Customs agencies urged to form regional cooperative pacts

WCO conference discussion centers around creation of technology-driven globally networked customs blocks, where countries can share and harmonize data.    Global customs officials were urged Wednesday to focus on the creation of so-called globally networked customs agreements and utility blocks to foster regional cooperation on data sharing and other complex customs processes.
   The push came via several panels at the World Customs Organization IT Conference in Freeport, Bahamas. The WCO’s goal is to form technology-driven regional blocks to aid customs initiatives across bordering nations as the body seeks to drive adoption of single window trade facilitation globally.
   The utility blocks essentially allow two or more nations to share critical customs information with each other. The prime example of such an initiative is the mutual recognition pact between the United States’ Customs-Trade Partnership Against Terrorism program an the European Union’s Authorized Economic Operator program.
   The benefits of a regional approach are numerous, delegates to the conference were told. For one, in pragmatic terms, it’s far easier establishing such a bilateral agreement than it is one involving multiple nations across multiple regions.
   Pulak Chakrabarti, president and chief executive officer of Chakrabarti Management Consultancy, Inc., noted that such agreements allow customs agencies to avoid multiple investments since the work done to certify parties by one agency can be leveraged by the other. It also prevents traders from having to be certified multiple times, helping customs authorities achieve their goal of facilitating trade.
   Chakrabarti did, however, note that the smaller scale of such regional initiatives meant that the framework of a global single window would necessarily be built more slowly, and that standardization across the utility blocks would be harder to achieve.
   Ramesh Siva, lead e-government specialist for the World Bank, said that customs agencies have to be realistic about such goals.
   “The challenge is determining a clear business rationale,” he said. “Is there a value in terms of security? Is there a value to traders? Is there a value to the customs authorities? Unless you can determine that value upfront, don’t even start.”
   Another issue is data sharing.
   “Many administrations don’t want to share their data,” said Paul Hillaire, permanent secretary, Caribbean Customs Law Enforcement Council. “But they want to see others’ data.” Hillaire described how a consortium of Caribbean nations has set up a GNC to improve data sharing.
   Such a GNC between Central American nations has been studied and could prove successful, Jhon Fonseca, vice minister for Costa Rica’s Ministry of Foreign Trade, told the conference.
   Fonseca said collaborative trade facilitation among Central American countries could boost imports and exports by 4 to 11 percent (depending on how far-reaching the regional pact is), boosting tax revenue to the nations in the process.
   The fact that the study shows tax revenue could increase shows the benefit of empowering trade, since most government finance officials believe reducing trade barriers erodes revenue, he said.
   Intikhab Shaik, group executive, business systems for the South African Revenue Service, said that politicians have to support customs agencies and that laws have to be flexible enough to enable officers in those agencies.
   He lauded an AEO-type Preferred Trader program in southern Africa that has proved valuable to member nations in the Southern African Customs Union. But Shaik noted that technology is an enabler but that customs officers are the backbone of any agency.
   “As technology is moving on, people are starting to neglect what we customs officers knew 25 years ago,” he said. “Back then, you innately knew which cargo (to examine), what stood out.”
   Shaik said technology is best deployed when it empowers officers to target suspect shipments, a more pressing problem given that customs agencies worldwide are faced with budget cuts that typically hit staffing first.
   Of course, there are more than just technological and political problems customs agencies must face. Some struggle with language barriers that prevent deeper data and IT cooperation.
   In an ironic moment during the conference, a Nigerian official stood up and bemoaned his country’s difficulty in building such partnerships with bordering nations since the primary language in Nigeria is English, while all but one of the nation’s neighbors primarily use French.
   The irony came when a panelist from Mexico replied to the Nigerian official in Spanish, only the Nigerian official didn’t have a translation headset and thus couldn’t understand the response.
   WCO Secretary General Kunio Mikuriya, meanwhile, emphasized his organization’s goal to broadening the reach of customs initiatives beyond just customs agencies and to other governmental bodies that are impacted by trade.
   John Bescec, director, global trade compliance and standards at Microsoft Corp., voiced his agreement. “The private sector tell us that customs understands their issues,” he said. “It’s the other government agencies that don’t understand.”