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

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.

NZ Customs to conduct WCO Cargo Targeting System pilot

nzc-wco

Photograph: (left to right) Philip Hague, Craig Chitty and Brian Cotton from New Zealand Customs Service’s Integrated Targeting Operations Centre (ITOC) are joined by the WCO’s Cristian Moldovan and Robert White for the launch of the WCO CTS air cargo pilot.

New Zealand Customs Service (NZCS) is assisting the WCO by conducting a pilot of the newly developed air cargo capability for the WCO Cargo Targeting System (WCO CTS). NZCS has extensive experience and expertise in cargo risk assessment and targeting and will be fully testing and evaluating the WCO CTS during a 3 month trial.

The WCO travelled to New Zealand during week commencing 10 October 2016 to launch the pilot and conduct training with NZCS personnel who will be using the WCO CTS. The findings of the pilot will be incorporated into the system before existing WCO CTS deployments are upgraded and the new capability becomes available to all WCO Members.

The enhancement of the WCO CTS to include conventional air cargo and express consignments comes 3 years after the WCO first launched the system for maritime containers. During that time the WCO CTS has been deployed to a number of WCO Members with more scheduled in the coming months

The WCO CTS is a cargo manifest risk assessment and targeting solution developed by the WCO for Customs administrations across the globe that require such capability. It allows those adopting the solution to implement international best practice cargo risk assessment including key pillars of the WCO’s SAFE Framework of Standards to Secure and Facilitate Global Trade.

For more information on the WCO CTS project please contact – cargotargetingsystem@wcoomd.org

SARS – Modernisation milestone materialising

Interfront logo2

Its been some time since I’ve penned an article on the South African Customs Modernisation Programme. Aside from it being the SA Revenue Service’s prerogative to communicate and publish notice of its internal developments and plans, some caution always needs to be exercised observing bureaucratic protocol, ensuring that the official message is forthcoming from SARS. Given the widespread interest in the programme as well as the development of the Interfront [formerly Tatis] integrated customs border management solution (iCBMs) as a wholly owned development of South Africa, I think it not out of place to inform the public interest on this matter. Readership of this blog has an extensive global following and a specific interest in Interfront developments.

Unlike ASYCUDA, Sofix, e-Biscus, and a host of other integrated Customs-tailored business solution offerings, Interfront’s solution for SARS will not include a client user frontend. In other words, the Interfront system (iCBMs) will essentially drive declaration backend processing. This comprises a fully integrated declaration validation and processing engine, supported by a sophisticated tariff engine and duty calculator; the latter offering future web-based services for customs users. In order to compliment the SARS corporate and standardised user interface approach, the iCBMs interfaces with SARS’s revenue accounting, trader registration, risk management, and case management workflow systems. Not only does this leverage cost savings and efficiencies, but ensures a unified ‘workspace’ for all of SARS employees.

Much of the Interfront technology is therefore hidden to the customs user, with traders experiencing an identical interface with SARS Customs, as it does today. From the outset of the Customs Modernisation Programme (July 2010), the approach has followed pragmatic migration of customs electronic clearance processing – across its 30 odd legacy systems – towards an integrated clearance process that could mimic the functionality featured on the new iCBMs. The modern technology and scalability of Interfront offers the ability and agility to enhance service levels and efficiencies to another level. At the same time, operational policies and procedures have been modernised with the aim and intent of meeting the requirements contained in Customs new Control and Duty Bills.

Much of the ‘change’ experienced by both customs officers and the trade over the last 2 years has prepared the country for the eventual migration to the new system. These have been significant, and at times painful changes, not without anxiety and apprehension. Over the last 6 months an even more painstaking and taxing effort has been expended by the Customs Modernisation Team, Interfront and other service providers in addressing a seamless harmonisation and switchover of customs business from disparate legacy systems to a new customs technology platform. The “Parallel Run” has witnessed the daily comparison of customs clearance data between the old and new systems, identification and logging of disparities (bugs), modification of the two environments to ensure the same result is achieved. This has not been an easy and simple process, as any country having undergone a system switchover can attest to.

This month, February 2013, service providers to the customs industry are readying their resources to commence user testing. This implies that service providers (computer bureaus) will engage their clients to prepare test cases for submission to customs to test the new Interfront process. Given that Customs legacy systems and Interfront have been synchronised to a high level of compatibility, the process for traders should not reveal much difference to what they have experienced over the period of modernisation over the last 2 years. One area of note will be the structure and content of Customs Response messages. Traders will have to familiarise themselves and test their interpretation of these messages to ensure they perform or respond appropriately to the instructions.

Satya Prasad Sahu - Technical Officer at the WCO provided members of SACU, SADC and the EAC comprehensive guidelines for the development of the GNC Utility Block concept in Africa (February 2012)

Satya Prasad Sahu – Senior Technical Officer at the WCO provided members of SACU, SADC and the EAC comprehensive guidelines for the development of the GNC Utility Block concept in Africa (February 2012)

In terms of compliance and compatibility with international developments, the new iCBMs is engineered on the WCO Data Model. All relevant simplification processes as exemplified in the Revise Kyoto Convention are likewise factored into its design, although not all of these will be immediately available with the initial rollout. Introduction of the new Customs Control and Duty Acts will require these principles to be fully functional and operational, however.

The WCO Data Model is the pivotal design component around which most of the new system’s business and validation rules are centred. This in itself is a major achievement as it bodes well for all future ‘cross border’, customs-2-customs connectivity initiatives. In this regard SARS is well advanced in bilateral and multilateral projects with key trading partners, for example IBSA (cross-global trilateral initiative), and in Africa, we are working with SACU, SADC, COMESA and the EAC to bring about regional customs connectivity. On a bilateral basis, initiatives with Swaziland, Mozambique and Zimbabwe are developing nicely. A significant contributor to cross border/cross global customs connectivity is undoubtedly the excellent work brought about by the dedicated members of the WCO’s Globally Networked Customs adhoc workgroup. In June last year, the WCOs policy Commission unanimously endorsed the GNC architecture and Utility Block approach. African customs connectivity efforts have likewise adopted this model which ensures harmonisation and uniformity in approach, legal dispensation, data exchange, risk management and procedure. The WCO moreover plays a overseeing role in many of these GNC and capacity building initiatives across the globe – this assists greatly in sharing and learning of experiences.

I would think that the above should be sufficient to wet the appetites of customs practitioners, traders, ICT technocrats, and perhaps even legislators and bureaucrats on developments in South Africa. Subsequent to the launch of Interfront SARS will make its ideas and strategy relating to forthcoming initiatives known to trade and the business community. A Year of Innovation? Yes, and hopefully a happy tale that will bode well for the South African trade and supply chain logistics community, and some good fortune for Interfront in its business development in the region and beyond!