Joy Orlek - SARS Identifies Trade Facilitation Imperatives

In a refreshingly frank presentation to the freight industry last week, acting chief officer Customs & Excise, Beyers Theron, conceded that the revenue authority had failed to deliver on its mandate of facilitating legitimate trade, but outlined a plan to rewire the process.

"We need to strike a balance between enforcement and facilitation - and it's a balance which in recent times we have failed to achieve," Theron told delegates at a joint FTW/JCCI business breakfast last week.

"Over the past three years we have focused too strongly on physical activity without moving to a vision of risk- and auditbased controls."

And to achieve this vision, Theron has identified three burning issues that need to be addressed - control, trade facilitation and revenue management.

"With regard to control, we need to move to an environment of data-driven supply chain control. Visibility is all very well, but it must be driven by data and risk. "When it comes to trade facilitation, we must focus on a segmented approach which includes differentiated services and tailor-made responses for AEO (authorised economic operator)/PT (preferred trader) clients."

On the issue of revenue management, he said this should not be about increasing inspections, but rather working smarter and "doing things right the first time".

"You need a data-rich environment to be effective at revenue management. You need to ensure that everything that comes into the country has a declaration and that the goods can be accounted for - and the same applies to exports. To check a bill of entry is not a job that you learn overnight. You need to be trained and understand the business of customs."

Theron believes that there are pockets of excellence within the organisation but made no pretence of the fact that it had failed on many levels to achieve the standards it had set for itself. "While we have aligned to World Customs Organisation standards we are not delivering optimally against that business model.

"We have also fallen short in terms capacity in addressing the challenges of Illicit trade in the tobacco, clothing and textiles, fuel and electronics sectors, for example.

"This is a critical problem if we want to grow the economy and change the vision of customs. This is where we have leakage in terms of revenue - and when you start addressing these things and when you get that right general compliance improves."

Theron said maybe they were moving too fast on NCAP (New Customs Act Programme) as trade was still lagging behind. "The industry is still not ready after the implementation of the first phase of RCG (reporting of conveyances and goods) in April this year- and for me to execute within the new system, I need the data. If I only have 50% compliance, that's not enough."

According to Theron, they had heard that for a large portion of trade, the problem lay with one service provider who wasn't ready for this release. "If we are to run at the pace of development we expect, we can't afford that going forward."

In the final analysis, Customs' mandate is to raise revenue. "That's important because we need that revenue but we need to collect the correct revenue.

"We need to refine our customs operating model and understand that the role of customs is significantly different from 10-20 years ago. It's no longer a gatekeeper but rather an economic facilitator of legitimate trade." "We know what's wrong and now need to move to actions and results to fix it."

We need to strike a balance between enforcement and facilitation - and it's a balance which in recent times we have failed to achieve.

Source www.ftwonline.co.za