WTO Workshop on Technical Assistance and Capacity Building in Trade Facilitation May 2001, Geneva Overview of Technical Assistance Activities by Japan Customs Kunio Mikuriya Director, International Affairs and Research, Customs and Tariff Bureau, Ministry of Finance, Japan

Objectives Assistance in modernization of customs administrations to fulfill their three main missions at national borders - Collection of revenue - Trade facilitation to promote trade & industry - Protection of society from the inflow and outflow of hazardous goods

Collection of revenue Secure the national revenue -- Important source of national revenue in the developing countries -- Example of US Customs; Predominance in the national revenue ( ) before the introduction of income tax Trade policy tool - Protection of domestic industry

Attention of Trade Community Has Been Shifted to Trade Facilitation Lowering of tariffs across the globe (WTO tariff negotiations) Cost of complying customs formalities Cost of duties to be paid exceeds

3481kg 2019kg 290kg Cannabis Opium, Heroin, Cocaine Methamphetamine 74.7% 79.0% 71.6% Border control is the most efficient tool to protect the society from the drug trafficking -Seizure at national borders in Japan (95-99)

Sharing Japans experience on modern customs techniques Risk management to strike a balance between the facilitation and border control requirements Post-clearance audit Pre-arrival declaration Paperless trade and one-stop service Mutual customs cooperation including information exchange

Customs procedures based on Risk Management Interdiction Commercial FraudCommercial Fraud Illicit drugs, FirearmsIllicit drugs, Firearms IPR, Endangered wildlifeIPR, Endangered wildlife Other Controlled ItemsOther Controlled Items Trade Facilitation Risk Analysis Appropriate Border Control Protection of Communities from: Protection of Communities from: Cross-Border Movement of GoodsGoods PeoplePeople Legitimate trade

Control method Change from all documentary and physical inspection to selected inspection based on risk management Importance of information gathering and intelligence

Post-clearance Audit Useful instrument for valuation while avoiding a delay in customs clearance Correctness of the value of goods declared by importers On-the-spot control of contract, invoices, accounting books etc.

Additional Collection of Duties by Post-entry Examination (1997) 67 billion yen from 2582 importers out of 4000 audited

Automation of customs procedures Sharing experience on automation towards paperless trade in collaboration with the private sector Automated risk management and building- up of database Pre-arrival declaration Coordination with other government agencies

Warehouse Declaration Documentary Examination Physical Inspection of cargo Release Vessel Airplane Procedures covered by computerization (from arrival to release of cargo) Quarantine etc. Duty payment

Cargo Physical Inspection Documentary Examination Immediate Release Cargo Selectivity Criteria High Risk Low Risk Physical Inspection Document Examination Immediate release Automated Risk Assessment

Customs Intelligence Database (CIS) Information on importers, their record, customs examination record and other relevant information Support selectivity criteria, post-clearance audit, customs investigation

Customs Computer Selectivity criteria Data and information CIS Cargo Documentary Release examination Result analysis assessment of risks Declaration data Importer Customs Input

Pre-arrival declaration Advanced examination based on pre-arrival declaration Immediate release upon arrival of cargo Further acceleration of trade flow

Efforts toward the one-stop service -Interface of computer system with other agencies Licensing Port authorities Customs computer (future plan)

The time needed from arrival of cargo to file an import declaration Sea cargo hours (1991) 81.1 hours (1998) Air cargo 50.3 hours (1991) 30.8 hours (1998)

Information exchange between customs Key to speed up customs control for revenue purpose (commercial fraud) and protection of society (drug trafficking etc.) Bilateral basis – Customs Mutual Assistance Agreement or Memoranda of Understanding Regional basis – Regional Intelligence Liaison Office (RILO)

Asia-pacific RILO covers 24 WCO regional members (Tokyo Customs).

JapanKorea Iran Bangladesh Pakistan India Sri Lanka Maldives Nepal Mongolia China Myanmar Thai Hong Kong Macao Viet NamPhilippines Malaysia Singapore Indonesia Australia New Zealand Fiji Brunei Asia/Pacific RILO: 24 Member Administrations Working hand in hand

WCO - RILO NETWORK Caribbean San Juan (Puerto Rico) South America Valparaiso (Chile) Eastern & Central Europe Warsaw (Poland) WCO Brussels (Belgium) North Africa Casablanca (Morocco) West Africa Dakar (Senegal) East & Southern Africa Nairobi (Kenya) Central Africa Douala (Cameroon) Middle East Riyadh (Saudi Arabia) Asia/Pacific Tokyo (Japan) Western Europe Cologne (Germany)

Integration of the customs procedures into the international standards WTO Valuation HS Nomenclature Kyoto Convention (simplification and harmonization of customs procedures) TRIPs Rules of Origin, etc. Standards

WTO Valuation Agreement (1995) Acceptance obligatory for WTO members - Acceptance of GATT Valuation Agreement was optional before the establishment of WTO Implementation for developing countries Need for preparation including introduction of post-entry examination

Principles adopted by the revised Kyoto Convention Automation and use of information technology Risk assessment and selectivity of control Pre-arrival information Audit based control Coordination with other agencies Transparency of customs regulations Partnership approach between customs and trade

The Revised Kyoto Convention Adopted in June 1999 at WCO Council A new instrument adapted to the challenge of trade facilitation Need an early ratification by the existing Members to put in force

Technical assistance strategy Asia Pacific Region WCO member countries based on regional approach Needs oriented

Training courses in Japan (6-8 weeks) 1199 participants from 83 economies since 1970 Customs clearance (including automation and Kyoto Convention) HS classification Valuation & post-clearance audit Enforcement & intelligence analysis Executive seminar Chemical analysis Information technology, etc.

Expert missions Long term experts specialized in training, post-clearance audit (ASEAN) and computerization etc. Short term experts in chemical analysis (customs laboratory), conducting seminars in various areas

Cooperation with international organizations Financial contribution to WCO Customs Cooperation Fund (JPY130 million in 2001) Human contribution (dispatching experts) to WCO CCF seminars

APEC Trade and Investment Liberalization and Facilitation TILF special account; Japans annual contribution of JPY500 million Capacity Building to implement WTO agreements ( ) Regional seminars & national workshops in valuation, TRIPs and Rules of Origin

Number of courses (participants) in Japan over the last 3 years Group training 14(149)16(163)22(196) WCO fellowship 2(9) WCO Scholarship (2)(4)

Number of expert missions (experts) over the last 3 years Long term experts (3) (4) Short term experts 6(6)7(12)12(23) WCO9(13)22(32)20(24) APEC5(7)7(9)7(13)

Needs inventory & planning Needs inventory to Asia-Pacific WCO members in September by WCO regional training coordinator (Japan) Evaluation & follow-up missions Plan training courses in April (Japans FY: April- March) Consultation with WCO in June (FY: July-June) Avoid overlap of technical assistance

Asia-Pacific Customs Training Needs Inventory International Training / Technical Co-operation Activities in 1999/2000 (Table 1) Training Needs in 1999 (Table 2) International Training / Technical Co-operation Activities Projected (Table 3) Training Needs in 2000 (Table 4)

TRAINING ACTIVITIES (1999/2000)

TRAINING NEEDS (As of Sep. 1999)

(%) COMPARISON BETWEEN TRAINING NEEDS AND TRAINING ACTIVITIES

TRAINING NEEDS (As of Sep. 2000)

Success & failure Focus on practical application of agreement rather than its theoretical explanation Selection of participants Usefulness of regional seminar for exchange of information/experience Human network

Challenges in the coming years Needs for WTO/WCO instruments related training in a practical manner Information technology Exchange of information Human resources development Integrity

Maintenance & monitoring of projects Evaluation after each training course to improve the service Follow-up missions to 6-8 countries annually (interview with former participants & senior management)

Coordination between bilateral donors & international organizations Avoid duplication for recipients Efficient use of limited human resources Coherence and synergy desirable from the planning stage More information sharing on technical assistance