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Customs: Securing the Business Environment and Providing Impetus for Growth

By Kunio Mikuriya, Secretary General of the World Customs Organization

Dr_Kunio_Mikuriya_WCO_SGIn an era increasingly marked by the growing presence of both the digital and shared economies, underpinned by the use of information communication technology (ICT), and the sharp increase in cross-border trade, the global Customs community is poised to play a major role in the establishment of a secure business environment in order to foster economic growth.

Ensuring a safe and secure supply chain is central to achieving an enabling environment for legitimate trade to thrive. To this end, Customs has been called upon to streamline procedures, tackle corruption and uphold integrity, and to facilitate the cross-border movement of goods, conveyances and people in general.

The WCO has developed instruments, tools, and initiatives to assist in building the ideal environment for international trade to flourish. Such instruments include, amongst others, the revised WCO International Convention on the Simplification and Harmonization of Customs Procedures (Revised Kyoto Convention/RKC), the WCO SAFE Framework of Standards to Secure and Facilitate Global Trade, and the WCO Security Programme.

 Customs and the Digital Economy

Rapid digitalization has become one of the key drivers of economic growth, providing inclusivity by reducing entry barriers to economic systems and global value chains, but it requires new collaborative approaches by governments and trade stakeholders.

In order to better respond to the fast-evolving digital economy and to seize new opportunities, the WCO has focused its efforts on providing all necessary support to Customs administrations in order to facilitate ICT implementation at the strategic, policy, legal and operational levels through a comprehensive ‘Digital Customs’ agenda and its strategic capacity building initiative, called the ‘Mercator Programme’.

The WCO strongly believes that digitally-enabled and data-driven Customs and other border agencies have enormous potential not only to improve efficiency and reduce trade costs, but also to achieve enhanced trade facilitation, improved supply chain security and effective border controls.

To this end, the global Customs community is leveraging ICT solutions in pursuing the efficient implementation of various trade facilitation measures stipulated in international conventions and agreements, such as the WCO’s Revised Kyoto Convention and the WTO’s Agreement on Trade Facilitation.

Enabling Cross-Border E-Commerce

Cross-border e-commerce has revolutionized the way businesses and consumers sell and purchase goods, providing global economic opportunities and a broader range of options. This phenomenon has also presented a number of challenges in terms of the facilitation of legitimate e-commerce trade, safety and security, fair and efficient revenue collection, and community protection.

The WCO, working through a multi-stakeholder Working Group on E-Commerce, has developed collaborative solutions that support the needs and expectations of all stakeholders in the e-commerce supply chain. Recently, the WCO issued its Luxor Resolution on Cross-Border

E-Commerce, setting out the key principles for developing an enabling e-commerce regulatory framework and supporting its implementation.

Noting the importance of a global standard in cross-border e-commerce, the WCO is currently engaged in developing a “Framework of Standards on Cross-Border E-Commerce” that will further support the development of a secure, inclusive and sustainable e-commerce environment.

 Illicit Financial Flows and Trade Mis-Invoicing

To build a business environment that is fair and sustainable and conducive to trade, it is of prime importance to combat illicit financial flows (IFFs), as such activities can undermine domestic resources which could otherwise be mobilized for economic development.

IFFs can furthermore destabilize the global financial system, and be exploited to finance international organized crime and terrorist activities. Since trade mis-invoicing was identified as the main channel for IFFs, Customs has been taking appropriate action.

In order to successfully combat IFFs, Customs can examine whether financial transactions between traders correspond with their trade records. In addition, not only can Customs investigate the under/over-invoicing of imports in order to detect IFFs, it can also use the same mechanism for exports.

Partnership with the G20

The WCO and the G20 enjoy a mutually beneficial and well-established relationship. Collaborative work on a range of issues such as IFFs, challenges of digital economy, and capacity building initiatives has consolidated the cooperation between the two entities.

The G20 Leaders’ Communiqué issued at the close of the September 2016 Summit held in Hangzhou, China, welcomed increased communication and coordination with the WCO to address the issue of cross-border financial flows derived from illicit activities, including deliberate trade mis-invoicing. The WCO has devoted significant resources to this issue, mobilizing experts and stakeholders in an attempt to accurately assess the magnitude of IFFs and their impact.

Furthermore, the WCO was invited by the German G20 Presidency to attend the G20 Africa Partnership Conference held in Berlin in June 2017. The Conference provided an opportunity for the WCO to outline the work of Customs in relation to economic growth, domestic resource mobilization and peace and security, and to advocate further investment to support capacity building and technical assistance initiatives among its 53 Members throughout the African continent.

 

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