SHIPPERS WANT CUSTOMS PROCESSES INTEGRATED INTO SUPPLY CHAINS
Customs agencies around the world are falling behind the digital curve, and international shippers want them to catch up.
Shippers voiced their concerns about customs and automation at a World Customs Organization/International Chamber of Commerce-sponsored information technology meeting in Brussels Monday.
“Without updated and accurate customs information, business shipments are unpredictable, and costly, making supply chains difficult to manage,” said Sergio Giacoletto, executive vice president of Europe, Mideast and Africa, for Oracle. “An Internet-enabled customs function provides business with the ability to integrate customs controls into their supply chains.”
The World Customs Organization has heard the concerns of the industry, and vows to play a more active role in motivating customs agencies to modernize their operations through Internet-based information technology.
“The WCO must pay more attention to the task of helping members increase their awareness and their efficiency, whichever computerization option they have chosen,” said Michel Danet, secretary general for organization during a joint information technology meeting with the International Chamber of Commerce in Brussels. “The WCO must also make sure that new frontiers — IT frontiers — do not develop, as in the long run this would hamper the liberalization of trade.”
The WCO has a long-standing involvement in the development of international electronic-data-interchange standards for customs agencies. The organization will now place more emphasis on the use of flexible XML (extensible markup language) of the Internet as means to communicate with the trade and among themselves.
During the past two years, customs agencies around the world have rushed to create Web sites containing information about their rules and procedures. More than 70 customs Websites are now accessible through the WCO Customs Portal, at http://www.wcoomd.org .
In 1999, the WCO adopted its revised International Convention on the Simplification and Harmonization of Customs Procedures, or Kyoto Convention. The convention requires contracting parties to use automation to manage customs procedures, such as risk management and the receipt of import declarations prior to cargo arrival.
“The revised Kyoto Convention contains all the provisions, recommendations and best practices that are essential for the modern, transparent, clear, efficient, rapid and simplified accomplishment of customs clearance operations,” Danet said.
The progress of countries acceding to this international convention has been slow, Danet said. “I hope that approaches made by businesses to their national authorities on this matter will help to speed things up.”
In January, the WCO took over the maintenance and management of the Group of 7’s Customs Data Harmonization Initiative, now known as the WCO Customs Data Model. The model provides an international standard for cross-border regulatory information requirements and electronic messaging.
“In particular, (the model) will enable the development of so-called ‘single-window’ systems, where the trader submits all the required regulatory information electronically to a single point of contact, in order to obtain release of the goods,” Danet said. “The WCO Customs Data Model will also become the prerequisite for customs-to-customs data exchanges. Following the recent terrorist attacks, it will certainly become an important component in any customs control program, and the vehicle for increased customs cooperation.”
The WCO is also working closely with the express industry to develop future clearance guidelines, which take into account Internet technology.
“Where e-commerce is concerned it is both predictable and essential that new approaches will be adopted,” Danet said. “Logically, this will lead Customs and the other law enforcement agencies to ask themselves what laws and what rules should apply to this global digital marketplace? Within national boundaries, of course, it is the national legislation that will apply.”
“But without common understanding, and a common international agreement setting out minimum standards, national controls will have only a limited effect on this global phenomenon,” he said. “Customs will have to review the traditional concepts of ‘borders,’ ‘goods,’ ‘control’ and so on in the context of e-commerce.”
Industry executives warned customs authorities at the Brussels meeting not to develop automated standards in a vacuum. John Raven, a long-time industry consultant on cross-border issues, said customs’ e-commerce models should “behave” like business e-commerce models.
“Customs authorities need to be a partner in our supply-chain,” said Kevin Dillon, vice president of Europe, Mideast and Africa for Microsoft. “We want to collaborate and fully partner with customs agencies around the world.”
Michael J. Byrne, director of global customs processes and North America operations for Delphi Automotive Systems, said global systems standards used by customs agencies would allow the shipping industry to:
* Simplify processes to make them more predictable.
* Reduce costs and increase compliance levels.
* Provide large ‘low risk’ companies with opportunities for preferential treatment for clearance.
* Reduce cycle time in the supply chain.
“Through collaboration such as this forum, and by harnessing the power of the Internet, we can build secure, globally integrated customs administrations to reduce complexity and promote international trade,” Giacoletto said. “The Internet has changed everything, but can change nothing unless we are willing to adapt our perspective and embrace the new opportunities it provides.”