WTO Symposium on Practical Experience of Implementing Trade Facilitation Measures Post-Clearance Audit Case Study July 10, 2012 Judith Han Director, Department of Valuation, DGOC Chinese Taipei

Outline Brief overview of PCA Application of IT systems Case study Costs and outcomes of implementing PCA Continuing improvements Conclusions

Brief overview of PCA Implemented from 2002 Establish PCA framework Identify targets for auditing; e.g. incorrect classification, valuation, country of origin Recover evaded duties; impose fine and/or penalty Place traders acting abnormally on watch list Refer to competent agencies for further investigation

Application of IT systems Tariff operation system Valuation database Customs information system Import/export trade statistics management system PCA management and operation system Others

Case Study Background—target at high-risk imported goods Alert--undervaluation Risk Identification-no transaction documents Analysis--possible customs fraud Procedures--check with bank and foreign attachés Key Issues: different wire transfer amount, falsified invoices Outcome: US$208,200 evaded duties & fines to be levied Lessons taken: enrich valuation database, enhance scrutiny, instruct importers

Costs of implementing PCA (for fiscal year ’11) Number of auditors40 Personnel expensesUS$ 2.610,900 Training expensesUS$ 11,000 Total cost 2010 – ‘11US$ 2,621,900

Outcomes from implementing PCA (for fiscal year 2010 – ‘11) Audits completed 583 Discrepancies found 454 Estimated value of evaded duties and fines recovered US$ 26 mill. By type of discrepancy found: - Valuation49.57% - Tariff classification18.70% - Origin1.72% - Description of goods and specification1.20% - Concealment in imported goods0.17% - Others6.52%

Continuing Improvements Integrating related IT systems and valuation database Strengthening ability to analyse and identify risk

Conclusions Efficiency Effectiveness Cost & Benefit; Ensure Compliance Trade Facilitation Monitor of non-Com. 3Es Enlightenment Experience Sharing - Domestically - Within WTO

Thank you for your attention !