1. CUSTOMS MODERNISATION 2009

2. 1.To achieve at least a 10-fold improvement. 2.Modernisation –the combination of changes across people, process, policy and technology 3.No area of customs operations will be worse off than current state. 4.Deliver meaningful benefits through early introduction of new integrated modern technology. 5.Modernisation - a process of continuous change.

3. 1.Enhance international, regional, trade and OGA partnerships; 2.Focus on improved service delivery to trade and all internal and external stakeholders; 3.Encourage ownership and accountability for individual and organisational performance; 4.Enable automation of non-value adding activities to leverage scarce Customs human resources; 5.Empower intelligent and assertive Border Management & Control; and 6.Foster a transparent and predictable regulatory environment to facilitate self- compliance / regulation.

4. Consistent, predictable, efficient and effective processes Concentrate specialised skills on value adding activities. Create a new culture and performance driven. Smart and flexible systems enabling Customs operations to adapt to current and future regimes. PolicyProcessPeopleTechnology Modernisation of Customs is defined by how business is impacted across people, process, technology and policy streams. Policy dictates mandate, legal framework, rules, and procedures

6. Implement modern customs policies and practices – Kyoto Convention and SAFE Framework of Standards. Current practices and systems difficult to evolve and adapt to modern customs practices. Improve data exchange between traders and operators in the logistics pipeline. To meet increased and complex requirements of new trade agreements and national regulatory measures. Give SARS the confidence to engage on a customs-2-customs basis with other administrations and leading trade partners. Give full meaning and effect to a new automated processing and control environment. Introduction and phased implementation of new Customs Control and Customs Duty Acts. New improved, and internationally aligned methods of declaration processing, inspection, risk management, document management, and management of outstanding cases. Departure from transaction-based declaration control to a concept of control within Customs Procedures. Departure from amendment by voucher of correction to amendment by versioning. More control over supply chain operators through expanded licensing requirements. Provision for ‘Fast-track’ procedures for accredited traders, and specified types of clearances. Complete overhaul of declaration procedures, and related requirements. New legal framework implies adoption of new interpretations and terminology. Entails a Learning curve for all internal staff and external stakeholders. Widespread impact on current policies and procedures. More expansive coverage of supply chain operators in customs control. Improved Customs tariff engine. Increased coverage of electronic messaging between SARS, traders and logistics operators.

7. Define & Control Know & Maintain Movement Control Facilitate & Enforce Appoint places of entry/exit and regulates specific Customs activities. Visible Control activities: Anti- smuggling checks, rummages, etc. License and register supply chain operators. Segment trade. Reward legitimate and complaint entities. Intensify focus on non- compliant trade. Define accountability / liability obligations across the supply chain. Monitor “single view” of trader across SARS tax products. Account for all goods entering, transiting and leaving the Republic. Maximize use of electronic pre-arrival information, and e-communication with “release authorities” ensuring integrity across the supply chain. Prevent smuggling. Control market entry. Administer trade policy and trade remedies. Centralised processing of trade transactions. Collect taxes. Conduct transaction and Entity- based audit controls. Perform enforcement interdictions. Risk Management

8. Trader Management Cargo Control Declaration Processing Financials

9. Kyoto informs Customs Clearance formalities Revised Kyoto Convention * Kyoto Specific AnnexesKyoto ProceduresSARS Procedures BImportationB1Clearance for home use(i) Home Use B2Re-importation in the same state B3Relief from import duties and taxes CExportationC1Outright exportation(ii) Export (iii) Temporary Export DCustoms warehousesD1Customs warehouses(iv) Warehousing; ETransitE1Customs transit(vi) National Transit (vii) International Transit E2Transhipment(viii) Transhipment E3Carriage of goods coastwise FProcessingF1Inward processing(ix) Inward Processing F2Outward processing(x) Outward Processing F3Drawback F4Processing of goods for home use(xi) Processing for Home Use GTemporary admissionG1Temporary admission(xii) Temporary Admission JSpecial proceduresJ1Travellers J2Postal traffic J3Means of transport for commercial use J4Stores(xiii) Stores. J5Relief consignments (v) Tax Free Shop * Refer to Kyoto slides for detailed descriptions.Refer to Kyoto slides for detailed descriptions.

10. * Current “ SAD500 purpose codes are aligned to the relevant (appropriate) procedure. For the purposes of the operational and systems implementation of the Control Bill, “Home Use” is treated along the lines of a customs procedure. The table includes cross-border SACU transactions, which will for the purposes of the Customs Bill be treated as imports and exports.

12. Numerous outdated systems that operate on different technology platforms. Systems not designed to handle integration in the customs environment. No single view of Trader. Duplication of data and poor data quality. System hard to change due to inflexible architecture. Hard-coded business rules. Poor network performance. Multiple platforms to support and maintain. Too many human interventions in the automated process. Replacement of legacy systems with TATIScms, U3TM and SAP financials - enabling a single client view at a national level. Introduction of more electronic channels for traders – not only EDI/discs, also eFiling and e@syFile. A dynamic “self-tuning” risk engine encompassing traditional Customs risk filters as well as 3 rd party data, statistical analysis, etc. An automated trader compliance history/rating capability. Web-based, centralised processing for registration, accreditation and licensing. Automated, centralised assessment of goods declarations. Automated acquittal and tracking of goods in transit. Virtual collaboration with OGAs - “single-window” processing. Your tasks will become more automated and less cumbersome. Your work activity will be risk- driven. The system provides multiple entry channels catering for trader needs. You will only be allocated work that you are able to complete and you will be measured on your performance thereof. You will have more and better information at hand to guide your tasks, activities and decision-making. * TatisCMS – Customs’ new integrated declaration solution * U3TM – SARS’s new Unified Taxpayer, Traveller and Trader Management system – for client licensing, registration and accreditation. * SAP Financials – Customs’ new revenue accounting system * TatisCMS – Customs’ new integrated declaration solution * U3TM – SARS’s new Unified Taxpayer, Traveller and Trader Management system – for client licensing, registration and accreditation. * SAP Financials – Customs’ new revenue accounting system

14. Too much time and effort spent on chasing volumes, revenue targets, in the absence of real risk basis, and inadequate resources. Lack of integration across legacy systems requires significant human intervention and broken processes. Lack of alternative channel to EDI means more burden on customs to capture non-automated clearances, especially BLNS cross border transactions. Current processes are founded on transaction control – do not cater for the modern concept of control over customs procedures. Replacement of legacy declaration systems with a single integrated clearance processing system. Process re-design to adopt a ‘Pull” action as opposed to “Push” – will enable customs to manage highest risk, trade volumes according to available resources. Processes and procedures must augment the concept of “Customs Control” contained in the new legal framework. Your tasks will be primarily automated. Your skills will define the next course of action – free from having to move vast amounts of paper from place to place. All supporting documents will in future be filed electronically to you for action and finalisation. Dynamic forms will provide ease of data capture – specifically for trader management, and branch front- end assistance to traders. Automated case management will bridge the parallel customs activities with the mainstream system.

16. Technology innovation means less administrative tasks – –more time for ‘real’ customs work! –certain tasks become redundant. Centralised processing allows trade administration staff to work in isolation of cargo location. Need to consolidate scarce resources and capability. Capitalize on concentrated work efforts – centralised and virtual deployment. Need to maximise capacity and skills released from redundant tasks and activities. Dispense with all non-value adding activities. Automated risk management - minimises transactional ‘human’ intervention and focus – increase “pre-clearance” and “post clearance” staff capacity and trade coverage. Comprehensive overhaul of Trader Management to provide ability for Customs to manage and monitor trader compliance. Introduce specialised areas of customs focus and intervention through a segmented approach – Trade regimes, areas of analysis (i.e. Tariff, Valuation, Origin, and invoice analysis). Take performance management to new heights through end-to-end auditibility of new solution. Possible staff displacement due to organisational redesign and job concentration. Expansive job and work opportunities available for displaced staff. Extensive staff re-skilling and re- alignment with the interpretation of new legal framework, work procedures, and policies. Staff performance and activities to be tracked in ‘real time’. New solution will enable Customs to be demand-led according to capacity and risk.