WCO news Council 2019 Risk management and technology E-commerce and security - n 90 | October 2019 - World Customs Organization
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WCO news n°90 | October 2019 Council 2019 Risk management and technology E-commerce and security … World Customs Organization mag.wcoomd.org
I.T SOLUTION
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HIGHLIGHTS WCO news n° 90 October 2019 3
5 FLASH INFO 44 PANORAMA Botswana
The WCO nCEN transitions to a comprehensive
Programme is taking national trade platform
Customs by storm
50 PANORAMA
Lithuania’s experience in controlling dual-use goods
65 POINT OF VIEW E-commerce 71 POINT OF VIEW
security and safety concerns Why investing in
require forceful action leadership should be a
priority
TABLE OF CONTENTS
5 FLASH INFO
5 From the WCO drawing board to Customs strategic
plans: is the nCEN Programme taking Customs by
storm?
7 UNODC-WCO Container Control Programme: 15
years old and still going strong
10 WCO Data Model: understanding the WCO’s key
data harmonization and standardization tool for
cross-border regulatory processes
12 DOSSIER
14 Reflections on WCO Members’ priorities
20 Tariff and Trade Affairs
25 Procedures and Facilitation
30 Capacity Building
33 Compliance and Enforcement
41 Elections: a new Council Chairperson and two new
Directors
42 PANORAMA
42 Dubai Customs uses artificial intelligence to boost
productivity
44 Botswana’s perspective on ensuring business
continuity when transitioning from its Customs IT
system to a more comprehensive national trade
platform
50 Controlling dual-use goods in a transit country:
Lithuania’s experience
55 Russian businesses commit to creating a better trade Editor / Writer Laure Tempier
environment Editorial Consultant Grant Busby
58 GTAS implementation: an historic milestone for the Publication Assistant Sylvie Degryse
Online subscriptions
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61 Saudi Arabia engages cross-border trade boosters Advertising
65 POINT OF VIEW
Bernard Bessis bernard.bessis@bb-communication.com
65 E-commerce security and safety concerns require
Publisher
forceful action World Customs Organization
Rue du Marché, 30, B-1210 Brussels, Belgium
71 Investing in leadership should be an unwavering Tel.: +32 (0)2 209 94 41 - Fax: +32 (0)2 209 92 62
communication@wcoomd.org
priority for all Customs administrations www.wcoomd.org
74 Perspective on risk management systems for Editorial note
Customs administrations WCO News is distributed free of charge in English and in French to Customs
administrations, international organizations, non-governmental organizations, the business
community, and other interested readers. Opinions expressed in WCO News are those
81 EVENTS of the contributors and do not necessarily reflect the official views of the World Customs
Organization. Contributions in English or French are welcome, but should be submitted no
81 Key points from the WCO’s newly-launched later than 13 December 2019 for consideration. The WCO reserves the right to publish,
not to publish, or to edit articles to ensure their conformity with the magazine’s editorial
technology event policy and style. The WCO Communications Service is available to answer all requests for
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87 Calendar of Events Please email communication@wcoomd.org.
Copyright © World Customs Organization
All rights reserved. Requests and enquiries concerning translation, reproduction and
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Acknowledgements The Editorial Team wishes to express its sincere thanks to all who
contributed to this publication.
Illustrations Our thanks also extend to all who provided photos, logos and drawings to
illustrate this issue.
Photo cover © Sudan Customs
Design www.inextremis.be - mp6113
FLASH INFO WCO news n° 90 October 2019 5
From the WCO drawing board to Customs
strategic plans: is the nCEN Programme
taking Customs by storm?
© AdobeStock
By Iwona Sawicka, CEN Programme, WCO
When it all began, in 2013, the National Customs With the first version of the nCEN, the focus was
Enforcement Network (nCEN) application was primarily on data collection for risk management.
only used in one country which needed a tool As the user base grew and more countries
to collect, store, analyse, and disseminate law began using the application, the communication
enforcement information efficiently in order component called Icomm was improved to allow
to establish robust intelligence capabilities. In for simpler and more comprehensive data
the first year after its release, eight countries exchange between Customs administrations.
began using the application, and, as time went
on, others followed suit. Today, nCEN has been Today, the interest of enforcement officers in
deployed in 35 Customs administrations, and the nCEN goes beyond risk analysis, towards
concrete plans are in place to increase this profiling and targeting of suspects, companies,
number to 50 by the end of 2020. or means of conveyance. The latest version of
the nCEN, soon to be released, contains basic
The fast growth in the number of nCEN data analytics functionality such as automated
countries is, in large part, due to the generous searches on new data, and matching rules that
funding provided to the WCO from several allow users to identify connections between
donor countries. Indeed, the WCO offers the data elements in the application. New versions
nCEN software to its Members free of charge, of the nCEN are released to nCEN countries
but does not cover the purchase of the hardware periodically through an automated update
needed to run the nCEN application, the costs manager component in the application.
associated with training, and the costs related to
modifications of local IT infrastructure, which is Discussions are underway to further expand
sometimes necessary. the functionality of the nCEN to meet the
expectations of Customs administrations
Donors’ funding also enables the WCO to and the broader enforcement community, by
make important functionality enhancements reevaluating and standardizing the current ways
to the application. The continued success of of collecting data on suspects and offenders, and
the nCEN Programme is largely dependent on creating an additional “persons” database.
these donations, especially taking into account
the long list of candidate countries in need of Data transfer between the three applications
such support. which form the CEN Suite - the CEN, CENcomm,
6 Flash info
and the nCEN - has also been made easier. Aware cooperation structures that enable nCEN users
that data collected by different systems cannot to exchange best practices and experiences,
be easily integrated, often lacking variables for and discuss functionality enhancements to the
matching across systems, the WCO has been application.
investing in making the CEN Suite increasingly
interoperable. Regional meetings on nCEN matters now take
place in East and Southern Africa and in Asia/
The latest version of CENcomm, also to be Pacific, and the Global nCEN Network keeps
released shortly, enables seizure data collected growing in importance as more countries
during Customs operations to be transferred to implement the application. The nCEN is also
the nCEN at a push of a button, while the third being integrated into the strategic plans of
party connection feature in the CEN and the its user administrations, a much needed step
nCEN makes it possible to feed seizure data in order to guarantee an adequate level of
automatically to those applications from existing support for the growth and strengthening of the
national systems. implementation programme at the national level.
Although it was designed as part of a connected In conclusion, is the nCEN taking Customs by
and interoperable CEN Suite, the nCEN is, in storm? From one pilot country to 35 countries,
fact, an application that is composed of a set and soon 50! The numbers speak for themselves.
of independent modules, which can be utilized
in combination or separately, depending on More information
the operational or legislative needs of the ncen@wcoomd.org
implementing Customs administration.
While in certain administrations the nCEN is
proving to be an effective tool for communication About the CEN Suite
between local stakeholders (other enforcement
agencies and other services) and information The Suite includes three stand-alone applications:
sharing for the purpose of training, others Customs Enforcement Network (CEN), a web platform that
appreciate the tool’s workflow management acts as a depository of enforcement-related information,
features and its structured communication which analysts can mine to produce valuable analysis
relating to the investigation process or post- and intelligence. At its core is a database of seizures and
seizure action items. offences as well as pictures. Its value rests squarely on the
steady flow of quality data provided by all WCO Members.
Moreover, recent deployments of the application
in Customs administrations already possessing National CEN (nCEN), an application that gives Customs
centralized systems for enforcement data show the ability to collect, store, analyse, and disseminate
that the nCEN can be instrumental in setting up law enforcement data effectively. It consists of three
cooperation mechanisms at the regional level or independent databases. The principal database of national
beyond, as all users of the application form part seizures and offences comprises data required for analysis,
of a Global nCEN Network. as well as means of conveyance, routes, and the possibility
to view photos depicting exceptional concealment methods.
Despite the availability of the nCEN in multiple Two supplementary databases contain information on
language versions, the connection between suspect persons, methods of conveyance and business
users is facilitated by a rigid data model, enabling entities of interest to Customs, thereby facilitating a
the structured translation of labels and data structured investigation process.
lists. This, in turn, allows for the breakdown CEN communication platform (CENcomm), a web-based
of language barriers and easier conversion communication system permitting a closed user group
between the different nCEN language versions. of officers to exchange information, in real time, for the
duration of an enforcement operation or project. Information
The technological advancements of the nCEN reporting can be standardized with the use of templates,
have been driven directly by its users. With a which can be customized to only include data fields that are
growing number of deployments, the WCO pertinent to a specific operation.
has been facilitating the creation of regional
WCO news n° 90 October 2019 7
UNODC-WCO Container Control
Programme: 15 years old and still
going strong
By Norbert Steilen, CCP Coordinator, WCO
Identifying shipments containing prohibited or
smuggled goods is somewhat like searching for
the proverbial “needle in a haystack” for Customs
officers. Let’s keep this image in mind: modern
container ships are like massive “haystacks,”
each carrying up to 20,000 containers. It’s the
same with planes: while the volume of goods
they carry is less impressive, it is still substantial,
and the rise of e-commerce has generated
fleets of all-cargo aircraft carrying thousands
of individual parcels across the globe.
Aware of these challenges, the WCO and the
United Nations Office on Drugs and Crime
(UNODC) agreed 15 years ago, in 2004, to
launch a joint programme to deal with illicit
goods being transported in sea containers.
This saw the birth of the Container Control
Programme (CCP). The programme aims at
establishing and training dedicated Port Control
Units (PCUs) and Air Cargo Control Units
(ACCUs) at key seaports and airports, and to
improve their risk analysis capacity, enabling
them to efficiently control trade operations with
minimum disruption.
PCUs and ACCUs are “joint units” gathering
Customs officers and other national law
enforcement personnel, such as the police, the
drug enforcement agency, the environmental
agency, and the air security agency. The
composition of these units is a national decision.
If the legal tasks of participating authorities are
not merged, the fact that they are gathered into
a single unit and follow the same training enables
an inclusive analysis of risk, which increases the
Elephant tusks concealed
detection of illicit goods, be it drugs, strategic in sawdust were
goods, high excise products, protected timber discovered by officers
or endangered wildlife, and even stolen motor working at the Port Control
vehicles. Unit in Vietnam
8 Flash info
Training delivery and gender months with each PCU or ACCU to evaluate
mainstreaming their working methods, provide advice, retrain All training
them, if necessary, and document what is courses address
At the outset, the two Organizations adopted happening with the unit for report-back to the
a staged approach in the way they delivered programme management team. the risks
the programme. Activities are organized over a associated with
period of at least three years in stages, referred Moreover, a national Steering Committee in
to as the “crawl-walk-run” approach. While charge of monitoring their work meets regularly,
“insider threats”
the WCO focuses on delivering specialized and external assessments are conducted at as well as the
training to the units’ members, the UNODC midterm level. If the number of cases managed infiltration of
manages other aspects that include ensuring or initiated by the units is an indicator of their
funding, political support and preparing the pre- performance, it is not the only one. Also taken port and airport
deployment phase as well as maintaining close into account are the modus operandi put in infrastructure
contacts with participating countries. place, the level of exchange of information, and
by criminal
the motivation and skills of the team.
Full-time experienced trainers work for the syndicates. To
programme. Training starts with two basic Given the high focus now placed on gender combat these
courses to ensure members of the newly mainstreaming, an internationally embraced
formed teams have the necessary theoretical strategy to ensure gender equality, the “CCP issues of crucial
and practical knowledge, and then continues Women’s Network” was launched, in 2015, to importance, the
with regular specialized courses on precursor promote the role of women in the CCP and, units are always
chemicals, strategic trade goods, endangered more generally, in law enforcement activities. To
species, evidence handling, and other topics boost this decision, gender sensitization training strongly
specific to the challenges in a particular country. modules have been integrated into the training encouraged to
portfolio.
Safety and Security are also high on the CCP’s hold regular
agenda. Cooperation with the International Instruments and tools meetings with
Civil Aviation Organization (ICAO) enabled air
cargo security to be embedded into the training In terms of tools, the “ContainerComm” and
the private
curricula and ACCU staff to be sensitized on the “AirCargoComm” communication platforms sector.
critical elements to watch out for, in order to provided by the WCO enable PCUs and ACCUs
ensure the integrity of air transport. to exchange information on seizures made,
on suspicious shipments or on any analysis
All training courses address the risks associated undertaken so that they can update their
with “insider threats” as well as the infiltration national risk profiles on concealments, modus
of port and airport infrastructure by well- operandi, and smuggling routes.
organized criminal syndicates. To combat these
issues of crucial importance, the units are always Currently, ports and airports in more than
strongly encouraged to hold regular meetings 100 countries, including small islands as well
with the private sector, in particular, terminal as countries participating in the programme
freight forwarders and operators as well as as mentors or partners, have access to the
shipping line representatives. WCO’s communication platforms, creating a
large community of professionals. Some units
Study visits to other ports or airports are also also have access to the WCO Cargo Targeting
organized to familiarize the newly trained System (CTS), an IT system that enables users
officers with the working methodologies applied to capture advance electronic cargo manifest
elsewhere, and to enable them to establish information, and to perform risk assessment,
personal contacts with their fellow colleagues profiling, and targeting.
abroad. Each CCP training event is evaluated
by the participants, which enables the trainers All these elements, such as the use of pre-
to measure their performance and, if necessary, arrival data for risk management purposes,
adapt the methodology. Support is also provided regular meetings with private sector entities,
through mentoring: each CCP trainer acts as a Customs-to- Customs cooperation, are
mentor, spending a few days every two to three embedded in WCO instruments, in particular
WCO news n° 90 October 2019 9
the Risk Management Compendium and the
SAFE Framework of Standards to Secure and
Facilitate Global Trade.
Shortfalls and challenges
Of course, the implementation of a complex
programme such as the CCP does not go without
shortfalls and challenges. These range from poor
support from management and even isolation
of the PCUs and ACCUs, frequent rotation of
the units’ staff, to long-winded decision-making
processes, and a lack of adequate legislation.
Staff attached to PCUs and ACCUs have also
been threatened by criminal syndicates.
However, the WCO and the UNODC believe
in the value of the programme, and try to work
with each participating country in a flexible
manner, adapting to local situations and needs,
and keeping the momentum going. This is
evidenced by the recent focus on illicit trade in
timber in several Latin American and Southeast
Asian countries, and on illicit shipments of waste
and abandoned containers.
Members of the Port
The CCP is now 15 years old, and is one of the
Control Unit at Cebu in
Successes and thanks WCO’s longest-running programmes. Such
the Philippines attend a
longevity would not be possible without the
training session
Today, 53 countries participate in the programme generous financial support of the international
with more than 110 units established. The donor community, and the in-kind contributions
figures that follow demonstrate the successes of numerous WCO Members who have provided
of the CCP. Different PCUs and ACCUs have training experts and made facilities available.
identified and detained over:
The WCO and the UNODC Secretariats will
• 319 tons of cocaine; continue striving to keep the programme
• 6.5 tons of heroin; dynamic and responsive to both the needs of its
• 71 tons of cannabis; participating members and society, and would
• 1.7 million tons of precursor chemicals; like to thank the men and women working in
• 903 consignments of counterfeit goods; or with the programme, who day-after-day
• 1.9 billion cigarettes; demonstrate their commitment to safeguarding
• 98 shipments of strategic trade goods; the nations of the world.
• 183 shipments of illegal items infringing
environment related regulations. More information
CCP Annual Report
http://www.wcoomd.org/
10 Flash info
WCO Data Model: understanding the
WCO’s key data harmonization and
standardization tool for cross-border
regulatory processes
By the WCO Secretariat
The availability of quality and timely electronic Currently, the WCO DM contains 727
data in a standardized and harmonized manner data elements that support different data The WCO
underpins the effective use of information and requirements for various Customs and continuously
communication technologies (ICT) for modern border regulatory processes and systems,
border procedures. Some of the common including the Single Window environment. It examines data
challenges relating to data requirements is a comprehensive technical dataset that is requirements
for various Customs and border clearance dynamically updated through an established
processes include redundancy, proprietary Data Maintenance Request (DMR) mechanism
for new business
or bespoke standards, poor structure and to meet new and emerging requirements. processes. This
definition, and fragmented or excessive data includes the
requirements. The WCO DM does not stand in isolation, and
it should be seen in the context of a specific standardization
To that end, the WCO Data Model (DM) has been business process such as import, export, and
developed as a compilation of clearly structured, transit, e-certification, a security programme,
harmonization
harmonized, standardized and reusable sets of and e-commerce. It is closely linked with, and
data definitions and electronic messages, to supports, other WCO instrument and tools for of data elements
meet operational and legal requirements of fulfilling data requirements under respective in the area of
cross-border regulatory agencies, including instruments and related business processes.
Customs, which are responsible for border e-commerce,
management. As a global standard, the WCO Normally, the WCO body responsible for with regard to
DM has been organized in such a way that managing an instrument/tool on a specific topic which a policy
the complex nature of the data requirements determines the data elements based on policy
for various cross-border procedures could imperatives and business needs. Afterwards, dataset is
be developed and understood in a simple, those data elements are mapped to the WCO currently being
consistent and harmonized manner. DM or a subset thereof to help translate the
policy dataset into a technical standard to enable
developed.
The WCO DM also includes Information seamless data exchange. In cases where some
Packages, which are subsets of the Model that of the data elements, which may be required
act as standard templates linked to a particular for an existing or new business process, are not
policy/legal requirement and business process, already available in the WCO DM, they can be
such as the cargo declaration, the goods added to the Model through the established
declaration, conveyance reporting, licences/ DMR mechanism.
permits, and certificates. The Information
Package concept enables WCO Members to A non-exhaustive list that describes the
select and focus on a particular subset of the relationship between the WCO DM and
WCO DM that fits the purpose for a specific other policy datasets is outlined in the table
regulatory procedure, by deriving pertinent accompanying this article.
Information Package and translating it into a My
Information Package (MIP), namely the national
implementation of the WCO DM Information
Package.WCO news n° 90 October 2019 11
Relationship between the WCO Data Model and other datasets contained in international
instruments
Dataset Instruments and Main Topic WCO DM Equivalent
Tools
Pre-loading advance SAFE Framework of PLACI dataset for PLACI Derived
cargo information (PLACI) Standards air cargo security Information
7+1 dataset (Annex III to Package (DIP)
the SAFE Framework of
Standards)
SAFE Advance Electronic SAFE Framework of Pre-loading/pre- AEI DIP
Information (AEI) Dataset Standards arrival advance
(Annex II to the SAFE electronic data
Framework of Standards) for supply chain
security
Immediate Release Immediate Release Simplified data IRG DIP
Dataset Guidelines (IRG) requirements for
immediate release/
clearance
CN 22/23 dataset WCO-UPU Postal Simplified and UPU DIP
Customs Guide harmonized dataset
for postal items
Advance Passenger WCO/IATA/ICAO API Advance API DIP
Information (API) Guidelines passenger data
for facilitation and
control
International Maritime IMO Compendium Standardized IMO FAL DIP
Organization (IMO) for Electronic dataset for ship
Facilitation (FAL) Forms Business reporting
The relationship between the WCO DM and regard to which a policy dataset is still being
other policy datasets for specific business developed by the relevant working bodies.
domains ensures that further development and Once this exercise is completed and endorsed
maintenance of the Model as an international by the WCO Council, the identified dataset will
technical standard are in line with, and driven be mapped to, and incorporated into, the WCO
by, respective business needs and requirements. DM, potentially as a new DIP.
In addition, it helps ensure that all datasets
developed and maintained by different working E-learning courses have been developed.
bodies are aligned with each other, specifically Customs officers may access them via the
when the same data elements are used/reused CLiKC! Platform, and trade professionals via
in different policy datasets. the WCO Academy. Customs officers who
wish to acquire more in-depth knowledge
The WCO, through its different working bodies, about, and contribute to, the WCO DM should
continuously examines data requirements also consider attending the DMPT meetings and
for new business processes. This includes the workshops that are organized from time to time.
standardization and harmonization of data
elements in the area of e-commerce, with More information
facilitation@wcoomd.org12 DOSSIER
Council 2019WCO news n° 90 October 2019 13 Directors General of Customs gathered at WCO Headquarters from 27 to 29 June 2019, as part of the annual Council Sessions, to consider and endorse the enormous amount of work done by the Organization from July 2018 to June 2019, and to provide strategic direction as well as chart the way forward in the months ahead. This dossier touches on the WCO's main areas of work – compliance, facilitation, tariff and trade affairs, and capacity building – during the period under review, and presents the progress made and initiatives taken in each of these areas, including interesting events that occurred during the Council Sessions.
14 Dossier
Reflections on WCO Members’
priorities
By Kunio Mikuriya, Secretary General, World Customs Organization
At the 2019 WCO Council Sessions, Members I am also pleased to announce that, thanks to The WCO has
endorsed a new Strategic Plan for the 2019- the work of major non-intrusive inspection embarked on the
2022 period, comprising nine priorities that the (NII) industry players, a new standard has come
WCO Secretariat should focus on: Coordinated into being this year for X-ray files generated development of a
Border Management, Safety and Security, the by NII devices. Known as the Unified File “Single Window
Revised Kyoto Convention, E-Commerce, the Format (UFF), it will significantly facilitate the
Harmonized System, the Capacity Building interoperability of NII equipment supplied
Study Report,”
Strategy, Performance Measurement, Integrity, by different manufacturers, and improve which presents the
and Digital Customs and Data Analytics. In this the exchange of images within and between findings drawn from
article, I will take up each of these topics in turn, Customs administrations, as well as between
explaining what we have recently done in these Customs administrations and other agencies. It a survey among its
areas, and what is yet to come. is now crucial for WCO Members to start using Members, including
this standard by requiring their suppliers to
existing typologies
Coordinated Border Management deploy the UFF on equipment in use, if possible,
and to add the specifications of UFF 2.0 in and models, and
A key enabler of coordinated border their tender documents for the procurement which addresses
management (CBM) is connectivity, supported of NII systems. Ways to enhance the standard
by the establishment of IT platforms that create have been discussed, but developments in this interoperability
a one-stop shop for trade and which can be regard will largely depend on the extent that the issues as well as the
linked across borders. These platforms can take recently adopted version is used. impact of the latest
different names and forms. We call them Single
Window environments. The WCO “Single Digital collaboration requires underlying technologies and
Window Compendium” provides guidance on cooperation mechanisms to be in place between analytical tools on
what such environments should look like and Customs and other agencies. In this regard,
how they should operate. the WCO continues to work on developing
this environment
guidance material for strengthening institutional and its evolution.
Given the high uptake of Single Windows cooperation. Handbooks have been published
around the world, the WCO has embarked on on the establishment of coordination and
the development of a “Single Window Study cooperation mechanisms between Customs and
Report,” which presents the findings drawn tax administrations as well as between Customs
from a survey among its Members, including and the police. A new handbook focusing on
existing typologies and models, and which cooperation between Customs and financial
addresses interoperability issues as well as the intelligence units is currently being developed,
impact of the latest technologies and analytical and will be submitted for consideration and
tools on this environment and its evolution. adoption in June 2020.
Moreover, to enable data harmonization Safety and Security
and digital collaboration at the national
and international level, which supports the The WCO continues to offer assistance as
development of Single Window environments, part of its Security Programme in five domains:
the WCO continues to expand its Data Model passenger controls; the fight against chemicals
so that it covers more and more border and components that could be used in the
regulatory requirements. The continuing manufacture of improvised explosive devices
uptake of the Model by WCO Members is a (IEDs); strategic trade Controls; the fight against
gratifying development. trafficking in small arms and light weaponsWCO news n° 90 October 2019 15
(SALW); and terrorist financing. We will have a other things, the possible standardization of data
chance to review progress in these areas at the for maritime passengers.
second WCO Security Conference, which will
take place in mid-December 2019. I would like to highlight the launch of a new
project, called COLIBRI. The project focuses
Interesting developments in the area of on general aviation, a sector that is not very
passenger controls are taking place, beginning well controlled, along the cocaine route. It has
with the first deployments of the Global Travel a capacity building component as well as an IT
Assessment System (GTAS), an application that component, which is very promising.
enables advance passenger information (API)
and passenger name record (PNR) data to be I am also glad that the WCO Counterfeiting and
collected, visualized, and analysed. Piracy Group (CAP) agreed on new terms of
reference, enabling the Group to provide more
With the GTAS in place, the WCO Secretariat effective assistance and support to the work
can now not only continue to promote and of the Secretariat in developing relevant, non-
maintain API and PNR standards, but also binding tools and guidance material to respond
answer requests from administrations that do to emerging risks, and WCO Members’ needs
not have the internal capacity to develop their to enhance their capacity in the fight against
own in-house system, but want to start using counterfeiting and piracy.
such data. For information, the GTAS is open
source and free. The system was very recently The WCO Secretariat is also exploring ways
deployed in the Maldives, who share their to be more active in the protection of the
experience in this edition of the magazine. environment. The Contracting Parties to the
Basel, Rotterdam and Stockholm Conventions
The WCO is also taking up the issue of passenger (three multilateral environmental agreements
control in the maritime environment, primarily dealing, respectively, with hazardous wastes,
focusing on cruise ships and exploring, among hazardous chemicals and pesticides, and16 Dossier
persistent organic pollutants), which met in Moreover, discussions are ongoing as to
April 2019, highlighted the role of Customs how to review this critical instrument, with
while reaffirming the need to cooperate with particular attention being given to Specific
the WCO to ensure compliance with the three Annex D and K, dealing respectively with
Agreements’ provisions. free zones and rules of origin. To support the
WCO Working Group on the Comprehensive
In the above regard, the WCO is currently Review of the Revised Kyoto Convention
preparing a fifth edition of the enforcement (WGRKC), the Secretariat has undertaken
operation codenamed DEMETER, and I hope research on special Customs zones/free zones
that all Customs administrations will, once again, (SCZs).
join together to demonstrate their commitment
to fighting illegal waste trafficking. In the above regard, existing literature was
reviewed, and throughout 2018 and early
Indeed, enforcement operations enable us to 2019, a series of regional workshops were
keep law enforcement efforts going and to obtain held to encourage discussions on SCZs
seizure reports from Customs administrations, among WCO Members. In parallel, fieldwork
which are then fed into the WCO Customs was undertaken in 11 countries. Using the
Enforcement Network (CEN). However, the knowledge gained through these activities, a
amount of data collected during the course of an research paper was produced to provide an
operation is obviously not enough to gain a really analysis of the current situation surrounding
good picture of this trade, and merely provides such zones, and will hopefully be followed by
a snapshot of what is happening on the ground. a guidebook in the coming months.
With the above in mind, I would like to, once E-Commerce
again, remind WCO Members of the importance
of sharing enforcement data through the CEN, In June 2018, the WCO adopted the “Framework
as we need global comprehensive data to fully of Standards on Cross-Border E-Commerce” to
understand the illicit trade phenomenon. Indeed, assist its Members in developing or enhancing
with such information, we will be able to better strategic and operational frameworks for
our efforts in targeting those involved in these e-commerce. This year, the WCO Council
nefarious activities that poison the international endorsed technical specifications relating to
trade supply chain. the Framework, as well as other guidance
material that further enriches the instrument
Of course, it is also critical, in general, to such as definitions of certain terms used in the
collect and analyse data to enable effective Framework, flow charts, business models, and
risk analysis and efficient intelligence-based case studies. An implementation strategy, an
controls. Here, I might add that I am glad to see action plan, and a capacity mechanism aimed
that more and more Customs administrations at ensuring the widespread adoption and
are implementing the National Customs implementation of the Framework were also
Enforcement Network (nCEN), another adopted.
critical tool that the WCO provides to its
Members free of costs. All the above-mentioned documents have
been brought together in a WCO E-Commerce
Revised Kyoto Convention Package, a living document that will be regularly
maintained and updated. In addition, work on a
The revised International Convention on the reference data set for e-commerce, revenue
Simplification and Harmonization of Customs collection approaches, and the roles and
Procedures (Revised Kyoto Convention responsibilities of e-commerce stakeholders
or RKC), which was adopted in 1999 and will continue, and documents related to these
entered into force in 2006, currently has areas will be submitted to the WCO Council in
120 Contracting Parties. The WCO continues June 2020.
to provide assistance to its Members, and
especially Small Island Economies, to ratify The Framework places emphasis on advance
the Convention. electronic data for pre-arrival risk assessment.WCO news n° 90 October 2019 17
For the past 20 years, the WCO has been Capacity Building Strategy
advocating for a move towards a paperless
environment for traditional trade. The same WCO Members have requested the Secretariat
should apply to e-commerce. Express carriers to review its Capacity Building Strategy and
are largely providing advance electronic data as the management of experts, in order to ensure
recommended in the Framework of Standards, that the strategy has a clearly defined future
enabling Customs to conduct risk assessments in direction, and that it improves the delivery of all
advance. However, postal operators are lagging WCO capacity building activities. Among other
behind, although progress has been made in things, it has been decided to create a pool of
some countries with support being provided by experts on every topic on which the Secretariat
the WCO and the Universal Postal Union (UPU). provides technical assistance in each
WCO region.
Over the past few months, the WCO and the The 2022 edition of the
UPU have worked together to develop additional More than 600 capacity building Harmonized System
guidance on the exchange of advance electronic activities were delivered from July 2018
data, including data capture and data quality, to June 2019, and detailed information has been adopted and
as well as the associated legal and operational on these activities has been made will enter into force on
frameworks. This resulted in the “Joint WCO available in the WCO Capacity Building
UPU Guidelines on Exchange of Electronic Progress Report. This year, the WCO
1 January 2022 for
Advance Data between Posts and Customs,” Secretariat also published the Mercator all Contracting Parties
which the WCO Council adopted in June 2019. Programme Report, which presents to the HS Convention,
activities undertaken since the launch
The WCO and the UPU also continue to support of this key programme five years ago. numbering 158 at the
Customs and Posts in the implementation end of September 2019.
of electronic advance data, and on the Performance Measurement
implementation of the Customs Declaration
System (CDS), which was developed by the The WCO Council adopted the terms
UPU’s Postal Technology Centre. of reference of the Working Group
on Per formance Measurement
Harmonized System (WGPM) whose role is to develop a
new mechanism to measure Customs
The 2022 edition of the Harmonized System performance. The Group will meet in the coming
or HS has been adopted by the WCO Council weeks, and I invite all administrations to join it.
and will enter into force on 1 January 2022 for Wide participation in WCO working bodies
all Contracting Parties to the HS Convention, leads to more comprehensive outcomes, a point
numbering 158 at the end of September 2019. which I cannot stress enough.
Of course, I sincerely hope that this new version
of the HS will be implemented diligently by all HS Moreover, the WCO Secretariat has also been
Contracting Parties. looking at the methodology used by other
international organizations, including the World
The potential for a strategic review of the HS was Bank and its Doing Business team with whom
raised with the WCO Policy Commission, leading it continues a dialogue, in order to convey the
to a Conference on the review of the HS being views of Customs, as well as those of the WCO
held in May 2019. After reporting the discussions Private Sector Consultative Group (PSCG), in
back to the Commission, the Secretariat has an effort to improve the methodology. It also
been tasked to prepare a business case, for engaged with the World Bank to improve the
submission to the WCO Finance Committee WCO Time Release Study, a key performance
in the first instance, covering the scope of a indicator tool.
possible review, the initial impact and feasibility
studies, possible governance mechanisms for Integrity
the change process, and the expected financial
and human resource costs. The WCO Secretariat carries out various types
of missions at the request of its Members, such
as integrity assessment missions, missions18 Dossier
to provide guidance on the introduction of Among other things, the WCO plans to develop
performance measurement systems, and ad hoc a Digital Customs Package, bringing together
missions to provide support in revising a code of all relevant information, tools, guidance, and
conduct, an integrity strategy, a training plan or training material that can be used by Customs
the mapping of corruption risks. administrations to implement new mechanisms
for data collection, exchange, and analysis. The
It recently gathered the experience of some compilation of studies and methods will be
administrations in implementing Principle 6 of further developed, and regional workshops will
the revised WCO Arusha Declaration on good also be organized on disruptive technology in
governance and integrity in Customs, focusing order to pursue efforts to raise awareness and
on audit and investigation, and published them share best practices.
in a document entitled “Compilation of WCO
Members’ Integrity Practices on Internal Continuous capacity building support will be
Controls and the Relationship with External provided in these areas, led by specialized WCO
Controls.” staff. The Secretariat will take forward its work
through a Cloud Computing Server, offering
Moreover, in January 2019, the WCO and support and guidance to WCO Members in the
the Norwegian Agency for Development area of data analytics, with the development of
Cooperation launched the Anti-Corruption more concrete solutions adapted to Customs
and Integrity Promotion (A-CIP) Programme issues and operations.
for 11 WCO Members: Afghanistan, Ghana,
Ethiopia, Lebanon, Liberia, Mali, Mozambique, Going forward
Nepal, Sierra Leone, Tanzania, and Tunisia. Each
is expected to develop a multi-annual action plan I have highlighted here only a few of the
along with clear benchmarks and performance activities carried out and results achieved over
measurement criteria. the last 12 months on each of the priorities of
the WCO’s new Strategic Plan. Additional WCO
Digital Customs and Data Analytics activities are summarized in the articles which
follow, under the name of each specific WCO
The WCO Secretariat has been asked to place a Directorate.
new focus on the development of guidance and
capacity to support the digitalization of Customs In closing, I trust that you will enjoy reading
operations and the use of technologies and data about what the WCO has done and what it will
analytics. This is one of the new priorities of the be doing in the months ahead, and that you will
Strategic Plan, and one of the issues that will equally appreciate the other interesting and
be discussed by the WCO Policy Commission insightful articles that were selected for this
in December 2019, to enable the Secretariat to edition of the magazine.
obtain orientation and guidance.with technology from
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Tariff and Trade Affairs
Cross-cutting activities First Workshop of the African Union Technical
Customs Working Group on Pre-Shipment
WCO Revenue Package and advance rulings Inspections.
The WCO continued to assist its Members
in implementing the Revenue Package, which Nomenclature and classification
provides guidance and best practices for
improving the efficiency and effectiveness of The WCO continued to carry out its work on
revenue collection, as well as in implementing the uniform application of the Harmonized
an advance ruling system for classification System (HS), with the adoption of numerous
and origin, as required under the World Trade classification decisions and intensified capacity
Organization’s (W TO) Trade Facilitation building efforts devoted to the implementation
Agreement (TFA). of HS 2017, including the harmonization and
enhancement of analytical methods used by
Assistance was provided to Azerbaijan, Bahamas, Customs laboratories as well as the work on
Eswatini, Lesotho, Liberia, Mauritius and Niger the implementation of advance ruling systems
to assist them in developing or expanding their mentioned earlier.
advance ruling systems.
HS Contracting Parties and status on the
As part of the programme “Harmonizing implementation of HS 2017
the classification of goods based on WCO The number of Contracting Parties to the HS
standards to enhance African trade,” a regional Convention has reached 158, with the accession
accreditation workshop for Technical and of The Gambia (June 2019). At present, 120
Operational Advisors (TOAs) on the cross- Contracting Parties have notified the WCO
cutting tools for classification, origin and that they had implemented HS 2017, and a
valuation was conducted for French-speaking further 14 had indicated that they would have
African officers. implemented it by January 2019.
Secretariat staff also supported Customs Speeding up the HS decision-making process
administrations who themselves provide The Recommendation of 30 June 2018
training to foreign colleagues. In addition, they amending Article 8 of the HS Convention with
participated in various events, including the a view to speeding up the HS decision-makingWCO news n° 90 October 2019 21
process by placing a two-reservation limit also provides, at the request of a Member, advice
on classification decisions taken by the HS on the classification of commodities.
Committee was unanimously adopted and will
enter into force on 1 January 2021. Assistance aimed at increasing institutional
capacity to carry out classification work was
Classification decisions and amendments to provided to the Bahamas, Georgia, Vietnam
HS publications and Palestine Customs. A diagnostic mission
At its 62nd and 63 rd Sessions, the WCO HS to assess the existing infrastructure in respect
Committee took 304 classification decisions, of work undertaken with regard to the HS and
including 242 classifications of international tariff classification was held in Niger. Regarding
nonproprietary name (INN) pharmaceutical the accreditation of experts, a regional workshop
products linked to the WTO Agreement on for expert trainers on the HS in the West and
Trade in Pharmaceutical Products. Central Africa region was conducted in Burkina
Faso.
The HS Committee, at these two sessions,
also adopted 58 amendments to the HS National workshops on the development of an
Nomenclature, 6 sets of amendments to the advance ruling system for classification were
HS Explanatory Notes (Article 16 procedure organized in Bhutan, Malawi, Nepal, Papua New
/ effective on 1 January 2022), 8 draft Guinea, Vietnam and Zimbabwe.
corrigendum amendments to the Explanatory
Notes (Article 8 / HS 2017), and 53 new Technical assistance related to Customs
Classification Opinions. With the exception of laboratory infrastructure and analysis
those for which reservations have been entered, methodology was provided to Albania, Colombia,
the decisions and amendments are available on and 14 countries in the MENA region. Moreover,
the WCO website and via the WCO bookstore. experienced Customs chemists and classification
officers from six countries participated in the 6th
Technical assistance Customs Laboratory Programme, which was
HS-related capacity building assistance to funded by Japan Customs. Participants spent
WCO Members is delivered in the form of one week studying WCO HS tools at the WCO
national and regional seminars and workshops Secretariat before going to Japan for six weeks’
on the implementation and uniform application practical training on chemical analysis methods.
of the HS, on the modernization of Customs
laboratories and their analysis methodology, In addition, the Organisation for the Prohibition
and on the implementation of advance ruling of Chemical Weapons (OPCW) invited the
systems for classification. The WCO Secretariat WCO to introduce the role played by the22 Dossier
Organization in controlling the trade in chemical New recommendation
products to participants attending the OPCW’s The Council adopted the Recommendation on
Associate Programme – an annual programme the insertion in national statistical nomenclatures
for developing countries that aims to enhance of subheadings to facilitate the monitoring of
their capacities by of fering training in the international movement of substances that
chemistry and chemical engineering. deplete the ozone layer, controlled by virtue of
the Kigali amendments to the Montreal Protocol.
During the 2018/2019 financial year, 97
classification advice responses, covering 109 Valuation
products, were provided to WCO Members
by the WCO Secretariat. The WCO continued its efforts in assisting its
Members with the uniform application of the
Review of the HS WTO Agreement on Customs Valuation (the
The potential for a strategic review of the HS Agreement), in particular, by providing guidance
was raised with the WCO Policy Commission, on the management of Customs valuation
which led to a Conference on the review of the matters.
HS being held in May 2019. After reporting
the discussions back to the Policy Commission, Examination of Customs valuation questions
the Secretariat has been tasked to prepare a The WCO Technical Committee on Customs
business case, for submission to the WCO Valuation (TCCV) completed the examination
Finance Committee in the first instance, of the “Valuation of imported goods purchased
covering the scope of a possible review, the in flash sales” case that was submitted by
initial impact and feasibility studies, possible Mauritius, and which led to the adoption of
governance mechanisms for the change Advisory Opinion 23.1 at its 48th Session in May
process, and the expected financial and human 2019.
resource costs.
During 2018/2019 the TCCV had examined
HS 2022 questions concerning:
The WCO Council adopted an Article 16
Recommendation concerning the amendment • the valuation of imported chip cards relating to
of the HS for HS 2022. It contained 351 sets transportation service and tourist admission
of amendments. Some notable amendments tickets;
include new headings or defining Notes for: • the use of transfer pricing documentation to
examine related party transactions, according
• new or major technologies (3D printers, to Article 1.2 (a) of the Agreement;
smartphones, drones and novel tobacco • the sale for export to the country of
products): importation under Article 1;
• electronic waste (e-waste); • the interpretation of the value of adjustments
• various gases with high global warming under Article 8.1 (b) of the Agreement;
potential; • the payment of royalties and licence fees,
• rapid diagnostic kits for the Zika virus and calculated by reference to the sales price
other mosquito-borne diseases; of products manufactured in the country
• new fentanyl opioid derivatives; of importation from imported inputs, and
• cultural articles; their relevance to the Customs value of
• edible oils produced by microbes; the imported inputs necessary for the
• edible insect products; manufacture of the finished goods;
• minimally processed quinoa. • the treatment of income tax paid on royalties
payable to a licensor in a foreign country;
HS 2022 will enter into force on 1 January • the valuation of imported inputs for which
2022 for all HS Contracting Parties, but will a “commission” is paid by the buyer to a
exclude any amendments objected to during promoter under a Promotion and Marketing
the six month time-frame, during which Service Agreement;
Parties can notify the WCO of an objection • the valuation of an imported product bearing
to a recommended amendment. the importer’s own trademark when, atWCO news n° 90 October 2019 23 the same time, the same product with another trademark is presented for importation at a different price; • the valuation of imported goods sold at discounted prices to accredited buyers; • the valuation treatment of amounts paid for access rights to a TV bouquet under Article 8.1 (c) of the Agreement; • the situation involving intra-group transactions, where two invoices with different prices for the same consignment were found during the examination of documents submitted by an importer. The first question has been put in Part III of the Conspectus of Technical Valuation Questions, and the remaining questions will be examined by the TCCV at its next session. Technical assistance National workshops on valuation issues took place in the Bahamas, Bhutan, Colombia, Lesotho, Rwanda, Senegal, Sierra Leone, Thailand, Togo and Montenegro. A Sub-regional workshop was organized for countries of the pacific. In addition, diagnostic missions on the valuation control system and assessment of related expertise were carried out in Côte d’Ivoire, Bhutan, Liberia and Niger. As part of a series of joint regional workshops conducted by the WCO and the Organisation for Economic Co-operation and Development (OECD) on Customs valuation and transfer pricing, a workshop was organized for countries in the Asia/Pacific region. For the 2018/2019 financial year, the WCO Secretariat responded to nine requests for advice received from WCO Members in relation to Customs valuation. Events WCO valuation experts participated in a private sector conference series focusing on transfer pricing called the “TP Minds Conference,” which was organized in Australia, Singapore, South Africa and the United Kingdom with the objective of promoting WCO valuation work. They also participated in a WTO workshop entitled “Experience sharing on the implementation of the Customs Valuation Agreement, and ensuring that the Trade Facilitation Agreement supports implementation of the CVA including technical assistance and capacity building.” Rules of origin The WCO continued to support its Members with their understanding, management and implementation of rules of origin amid the ongoing proliferation of regional trade agreements. The Technical Committee on Rules of Origin (TCRO) met to report on the technical aspects of the WTO Agreement on Rules of Origin. The work on the harmonization of non-preferential rules of origin at the WTO has remained stagnant for some years, but
24 Dossier
discussions have taken place on issues linked to
notifications and transparency.
Back to back with the TCRO, a workshop
was organized to address preferential
market access for LDCs, origin procedures
including certification and verification, and
e-learning opportunities for public and private
representatives. The review of the Revised
Kyoto Convention (RKC) was also discussed,
with the inputs being reported to the Working
Group on the Comprehensive Review of the
RKC.
Technical assistance
Capacity building activities included the
organization of eight training workshops:
• In Sri Lanka, WCO Secretariat staff partnered • The WCO Origin Compendium, a compilation
with the WTO to deliver presentations related of all origin related tools and instruments, is
to the operational aspects of origin. now available in Spanish.
• In Angola, Indonesia and the Lao People’s • The Database on Preferential Rules of Origin,
Democratic Republic, they assisted Customs and the Comparative Study on Preferential
officers in enhancing their knowledge of Rules of Origin have been updated, with the
preferential rules of origin and their ability to Study now translated into French and Spanish.
correctly apply the rules related to origin.
• In the Bahamas, they delivered a train-the- Specific Annex K of the Kyoto Convention
trainer workshop for eight officials. The WCO Secretariat believes that there is a
need to update Specific Annex K of the Revised
WCO Secretariat staff also participated in Kyoto Convention (RKC) that deals with rules
several external events: of origin as part of the current RKC review. The
Annex was not part of the revision of the original
• A workshop on electronic certificates of origin, Kyoto Convention, and, as such, there is a need
gathering the four Members of the Agadir to update the text to ensure that it matches
Agreement (Egypt, Jordan, Morocco and modern Customs and trade procedures and
Tunisia). practices.
• A roundtable on the future of rules of
origin and utilization rates organized by the Moreover, the WCO Secretariat is advocating
European University Institute in cooperation for binding and enforceable provisions, thereby
with UNCTAD, aimed at providing a platform promoting that the WCO and Customs take the
for origin experts, researchers, government lead in relation to international standards on
officials and the private sector to discuss the administrative procedures regarding rules
developments in the area of rules of origin. of origin.
• A workshop on the implementation of the
APEC Customs Transit Guidelines that were More information
adopted in 2014. hs@wcoomd.org
valuation@wcoomd.org
New publication origin@wcoomd.org
A number of origin tools have been updated or
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