Reflections on WCO Members’ prioritiesBy Kunio Mikuriya, Secretary General, World Customs Organization
At the 2019 WCO Council Sessions, Members endorsed a new Strategic Plan for the 2019-2022 period, comprising nine priorities that the WCO Secretariat should focus on: Coordinated Border Management, Safety and Security, the Revised Kyoto Convention, E-Commerce, the Harmonized System, the Capacity Building Strategy, Performance Measurement, Integrity, and Digital Customs and Data Analytics. In this article, I will take up each of these topics in turn, explaining what we have recently done in these areas, and what is yet to come.
Coordinated Border Management
A key enabler of coordinated border management (CBM) is connectivity, supported by the establishment of IT platforms that create a one-stop shop for trade and which can be linked across borders. These platforms can take different names and forms. We call them Single Window environments. The WCO “Single Window Compendium” provides guidance on what such environments should look like and how they should operate.
Given the high uptake of Single Windows around the world, the WCO has embarked on the development of a “Single Window Study Report,” which presents the findings drawn from a survey among its Members, including existing typologies and models, and which addresses interoperability issues as well as the impact of the latest technologies and analytical tools on this environment and its evolution.
Moreover, to enable data harmonization and digital collaboration at the national and international level, which supports the development of Single Window environments, the WCO continues to expand its Data Model so that it covers more and more border regulatory requirements. The continuing uptake of the Model by WCO Members is a gratifying development.
I am also pleased to announce that, thanks to the work of major non-intrusive inspection (NII) industry players, a new standard has come into being this year for X-ray files generated by NII devices. Known as the Unified File Format (UFF), it will significantly facilitate the interoperability of NII equipment supplied by different manufacturers, and improve the exchange of images within and between Customs administrations, as well as between Customs administrations and other agencies. It is now crucial for WCO Members to start using this standard by requiring their suppliers to deploy the UFF on equipment in use, if possible, and to add the specifications of UFF 2.0 in their tender documents for the procurement of NII systems. Ways to enhance the standard have been discussed, but developments in this regard will largely depend on the extent that the recently adopted version is used.
Digital collaboration requires underlying cooperation mechanisms to be in place between Customs and other agencies. In this regard, the WCO continues to work on developing guidance material for strengthening institutional cooperation. Handbooks have been published on the establishment of coordination and cooperation mechanisms between Customs and tax administrations as well as between Customs and the police. A new handbook focusing on cooperation between Customs and financial intelligence units is currently being developed, and will be submitted for consideration and adoption in June 2020.
Safety and Security
The WCO continues to offer assistance as part of its Security Programme in five domains: passenger controls; the fight against chemicals and components that could be used in the manufacture of improvised explosive devices (IEDs); strategic trade Controls; the fight against trafficking in small arms and light weapons (SALW); and terrorist financing. We will have a chance to review progress in these areas at the second Global Security Conference, which will take place in mid-December 2019.
Interesting developments in the area of passenger controls are taking place, beginning with the first deployments of the Global Travel Assessment System (GTAS), an application that enables advance passenger information (API) and passenger name record (PNR) data to be collected, visualized, and analysed.
With the GTAS in place, the WCO Secretariat can now not only continue to promote and maintain API and PNR standards, but also answer requests from administrations that do not have the internal capacity to develop their own in-house system, but want to start using such data. For information, the GTAS is open source and free. The system was very recently deployed in the Maldives, who share their experience in this edition of the magazine.
The WCO is also taking up the issue of passenger control in the maritime environment, primarily focusing on cruise ships and exploring, among other things, the possible standardization of data for maritime passengers.
I would like to highlight the launch of a new project, called COLIBRI. The project focuses on general aviation, a sector that is not very well controlled, along the cocaine route. It has a capacity building component as well as an IT component, which is very promising.
I am also glad that the WCO Counterfeiting and Piracy Group (CAP) agreed on new terms of reference, enabling the Group to provide more effective assistance and support to the work of the Secretariat in developing relevant, non-binding tools and guidance material to respond to emerging risks, and WCO Members’ needs to enhance their capacity in the fight against counterfeiting and piracy.
The WCO Secretariat is also exploring ways to be more active in the protection of the environment. The Contracting Parties to the Basel, Rotterdam and Stockholm Conventions (three multilateral environmental agreements dealing, respectively, with hazardous wastes, hazardous chemicals and pesticides, and persistent organic pollutants), which met in April 2019, highlighted the role of Customs while reaffirming the need to cooperate with the WCO to ensure compliance with the three Agreements’ provisions.
In the above regard, the WCO is currently preparing a fifth edition of the enforcement operation codenamed DEMETER, and I hope that all Customs administrations will, once again, join together to demonstrate their commitment to fighting illegal waste trafficking.
Indeed, enforcement operations enable us to keep law enforcement efforts going and to obtain seizure reports from Customs administrations, which are then fed into the WCO Customs Enforcement Network (CEN). However, the amount of data collected during the course of an operation is obviously not enough to gain a really good picture of this trade, and merely provides a snapshot of what is happening on the ground.
With the above in mind, I would like to, once again, remind WCO Members of the importance of sharing enforcement data through the CEN, as we need global comprehensive data to fully understand the illicit trade phenomenon. Indeed, with such information, we will be able to better our efforts in targeting those involved in these nefarious activities that poison the international trade supply chain.
Of course, it is also critical, in general, to collect and analyse data to enable effective risk analysis and efficient intelligence-based controls. Here, I might add that I am glad to see that more and more Customs administrations are implementing the National Customs Enforcement Network (nCEN), another critical tool that the WCO provides to its Members free of costs.
Revised Kyoto Convention
The revised International Convention on the Simplification and Harmonization of Customs Procedures (Revised Kyoto Convention or RKC), which was adopted in 1999 and entered into force in 2006, currently has 118 Contracting Parties. The WCO continues to provide assistance to its Members, and especially Small Island Economies, to ratify the Convention.
Moreover, discussions are ongoing as to how to review this critical instrument, with particular attention being given to Specific Annex D and K, dealing respectively with free zones and rules of origin. To support the WCO Working Group on the Comprehensive Review of the Revised Kyoto Convention (WGRKC), the Secretariat has undertaken research on special Customs zones/free zones (SCZs).
In the above regard, existing literature was reviewed, and throughout 2018 and early 2019, a series of regional workshops were held to encourage discussions on SCZs among WCO Members. In parallel, fieldwork was undertaken in 11 countries. Using the knowledge gained through these activities, a research paper was produced to provide an analysis of the current situation surrounding such zones, and will hopefully be followed by a guidebook in the coming months.
In June 2018, the WCO adopted the “Framework of Standards on Cross-Border E-Commerce” to assist its Members in developing or enhancing strategic and operational frameworks for e-commerce. This year, the WCO Council endorsed technical specifications relating to the Framework, as well as other guidance material that further enriches the instrument such as definitions of certain terms used in the Framework, flow charts, business models, and case studies. An implementation strategy, an action plan, and a capacity mechanism aimed at ensuring the widespread adoption and implementation of the Framework were also adopted.
All the above-mentioned documents have been brought together in a WCO E-Commerce Package, a living document that will be regularly maintained and updated. In addition, work on a reference data set for e-commerce, revenue collection approaches, and the roles and responsibilities of e-commerce stakeholders will continue, and documents related to these areas will be submitted to the WCO Council in June 2020.
The Framework places emphasis on advance electronic data for pre-arrival risk assessment. For the past 20 years, the WCO has been advocating for a move towards a paperless environment for traditional trade. The same should apply to e-commerce. Express carriers are largely providing advance electronic data as recommended in the Framework of Standards, enabling Customs to conduct risk assessments in advance. However, postal operators are lagging behind, although progress has been made in some countries with support being provided by the WCO and the Universal Postal Union (UPU).
Over the past few months, the WCO and the UPU have worked together to develop additional guidance on the exchange of advance electronic data, including data capture and data quality, as well as the associated legal and operational frameworks. This resulted in the “Joint WCO UPU Guidelines on Exchange of Electronic Advance Data between Posts and Customs,” which the WCO Council adopted in June 2019.
The WCO and the UPU also continue to support Customs and Posts in the implementation of electronic advance data, and on the implementation of the Customs Declaration System (CDS), which was developed by the UPU’s Postal Technology Centre.
The 2022 edition of the Harmonized System or HS has been adopted by the WCO Council and will enter into force on 1 January 2022 for all Contracting Parties to the HS Convention, numbering 158 at the end of September 2019. Of course, I sincerely hope that this new version of the HS will be implemented diligently by all HS Contracting Parties.
The potential for a strategic review of the HS was raised with the WCO Policy Commission, leading to a Conference on the review of the HS being held in May 2019. After reporting the discussions back to the Commission, the Secretariat has been tasked to prepare a business case, for submission to the WCO Finance Committee in the first instance, covering the scope of a possible review, the initial impact and feasibility studies, possible governance mechanisms for the change process, and the expected financial and human resource costs.
Capacity Building Strategy
WCO Members have requested the Secretariat to review its Capacity Building Strategy and the management of experts, in order to ensure that the strategy has a clearly defined future direction, and that it improves the delivery of all WCO capacity building activities. Among other things, it has been decided to create a pool of experts on every topic on which the Secretariat provides technical assistance in each WCO region.
More than 600 capacity building activities were delivered from July 2018 to June 2019, and detailed information on these activities has been made available in the WCO Capacity Building Progress Report. This year, the WCO Secretariat also published the Mercator Programme Report, which presents activities undertaken since the launch of this key programme five years ago.
The WCO Council adopted the terms of reference of the Working Group on Performance Measurement (WGPM) whose role is to develop a new mechanism to measure Customs performance. The Group will meet in the coming weeks, and I invite all administrations to join it. Wide participation in WCO working bodies leads to more comprehensive outcomes, a point which I cannot stress enough.
Moreover, the WCO Secretariat has also been looking at the methodology used by other international organizations, including the World Bank and its Doing Business team with whom it continues a dialogue, in order to convey the views of Customs, as well as those of the WCO Private Sector Consultative Group (PSCG), in an effort to improve the methodology. It also engaged with the World Bank to improve the WCO Time Release Study, a key performance indicator tool.
The WCO Secretariat carries out various types of missions at the request of its Members, such as integrity assessment missions, missions to provide guidance on the introduction of performance measurement systems, and ad hoc missions to provide support in revising a code of conduct, an integrity strategy, a training plan or the mapping of corruption risks.
It recently gathered the experience of some administrations in implementing Principle 6 of the revised WCO Arusha Declaration on good governance and integrity in Customs, focusing on audit and investigation, and published them in a document entitled “Compilation of WCO Members’ Integrity Practices on Internal Controls and the Relationship with External Controls.”
Moreover, in January 2019, the WCO and the Norwegian Agency for Development Cooperation launched the Anti-Corruption and Integrity Promotion (A-CIP) Programme for 11 WCO Members: Afghanistan, Ghana, Ethiopia, Lebanon, Liberia, Mali, Mozambique, Nepal, Sierra Leone, Tanzania, and Tunisia. Each is expected to develop a multi-annual action plan along with clear benchmarks and performance measurement criteria.
Digital Customs and Data Analytics
The WCO Secretariat has been asked to place a new focus on the development of guidance and capacity to support the digitalization of Customs operations and the use of technologies and data analytics. This is one of the new priorities of the Strategic Plan, and one of the issues that will be discussed by the WCO Policy Commission in December 2019, to enable the Secretariat to obtain orientation and guidance.
Among other things, the WCO plans to develop a Digital Customs Package, bringing together all relevant information, tools, guidance, and training material that can be used by Customs administrations to implement new mechanisms for data collection, exchange, and analysis. The compilation of studies and methods will be further developed, and regional workshops will also be organized on disruptive technology in order to pursue efforts to raise awareness and share best practices.
Continuous capacity building support will be provided in these areas, led by specialized WCO staff. The Secretariat will take forward its work through a Cloud Computing Server, offering support and guidance to WCO Members in the area of data analytics, with the development of more concrete solutions adapted to Customs issues and operations.
I have highlighted here only a few of the activities carried out and results achieved over the last 12 months on each of the priorities of the WCO’s new Strategic Plan. Additional WCO activities are summarized in the articles which follow, under the name of each specific WCO Directorate.
In closing, I trust that you will enjoy reading about what the WCO has done and what it will be doing in the months ahead, and that you will equally appreciate the other interesting and insightful articles that were selected for this edition of the magazine.