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THE RELATIONSHIP BETWEEN
CUSTOMS COMPLIANCE AND TRADE FACILITATION
The Customs
Control Act 31 of 2014 will replace the provisions relating to customs
control in the Customs and Excise Act, 1964 towards 2016. South Africa’s
Customs legislation had to be updated since it has not kept pace with
technological advances and it does not fully reflect the modern standards of
the International Convention on the Simplification and Harmonization of
Customs procedures (Revised Kyoto Convention) of the World Customs
Organization, the WCO SAFE Framework of Standards to Secure and Facilitate
Global Trade and other related instruments the Republic of South Africa has
assented to.
There is a
close relationship between customs control and trade facilitation, and the
South African customs legislation had to be aligned to these instruments
since these instruments serve as a modern framework for modern, efficient
and cost effective customs control and simplified customs procedures and
formalities.
The Customs
Control Act also provides a new legislative framework for the further
development and reform of customs legislation in an open and democratic
society since it was recognized that the mere amendment of the Customs and
Excise Act, 1964 would not have achieved the desired result of modernisation
and transformation of customs legislation and the simplification of customs
procedures and formalities.
The Revised
Kyoto Convention entered into force on 3 February 2006, and negotiations for
a WTO Trade Facilitation Agreement commenced in 2004. The agreement was
signed in Bali, Indonesia in December 2013, seven months prior to the
publication of the Customs Control Act in Government Gazette 37862
dated 23 July 2014.
The Customs
Control Act also recognizes that customs administration plays a critical
role within the context of international trade and tourism in ensuring
effective controls that secure revenue recovery, facilitation of legitimate
trade and protection of society at large and that customs procedures and
formalities should be efficient, transparent and predictable for carriers,
importers, exporters, traders, travelers and other persons involved in or
affected by customs procedures and formalities and not impede legitimate
international trade, economic competitiveness and the movement of people and
goods across national boundaries.
The Customs
Control Act provides a new legislative framework that was written to achieve
a balance between effective customs control, the secure movement of goods
and people into and from the Republic and the facilitation of trade and
tourism.
Lastly, the
Customs Control Act serves as a “platform” for the implementation of various
other laws that impose taxes on goods, and laws that prohibit, restrict or
control the import or export of certain goods.
Trade
facilitation has different meanings. According to the World Trade
Organization trade facilitation means: “the simplification and harmonization
of international trade procedures,” with trade procedures being “the
activities, practices and formalities involved in collecting, presenting,
communications and processing data required for the movements of goods in
international trade”.
According
to the Swedish Board of Trade, the fundamental principles of trade
facilitation are transparency, simplification, harmonization, and
standardization.
Within the
context of the World Customs Organization trade facilitation aims to make
Customs controls and procedures more efficient.
Despite the
different definitions, trade facilitation has one common goal in mind,
namely to reduce transaction costs which will make economies and business
more competitive. The benefits will accrue from reduction in delays and
costs which are achieved with predictable and efficient movement of goods
across borders because national customs administrations and governments are
able to utilize modern customs procedures to enhance controls, ensure proper
collection of revenues due and at the same time contribute to the economic
development through increased trade and encouragement of foreign
investment. The desired results can however only be achieved if governments
align their national legislation to the WCO Revised Kyoto Convention and
related instruments and implement the provisions of the WTO Trade
Facilitation Agreement which has also been linked to these instruments.
Article 7
of the WTO Trade Facilitation Agreement deals with the release and clearance
of goods. It sets out the procedure Member States are obliged to establish
or maintain for the release and clearance of goods for import, export or
transit. Article 7 of the WTO Trade Facilitation Agreement is aligned to
various trade facilitation instruments which includes but are not limited to
parts of the WCO Revised Kyoto Convention, Safe Framework, Guidelines for
the immediate release of consignments by Customs, the WCO Compendium of Risk
Management and the WCO Risk Management Guide, the UNCTAD Technical Note on
pre-arrival processing, the Customs Guidelines of the International Chamber
of Commerce and UNCTAD Technical Notes on Risk Management for Customs
Control.
The WCO
Revised Kyoto Convention is sometimes referred to as the WCO’s Trade
Facilitation Agreement. The WCO Revised Koyto Convention (RKC) is regarded
as the blueprint for modern and efficient customs procedures in the 21st
century. It provides importers and exporters with predictability and
efficiency that modern trade requires – and which will make companies more
competitive. The Revised Kyoto Convention contains several key principles
which are also principles of the WTO Trade Facilitation Agreement -
transparency, simplification, harmonization, and standardization.
The
principles of the WCO Revised Kyoto Convention, which have also been
incorporated in the new South African Customs legislation are:
·
Transparency and predictability of customs actions;
·
Standardization and simplification of the customs clearance declaration and
supporting documents;
·
Simplified
procedures for authorized persons;
·
Maximum use
of information technology;
·
Minimum
necessary customs control to ensure compliance with regulations;
·
Use of risk
management and audit based controls;
·
Coordinated
interventions with other border agencies; and
·
Partnership
with the trade (importers, exporters and their appointed customs brokers).
The RKC
promotes trade facilitation and effective controls through it legal
provisions. The RKC also contains new and obligatory rules for its
interpretation which have been incorporated in the South African Customs
Control Act, 2014.
Many
provisions of the WCO Revised Kyoto Convention and the WTO Trade
Facilitation are already present in South Africa’s Customs and Excise Act,
91 of 1964. However, once the Customs Control Act, 2014 and the Customs Duty
Act, 2014 and the remainder of the provisions are implemented importers,
exporters and manufacturers, and in particular small, medium and micro
enterprises will truly benefit from the trade facilitation benefits that
have been contained in South Africa’s new legislation. |
