customs and border management

Customs and Coordinated Border Management

Alain Clò E-Government and High Performance Specialist

• Customs Environments• Trends and Challenges• Business Case and Solutions

Alain Clò- eGovernment Specialist 2

Agenda

• Customs Public agencies• Evolving Role of Customs• High Performance Customs• Customs Single Window – Trade Process• Border Management - Paradigm Shift• Economic and Customs Landscapes• Addressable Business in Customs


Customs Public agencies• Central Administration :

– Customs management systems– Trade Tariff systems– Trade Quota monitoring systems– Export licensing systems

• Customs Border control :– EDI– Anti-Smuggling

• Airport- & Port Authorities :– EDI– Customs declarations– Cargo management systems

• (Logistics companies/Freight forwarders)

TraderApplies for Export Licensev

Shipping/Logistics CompanyEnsures all appropriate paperwork is in order & accompanies Product

Transports product to destination

Country of DestinationNational Gov't

Monitor status &location of shipmentAccept shipment &performs Customs

Declaration.Accept shipment & performs Customs

Declaration

Local Shipping/Logistics Partner

Represents Trader to Countryof destination National

Gov't

Harmonized Codes

National Quota

System

TariffSystem/

Calculator

National Gov'tEnsures

Trader is legitimate, checks export quota &

ensures quota for country ofdestination has not been

exceeded

WTO/WCO

CMS

WTO/WCO Harmonized Codes/Tariff

ReportingSystem

eCustoms EcoSystem CustomManagement

Port AuthoritiesPerform Cargo Management& Scheduling for local port

CargoManagement

Reporting System

Reporting System


Evolving Role of Customs

• Traditional Role of Customs is Revenue Collections from– Customs Duties and Value Added Taxes– Excise Taxes

• Provides Major Revenue Source for States– ~1/3 of National Budgets

• The Pressure comes – from Merchandise Volume Growth (Annual Export WTO)

China 35% India 26% EU 21% US 13%– And Growing Innovative Threats such as counterfeit, frauds,

smuggling, terrorism• World Wide Trade will be around 60$ Trillion by 2020


High Performance Customs

• High Performance is needed for Customs in order to– Facilitate Legitimate Trade / Optimize the Global Supply

Chain– Protect Nations and Citizen from Innovative Threats

(counterfeit, frauds, smuggling, terrorism)• Hot Topics are

– Single Window System– Coordinated Border Management– Risk Assessment - Authorized Economic Operator– SOA, Identity Management, RFID


Single Window Systems

• Facilitate Legitimate Trade • Single Window for customs services

– Paperless, On-Line G2B2G (government-to-business-to-government) cooperation, On-Line C2B (customs to business), One Point of Contact for access to declarations, permits, etc ...

– Transforming ot Migrating Bespoke* Legacy Systems to net- and network-centric services using international and regional standards for customs processes (WCO etc.), InterOperable Integrated e-Customs Services systems

• Move to modern systems using International and Regional Standards (UN,WTO)


Ministry of Finance

Customs Single Window - Scenario

Calculation of Duties

Payments of Excises, VAT

and Duties

Import Licenses Request

RegistrationLogisticsTraders

Customs Border Control(fraud, counterfeit,

laundry, smuggling, weapons, drugs,

Sanitary checks,...)

World Trade Organization World Customs Organization

European Commission

LogisticsTrader

PoliticiesDataBase

Tariff and Quota

Single Window Scope

Scanner, RFID

Portal AccessForeign Customs

Exchanges- Alerts

Risk Managment


Trade Processes

B2G


Trusted Foundation Software

11Alain Clò- eGovernment Specialist

Example: ICDTS

Customs Government

GatewayCELINA

Declaration Processing System (Export, Import, Transit)Risk Analysis

Module

Validation Module

ZEFIRBudget Accounting and Tax/Customs Clearing

System

Analytical Subsystem(Data Warehouse)

Reference Data Subsystem

Users in Ministry of Finance and

Customs Agencies

Traders

ISZTAR (Master Tariff)

EU NCTS (Transit)

Other Customs systems

Central Statistical Office

Other Government systems

National Bank

EU systems:TARIC, NCTS, TQS,

EBTI, ISPP, SMS and others

CCN/CSI

Operational Tariffwith Tariff Calculator

Excise Module

TOR Module

Reporting Module

*) Modules under development


Function List

Notification Recording and risk analysis

Verification of declaration

Release for procedure

Collection of dues

Balancing w/previous

declarations

Traders support

Duty and tax clearing

Amount due support

Traders supportTraders support

Duty and tax clearing

Vindication Liquidation Assets’ Sale

General Collaterals

General Ledger

Expenses and Costs

Posting of amounts due

Debtors’ management

Bank supportGuarantees’ &

Deposits’ Support

Budget Discipline

ControlTraders supportTraders support

Traders’ support

Registering Roles’ management

Status management

Guarantee management

License management

Declaration processing

Main processesMain processes

Tariff dataTariff dataTraders supportTraders support

Tariff data

Non-tariff measures Legal basis

Binding tariff information

Sensitive goods’ lists

Amendment service

Commodity codes Duty rates

Tariff measures Tax rates

Tariff calculator


Technical Architecture

Integration & Security

Integration & Security

Customs Users

Customs Users

TradersTraders

Identity Management

Identity Management

Integration :JMSGrid

Integration :JMSGrid

Customs ProcessingCustoms

Processing

CustomsGateway

or Portal

CustomsGateway

or Portal

CustomsBack Office

CustomsBack OfficeFront OfficeFront Office

e-ID

LogisticsLogistics

PoliceCoastal Guards

PoliceCoastal Guards

FirewallsCluster of Web Servers and

Http TransactionsClustered Load Balancing

DMZ1Portal in ClusterIdentity Server Cluster modeWorkflow in Cluster modeESB + JMS Grid

DMZ2Cluster DBMS

High End ServersStorage systems

https:sslWS-Security

saml:ldaps

https://ssl/


Design, Development, Implementation• Single Window Design

– Automate Single Window– Re-engineer BackOffices– Simplify Trade Documents and Eliminate Duplication– Streamline Trade Transactions Processes

• Capability Assessment, Partner/Supplier Selection, Design, • Build, Test, Implement, Operate, Mandate, Governance• Issues :

– Trade Processes / Chain Effect / Everything Must Fit– Manage Project Risks, Inter-Institutional Dependancies– Resistance to Change / Organizational / All Electronic

• Success Factors : Relevancy to Firms, Commitment from Top Government, Cooperation between private sectors and government, Simplification, Standardization


Border Management - Paradigm Shift• Control focus • High levels of Physical inspection • Focus on the goods • Focus on identifying non-compliance • One size fits all • Limited use of ICT • Adversarial relationship with trade • Competition between agencies • Limited incentives for compliance • Limited cooperation with neighbors • Limited operational statistics

• Facilitation/control balance• Intervention by exception• Focus on information• Compliance/non-compliance balance• Flexible solutions for different clients• Extensive use of ICT• Constructive partnership with trade• Single window (or single submission)• Strong incentives for compliance• Extensive cooperation and sharing• Clear measures of performance


Other Challenges and Trends

• Efficient Risk Management (risk-classification-increased/ reduced control), Authorized Economic Operator

• Coordinated Border Management, Cross Border and Cross-Agency Information Exchange/ reporting co-operation (tax authorities – border security – health & food inspectorates)

• Fraud Detection (customs duties and taxes)• Anti-Smuggling


Economic and Customs LandscapesInitiatives

TransEuropean Customs InfoNet and Customs and Tax systems

Single WindowPaperless customs

Single Window

Customs modernisation and Single Window

TradeNet and TradeExchange

EU CUSTOMS & FISCALIS 2007-2013

US

ASEAN

SINGAPORE


Addressable Business in Customs• Every country must have an IT system for

– Customs duties and import tax collection– Supporting all customs and country protection– Procedures (movement of goods)

• 149 countries in WTO• 25 + 5 EU countries (HS codes, national procedures)• Evolution of role and operations of customs Authorities and

agencies means the need to restructure customs infrastructure every 10-20 years.

• An automated custom system 5M$ average• Addressable WW Customs Solution IT Markets : > 3Billion $


Layers – Who Does What

Vendors, Products, Technologies: Microsoft, IBM, Oracle, SAPCes sociétés développent et vendent des produits informatiques non spécifiques aux Douanes.

Politics, Quotas and Tariff : European Commission DG Taxud, WCO, WTOCes intitutions développent les directives politiques, et fournissen aux pays des outils de type Base de

Données Quota et Tariff.

Consultants, Integrators : Accenture, Crown Agents, IntraCom, GaindeCes sociétés sont maître d'oeuvre/ouvrage des projets Douanes.

E-Customs Solutions and ISVs: Bull, Crimson Logic, IBMCes sociétés développent et vendent des logiciels pour les Douanes.

World Bank, United Nations, UNECE, UNCTAB, USAIDCes organismes fournissent des fonds financiers aux pays en voie de développement et sont

souvent maître d'ouvrage.


References• EU Commission – Customs and Taxations

http://ec.europa.eu/taxation_customs/index_en.htm• Accenture Customs 2020

http://www.accenture.com/Global/Services/By_Industry/Government_and_Public_Service/Customs/R_and_I/Customs2020View.htm• e-Customs Best Practices, Global Government,

Sun Microsystems, Inc.

http://ec.europa.eu/taxation_customs/index_en.htm

http://www.accenture.com/Global/Services/By_Industry/Government_and_Public_Service/Customs/R_and_I/Customs2020View.htm


Customs and Coordinated Border Management

Thank You !Alain Clò E-Government and High Performance Specialist

• Business Development• Project and Team Management• Solution Architect