Dossier

A few words about the theme of the year

By Kunio Mikuriya, Secretary General, WCO

Each year, the WCO Secretariat chooses a theme that is relevant to the international Customs community. The slogan chosen for 2018 is “A secure business environment for economic development.” Under this banner, Members of the WCO are encouraged to look at how they can create an environment for businesses that will foster their participation in cross-border trade, and, ultimately, how they can best serve their people and empower their entrepreneurs.

Not only is it important for governments to support specific interventions for businesses to flourish, it is equally important to look at the external environment in which businesses operate. By “secure,” we mean an environment that is enabling, safe, fair and sustainable, all wrapped into one. Such an environment will help businesses, especially micro, small and medium-sized enterprises (MSMEs), to expand their activities, create incentives for them to participate more fully in international trade, and encourage them to innovate, generate employment and invest in human resources, thereby boosting economic growth and raising living standards.

Following my introduction, it would be opportune for me, at this juncture, to develop further the idea of a secure business environment, especially its key elements: “enabling,” “safe,” and “fair and sustainable.”

Evidence-based research, recognized internationally, clearly shows that Customs can contribute to making the business environment more “enabling,” or in other words, more stable and predictable by, for example, streamlining procedures, tackling corruption, enhancing integrity, and facilitating the cross-border movement of goods, conveyances and people in general.

Ensuring safety is also critical. Legitimate businesses require a secure supply chain to prosper, but some threats come from within the trade itself, such as the shipment of illicit goods that could endanger peoples’ health, safety and security. Combating cross-border crime, including the illicit funding of international terrorism through trade activities, is our responsibility, and one that Customs takes seriously in its efforts to ensure a “safe” environment.

Last, but not least, Customs must strive to build an environment that is “fair and sustainable.” The importation of illegal goods, such as goods that infringe intellectual property rights (IPR), or legal goods which, for example, are smuggled into a country to avoid the payment of duty or whose value has been misreported, can do immense harm to a country’s economy. It is not only a question of financial losses for both legitimate traders and governments, such activities can also affect governance, the economy, development and human security across the globe.

To take our annual theme forward, for the dossier of this edition, we invited various people to share information on initiatives and related projects that contribute to creating a secure environment for businesses. The idea is, as always, to highlight any challenges faced, to showcase those projects that will inspire others, and, of course, to communicate best practices.

The dossier starts with an article by China Customs on a pan-governmental initiative called the AEO Joint Incentive programme under which Chinese authorized economic operators will be entitled to enjoy as many as 49 facilitation measures provided by Customs and other government departments in China.

This year’s theme also echoes the current Customs focus on trade facilitation, created by the entry into force of the World Trade Organization’s Trade Facilitation Agreement (TFA). In this edition of the magazine, India Customs explains how it handled one of the TFA’s provisions, namely the establishment of a National Committee on Trade Facilitation (NCTF), and how it has structured its NCTF, all guided by a vision to transform India’s trade ecosystem by reducing the time and cost of doing business.

Inter-agency cooperation, both at the international and national levels, to ensure mutual understanding and coordinated actions, is, of course, key to facilitating trade. Peru and Chile recently opened their first joint integrated border control centres, and Peru Customs kindly agreed to explain how the centres work to facilitate the movement of people, baggage and motor vehicles, which is a good example of the practical implementation of the WCO’s coordinated border management (CBM) concept.

The question of how to measure our performance is also addressed in the magazine. Procomex, an alliance of Brazilian companies and private sector organizations which support Customs modernization, explains why it decided to replicate the survey used by the World Bank to evaluate the performance of the country when it comes to the ease of trading across borders, and what the exercise revealed. In another article, researchers Andrew Grainger and Duncan R. Shaw suggest a method for measuring the quality of trade facilitation, as it is the quality of implementation that will deliver economic benefits.

Several articles touch on how to manage the growth in international mail due, in particular, to the exponential growth in e-commerce transactions. The Universal Postal Union introduces the work done to speed up the clearance of postal items being transported by rail between China and Europe, while Australia and New Zealand Customs explain how they try to leverage the use of mail data for risk assessment, targeting and border clearance purposes, and what they would need to do to redesign their operational processes in their international mail facilities to integrate the use of mail data.

On this very topic, I would like to remind readers that the WCO is currently developing a “Framework of Standards on Cross-Border E-Commerce,” which should be ready in the coming months for adoption by the WCO Council in June 2018. This new WCO tool is aimed at assisting Customs in developing strategic and operational e-commerce frameworks. It will be equally useful for those who are seeking to enhance existing frameworks in order to effectively meet the requirements of new and evolving business models. The Framework of Standards will be supported by an implementation strategy and an action plan, as well as a robust capacity building mechanism to ensure its harmonized and expeditious implementation.

Data analysis is another topic of great importance to the WCO. Two articles in this dossier deal with the collection and analysis of data to fight fraud. Malawi Customs highlights its efforts to combat illicit financial flows out of Malawi through the undervaluation of exports and the overvaluation of imports, while Customs researchers explain how they have been leveraging data analysis to identify irregularities at the border between Peru and Ecuador.

The WCO is currently developing a “Framework of Standards on CrossBorder E-Commerce,” which will be supported by an implementation strategy and an action plan, as well as a robust capacity building mechanism to ensure its harmonized and expeditious implementation.

An example of the use of data mining tools and technologies is provided by Brazil Customs. The administration explains how it managed to achieve vital leaps in efficiencies when it came to the processing of international travellers through the use, firstly, of a risk assessment system that enables advanced passenger information (API) and passenger name records (PNR) to be processed, and the use, secondly, of a passenger facial recognition system.

Engaging  with  stakeholders , including the implementation of open communication, effective collaboration and meaningful consultation, with the goal of promoting compliance as well as effective and efficient implementation of change, is another policy advocated by the WCO. To illustrate this aspect, the dossier includes an article by the Secretary General of TIACA, who explains how similar the concerns and objectives of the air cargo industry and Customs administrations are, and how important it is not to operate in isolation.

The dossier ends with an article which questions the way we link security and development. Inspired by experience gained in field studies undertaken in sub-Saharan Africa since 2000 and anthropological research conducted in seven border areas that can be considered as “fragile,” the article argues that the development of a strategy focusing on borderlands should also look at how to support cross-border trade activities.

This last article and the others remind us that building a secure business environment is an ambitious project, and that even with the best intentions, we can sometimes easily fail to understand all the subtleties of how this complex reality works. But through the sharing of knowledge and information, supported by in-depth research and good communication, we can hopefully achieve our aim: a secure business environment for economic development.

In wrapping up, I would like to sincerely thank all the contributors to this dossier, as well as all the other contributors to the magazine who took the time to share with us their experiences on various Customs and trade related issues. It has been our pleasure to produce another edition of the WCO’s magazine, and we trust that you will enjoy reading all the insightful articles.