Archives For Digital Customs

THE NEW YOUGrowing electronic commerce (E-Commerce) has provided unparalleled opportunities for and has become a game changer in the international trade arena. It has revolutionized the way businesses and consumers are selling and buying goods with wider choices, advanced shipping, payment, and delivery options.  At the same time, E-Commerce, in particular Business to Consumer and Consumer to Consumer (B2C and C2C) transactions, is presenting several challenges to governments and businesses alike.

The WCO Working Group on E-Commerce (WGEC) together with its four Sub-Groups is steadily progressing with the four identified work packages, namely Trade Facilitation and Simplification of Procedures, Safety and Security, Revenue Collection, and Measurement and Analysis with a view to develop recommendations/guidelines on cross-border E-Commerce from a wider facilitation, security or revenue perspective, to collect and disseminate good practices/initiatives, and to enhance/update related WCO instruments and tools.

Given the current focus of the WCO Members and the private sector on this topic, the 215th/216th Sessions of the Permanent Technical Committee (PTC) held a whole day dedicated session on E-Commerce on 5 April 2017. During the ‘E-Commerce Day’, the delegates were provided an update with the work done thus far, as well as, the envisaged work by the four Sub-Groups on respective work packages. A number of valuable suggestions were provided by delegates from policy, business process, and operational perspectives to further enhance the WCO E-Commerce Work Programme with tangible and practical deliverables for providing a concerted and effective response to this growing channel of trade.

In addition, four thematic workshops relating to different dimensions of E-Commerce were organized by the Sub-Groups’ Co-Leads together with other partners. Through these workshops, some interesting facets of e-commerce were explored in detail and a number of interim recommendations were made concerning facilitation, risk management, safety and security, revenue collection, and associated capacity building through enhancement partnerships with all e-commerce stakeholders and augmented public awareness and outreach programmes.

In the course of the panel sessions, a number of collaboration success stories were identified, and they will be captured more formally and shared with interested parties, through the WCO webcorner.

The WGEC Sub-Groups will continue carrying out further work and a consolidated set of interim recommendations will be presented to the July 2017 Sessions of the WCO Policy Commission and Council. Source: WCO

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Predictably, the first edition of WCO News 2017 provides a spectrum of insight on this year’s Customs theme – “Data Analysis”. Here’s a preview:

  • Data analysis: seizing opportunities for effective border management – By Kunio Mikuriya, Secretary General, World Customs Organisation.
  • Data analysis for effective border management – the Canadian experience By Charles Slowey, Director General, Global Border Management and Data Analytics, Canada Border Services Agency.
  • Border management modernization in New Zealand forges ahead – By Murray Young, Chief Information Officer, New Zealand Customs Service.
  • Mirror analysis, a risk analysis support tool for Customs administrations – By Roger-Claver Victorien Gnogoue, Financial Services Director, Côte d’Ivoire Customs
  • Data analysis in risk management: Singapore Customs’ perspective – By Singapore Customs
  • API-PNR: an overview of the French system and the challenges faced – By Christophe Hypolite, PNR Mission, France
  • Developing data analyst skills: how the WCO contributes to expanding this specialized area of work By Tsendsuren Davaa, Ph.D., Professional Associate, Compliance and Facilitation Directorate, WCO
  • Cognitive computing for Customs agencies: improving compliance and facilitation by enabling Customs officers to make better decisions – By Stewart Jeacocke, Global Customs Expert, IBM, and Norbert Kouwenhoven, EU Customs Leader, IBM European Union Team

Nice to also see a contribution from one of SARS’ own titled “Customs and the environment: bringing about a better future for all” – By Roux Raath, Environmental Programme Manager, WCO. You can access and download the magazine by clicking here!

wco-icd2017As national Customs administrations and border agencies celebrate International Customs Day, no doubt showcasing their recent ICT endeavours, it is good to reflect not only on the available standards and tools which are becoming more available to Customs and Border Management Agencies.

The WCO spearheads and supports several initiatives aimed at fostering increased coperation and collaboration between member states under the banner of ‘Digital Customs’. In the post security era, throught is capacity building arm, the WCO champions global development of its Digital Customs concept and strategy. The WCO’s work programme in this regard covers a broad area of focus, for example:

  • to support the WTO Trade Facilitation Agreement,
  • the updating of related WCO instruments and tools,
  • ongoing promotion and maintainance of the WCO Data Model,
  • monitoring of new and emerging technological developments (3D printing, Big Data, Predictive Analytics, Drones and Blockchain),
  • promotion of e-services and apps,
  • exchange of information between stakeholders nationally and accross borders, and
  • promotion of the Single Window concept.

For most customs and border administrators, they have somewhere heard of, or to some extent are aware of the ‘buzz words’. The various chapters of the WCO through the working groups provide up-to-date developments in all facets on developments in the modern Customs operating and global trade environment. These are ably supported by several internal business organisations and umbrella associations adding credence to the developmental work and ultimately the standards, policies and guidelines published by the WCO.

In this modern era of uncertainty – global political and socio-economic risks – International Customs Day should be a combined celebration not only for Customs, but moreover, the associated supply chain industries and business intermediaries. If there was no trade in goods there would be no Customs or WCO. Without the providers of ‘big data’ there would be no need for data analysis. Without illicit activities there would be no need for expensive enforcement technology and equipment and the application of risk management.

Thanks to an imperfect and unequal world the WCO, through its association with the world’s customs authorities, big business and ICT service providers is able to develop a Digital Customs Maturity Model, which provides a road map for administrations from the least to most developed (mature rather). The pace and extent of maturity is undoubtedly determined by a country’s discipline and agility based on a clear strategy with the support and commitment of government and allied industries.Happy Customs Day!

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The WCO Policy Commission, held in Moscow, Russian Federation, from 5 to 7 December 2016 under the chairmanship of Mr. R. Davydov, brought to the fore the key role of Customs in creating a sustainable and efficient e-commerce ecosystem, reviving-up the exchange of data between stakeholders and enhancing risk-management through electronic interface. The other main topics discussed during the Commission pertained to trade facilitation, security, the enhancement of the Customs/Tax cooperation and the modernization of Customs administrations.

The newly established WCO Working Group on E-Commerce will work to tackle the different dimensions of e-commerce by collecting and exchanging best practices in the field, stocktaking and leveraging some of the ongoing work being carried out by other entities and drawing up proposals geared towards the development of practical solutions for the clearance of e-commerce shipments, including appropriate duty/tax collection mechanisms and control procedures.

Concerning the in-depth discussions on Custom /Tax cooperation, the WCO issued this year “Guidelines for strengthening cooperation and the exchange of information between Customs and Tax authorities at the national level” and will continue working on topics of common interest for Customs and Tax experts such as transfer pricing, drawback and Illicit Financial Flows (IFF).

During the Commission, WCO Secretary General Kunio Mikuriya, confirmed the WCO Theme for 2017 “Data Analysis for Effective Border Management” and stressed the impact of the digital revolution and the need to address promptly the challenges posed to the global economy. The Secretary General invited all the WCO Members to promote and share information in the coming months on how they are leveraging the potential of data to advance and achieve their objectives and respond to the expectations of traders, transport and logistic operators, and governments.

As data analysis will be emphasized in 2017 as a force multiplier for Customs administrations, it is relevant to highlight that the WCO is carrying out a Study to collect best practices among its members to assess and promote initiatives in the area of e-commerce. A previous analysis of preliminary data underscored the need for digitalization of processes, better sharing of information between e-commerce stakeholders and customs for improved risk management and the necessity for harmonization in the low-value shipment processes. Source: WCO

wco-icd2017The Secretary General of the WCO, Kunio Mikuriya, announced today that 2017 will be dedicated to promoting data analysis under the slogan “Data Analysis for Effective Border Management.” WCO Members will thus be called upon to further promote their efforts and initiatives in a sector that is becoming a key element in Customs modernization process: collecting and analysing data.

Customs has a substantial amount of data at its disposal, such as data submitted for the Customs clearance process. Customs can also tap data from other government agencies, commercially available databases, and open source information platforms such as digitized global public records and multilingual news sources.

Moreover, physical objects are nowadays embedded within electronics, software, sensors and network connectivity, which enables these objects to collect and exchange data, a phenomenon known as the ‘Internet of things’.

Simply collecting data for its own sake, however, is not sufficient and Customs administrations may face the risk of being overwhelmed with an avalanche of data. Data only has value when it is used effectively and efficiently. It is critical, therefore, that Customs administrations leverage data to make informed decisions, especially given the sophisticated and evolving challenges that Customs administrations face every day.

Data analysis can propel Customs to new levels of success in both compliance and facilitation, by enabling it to:

  • improve risk management which supports enhanced detection of irregularities, illicit consignments, the suspicious movement of people and financial flows, and the facilitation of legitimate trade;
  • learn from historical activity to predict trader or passenger behaviour;
  • engage with other government agencies to leverage their experience and expertise;
  • conduct quantitative research for purposes of building knowledge;
  • enhance performance measurement to improve officer practices and integrity. Data analysis thus can greatly support the core Customs’ objectives of revenue collection, border security, collection of trade statistics, and trade facilitation.

“To achieve these benefits, Customs administrations should make data analysis a strategic priority and acquire cutting-edge technology, establish appropriate automation policies, and recruit experts to collect and analyse data, and act upon the data-driven insights”, said WCO Secretary General, Kunio Mikuriya.

There are of course potential obstacles to an optimal use of data, such as the lack of qualitative data, data that has not been integrated or merged, lack of harmonization of data across border agencies, lack of skilled resources, IT infrastructures and cultural challenges. In addition, it is vital that appropriate privacy and confidentiality laws be respected.

“Data analysis and related challenges will be thoroughly discussed within the WCO during 2017, and at events such as the Information and Technology Conference, the Global Conference on Transit, and the Technology and Innovation Forum”, Dr. Mikuriya added.

As part of this initiative, the WCO will enhance the promotion of tools such as the WCO Customs Enforcement Network (CEN) which is a global Customs seizure database; the WCO Time Release Study (TRS) which is a methodology for measuring border agency clearance times; mirror analysis which involves using the HS Code to compare imports (or exports) of a country with exports (or imports) reported to the country by its trading partners to detect gaps in terms of quantities, weight or value that may reveal fraudulent flows or practices; the use of performance measurement to improve Customs procedures and integrity, such as through the techniques presented in the WCO Performance Measurement Contracts Guide; and the Data Model which supports data analysis by improving data collection and enabling the sharing of data between government agencies.

The WCO’s annual theme will be launched on International Customs Day, which is celebrated annually by the global Customs community on 26 January in honour of the inaugural session of the Customs Co-operation Council (CCC) which took place on 26 January 1953.

The WCO invites the Customs community to mark 26 January 2017 in their diary. Source: WCO

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!

WCO Data Model Workshop, Pretoria, South Africa, Dec. 2015

SARS’ EDI and Customs Business Systems representatives with WCO Data Model facilitators Mr. Giandeo Mungroo (2nd from the left) and Ms. Sue Probert (2nd from the right) [Photo – SARS]

Officials of the South African Revenue Service (SARS) last week attended a WCO workshop on the Data Model facilitated by Ms. Sue Probert and Mr. Giandeo Mungroo. The event, held in Pretoria, South Africa was sponsored by the CCF of China as part of the WCO’s Capacity Building endeavours to promote the adoption and use of customs standards and best practice amongst it’s  member states.

The workshop was requested by SARS ahead of new technical and systems developments and requirements informed by SARS’ new Customs Control and Duty Acts. Moreover, there are also political ambition to institute a Border Management Agency for the Republic of South Africa. All of this requires that SARS Customs has a robust electronic tool to assist the organisation in mapping national data requirements according to specific needs.

Besides the use of a value added Data Model tool – GEFEG, it is imperative for the organisation to develop capacity in the knowledge and understanding of the WCO Data Model. SARS has successfully EDI (Electronic Data Interchange) for the last 15 years with various local supply chain trading partners and government agencies. Over the last few years SARS has been actively pursuing and promoting IT connectivity with regional trading partners with the express purpose to extend the benefits of eCommerce across borders.

GEFEG.FX software is used to model data formats and develop implementation guidelines for data interchange standards such as UN/EDIFACT. It is a software tool that brings together modelling, XML schema development, and editing of classic EDI standards under a unified user interface, and supports the development of multilingual implementation guidelines.

Version 3 of the WCO Data Model brought about a distinct shift towards an ‘all-of-government’ approach at international borders with the introduction of the GOVCBR (Government Cross Border Regulatory) message. The message and underlying data requirements facilitate the exchange of customs and other government regulatory information to support a Single Window environment.

WCO Data Model not only includes data sets for different customs procedures but also information needed by other Cross-border Regulatory Agencies for the cross-border release and clearance at the border. The WCO Data Model supports the implementation of a Single Window as it allows the reporting of information to all government agency through the unique way it organizes regulatory information. This instrument is already 10 years old and is seeing increased use by WCO members.

Amongst the benefits derived from the workshop, SARS staff acquired the following competencies that will not only aid their work but business user support as well –

  • Competence in operating the tool to build a source control collaborative environment to support national and regional harmonization;
  • Competence to build a base to conduct national/ regional data harmonization based on the WCO Data Model to support national Single Window implementation as well as Regional Integration;
  • Competence to build systems/ electronic interfaces between Customs and its partner government agencies including a Border Management Agency; and
  • Provide needed competence to develop, maintain and publish national and regional information packages based on the WCO Data Model.

WCO Customs Theme 2016The Secretary General of the WCO, Kunio Mikuriya, announced today that 2016 will be dedicated to promoting the digitalization of Customs processes under the slogan “Digital Customs: Progressive Engagement.” WCO Members will have the opportunity to showcase and further promote their use of Information and Communication Technologies (ICT).

The term Digital Customs refers to any automated or electronic activity that contributes to the effectiveness, efficiency, and coordination of Customs activities, such as automated Customs clearance systems, the Single Window concept, electronic exchange of information, websites to communicate information and promote transparency, and the use of smart phones.

This new era of Digital Customs has transformed the way that Customs operates. Ultimately, it ensures progression – the enhanced ability of Customs Administrations to communicate, process goods, receive and exchange information, coordinate border activities, collaborate on law enforcement actions, and promote transparency. Improved technologies thus have the ability to positively impact and transform the Customs landscape through:

  • Improved compliance as a result of increased access to regulatory information and functions, as well as services, on the part of all international trade stakeholders;
  • Faster clearance times for legitimate trade;
  • Enhanced coordination between Customs units, as well as between Customs and other border regulatory agencies at the national and international level;
  • Increased transparency in regulatory processes and decision-making;
  • The use of performance measurement to improve Customs procedures and levels of integrity, such as through the techniques presented in the WCO Performance Measurement Contracts (PMC) Guide;
  • Enhanced detection of irregularities and illicit consignments through the collection and analysis of data.

Such positive outcomes will contribute significantly towards the realization of Customs’ objectives, including improved revenue collection, border security, the collection of trade statistics, and trade facilitation. “Border agencies are increasingly embracing digitalisation to enhance their effectiveness and efficiency.

The WCO has an extensive portfolio of instruments and tools to support WCO Members in their efforts to further adopt Digital Customs.” said WCO Secretary General Kunio Mikuriya.

“Over the course of 2016, I invite all WCO Members to promote and share information on how they are implementing and using digital technologies to advance and achieve their objectives.” Mr. Mikuriya added.

The WCO’s annual theme will be launched on International Customs Day, which is celebrated annually by the global Customs community on 26 January in honour of the inaugural session of the Customs Co-operation Council (CCC) which took place on 26 January 1953.

The WCO invites the Customs community to mark 26 January 2016 in their diary. Source: WCO