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The Greater Caribbean This Week

The challenge of customs
modernization and facilitation

by Luis Noriega

Since the 1950s, an important process began in the area of customs that was geared toward promoting an honest, transparent and predictable environment that would legitimize in countries' customs administrations, the flourishing international trade taking place at that time and which would also allow effective measures to be taken against illegal activity.

Thus, in 1952, the body referred to today as the World Customs Organization (WCO) was created. This is an inter-governmental organization specializing in the area of customs, with more than 160 Member States and which has promoted important international agreements, working on issues such as the harmonized tariff nomenclature system, customs valuation, the origin of goods, customs facilitation and procedures, as well as the modernization and integrity of customs management.

One of those major contributions is the Harmonized Tariff Nomenclature System, which is employed by approximately 180 countries around the world. When developed during the 70s and 80s, the system was promoted as a trade facilitation initiative. Today, it is used more as customs nomenclature, for formulating international trade statistics, for applying rules of origin, for collecting taxes, for international trade negotiations, transport statistics and for monitoring controlled goods (e.g. waste, narcotics, arms, and endangered species).

Yet another important instrument is the Kyoto Convention, which has allowed for the definition of the vital role that must be played by customs in the growth of international trade and in the development of markets in the globalized world. The current global environment, which is highly competitive, demands great efficiency in customs services.

It is an indisputable fact that the trade of goods in the world has grown at a dizzying rate, combined with the development of information technologies and a different international business environment, and given the demand for service quality and customer satisfaction. These new realities have given rise to a conflict between traditional customs methods and procedures and current needs. These days, there is talk of incorporating modern concepts that include the application of new technologies, new philosophies on customs control and a need for the private sector to partner up with governments, establishing strategic alliances of support and mutual benefit.

It is now a matter of developing joint and coordinated efforts to eliminate existing barriers to trade by simplifying and harmonizing customs procedures, combining the efforts of organizations like the World Trade Organization (WTO), UNCTAD and the WCO.

The issue is a complex one because while trade must be facilitated, customs must have effective controls to avoid illicit trade and must continue tax collection efforts, since in some countries customs duties still have an extremely heavy influence on total collections.

This is an important alternative in which many customs administrations are involved. Added to this is the low level of support and priority given by some governments to the issue of customs in their domestic policy. Furthermore, there have been constant changes taking place in their managerial, administrative and technical staff every time governments change.

Lastly, it is imperative to point out that some countries do not have sufficient budgetary resources for their physical modernization and for staff training. In addition to this, there is the difficulty of eradicating an endemic ill in customs, the lack of transparency and honesty. Without sufficient resources, it is tough for some countries to adequately face the challenges of customs modernization and facilitation.

Luis Noriega is the Director of Trade of the Association of Caribbean States. The views expressed are not necessarily the official views of the ACS. Feedback can be sent to mail@acs-aec.org

Also in this section:
Delarge, Why not build a road through the Darien?
Hassan, Double standards about nepotism?
Jackson, Wolfowitz, a tougher guy in a weaker World Bank
Weisbrot, The World Bank's problems go well beyond Wolfowitz
Kozloff, Venezuela and the oil weapon
Revenga, The world's growing water crisis
Noriega, Customs modernization
Avnery, Splitting Sharon from the settlers
Leis, Public confidence in the law is at stake
Bernal, Judicial and legislative scandal