Another feature filled WCO News e-publication featuring Blockchain big time!
Another feature filled WCO News e-publication featuring Blockchain big time!
Customs officers seized 31m counterfeit items at the EU’s borders last year worth more than €580m – with food, toys and cigarettes intercepted most frequently.
The total numbers of seized products has declined since 2016, but there is a worrying trend towards a higher proportion of potentially dangerous items such as food, medicines, electrical goods and toys, which accounted for 43 per cent of all detained goods. That’s up from 26 per cent in 2015 and 34 per cent in 2016.
Almost a quarter (24 per cent) of the seizures were for foodstuffs, followed by toys making up 11 per cent, cigarettes at 9 per cent and clothes at 7 per cent of the total.
“The EU’s customs union is on the front line when it comes to protecting citizens from fake, counterfeit and sometimes highly dangerous goods,” said Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs.
“Stopping imports of counterfeits into the EU also supports jobs and the wider economy as a whole,” he added. Given the increasingly likelihood that the UK will no longer be part of the customs union post-Brexit, it’s worth noting that UK customs seized almost 1.5m goods last year.
Once again, China and Hong Kong were the primary sources for the vast majority of illicit goods, at 73 and 10 per cent, respectively, with China down from 81 per cent in the prior year and Hong Kong up from around 8 per cent. Other countries have emerged as hot spots for particular product categories, however, with Moldova a source of illicit alcohol, the US for other fake beverages and Turkey for counterfeit clothing. India was the top country of origin for fake, and potentially harmful, medicines.
In terms of modes of transport, two thirds (65 per cent) of all detained articles entered the EU via the maritime route, usually in large consignments. This was followed by air traffic which transported 14 per cent, and courier/postal traffic which together accounted for 11 per cent and mainly involved consumer goods ordered online such as shoes, clothing, bags and watches.
The Commission said the downturn in seizures comes after it implemented new measures aimed at protecting intellectual property rights last year, with a particular emphasis on helping smaller companies and startups respond to breaches.
Source: Securingindustry.com, P.Taylor, 2018.09.27
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
The World Customs Organization (WCO) has initiated work to identify possible case studies and uses of blockchain for Customs and other border agencies with a view to improving compliance, trade facilitation, and fraud detection (including curbing of illicit trade through the misuse of blockchains and Bitcoins), while touching on associated adjustments in legal and regulatory frameworks.
The objective of this research paper is to discuss ways in which Customs could leverage the power of blockchain and the extent to which the future of Customs could be shaped by the use of blockchain-based applications. Blockchain projects are currently in the beta testing phase in the finance sector (facilitating inter-banking system processes), insurance sector (preventing fraud and accelerating coverage) and international trade. With regard to the latter, this paper focuses its attention on two initiatives.
A conclusion that has been reached after discussion is that Customs would be able to have a broader and clearer picture of international trade particularly in terms of the movement of cargoes and consignments as being tied with the flow of capital. With blockchain-based applications, therefore, Customs could become a full-fledged border regulator with greater capabilities in the future.
Source: WCO, Y.Okazaki, June 2018
A new online course on the 2017 Edition of the Harmonized System (HS) has just been released by the WCO.
Through educational videos and a knowledge test, this course allows you to learn about the major changes in the 2017 version of the HS.
This course is available on CLiKC!, the WCO online learning platform, but is also the first WCO e-learning course which is built using mobile learning technologies. By downloading the app, available on the App Store and on Google Play, users will benefit from more features such as a search engine which indicates if a specific HS code has been amended in the 2017 version.
The app is available for free to anybody who wishes to learn about HS2017. The added feature for our Member administrations’ Customs officers, who have an account on this website, is that it will be synchronized with CLiKC!
The Economist Intelligence Unit and the Transnational Alliance to Combat Illicit Trade (TRACIT) have released their Global Illicit Trade Environment Index, ranking 84 countries on the extent they enable or prevent illicit trade.
Finland ranks first in the Index with a score of 85.6 (out of 100), just barely ahead of the U.K. The rest of the top 10 includes a handful of European countries (Sweden, Austria, Netherlands, Denmark and Germany), along with the U.S., Australia and New Zealand. South Africa features 42nd in the list.
At the bottom of the Index ranking is a group of developing economies from all regions of the globe. Libya ranks last with a score of 8.4, and is joined by Iraq in 83rd place, scoring less than six points better. Filling out the bottom ten of the Index are: Myanmar, Laos, Venezuela, Cambodia, Kyrgyzstan, Belize and Ukraine.
Regionally, Europe (34 economies in the index), earns the highest the average score (68.0). The Asia-Pacific (21 economies) comes second at 56.0 and the Americas (19 economies), including the U.S. and Canada, is third at 54.0. The Middle East and Africa (10 economies) comes in last, with an average score of 50.0.
The Index is constructed on consideration of government policy, supply and demand, transparency and trade, and customs environment.
Download the White Paper here!
“The Index provides essential information to help policy makers better understand the regulatory environment and economic circumstances that encourage illicit trade,” said Jeffrey Hardy, Director-General at TRACIT. “Illicit trade not only hurts consumers and takes revenue away from governments, it threatens the security of nations by supporting transnational criminal syndicates and terrorist groups, and governments and the private sector must work together to fight it.”
TRACIT hopes that economies that are at the top will concentrate on implementation and enforcement and says they need to provide leadership to help countries with lower scores to build a better environment to prevent illicit trade.
TRACIT calls for Governments across the globe to:
Source: The Economist, Illicit Trade Index, June 2018
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 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.
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.
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 –
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
The Korea Customs Service (KCS) has developed a customs clearing system powered by blockchain technology and artificial intelligence to prevent fraud and smuggling in South Korea and is enlisting importers and exporters to try out the new system.
The initiative is a response to a huge import/export and e-commerce boom in the country. The commissioner of the Korea Customs Service (KCS) Kim Yung-moon said back in March: “Adopting new technologies to respond to the ‘fourth industrial revolution’ is an overriding agenda for us as trade form is becoming more complicated.”
The blockchain-based customs clearance platform has enlisted five groups and over 50 exporters as well as five working groups and ten Singapore- and Vietnam-based importers for the test-run.
According to KCS, the volume of trade transactions involving imports and exports in South Korea grew eight-fold from 3 million to 27 million from 1990 to 2017. The new volumes call for improved efficiency in customs clearing. The new blockchain-based data analysis center is expected to increase accuracy and timeliness as well as helping to identify contraband and improve the issuance of Certificates of Origin (CO). A Certificate of Origin is a standard requirement in the shipping industry that contains information about a product’s country of origin and destination and helps to determine the product’s categorization for import tariffs.
The system will use X-rays powered by artificial intelligence to screen and examine high-risk items. It will use blockchain technology to run information networks to connect nodes on the supply chain and to share real-time information that will help in preventing cross-border fraud.
Should everything go according to plan, the Korea Customs Service (KCS) will eventually apply the technology to all its other services. The outcomes of the test will be laid bare this coming Tuesday at Seoul’s central customs office.
Source: Bitrates.com, article by Tom Nyarunda, 14 May 2018
“WCO Academy” is the online platform where representatives from the trade community are able to access e-learning courses, webinars, books and news.
The WCO has already developed 23 Customs-focused e-learning courses covering more than 500 hours of e-training on major international instruments, topics and concepts that contribute to enhancing the work of Customs officers from across the globe, directly at their work place.
Specific courses are now available to company staffers and University students, which have been suitably adjusted to meet their needs.
Aimed at building the Customs skills of current and future trade professionals, as well as further enhancing their work performance, the WCO Academy is the ideal platform for the private sector to gain in-depth knowledge and specialized information from the WCO. Source: WCO
This Friday, 20 April 2018, SARS Customs will implement its new Cargo, Conveyance and Goods Accounting solution – otherwise known as the Cargo Processing System (CPS). In recent years SARS has introduced several e-initiatives to bolster cargo reporting in support its electronic Customs Clearance Processing System (iCBS), introduced in August 2013.
Followers of SARS’ New Customs Acts Programme (NCAP) will recognise that the CPS forms part of one of the three core pillars of the new legislative programme, better known as Reporting of Conveyances and Goods (RCG). The other two pillars are, Registration, Licensing and Accreditation (RLA) and Declaration Processing (DPR). More about these in future articles. In order to expedite the implementation of the new Acts, SARS deemed it necessary to introduce elements of the new functionality via a transitional manner under the current Customs and Excise (1964) Act.
Proper revenue accounting and goods statistical reporting, can only be adequately achieved if Customs knows what goods ‘actually’ arrive, transit and exit it’s borders. Many countries, since the era of heightened security (post 9/11), have invested heavily in the re-engineering of policies and systems to address the threat of terrorism. This lead to a re-focus of resources and energies to develop risk management systems based on ‘advanced information’. SARS has invested significantly in automated systems in the last decade. Shortly, SARS it will also introduce a new automated risk engine with enhanced capabilities to include post clearance audit activities.
It should also not come as a surprise to anyone conversant with Customs practice, that international Customs standards such as the WCO’s SAFE Framework of Standards, the RKC and the Data Model are prevalent in the new Customs legal dispensation and its operational business systems.
South Africa will now follow several of its trading partners with the introduction of ‘advance reporting of containerised cargo’ destined for South African sea ports. This reporting requires carriers and forwarders to submit ‘advance loading notices’ to SARS Customs at both master and house bill of lading levels, 24 hours prior to vessel departure.
The implementation of CPS is significant in terms of its scope. It comprises some 30 odd electronic cargo notices and reports across the sea, air, rail and road modalities. These reports form the ‘pipeline’ of information deemed necessary to ensure that the ‘chain of custody’ is visible and secure from point of departure to final destination. For the first time, South Africa will also require cargo reporting in the export domain.
It is no understatement that the CPS initiative is a challenge in particular to new supply chain entities who have not been required in the past to submit electronic reports. In order to meet these reporting requirements, a significant investment in systems development and training is required on the part of SARS and external trade participants. To this end, SARS intends to focus on ramping up compliance amongst all cargo reporters across all transport modalities. The first modality will be road, which is the most significantly developed and supported modality by trade since the inception of manifest reporting under the Customs Modernisation Programme. The remaining transport modalities will receive attention once road is stabilised.
Customs and Border Protection has developed an e-commerce strategy in a bid to tackle the increase in online shopping and growth of illicit and counterfeit goods shipped as small packages.
The strategy, which notes that CBP must “adapt” to the new e-commerce landscape, seeks to address emerging threats posed by the global change in commerce habits and ensure CBP has the means to enforce violations.
Under the new e-commerce strategy, CBP will, among a number of measures, look to enhance data collection and intelligence, develop and utilise state-of-the-art techniques and technologies, review its existing legal and regulatory authorities, seek to strengthen partnerships with the private sector, facilitate international trade standards for e-commerce, and educate the American public of the risks, both as consumers and as importers, associated with non-compliant products.
The crackdown and new emphasis for the CBP reflects the shift from traditional methods of importing via large, containerised shipments to small, low-value packages as direct-to-consumer business becomes more common. This has presented new inspection and data challenges for CBP, especially as the volume of these small packages has increased.
In addition, transnational criminal organisations are increasingly shipping illicit goods to the US via small packages on the belief there is a lower risk of interdiction and less severe enforcement consequences if caught. CBP said this illicit activity poses a risk to the health and safety of Americans and compromises US economic security.
The new e-commerce strategy also follows a report last month by the Government Accountability Office, which reviewed the enforcement efforts by CBP and US Immigration and Customs Enforcement in light of the increase in online shopping and sale of counterfeit goods. The report found that CBP had conducted a limited evaluation of its efforts, suggesting its activities were not the most efficient or effective, and recommended it evaluate its activities to enhance intellectual property enforcement.
The new strategy has a strong focus on data, which is one of the current limitations around enforcement of small packages. For instance, according to the strategy document, CBP will strengthen partnerships with stakeholders and encourage information sharing, proposing benefits for those parties who share advance electronic data and other information and will penalise those who are not compliant in this area.
The agency will also increase its operational efficiency and effectiveness by using data analytics, data mining, and an array of powerful analytical tools. In addition, CBP will expand its existing advance electronic data pilot in the international mail environment to include additional foreign postal operators.
Potential technology options include mobile applications and an e-commerce resource library, the strategy notes. CBP will also develop a portal that contains a database on importers that CBP has vetted and deemed “trusted”.
Source: USCBP and Securing Industry, online article 2018.03.28
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
Zimbabwe’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.
On Thursday, 4 January 2018, Nigeria’s President, Muhammadu Buhari, inaugurated the Kaduna Inland Dry Port and warned the Nigeria Customs Service and port officials against frustrating the effective use of the facilities. Inaugurating the facilities in Kaduna, Buhari said the customs and the port officials must make the facilities work and not to frustrate business, commercial and industrial enterprises with unnecessary bureaucracy.
It remains for Customs and Ports officials to make these facilities work and not to frustrate business, commercial and industrial enterprises with unnecessary bureaucracy and inflicting on them delays and hardships, thereby defeating the object of the whole exercise as has happened in the past.
According to him, the hinterland business community has waited for too long for such facility that has tremendous potentials to ease the way of doing international business for the interior based importers and exporters. He said that the development of Inland Dry Ports was an important factor in the nation’s economic development efforts.
As Ports of origin for exports and ports of destination for imports, the Inland Dry Ports will accelerate the implementation of our economic diversification policy. “The concept of Inland Dry Port has gained widespread importance with the changes in international transportation as a result of the container revolution and the introduction of door-to-door delivery of cargo.
It provides importers and exporters located within the nation’s hinterland, especially industrial and commercial outfits, access to shipping and port services without necessarily visiting the seaports. “It also enables them to process clearance of their import cargo and take delivery of their raw materials and machinery close to their places of business.
President Buhari also said that the Dry Ports would provide exporters the much-needed facilities to process, package, consolidate and forward their exports to their customers all over the world without having to physically be at the seaports. According to him, this replicates the port economy in the various centres where the Dry Ports are located inland thereby generating employment and contributing to the ease of doing business.
He said in addition to the Kaduna Inland Dry Port, six other Inland Dry Ports in Ibadan, Aba, Kano, Jos, Funtua and Maiduguri, which had also been gazetted, were at various stages of completion. He congratulated the Kaduna State Government, the Federal Ministry of Transportation, Nigerian Shippers’ Council as well as the hinterland importers and exporters on the inauguration of the facilities.
The president also commended the initiative of Nigerian Shippers’ Council towards promoting the provision of these modern transport infrastructural facilities. He, however, urged the Concessionaires of the other six Dry Ports to emulate the Concessionaires of the Kaduna Dry Port by accelerating work on theirs so as to ensure speedy completion of the projects.
He said that with the full complement of the seven Dry Ports, congestion at the seaport and traffic gridlock in the port complex would be eliminated.
“Consequently, the cost of transportation and cost of doing business will be reduced,’’ he said. He lauded the efforts of the Kaduna state government for facilitating the establishment of Kaduna Inland Dry Port.
According to him, the provision of access roads and other utilities to the Dry Port by Kaduna State Government is worthy of emulation by the other Dry Ports host State Governments.
He urged relevant stakeholders across the public and private sectors, particularly Nigeria Customs Service, Nigerian Ports Authority, Nigerian Railway Corporation, Shipping Companies and Agencies, Seaport Terminal Operators, Clearing and Forwarding Agents, Road Haulers and importers and exporters to utilize the facility optimally. Source: article originally published by Vanguard (Nigeria), 4 January 2018