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RAISING THE PORTCULLIS

RAISING THE PORTCULLIS. A Presentation to the WCO Conference on Developing the Relationship between WCO, Universities and Research Establishments Brussels - March 2006 Prof. David Widdowson CEO, Centre for Customs & Excise Studies University of Canberra, Australia. Portcullis.

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RAISING THE PORTCULLIS

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  1. RAISING THE PORTCULLIS A Presentation to the WCO Conference on Developing the Relationship between WCO, Universities and Research Establishments Brussels - March 2006 Prof. David Widdowson CEO, Centre for Customs & Excise Studies University of Canberra, Australia

  2. Portcullis • The traditional symbol of Customs • Symbolises a nation’s ports - the gates through which international trade must pass • Customs is the gatekeeper • ‘Gatekeeper’ approach traditionally implies intervention simply for the sake of intervention

  3. Portcullis • Customs must raise the portcullis to achieve an effective balance between trade facilitation and regulatory intervention • Intervention by Exception • Intervention when there is a legitimate need to do so • Intervention based on identified risk

  4. BALANCE Facilitation/Control Change in approach: • From ‘Gatekeeper’ strategies • To a balance between trade facilitation and regulatory control

  5. BALANCE Facilitation/Control The means of achieving the desired balance between trade facilitation and regulatory control is through the use of risk management

  6. High RED TAPE APPROACH BALANCED APPROACH C O N T R O L CRISIS MANAGEMENT LAISSEZ-FAIRE APPROACH Low High FACILITATION Facilitation/Control

  7. Facilitation/Control

  8. Revised Kyoto Convention • Simplification and Harmonisation of Customs Procedures • Contracting parties must integrate the principles of risk management into all Customs control programs

  9. Penalty Formal Warning Persuasion Recognition Enforcement Compliance Assessment Client Service Legislative Base © David Widdowson 2004 Rewards RISK-BASEDCOMPLIANCE MANAGEMENT PYRAMID

  10. Enforcement/Recognition Assessment of Compliance Levels Client Service Legal Base • Statutory Provisions • Relevant Laws • Regulations • etc.

  11. Enforcement/Recognition Assessment of Compliance Levels Client Service Legal Base Clear Administrative Guidelines Formal Rulings Education & Awareness Technical assistance, advice

  12. Enforcement/Recognition Assessment of Compliance Levels Client Service Legal Base Risk-based Procedures: Pre-arrival clearance Physical Examination Documentary Check Trader-focused audit Investigation

  13. Enforcement/Recognition Assessment of Compliance Levels Client Service Legal Base Punish Non-Compliance Reward Compliance

  14. Enforcement/Recognition Assessment of Compliance Levels Client Service Legal Base Punish Non-Compliance Reward Compliance Reduced regulatory scrutiny Periodic payment arrangements Increased self-assessment Less onerous reporting Intervention by exception

  15. Enforcement/Recognition Assessment of Compliance Levels Client Service Legal Base Punish Non-Compliance Reward Compliance Penalty Formal Warning Persuasion Penalty Formal Warning Persuasion

  16. Gatekeepers Risk Managers • Strategy dependent upon level of risk • Dual enforcement/ client service focus • “One size fits all” compliance strategy • Enforcement focus

  17. Gatekeepers Risk Managers • Focus on high-risk areas • Minimal intervention in low-risk areas • Trader focus • Administrative discretion • Indiscriminate focus or 100% check • Intervention in all areas • Transaction focus • Inflexible procedures

  18. Gatekeepers Risk Managers • Increased focus on post-clearance compliance assessment • Pre-arrival import clearance • Nexus broken between physical control and revenue liability • Focus on real-time compliance assessment • Post-arrival import clearance • Physical control maintained pending revenue payment

  19. Gatekeepers Risk Managers • Seek to identify both compliers and non-compliers • Rewards for compliers • Seek to identify non-compliers • No special benefits for compliers

  20. Recognised Compliers: “Authorised Economic Operators” Actual benefits v. anticipated benefits (“expectation gap”) Benefits over and above other members of the international trading community Research Activities

  21. Supply Chain Security Initiatives: Tangible commercial benefits Commercial Benefits v. Regulatory Benefits “Win-Win” or “Win-Lose” Research Activities

  22. Supply chain security initiatives: Tipping the balance in favour of regulatory intervention Unreasonably high intervention practices being erroneously “blamed” on security requirements Emerging Issues

  23. Rules of Origin: Proliferation of FTAs Proliferation of Rules of Origin Reversing the trend of Harmonisation and Simplification Retarding the international trade facilitation agenda Emerging Issues

  24. Role of WCO and National Administrations: Lobby for international agreements which support global trade facilitation through the ongoing harmonisation and simplification of regulatory procedures Emerging Issues

  25. Thank You Centre for Customs & Excise Studies www.customscentre.canberra.edu.au

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