Archives For Customs Declaration

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Another feature filled WCO News e-publication featuring Blockchain big time!

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GEC

Land borders in the SADC region are critical zones for unlocking economic development, regional value chains and trade. In this light the Global Economic Governance Africa programme is working with the Zimbabwe Trade Forum and the University of Zambia to look at two case studies on the border regions around Beitbridge and Chirundu. The borders, between South Africa and Zimbabwe, and Zimbabwe and Zambia, represent critical links in the North-South Corridor and are vital in both regional development initiatives as well as bilateral ones between the countries.

The seminar, attended by trade experts, policy makers and researchers from South Africa and the region discussed the field research findings of a study at the Beitbridge and Chirundu border posts conducted on behalf of the programme in June 2018.

The following presentation documents should be of interest to all parties concerned with inter regional trade and trade facilitation development initiatives.

It is also worthwhile to visit Tutwa Consulting’s webpage as it explains how the surveys were conducted and provides salient features in relation to each of the border posts concerned which may not necessarily be apparent in the presentation documents as such.

Source: Tutwa Consulting

Tin Can Island Nigeria

Nigerian importers operating in all ports in Lagos are facing a tough time in clearing their consignments via the new Nigeria Customs Service (NCS) clearing platform, created to facilitate trade.

The platform

The new IT platform introduced to aid smooth clearance of cargo at the various port terminals has been given the Service sleepless nights before it was further wrecked by windstorm few days ago.

The platform, called Nigeria Customs Integrated System (NCIS)II is an improvement on  earlier automation processes such as Automate System for Customs Data (ASYCUDA), ASYCUDA 2.3, ASYCUDA 2.7,ASYCUDA ++, and NICIS I, which is a software specially created to enhance seamless cargo clearance.

Under ASYCUDA, agents could only make five declarations in one hour, but under the NICIS II, they can make up to 18 declarations within an hour.

Also, under NICIS I, customs agents could view what other control agencies such as National Agency For Food And Drug Administration And Control (NAFDAC), National Drug Law Enforcement Agency (NDLEA), Standards Organisation of Nigeria (SON) are doing with their declarations. Similarly, they could actually interact with these agencies under NICIS II.

The new software had earlier been launched at Lilypond Terminal, Port and Terminal Multi-services Limited (PTML) and Tin Can Customs Commands.

Disruption

However its failure has affected cargo clearance at the ports in Lagos, Tin Can Island, and Kirikiri Lighter Terminal (KLT) twice this month during a heavy downpour.

The disruption was more pronounced at Lagos Port, which handles the largest imports just two weeks when it migrated to the new platform after its trial at Lilypond, PTML and Tin Can commands.

Challenges

Speaking on the challenges, the Assistant Comptroller of Customs in charge of Customs Processing Centre (CPC), Apapa command, Yahaya Muktar highlighted some of the challenges the command had faced since the NCIS II took off two weeks ago, namely –

  • that the migration from ASYCUDA system to NCIS II platform had caused a little disruption in revenue generation, however he said that the command had caught up on what was initially lost to the mixed up; and
  • that the recent windstorm also contributed to the teething problems experienced at the command.

He explained that the service had not been able to access any work because of the server failure.

For the first week, there was no revenue collected. In the second week, when NCS got acclimatised to it, NCS collected N4.3 billon in a day which has now made up for the three days where no revenue was collected.

At the moment, the Lagos Port had only one scanning machine and that this was not adequate for the backlog of pending containers to be cleared. It was also confirmed that scanners were not working in some port terminals (Tin Can).

Requests for inspection were not being triggered properly resulting inspections not being completed.

Issues are also being experienced with debit notes resulting in importers being billed twice.

Many users were reluctant about using the new IT platform in the light of all the difficulties.

The challenges experienced range from network to various hardware and software technical issues. The NCS’s technical partner, Webb Fontaine is working with the implementation team to ensure normal resumption of customs processing for trade.

Source: New Telegraph Online, original article by Bayo Akomolafe, 30 May 2018

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This edition of WCO News features a special dossier on the theme chosen by the WCO for 2018, namely “A secure business environment for economic development”, with articles presenting initiatives and related projects that contribute to creating such an environment. The articles touch on authorized economic operators, national committees on trade facilitation, coordinated border management, performance measurement, e-commerce, data analysis, and partnerships with the private sector.

For sub-Saharan African readers, look out for the write up of the Customs systems interconnectivity and the challenges and opportunities for Customs administrations in the SACU region.

Other highlights include articles on Customs systems interconnectivity in the Southern African Customs Union, on the experience of a young Nigerian Customs officer who participated in the Strategic Management and Intellectual Property Rights Programme at Tokyo’s Aoyama Gakuin University, on how the WCO West and Central Africa region is using data to monitor Customs modernization in the region, and on the benefits that can be derived by facilitating transit procedures.

Source: WCO, February 2018

ZIMRAaaaaaaaZimbabwe’s Deputy Finance and Economic Planning Minister Terrence Mukupe has estimated that the country has lost an estimated $20 million in revenue receipts since ZIMRA’s automated Customs processing system (ASYCUDA World) collapsed in the wake of server failure on 18 December 2017.

During a site visit of Beit Bridge border post earlier this week, it was revealed that ZIMRA collects an estimated $30million per month in Customs duties at its busy land borders. The Revenue Authority has since instituted manual procedures.  Clearing agents are submitting their customs documents accompanied by an undertaking that they will honour their duties within 48 hours. That is, when the ASYCUDA system is finally resuscitated and this is totally unacceptable.

Furthermore, Zimbabwe lies at the heart of the North-South Corridor which handles a substantial volume of transit traffic. The threat of diversion due to lack of proper Customs control and opportunism will also create both a fiscal and security headache. The deputy minister stated that the government was considering abandoning the Ascyuda World Plus system to enhance efficiency and the ease of doing business. “We need to benchmark it with what our neighbours in the region are using”.

It has also been suggested that the ZIMRA board have been complacent in their oversight of the affair. While it is a simple matter to blame systems failure, the lack of management involvement in taking proactive steps to ensuring redundancy of the country’s most crucial revenue collection system has been found wanting.

This calamity undoubtedly signals a huge concern for several other African countries who are likewise supported by UNCTAD’s ASYCUDA software. Many question post implementation support from UNCTAD, leaving countries with the dilemma of having to secure third party vendor and, in some cases, foreign donor support to maintain these systems. The global donor agencies must themselves consider the continued viability of software systems which they sponsor. Scenarios such is this only serve to plunge developing countries into a bigger mess than that from which they came. This is indeed sad for Zimbabwe which was the pioneer of ASYCUDA in sub-Saharan Africa.

This development must surely be a concern not only for governments, but also the regional supply chain industry as a whole. While governments selfishly focus on lost revenue, little thought is given to the dire consequence of lost business and jobs which result in a more permanent outcome than the mere replacement of two computer servers.

Under such conditions, the WCOs slogan for 2018 “A secure business environment for economic development” will not resonate too well for Zimbabwean and other regional traders tomorrow (International Customs Day) affected by the current circumstances. Nonetheless, let this situation serve as a reminder to other administrations that management oversight and budgetary provisioning are paramount to maintaing automated systems – they underpin the supply chain as well as government’s fiscal policy.

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Are toilet seats bought by the kilogram or on a per piece basis? Should tableware or porcelain be measured by weight or as a unit? Likewise with a coffee table — weight or number? The answers may seem obvious but they’re not. Differences in commercial practices and customs guidelines on the measurement of some goods may have wreaked havoc with the country’s trade statistics, not to mention sparking a plethora of disputes and delays in the clearance of consignments.

The Central Board of Excise and Customs (CBEC), India has now begun a review of standard unit quantity codes (UQC) to address the issue and help improve the ease of doing business while reducing the scope for disputes. India has already identified ‘trade across borders’ as one of the areas where it can show substantial improvement in ease of doing business.

India is ranked 119 on this count in the World Bank’s latest rankings.

“There are issues particularly in some tariff lines… We are now looking at how we can bring about uniformity,” said a government official. For instance, UQC for products under Heading 6911— tableware, kitchenware and other household articles, and toilet articles of porcelain or china—is in kilogram.

However, the trade transacts in units or by number of pieces. Moreover, there is no uniformity in UQC declarations by traders. These are not the same for a particular item at different customs locations. The World Customs Organization has prescribed standard UQCs that are used internationally. India implemented mandatory standard UQCs from 2013 as part of export-import declarations.

There are inconsistencies in the way these have been applied. Variance in codes is approved by field officials, which makes the system subject to discretion and interpretation. CBEC has reached out to the industry to arrive at ways in which the matter can be addressed.

“Use of standardised UQC as prescribed in Customs Tariff Act, 1975, is a challenge at times faced by trade due to different market practices,” said Rahul Shukla, executive director, PwC.

“The same has been recognized by the customs authorities and they have supported the trade in resolving it as well on case-to-case basis. Shukla said the proposed move by CBEC to take another look at UQCs prescribed in the Customs Tariff Act and align them with practice was a positive move and in line with the continued commitment to trade facilitation.

“It will help if CBEC can consider allowing multiple UQCs for the same commodity or adopting a particular UQC which is used more frequently by trade,” he said. India jumped 30 places to 100 in World Bank’s overall ease of doing business rankings in the latest listing released in October after undertaking various reforms to improve the environment. Source: By Deepshikha Sikarwar, The Economic Times, India, 8 January 2018.

HS_30_GalleryThe Harmonized System (HS) allows a world of many languages to speak with one. A multipurpose nomenclature for trade, the HS is one of the most successful instruments developed by the World Customs Organization. Its Convention has 156 Contracting Parties and the HS is used by more than 200 countries, territories and Customs or Economic Unions. It forms the basis for Customs tariffs and statistical nomenclatures around the world, and is used for around 98% of world trade. The year 2018 marks the 30thAnniversary of the HS which came into effect on 1stJanuary, 1988.

As an international standard with global application, the HS plays a key role in facilitating world trade. The HS is used as the basis for:

  • Customs tariffs;
  • Trade policies and quota controls;
  • Collection of international trade statistics and data exchange;
  • Rules of origin;
  • Trade negotiations such as the WTO Information Technology Agreement and Free Trade Agreements;
  • Monitoring of controlled goods, for example, chemical weapons precursors, hazardous wastes and persistent organic pollutants, ozone depleting substances and endangered species;
  • Many Customs controls and procedures, including risk assessments and profiling, electronic data input and matching and compliance activities; and Economic research and analysis..

The HS is crucial to the development of global trade. It is also fundamental to achieving fair, efficient, and effective revenue collection, a primary Strategic Goal of the WCO. In addition, as it provides an essential tool for the simplification and harmonization of customs procedures and provides the basis of knowing what trade goods are crossing borders, it contributes to other major strategic goals of Customs administrations and of the WCO.

The HS is a living language. The HS is now in it’s 6th edition and in the process of preparing for the Seventh Edition of the HS (HS 2022). During the life of the HS, there have been 60 meetings of the Harmonized System Committee (HSC) where 4,144 agenda items were discussed, 10 Recommendations were produced concerning the application of the HS Convention, 2280 classification decisions made and 871 Classification Opinions adopted to ensure the harmonization of classification. On 1st of January 2018, Members can be congratulated on having worked through the 60 HSC meetings, 53 meetings of the Review Sub-Committee (RSC) and 32 meetings of the Scientific Sub-Committee (SSC) to maintain and update the HS to keep it responsive and relevant to current needs.

On the occasion of this anniversary, the WCO calls for the international Customs community, in partnership with the international trade community, to continue to be proactive and pursue its efforts to develop and maintain the HS, especially in terms of the application and uniform interpretation of the HS, so as to safeguard and further grow the benefits of this success. Source: WCO, 3 January 2018.

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At least 30 representatives of the Southern African Customs Union (SACU) recently met in Maseru – capital of the ‘Mountain Kingdom’ – Lesotho, to undertake a 5-day training workshop on the WCO Data Model, between 29 May to 2 June.

The training formed part of capacity building support to Member States to implement IT connectivity and information exchange between SACU Customs Administration. The training was facilitated by WCO Data Model Expert, Mr Carl Wilbers from South African Revenue Service (SARS) and GEFEG.FX software tool Expert, Mr. Martin Krusch from GEFEG, Germany.

The recent ratification of Annex E to the SACU agreement – on the use of Customs-2-Customs (C-2-C) Data Exchange between member states – paves the way for participating countries to exchange data within the terms of the agreement on the basis of the GNC Utility Block, also greed to by the respective member states. It also coincides with recent work on the establishment of a SACU Unique Consignment Reference (UCR) which must be implemented by the SACU countries in all export and transit data exchanges between themselves, respectively.

Just recently, in May 2017, the heads of SACU Customs administrations were presented a prototype demonstration of data exchange between the respective systems of the South African Revenue Service and the Swaziland Revenue Authority.

The WCO Data Model provides a maximum framework of standardized and harmonized sets of data and standard electronic messages (XML and EDIFACT) to be submitted by Trade for Cross-Border Regulatory Agencies such as Customs to accomplish formalities for the arrival, departure, transit and release of goods, means of transport and persons in international cross border trade.

The course was extremely comprehensive, providing SACU customs users the full spectrum of the power and capability which the GEFEG.FX software tool brings to the WCO’s Data Model. GEFEG is also the de facto Customs data modelling and data mapping tool for several customs and border authorities worldwide. It significantly enhances what was once very tedious work and simplifies the process of mapping data, ensuring that the user maintains alignment and consistency with the most up-to-date version of WCO data model. One of the more significant capabilities of the GEFEG.FX software is its reporting and publishing capability. For examples of this please visit the CITES electronic permitting toolkit and the EU Customs Data Model webpages, respectively. Pretty awesome indeed!

Users had the opportunity of mapping the SACU agreed data fields both manually as well as using the tool. The SACU group was able to add additional enhancements to its agreed data model, providing an added benefit of the work session.

China Customs EmblemAudit firm KPMG reports that the General Administration of Customs (GAC) will reform the existing customs clearance procedure for imported goods, according to a GAC Circular on Carrying out Pilot Reform of Tax Collection and Administration Procedure issued on 29 October 2016. Under the current procedure, review of the customs declaration is required before goods are released. This reform is designed to further guide import and export enterprises to be self-disciplined and law-abiding, with the principle stated as “honesty and observance of the law brings convenience; dishonesty and irregularity leads to punishment” to improve customs clearance efficiency.

Content of pilot reform  includes the following elements:

Independent customs declaration and tax payment – when importing goods, enterprises should submit customs declarations truthfully and accurately in advance, calculate tax payable and surcharges and handle payment-related procedures on their own.

Review of elements relating to tax calculation after release of goods  – generally, goods will be released after enterprises complete the customs declarations and tax payment procedures on their own. Afterwards, the customs authority will spot-check and review the valuation, classification and origin of the imported goods of the enterprises. In special cases, the authority will inspect the customs declaration in advance.

Proactive disclosure scheme After release of goods – enterprises are encouraged to report to the authorities in writing if they are aware of any of their own violations against customs regulations. Enterprises which the customs authority believes to be voluntary disclosers of their own irregularities will be less punished or free from punishment. For enterprises which have disclosed their irregularities and paid back taxes proactively, late fees can be reduced or eliminated.

For more details access the KPMG report here! Source: KPMG

sars-edi-user-manualSARS has been operating Electronic Data Interchange (EDI) with its external stakeholders since 2001. More than 98% of all customs declaration (CUSDEC) transactions are today submitted electronically to Customs and the electronic submission of multimodal cargo reports (CUSCAR) is steadily increasing. Today, declaration processing is fully electronic end-to-end thanks to the availability of highly established EDI and Customs software service providers supporting the local customs and logistics community. SARS has also recently introduced a benefit for compliant cargo reporters who will be absolved of certain manual (paper) submission requirements once they attain an acceptable level of electronic submission compliance and data accuracy.

The ultimate objective is to ensure that all Customs-to-Business (C2B) transactions are electronic to enable full supply chain connectivity between the South African business community and Customs. This in turn enables the possibility of SARS accrediting or approving ‘supply chains’ as opposed to just individual trader segments (importers and exporters). The extent of electronic compliance is also a pivotal requirement for traders operating under the new Customs Control Act, to be enacted in the future.

SARS overall EDI capability extends further than declarations and cargo reports. In recent years Customs-to-Government (C2G) messaging has also been successfully established between SARS and the Department of Trade and Industry (dti) as well as the South African Reserve Bank (SARB). SARS is also engaging other government stakeholders concerning IT connectivity and data exchange.

Moreover, developments for cross-border Customs-to-Customs (C2C) data exchange are also in the pipeline and could come to fruition with the partner administrations in Mozambique and Swaziland in the foreseeable future. These initiatives will usher in increased supply chain connectivity through active use of the Unique Consignment Reference (UCR) between participating customs administrations. The ultimate objective here is the creation of mutual recognition benefits for local and cross-border traders based on their accreditation status agreed between the participating customs administrations.

The SARS Electronic Data Interchange (EDI) Manual (which can be downloaded from the SARS EDI webpage) has been updated with the latest versions of SARS Edifact Data Mapping Guides as well as improved diagrams explaining the functional composition of the various electronic messages specified for Customs processing. Also included are the requirements for registering as an EDI user with SARS.

The manual includes recent updates relating to cargo reporting (manifests) as well as the updated customs declaration message incorporating recent inclusion of customs surety, penalty and forfeiture requirements. The latter enhancement removes another document based requirement (the Form DA70 Provisional Payment) for Customs Brokers with the view streamlining data requirements, enhancing customs billing and customs status reporting with the trade and logistics community. This EDI Manual will be an important document over the coming months and years in that it will feature updated electronic requirements in support of the new Customs Control Act. Watch this space!

HS_HandbookFollowing the accepted complementary amendments to the Harmonized System Nomenclature listed in the Council Recommendation of 11 June 2015, the Correlation Tables between the 2012 and 2017 versions of the HS have been revised. The revised Correlation Tables show the correlation resulting from both the amendments to the Nomenclature which have been accepted as a result of the Council Recommendation of 27 June 2014 and the complementary amendments to the Nomenclature which have been accepted as a result of the Council Recommendation of 11 June 2015.

For more details visit the WCO website.

SARS R78 million Airport Cash BustIn order to assist Members with the updating of their existing Rules of Origin in relation to changes in the Harmonized System, the WCO has issued the “Guide for the technical update of Preferential Rules of Origin“. The Guide is available for WCO Members only.

Classification and origin determination of goods are closely interlinked. It is therefore critically important to update Rules of Origin (i.e. Product Specific Rules) to ensure consistency between HS classification and origin determination. This would help to prevent misapplication of Rules of Origin, ensure efficient and effective revenue collection and facilitate trade. Source: WCO

Ivory Coast SEW2As Customs and Border regulatory authorities ramp up their commitment to international agreements, such as the WCO Revised Kyoto Convention, SAFE Framework of Standards and the more recent WTO Trade Facilitation Agreement, more countries will offer a single point of entry through which traders, international carriers and logistics providers can access and comply with the resident customs and other government regulatory regimes.

The concept of a Single Window is borne out of the fact that traditional import/export and related regulatory requirements pose a barrier to market entry for international goods. There are many derivatives of Single Window in operation globally. Perhaps the best resource for this can be found on the UNECE’s interactive Trade Facilitation Implementation Guide webpage. One can navigate to the case studies page to read up on a country-by-country experience on various trade reforms including Single Window developments.

Côte d’Ivoire (Ivory Coast) is one of many African countries who have introduced Single Window as a facilitation measure whereby international trade can interface with Customs in a number of ways. It consists of a web-based trade portal (operated by Webb Fontaine) which interfaces with AsycudaWorld (AW), Côte d’Ivoire Customs’ management system. The portal allows traders to key-in advance import/export information within an electronic document called TVF (Trade Virtual Folder). Customs declarations are then subjected to tariff classification  and valuation, thereafter routed for commercial/risk assessment and revenue accounting on AsycudaWorld, or Sydam World as it is known in Côte d’Ivoire.

Commercial banks use the TVF within the Single Window to endorse the settlement of each import; the Ministry of Commerce subsequently authorizes the overall transaction through the system.

The Single Window provides an entry point for traders and supply chain operators to accomplish various Customs formalities such as –

  • Customs Declaration processing – allowing importers and exporters to electronically file clearances.
  • Manifest operations – used by all carriers to upload their XML manifests and register the same through the trade portal directly into AsycudaWorld. The facility also allows the amendments of waybills (e.g. excess and shortages) and automatically synchronizes the operations with the AW system. The Port Authority IT systems, including the Port of Abidjan and the Port of San Pedro, automatically receive and integrate the manifests submitted by carriers.
  • License module – allows traders to request import/export licenses (regulatory permits) that are later on approved online by the relevant ministries. Each license comprises a list of regulated products, quota allowable amount based on a predefined scheme (gross mass, net mass, FOB, Unit of measurement or unlimited quota). Further developments will include the automatic write-off of license quota by declarations using the Declaration module.

Source: Webb Fontaine

TraxensFrench shipping giant CMA CGM will start phasing in ‘smart’ containers this year, allowing the line and its customers to keep track of each box equipped with new sensors at all times. In an industry first, technology being developed with a start-up company, Traxens, would enable data on the location and condition of the container to be monitored at all times throughout a delivery.

The world’s third-largest container line and Ocean Three member said it had contributed to the capital increase of French firm Traxens that will enable CMA CGM to have access to an unprecedented amount of information on each container and offer clients what it describes as unique tracking solutions and real-time data collecting from all over the world.

Elie Zeenny, CMA CGM senior vice-president, Group IT Systems, said the technology would bring the shipping industry into a new era. This year, Traxens plans to equip the first CMA CGM containers with the patented technology so it will be possible to know in real-time not only a container’s position, but also its temperature, the vibrations it will be subjected to, any attempted burglary, the presence of traces of specific substances in the air or even the regulatory status of the cargo.

With its “4Trax” solution, Traxens offers the tracking of containers from cargo loading to their final destination, and the forwarding of data in real time to all actors in the multimodal transport chain. Traxens has also worked closely with French Customs in the development of its solution. In this regard the solution aims to record the legal status of the container (customs clearance) with the view to eradicate false declarations and counterfeits and to facilitate controls. Sources: Lloyds loading, CMA CGM and Traxens

KentradeThe Kenya Trade Network Agency, operator of the National Electronic Single Window System, has refuted claims by some clearing agents that the platform is lapsing. KenTrade has instead blamed slow integration of its system on the continued parallel use of the Kenya Revenue Authority’s systems – the Orbus and Simba. Currently, importers are using both systems to process documents such as import permits.

Project director Amos Wangora said there is need to retire Orbus system for agents to embrace the Single Window System, particularly in filing Import Declaration Forms. Kentrade accused KRA officials of avoiding the Single Window System.

“We don’t have any problem in the use of the Single Window System. It’s only people who don’t want to embrace the new system. Those using it are doing good only for some KRA officials who still want to use the Orbus system,” said Wangora in an interview on Friday.

KenTrade is the state agency tasked with facilitating cross-border trade through the Single Window System.

Wangora said only three modules remain for the Single Window System to be completed fully – include on declaration submission, bonds and exemption. Testing of the declaration submission module is on and is expected to be completed by 20 January 2015.

A section of clearing agents had raised concerns over delays in cargo clearance at the port of Mombasa under the Single Window System. Yesterday, the Kenya International Freight and Warehousing Association, Mombasa chapter, said KRA officials prefer their own system, which “lacks transparency”.

A clearing agent told the Star that one has to personally push for services, which involves handouts, under the KRA system. Kentrade has since written to KRA commissioner-general to halt the Orbus system on January 31.

The Single Window System integrates about 24 government agencies’ functions, offering a one-stop shop for processing import and export permit documents.  More than 6,000 imports and exports permits were issued under the new system last year, including permits from Kenya Bureau of Standards and Ministry of Health’s veterinary and pharmaceutical departments.

About 1,200 clearing agents, shipping agents, consolidators and partner government agencies will be trained on the remaining modules. Kentrade targets to have the system fully embraced by all stakeholders by July, with the country set to go paperless by 2015. Source: The Star (Kenya)