMO via the Integrated Technical Cooperation Programme (ITCP).
Kitack Lim, IMO’s Secretary-General, said, “Increased digitalisation supports greater efficiency which benefits the ship, the port and wider supply chain.
“We want to support countries in implementing the FAL Convention requirements for electronic data exchange, by supporting a pilot project which will show the way and result in know-how which can then be shared with others.”
Following the initial pilot and subject to funding availability, the aim is to replicate the pilot project in other IMO Member States in need of similar technical assistance, the IMO claimed.
Julian Abril, Head of IMO’s Facilitation Section, “Following implementation in the pilot port, the IMO-Singapore project endeavours to springboard countries in their digitalisation journey and unlock the full potential of their maritime sectors.
“It is only when most, if not all, ports undergo digital transformation, that the full benefits of digitalization can be realized by the maritime community.
“With support from IMO’s Department of Partnership and Projects, we envisage an increasing number of discussions with external partners and resource mobilization efforts to support an ambitious scaling-up plan for this pilot initiative.”
The International Chamber of Commerce (ICC) in partnership with West Blue Consulting, United Parcel Services (UPS), Trade Law Center (TRALAC) have officially launched the eTradeHubs portal, http://www.etradehubs.com.
The eTradeHubs portal is a one-stop for Trade Tools, Information & Collaboration which aims to reduce the time and cost of doing business by supporting businesses at all levels of maturity – the micro enterprise to the multinational.
The portal which was virtually launched last week Thursday has features such as a multi country Tariff and Trade Information Tool and a Duty Calculator.
A first-time trader or existing trader wishing to import raw materials or export finished goods, can search on the portal.
The Duty Calculator further provides an estimate of the customs duty, tax and levies of the destination region or country to aid in financial and logistical planning.
eTradeHubs also provides a Trade Management Tool. Equipped with accurate trade information, the trader can proceed to transact, by generating trade compliant documentation, manage compliance, workflow and costs – all on the same platform, without the need to visit multiple regulatory agencies, entities, websites and physical offices as done previously.
The portal currently provides country data on Ghana, Kenya, Nigeria, South Africa, Zambia and the ECOWAS sub region, with more countries and sub regions to be introduced in support of the Digitise 5 million African SMES initiative.
CC, UPS, Tralac, and West Blue Consulting through a Memorandum of Understanding (MOU) announced a partnership to support women-led small and medium-sized enterprises (SMEs) in Africa.
The partners will offer capacity building programmes and tools, including co-developed trade and information portals called “e-Trade Hubs,” advocate for enabling public policy, and create electronic guidelines to help women entrepreneurs scale-up and digitise their businesses.
The Secretary General of ICC, Mr John W.H. Denton AO in his remarks said the economic, social, and health consequences associated with the COVID-19 pandemic had unequally impacted the lives and livelihoods of women business owners everywhere.
“We are extremely proud to partner with UPS, Tralac, and West Blue Consulting to level the playing field in Africa and provide women entrepreneurs with the required resources to digitise their businesses. Women-led businesses are the backbone of their local economies – we can’t afford to leave them behind,” he added,
The CEO and Founder of West Blue Consulting, noted that “The adoption of solutions by women in business and trade, will ensure benefits such as an increased ability for women to work from home whilst raising families; improved global market access, employment opportunities and a shift of women from the informal sector to the formal.
“The portal will provide a 24/7 collaborative space where women traders and entrepreneurs in the African Continental Free Trade Area (AfCFTA) and of course their male peers can connect and access timely and up to date information, skills and operational tools, offered by various providers”, she added.
Ms Mintah expressed delight to partner with ICC, UPS and TRALAC to provide the needed skills training, trade information and tools via the eTradeHubs portal http://www.etradehubs.com.
President of UPS, Ms Penny Naas, the International Public Affairs & Sustainability said “Research shows that only 1 out of 5 businesses that exports is led by a woman. At UPS, we’re moving our world forward by helping women-run businesses maximize their participation in trade through public-private partnerships that provide policy recommendations and support with knowledge sharing and building skills”.
Executive Director of Tralac, Ms Trudi Hartzenberg, said the adoption of digital trade solutions for the AfCFTA would address many border management challenges that disproportionately impact women traders.
The UK government has promised that a plan to create eight freeports with low-tax zones will boost the post-Brexit economy, but has also sparked fears that they could allow flows of illicit trade into the country.
The designated free-trade zones (FTZs) – due to be created at Felixstowe/Harwich, Liverpool, Hull, Southampton, London Gateway, Plymouth, Teesside and East Midlands airport – will attract investment and job creation in some hard-hit areas of the country, say backers of the proposal, headed by Chancellor Rishi Sunak.
Goods can be landed, stored, handled, manufactured or reconfigured and re-exported at freeports without being subjected to customs tariffs. In addition, companies operating inside the sites will be offered temporary tax breaks, mostly lasting five years.
In the other camp are those who point to the experience with FTZs in other parts of the world in facilitating the trade in things like counterfeit goods and drug trafficking.
In 2018, a report by the Organisation for Economic Co-Operation and Development (OECD) and the EU Intellectual Property Office found that FTZs were linked to a 5.9 per cent rise in the value of counterfeit goods exported from hosting countries.
“These results confirm the anecdotal evidence pointing to the misuse of FTZs to conduct illicit trade, and they should be a prompt for future actions,” it concluded.
Since then, the EU has started to pay more attention to the activities of the 82 FTZs within its borders post-Brexit, launching new rules to crack down on what the European Commission says is a “high incidence of corruption, tax evasion, [and] criminal activity.”
The UK government reckons it can move ahead with its freeport plan without the risk of stimulating illicit trade, based in part on the findings of a report published last year by independent research body the Royal United Services Institute for Defence and Security Studies (RUSI).
That study acknowledges the evidence of criminal activity taking place at freeports around the world, saying it most commonly takes the form of counterfeit goods, drug trafficking, smuggling of untaxed goods or trade-based money laundering.
Those dangers may be mitigated, it says, through careful risk assessment at each geographical location where freeports are established, making sure crime prevention measures are proportional to those risks, and close vetting of businesses wishing to operate in them.
The freeport operators should also be regularly placed under scrutiny to assess their effectiveness in “discharging their security-related responsibilities,” and recommendations laid out by the OECD should also be adhered to.
The latter includes making sure the authorities have access to goods and related documentation, ideally digital, in addition to screening of businesses operating in the FTZ.
In its notice for the tender for freeport operators published last November, the government says operators “must adhere to the OECD code of conduct…and the specific anti-illicit trade and security measures therein,” as well as the UK’s obligations on money laundering, terrorist funding and transparent transfer of funds.
RUSI’s research has shown that a lack of oversight in freeports provides opportunities “to manufacture, assemble, tranship, relabel and repackage illegal goods, including counterfeit medicines, electronics and fashion items.”
It also notes that ‘leakage’ is common, where goods are smuggled from a freeport into a host economy, thus avoiding relevant checks on health and safety standards, import taxes and VAT.
At least seven freeports operated in the UK between 1984 and 2012, when the government stopped renewing freeport licenses and switched its attention to “enterprise zones”, which also provide tax breaks in a bid to encourage industrial growth and community regeneration.
RUSI notes that the US does seem to be able to operate FTZs without increasing the risk of illicit trade, and says it is “reassuring that, for some parts of government at least, tackling economic crime remains top of the agenda.
Critics of the UK plan, including the opposition Labour Party, think there are other downsides as well.
One viewpoint is that rather than growing the economy, the freeports will simply move it around the country, benefitting deprived areas but providing no net gain overall.
Some also argue that the net result will be even worse – a reduction in tax contributions from industry to the treasury – with businesses elsewhere undercut by those operating within freeport. Others meanwhile are concerned that the rights of people working within the FTZs will be diluted.
“If the government thinks freeports are a magic bullet that will create hundreds of thousands of new jobs, bring billions of additional pounds to the Exchequer and radically transform an area it is mistaken,” according to Professor Catherine Barnard, deputy director of UK in a Changing Europe.
“That is not to say they should not be created but the thought they’re going to transform the wealth and prosperity of this country is simply untrue. It will help the regions that get a freeport – but possibly to the detriment of those that don’t.”