Customs Reform Modernization and Capacity Building
Nowhere is the impact of the liberalization of world trade and other economic developments more keenly felt than in the Customs administrations of the Caribbean. With the drive for global free trade and the development of enlarged regional free trade areas, our members are under great pressure to change. Traditional levels of control and service must change, as the cost of these operations to trade, industry, and the public alike become ever more prohibitive.
The modern customs administration makes a vital contribution to the objectives of Government in the following areas:
- The collection and protection of revenue;
- The protection of society through frontier and anti-smuggling controls.
- The implementation of financial, trade and foreign policies;
The CCLEC recognizes that its members need to demonstrate to government that this contribution can be made effectively, efficiently and economically.
In 1993, CCLEC participated with the WCO in some of the early development work of the Diagnostic Study. This study was a practical management tool for customs managers, which enabled them to make a self-analysis of their administration and the environment in which it operates. Administrations using the study were able to identify problems, their causes and solutions. The process included the creation of plans for reform, training and, where appropriate, assistance.
CCLEC supports members in the implementation of the recommended changes. During that time CRM programs were completed in the BVI, Grenada, St. Lucia, St Vincent & the Grenadines, St Kitts, Turks & Caicos Islands and Trinidad & Tobago. Diagnostic studies were conducted in Antigua, Barbados and the Netherlands Antilles.
However at the Caribbean Customs Law Enforcement Council’s 25th Annual Conference in Curaçao in 2002 Members identified a number of serious issues regarding the capacity of Customs in the region and needed assistance to cope with and keep pace with the continually changing demands from trade liberalisation, globalisation and international cross border crime.
They agreed that despite the critical role of Customs in providing the majority of revenue in the Caribbean Region and forming the first line of national, social and economic defence at the frontier, Customs in the region are often not recognised or valued according to their worth. This is reflected in the level of resources allocated to Customs in many countries of the region.
Ministers, policy makers, law enforcement bodies and international organisations need to be made aware of the important value and role of Customs and Revenue administrations in collecting national revenue, enforcing the law, securing the international trade supply chain, facilitating trade, and compiling international trade statistics.
Whilst being a sensitive and delicate issue the Conference recognised that in the past, some Customs administrations have been used as political tools to facilitate political agendas. In addition, certain aspects of Customs have been, and still are used, to further individual politicians’ objectives. This has a direct bearing on issues such as exemptions granted by Government Ministries (and Ministers) and pressures exerted on Commissioners of Customs for them to relieve certain importations of Customs charges, often for illegal, personal reasons. The net result of this unacceptable practice is loss of national revenue, promotion of the view of Customs as corrupt and a weakening of the national and regional judiciary and law enforcement systems. In order to be effective, Customs need the scope to operate professionally without political interference.
With the reduction of Customs duty as a main means of collecting national revenue there is increasing emphasis on indirect taxation regimes such as VAT and Excise duties. Modern Customs and taxation administration’s methods are becoming increasingly linked with an emergence of common skills and a “single window approach” for the trade and public. The model of a single Revenue Administration has considerable merit and should be considered in the Caribbean Region in order to improve organisational management and increase efficiencies. A critical element in the modern revenue administration is an integrated automation system, well maintained and kept up to date by properly skilled and rewarded staff.
The development of the organisation’s human resources is critical to its success in terms of recruitment, retention, reward and recognition. Technical and management training and development must be available in order to build the required knowledge, skills and attitudes at all levels of the organisation. There is an increasing demand for more complex transactions and strategic management methodologies giving rise to the need for more immediate, up to date technical training, delivered using a variety of means including the internet, as well as the need for middle, senior and strategic management qualifications in the form of certificates, Degree and Masters qualifications.
The conference concluded that rapid environmental changes such as WTO, FTAA, and the demands of other international conventions are placing increasing pressures on Customs and revenue administrations. There appears to be little assessment as to the capacity of revenue administrations to meet those demands during the international negotiations stage. An example of this is the WTO requirement for post clearance audit facilities that were agreed without assessing the impact on recruitment, salaries, training and academic accountancy qualifications for Customs personnel.
This requirement changes the profile of a more traditional Customs Officer and can put unrealistic burdens on mall Islands States if they are required to sign up to WTO and other agreements. It is already being discovered that customs face serious problems when it comes to implement the rules and requirements of WTO and FTAA.
It is essential to ensure the security of the international trade supply chain and external frontiers. This can only be achieved through a closer working relationship between customs, police and all other related agencies. In turn, the capacity requirements of all organisations must be identified and met. This includes the agreement of standard operating procedures and the signing of Memoranda of Understanding.
Customs has not always been perceived by the police, military and other related agencies in a positive light. This image needs to be improved and Customs need to assert themselves and recover that lost position. It’s been suggested that part of this poor image stems from a lack of confidence and not fulfilling the law enforcement role allocated to customs by government and legislation. There has been reluctance in some areas to adopt a law enforcement role despite this mandate given to customs through legislation. This in turn has created the perception that customs has only been about collecting revenue and not enforcing all aspects of the law. Customs needs to assert itself in border control.
For more detail please review the Customs Capacity Building Strategy prepared by the World Customs Organization with additions by the Caribbean Customs Law Enforcement Council on behalf of the international Customs community in the Latin American and Caribbean Region.
CCLEC, recognizing the importance of integrity in every day public service (and elsewhere), established a working group to develop an integrity program.
Utilizing the tools designed by the World Customs Organization (WCO), the integrity work group has developed a program to assist the Customs administrations of the Caribbean to enhance currently existing, or implement new, integrity programs.
Over the past few years the organization has endeavored to take the program forward through:
- The convening of workshops on integrity at its Annual Conferences
- The development of a Generic Code of Ethics
- The provision of training courses on integrity
CCLEC established the Integrity Award in 2001 to recognize efforts by officers and departments who have achieved excellent integrity standards.
The award is presented at the CCLEC Annual Conference, though it does not have to be awarded on an annual basis - see the criteria for nomination.
Joint Intelligence Office/WCO RILO
During CCLEC's early days the post of Regional Liaison Officer was created within the US Customs Communications Center in San Juan, Puerto Rico to coordinate all regional enforcement activities and to provide support to Caribbean members.
In 1992, it was recognized that there was a good business case to support the co-location of the CCLEC Regional Liaison Office (RLO) and the Regional Intelligence Liaison Office (RILO) of the World Customs Organization (WCO). The merger was consolidated by the agreement of a Joint Management Plan and Standard Operating Procedures for the office between the WCO and the CCLEC. In 1994, the RLO was re-titled the Joint Intelligence Office (JIO).
In support of its enforcement efforts, the Council established the Customs Enforcement Network (CEN) which is made up of the Joint Intelligence Office (JIO) and Enforcement Liaison Officers (ELO) who are located in each member country.
The role of CEN is to strengthen the enforcement capabilities of Customs administrations at the national level through the exchange of information and intelligence.
The enforcement efforts of the Council are not limited to drug enforcement. The CCLEC has active programs in the areas of commercial fraud and money laundering in addition to its drug enforcement projects and liaison programs.
The Permanent Secretary of the CCLEC manages the office on behalf of both organizations.
Since November 2003 the JIO has been re-located to the Permanent Secretariat in Saint Lucia
Regional Airport Anti-Smuggling Initiative (RAASI)
The Caribbean Customs Law Enforcement Council plays a pivotal role in helping to suppress the flow of drugs within the region and one of its highest strategic goals is to strengthen the enforcement capabilities of the region.
Customs is the first line of defence against smuggling threats. Trafficking through Caribbean airports poses a significant threat to the region and the international community by extension. The Regional Airport Anti-Smuggling Initiative (RAASI) was established in 1999 to address the smuggling threats at regional airports. RAASI examines systems and controls currently in place at the major Caribbean hub airports, identifies strengths and weaknesses, and recommends the implementation of effective countermeasures. The first project was fully funded by Netherlands Customs.
Under this project 167 officers in eleven countries were trained. Most countries have established anti-smuggling units which help to prevent and detect the smuggling of contraband and prohibited items.
The CCLEC continues to assist Customs in the region to improve the detection of smuggling methods through training and information sharing.
Regional Clearance System (RCS)
The smuggling of drugs and other contraband in the Caribbean is a crucial problem that eventually affects everyone. To help combat the problem, the Caribbean Customs and Law Enforcement Council (CCLEC) has developed and introduced a small craft tracking system in the region. The system, supported by the United Nations International Drug Control Programme (UNDCP) and the EU, monitors the movement of small vessels throughout the Caribbean Region.
The Regional Clearance System (RCS) is a web-based information system that captures national Customs Clearance information for pleasure craft sailing through most ports in the Caribbean.
Presently Customs staff enters the data manually from the inbound and outbound clearance documents completed by each master. The information is then entered on the system and becomes available to other participating countries.
It is recognized that the system has the potential to benefit the yachting community as well as the Tourist Boards in the region. To facilitate this, CCLEC has embarked on further enhancement of the system. The e-SeaClear or pre-arrival notification system was developed in 2008 and is currently being used by many of the countries in the region.
The e-SeaClear will help to improve the entry process by allowing the ship masters to complete the Clearance form prior to arrival.
Training has been perhaps one of the most successful areas of CCLEC activity. CCLEC training curriculum includes:
- Junior officer basic training
- Commercial fraud
- Drug enforcement training
- Train-the-trainer training
- Intelligence training for ELOs (investigation and enforcement techniques)
- Facilitation skills training for the diagnostic study in support of the Customs Reform and Modernization Program (in partnership with the WCO)
- Management training
- Container profiling training
- Risk analysis/risk management training
Specific modules have been developed by CCLEC for:
- Junior officer basic training
- Commercial fraud training
- Intelligence training
- Courtroom Testimony
- Container Profiling
- Middle Management
- Rules of Origin
- Risk Management
A professional and efficient Customs valuation programme is critical to a government’s trade and fiscal agendas.
The countries in the Caribbean region are 'open economies' greatly dependent on the outside. The scarcity of resources and the smallness of the domestic markets within the Caribbean region do not allow the countries to viably produce the goods they need. Thus, the needed goods must be imported and exports are based on small variety of products. As a result of this reliance on trade, tax revenues greatly depend on import and export volumes; and can be affected by economic or political events within and outside of the Caribbean region.
Customs services in the Caribbean region now face sustained pressure from their governments and the trade to provide better levels of service, and to reform their business systems and control procedures to meet the demands of their governments on one hand and demands of the trade on the other. As governments make national and regional agreements to implement the World Trade Organization's (WTO) standards, including the WTO valuation code and the Free Trade Area of the Americas (FTAA) Agreement, Customs services must modernise current processes, systems and methodologies.
Introduction and implementation of the World Trade Organization's (WTO) Valuation Agreement require many modifications for most countries in the Caribbean region. The Caribbean Customs Law Enforcement Council (CCLEC) has delivered training in six Caribbean countries in an effort to promote use of fair and consistent Customs valuation procedures, protect the revenue, effectively utilize Customs resources, enhance global competition, and foster capacity building within the region