1. RAISING THE PORTCULLIS
A Presentation to the WCO Conference on Developing the Relationship between WCO, Universities and Research Establishments
Brussels - March 2006
Prof. David Widdowson
CEO, Centre for Customs & Excise Studies
University of Canberra, Australia

2. Portcullis The traditional symbol of Customs
Symbolises a nation’s ports - the gates through which international trade must pass
Customs is the gatekeeper
‘Gatekeeper’ approach traditionally implies intervention simply for the sake of intervention

3. Portcullis
Customs must raise the portcullis to achieve an effective balance between trade facilitation and regulatory intervention
Intervention by Exception
Intervention when there is a legitimate need to do so
Intervention based on identified risk

4. Facilitation/Control
Change in approach:
From ‘Gatekeeper’ strategies
To a balance between trade facilitation and regulatory control
BALANCE

5. Facilitation/Control
The means of achieving the desired balance between trade facilitation and regulatory control is through the use of risk management
BALANCE

6. Facilitation/Control
High
Low
RED TAPE APPROACH
BALANCED APPROACH
CRISIS MANAGEMENT
LAISSEZ-FAIRE APPROACH C O N T R L
FACILITATION

7. Facilitation/Control

8. Revised Kyoto Convention
Simplification and Harmonisation of Customs Procedures
Contracting parties must integrate the principles of risk management into all Customs control programs

9. Compliance Assessment
© David Widdowson 2004
Client Service
Legislative Base
Compliance Assessment
Recognition
Rewards
Formal Warning
Persuasion
Penalty
Enforcement
RISK-BASED COMPLIANCE MANAGEMENT PYRAMID

10. Assessment of Compliance Levels Enforcement/ Recognition
Client Service
Legal Base
Assessment of Compliance Levels
Enforcement/ Recognition
Statutory Provisions
Relevant Laws
Regulations
etc.

11. Assessment of Compliance Levels Enforcement/ Recognition
Clear Administrative Guidelines
Formal Rulings
Education & Awareness
Technical assistance, advice
Client Service
Legal Base
Assessment of Compliance Levels
Enforcement/ Recognition

12. Assessment of Compliance Levels Enforcement/ Recognition
Risk-based Procedures:
Pre-arrival clearance
Physical Examination
Documentary Check
Trader-focused audit
Investigation
Client Service
Legal Base
Assessment of Compliance Levels
Enforcement/ Recognition

13. Assessment of Compliance Levels Enforcement/ Recognition
Client Service
Legal Base
Assessment of Compliance Levels
Enforcement/ Recognition
Punish Non-Compliance
Reward Compliance

14. Assessment of Compliance Levels Enforcement/ Recognition
Client Service
Legal Base
Assessment of Compliance Levels
Enforcement/ Recognition
Punish Non-Compliance
Reward Compliance
Reduced regulatory scrutiny
Periodic payment arrangements
Increased self-assessment
Less onerous reporting Intervention by exception

15. Assessment of Compliance Levels Enforcement/ Recognition
Client Service
Legal Base
Assessment of Compliance Levels
Enforcement/ Recognition
Punish Non-Compliance
Reward Compliance
Penalty
Formal Warning
Persuasion
Penalty
Formal Warning
Persuasion

16. Gatekeepers Risk Managers
“One size fits all” compliance strategy
Enforcement focus
Strategy dependent upon level of risk
Dual enforcement/ client service focus

17. Gatekeepers Risk Managers
Indiscriminate focus or 100% check
Intervention in all areas
Transaction focus
Inflexible procedures
Focus on high-risk areas
Minimal intervention in low-risk areas
Trader focus
Administrative discretion

18. Gatekeepers Risk Managers
Focus on real-time compliance assessment
Post-arrival import clearance
Physical control maintained pending revenue payment
Increased focus on post-clearance compliance assessment
Pre-arrival import clearance
Nexus broken between physical control and revenue liability

19. Gatekeepers Risk Managers
Seek to identify non-compliers
No special benefits for compliers
Seek to identify both compliers and non-compliers
Rewards for compliers

20. Research Activities Recognised Compliers:
“Authorised Economic Operators”
Actual benefits v. anticipated benefits (“expectation gap”)
Benefits over and above other members of the international trading community

21. Research Activities Supply Chain Security Initiatives:
Tangible commercial benefits
Commercial Benefits v. Regulatory Benefits
“Win-Win” or “Win-Lose”

22. Emerging Issues Supply chain security initiatives:
Tipping the balance in favour of regulatory intervention
Unreasonably high intervention practices being erroneously “blamed” on security requirements

23. Emerging Issues Rules of Origin: Proliferation of FTAs
Proliferation of Rules of Origin
Reversing the trend of Harmonisation and Simplification
Retarding the international trade facilitation agenda

24. Emerging Issues Role of WCO and National Administrations:
Lobby for international agreements which support global trade facilitation through the ongoing harmonisation and simplification of regulatory procedures

25. Centre for Customs & Excise Studies
Thank You
Centre for Customs & Excise Studies