Category / Mutual Recognition

by Mike Poverello

USA & Singapore – Letter of Intent to Explore Single Window Connectivity

U.S. Customs and Border Protection (CBP) and Singapore Customs signed a historic letter of intent today that will enable closer cooperation in the areas of trade facilitation, revenue protection and risk management.

Executive Assistant Commissioner for the Office of Trade Brenda Smith signed the letter of intent in Washington, DC on behalf of CBP and Deputy Director-General Lim Teck Leong signed the letter of intent in Singapore on behalf of Singapore Customs.

The Letter of Intent to Explore Single Window Connectivity between Singapore’s Networked Trade Platform (NTP) and the U.S. Automated Commercial Environment (ACE) formalizes the United States’ and Singapore’s commitment to sharing trade data and to exploring the possible connection of the two countries’ national Single Windows for trade facilitation. Single Windows are electronic systems that automate and expedite the processing of import and export data by allowing traders to input standardized information in a single entry point to fulfill all import and export requirements. In doing so, Single Windows reduce costs, enhance accountability and improve collaboration among government agencies and the trade community.   

“We value the opportunity for transparency and cooperation that a shared Single Window will bring,” said Executive Assistant Commissioner Smith. “Government-to-government data sharing is rapidly becoming an important component of efficient and secure trade, and CBP looks forward to working with Singapore Customs on this forward thinking approach to trade facilitation.”

“The signing of this letter of intent signifies the first step towards trade data connectivity between the two Customs administrations, and reinforces our commitment to maintain the security of international supply chains, while facilitating legitimate trade,” said Deputy Director-General Lim. 

The letter of intent follows the successful negotiation of the U.S.-Singapore Free Trade Agreement in 2004 and builds on the Authorized Economic Operator-Mutual Recognition Agreement and the Customs Mutual Assistance Agreement concluded by CBP and Singapore Customs in 2014. These efforts support the principles, standards and objectives of the World Customs Organization Framework of Standards to Secure and Facilitate Global Trade.

The collaboration between CBP and Singapore Customs complements the United States’ continued engagement with the Association of Southeast Asian Nations (ASEAN) Single Window Steering Committee on trade facilitative data exchange and Single Window connectivity/interoperability. Singapore is an active member of ASEAN and the ASEAN Single Window. 

In 2019, two-way trade in goods between the United States and Singapore totaled $57.6 billion, making Singapore the United States’ 17th largest trading partner and its second-largest trading partner in ASEAN. 

Source: US Customs and Border Protection, 10 November 2020

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by Mike Poverello

South Korea – aiming to become a Global Customs Services Leader

South Korea hopes to be a leader in global customs services by offering solutions to complex international clearance procedures.

South Korea Customs Service (KCS) chief Kim Yung Moon said the agency hopes it can help foster trade relations between local businesses and partner nations worldwide.

In an interview with the Korea Times, he said the agency would continue to devote its manpower and resources to provide full support for export firms, especially the small and medium sized enterprises (SMEs) that were the foundations of the South Korean economy.

The agency’s commitment was well-illustrated as the KCS under his leadership helped limit the fallout following the ongoing South Korea – Japan trade war that has led to major losses for South Korean exporters.

Since March, KCS officials have been dispatched to 30 customs offices nationwide to offer various forms of support, including consulting, technical aid and trade statistics data management.

The support has helped 2,189 SMEs log a combined US$2.4 billion (RM10 billion) in exports in the March-October period, up 2.2 per cent from US$2.3 billion (RM9.8 billion) the year before.

“We tried to identify what the firms needed most and came up with ideas on how we could be of assistance. I am glad we were able to fulfil our public duty,” Kim said.

In July, the KCS saved a local zinc coated steelmaker 1.3 billion won (RM4.5 million) in tariffs imposed by Taiwanese customs authorities after they accepted KCS opinion asking them to reclassify the item as a tariff-exempt product.

Similarly, a team of KCS officials was able to have the Indian customs authorities in March rescind a 10 per cent tariff imposed on Korea-made copy papers categorised as a no-tariff item under the Comprehensive Economic Partnership Agreement (CEPA), a free trade agreement between South Korea and India.

This helped a local paper maker not only avoid what could have been an annual tariff of 200 million won (RM700,000), but also cleared the way for similar businesses to enter the market without the uncertainty of hefty, unexpected tariffs.

Most significant is that the agency was able to finalise the international standards on display modules, Korea’s key export item.

This allowed them to be classified as LCD modules exempt from tariffs in line with the Information Technology Agreement (ITA), a multilateral agreement enforced by the World Trade Organization (WTO).

The process required painstaking efforts to persuade members of the World Customs Organization (WCO) and it proved South Korea’s “soft power” with the international customs body comprised of 183 countries representing over 98 percent of international trade.

A senior KCS official Kang Tae Il has also been elected a director of the Capacity Building Directorate at the WCO, whose members look to South Korea for training, consulting and multilateral aid utilising official development assistance funds and Customs Cooperation Fund-Korea.

Since 2009, 3,727 customs officials from around the world have undergone training offered by the KCS.

The appointment of Kang has also boosted KCS’ standing on the global stage, coupled with its artificial intelligence-based block chain customs services in a country recognized for its high-tech infrastructure and ICT expertise.

The agency’s key achievement is UNI-PASS, a KCS-developed electronic clearance system designed to enhance swift customs clearance and logistics service convenience.

The e-clearance system highly regarded by the KCS’s global peers increases work efficiency by minimizing manual errors and improving input accuracy by auto-generation of trade records.

“We will continue our efforts to strengthen influence and boost our say in the international customs circle. We will also become a leading standard setter involving the implementation and revision of related customs practices concerning e-commerce and risk management. This will boost the standing of Korea on the global stage,” Kim said.

Source: New Straits Times – December 11, 2019 

by Mike Poverello

SA Customs launches AEO Programme

Customs stakeholders with members of the SARS Preferred Trader team 

The stakeholders – from various business associations and Customs umbrella bodies – were very positive after the engagement and were open to form part of an AEO Working Group going forward. The idea is to have representatives from the public and private sectors who would discuss and examine the various issues related to the design and roll-out of the future AEO programme.

An engagement with various key Customs stakeholders was held on 25 September to share Customs’ plans to introduce an Authorised Economic Operator (AEO) programme in South Africa.

The AEO programme follows in the footsteps of Customs’ Preferred Trader programme which offers various benefits to compliant Customs clients. The SARS’ Preferred Trader programme, which was officially launched in May 2017, currently has 105 accredited clients who have been awarded Preferred Trader status. 

The AEO programme – based on the World Customs Organisation’s SAFE Framework of Standards – requires an extra level of safety and security compliance from traders and offers additional benefits, compared to the Preferred Trader programme. It is also open to the entire Customs value-chain, as opposed to only local importers and exporters.

SARS Customs intends to pilot the AEO programme in South Africa before the end of 2019. Clients in the motor vehicle manufacturing industry – representing big businesses have been earmarked to participate in the pilot, as well as SMMEs in the Clothing and Textile Industry. SARS is also in the planning stage of engagements with its major trading partners within BRICS and the EU for the purpose of establishing Mutual Recognition Agreements (MRAs) for its AEO Programme and intends to commence engagements within Africa as well.

At the recent stakeholder engagement session, Customs and Excise Group Executive, Rae Vivier, indicated that the AEO programme was being designed for Customs to partner with the private and public sector to improve voluntary compliance and trade facilitation in the country. She mentioned a few key points that SARS was looking at when it came to AEO, including Mutual Recognition Agreements with SACU/SADC trading partners, close cooperation with Other Government Agencies (OGAs) in South Africa to ensure the programme is recognised by all government departments, exploring modern technology such as block chain and augmenting AEO benefits in order to design a programme that would be beneficial for trade. 

She also mentioned that C&E Trade Services would soon be sending a survey to Customs traders to find out what clients’ requirements are, from a trade facilitation point of view. “We need to collaborate with each other to ensure we design something for the future,” she said. 

Source: South African Revenue Service

by Mike Poverello

9/11 – 18 years on

WTC 6, home to the US Customs Service, New York until September 2001

As unrecognisable as the building is, the same can be said for the world of Customs today. Few contemplated a ‘Customs’ parallel at the time; but, when the Department of Homeland Security was launched, the emergence of US Customs and Border Protection (USCBP) ushered in a new way of doing business. The world of Customs was literally ‘turned on its head’. Bilateral overtures seeking agreements on ‘container security’, ‘port security’ as well as an industry focussed ‘Customs and Trade Partnership Against Terrorism’ (C-TPAT) forced the World Customs Organisation (WCO) into swift action. After years of deliberation and negotiation several guidelines were released, later to be packaged as the WCO SAFE Framework of Standards. It seemed that the recent Revised Kyoto Convention (RKC) on simplification and harmonisation of Customs procedures was already ‘dated’. Customs as a proud solo entity was gone for ever, as country after country seemed compelled to address border security through wholesale transformation and upheaval of their border frontier policies and structures. Thus was born ‘border security’ and ‘cooperative border management’. In a manner of speaking, 9/11 put Customs onto the global map. Along with WCO developments, the tech industries brought about several innovations for risk management and other streamlined and efficient service offerings. Prior to 9/11, only the wealthy countries could afford non-intrusive inspection capabilities. One key aspect of the SAFE Framework’s was to include a pillar on Capacity Building. Through this, the WCO and business partners are able to offer tailor-made assistance to developing countries, to uplift their Customs and border capabilities. In particular, countries in Africa now are now in a position to consider ‘automated’ capabilities in the area of Customs-2-Customs information exchange as well as establishment of national Preferred Trader and Authorised Economic Operator (AEO) schemes. At the same time a parallel industry of ‘Customs Experts’ is being developed in conjunction with the private sector. The end result is the availability of ‘standards’, ‘policies’ and ‘guidelines’ fit for Customs and Border operations, focussed on eliminating incompatibilities and barriers to trade. Where these exist, they are largely attributed to poor interpretation and application of these principles. With closer cooperation amongst various border authorities still a challenge for many countries, there are no doubt remedies available to address these needs. In gratitude, let us remember the thousands of public servants and civilians who lost their lives that we can benefit today.

by Mike Poverello

WCO SAFE FoS – 2018 Edition

SAFE FoS 2018 Edition2

The WCO has published a 2018 edition of its Framework of Standards. The 2018 version of the SAFE Framework augments the objectives of the SAFE Framework with respect to strengthening co-operation between and among Customs administrations, for example through the exchange of information, mutual recognition of controls, mutual recognition of AEOs, and mutual administrative assistance.

In addition, it calls for enhanced cooperation with government agencies entrusted with regulatory authorities over certain goods (e.g. weapons, hazardous materials) and passengers, as well as entities responsible for postal issues. The Framework now also includes certain minimum tangible benefits to AEOs, while providing a comprehensive list of AEO benefits.

The updated SAFE Framework offers new opportunities for Customs, relevant government agencies and economic operators to work towards a common goal of enhancing supply chain security and efficiency, based on mutual trust and transparency.

Customs officers and trade practitioners also be on the lookout for then new WCO Academy course on SAFE and AEO. The Framework of Standards to Secure and Facilitate Global Trade is a unique international instrument which usher in a safer world trade regime, and also heralds the beginning of a new approach to working methods and partnership for both Customs and business. This E-Learning course aims to present this tool and the benefits of its implementation.

by Mike Poverello

Australia and Singapore sign Customs Mutual Recognition Agreement

singapore_australia-flags

Companies that have been certified by the Singapore Customs for adhering to robust security practices can now enjoy a faster customs clearance process for goods that they export to Australia, the agency for trade facilitation and revenue enforcement said on Thursday.

In addition to the faster clearance process, certified Singapore firms will also be subject to reduced documentary and cargo inspections. The same will be applied to Australian companies that are certified by the Australian Border Force (ABF) for goods that they export to Singapore.

The move was recognised under a Mutual Recognition Arrangement (MRA) of Authorised Economic Operator programmes signed by Singapore Customs and the ABF on May 31 that aims to foster closer customs collaboration and elevate bilateral trade ties between the two countries.

The MRA comes under the Comprehensive Strategic Partnership signed between Singapore and Australia in 2015. In addition, Singapore is the first Asean country to sign an MRA with Australia.

In its media statement on Thursday, Singapore Customs said: “The Australia-Singapore MRA recognises the compatibility of the supply chain security measures implemented by companies certified under Singapore Customs’ Secure Trade Partnership (STP) programme and the trusted companies of the ABF’s Australian Trusted Trader programme.”

The agreement was signed on Thursday by Singapore’s director-general of customs, Ho Chee Pong, and the commissioner of ABF and comptroller-general of customs, Michael Outram, in Singapore.

Mr Ho said: “The signing of this MRA reinforces the commitment of both our customs administrations to maintain the security of regional and global supply chains, and to facilitate legitimate trade undertaken by Authorised Economic Operators in both countries.

“As major trading partners, I am confident that this new MRA of our respective Authorised Economic Operator programmes will bring about much benefit to our businesses and boost bilateral trade.”

The signing of the Authorised Economic Operator-MRA will further strengthen closer cooperation at the borders and smoothen the passage of goods between our two countries of trusted traders.

Source: The Business Times (Singapore), original article by Navin Sregantan, 31 May 2018