2. ... the pathway to fair and efficient revenue collection …

3. WHAT IS THE REVENUE PACKAGE?  Response to Members’ concerns regarding falling revenue returns and declining duty rates  Revenue collection still high priority and challenge to many Members  Action Plan developed to meet Members’ needs  Focus on verification of duty liability  A “Package” of new and existing tools and instruments  First of WCO’s coordinated Packages : 2

4. 3

5. KEY TOPICS Customs Valuation Preferential Origin Classification 1 1 2 2 3 3 Post-Clearance Audit 4 4 4

6. Trade Facilitation IS …. The enemy of revenue collection !!! NO! 5

7. CHALLENGES TO EFFECTIVE VALUATION CONTROLS IN DEVELOPING COUNTRIES 6  Infrastructure challenges  new diagnostic tools  Large informal sector  weak/non-existent audit trail  cash transactions

8. MANAGING VALUATION RISK  Disciplined use of valuation databases/price data  Use as risk indicator only  Derive data from previous Customs declarations  Safeguards against mis-application  Analyse aggregate statistical data & trends  Focus on importer profiling/ trade segmentation  Effective risk management = trade facilitation 7

9. CUSTOMS VALUATION – RIGHTS and OBLIGATIONS  WTO Agreement provides ‘balance’  WTO Decision 6.1  Assist/educate business  Proportionate penalties for non-compliance Rights and obligations of importer Rights and obligations of Customs 8

10. BALANCING CUSTOMS CONTROLS  Pre-arrival : Advance rulings:-  Guidance available on classification, origin and valuation  Consolidated guidelines produced  Clearance : targeted controls (e.g. informal trade)  Post-clearance : PCA :-  WCO Guidelines, Volumes 1 and 2  E-learning and trainer accreditation programmes  Diagnostic tool (in preparation) 9

11. KEY MESSAGES – POST-CLEARANCE AUDIT  Need to clarify definition / misunderstandings :  Not an enforcement tool or internal audit  Use PCA as a compliance tool  PCA is the only effective mechanism to control valuation – access to documents, time etc.  Plan migration of controls to post-clearance environment  Infrastructure/human resource needs  WCO Guidelines – two modules 10

12. Reliance on database Effective PCA PCA v. use of a valuation database Implementation of PCA

13. KEY MESSAGES – PREFERENTIAL ORIGIN  Guidelines on preferential origin verification  Irregularities study  Mutual administrative assistance system between FTA partners, not always working well  Difficulties verifying preferential origin at importation  Study on certification  Trend towards self-certification  Subsequent verification will focus on originating status of the goods 12

14. KEY MESSAGES – TARIFF CLASSIFICATION  Infrastructure for tariff classification work  Diagnostic tool  Critical backbone of international trading system  150 Contracting Parties  HS-2017 amendments adopted 13

15. LINK TO WTO AGREEMENT ON TRADE FACILITATION Advance rulings (Art. 3) Risk management (Art. 7.4) PCA (Art. 7.5) Termination of inspection contracts (Art. 10.5) Exchange of information (Art. 12) 14

16. 15

17. Trade Facilitation IS …. The friend of revenue collection !!! FINAL MESSAGE 16 THANK YOU!