Archives For customs declaration

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Picture1The Japanese-funded e-Customs system known as “VNACCS/VCIS” (Vietnam Automated Cargo and Port Consolidated System and the Vietnam Customs Information System) is set to “go live” on April 1, 2014.

Based on the NACCS/CIS of Japan, VNACCS/VCIS is intended to handle e-Declaration, e-Manifest, e-Invoice, e-Payment, e-C/O, selectivity, risk management/criteria, corporate management, goods clearance and release, supervision and inspection.

With the launch of the VNACCS/VCIS, Vietnam Customs is trying to simplify customs clearance procedures, reduce clearance time, enhance the management capacity of customs authorities in line with the standards of modern customs, as well as to cut costs and facilitate trade. VNACCS/VCIS also purports to ensure Vietnam’s compliance with the ASEAN “single window” initiative.

VNACCS/VCIS is intended to improve on the current e-Customs system. For example, the VNACCS/VCIS provides new procedures for the management of pre-clearance, clearance and post-clearance processes, adds new customs procedures such as registration of the duty exemption list, introduces a combined procedure for both commercial and non-commercial goods, simplifies procedures for low unit value goods and offers new management procedures for temporarily exported/imported goods, etc.

After the testing phase (which took place from November 2013 until the end of February 2014), users have been raising concerns regarding the VNACCS/VCIS system’s complexity. VNACCS/VCIS provides a declaration process with 109 export and 133 import data fields, compared to the current 27 export and 38 import declaration fields. Many of them are not compatible with the actual systems of companies, and appear to require from declarers an extensive knowledge of customs-related matters.

Comment – from an outsider’s perspective, besides systems testing, it would seem to appear that insufficient time has been allocated for alignment of industry systems to Vietnam Customs’ new data requirements. This, and the fact that no ‘grace period’ (waiver of sanctions or penalties) will be considered by the customs administration does not bode well for a smooth transition.

VNACCS/VCIS employs the quantity reporting mechanism in the official Units of Measures (“UOMs”), often used in international trade statistics, yet creates significant obstacles to companies that do not have compatible manufacturing, inventory planning and control systems. Vietnam Customs has stated that it will work on improving this issue.

VNACCS/VCIS also applies the declaration of customs values at the unit level. Since unit costs and unit prices used in financial systems of companies may not always be identical to declared values, companies may fail to comply with such requirement. Sanctions may be applied from day 1 of the new systems activation.

Technical difficulties are also a matter of great concerns to business community, e.g. with asset tracking. Currently under VNACCS/VCIS, reporting is limited to 7 digits, incompatible with many companies having asset tracking systems with identification numbers of up to 20 digits. To address concerns raised by the business community about the new system, Japanese experts have agreed to support Vietnam Customs 1 year after the official implementation date of the system.

There are concerns for potential risks of non-compliance for wrong declaration due to lack of an adequate understanding of VNACCS/VCIS. Vietnam Customs has rejected a proposal for “grace period” before applying sanctions upon violations, but encourages companies to actively participate in training programs organized by customs authorities to better avoid potential non-compliance risks.

Another concern is the chance of system failure which may lead to severe interruptions and delays in clearance procedures. Vietnam Customs has ensured business community that they have a back-up contingency mechanism in place to support customs procedures in the event that VNACCS/VCIS fails to operate properly. In the meantime, a new circular detailing the implementation of VNACCS/VCIS is being drafted and should come into effect by the launch date. Various business associations are still trying to find ways to mitigate the likely disruption from the sudden transition to the new system. Source: Baker & McKenzie (Vietnam)