Tag / Tariff

by Mike Poverello

WCO News – October 2016 Edition

wco-news

This edition of WCO News features a special dossier on the 2016 Council Sessions, in particular the latest developments in the core WCO areas of work: tariff and trade affairs, trade facilitation, enforcement, and capacity building.

It also puts a spotlight, in its focus section, on the Customs brokers profession, including the practices adopted by some Customs administrations related to licensing and regulatory regimes.

Other highlights include articles covering the quantification and taxation of carbon emissions, the protection of cultural heritage through enhanced cooperation between Customs officers and museum professionals, and much more.

The magazine is published and distributed free of charge three times a year, in February, June and October, and is available online or in paper format.

If you do not want to miss future issues of WCO News, the WCO  invites you to fill out the online subscription form – click here!

Source: WCO

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by Mike Poverello

Pakistan and China Customs to accelerate establishment EDI

Sost_Pakistan_Customs_and_Chinese_TrucksPakistan Customs’ experts are in China to make further progress on the establishment of direct Electronic Data Interchange (EDI) with the trusted and neighbouring country to reduce the incidences of revenue losses.

The sources told Customs Today that Chief Customs Automation Abdul Qadir, Director Majid Yousfani, Riaz Chaudhary and Azeem from PRAL flew to China on August 9 to hold series of meetings with the Chinese counterparts to make further progress on the EDI.

The sources said, that the EDI will help access trade documents on real time basis from computers of cross-border customs stations. The directorate had exchanged the technical documents with China for EDI, the sources said, adding that the Chinese Customs had given feedback and counter proposal on the technical documents.

In order to expedite finalisation of the EDI arrangement, earlier a meeting with the Chinese Customs for exchange of data relating to the certificate of origin between the two countries was held on February 2 to 4, 2015 in Beijing. And, this is the second meeting of Pakistan Customs officers with the Chinese Customs, sources added.

It is recalled here, that Federal Board of Revenue had issued an alert regarding mis-declaration in imports from China under 50 HS Codes. The Board also showed concerns on the un-warranted concessions granted under various SROs covering preferential or free trade agreements.

The Board had advised verification of suspected Certificates of Origin directly through the commercial missions of Pakistan abroad, discouraging mis-classification of goods to obtain concessions and extending benefits only to goods which strictly matched the description provided in respective SROs.

It may be mentioned, that the export data of China customs for CY 2013 was cross matched with the import data of Pakistan Customs for same period and it transpired that in respect of 376 tariff lines the import value declared before Pakistan Customs was short by $2.437 billion recorded by China Customs as export value to Pakistan.

Moreover, in respect of 13 tariff lines the import value declared before Pakistan Customs was in excess of $829 million that that recorded by China Customs as export value to Pakistan. This is indicative of possible mis-classification of those goods which attract higher rates of duty but are cleared as goods attracting lower rates. Source: CustomsToday

by Mike Poverello

Serbia – History of Customs Law & Customs Tariffs

The following comes from the Serbian Customs website – darn interesting! I would indeed like to learn of any other Customs administrations who have preserved “with diginity” their relics of the past.

The Customs profession, one of the oldest trades (emerging immediately after the clerical, ruling and military professions – lets not forget prostitution) withstood many turbulences and assaults, but it persevered, survived and developed. The number of customs officers and customs houses reflects the greatness of a state. And there lies also the greatness of the customs profession.”  These words end a text written on his profession by Veljko Velikić, a customs officer from Vršac, published in the magazine “Carinik” (Customs Officer) in November 1926.

The oldest preserved customs law related to our region was the Dubrovnik customs statute – Liber Statutorum Doane – from 1277 A.D. in Serbia, in addition to case law and national written legal sources, as early back as 13th century the first written legal source of Byzantine origin was applied. Sava Nemanjić, Saint Sava, on declaration of autocephaly of Serbian Orthodox Church in 1219, issued the Nomokanon, a collection of ecclesiastical and civil law regulations.

The oldest preserved customs law related to our region was the Dubrovnik customs statute – Liber Statutorum Doane – from 1277 A.D. in Serbia, in addition to case law and national written legal sources, as early back as 13th century the first written legal source of Byzantine origin was applied. Sava Nemanjić, Saint Sava, on declaration of autocephaly of Serbian Orthodox Church in 1219, issued the Nomokanon, a collection of ecclesiastical and civil law regulations.

This view of our colleague from early XX century was based on historical facts, since customs duties, in the form of tolls or taxes, were known back in the Old Ages.  They were levied by the state or individual cities.  The Old Greeks in Athens imposed a duty of 2% on imports and exports over the Pierian Mountains. The Romans also used to levy such duties as state and provincial or city taxes.  As early back as the Roman times customs duties made up a significant part of public revenues for the state treasury. At certain communication points in the provinces there were customs stations (stationes) where the duties were charged for the goods passing such points. The amount of duties was 2.5% (quadrogesimo) of the value of imported goods. The collection of customs duties was also farmed out, at the beginning granted even to farmers from the ranks of domiciled population, and later on, from mid-2nd century on, duties were collected by officials that in our territory were called publicum portarii Illyrici et ripae Thraciae. In the Middle Ages, in addition to import and export duties, the so-called transit duties were also levied. 

It was the basis for Dušan’s Code, drawn up at the times of developed feudal state in 1349, and amended in 1354, and this Code provided rules for the largest number of social relations.  Medieval Serbian rulers usually farmed out the collection of customs duties, most often to Dubrovnik citizens. After the arrival of Ottoman Turks in the Balkans the structure of revenues was changed entirely. The most important tax was the one paid in money, the so-called desetak (tithe), and also in “fruit of the land” and in labour; also levied were a district surcharge (nahijski prirez), fines, and revenues were also collected from customs duties, transportation and fishing taxes. On liberation from Ottoman Turks, the revenues from customs duties and charges on ferry transportation started to be collected for the first time in May of 1804, when Karadjordje established a customs house with a ferry at Ostružnica. Similar to the rate during the Ottoman rule, the customs duties stood at 3%. The vassal Serbia had to establish its customs tariffs in line with the then applicable provisions of agreements with the Holy See, and Prince Miloš fully complied with the Holy See’s instructions in that area.

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by Mike Poverello

Port Tariffs to Drop on Export Containers

cargo-container-shippingThe Ports Regulator of South Africa will soon announce anew port tariffs structure that will include a cut of about 40% in the tariff on exported containers. This step is part of the Transnet National Ports Authority‘s strategy to reduce South African port charges, which are seen as among the highest in the world, because it erodes the competitiveness of South Africa’s exports.

This announcement was made during a colloquium on the impact of administered prices on the manufacturing sector. The purpose of the colloquium was to get all the stakeholders together to try and find a solution to the challenges. It had become clear that the stakeholders did not have a regular opportunity to engage on the issue of administered prices.

In addition to the new tariffs, the authority is proposing a reworking of its tariff structure, which if accepted by the regulator, will see higher charges for bulk commodities, up to 68%. South African port tariffs were at least 8.7 times more than the global average for containers and 7.4 times the global average for automotive cargo.

Transnet’s CEO said the shift in the tariff burden was aligned with the government’s manufacturing growth strategy. The mining sector had been hugely subsidised by a tariff structure weighted in favour of raw exports, at the expense of the manufacturing and agricultural sectors. Department of Trade and Industry has also welcomed the expected tariff reduction, saying it would be a major boost for exporters. 

One would therfore like to believe that these tariff reductions will be extended to agriculture and agro-processing. Hopefully ocean carriers will not see this as an opportunity to increase their tariffs!

by Mike Poverello

TRALAC – What has happened since customs duties on 124 clothing tariff lines were increased in 2009?

I really enjoy TRALAC’s Newsletter – their analysis is always concise and down-to-earth. This Hot Seat Comment is no exception. One often wonders about the impact and nett result of tariff changes and trade remedies. Here we get some insight.

The clothing and textile industry has a long history in South Africa and is still a very important source of employment, especially for women and in poorer communities. The industry is geographically bound to specific provinces, including the Western Cape, KwaZulu-Natal, the Free State and Gauteng. In many rural areas the clothing and textile sector is often the only source of formal employment. Since about 2002 the Rand appreciated substantially and South African exports became less competitive in the global market. Coupled with the trade liberalisation, in terms of South Africa’s WTO offer, the clothing and textile industry has experienced sustained import competition due mostly from Asian imports. In order to try and remedy large-scale factory closures and employment losses in the industry the Southern Africa Clothing and Textile Workers Union (SACTWU) applied for an increase in the import tariffs of 124 clothing tariff lines to the WTO bound rates of 45 percent in 2009. These clothing tariff lines are classified under Chapter 61 and 62 of the South African Tariff Book and include various clothing items, including men’s woven and knitted shirts, jackets and trousers; babies’ garments; and women’s woven and knitted jackets, skirts, dresses and trousers. Although the retailers objected to an increase in import duties the International Trade Administration Commission (ITAC) granted the application and general customs duties on 121 clothing tariff lines were increased from 40 percent to 45 percent, while the general customs duties on three tariff lines (hosiery) was increased from 20 percent to 45 percent.

imagesIn its application SACTWU stated three reasons for the application: there has been a significant increase in imports under these 124 tariff lines flowing into South Africa; market disruptions in the SACU industry which have resulted in factory closures and retrenchments warranted increased protection for the domestic industry; and increased tariffs will provide both relief and show increased confidence in the industry. The retail industry objected to the application on the following grounds: the loss of business in the manufacturing industry can not only be attributed to price competition, but also inefficiency in the local industry; increased duties will have an inflationary effect impacting the ability of consumers to buy clothing at competitive prices; and increased duties will have a punitive effect on the rail sector and the end consumers. In its decision the Commission found the declining rate of investment and employment in the clothing sector coupled with increased imports a disturbing trend. The Commission decided that an increase in customs duties will enable manufacturers to protect existing jobs, increase market penetration and price competition and growth the domestic manufacturing sector in the export market. However, the question of whether the increase in these customs duties have been successful in reaching its goal of decreased imports and increased domestic production, sales and exports still remain.

Import and export data sourced from the World Trade Atlas (2013) and production and sales data sourced from Statistics South Africa (2013) show the following patterns in the clothing industry between 2009 and 2012:

  • Over the time period imports of the 124 clothing tariff lines increased by 15 percent, from approximately US$ 834 million in 2009 to approximately US$ 1.2 billion in 2012.
  • The top five importing countries were China, Mauritius, India, Madagascar and Bangladesh, accounting for 89 percent of the total imports of these clothing articles into South Africa over the time period.
  • China mainly exported men’s, boy’s, women’s and girl’s cotton trousers; knitted sweaters and pullovers; cotton and knitted t-shirts; and knitted babies’ garments to South Africa between 2009 and 2012.
  • South Africa’s exports of these clothing tariff lines increased by 6 percent, from approximately US$ 71 million in 2009 to approximately US$ 84 million in 2012.
  • These clothing articles were mainly exported to African countries, including Zambia, Mozambique and Zimbabwe.
  • The production index of the physical volume of production (base year is 2005) show there has been a significant decrease in the volume of production of knitted and crocheted articles and wearing apparel in South Africa. The index decreased from an average of 108.11 in 2009 to an average of 79.82 in 2012.
  • The sales of knitted and crocheted articles and wearing apparel also declined over the time period. Actual value of sales declined by 3 percent, from approximately US$ 18 billion in 2009 to approximately US$ 16 billion in 2012.

Although there has not been a significant lapse of time since the increase of import tariffs the data gives the short term response of imports, exports, and production to the change in import duties in November 2009. Immediately after the increase in tariffs there was an initial decrease in exports, production and sales.  However, exports recovered by the end of 2012, while production and sales are still significant lower than pre-2009 levels. SACTWU has also recently indicated that employment in the clothing, textiles and leather sector seems to be more stable over the last two years. However, one of the main objectives of the increase in import duties, to deter lower priced imports mainly from Asia, has not been accomplished. Source and content credit – Willemien Viljoen, TRALAC Researcher.

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by Mike Poverello

New WCO Website

New look WCO WebsiteVisit the new WCO website. My impression is a very cool, uncluttered and refreshing design tailored for easy of use and the burgeoning social media space. Navigation is now a synch with the entire website content accessible via menu bar. Visit http://www.wcoomd.org/en.aspx now!

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by Mike Poverello

New Zealand – Contraband now available On-line

New Zealand Customs popular Contraband magazine is now available as an online publication. You can still however locate and link to previous publications that are downloadable in .pdf format. The latest edition includes articles on  –

  • What’s My Duty?, an import duty estimator to help people buying goods online know how much duty and GST they may be liable for.
  • China and NZ Customs to work more closely together on to combat the smuggling of pharmaceutical products used to manufacture methamphetamine.
  • Kunio Mikuriya, Secretary General of the World Customs Organization’s (WCO) visit to New Zealand – commending the Service for its strong reputation for border management of Customs.

Source: New Zealand Customs Service

 

by Mike Poverello

Nigeria – Who’s afraid of new Customs Law?

English: Ngozi Okonjo-Iweala, Managing Directo...

English: Ngozi Okonjo-Iweala, Managing Director, World Bank, Washington DC; Global Agenda Council on Corruption, is captured during the session ‘Zero Option for Corruption’ in the Congress Centre of the Annual Meeting 2010 of the World Economic Forum in Davos, Switzerland. (Photo credit: Wikipedia)

Not a few people raised eyebrows at one session of a senate committee when the Minister of Finance, Dr Ngozi Okonjo-Iweala, intervened during proceedings. Unlike most public hearings in the National Assembly, the particular one conducted by the Finance Committee of the Senate on the new Customs Bill was historic. Everyone agreed that the bill, which seeks to repeal the pre-independence Act, was timely. The dominant argument was that the roles and responsibilities of the Department of Customs and Excise have changed and required legislation to accommodate those changes.

From a modest outfit collecting taxes and royalties on coastal trading activities, the Department has evolved to become a large organisation employing over 20,000 Nigerians, with responsibilities cutting across revenue collection, border protection, public health and trade facilitation. The new law is to take account of the realities of the 21st century. Provisions were therefore made for electronic processes of Customs clearance, use of non-intrusive intervention methods to enforce controls and adherence with global best practice in customs operations.

However, Dr Okonjo-Iweala , who by virtue of her position is the Chairman of the Nigeria Customs Service Board raised dust when she expressed concerns over the powers of Mr President and the Minister of Finance as contained in the new Bill. Committee members were astonished when she appeared to labour to sound modest in kicking against the provisions which she complained ‘whittled down the powers of Mr President and the Minister over Customs’.

Another dissenting voice came from the Director of Budget in the Ministry, Dr Bright Okogwu, who argued that Customs should not be funded up to the tune of 2.5 % of Value on Board (FOB)’ as provided under Section 18 of the new Bill, although his earlier view appeared to support to the canvassed by Central Bank of Nigeria on the matter.

It is a fact that many Nigerians were not opportune to read the bill before the hearing. My interest in it followed claim of the possibility of creating a Customs outfit that would be too powerful to be under the thumb of the president or the minister of finance.

On the contrary, the bill does seek a stronger Board capable of enunciating policies devoid of bureaucratic bottlenecks. The bill still allows the minister enormous powers as chairman of the Board with the power to appoint some of its members.

But the notion that the bill strips the president of certain powers gave added impetus to the public hearing; Mrs Okonjo-Iweala was clearly agitated. But try as they could, no one could pinpoint the sections which allegedly render the President powerless over Customs matters.

The major omission in the existing legislations put up for repeal is the Customs, Excise Tariff, etc. (Consolidation) Act Cap C.49 of 1995. Perhaps the hullabaloo about the powers of Mr President stems from the erroneous impression that all the previous Acts relating to Customs matters were being repealed. Section 13of this Act is emphatic about the powers on the much-hyped waivers and concessions. The section vested on the president the power to impose, vary or remove any import or excise duty on goods that are liable to payment of such charges. This provision is still extant.

Opposition to Sections 42 and 43 which sought to prohibit by law the future use of Pre-shipment and Destination Inspection service providers was a source of disappointment to most Nigerians. Leading the pack of opposition was the Central Bank of Nigeria with the argument that the provision ‘ties government hands ‘, if such service is found necessary in the future.

Customs position throughout the hearing was to express readiness to take over its statutory roles. If there was any doubt about Customs ability, the CBN and the Finance Ministry, both supervisory organs of the destination Inspection should be held responsible for the orchestrated effort to perpetrate or institutionalise self-gratifying contracts.

All said and done, Nigerians are patiently waiting for the senators to do what is right and ignore sentiments associated with the various positions canvassed during the hearing. It should not be about muscle flexing of who wields what powers as was witnessed during the hearing. Nor should it be about the office holders, since the Service will outlive the current actors involved. It is about building a strong institution that can stand the test of time. Source: The Daily Trust (Nigeria)

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by Mike Poverello

World Trade Report 2012

This year’s World Trade Report ventures beyond tariffs to examine other policy measures that can affect trade. As tariffs have fallen in the years since the birth of the General Agreement on Tariffs and Trade (GATT) in 1948, attention has progressively shifted towards non-tariff measures (NTMs). The range of NTMs is vast, complex, driven by multiple policy motives, and ever-changing. Public policy objectives underlying NTMs have evolved. The drivers of change are many, including greater inter-dependency in a globalizing world, increased social awareness, and growing concerns regarding health, safety, and environmental quality. Many of these factors call for a deepening of integration, wresting attention away from more traditional and shallower forms of cooperation. Trade in services is a part of this development and has come under greater scrutiny, along with the policies that influence services trade.

So what does the report contain? Click here to download the report!

  • Section A of the Report presents an overview of the history of non-tariff measures in the GATT/WTO. This overview discusses how motivations for using NTMs have evolved, complicating this area of trade policy but not changing the core challenge of managing the relationship between public policy and trading opportunities.
  • Section B examines the reasons why governments use NTMs and services measures and the extent to which public policy interventions may also distort international trade. The phenomenon of off-shoring and the cross-effects of services measures on goods trade are also considered. The section analyses choices among alternative policy instruments from a theoretical and empirical perspective. Finally, case studies are presented on the use of NTMs in particular contexts.These include the recent financial crisis, climate change policy and food safety concerns. The case studies consider how far measures adopted may pose a challenge for international trade.
  • Section C of the Report surveys available sources of information on NTMs and services measures and evaluates their relative strengths and weaknesses. It uses this information to establish a number of “stylized facts”, first about NTMs (TBT/SPS measures in particular) and then about services measures.
  • Section D discusses the magnitude and the trade effects of NTMs and services measures in general, before focusing on TBT/SPS measures and domestic regulation in services. It also examines how regulatory harmonization and/or mutual recognition of standards help to reduce the trade-hindering effects of the diversity of TBT and SPS measures and domestic regulation in services.
  • Section E looks at international cooperation on NTMs and services measures. The first part reviews the economic rationale for such cooperation and discusses the efficient design of rules on NTMs in a trade agreement. The second part looks at how cooperation has occurred on TBT/SPS measures and services regulation in the multilateral trading system, and within other international forums and institutions. The third part of the section deals with the legal analysis of the treatment of NTMs in the GATT/WTO dispute system and interpretations of the rules that have emerged in recent international trade disputes. The section concludes with a discussion of outstanding challenges and key policy implications of the Report. Source: World Trade Organisation.
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by Mike Poverello

Is South Africa being screwed by China?

In recent days there’s been mutterings amongst several business commentators concerning the state of the South African manufacturing sector and its inability to compete in the local economy in the face of ‘so-called’ cheap imports. For once I heard some common sense instead of the usual WTO/economist waffle which normally just confuses people instead of shedding light on the inherent problems. What the Business Times article below suggests is that our prevailing job plight is self-induced and should not be blamed entirely on rogue elements alone. Under valuation and mis-declaration have and always will pose a challenge to any country. The blame has been placed on Customs not doing its job; yet, the problem appears to lie at the feet of policy makers who have made foolish decisions for which the country as whole now pays the price. 

The trouble began soon after 1994, when then Trade and Industry Minister, anxious to prove to the then rich and powerful, and sceptical, West what lovers of democracy and free markets they were, removed tariff protection on cheap imports against a considerable body of expert advice. And 12 years before we needed to, because the World Trade Organisation‘s predecessor, GATT, had given South Africa 12 years to modernise its manufacturing, improve its skills and prepare itself before lowering import tariffs.

At the time, Trade and Industry Minister and the government thought South Africa did not need a grace period. Leslie Boyd, then head of the Anglo-American industrial division, warned of the devastating consequences but to no avail. “They thought if they took the crutches away we’d become a free market economy and we’d be competitive,” says Stewart Jennings, chairman of the Manufacturing Circle which represents thousands of manufacturers in SA. “It was the most ridiculous thing you could ever imagine. Those of us in business know there is no free market in the world. Every country protects itself. We don’t. Here’s an economy without skills that just throws open the tariffs. We’re the country that’s whiter than white in terms of the WTO. Everybody else just abuses us.”

Business consultant Moeletsi Mbeki opines “[government] is too ideologically orientated, it operates from ideology rather than from practical expertise. This motivates our relationship with China. The Chinese can do no wrong.”

One of the worst mistakes they made, he believes, was to sign an agreement that gave the Chinese market economy status which it did not and does not deserve. The talk was that SA agreed to do this as compensation for imposing a three-year quota on Chinese textile imports. The effect on SA’s manufacturing sector has been devastating. “As a consequence of that agreement it is virtually impossible for us to get countervailing duties into China through ITAC [the International Trade Administration Commission which used to fall under the Department of Trade and Industry but is now under Ebrahim Patel‘s Department of Economic Development],” says Stewart Jennings. “We’ve battled to get dumping duties or safeguards against China. Most of the applications that have gone to ITAC have been kicked into touch.”

First, China starts with a currency that is 30% undervalued. It manipulates it, so any goods it exports to SA are 30% cheaper than they should be. On top of that there are all sorts of incentives for Chinese exporters. And then, as Jennings says, attempts by local manufacturers to defend themselves by applying for countervailing duties more often than not go nowhere.

Iraj Abedian of Pan African Investment and Research says the short answer to the question is yes, we are being screwed. “Not because the Chinese have been smart but because we’ve been snoozing and naïve.”

SA was so flattered to be asked to join the BRIC (Brazil, Russia, India, China) club of developing economies that it did not drive a hard enough bargain. “We were romanticising our relationship with China and celebrating the fact that China was inviting us to join BRIC. We took it as a form of political honeymoon without recognising its effect on manufacturing, without assessing our counter-strategy for safeguarding national interests in the form of jobs and tax revenue.” China needed SA to join BRIC at least as much as SA itself wanted to join, but SA failed to capitalise on this.

Executive director of the Manufacturing Circle, Coenraad Bezuidenhout, who has observed the effect at close quarters, thinks part of it is that “our guys find the prospect of dealing with China daunting. They feel we need China as a market for our raw materials more than China needs us.” He thinks this attitude reflects a worrying lack of professionalism on the part of those who are paid to battle for SA’s interests. “We should be leveraging our position with regard to our minerals and our access to African markets far more than we do when we deal with China.”  Source: Business Times

by Mike Poverello

Customs Core Skills – in danger of extinction or a casualty of progress?

The recent death of a close friend and colleague – Lester Millar – brings to mind, once again, the dire situation of a dwindling ‘knowledge base’ in the area of Customs’ core competency. In an era where most customs or border management authorities are happy to employ people with a variety of tertiary qualifications – with the idea that this alone will be sufficient to ‘arm and support’ them in the field of customs/border control and management – what happened to the skills of yesteryear which allowed both government and trade practitioners to exercise their technical abilities to agree or disagree amicably on a customs tariff or valuation interpretation that could result in thousands of rands (ZAR) going to state coffers or the retailer’s bank account?

Many would argue that with the extent of automation and modern techniques, customs core skills are no longer valid or even necessary. Indeed the extent and design of systems goes so far as removing the relevance of human intuition and decision-making. Today we have automated risk management, automated duty calculation and declaration processing, automated cargo and goods accounting, any even a call centre – so is there really a role for a Customs specialist in the 21st century? Customs Managers today have their reports and other so-called ‘empirical data’ to rely on for decision-making and strategizing. The year-end revenue rush, it-self, relies on such computer generated reports negating the need for an internal ‘think-tank’ to devise means of collecting the hidden revenue before the deadline.

For those in the trade, a similar situation exists, with some difference however. The traditional customs clearance and cargo reporting process is highly mechanised these days and if your systems are up to the task, you can rest assured staff can remain glued to their seats and screens without having to venture to the Customs House. Here too, lies a significant change. The traditional Custom House no longer exists and is basically home to the ‘Customs Frontline’ which deals with ‘physical’ intervention and other trade services. Tariff, Valuation and Origin are now confined to back-office functions accessible via a call centre or tiered response mechanisms embedded in Customs’ new automated workflow; that is, if physical or telephonic access to regional customs specialists have been removed.

Few can dispute the advantages of technology supported processes. Yet, when things go array, even the knowledgeable people have difficulty in resolving an issue. Some suggest that human discretion is dangerous and counter-productive, which perhaps is true if left to an uncouth, power-crazy customs or border control official. Yet, ‘discretion’ is a tenet most necessary for interpretative and cognitive skills which once most Customs Officials used to have.

So what is this core competency to which I refer? First of all Customs competency requires an officer to reason, interpret and apply the customs law in the “fairest” possible way based on the facts at his/her disposal. So it means the officer must have an ability to discern; importantly between right and wrong. Discernment must also take into account an acute understanding of previous/historical evidence relating to a case. For a customs official, it will be important to comprehend the rights and legal obligations of the parties concerned, as well as the documentation relating to the case/transaction. Moreover, where a case/transaction deals with a matter of ‘tariff’, or ‘valuation’ or ‘origin’ the officer must at least have the basic knowledge and skills of the internationally defined rules of interpretation in these disciplines. I say ‘at least’, because in any of the mentioned areas, it may require an expert opinion to further conclude the outcome of a matter.

While automation will take care of validation and computation to the n’th degree, storing and retrieving vast amounts of data in milliseconds, the fact remains that a competent ‘human being’ is still required to preside over a complex decision. Good systems are built on ‘rules’, not exceptions. It is the latter therefore that requires ‘customs core competency’ to resolve.

Our dear friend and colleague Lester was gifted with a phenomenal ability to distill and comprehend information. This knowledge made him one of our finest, and sadly virtually last remaining tariff experts. Add to this, a wonderful and helpful nature and willingness to serve the public – a not too common trait nowadays. Adios Lester…..since we did not fully profit from your time with us, may we at least profit from our loss!

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by Mike Poverello

Another WCO resource for the Customs and Trade Professional

The WCO developed the Revenue Package in response to Members’ concerns in regard to falling revenue returns in the light of the global financial crisis and declining duty rates.

Revenue PackageCollection of revenue has historically been the cornerstone of a Customs administration’s responsibilities. For a number of years, Customs has been actively involved in protection of society and trade facilitation initiatives. More recently, the role of Customs has expanded; issues such as the fight against counterfeiting, counter-terrorism activities and the protection of the environment have featured high on the agenda of international Customs work programmes. Alongside these important topics, revenue collection continues to be an area of concern for Customs administrations. The global financial crisis has led to a downturn in international trade which has inevitably hit government revenues. Additionally, the global trend in the reduction of Customs duty rates, through unilateral, regional, and multilateral trade liberalizations, can potentially have the same effect.

The Revenue Package currently consists of all available tools and instruments relevant to revenue collection. This includes, inter alia, formal instruments and Conventions, guidance notes and training material. Members are encouraged to consult the Package to ensure that necessary requirements have been met and that all relevant material has been obtained by the administration and is being utilized as appropriate.

The Revenue Package is divided into six topics :

  • Topic 1. Facilitation and Procedures
  • Topic 2. Customs Valuation
  • Topic 3. Harmonized System/Nomenclature
  • Topic 4. Origin
  • Topic 5. Compliance and Enforcement
  • Topic 6. Capacity Building and Training

Under each topic, the prime text is referenced, where appropriate. For example, for Topic 1 (Facilitation and Procedures), the Revised Kyoto Convention is the prime text. This is followed by a list of supporting instruments and tools for that topic, providing information on content and availability. Web links are included to provide convenient access to the relevant material, which is either freely available to download or available for purchase from the WCO’s Online Bookshop. Source: WCO.