AFIP

1. AFIP Customs General Directorate Control Department

2. CONTROL DEPARTMENT CGD DANGEROUS DRUGS Department CUSTOMS POLICE CUSTOMS CONTROL Division CUSTOMS SELECTIVITY STATISTICS Section ADMINISTRATIVE

3. CONTROL DEPARTMNET CONTROL DEPARTMENT AFIP has created the Control Department, by means of Provision No. 326/02 – AFIP – reporting to the Customs General Directorate, responsible for controlling the Customs Legislation and exercising the authority of Customs Police and public force throughout the country, pursuant to the provisions set forth in the Customs Code, Public Law No. 22415. Three organic units with departmental level were grouped around this area, reporting to the Control Department DANGEROUS DRUGS CUSTOMS CONTROL CUSTOMS POLICE The Customs General Directorate, therefore, regains a fundamental role, at the level of the best Customs organizations, allowing a better and more direct connection with the Federal Justice system, and with the Criminal Economic Justice system, in the metropolitan area.

4. CONTROLDEPARTMENT CGD DANGEROUS DRUGS Department CUSTOMSPOLICE CUSTOMSCONTROL PORTS AND AIRPORTS SELECTIVECONTROL AND COMPLEX CRIMES OPERATING COORDINATION PREVENTIVE PROCEEDINGS Division

5. SELECTIVE CONTROL AND COMPLEX CRIMES DIVISION ACTION To supervise –as selective control- the final Customs destinations irrespectively of the selectivity channel that was assigned, for all goods listed in the harmonized system excercizing the authority of Customs police and public force. TASKS 1- To develop supervision actions at import and export destinations both in primary and secondary areas. 2- To supervise selectively and by surprise the import and export destinations occurring as a result of the entrance and departure of goods to and from the free trade area and in-house Customs. 3- To propose control actions within the Customs Police Department obtaining the relevant logistics support. 4- To produce statistics in order to determine factors and/or elements allowing to improve the selectivity system in force so as to analyze -through the respective areas- the convenience of determining create-delete- modify actions. 5- To conduct research in order to detect hazardous materials, waste, used goods, chemical and biological weapons precursors, weapons and explosives, nuclear materials and any sensitive goods, coordinated by the Control Department.

6. SELECTIVE CONTROL AND COMPLEX CRIMES DIVISION For operational purposes, it is divided into branches that cover all the chapters in the list: - Branch A Meats, leathers, foods, vegetal materials - Branch B Chemicals - Branch C Textiles and papers, and other materials - Branch D Machinery, electricity and hardware. It consists mostly of professionals from different areas, who work as a police force with high technical and operating skills. The results are reflected in the statistics conducted monthly and submitted to the higher office for their consideration. A copy thereof is sent to the Selectivity Division, so that they may be aware of new events. The working environment is restricted to the Buenos Aires Customs, Ezeiza and Free Trade Area. However, and due to the specific tasks performed, research has been conducted in Provincial Customs, in collaboration with the Regional Customs Directorates.

7. Operating Organization of the Division PRIMARY AREA SUPERVISIONS SECONDARY AREA REQUIRED PERSONNEL LOGISTICS VEHICLES DETERMINING FACTORS TYPE OF GOODS DISTANCE TO FINAL DESTINATION|

8. Model of Report submitted to the Higher Office and to Other Areas INTERVENTIONS DURING 2003

9. Model of Report submitted to the Higher Office and to Other Areas QUANTITATIVE ANALYSIS OF EVENTS - 2003

10. TYPE OF EVENTS - 2003

11. Model of Report submitted to the Higher Office and to Other Areas

12. Model of Report submitted to the Higher Office and to Other Areas

13. Model of Report submitted to the Higher Office and to Other Areas CHART OF EVOLUTION OF COMPLAINTS

14. Contravention complaints Smuggling complaints TOTALS Fiscal Damages 1728194.52 0.00 1728194.52 Minimum Fines 1978445.06 5434245.20 7412690.26 TOTALS 3706639.58 5434245.20 9140884.78 Model of Report submitted to the Higher Office and to Other Areas AMOUNTS REPORTED– YEAR 2003

15. TASKS OF THE DIVISION INTRODUCTION One of the tasks assigned to the Selective Control and Complex Crimes Division, since its inception in October 2002, is: “To conduct research in order to detect hazardous materials, waste, used goods, precursors of chemical and biological weapons, weapons and explosives, nuclear materials, and any sensitive goods.”

16. Most Relevant Cases Analyzed • REGULATORY FRAMEWORK • Article 41 of the Argentine Constitution. • Law 23922 passed in 1991 • Decree 181/92 • Which states as follows: • Art.1 – The transportation, introduction and final or temporary import to the National Territory, Special Customs Area, and the Free Trade Areas, created or to be created, including their air and maritime spaces, of any type of residue or waste from other countries, included in a non-restrictive list in Annex I hereof, is hereby forbidden. • Art.2 – The residues or wastes obtained from recycling or material recovery of waste not bearing a public health and environment harmlessness certificate issued before shipment by the competent authority of the origin and/or previous country and ratified by the enforcement authority of this Decree, notwithstanding the specific powers of the National Customs Administration, shall also be included in the provisions set forth hereinabove.

17. Most Relevant Cases Analyzed • Law 24051 passed in 1992 • With respect to foreign trade, the same is highlighted in Article 3: • The import, introduction and transportation of all types of residues coming form other countries to the national territories and their air and maritime spaces. is hereby forbidden. Such prohibition is extended to nuclear residues, notwithstanding the provisions set forth in the previous article, last paragraph. • Decree 831/93. • “The National Customs Administration shall control the enforcement of the provisions set forth by the Law in its Article 3, within the scope of its jurisdiction. In case of doubt from the National Customs Administration about the category or description of a residue, the Secretariat for Natural Resources and Human Environment proceedings shall be forwarded so that such Office may announce its decision by express act within a term no longer than ten (10) working days as from its receipt.” • Customs Resolution 1742/93 • Art.1 – The Customs service shall arbitrate and/or coordinate with the other competent authorities, in order to prevent the entrance to the Customs territory and free trade areas as well as to its control areas of vehicles carrying products covered by Decrees 181/92 and 831/93. The same procedure shall be applied to unloading, when such vehicles have arrived to the Customs territory.

18. Most Relevant Cases Analyzed • TYPES OF RESIDUES • BANNED FROM BEING INTRODUCED TO THE NATIONAL CUSTOMS TERRITORY PURSUANT TO THE REGULATION • Plastic materials of substandard quality and used manufactures • Paper waste, unclassified and with high content of plastic, etc. • Used tires • Used clothing, mostly made of synthetic fiber • Pesticides forbidden in their country of origin. • Used motorbikes or scooters, containing oil, hydraulic fluids, and used tires. • Sewage mud, to be used as fertilizer. • Obsolete, useless or expired materials for medical usage. • Used storage batteries for metal recovery • Ashes coming from combustion ovens, to be used as fillers.

19. Risk Profiles RISK PROFILES. 1. Awareness of the international trend regarding that type of waste 2.Record of event history 3.Donations made by Pseudo-humanitarian assistance organizations 4. Financial situation 5.Appearance of a commercial operation

20. Most Relevant Cases Analyzed 1- USED MONITORS. - International trend of hazardous waste, especially Electronic Waste or E-Waste. - Only in the U.S., a total of 315,000,000 computers should be disposed of by 2004, manufactured from 1997 to such date. s - Toxicity for the environment lies in the millions of kilograms of lead, cadmium, mercury and plastic that end up in local dumps. The first interventions in our country occurred due to the shipment of used monitors, in the following conditions: - They were to be entered in the same condition as they were discarded - Presented in bulk and very poorly conditioned - The outside condition showed clearly their long-term use, many of them showing broken casings. - The Secretariat for Environment and Human Development ratified their status as waste. Actions of the Customs Service: - Shipments were detected in a customs primary area. - Article 449 of the Customs Code was applied in order to call upon the importer to reship the goods so as to avoid being reached by Article 451 of the Customs Code, notwithstanding the punishments that may apply to the importer for such events.

21. Most Relevant Cases Analyzed 2- EXPORTS OF COPPER WASTE. - Starting in 2002, a substantial increase occurred in exports of copper and aluminum waste, at much higher levels than usual. - They consisted of exports concentrated by a few companies recently created and registered with the customs service. - Exports were mainly destined to China and Korea. More than 15,000 tons of such materials had been exported during the course of the year. Actions of the Customs Service: - All destinations where such materials were exported were audited. - Note was taken that they consisted of very diverse metallic products (remains of taps, keys, bathroom fittings, door handles, etc.) There were doubts about the legal ownership of such materials. - At the same time, complaints in the media accounted for thefts of telephone and electricity cables, metallic articles such as bronze plates from public areas, cemeteries, etc. - The customs audit resulted in investigations that ended in criminal complaints, currently pending a judicial decision. - By such actions, the theft of cables and metallic objects was substantially stopped.

22. SELECTIVE CONTROL AND COMPLEX CRIMES DIVISION Form of Work • Query of detailed statement of Load Notices. • Selection process of import and/or export destinations. • The area may invalidate the release of goods, without its prior intervention

23. SELECTIVE CONTROL AND COMPLEX CRIMES DIVISION Form of Work Import • The system does not allow the goods to be released if the last “LOAD NOTICE” registered is not in AUTHORIZED status. The customs broker that records the departure from the Primary Area withholds the documents until the Control Area personnel takes over.

24. SELECTIVE CONTROL AND COMPLEX CRIMES DIVISION Mode of Work Export • When the destination is submitted, if the “LOAD NOTICE” is not in AUTHORIZED status, the system issues a message to the submitting broker indicating that the documentation must be withheld until the control personnel takes over.

25. SELECTIVE CONTROL AND COMPLEX CRIMES DIVISION Case Study based on Actions Performed by the Area Working group “C” Origin: U.S. Paper waste authorized by the Secretariat for Environment and Sustainable Development The Secretariat authorizes acceptable percentages of materials other than paper that are entered as waste. The Division personnel controls the goods and detects that the goods documented for admission are among the “Banned” products. As a result of the audit, the goods are reshipped and the importer is applied the fine corresponding to the F.O.B. value.

26. SELECTIVE CONTROL AND COMPLEX CRIMES DIVISION Case Study based on Actions Performed by the Area Authorized Quality PSI 12 – Old Corrugated Cardboard (OCC). Dry, baled, corrugated cardboard boxes doubly selected from supermarkets or industrial companies. Free from plastics, not corrugated materials or wax. Banned Materials may not exceed 0.5%

27. SELECTIVE CONTROL AND COMPLEX CRIMES DIVISION Case Study based on Actions Performed by the Area

28. SELECTIVE CONTROL AND COMPLEX CRIMES DIVISION Case Study based on Actions Performed by the Area

29. SELECTIVE CONTROL AND COMPLEX CRIMES DIVISION Case Study basee on Actions Performed by the Area

30. SELECTIVE CONTROL AND COMPLEX CRIMES DIVISION Case Study based on Actions Performed by the Area

31. SELECTIVE CONTROL AND COMPLEX CRIMES DIVISION Case Study based on Actions Performed by the Area

32. SELECTIVE CONTROL AND COMPLEX CRIMES DIVISION Case Study based on Actions Performed by the Area

33. SELECTIVE CONTROL AND COMPLEX CRIMES DIVISION Case Study based on Actions Performed by the Area

34. SHORT TERM To promote access to all the information systems available at AFIP. To improve both human and material technical resources. To highlight the importance of having information in advance. To improve the information system by accessing the pre- and post- release information. To communicate with the punishment areas in order to learn about the result of cases. LONG TERM To have an IT tool that enables to trigger actions by different control areas: Verification, Control, Customs Police, etc. To have integrated systems allowing: To enter the CUIT number in order to obtain the operator’s tax and customs information To enter the Tariff Item in order to obtain integrated and detailed information (tax and customs advantages, criminal and contravention history, behavior of price and production levels, reference values, etc.) about the goods to be analyzed. HORIZON