Customs use of inspection companies
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Customs use of inspection companies. Background & Way Forward. Evolution of inspection services. 1960s : PSI developed (mainly for exchange control)

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Customs use of inspection companies

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Customs use of inspection companies

Background & Way Forward

Evolution of inspection services

  • 1960s : PSI developed (mainly for exchange control)

  • 1980s: Used for strengthening Customs controls; particularly in developing countries, including verification of Customs values and classification

  • 1995 : WTO Agreement on PSI … sets out standards, e.g. obligation to follow principles of WTO Valuation Agreement

  • 2000s : Transition to destination inspection activities; broader scope, incl. scanners, single window activities.


Current position

  • Several countries considering termination

  • Niamey Declaration

    • Agreement by DGs in West & Central Africa Region

  • WTO Agreement on Trade Facilitation

  • Article 10.5 Pre-shipment Inspection :

    • 5.1. Members shall not require the use of pre-shipment inspections in relation to tariff classification and customs valuation.

    • 5.2. Without prejudice to the rights of Members to use other types of pre-shipment inspection not covered by paragraph 5.1, Members are encouraged not to introduce or apply new requirements regarding their use

WCO workshop : 6/7 March 2014

  • Representatives from the WCO, the African Development Bank, African Union Commission, International Monetary Fund, West African Economic and Monetary Union, World Bank, and WTO (as observer)

  • … to discuss the topic of preshipment inspection (PSI) and destination inspection (DI) companies.

  • At the meeting it was recommended that:

1) Governments:

  • Provide political will, support and resources to Customs administrations to assume responsibility for the core Customs functions of determining Customs duties and taxes payable, risk management and examination of goods

  • Where exceptional circumstances dictate the entry into, or extension of, contracts, fully involve Customs administrations in contract design, negotiations and decision-making;

  • Ensure that such contracts are short-term, transparent, cost-effective, procured in an open, competitive and transparent manner commensurate with the applicable laws of the country and that fees are commensurate with services provided; and …

1) Governments:

Further ensure that such contracts provide at least for :

  • the measurement of agreed results and objectives;

  • governance arrangements and responsibilities;

  • appropriate compliance with obligations, in line with international and regional commitments; and

  • the transfer of appropriate skills, knowledge and technology to Customs as a key objective. 

2) Customs administrations:

  • Engage national policymakers and take ownership of the Customs functions covered by preshipment and destination inspection contracts;

  • Demonstrate leadership and commit to reform and modernization to assume responsibility for functions covered by these contracts by developing comprehensive strategies and implementation plans;

  • Commit to good governance and to combat corruption by effectively implementing integrity promotion programmes;

  • Coordinate support provided by development partners and donor organizations transparently and efficiently; and

  • Enhance communication and partnerships with stakeholders, including neighbouring Customs administrations, to better articulate Customs efforts on modernization and trade facilitation

3) International and regional organizations as well as development partners:

  • Provide advice consistent with the recommended principles to Governments with regard to inspection companies, including the exceptional cases or situations where there may be a need in the short to medium term for contracts;

  • Engage with each other in a more structured manner to coordinate and harmonize as far as possible their policies and instruments on Customs reform and modernization and capacity building programmes; and

  • Coordinate their efforts and initiatives to advise and support Customs Administrations to successfully manage their reform and modernization programmes and in particular the core Customs functions.

What can WCO provide?

  • Revenue Package programme provides access to all tools and instruments

  • New materials in 2012 focus on practical aspects

  • Phase II in development. By June 2015 :

    • New diagnostic tools for valuation, origin and PCA

    • Guidance for countries terminating contracts

    • Good practices for :

      • Informal trade challenges

      • Identifying/tackling revenue risks & gap

      • Origin irregularities

  • Further capacity building/technical assistance

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