the role of customs administration

7/28/2019 The Role of Customs Administration

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Historical perspective

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Romans were one of the first civilizations to introduce

Customs duties

Customs officials of the day had a responsibility toensure that the right amount of duties were collected and

that would-be smugglers were brought to account.

On the other side of the counter would have been many

honest traders who would render to Caesar that whichwas Caesars, and some not so honest traders who would

seek to render as little as possible.

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It is therefore probable that the Romans faced the same

types of challenges that are being faced by Customs

administrations around the world today - Customs

officials seeking to ensure that the law is upheld;

traders seeking uninhibited(0pen) passage of their

cargoes; and honest traders seeking recognition of their

good track record of compliance.

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What has changed, and changed dramatically, is the trading

environment - the manner in which goods are carried and traded,

the speed of such transactions and the sheer(huge,total) volume of

goods that are traded around the globe.

There have been a number of significant changes in globaltrading practices, and Customs administrations around the world

have been required to continually adapt their methods of

operation in an effort to maintain their effectiveness and4


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Emergence of wide bodied aircraft, shipping containers, e-

commerce and the increasing complexities of international trade

agreements have all impacted on the way in which CAs have

fulfilled their responsibilities, and CAs world-wide have seen a

dramatic increase in workload across all areas of activity, fuelled

by the technological advances that have revolutionized trade and

transport.

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Nevertheless, the basic elements of CA appear to remain essentially

the same

government officials are seeking to enforce the law and traders are seeking to

minimize government intervention.

An effective CA must find the proper balance between those two

positions

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CA

.the govert service which is responsible for the

administration of Customs law and the collection of import andexport duties and taxes and which also has responsibility for the

application of other laws and regulations relating, inter alia, to

the importation, transit and exportation of goods(WCO).

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The actual responsibilities of Customs will vary from country to

country but typically involve

Revenue collection,

Some form (or forms) of border protection or security,

The responsibility for collection of other taxes such as VAT or

G & S tax (GST).

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More specific responsibilities are likely to include the

enforcement of trade agreements, detection and

interdiction of narcotics and other prohibited or

restricted imports or exports, counter terrorism,

protection of cultural heritage and enforcement of

intellectual property laws.

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Additionally, Customs administrations tend to carry out

border control functions on behalf of other agencies.

These activities are likely to be undertaken on behalf ofand/or in conjunction with immigration, quarantine and

health authorities, border or economic police, agriculture

and environmental agencies and many others

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According to WCO

CA around the world face a number of important challenges

and the envt in which they operate will continue to becharacterized by:

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1. Globalization with continued growth and devt of

international trade, as well as increased recognition of

international trade as a key driver to promote investmentand economic growth

2. Increased investment by the private sector in modern

manufacturing, information and supply chain mgt

systems,supported by information and communicationtechnologies, and a resultantincrease in expectationsfor

prompterandmore cost-efficientandpredictableborder

processing of goods and people

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3. Heightened awareness of the external drivers that add

complexity to the global trade landscape, including

initiatives to furtherliberalize trade, more complex traderules, and theproliferation of regional trade agreements

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4. Greater awareness of the factors that increase the

vulnerability of the international trade supply chain,

including international terrorism, transnational organizedcrime, drug trafficking and revenue fraud, and the resultant

increase in expectations for strengthened border control

while ensuring continued improvts in trade facilitation

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5. Greater policy and procedural requirements directly

associated with developing and meeting international

commitments and standards for efficient and effective border

procedures, while avoiding a plethora of duplicating and

conflicting requirements on the part of national and other

agencies

6. Increased awareness of the importance of Customs as a key

vehicle for economic growth, social devt and national

security, and the resultant need for govts and donor orgs to

invest in sustainable capacity building activities in Customs,

supported by research-based strategy and professionalism

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7. Increased awareness of the implementation ofgood

governance and sound integrity within Customs services

in co-operation with stakeholders, as a foundation fordevt policy and capacity building

8. Constraints on budget and human-resource allocation

notwithstanding the increase in workload and

government expectations; and

9. Changes in organizational arrangements reflecting

changes in government priorities.

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CAs, identified the issues they saw as most likely to impact upon Customs b/n

them and the year 2020. Some of the key issues were identified as:

1. Globalisation / regionalisation / Free Trade Agreements2. Changes in international trade and services3. Trade & supply chain security4. Decreasing human resources

5. Corruption / integrity6. Security / terrorism / transnational crime7. WTO / WCO requirements8. Risk management9. Accountability10. Trade facilitation11. Technology12. Change management / people management13. International cooperation

Identify two issues most likely to impact upon our CA b/n now and 2020.Please explain why you believe these will be the most important issues andwhat impact each issue is likely to have upon our CA

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Rules of origin are the criteria used to determine thenationality of a product.

Rules of origin are the criteria used to definewhere a product was made.

Rules of origin are also used to compile trade statistics,

and for made in ... labels that are attached to

products.

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They are an essential part of trade rules because anumber of policies discriminate between

Exporting Countries:

Quotas,

Preferential Tariffs, Anti-dumping Actions,

Countervailing Duty (charged to counter exportsubsidies), and more.

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Once the origin of a good is known, the importingcountry can apply :

any country-specific or trade area-specific trade preferences

restrictions to the imported good such as duty free entry for

goods originating in a free trade area quantitative restrictions on goods originating in a country

subject to a quota

anti-dumping duties

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Because rules of origin are a means of implementingdiscriminatory trade regimes, its importance has grown

significantly as countries increasingly have treated

similar imported goods differently according to where

the product was made.

Rules of origin becomes more important because the

degree of differentiation among similar goods from

different countries increases.

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The increased treatment of similar goods places number ofrestrictions on the use of traditional tariff goods.

The rise of multinational corporations and the productionof goods in multiple stages using parts produced in

different places around the world provided an opportunityto use rules of origin as an effective means of protection.

In a world where goods are produced from parts fromaround the world, there is no single, correct definition oforigin.

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Rules of origin can serve an effective means of

protectionism in two ways. 1. Applications of preferential rules of origin may deny trade

preferences to products.

2. Second definitions and applications of non-preferential

rules of origin will extend country-specific trade restrictive

measures to products.

The technical nature of rules of origin made it difficult

to realize that they were being used for restrictive

purposes.

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While the GATT increasingly restricted the ability ofcountries to use tariffs or traditional non-tariff barriers

to protect domestic industry from foreign competition,

it did not regulate rules of origin.

Therefore, the use of rules of origin to insure traderestrictive effects provided a means for countries to

satisfy pressure from domestic industry for protection

from foreign competition.

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Rules of origin are divided into two categories:

preferential and non-preferential rules of origin.Preferential rules of origin are used to determine whether

certain products originate in a preference-receiving country or

trading area and hence qualify for the trade preference.

Non-preferential rules of origin are used for all other purposes,including enforcement of product and country specific trade

restrictions or restrict or prevent market entry

The Rules of Origin Agreement requires WTO members to

ensure that their rules of origin are transparent; that they do not

have restricting, distorting or disruptive effects on international

trade; that they are administered in a consistent, uniform,

impartial and reasonable manner

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When a product is wholly obtained and produced in a single

country, it is relatively easy to determine its origin.

Difficulties arise in determining the origin of a product thatis manufactured in, assembled in, oruses materials

originating in more than one country.

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At least three different methods or criteria exist fordetermining the origin of goods that are manufactured in,

assembled in, or use materials originating in more than

one country:

1. Using the concept ofsubstantial transformation as a rule;2. Using an ad valorem percentage test;

3. Listing specific manufacturing or processing operations which

confer or do not confer origin upon the goods

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The following operations shall not be taken intoconsideration when determining the origin of importedgoods, whether or not accompanied by a change in thetariff classification:

1. Operations carried out to insure that the goods arepreserved in good condition during transport or storage;

2. Operations carried out to facilitate transportation ofgoods;

3. Operations carried out topackage or prepare goods forsale;

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4. simple operations on goods such as ventilation,

spreading out, drying, cooling, removal of damaged

parts, greasing or rust removal, adding a coat ofpaint to protect against natural elements, washing,

cleaning, sifting or screening, sorting or classifying,

scaling, testing or calibration, packaging or breaking

up of assembled packages or repackaging,

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.dividing the bulks, affixing marks, labels or other

distinguishing signs on the packages of goods, dilution by

water or any other aqueous solution, ionization, salting,peeling, crushing, removal of seeds from fruits and

slaughtering of animals;

5. simple assembly of parts to constitute a complete

product;6. any combination of the above.

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the role of customs administration

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