Category / Integrity

by Mike Poverello

SARS hosts Single Government Authorised Economic Operator Workshop in collaboration with Border Management Agency (BMA)

Customs activities for this year are underpinned by the World Customs Organization’s (WCO) 2021 theme “Customs bolstering recovery, resilience and renewal for sustainable global supply chain”. The colossal task that lies ahead as nations look to reconstruct their global supply chain is one of the reasons that the WCO has advocated Authorised Economic Operator (AEO) programmes as a tool to promote reconstruction.  

SARS, in collaboration with the Border Management Agency (BMA), is leading the process  of creating  a Single Government  AEO (SGAEO) programme to ensure improved trade facilitation and supply chain security in South Africa, the Southern African region, the African continent and globally. The World Bank (WB) and WCO have agreed to assist SARS to create a SGAEO programme, through the WB Trade Facilitation Programme.

The agreement to conceptualise a SGAEO for South Africa culminated in agreement that SARS and the BMA would jointly host a workshop with all agencies involved in managing trade at the border. The WB and WCO have agreed to participate in the workshop on 2 March 2021. The workshop is intended to contextualise and set the scene for the creation of a SGAEO programme in South Africa and to allow for comparison of the various OGA risk management programmes for cross border trade with the SARS AEO programme.

International drivers for Single Government AEO programmes include the World Trade Organisation’s Trade Facilitation Agreement and the WCO’s SAFE Framework of Standards. South Africa’s scoring on the OECD’s Trade Facilitation Indicator is used as input into the World Bank’s (WB) Ease of Trading across Borders in its annual Doing Business Report.

For Customs Administrations, AEO programmes are vital tools for developing trust-based partnerships with economic operators who have high levels of commitment to compliance and supply chain security. Economic operators, on the other hand, are interested in the tangible benefits offered to participants, particularly, mutual recognition agreements (MRAs) with trading partners. 

While several countries have adopted different OGA (Other Government Agencies)AEO models, SARS’ preferred model is a Single Government AEO Programme with one certification process and benefits granted by all agencies.

Source: South African Revenue Service, Rae Vivier, 2 March 2021

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by Mike Poverello

Compilation of Customs Integrity Practices

WCO Compilation of Integrity PracticesThe WCO Secretariat has undertaken a new initiative involving the compilation of good internal control [governance] practices by Customs administrations, and their relationship with external controls. The Secretariat carried out a survey of Members to find out how they implement principle 6 of the Revised Arusha Declaration. The responses indicated that internal control functions can be structured differently and do not operate in the same way.

The survey collected material on the experiences of Members and on their integrity practices, with a view to compiling a good practice guide which Members could use to enhance their integrity strategies, including external oversight. It consisted of 18 questions, and was divided into four sec- tions: (1) Governance of Internal Control; (2) Operational Aspects; (3) Relationship with External Controls; and (4) Sharing Good Practices with Other Members. Responses were received from 58 Member administrations. Download this link.

 

 

by Mike Poverello

WCO 2018 – Secure Business Environment for Economic Development

WCO 2018 Theme

On 9 November 2017, the Secretary General of the World Customs Organization (WCO), Kunio Mikuriya, announced today that 2018 will be dedicated to strengthening the security of the business environment, with the slogan “A secure business environment for economic development.”

The development of international trade is not an end in itself, but rather a vehicle through which economic development can be achieved. We should, therefore, strive to create an environment for businesses that will foster their participation in trade, for the benefit of all.

With the above in mind, it is imperative that we ask ourselves, how we can, as Customs, contribute to better secure the business environment and, in doing so, boost economic prosperity. Three key elements come to the forefront:

Enabling environment

It is globally recognised that Customs can contribute to making the business environment more stable and predictable by, for example, streamlining procedures, tackling corruption, enhancing integrity, and facilitating the movement of goods, conveyances and people in general.

Safe environment

Legitimate businesses require a secure supply chain to prosper, but some threats come from within the trade itself, such as the shipment of illicit goods that could endanger peoples’ health, safety and security. Combating cross-border crime, including the illicit funding of international terrorism through trade activities, is our responsibility. By taking advantage of the WCO’s tools, instruments and expertise, Customs has the means to actively secure the global trade landscape.

Fair and sustainable environment

The importation of illegal goods, such as goods that infringe intellectual property rights (IPR), or legal goods which, for example, are smuggled into a country to avoid the payment of duty or whose value has been misreported, can do immense harm to a country’s economy. It is not only a question of financial losses for both legitimate traders and governments, such activities can also affect governance, the economy, development and human security across the globe.

“All these different aspects of securing the business environment are invariably connected to the current Customs focus on trade facilitation, in particular the implementation of the WCO Revised Kyoto Convention and the World Trade Organization’s Trade Facilitation Agreement that support the goals contained in the United Nations’ Transforming our world: the 2030 Agenda for Sustainable Development,” said Secretary General Mikuriya.

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 2018 in their diary.

Source: wcoomd.org

by Mike Poverello

China Customs – pilots Independent Customs Declaration and Tax Payment for Imported Goods

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

by Mike Poverello

East African countries set-up of cargo control unit

KRA-Customs-Transit-Control

Kenya Revenue Authority Commissioner-General John Njiraini announces the implementation of a common customs and transit cargo control framework to rid Mombasa port of corruption

Four East African countries on Tuesday agreed to fast-track implementation of a common customs and transit cargo control framework to enhance regional trade.

Commissioners-general from the Kenyan, Ugandan, Rwandan and Tanzanian revenue authorities said adoption of an excise goods management system would curb illicit trade in goods that attract excise duty across borders.

They said creation of a single regional bond for goods in transit would ease movement of cargo, with taxation being done at the first customs port of entry.

The meeting held in Nairobi supported formation of the Single Customs Territory, terming it a useful measure that will ease clearance of goods and reduce protectionist tendencies, thereby boosting business.

Implementation of the territory is being handled in three phases; the first will address bulk cargo such as fuel, wheat grain and clinker used in cement manufacturing.

Phase two will handle containerised cargo and motor vehicles, while the third will deal with intra-regional trade among countries implementing the arrangement.

The treaty for establishment of the East African Community provides that a customs union shall be the first stage in the process of economic integration.

Kenya Revenue Authority (KRA) commissioner-general John Njiraini said the recently introduced customs and border control regulations were designed to enhance revenue collection and beef up security at the entry points.

“At KRA, we have commenced the implementation of a number of revenue enhancement programmes particularly on the customs and border control front that will address security and revenue collection at all border points while enhancing swift movement of goods,” he said.

To address cargo diversion cases, the regional revenue authorities resolved that a joint programme be rolled out to reform transit goods clearance and monitoring processes. Source: DailyNation (Kenya)

by Mike Poverello

SADC launches National Customs Business Forums

Namibia Customs Business Forum Launch – 22nd May 2013 in Windhoek, Namibia.
Zambia Customs to Business Forum (ZCBF) launched on April 26th, 2013.

The SADC Sub-Committee on Customs Cooperation (SCCC) emphasizes great importance in strengthening cooperation between Customs and the private sector in order to give Customs Administrations in the SADC region an opportunity to offer a more efficient and effective customs service to their clients. The overall purpose of Customs to business partnerships is to ensure a partnership and dialogue structure of key stakeholders in the trading chain that contributes to trade facilitation, improvements in customs operations and higher compliance by the trading community.

The SCCC during its 20th meeting made the recommendation to establish National Customs Business Forums (NCBF) in all SADC Member States. Recently National Customs Business forums were established and launched in Malawi (September 2012), Zambia (April 2013) and Namibia (May 2013).  The NCBFs are meant to facilitate a stronger partnership between Customs and business at national level, promoting a regular and results oriented dialogue, and taking action on existing challenges in the supply chain of goods.

The Zambia Customs to Business Forum (ZCBF) was launched on April 26th, 2013 by the Deputy Minister of Commerce Trade & Industry in the presence of Commissioner General of the Zambia Revenue Authority (ZRA), Commissioner Customs (ZRA) and several public sector and business representative organizations which are important players in the Trading chain. In his keynote address, the Minister said “As a minister responsible for trade, i am profoundly delighted at seeing such initiatives being brought to the fore as this will help in improving the ease of doing business in Zambia. Furthermore, it is important to state that such initiatives are in line with best practices as stipulated under both multilateral organisations namely; the World customs organisation and the World trade organisation”.

The Namibia Customs Business Forum was launched by the Finance Minister Saara Kuugongelwa-Amadhila on the 22nd May 2013 in Windhoek, Namibia. The forum is envisaged to become “a bi-annual dialogue forum that brings together public and private sector [actors] in the trading chain to continually assess and adopt measures that promote effective trade facilitation, as well as enhance customs operations and higher compliance,” a statement from the Finance Ministry says.

In May 2013, the SCCC endorsed a Private Sector involvement strategy which additionally recommends the establishment of a Regional Customs Business Forum (between Customs and its stakeholders) in a bid to facilitate the implementation of the SADC Protocol on Trade. Source: SADC Secretariat.

by Mike Poverello

Inside track to the local Tobacco ‘Cabal’

Peter Tell-AllWith much international focus on tobacco and tobacco products its great to read something outside of the mainstream media. Evidently this guy has some real insight in the tobacco industry and he sure is passionate about his views. This is a fine example of ‘Social Media’ providing what your average Google search-and-hit will never reveal. Conspiracy theory or not, this is a site dedicated to one thing – exposing the ‘Anglo-American tobacco cabal’. Aptly titled “All Disclosed by Peter Tell(all)” he invites you………

…………… to browse, interact and explore my website dedicated to the exposure of facts, truths and the responsible sharing of the information contained within these pages, about South Africa’s Tobacco Industry! The compilation of articles and also unpublished fact sheets about how this very lucrative and secretive industry operates has up until now been a very dark and well-kept secret! Why would all this information be kept from us? Why would they not want us to know how much money is being made? Why does the Government play both sides of the fence? Who pulls the strings of the authorities? THESE ARE THE QUESTIONS WE SHOULD BE ASKING!!

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by Mike Poverello

Nigerian Trade Procedures – Customs, Freight Forwarders on a warpath

Mobile-scanner installed at Apapa Port as part of DI contract

Mobile-scanner installed at Apapa Port as part of DI contract

Destination Inspection takeover – it seems that all is not well. A stand-off between officers of the Nigeria Customs Service (NCS) and members of the freight forwarding community is festering over trade facilitation issues. The  long association between officials of the Nigeria Customs Service (NCS) and big time freight forwarders, including association leaders may have gone sour. THISDAY checks at the ports revealed that most leaders of freight forwarding associations are on the warpath with the Customs. The agents are aggrieved over what they described as high handedness on the implementation of trade policies by the Customs. They alleged that the Customs has in a bid to meet revenue targets embarked on measures that will force most traders who are mainly their clients out of business.

It is lead to believe that made some leaders of customs agents associations work against the Customs Service concerning the take-over of Destination Inspection from agencies handling the project. The Federal Government had extended the contracts of the Destination Inspection Agents (DIAs) by six months at a time that the Customs had prepared to take over the scheme. Customs had trained about 2000 officers for the scheme. The Service, it was gathered had also planned to inherit the scanning machines from the DIAs before the contract was extended. Indications are that the contracts may be further extended by more than one year at the expiration of six months. Since the extension was announced, many leaders of customs agents have not come out openly to condemn it.

Bone of Contention – When the NCS failed to introduce duty benchmark at the ports last year, the relationship between the it and freight forwarders has changed.Customs issues Debit Note (DN) to recover what is lost due in terms of under-valuation, this has often been abused as importers and their customs agents negotiate what to pay with some of the valuation officers responsible for this. So, the management of the Customs believed that the only way to address this problem was a duty benchmark which saves the importer. The idea of the benchmark was to check revenue losses as a result of under-valuation of goods coming into the country. However, the benchmark arrangement was dropped on the order of the Presidency. Since then, the Service has adopted other means to ensure that no revenue is lost, a development that has angered the clearing agents.

Duty Targets – With a revenue target of N1trillion last year, the Customs had worked hard to ensure that it meets its revenue target. The Service realised about N800bn. Freight forwarders are bitter that so many containers have been abandoned by their owners at the ports due to high-handedness by the Customs in terms of outrageous DNs on the goods. A member of National Association of Government Approved Freight Forwarders (NAGAFF) told THISDAY that the amount being issued as DN is such that many importers have been unable to pay. A top official of NAGAFF who did not want to be quoted said that it appears there is a grand plan by some officials of customs to frustrate some importers out of business by issuing outrageous DNs. “In some cases, the DN is such that the importer will be at total loss after clearing the goods. We have appealed to the management of the customs about this thing, but their officers have failed to come down on the value placed on these goods. Source: This Day (Nigeria)

by Mike Poverello

Keeping manifest information confidential

confidentialAn interesting and pertinent issue has been raised in the social media area on the ‘confidentiality’ of carrier information submitted to Customs. In this particular regard it relates to the practice of the US Customs and Border Protection Agency. One blogger commented “It’s kind of ironic in the U.S. for example that importers/consignees are required to submit a request to customs to opt-in to keep manifest information confidential.”

CustomsNow, a direct filing solution for US traders relates “As a common practice, importers and consignees may submit a request to US Customs, pursuant to 19 CFR 103.31, to keep manifest information confidential.  Our previous blog post on this topic  includes several tips to ensure these requests result in the broadest degree of confidentiality.”

Recently, importers and consignees who have submitted confidentiality requests have complained to CBP that confidential shipping data — party/shipper/consignee name and address — for ocean freight have nevertheless been disclosed to the public.  After reviewing the matter, Customs has determined that “improper data entry” was the cause.  To avoid this, CBP advises in a recent CSMS publication, when filing e-Manifests in ACE, “the commercial party name fields must ONLY contain commercial party name data.”  Otherwise, “…the name of the party stored in the ACE database is corrupted because it includes address data. This inaccurate party name data fails the confidentiality edits resulting in confidential business information being shared publicly. This inadvertent disclosure is tied directly to the way in which data is transmitted by users.” Additional information can be found in CBP’s CSMS #13-000064.

In South Africa, and I’m sure a great many other countries too, one just has to accept that the Customs authorities will secure such information, because they say its safe. Read the link below – cause for concern.

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by Mike Poverello

Systematic corruption found at Brazilian ports

Brazilian ports have been tarnished by corruption

Brazilian ports have been tarnished by corruption

An investigation by Brazil’s federal police has uncovered endemic corruption at ports in Rio, Itaguai, Vitória and Santos, with claims of bribes paid to employees of the Inland Revenue Service and to Customs brokers as a means of expediting the entry of illegal goods.

While the detail of the investigations has not been made public, it is clear that 13 people have been indicted, of which four are businessmen. Politicians may be implicated, too.

Investigations, which first started in the Port of Vitória in 2009, have so far led to six cases being sent to the Federal Court in Rio and Espirito Santo. These involve auditors being asked to delete information from a database, the deliberate falsification of information and turning a blind eye in respect of the importation of explosives. All of the companies implicated in the various prosecutions deny any illegal activity took place. Source: Portstrategy.com

by Mike Poverello

Corruption persists at Customs and Border Protection

A CBP vehicle patrols the border in Arizona in 2010. (Matt York/AP file photo)

A CBP vehicle patrols the border in Arizona in 2010. (Matt York/AP file photo)

Nearly 150 Customs and Border Protection officers were arrested or indicted for corruption over the last eight years, a new report has found. A majority of the officers were stationed along the Southwest border, the Government Accountability Office determined. An additional 2,170 were arrested for misconduct in the same time period. GAO cited CBP’s lack of review and oversight of its employees and monitoring processes as complicit in allowing corruption to fester within the agency. (Readers please bear in mind that CBP has over 50,000 members)

Incidents of corruption included fraud, harboring aliens, selling immigration documents and allowing loads of narcotics through a port or checkpoint. Of the 144 corruption incidents, 103 — more than 70 percent — were considered “mission-compromising.” CBP even reported some instances of “infiltrators” seeking and gaining employment at the agency for the sole purpose of engaging in mission-compromising activity. For example, an officer stationed in El Paso, Texas, was arrested in 2007 for conspiring to import 5,000 pounds of marijuana each month into the United States. Less than 1 percent of arrests for misconduct, however, were related to CBP’s mission.

GAO recommended CBP — part of the Homeland Security Department — better track which pre-employment screens assist in identifying unacceptable job applicants. CBP currently conducts background investigations and polygraph examinations for potential hires, but does not monitor which tactics are the most effective. GAO also suggested CBP assess the feasibility of expanding the polygraph program to include occasional tests for current employees. Additionally, the auditors said the agency should improve the quality assurance of its screenings and set a timetable to complete a comprehensive employee-integrity strategy. CBP concurred with all of GAO’s recommendations, saying while an overwhelming majority of its employees are honest and hardworking, there is little room for error. “Any act of employee corruption interferes with the agency’s mission to secure the nation’s borders against all threats and facilitate legitimate travel and trade,” Jim Crumpacker, DHS’ chief liaison to GAO, wrote in a letter to the auditors. Source: www.govexec.com

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