Role of Customs in Trade Facilitation

Report
Role of Customs in
Trade Facilitation
Ramchandra Man Singh
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Outline of Presentation
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Background
Trade Facilitation (TF)
Customs Role
Customs and TF
Modern Customs
WCO Instruments
TF Initiations in Nepal
Coordination
Conclusion
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Background
Accurate, predictable, and speedy
movement of goods across the border offers
an attractive feature in the strategy of
economic development
Certainty, clarity, Flexibility, &Timeliness
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Trade Facilitation
Simplification, Harmonization,
Standardization and Modernization
of trade process
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Contd.
• It aims at-developing a consistent ,
transparent, and predictable environment
for international trade transactions.
• It is based on internationally accepted
norms and practices.
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Trade Facilitation- a necessity
• Growing volume of trade. Global traffic increased
from 137 to 417 million containers between 1995
and 2006.
• Fall in tariff levels after the conclusion of Uruguay
Round.
• Availability of modern technology.
The OECD (2003) calculates that each 1% saving in
trade related transaction costs yields a worldwide
benefit of US$ 43 billion.
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Goal
Reduces the transaction cost and complexity
of international trade and improves the
trading environment in a country, while at
the same time enhancing government
controls.
Helps in successful integration into the world
economy
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Benefits
Results in direct benefits both to
Governments and to Business community in
terms of increased economic efficiency,
better security, faster delivery of goods, and
reduced costs
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Customs
Customs has become the hub around which
the wheel of globalization turns, and that
hub must be both strong and flexible in
order to global trade to operate efficiently
while society remains safe.
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Customs Role
Fulfills three fold mission
• Fiscal mission
• Economic mission
• Social mission
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Changing Role
The role of customs has been changing• From a primary focus on revenue collection to
one of trade facilitation, by enabling successful
balance between effective control measures and
facilitation of trade
• Development of a nation through promotion of
trade and investment.
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Customs and TF
TF and WTO negotiations:
• 1996 WTO Singapore Ministerial conference recognized
TF in WTO agenda.
• 2001 Doha Ministerial conference adopted a declarationmandate for negotiations in area of TF.
Particular reference to modernization of Articles V, VIII
and X of GATT 1994
• 2004, WTO General Council on Doha work
Program decided to commence negotiation on TF.
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WCO Support the WTO Work on TF
GATT 1994
Articles V-Freedom of Transit
Article VIII –Fees/Formalities
Articles X- Publication & appeals
WCO (Kyoto)
• Effective rules for transit procedures
• Fees limited to the cost of services rendered
• Simplified procedures and limited data
requirements
• Publication of regulations
• Appeals
Tool to implement WTO
Principles
High Principles
Compatible
Complementary
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Customs in the 21st Century
New strategic Direction
Enhancing growth and Development through trade
facilitation and border security.
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Contd.
Ten building blocks
• Globally networked Customs
• Better coordinated border management
• Intelligence-driven risk management
• Customs Trade partnership
• Modern working methods
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Contd.
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Enabling technology and tools
Enabling powers
A professional knowledge based service culture
Capacity building
Integrity
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WCO instruments to TF
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Revised Kyoto Convention
Harmonized System on Tariff Classification
Istanbul Convention on temporary admission
Immediate Release guidelines
Customs Data Model and time Release Guide
Framework of Standards to Secure and Facilitate
Global Trade.
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Efficient Customs
• Achieving high compliance and facilitation is the
definition of world class Customs
Customs must reduce the burden of trade as
measured by 3 C’s
• Clearance time
• Cost of Compliance
• Consistency of practices
Improved trade security, trade efficiency and effective
enforcement.
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Trade Facilitation Initiatives In Nepal
Customs related
• Adoption of Harmonized System
• Implementation of WTO Agreement on Customs
Valuation
• Tariff Structure rationalized
• Implementation of ASYCUDA
• Important provisions of Revised Kyoto convention
incorporated in Customs Act.
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Contd.
• Post Clearance Audit, Pre arrival clearance and risk
management
• Physical infrastructure improved
• Inter sectoral coordination committee
• Operationalisation of ICD
• Bonded ware house facility
• Accession to WTO, SAFTA, BIMSTEC
• Integrated customs Border Points.
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Coordination
A Study by World Bank in 2004 revealed
• Increasing global capacity in trade facilitation by
half, when compared with the global average,
would increase world trade by US$ 377 billion
9.7% rise in global trade.
• About US$ 107 billion of the total gains would
come from improvement in port efficiency, about
US$ 33 billion for improvements in customs
environments and US$ 83 billion from
improvements in the regulatory environment
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Contd.
• Significant scope for improvement outside
customs.
• Focusing on customs reform alone will not
produce significantly improved border
management performance.
• Time for a new and more comprehensive
approach to border management reform
- Coordinated Border Management.
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Conclusion
• Trade facilitation is no luxury it is a must
• Customs must become even more effective.
So, Streamlined, effective systems are a
prerequisite to fully exploit the opportunity of
unfettered global trade in an increasingly hostile
environment by enabling a successful balance
between effective control measures and
facilitation of trade.
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Thanks
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