CUSTOMS FOSTERING SUSTAINABILITY FOR PEOPLE, PROSPERITY AND THE PLANET - January 2021
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LOOKING BACK ON THE WCO THEME FOR 2020 CUSTOMS FOSTERING SUSTAINABILITY FOR PEOPLE, PROSPERITY AND THE PLANET January 2021 www.wcoomd.org 1
LOOKING BACK ON THE WCO THEME FOR 2020 CUSTOMS FOSTERING SUSTAINABILITY FOR PEOPLE, PROSPERITY AND THE PLANET January 2021 This publication was developed by Valentina Ferraro, drawing on contributions of colleagues in the WCO
Contents Foreword .............................................................................................................................................................................................................. 4 Introduction ....................................................................................................................................................................................................... 5 Serving People by building safe and secure societies ................................................................................................. 7 Ensuring Prosperity by reducing trade barriers to create inclusive societies ..................................... 11 Protecting the Planet and ensuring its sustainability for future generations .................................... 13 Conclusions...................................................................................................................................................................................................... 16 Annex .................................................................................................................................................................................................................... 18
WCO I CUSTOMS FOSTERING SUSTAINABILITY FOR PEOPLE, PROSPERITY AND THE PLANET Foreword Last year’s International Customs Day, celebrated annually by the World Customs Organization (WCO), was ded- icated to the theme for 2020: “Customs fostering Sustainability for People, Prosperity and the Planet”. Driven by the mandate to ensure its actions reflected the above-mentioned theme, the WCO Secretariat carried out a number of initiatives throughout 2020 which also served as an opportunity to reflect on Customs’ role in ensuring an effective and equitable transition towards a more inclusive, sustainable and greener supply chain. This transition can be achieved through balanced actions with respect to revenue collection, protection of society and facilitation of legal trade. Although these core Customs competencies make a vital contribution to support- ing sustainable economic growth and development, Customs’ role has been redefined over recent years with even greater stress now being placed on the importance of its contribution to sustainable development. In order for Customs to support the achievement of the United Nations (UN) 2030 Agenda for Sustainable De- velopment, coordination with other public authorities and the private sector is essential. Enhanced coordination and sharing of data with other public and private stakeholders at borders is one of the key success factors not only for consistent and sustainable policies but also for an effective response to the COVID-19 pandemic and for sustained recovery in the post-pandemic world. The WCO’s ongoing actions to contribute to the attainment of sustainability goals have become even more rele- vant in the midst of the COVID-19 pandemic, which has drawn attention to the environmental impact of pre- pandemic business and social models and has highlighted the need to bolster the resilience and sustainability of supply chains through harmonized policy responses to interconnected global challenges. This publication is designed as a look back on the WCO theme for 2020. It is aimed at raising awareness of related WCO initiatives and programmes and of the relevant WCO tools for building Members’ capacity to achieve long- term economic, social and environmental goals at the national, regional and global levels. The WCO has confirmed its ongoing commitment towards sustainability under its theme for 2021: “Customs Bolstering Recovery, Renewal and Resilience for a Sustainable Supply Chain”. Collaboration for effective recov- ery, innovation and technological advances for renewal, and organizational resilience are key aspects that will serve as the catalyst for this year’s efforts focused on Customs’ role in ensuring resilient and sustainable supply chains. At a time when trust in governments’ effectiveness in tackling pressing global challenges is declining, raising awareness of the impact of Customs action for achieving global sustainable development goals may contribute to the belief that governments can indeed make changes for a better future. Dr. Kunio Mikuriya WCO Secretary General 4
Introduction The UN Sustainable Development Goals (SDGs) are ganizational Development Package), Customs ad- the global blueprint to end poverty, protect the ministrations can directly contribute to the achieve- planet and ensure that all people enjoy peace and ment, at the national level, of 13 of the 17 SDGs (An- prosperity by 2030. The UN call for action is aimed nex hereto) and indirectly contribute to the others at addressing global challenges related to poverty, (SDGs 2, 4, 6 and 7)4. inequality, environmental degradation, and peace and justice, by coalescing cross-sectoral interven- Although the SDGs constitute the background to tions around 17 multidimensional and intercon- WCO activities in the sustainability domain, applying nected Goals1, requiring policy integration and coor- an SDG lens to WCO instruments and tools requires dinated actions at the international and national the identification of opportunities for contributing to level. the SDGs’ implementation, as well as an assessment of the need to further adapt the WCO’s instruments The role of Customs administrations in supporting and tools so as to move towards the global targets the achievement of the SDGs has been discussed in set. both of the WCO’s high-level governing bodies, the Council and Policy Commission2 , as well as in two of In order to position the future Performance Meas- the key technical committees, the Enforcement urement Mechanism with respect to Customs’ global Committee and Permanent Technical Committee impact in terms of sustainability, the Working Group (PTC)3. By fulfilling their mandate and, at the same on Performance Measurement included the map- tools collectively described in its Strategic Packages ping of performance dimensions against the SDGs in (Revenue Package, Economic Competitiveness Pack- age, Compliance and Enforcement Package, and Or- 1 The proposed goals and targets should be seen as a network, in which the goals are linked through targets referring to multiple goals: https://www.un.org/esa/desa/papers/2015/wp141_2015.pdf 2 Policy Commission working document SP0626E on “Customs and the UN 2030 Agenda for Sustainable Development” 3 PTC working documents PC0546E on “SDGs: Environmental sustainability for global supply chains: challenges and implications for Cus- toms control and facilitation” and PC0568E on “How can trade facilitation and Customs contribute to SDGs, especially in managing trans- boundary movements of plastic waste and e-waste?” 4 http://www.wcoomd.org/-/media/wco/public/global/pdf/about-us/wco-in-brief/sdg2018_pillars.pdf?db=web 5
WCO I CUSTOMS FOSTERING SUSTAINABILITY FOR PEOPLE, PROSPERITY AND THE PLANET the Mechanism’s design. This will offer greater clar- and solid partnerships. As a result, the transversal ity about Customs’ role in contributing to a sustaina- SDGs offer vital support in the quest for Prosperity ble future through its performance. and form another natural focus of the WCO’s work. The inclusion of the SDG perspective across WCO in- By way of example, integrity is a prerequisite for the struments and tools may also require a review of ex- proper functioning of a Customs administration. A isting strategies to make them “SDG-aware”, thus lack of integrity in Customs seriously distorts trade ensuring that their full potential to support the and investment opportunities, undermines public achievement of the relevant SDGs is exploited. trust in the work of government and ultimately jeop- ardizes the well-being of all citizens. The WCO Re- Adoption of the sustainability paradigm for Customs vised Arusha Declaration is an integrity tool that entails framing the relevant policy at the intersection helps countries comply with their obligations under between the economic, environmental and social anti-corruption conventions and meet UN SDG 16, spheres. Adopting an SDG lens should, in turn, ena- which includes commitments to fight corruption, in- ble Customs strategies to take account of the needs crease transparency, tackle illicit financial flows and stemming from resource conservation policies, the improve access to information. By making changes commitment to “leave no one behind” and new de- to Customs’ operational and administrative pro- mands raised by responsible business models that in- cesses, in line with the 10 key factors of the Revised clude social and environmental outcomes in their Arusha Declaration, corrupt behaviour is curbed and profit equation. good governance is promoted, improving the busi- The 2020 edition of the UN’s World Economic Situa- ness environment for cross-border trade as a result. tion and Prospects (WESP) report points out that as weak global growth makes it harder to achieve the Additionally, emerging technologies are accelerat- 2030 Agenda and its SDGs, policy-makers are being ing the use of data analytics to improve the way Cus- urged to look beyond promoting gross domestic toms deals with evolving threats, predicts and man- product (GDP) growth towards investment in pro- ages non-compliance and increases productivity and jects fostering environmental sustainability and resil- performance. In this respect, data analytics provide ient infrastructures, in order to increase economic a robust foundation for core Customs’ objectives re- resilience and cohesion and address structural vul- lated to revenue collection, border security, trade fa- nerabilities. This becomes even more crucial when cilitation and integrity, thus supporting the achieve- faced with the risk of losing momentum amid large- ment of the interrelated UN SDGs. scale threats of a downturn. In line with the call for global partnership and collab- orative actions to support the UN’s Sustainable Agenda throughout 2020, the WCO endorsed “Cus- toms fostering Sustainability for People, Prosperity and the Planet” as its theme for 2020. Under this banner, the Customs community was invited to dis- cuss and position Customs’ role in contributing to a sustainable future in which social, economic, health and environmental needs are at the heart of govern- ment and private sector actions. Against this background, Customs’ contribution to sustainability revolves around the SDGs and targets related to “People”, “Prosperity” and the “Planet” (Figure. 1). By using a range of WCO tools for revenue collection, trade facilitation and border control, Customs can play an active role in supporting the achievement of all the UN SDGs, thus striving towards serving People better, ensuring Prosperity and protecting the Planet. However, the achievement of Prosperity goals re- quires peace, strong and trustworthy institutions 6
Figure 1: SDGs related to People, Prosperity and the Planet Source: Adapted from CIFAL Unitar 2018, https://cifal-flanders.org/cifal-activities/materials/sdg-training-materials/ range of RKC provisions, such as those on standardi- Serving People by building safe and zation and simplification of Customs procedures, risk management and audit-based control, has been secure societies proven to enhance revenue collection and overall national economic growth. This approach directly contributes to supporting countries in their efforts to end hunger and poverty and foster social well-being. The SDGs related to “People” (SDGs 1, 3, 5, 16 and 17) address the overarching objective of ending pov- In addition, the WCO SAFE Framework of Standards erty and hunger as well as ensuring that all human (SAFE FoS) is another leading instrument that sup- beings can fulfil their potential in dignity and equal- ports Member Customs administrations striving to ity, in a safe and secure environment. 5 secure the global supply chain, fight crime and en- sure compliance with safety standards, while facili- Customs effectively contributes to poverty and hun- tating legitimate trade. The three Pillars of the SAFE ger reduction by facilitating global trade flows, which FoS, emphasizing partnerships involving Customs-to- in turn support the creation of employment oppor- Customs, Customs-to-Business and Customs-to- tunities and revenue collection. Other Government and Inter Government Agencies It is widely recognized that the WCO’s Revised Kyoto in the compliance and security domains, can prove Convention (RKC) is a flagship instrument fit for mul- effective in ensuring the seamless movement of tiple purposes. It offers a comprehensive set of mod- goods and means of transport globally, especially ern and efficient Customs procedures to facilitate le- through the use of technology including non-intru- gitimate trade while conducting Customs controls, sive inspection equipment (NII). thus ensuring fair revenue collection and protection Customs plays a key role in enforcing multiple safety of society. Customs legislation complying with a and security regulations that protect citizens and 5 https://unfoundation.org/blog/post/the-sustainable-development-goals-in-2019-people-planet-prosperity-in-focus/ 7
WCO I CUSTOMS FOSTERING SUSTAINABILITY FOR PEOPLE, PROSPERITY AND THE PLANET contribute to supply chain integrity and, in so doing, Criminals have attempted to use the COVID-19 pan- contribute towards the achievement of the UN SDGs. demic to exploit potential vulnerabilities in Customs In this context, there is a crucial need to incorporate controls. Environmentally-sensitive commodities effective enforcement regimes in Customs’ overall regulated through various Multilateral Environmen- strategy and approach. tal Agreements (such as the Basel Convention on the Control of Transboundary Movements of Hazardous Enforcement requires Customs to take action against Wastes and their Disposal; Montreal Protocol on those entities that do not comply with and abuse do- Substances that Deplete the Ozone Layer; Conven- mestic and international legislation, rules and regu- tion on International Trade in Endangered Species of lations that govern international supply chains. Cus- Wild Fauna and Flora (CITES); Minamata Convention toms is the primary enforcement agency at the bor- on Mercury; Cartagena Protocol on Biosafety to the der and its various actions contribute towards im- Convention on Biological Diversity, etc.) are fre- proving the integrity of the supply chain. One of the quently and illegally moved between jurisdictions in tactics deployed by Customs is to take criminal ac- contravention of prevailing laws, and Customs rules tion against criminals and, to this end, the WCO Cus- and procedures. In this context, the application of toms Operational Practices for Enforcement and the Compliance and Enforcement Package is instru- Seizures (COPES) Programme continues to support mental in ensuring the facilitation of legal trade the Organization’s Members by sharing best prac- while providing a safe and secure environment for tices and standards in the areas of evidence collec- citizens. tion, seizures of criminal assets, criminal investiga- tions and prosecutions. All these core functions of Revenue fraud, perpetrated through the smuggling Customs ultimately support the achievement of of excise goods (tobacco, alcohol, fuel and other re- SDGs aimed at serving People, as illicit trade poses a fined petroleum products, etc.), other high-value fundamental risk to the implementation of the SDGs goods (precious metals and gemstones) and through and consequently to sustainability for all. Accord- commercial fraud activities (undervaluation, over- ingly, effective enforcement remains a cornerstone valuation, misclassification, misdeclaration of origin, of a modern day Customs strategy. drawback fraud, etc.), is not only an area of constant concern for developing countries but also greatly af- The Strategic Trade Control Enforcement (STCE) fects developed countries. It causes significant dam- Programme provides key input to Customs officials age not only in the form of revenue leakage but also and, on a larger scale, to administrations by embed- by hampering the economic competitiveness of com- ding non-proliferation knowledge and measures into pliant traders. In response to WCO Members’ re- their daily practices. Through the provision of this quests for capacity building to counter problems re- Programme at the global level, Customs enforce- lated to revenue fraud, the WCO has produced a ment capabilities in this field continue to support ef- number of tools such as Technical Materials on forts to curb the spread of weapons of mass destruc- Commercial Fraud, Guidelines for Post-Clearance tion and, in so doing, contribute to the SDG aimed at Audit, and Guidelines for Strengthening Coopera- protecting societies from terrorist attacks. tion and the Exchanging of Information between Customs administrations are promoting the use of Customs and Tax Authorities at the National Level advance passenger data, in the form of Advance Pas- and the Customs-Police Cooperation Handbook. It senger Information (API) and Passenger Name Rec- has also created a closed expert group, TobaccoNET, ord (PNR), to address global terrorism and serious as a platform for combating illicit trade in tobacco organized crime while simultaneously facilitating products and for information- and intelligence-shar- travel. During the current COVID-19 pandemic, ad- ing in this domain, as well as devising a short-term, vance passenger data has been used to support con- regional and non-commodity specific operation to tact tracing and contactless procedures for interna- combat cross-border smuggling, known as Opera- tional travel. tion LYNX, with the primary purpose of increasing the volume of spontaneous intelligence- and infor- The WCO Customs Risk Management Compendium mation-sharing. includes several documents covering organizational and operational aspects of risk management in order The spread of drug trafficking through international to ensure optimum levels of trade facilitation while trade undermines efforts by the Customs community enhancing risk-based selectivity and compliance. in the area of trade facilitation. The fight against The WCO Cargo Targeting System facilitates the drug trafficking is at the core of the WCO's activities, practical implementation of this approach by Cus- facilitated through capacity building and infor- toms. mation-sharing projects and programmes. In part- nership with other international organizations, the 8
WCO Drugs and Precursors Programme provides The UNODC-WCO Container Control Programme practical support to the Organization’s Members (CCP) serves as an example of what Customs and through the Container Control Programme (sea and other law enforcement agencies can achieve when air cargo), AIRCOP Project (targeting high-risk airline targeting illicit trade at operational level and by join- passengers) and Colibri Project (general aviation ing forces to address the challenges posed by all monitoring and control). In collaboration with its types of cross-border crime in the cargo sector. The partners, the WCO is intensifying controls on syn- Programme, designed to establish sustainable and thetic drugs and precursors trafficked in express intelligent Customs enforcement capabilities in key freight and continues to develop advanced tech- seaports and airports, incorporates numerous SAFE niques for the deployment of detector dogs. FoS recommendations and international best prac- tices on risk management and profiling, whilst main- Cooperation among Customs administrations and taining an adequate level of trade facilitation. Fol- with competent law enforcement entities in identi- lowing implementation in more than 60 countries fying and tackling illicit goods is a crucial element of worldwide, the Programme has demonstrated its po- a holistic risk management approach which leads to tential in meeting the SDG goals for the benefit of reduced yet risk-focused controls and, as a result, People and the Planet. swift clearance procedures for legitimate traders. In- itiatives such as the AIRCOP Project promote coop- In order to protect the public against counterfeit/il- eration between border control authorities and seek licit medicines and other medical supplies and equip- to incorporate information and intelligence supplied ment associated with the COVID-19 pandemic, the by these entities in the risk management process. WCO launched Operation STOP. Some 99 WCO This concept leads to improved inter-agency cooper- Members as well as the Organization’s Regional In- ation, enhanced risk assessment and, as a corollary, telligence Liaison Offices (RILOs) participated in this better results with less interference in the move- Operation, supported by the United Nations Office ment of passengers and cargo. on Drugs and Crime (UNODC), INTERPOL, Europol The activities of the Security Programme actively and the European Anti-Fraud Office (OLAF). The Op- aim to reduce violence and improve the security sit- eration was aimed at stemming the significant in- uation within countries by restricting the illicit trade crease in trafficking of medicines and medical sup- in small arms and light weapons (SALW) and impro- plies associated with the COVID-19 pandemic. vised explosive device (IED) precursors which are Comprehensive data analysis is unquestionably a key drivers of violence around the world. component supporting effective and efficient Cus- toms enforcement activities. The information cap- As outlined in the SDGs, the rate of intentional hom- tured in the WCO Illicit Trade Report (ITR) provides icides per 100,000 population has increased in re- crucial insight into occurrences of illicit trade, cent years. Many of these homicides are carried out thereby assisting Customs administrations to under- using illicitly obtained weapons. Furthermore, SALW stand trends and patterns and make well-informed are being used both by extremist groups and orga- decisions to secure cross-border trade. The ITR is an nized criminal groups and, as a result, are a threat to annual publication offering a comprehensive study the security, stability and wealth of countries and re- of illicit trade flows through an in-depth analysis of gions. The illicit use of SALW has also been found to seizure data and case studies voluntarily submitted disproportionately affect women and children. The by WCO Member Customs administrations world- WCO SALW Programme provides awareness-raising wide. and training for Customs administrations to assist in the detection of illicit SALW at borders. Of particular importance for enforcement activities as well as for the accomplishment of the SDG targets The WCO Security Programme also supports the re- is the identification of sensitive commodities at bor- duction of armed conflict through its Programme ders. The key tool for identifying and classifying Global Shield (PGS) activities. These activities are goods globally is the Harmonized System (HS). Work aimed at reducing the threat from IEDs by monitor- on the HS relating to the SDGs is ongoing over several ing the movement of the 13 most commonly-used years, as changes to the HS are made during five-year chemical precursors and other materials involved in cycles. Last year, the focus was on preparing the ma- the manufacture of IEDs. PGS enables Customs to terials for the upcoming HS 2022 edition, comprising set up effective enforcement regimes to protect improvements to support the SDGs, as well as work- their citizens and safeguard international supply ing on the HS 2027 review cycle amendments. Mul- chains. tiple changes are included in the HS 2022 in support of the SDGs focused on “People”. Some highlights 9
WCO I CUSTOMS FOSTERING SUSTAINABILITY FOR PEOPLE, PROSPERITY AND THE PLANET include provisions for diagnostic kits for Zika virus some donors with local rules, and disruption to nor- and other diseases spread by Aedes genus mosqui- mal procedures. In this context, the implementation tos, blinded clinical trial kits, cell cultures and cellular of national/regional Single Window solutions could therapy products. Such changes help simplify trade potentially contribute to ensuring transparency of in important health and health research-related the regulatory framework and efficient cooperation goods and assist governments to monitor and facili- among all the stakeholders involved. tate such trade. The HS 2022 also introduces new provisions identified by the Food and Agriculture Or- Another example relating to protection of People, ganization (FAO) as important for monitoring global namely the Convention on Temporary Admission and regional food security, as well as more precise (widely known as the Istanbul Convention), contains classifications for explosive goods, various dual use facilitation measures for the temporary admission of items and a range of other products that impact the goods and equipment imported for humanitarian health and safety of People. purposes. The WCO Harmonized System (HS) Convention is The growing volume of trade, introduction of new one of the most prominent and long-standing univer- trade requirements, ever-changing concept of bor- sal standards for boosting global trade and disman- der management and emerging security threats tling trade barriers. It has a truly global reach, with place a strain on Customs administrations. Customs more than 200 countries and economies using the HS administrations’ human resources have a significant as a basis for their Customs tariffs and for the collec- impact on the effectiveness of service delivery. Hu- tion of international trade statistics, and with over man resilience and well-being in the workplace are 98% of the global trade in goods classified in terms becoming ever more important, as Customs leaders of the HS. The HS is widely recognized as the com- acknowledge the link between content, safe and mon language of international trade, reducing barri- healthy staff and an organization’s performance and ers between nations and contributing to the smooth sustainable development. Given the major chal- flow of legitimate trade. It has also played a vital role lenges that face Customs administrations, coupled during the COVID-19 pandemic and other crises by with the impact of the COVID-19 pandemic, tradi- facilitating and minimizing disruption to cross-bor- tional leadership is no longer valid and Customs ad- der trade in goods, particularly essential goods such ministrations are increasingly being called upon to as medicines, food and energy, as well as by combat- develop a human-centric leadership culture. ing the trade in fake medicines, etc. The current crisis has transformed employment rules Against the current global background of the COVID- and changed the principles underpinning the rela- 19 pandemic, WCO instruments and tools such as tionship between staff and management. Today’s Chapter 5 (Relief Consignments) of Specific Annex J employment agreements should focus on positively to the RKC; the Framework of Standards (FoS) on impacting the well-being of staff while honing their Cross-Border E-Commerce; and the Resolution of skills. Organizations should offer employees more the Customs Co-operation Council on the Role of flexibility, thereby creating common interests and Customs in Natural Disaster Relief have proven to goals as well as building deeper connections. Chang- be even more relevant in helping Members protect ing trends in the work environment reflect a marked People while ensuring supply chain continuity. This acceleration in new forms of working in which tradi- underscores the importance of focusing greater re- tional and complex structures must give way to agile sources on capacity building in the humanitarian and simplified structures. Moving forward, a human- area and of ensuring risk preparedness and coordi- centric (Humanistic) approach to the workplace that nated responses. In particular, the promotion and focuses on staff experience and care will become the implementation of the FoS on Cross-Border E-Com- norm in order to maintain an organization’s reputa- merce play a vital role in strengthening appropriate tion and win stakeholders’ trust and loyalty. regulatory responses by Customs to the extraordi- Customs administrations foster sustainability by nary volume and dynamism of E-Commerce during building safe and secure societies. In order to per- the COVID-19 crisis. form this important and challenging task, Custom of- When natural disasters occur, cross-border trade ficers require ongoing education and training, espe- rules applicable to consignments containing human- cially in this new era of emerging technologies. They itarian assistance - particularly for highly regulated also need to keep abreast of trends in the global items such as foodstuffs, medication, medical equip- trade environment. In this regard, the WCO builds ment, vehicles and telecommunications - are compli- the capacities of Customs administrations by devel- cated by the vital need for speed, the unfamiliarity of oping highly educated, knowledgeable, skilful and professional staff to carry out sustainable Customs 10
reforms and modernization. It also ensures equal ac- range of stakeholders and be able to reach out in dif- cess to Customs training by offering a comprehen- ferent languages and to individuals with a disability, sive range of e-learning courses and the possibility to individuals who are illiterate, etc. Several references participate in global and regional training workshops can be found to this end in the GEOAT. through the WCO Customs Learning and Knowledge Community (CLiKC!) platform. The WCO’s ex- tremely valuable training materials and a wealth of useful information are available in many different Ensuring Prosperity by reducing languages. trade barriers to create inclusive so- By developing specific e-learning courses tailored to cieties the needs of external supply chain stakeholders and other international trade professionals, vocational training via the WCO Academy promotes active dis- The SDGs related to “Prosperity” (SDGs 8, 9, 10, 11, semination of information and knowledge related to 16 and 17) aim to “ensure that all human beings can WCO standards, tools and instruments to a wider au- enjoy prosperous and fulfilling lives and that eco- dience and supports activities aimed at sharing this nomic, social, and technological progress occurs in information and knowledge worldwide. harmony with nature”.6 In addition, raising the awareness of, offering train- International trade plays a significant role in support- ing to and sharing knowledge with the trading com- ing prosperous, sustainable and resilient societies munity and society are critical if Customs wishes to and economies. partner with legitimate businesses that strive to be compliant but lack the overall knowledge to this end. Data collected from the last WCO Single Window The WCO/JICA Master Trainer Programme (MTP) Survey in 2019 confirms that Single Window Environ- contributes to enhanced cooperation and mutual ments (SWEs) are still deemed one of key enablers understanding between Customs and business by for trade facilitation. The role of Customs admin- means of training events delivered by local Customs istrations in SWEs also involves leading or co-leading trainers. It uses materials developed through the initiatives and therefore playing a specific role in Co- Programme, thus tackling the unique issues and chal- ordinated Border Management (CBM) and influenc- lenges faced and contributing to achieving the SDGs ing the enactment and operationalization of con- in partnership with business. sistent policies. By proactively implementing gender responsive and Digital Customs is well recognized as a key enabler inclusive measures in line with the WCO Gender for reducing information asymmetries, procedural Equality Organizational Assessment Tool (GEOAT), complexities, discretionary powers and physical in- Customs administrations can improve their services, teractions with economic operators. This, in turn, ensuring that these meet the diverse needs of the has a positive effect by reducing indirect trade costs public and different stakeholders. The GEOAT makes and inefficiencies as well as removing incentives for reference to sexual harassment and gender-based vi- corruption. olence and encourages Customs to ensure safety at This approach can be implemented through harmo- borders by providing sufficient infrastructure, devel- nized and standardized electronic data based on in- oping reporting mechanisms and also assessing staff ternational standards such as the WCO Data Model, safety, acknowledging that the needs may be differ- as well as enhanced pre-arrival risk management. 7 ent for female Customs officers and stakeholders Data standardization across supply chain processes (building safe and secure societies). To ensure that also enables visibility, traceability and predictability the Customs policies in place are inclusive, encom- of cross-border trade, while at the same time ensur- passing not only women traders but also small and ing data quality and accuracy. medium-sized enterprises (SMEs) in general and mi- nority groups to maintain a balanced diversity per- The implementation of the RKC provisions, the SAFE spective, it is important to engage with a diverse FoS, the FoS on Cross-Border E-Commerce and other 6 https://unfoundation.org/blog/post/the-sustainable-development-goals-in-2019-people-planet-prosperity-in-focus/ 7 https://unnext.unescap.org/content/un-global-survey-digital-and-sustainable-trade-facilitation-2019 11
WCO I CUSTOMS FOSTERING SUSTAINABILITY FOR PEOPLE, PROSPERITY AND THE PLANET international instruments and tools such as the Two areas posing a high risk to countries’ revenues World Trade Organization (WTO) Trade Facilitation are Illicit Financial Flows (IFFs) and revenue fraud. Agreement (TFA) assists Customs administrations in harmonizing and modernizing their procedures and As a result of a collaborative effort between the WCO operations. As a result, Customs can reduce the time and the Egmont Group of Financial Intelligence and cost of moving licit goods across borders and Units, in March 2020 the WCO launched the “Cus- stimulate legal trade activities, thus increasing in- toms - FIU Cooperation Handbook”, serving both as come and employment, promoting national and for- a reference document and as a tool for Customs and eign investment and expanding the connectivity of Financial Intelligence Units (FIUs) in the fight against micro-, small- and medium-sized enterprises money laundering and terrorism financing activities. (MSMEs) to global value chains. Strong partnerships between the WCO and other in- The Mercator Programme, launched in June 2014, is ternational organizations have proven important in a flagship WCO initiative supporting the Organiza- the WCO’s work with its Members to combat these tion’s Members worldwide with implementation of types of crime. Technical support with the valua- trade facilitation measures, and particularly those tion, classification and origin assessment of goods is associated with the WTO TFA, expeditiously and in a also essential in this domain. Highly technical and le- harmonized manner through the application of WCO gally complex issues in valuation, classification and tools and instruments. The Programme provides tai- origin are often exploited as vehicles for IFFs and rev- lor-made support and acts as an important vehicle enue fraud. Assistance to Members with the imple- for coordinating the needs and priorities of all con- mentation and use of the WTO Agreement on Cus- cerned stakeholders. The second edition of the Mer- toms Valuation is a high priority for supporting the cator Programme Report was published in Novem- collection of essential revenues for countries. This ber 2020. It highlights some common implementa- also increases the transparency and integrity of val- tion challenges and outlines how the Programme is uation procedures, in turn supporting the transversal assisting Members in providing tailor-made solu- issues covered by SDG 16. Coordination between tions. The Report also includes a series of descriptive Customs and Taxation agencies on valuation, espe- case studies that demonstrate the connection be- cially in relation to profit shifting and transfer pricing, tween the TFA and the real-world application of has also been an area of WCO work in 2020. WCO instruments that are already delivering tangi- Revenue fraud is one field where the application of ble results in many Member administrations. The data analytics as promoted by the WCO BACUDA production of the Mercator Programme Report is project may provide major benefits. The WCO BA- based on an understanding of the importance of doc- CUDA project was launched in September 2019 as a umenting the work of the WCO and its Members in collaborative research platform focused on data an- implementing the TFA. It is engaging and reflects the alytics. The project brings together Customs officials uniqueness of the WCO and its position as the global responsible for risk management, statistics and IT centre of excellence in Customs matters. It also systems, as well as professional economists and data demonstrates the “how-to” approach that helps fur- scientists with an academic background in computer ther develop the peer-to-peer relationships within science. The project’s name is an acronym which the global Customs community that define the WCO. stands for “BAnd of CUstoms Data Analysts”. It is Continued vigorous efforts are being made by the also a Korean word that means “to change”. Indeed, WCO to support its Members with the implementa- the aim of the project is to help Customs administra- tion of Advance Ruling (AR) systems according to tions embrace analytical tools and methodologies by the standards enshrined in Article 3 of the TFA, with providing them with data analytics algorithms in a view to making international trade more certain open-source languages and facilitating change man- and predictable. The WCO and WTO standards in agement throughout the administration. that area have been harmonized in the form of tech- Apart from the direct impact in terms of making nical guidelines, and technical assistance is provided trade faster, easier and cheaper, trade facilitation re- to Members wishing to move forward with the im- forms are also positive steps towards human, enter- plementation of AR systems. prise and institutional development. They help small Furthermore, by taking strong action against com- traders, often women, enter the formal sector, make mercial fraud and tax evasion, Customs also ensures economic activities more transparent and accounta- that national governments are not deprived of criti- ble, promote good governance, generate better cal revenues necessary to fund public infrastructure quality employment, strengthen information tech- and services. 12
nology capabilities and generally modernize socie- In terms of protecting cultural heritage, the WCO ties by bringing about benefits related to administra- Cultural Heritage Programme is encouraging effec- tive efficiency. tive cooperation and partnership with other interna- tional organizations and law enforcement agencies, One of the tools often used to assist the promotion such as the International Council of Museums of trade from least developed countries is origin-spe- (ICOM), the United Nations Educational, Scientific cific trade measures. The ability of MSMEs to access and Cultural Organization (UNESCO) and INTERPOL. these measures appropriately is affected by the ease Efforts are aimed at exchanging information and pre- of compliance with and clarity of origin require- venting illegal trade in cultural heritage. To accom- ments. The WCO provides technical support and de- plish this mission, the WCO relies on the competen- velops and updates various tools, such as the update cies and day-to-day efforts of Member Customs ad- of the Comparative Study on Certification of Origin ministrations, as well as on its RILO network. in 2020, to increase the uptake of available measures and help countries continue to improve their An example of these cooperative efforts is the Cus- measures. toms Enforcement Network Communication Plat- form (CENcomm) application for electronic infor- Countries with greater institutional capacity, higher mation exchange, codenamed ARCHEO, managed by trade volumes and greater financial resources are in the WCO. In addition, the WCO Prevention of Illicit a better position to invest in reforms that make trade Trafficking of Cultural Heritage (PITCH) training and faster, easier and more transparent, while develop- operations ensure preparedness of Customs officers ing countries that invest in programmes to modern- in the cultural heritage field, often requiring long pe- ize Customs administrations and trade procedures riods of investigation and the restitution of stolen may reap the benefits of increased trade, revenue objects, as well as continuously focusing a spotlight collection and institutional development. Accord- on trafficking from countries affected by war and in- ingly, there are a number of potential virtuous cir- stability. As proof of their commitment to protect cles. cultural heritage, the WCO and INTERPOL led the Prudent policy strategies are needed to ensure even global Customs-Police Operation ATHENA II, in syn- distribution of the costs and benefits between and chronization with the Europe-focused Operation within the different players, also taking into account PANDORA IV. The Operation spanned 103 countries the need to ensure inclusive growth. and resulted in more than 19,000 archaeological ar- tefacts and other artworks being recovered. The EU-WCO Programme for HS in Africa has been working to support various stakeholders in Africa to- A thorough and robust risk management strategy wards coordinated implementation and uniform ap- that also focuses on integrating electronic pre-arrival plication of one of the fundamental trade facilitation information on passengers and goods is essential for instruments, namely the HS Convention. This Pro- effective trade facilitation and enforcement of pro- gramme promotes more efficient, transparent and hibitions and restrictions in cross-border trade, simplified trade within and to/from continental Af- where required. Several documents in the WCO Risk rica. The Programme exceeded expectations in its Management Compendium also serve this purpose. first year and offered extensive technical assistance and support to countries seeking to improve their HS implementation, including implementation of HS Ad- Protecting the Planet and ensuring vance Rulings. its sustainability for future genera- A specific point to note is that the HS 2022 specifi- cally targets SDG 11.4 with respect to the world’s cul- tions tural and natural heritage. The first significant changes to Chapter 97 of the HS were made to refine the classification of cultural and natural heritage The SDGs related to the “Planet” (SDGs 12, 13, 14, goods, including the addition of age specifications. 15, 16 and 17) address the overarching objective of These changes were made to enable better targeting of compliance efforts to ensure that shipments of such goods have valid documentation, with a view to enhancing the safeguarding of the world’s heritage. 13
WCO I CUSTOMS FOSTERING SUSTAINABILITY FOR PEOPLE, PROSPERITY AND THE PLANET protecting the Planet “so it can support the needs of controlling and, at the same time, facilitating green the present and future generations”.8 supply chains would go beyond its enforcement function at the border. Customs administrations contribute to the fight against climate change and to ensuring greater envi- In particular, plastic and e-waste have recently at- ronmental sustainability by supporting effective im- tracted a great deal of attention in international fo- plementation of various Multilateral Environmental rums, especially with reference to the environmental Agreements (MEAs)9, whose objectives include ad- crisis brought about by importations of illegal waste. dressing the illicit trade in hazardous waste and Customs administrations are experiencing increasing ozone-depleting substances, combating the illicit pressure to shape feasible solutions that ensure trade in endangered species, and preventing the compliant waste importation, while promoting ex- spread of plant and animal diseases, as well as of in- port controls on waste. In this context, the sharing vasive alien species. of information on licences and relevant documents for waste shipments by Customs and environmental This work is supported by extensive additions to the authorities, via a SWE, could be one solution for en- HS 2022 for substances regulated under the Kigali hancing collaborative efforts to control the trans- Amendments to the Montreal Protocol. The changes boundary movement of waste. to the HS 2022 go further by also including specific provisions for mixtures that contain substances reg- In relation to e-waste, the HS 2022 makes provision ulated under the Montreal Protocol. This approach for the separate classification of e-waste at the is designed to support governments with meeting global HS level for the very first time. This will create their obligations by simplifying the identification of an unprecedented level of transparency with regard legally-traded goods at the border. In addition, haz- to legal global trade in e-waste as countries imple- ardous chemicals recently added to the substances ment the HS 2022 and start reporting on trade in e- controlled under the Rotterdam Convention are waste via international classification codes. Further- named specifically in the HS 2022 to assist with their more, the WCO, through its Tariff and Trade Affairs identification at borders. Directorate, will be working with Members on devel- oping specific HS codes in support of plastic waste Within the framework of CBM, application of the management for the 2027 Edition of the HS. Guidelines included in the WCO Customs Risk Man- agement Compendium as well as other related Rec- Motivated by the need to investigate waste control ommendations10 may enable Customs administra- at borders from a Customs perspective, in December tions to play a key role in addressing the risks that 2020 the WCO published a research paper titled cross-border trade could pose to the environment. “Current situation, analysis and observations on waste control at borders by Customs” in order to Fast Customs clearance times and efficient border shed light on aspects related to the facilitation of le- management contribute to increasing the efficiency gitimate trade, while placing greater emphasis on of green supply chains. Green supply chain manage- combating the illicit waste trade. 12 ment is considered an environmental innovation in- tegrating environmental thinking into supply chain Additionally, the WCO Secretariat, through its Envi- management. It is aimed at minimizing or eliminat- ronment Programme (EP) in the Enforcement and ing waste, including hazardous waste, along the sup- Compliance Sub-Directorate, is a member of the re- ply chain.11 In this domain, the role of Customs in 8 https://unfoundation.org/blog/post/the-sustainable-development-goals-in-2019-people-planet-prosperity-in-focus/ 9 The main MEAs comprising international trade-related provisions are the following: “Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal”, “Cartagena Protocol on Biosafety to the Convention on Biological Diversity”, “Con- vention on International Trade in Endangered Species of Wild Fauna and Flora (CITES)”, “Montreal Protocol on Substances that Deplete the Ozone Layer”, “Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in Interna- tional Trade”, and “Stockholm Convention on Persistent Organic Pollutants”. 10 For example, Recommendation concerning Actions Against Cross-Border Environmental Offences. 11 Green supply chain management, environmental collaboration and sustainability performance. In Procedia CIRP (Vol. 26, pp. 695–699). Elsevier B.V. https://doi.org/10.1016/j.procir.2014.07.035. 12 Kenji Omi (December 2020) Research Paper No. 50 “Current situation, analysis and observations on waste control at borders by Cus- toms” http://www.wcoomd.org/-/media/wco/public/global/pdf/topics/research/research-paper-series/50_waste_control_at_bor- ders_by_customs_omi_en.pdf?la=en 14
cently formed Plastic Waste Partnership (PWP) un- commodities (ESCs), and ensure compliance with der the auspices of the Basel Convention. The WCO trade-related provisions stipulated by MEAs. These EP played an instrumental role during the establish- MEAs include the Basel Convention on the Control of ment of the PWP and is now leading the efforts of a Transboundary Movements of Hazardous Wastes sub-group in preparing an enforcement practice and their Disposal, and the Montreal Protocol on guide for the PWP. The role of the Customs commu- Substances that Deplete the Ozone Layer. nity is central to the discussions on this matter. The EP continues to work with PWP members on the de- Various partners rallied in support of Operation DE- velopment of a plastic waste enforcement guide. METER VI, with 73 Customs administrations joining Any WCO Member wishing to contribute to this work forces. The WCO Secretariat, the RILOs for Asia/Pa- is invited to contact the EP. cific and Western Europe, and China Customs all played leading roles in the Operation, establishing The Asia Pacific Plastic Waste Border Management the Operational Coordination Unit in the Asia/Pacific Project, implemented under the auspices of the RILO based in Seoul, Republic of Korea. OLAF also Green Customs Initiative, is aimed at strengthening supported the Operation by assisting WCO Members the capacity of Customs administrations to mitigate with enhanced information on risks. and appropriately respond to environmental threats in the Asia/Pacific region. Particular focus is placed Almost 99,000 tonnes of waste and an additional on the implementation of the Basel Convention, and 78,000 pieces of waste materials (not weighed), as specifically on matters related to plastic waste and well as approximately 42 tonnes of substances con- the illegal shipment thereof. The Project is anchored trolled by the Montreal Protocol were seized during within the EP, with three Asia/Pacific countries iden- the Operation. Five countries reported most of the tified as beneficiaries. seizures of waste products, namely Belgium, Canada, China, Poland and Denmark, while most of the sei- Through its EP, the WCO has joined the Basel Con- zures of substances controlled by the Montreal Pro- vention’s Environmental Network for Optimizing tocol were performed in Bulgaria, Croatia, Denmark Regulatory Compliance on Illegal Traffic (ENFORCE). and Poland. The mission of ENFORCE is, by means of a network of relevant experts, to promote Parties’ compliance The WCO, through its EP, is a member of the Inter- with the provisions of the Basel Convention on the national Consortium on Combating Wildlife Crime Control of Transboundary Movements of Hazardous (ICCWC). The ICCWC is a collaborative effort by five Wastes and their Disposal pertaining to preventing intergovernmental organizations working to offer and combating illegal traffic in hazardous wastes and coordinated support to national wildlife law enforce- other wastes through better implementation and en- ment agencies and to sub-regional and regional net- forcement of national law. The Network aims to works that, on a daily basis, act in defence of natural bring together existing resources and enhance coop- resources. Under the auspices of the ICCWC, various eration and coordination between relevant entities, training and enforcement activities in support of with a specific mandate to deliver capacity-building Customs administrations have been undertaken to activities and tools on preventing and combating il- address enforcement-related risks along the entire legal trafficking. supply chain. By becoming a member of ENFORCE in 2020, the EP Under the EP’s INAMA Project, a risk management has consolidated WCO efforts to combat illegal traf- project was instituted regarding illegal wildlife trade fic in hazardous wastes. As a member of ENFORCE, in three key countries in Africa and Asia. Further- various initiatives will be implemented in coopera- more, enforcement activities in 13 countries have tion with other ENFORCE partners, subject to fund- been linked together, thus considerably strengthen- ing. These will include technical and enforcement ing Customs’ capacity to contribute to sustainability. capacity building and training, as well as the planning The WCO, in collaboration with INTERPOL, jointly or- and execution of small-scale enforcement opera- ganized Operation THUNDER 2020: a global enforce- tions. ment operation targeting the illegal trade in wildlife Operation DEMETER VI, which focused on thwarting and timber, conducted from 14 September to 11 Oc- transboundary shipments of illegal waste and ozone- tober 2020. The Operation aimed to disrupt and dis- depleting substances, was also set in motion through mantle the criminal networks behind illegal wildlife the EP. In their capacity as the principal regulatory trade (IWT). This includes trade in protected species border agency, Customs administrations around the of fauna and flora regulated under the CITES Conven- world are mandated to monitor and control cross- tion. The focus of this intelligence-led Operation tar- border movements of environmentally sensitive 15
WCO I CUSTOMS FOSTERING SUSTAINABILITY FOR PEOPLE, PROSPERITY AND THE PLANET geting specific criminal groups was to integrate en- ing crucial, along with the harmonization and simpli- forcement activities across various international or- fication of Customs procedures for trade facilitation ganizations and their members, by conducting sei- purposes. zures and making arrests, followed through by inves- tigations and subsequent prosecutions. A third field is related to the urgent need to move towards Digital Customs, as the COVID-19 crisis has In preparation for Operation THUNDER 2020, aimed highlighted some of the positive outcomes of paper- at combating illegal trade in wildlife and forestry less trade and teleworking not only as a business products, a total of 36 webinars were delivered and continuity solution but also in terms of a temporary 97 frontline Customs officers in 26 beneficiary coun- reduction in daily global CO2 emissions. Leveraging tries received training. digitalization as a response to the COVID-19 crisis has also proven that the use of available technologies is Some 103 countries participated in Operation Thun- a crucial factor for ensuring efficient CBM mecha- der 2020, including 65 Customs administrations. nisms and maximizing social distancing to protect Preliminary results show that 2,082 seizures of wild- People during a pandemic. life and forestry products were made and 699 of- fenders apprehended. A fourth field concerns attitudes towards uncer- tainty, as well as the perception of vulnerability to- Furthermore, to simplify and modernize procedures, wards threats and the need to tackle risks in a sys- improvements to the CEN Fauna- and Flora-related tematic manner throughout organizations. commodities were made, and include an update of the list of species protected under CITES and the ad- In this framework, enhanced risk management as dition of more fields to the seizure reporting form to well as collaboration and data-sharing with public facilitate data input. In addition, the mapping of and private stakeholders at borders are key factors Fauna and Flora historical data is under way. not only for consistent responses and sustainable policies but also in the interests of business continu- Additionally, Customs, together with other border ity and appropriate risk management in the post- agencies, has a mandate to facilitate “perishable pandemic world. shipments” (Article 7.9 of the TFA) to prevent avoid- able loss or deterioration of perishable goods, and to In this respect, the WCO CBM approach as well as the ensure that all regulatory requirements have been three-pillar strategy of the WCO SAFE FoS are in- met. creasingly relevant, paving the way for Customs-to- Customs network arrangements, Customs-to-Busi- ness partnerships and Customs-to-Other Govern- ment Agencies cooperation. Conclusions The WCO Customs Environmental Scan 2019 high- lighted the fact that the spread of COVID-19 and the much-needed internationally coordinated responses The COVID-19 crisis is likely to have long-lasting ef- clearly demonstrate that global crises require global fects on People, Prosperity and the Planet. answers. The pandemic’s long shadows may fall on several To this end, the WCO will pursue and strengthen its fields requiring an appropriate regulatory response partnerships with other international organizations before longer-term effects take root. on very tangible aspects of operational coordination following the positive developments already noted One of these fields is E-Commerce, in which the ex- with, for instance, the UNODC in the context of the periences emerging from the COVID-19 crisis could CCP. provide a further incentive to promote certainty, predictability, transparency, safety, security and effi- In a scenario marked by global Interconnections and ciency in the E-Commerce supply chain. unpredictable patterns of risk transmission, coupling sustainability and resilience could prove to be an en- Another field is regional integration, which is emerg- abling factor for an appropriate systemic response to ing as a growth determinant and critical factor for and recovery from crises. Against this background, ensuring economic recovery in the post-COVID era. the WCO remains strongly committed to tackling In this context, connectivity, interoperability, sustainability-related challenges, selecting as its strengthened Customs-to-Customs cooperation and theme for 2021: “Customs Bolstering Recovery, Re- international cooperation mechanisms are becom- newal and Resilience for a sustainable supply chain”. 16
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