Customs - Inspection Services - WCO Concerned
RECENTLY there was a meeting of the World Customs Organization (WCO), International Monetary Fund (IMF), World Bank, World Trade Organization (WTO) and others to discuss the topic of pre-shipment inspection (PSI) and destination inspection (DI) companies.
It was observed that:
1. International trade is an essential driver to promote development and economic competitiveness that alleviates poverty;
2. Customs administrations perform a wide range of important fiscal, economic and social functions, including the facilitation of legitimate trade, collection of revenue and protection of society from illicit trade;
3. A number of Governments have entered into inspection services contracts with PSI and DI companies to undertake core Customs functions, including the determination of Customs duties and taxes payable on imported goods, risk management and examination of goods moved across international borders;
4. An increasing number of countries have successfully taken ownership of these core functions with no adverse effect on revenue following termination of contracts;
5. In some instances, these contracts have been costly to governments and detrimental to the realization of Customs knowledge and skills in such areas as Customs valuation and classification and their objectives were not achieved;
6. The WCO has developed a comprehensive set of instruments and tools to support national Customs administrations with their reform and modernization programmes; and
7. Although some of these activities are currently regulated by the Agreement on Pre-shipment Inspection of the World Trade Organization, Article 10.5 of the Agreement on Trade Facilitation that was agreed in December 2013 provides that Members shall not require the use of pre-shipment inspections in relation to tariff classification and Customs valuation and encourages Members not to introduce or apply new requirements regarding their use.
It was recommended that:
Governments should 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.
Customs administrations should take ownership of the Customs functions covered by pre-shipment and destination inspection contracts; 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; enhance communication and partnerships with stakeholders, including neighbouring Customs administrations, to better articulate Customs efforts on modernization and trade facilitation.
What is the stand of the Indian Customs?