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Customs Risk Management PPT.Presentation
1. Customs Risk Management
The greatest risk to our operations is not thinking
about risk at every opportunity
March 16, 2017
2. What is Risk
Risk is the chance of an event occurring,
which may have a negative impact on any
activity or process and may affect the
mandate of Customs.
It can affect compliance with Customs
mandate
3. What is Risk Management?
Risk Management is logical and
systematic method to identify, analyze,
treat and monitor risks involved in any
activity or process
Risk Management is a methodology that
helps managers make best use of their
available resources
4. The Idea of Risk Management
How do we translate treaty obligations and
policy decisions into practical ‘on the ground’
changes that enhance revenue, facilitate trade
and create business atmosphere with a level
playing field?
5. Main Conventions
The Harmonized System (HS) - 1988
The WTO General Agreement on Tariffs and
Trade (GATT, 1948)
The Revised Kyoto Convention (2006)
The Arusha Declaration (Revised, 2003)
The WCO Framework of Standards to Secure
and Facilitate Global Trade (SAFE, 2006)
WTO Bali Trade Facilitation Agreement (2014
6. Who Uses Risk Management?
Risk Management practices are widely used in
public and the private sectors, covering a wide
range of activities or operations including:
Finance and Investment
Insurance
Health Care
Public Institutions
Governments
Project Management
7. Risk Management in Customs
Customs primary objectives are to collect and
improve revenue, facilitate trade in the most
secured manner, and effectively control
smuggling without delaying clearance
processes.
Provide facilitation while maintaining control
over legitimate international movement of
goods
RMU assist BCED in matching priorities to
available resources.
8. Why Risk Management?
We have limited resources
We cannot be everywhere at once, we cannot do
everything
There is a greater volume of international trade –
more than there has ever been in the past
Customs cannot search everything – they do not
have the people, the skills or the time and money.
Not all taxpayers can be queried or scrutinized. And,
importantly ….
We should not scrutinize everything – most traders
are honest, we should help them, not hinder them –
to promote compliance
9. ASYCUDA and Risk
Management
Declaration process:- Basis of Customs control
Information can be used for many other control
functions.
Selectivity:- Stopping declaration or directing it to a
specific section
Choosing transactions that are perceived to be of more
Customs interest.
10. Responsibility of RM Team
Research and identify major risks
Analyze risks to determine likelihood,
consequences and levels of perceived risk
Evaluate and prioritize the risks
Take steps to counter the risks, including
creation of selection criteria
Monitor results, review the risks and
update control measures accordingly
Regular reporting to senior management
11. Components of Risk
Probability – the chance that a loss will
occur
Consequence – the magnitude of the loss
Perception – the significance of the loss as
it relates to the basic objectives of an
organization
13. Risk Identification
Defining the type of risk
Identifying the stakeholders(i.e. who is involved)
Past events, future development
14. Analyze the Risks
How likely is the risk event to happened?
(Probability and frequency?)
What would be the impact, cost or consequences of that
event occurring?
(Economic, political, social?)
15. Evaluate The Risks
Rank the risks according to management priorities, by risk category
and rated by likelihood and possible cost or consequence.
Some risks are acceptable while others are not
Avoiding, accepting, reducing, transferring
17. Treating the Risks
A common method of treating risks is to
develop risk profiling and targeting systems.
The profile information is used as the basis for
Selection Criteria.
18. These companies have had previous values adjustments.
Ensure invoice validity and structure
(i.e. ensure brand name, size, packaging, etc... are clearly marked)
Verify authenticity of supplier to ensure all necessary information
needed are adequately provided.
Careful examination is requested for quantity, description and
classification.
Criteria "IMPVAL" ;
If InListCom ( "IMPVAL" ) = Found Then
RedLane IS 100 ;
Endif ;
19. Processing of Lanes
Red Lane - documentary check and
physical examination
Yellow – Documentary check
Blue – PCA
Green Lane - the declaration is normally
directly assessed
20. Monitor & Review
measure the effectiveness of risk profiles
and update as necessary
Reliable reporting of examination results
Compliance measurement activities
Feedback from the business community
21. Reporting of Inspection Results
Accurate inspection reporting
Effective use of the inspection act is essential
for internal audit purposes, (to ensure system
integrity), and for monitor and review of risk
management selections.
The risk management team needs to know if
current selectivity criteria are effective.
This helps by giving information that can be
used to achieve more precise risk targeting.
22. Sources of information for Risk
Assessments
Identify commodity or control risks; e.g., high duty rates or quantity
controls (Restricted Goods), the demand for prohibited goods
Research existing databases and records on commodity and trader histories
(Inspection Act, Intelligence from Post Audit and Enforcement Units).
Evaluate current procedures to identify potential control weaknesses.
