ICC Symposium on Trade Facilitation: A Dialogue Between Agencies and Business

1. ICC Symposium on Trade Facilitation:A Dialogue Between Agencies and Business

2. ASAPRA RELEVANT / VISIONARY / ESTRATEGIC 40 Years 20 Countries 25,000 Customs Professionals Argentina // Bolivia // Brazil // Colombia Venezuela // Chile // Ecuador // El Salvador Guatemala // Honduras // México // / Peru Nicaragua // Paraguay // Panamá // Portugal Spain // Dominican R. // Uruguay // Costa Rica

3. “We are witnessing the growth of the Trust Industry” Jeff Jarvis TRENDS FROM PAST TO PRESENT

4. TRENDS OF THE PAST 1988 2002 Safety (Private Sector & Public Sector) Trade Facilitation (Private Sector & Public Sector)

5. TRENDS OF THE PAST “ The application of policies, procedures, and technology to protect the supply chain assets (Product, facilities, equipment, information, and personnel) from theft, damage, or terrorism; and to prevent the unauthorized introduction of contraband, people, or weapons of mass destruction into the supply chain Closs and Mcgarrel (2004) Threat-Vulnerabilityand Risks.

6. PRESENT TO FUTURE TRENDS 2005 2012 • -XXI Century Customs • Border Assessment and Trade Compliance • Trade Continuity and Resumption - Safety and Facilitation (SAFE-OEA) - Birth of a new language

7. AEO General Data, to March 2012 19 AEO Programs 45 Countries (27 EU, 6 Asia Pacific, 8 Americas and Caribbean) 17 Mutual Recognition Agreements (MRA) (July 2012 EU-US) Source WCO

8. North America- March2012 1485 PIP 78% are also CTPAT CANADA 10 ,276 CTPAT 1,218 Foreign Manufacturers USA 1,100 EC (21 NEEC applicants) (445 are also CTPAT) MEXICO

9. 180 mil USD for implementation 118 mil USD for maintenance University of Virginia 2007

10. CONSIDERATIONS

11. The greatest challenge faced by Governments and the private sector consists on transforming International Trade into a positive force for global population. “Because trust reduces the cost of transactions…  high trust societies produce more output than low trust societies”  Paul Zak and Stephen Kanck

12. Economic Disparity Failures in global governance Illegal Trade Generates Protectionism Complex Multilateral Negotiation Systems Terrorism Theft Tax Fraud

13. HIGH LEVEL OF COMPETITIVENESS IN INTERNATIONAL TRADE: • Volume increase, • Timely availability of the product, • Swift changes in supply and demand, • Completely prevent logistic delays, • Frequent production peaks, • Just in time inventories, • Manufactured products whose costs are calculated based on the value of raw materials, transportation, and taxes. • Any element that increases the cost affects the country's ability to compete

14. Companies decide tojoinan AEO certificationprogrambasedonthe followingreasons:  48% The supply chain client of user requires it in order to do business. 19% As a sales tool 16% Due to the possible program benefits 9%Due to government outreach programs and based on the assumption that it may become compulsory in the future. 4% Because they are convinced that it generates value for the company in regards to its internal safety procedures. 4% Others Source: ASAPRA 2012

15. Diagnosis of the Modern Customs • Unclear delimitation of responsibilities for job positions • Untimely and inappropriate information • Fragmented systems unable to communicate with each other • Electronic Information not used in an efficient manner for Risk Assessment purposes • Complex Procedures • Insufficient Standardization • Duplicity of Activities Results in efficiency loss and inappropriate control

16. Customs Clients Government Agencies (Health, Agriculture) Carrier Warehouse Trade, Economic, and Security Policy Agencies Customs Broker Importers Exporters Passengers Internal Revenue and Statistical Info. Added Value Processes Guideline Processes Customs Clearance Services Customs Law Inspection of merchandise* International Agreements Verification of Documents, Information, Tax Payment * Free Trade Agreements Tax and Trade Laws Management of customs operations information Leyes de introducción y Extracción de mercancías Services to international passengers Regulations and Decrees Coordination Services with other Customs Enableing Processes Staff recruitment and training Survellance of facility entry points Infraestructure Development And Maintenence Technological Capability Quality System Information Technologies

17. THREE BLOCK MODEL • Eliminate: • Vices • Paradigms • Plan for Reengineering Implement Change Manage the Present “The right people will feel far more pressure to perform well when they are trusted”  Héctor Ruiz

18. IMPROVEMENTS TO THE LEGAL FRAMEWORK- CUSTOMS POLICY Tax Policy Trade Policy Customs Policy • Legal Certainty • Fight against Tax Evasion • Streamlining of Customs Procedures • Harmonization Of International Procedures • Trade Facilitation

19. CHALLENGES

20. Customs services are still largely subject to the legal systems and formalities of each country and not to a global standard.

21. Achieve Trustworthy -Visible –Controlled Supply chains Pillar Common Goal Customs – Private Sector Within a frame of complete efficiency.

22. Benefits/Cost analysis of AEO The Benefits must be visible and of high impact to companies.

23. The AEO program must be under constant evaluation in each region in order to keep track of any possible weak link in the certification process and to keep it flexible enough to adapt to the changes in its environment.

24. MUTUAL RECOGNITION • They must be the highest priority for the program's future. • They should be speed up in regional schemes instead of country by country.

25. AEO program requirements must be accessible to small and mid-sized companies.

26. The task of preserving public goods currently falls on Customs. To meet these challenges, support procedures, and international best practices are required; for which the participation of the Private Sector is essential. We must assume the challenge to advance.

27. Doveryai, no poveryai Trust, butVerify Confía, pero verifica. RussianProverb

28. THANK YOU A.A. Lic. Alejandro O. Ramos Gil President of ASAPRA aramos@laser.com.mx