After reading this article, the reader will have improved idea about the following:-
1.1. Every year, the Parliament creates new laws or amends or revises existing law or rescinds the laws which have become irrelevant with the passage of time. Many of these laws are enforced at border by the Customs officers. Can one estimate as to how many laws are required to be implemented/ enforced at Border (entry or exit points of international trade) by the Customs Officers?
1.2. Any law, having mention of terms “import” or “export” in it,is implemented by Customs Officers at Border. An illustrative list of various laws implemented by Customs officers at border can be as under:
|Broad Category / class of subject||Specific Law dealing with Subject|
|Tax /Revenue /Foreign Exchange Related laws||
|Specific Commodity related laws:||
|IPR related laws:||
|Protection of Environment, Human health and safety; Protection of plant and animals.
|Protection of national Wealth||
|National Security Related law||
The above list is not exhaustive, but illustrative only.
1.3. It is often said that “Any law is as good as the integrity (and capability) of the officer implementing it”. Let us understand the true meaning of above statement. If the custom officer does not know his job (i.e. ignorance) or he is negligent in his duties (i.e. negligent) or he lack integrity ( i.e. mistake with malafide intent), then one can imagine the consequences for our country, our society, our health or our environment, our tax resources which are so crucial for economic development of the country.
1.4. Whatever laws have been enacted by the Parliament with their hard-work and good intention of national development, national security; protection of the citizens and their health; protection of the flora and fauna; real test of effectiveness of such laws lies in integrity and capability of the officers entrusted with the task of implementing these laws-be it at Border or anywhere else in the country.
1.5. Real effectiveness of any legislation is reduced significantly, if officers entrusted with responsibility lack integrity. Considering the important and crucial role of Customs authorities at Border, a mere thought of the officers lacking integrity and consequences of poor enforcement of national legislations or international conventions, which they are supposed to enforce, are enough to instill fear. It becomes all the more important when there is real threat of the global supply chain being used by the terrorist organization or criminals group, which are operating internationally across the border. It is true that without integrity, standards, best practices, other instruments would not achieve the desired results; there would be no proper border security; no effective revenue collection; no public trust in customs agencies. Moreover, no country can consider itself to be safe if the officers at the border lack integrity and are corrupt.
1.6. Since customs performs many crucial functions as the gatekeeper of the nation, integrity in its operations is a critical requirement. Customs is the chief enforcer of trade policy, responsible for administering differential tariffs, quantitative restrictions, rules of origin, anti-dumping measures, and trade embargoes. It has an important role in export promotion through the administration of duty drawback schemes and other incentives. Customs is one of the core agencies responsible for stopping the entry into the country of socially harmful goods, such as drugs, arms, ammunition and dangerous chemicals. It implements national obligations under international trade treaties, such as those protection of endangered species of fauna and flora. Last, but not the least, customs is one of the major tax collection agencies of the central government.
1.7. Not only must customs perform these onerous duties effectively, it must do so with minimal interruption in trade flows. In open economies, volume and speed of international trade is critical. Infringement of trade policy can expose domestic industries to unfair competition. Smuggling of prohibited goods can expose society to serious public health and law and order risks. Transit of drugs through a country can generate strong pressure from the destination countries. Breach of international treaty obligations can trigger retaliatory measures by other countries. Acceptance of misclassification or under-valuation of imports, perfunctory investigation of customs fraud and improper disposal of confiscated goods can lead to serious revenue loss. Delays in processing of imports and exports can cause significant economic losses, increase the cost of doing business, affect competitiveness of a country‟s firms and scare away foreign investment.
2. Meaning of the Term “Integrity”
2.1 In oxford dictionary, the term “integrity” means “the quality of being honest and having strong moral principles” or “the state of being whole and not divided”.
2.2 The World Customs Organization has defined the term “integrity” as
“A positive set of attitudes which foster honest and ethical behavior and work practices”
2.3 From the definition mentioned above, it may be noted that it is more than mere absence of abuse of power and corruption; and it includes delivering services to meet the organizational objectives.
2.4 We live in dynamic world and the pace of changes happening all around us is becoming faster and faster. We are seeing more changes happening in a certain time frame than we saw in yester years. The pace of changes is likely to become faster in future. The question we face now is as to how to remain relevant in today‟s dynamic world? This question bothers us [or if it is not bothering, then it is a serious matter,] all the time with reference to perspective of our country; our department, our society/family/individual perspective. In this context, the following words of Charles Darwin are the most appropriate ones:-
“It is not the strongest of the species who survives, not the most
intelligent one, but the one most responsive to the change”.
2.5 In today‟s highly dynamic world, priorities of Customs Administration are fast undergoing change and getting re-determined. While revenue collection still remains an important consideration, other aspects such as national security, safety and security of people, health, and environment are becoming more important and have emerged as number one priority. Trade facilitation and safe & secure trade supply chain is acquiring number two slot and revenue coming at third place. When priorities of Customs administration are changing so fast, our approaches towards the subject of integrity of human resources/ officers also require dynamic strategy and need to occupy Central stage.
3. WCO 10 Building Blocks of a Modern & Efficient Customs Administration (Customs in the 21st Century): Global Perspective
3.1 Globalization and the other strategic drivers necessitate a new approach to managing the movement of goods through international trade supply chain across border. This requires the development of a New Strategic Direction for Customs. The building blocks for the New Strategic Direction are:
(a) Globally networked Customs:
The new challenges of the 21st Century demand a new concept of Customs-to-Customs cooperation. There is a need for closer real-time collaboration between Customs administrations and between Customs and business in facilitating legitimate trade and undertaking Customs controls. The new requirement is to create, in partnership between the various stakeholders of the public and the private sectors, a global Customs network in support of the international trading system. The vision of this network implies the creation of an international “e-Customs” network that will ensure seamless, real-time and paperless flows of information and connectivity. Mutual recognition is an important enabler. This includes mutual recognition of Customs controls and Authorized Economic Operator (AEO) programmes. The concept of networked Customs is critical for the 21st Century model of managing seamless end-to-end international supply chains. End-to-end supply chain management enables risks to be assessed in more depth and managed earlier where necessary, it reduces the need to intervene with goods in the choke point of the port of arrival, and it allows for the tracking and tracing of goods throughout supply chains. The basic operation relies on secure, real-time exchange of information between business and Customs and between the Customs administrations in a supply chain starting with the export administration. This will require:
(i) Internationally standardized data requirements for export, transit and import and the implementation of the WCO Unique Consignment Reference number as part of a Cross-Border Data Reference Model;
(ii) Interconnected systems and aligned Customs databases to enable the electronic exchange of data between Customs administrations as early as possible in the international movement of goods;
(iii) Mutual recognition and coordination protocols between exporting, transit and importing administrations to eliminate unnecessary duplication of controls in international supply chains;
(iv) Standards to enable the development of a system of mutual recognition for AEOs; and
(v) A set of rules governing the exchange of information between Customs administrations, including rules on data protection.
(b) Better coordinated border management:
This entails coordination and cooperation among all the relevant authorities and agencies involved in border security and regulatory requirements that apply to passengers, goods and conveyances that are moved across borders. Governments also need to explore more effective solutions to border management. The establishment of better coordinated border management for the cross-border movement of goods requires:
(i) The recognition of Customs or the agency responsible for the Customs function as the lead front-line administration at national borders for controlling the movement of goods. According to the UN Trade Facilitation Network, Customs administrations are usually best suited to develop integrated procedures for processing goods at points of entry; and
(ii) The introduction of the electronic Single Window concept that allows a trader to provide all necessary information and documentation once to the designated agency that, in turn, distributes the information to all relevant agencies.
(c) Intelligence-driven risk management:
The expanding responsibilities and opportunities facing Customs administrations require a more sophisticated understanding of the risk continuum. It is well understood that scarce resources need to be targeted to the higher end of the risk continuum. The challenges facing Customs administrations are two-fold: how best to apply the rapidly expanding body of knowledge of risk management to identity and mitigate risk at the operational level, and how to apply this knowledge of risk management beyond the operational level and in the management of Customs administrations. The key to this will be the building of feedback learning loops that will allow Customs administrations to integrate risk-related activities and to learn from past decisions to enable them to build an organization that is forward-looking, with more sophisticated predictive capacity, rather than being merely responsive.
(d) Customs-Trade partnership:
Customs in the 21st Century should enter into strategic pacts with trusted economic operators. Customs needs to understand the concerns of business, while business needs to know the requirements of Customs. Most importantly, there is a need to translate this relationship into a partnership that results in mutually beneficial outcomes.
(e) Implementation of modern working methods, procedures and techniques:
Demands regarding the rapid movement of goods, combined with complex regulatory requirements, require modern innovative approaches. These include audit-based controls undertaken away from the border, moving from transaction-based controls alone to using systems-based controls where the level of risk allows, as well as moving away from paper-based systems. There is also a need to review existing procedures on the basis of international conventions (including the WCO Revised Kyoto Convention) and international best practice.
(f) Enabling technology and tools:
Customs must take advantage of new and emerging technologies to enhance, amongst others, processing, risk management, intelligence and non-intrusive detection.
(g) Enabling powers:
In order to address these challenges, Customs administrations require appropriate legislative provisions that strengthen enforcement powers, the provision of advance information and the sharing of information domestically and internationally. These powers are necessary, in particular, in order to combat organized crime more effectively. More needs to be done to increase the safety of Customs officers.
(h) A professional, knowledge-based service culture:
The future orientation of Customs requires moving towards a knowledge-based and customer-orientated model. Staff competencies need to support timely customer-focused processes and services that minimize the administrative burden on legitimate trade. Training and organizational culture should support high levels of integrity, demonstrating consistency, transparency, honesty and fairness. Effective change management and leadership skills also need to be developed.
(i) Capacity building:
Customs administrations need to ensure that they have the capacity and skills across all dimensions of the operating model to perform all Customs functions most efficiently and effectively. It also goes without saying that the concept of “Networked Customs” relies on professional and competent Customs administrations, and that intensified and focused capacity building efforts are required to achieve this objective. The Columbus Programme of the WCO is an ambitious international effort to build Customs capacity. Some of the challenges that need to be addressed include how to manage scarce resources to deliver sustainable capacity building, how to promote effective performance criteria, monitoring and follow-up, how to avoid duplication of efforts and how to manage impediments in the recipient country. Leadership from both developed and developing-country Customs administrations as well as a true partnership are critical to ensure sustainable capacity building.
The fight against corruption remains an important task that should be undertaken over the years to come. The WCO Arusha Declaration will remain the reference document for all Customs administrations. All the efforts of the Columbus Programme could be undermined and even eliminated without integrity.
Note: The complete text of WCO 10 building blocks of modern and efficient Customs Administration have been taken from WCO document titled as “CUSTOMS IN THE 21ST CENTURY -Enhancing Growth and Development through Trade Facilitation and Border Security”. The same can be downloaded using the following link :-http://www.wcoomd.org/en/topics/key-issues/~/media/3EE76BC1 65B9409CBE6E31 F9923CABB8.ashx
4. Importance of Integrity in Customs
4.1 The lack of integrity in Customs can have the following consequences:
5. How to deal with Integrity Issue in Customs
5.1 Noting that Customs administrations throughout the world perform a number of vitally important tasks on behalf of their Governments and contribute to national goals such as revenue collection, community protection, trade facilitation and protection of national security; WCO adopted the Arusha Declaration in 1993 on Integrity in Customs.
5.2 This Declaration is aimed at encouraging Members countries to comply with rules governing integrity and to carry out their activities effectively. It contains specific elements that are designed to improve the efficiency of Member administrations and reduce or eliminate opportunities for corruption. It is the focal point for the WCO‟s anti-corruption and Integrity development effort. Ten years later, the WCO adopted the Revised Arusha Declaration in its Council Sessions in 2003.
5.3 The approach adopted to fight menace of corruption in Customs all over the world as envisaged in WCO revised Arusha declaration is as under:-
1. Leadership and Commitment
2. Regulatory Framework
5. Reform and Modernization
6. Audit and Investigation
7. Code of Conduct
8. Human Resource Management
The implementation of sound human resource management policies and procedures plays a major role in the fight against corruption in Customs. Human resource management practices, which have proved useful in controlling or eliminating corruption in Customs, include :
9. Morale and Organizational Culture
10. Relationship with the Private Sector
6. Other Efforts by WCO and Other Regional Bodies on Integrity
6.1 For more information about WCO as well as Regional efforts to deal with issue of corruption in Customs worldwide, the several new initiative taken by WCO/ Regional Groups are as under:
6.2 In December, 2012, the WCO has come out with revised Integrity Development Guide (IDG) and is designed primarily for member countries. The purpose of IDG is to provide the necessary framework in which the entire range of integrity elements can be fully discussed and enhanced. The revised Integrity development guide can be downloaded from the WCO website using the following link:
http://www.wcoomd.org/en/topics/integrity/~/media/B89997B68D6A4E34AE9571979EAD A39 F. ashx
6.3 Reader may visit WCO website for reading material on the above listed efforts by WCO or other regional Bodies.
7. Relevant Websites and Resources
7.1 Website of World Customs Organization i.e. www.wcoomd.org for downloading free learning resources, Revised Arusha Declaration and text of other declarations.
8. Reference and Research Material
8.1 Revised Arusha Declaration [Note: It was first done at Arusha, Tanzania, on the 7.07.1993 (81st/82nd Council Sessions) and later revised in June 2003 (101st/102nd Council Sessions).] The text of Revised Arusha Declaration is available on WCO website and can be downloaded by using the following link:-
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(C. P. Goyal)
Additional Director General
NACEN, RTI, Kanpur
Source-National Academy of Customs Excise and Narcotics Regional Training Institute, Kanpur (India)