Nature, Structure and Functioning of the TIR Guarantee System & Risk Management Virginia Tanase Head – TIR Policy, Training & Information Moscow, October 2003

© International Road Transport Union (IRU) 2003 Page 2  Harmonisation TIR Convention  Simplification TIR Carnet = Customs Declaration & surety  Costs reduction 5 cents for 100 USD of guarantee TIR =TRADE FACILITATION NATURE

© International Road Transport Union (IRU) 2003 Page 3 NATURE  TIR is a privilege not a right  Guaranteeing Association acts as surety for persons using the TIR procedure (Art. 1(q) - TIR Convention)

© International Road Transport Union (IRU) 2003 Page 4 STRUCTURE ASSOCIATION SURETY AGREEMENT  Subject to national legislation  Main conditions for surety  Maximum amount of surety  SafeTIR agreement (annex) CUSTOMS

© International Road Transport Union (IRU) 2003 Page 5 STRUCTURE ASSOCIATION DEED OF ENGAGEMENT  Rules & responsibilities for administration of TIR system  Engagement from the IRU to guarantee the surety provided by the association to Customs IRU

© International Road Transport Union (IRU) 2003 Page 6 STRUCTURE ASSOCIATION IRU

© International Road Transport Union (IRU) 2003 Page 7 STRUCTURE ZH  3 Mil TIR Carnets issued per year  500 Mil USD of guarantees per day  Guarantee Chain is backed by a financial institution (ZH)  ZH guarantees the surety provided by the Guarantee Chain to Customs IRU GLOBAL GUARANTEE CONTRACT

© International Road Transport Union (IRU) 2003 Page 8 STRUCTURE ASSOCIATION IRU ZH

© International Road Transport Union (IRU) 2003 Page 9 FUNCTIONING  TIR is a financial security for Customs  Persons directly liable => Financially liable to Customs without limits

© International Road Transport Union (IRU) 2003 Page 10 FUNCTIONINGFUNCTIONING  goods  vehicle  TIR Carnet Holder of TIR Carnet = Declarant of transit operation => responsible for the presentation of: (Art. 1(o) – TIR Convention) at the Customs office of destination => Legitimate contact person for Customs

© International Road Transport Union (IRU) 2003 Page 11 FUNCTIONINGFUNCTIONING  Provide relevant documents  Cooperate for the proper identification of the persons directly liable OR  Pay the Customs debt when at fault (Art. 8.7 – TIR Convention) Holder of TIR Carnet must assist the Customs to solve any problem related to a TIR operation. He must:

© International Road Transport Union (IRU) 2003 Page 12 «...the competent Authorities shall so far as possible require payment from the person or persons directly liable before making a claim against the Guaranteeing Association… » FUNCTIONINGFUNCTIONING Article 8.7 – TIR Convention BASIC PRINCIPLE:

© International Road Transport Union (IRU) 2003 Page 13 FUNCTIONING  Importer  Company responsible for transport and Customs clearance (forwarding agent)  Company owning or disposing of the goods  Holder of TIR Carnet  Guaranteeing Association acting as surety Liability Chain:

© International Road Transport Union (IRU) 2003 Page 14 FUNCTIONING The Chain of Guarantee can only function efficiently when the TIR Convention is properly implemented:  Persons directly liable quickly identified  Proper procedure engaged to obtain payment from them  Sanctions are applied in due course against non-compliant operators

© International Road Transport Union (IRU) 2003 Page 15  Make sure that all irregularities and claims are handled according to the same principles (TIR Convention) throughout all the Contracting Parties. Role of the IRU: FUNCTIONING Role of the Association:  Implement the decisions of the Chain of Guarantee and follow the procedures to handle claims.

© International Road Transport Union (IRU) 2003 Page 16  Appropriate (strict) Management rules  Preventive measures by all actors (IRU, Associations, Holders of TIR Carnets, Customs)  Risk Management: SafeTIR For the correct functioning of the TIR System and the Guarantee Chain it is essential to have a systematic application of: FUNCTIONING

© International Road Transport Union (IRU) 2003 Page 17 RISK MANAGEMENT: SafeTIR Why SafeTIR?  To confirm at any time and in real - time the validity of the Customs stamp on the TIR counterfoil (souche)

© International Road Transport Union (IRU) 2003 Page 18 Holder returns TIR carnet to Association TIR Carnet Physical check with Electronic SafeTIR cross-check RISK MANAGEMENT: SafeTIR SafeTIR = Risk Management If OK issue new carnet If not OK, request proofs + reconciliation If still not OK, suspend issuance If still not OK, suspend issuance

© International Road Transport Union (IRU) 2003 Page 19 RISK MANAGEMENT: SafeTIR Real Time Capture & Transmission of SafeTIR data IRU Database

© International Road Transport Union (IRU) 2003 Page 20 ONLY % of SafeTIR data transmitted within 24 hours ONLY % of SafeTIR data transmitted within days % of SafeTIR data transmitted within 15 days 0.4%7%75% RISK MANAGEMENT: SafeTIR Real time capture and transmission of SafeTIR data is needed for effective Risk Management

© International Road Transport Union (IRU) 2003 Page 21 RISK MANAGEMENT: SafeTIR Efficiency of SafeTIR also depends on the reconciliation procedure: BUT 50 % of the reconciliation requests take up to 50 days for response

© International Road Transport Union (IRU) 2003 Page 22  Secure Customs data  Internet based  Low cost  Download possibilities Tool Accessibility: CUTE-Wise RISK MANAGEMENT: SafeTIR

© International Road Transport Union (IRU) 2003 Page 23 Efficient if Customs:  Capture and transmit ALL SafeTIR data  In Real Time  For each Termination of TIR Operation at each Customs office of destination  Implement efficient Reconciliation procedure RISK MANAGEMENT: SafeTIR

© International Road Transport Union (IRU) 2003 Page 24 TIR Guarantee System is based on:  Proper implementation of TIR Convention  Early detection of potential irregularities through Risk Management  Collection of duties and taxes from real debtors  Sanctions of Fraudsters CONCLUSIONCONCLUSION