Risk Management System (RMS) - Charter of functions for Risk Management Division and constitution of national/local risk management committee – CBEC instructions
Yesterday I was talking to a former Additional Commissioner of Central Excise and told her that recently RMS was inaugurated in the Hyderabad Air Cargo Customs. “What! They didn’t have RMS all these days?”, she asked me in genuine surprise.
Now the Board informs that a Risk Management Division has been created in the Directorate of Systems.
The objective of the Risk Management System (RMS) is to achieve an optimal balance between providing appropriate levels of facilitation to the international trading community and ensuring compliance with regulatory provisions. With a view to streamlining the operations of the RMS, the Risk Management Division has been created.
Charter of functions for the RMD.
++ overall responsibility for the management of the RMS which has been designed to address risks facing Customs, i.e., the potential for non-compliance with Customs and allied laws and security regulations, including risks associated with the potential failure to facilitate international trade.
++ RMD will be the nodal agency with the overall responsibility for designing and implementation of Risk Management System using various risk parameters and risk management tools. RMD will suggest assessment and examination in respect of consignments perceived to be risky and facilitate the remaining ones.
RMD will also be responsible for collecting and collating information and developing an intelligence database with a view to effectively implement the RMS and also carry out effective risk assessment, risk evaluation and risk mitigation techniques. It will update and maintain risk parameters in relation to the trade, commodities and all stakeholders associated or involved with the supply chain logistics.
++ RMD will be the nodal agency for Accredited Client’s Programme (ACP). It will maintain a list of accredited clients in the RMS and closely monitor the compliance standards of these accredited clients.
++ RMD will closely interact with all Custom Houses, Directorate of Revenue Intelligence (DRI) and Directorate of Valuation (DOV) to enable it to effectively address national risks.
++ RMD will also review the performance of the RMS in terms of reviewing the various targets/interventions inserted by the Local Risk Management (LRM) Committee, make an objective assessment of the effectiveness of such insertions, and ensure that the performance is consistent with the objective laid down.
++ RMD will also coordinate and liaise with other Government Departments (OGDs), in order to deal with risks relating to the compliance requirements under allied Acts which the Customs department is required to administer, under the overall direction of the D.G. (Systems).
++ RMD will work in close coordination with NACEN in developing training manuals and other documentation necessary for the implementation of RMS. In addition to this, it will also work out regular training schedules for training of officers responsible for implementing the RMS in major customs locations.
++ RMD shall work in close coordination with Directorate General of Audit (DG Audit), which has the responsibility for formulating audit policies and procedures, developing criteria and parameters for selection of cases or documents for audit.
++ DG(Systems) will submit periodic reports on the functioning of the RMS to the Board.
National Risk Management (NRM) Committee
A National Risk Management (NRM) Committee with the DG(Systems) as the head is to be established. The RMD will be the nodal agency responsible for convening the National Risk Management (NRM) Committee to review the functioning of the RMS, supervise the implementation of RMS and provide feedback for improving the effectiveness of RMS. The NRM Committee will be a standing committee and shall include representatives of Directorate General of Revenue Intelligence (DGRI), Directorate General of Valuation (DGOV), Directorate General of Audit (DG Audit), Directorate General of Trade Facilitation (DGSTF) and Tax Research Unit (TRU).
Is this another exercise to waste tons of paper and may be create a few posts? Let’s wait and see. We will bring you a report after six months.
CIRCULAR NO. , Dated: June 28, 2007