The Role of Customs Brokers In Trade Facilitationsiteresources.worldbank.org/INTRANETTRADE/Resources/Internal... · The Role of Customs Brokers In Trade Facilitation World Bank Brown

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The Role of Customs Brokers In Trade Facilitation

World Bank Brown Bag Lunch

6 January 2011

Carol WestSecretary, International Federation of Customs Brokers Associations

President, Canadian Society of Customs Brokers

Chair, WCO Private Sector Consultative Group

OUTLINE

Statement of Principle

About the IFCBA

About customs brokers

Best Practices for customs broker licensing

IFCBA Survey

Principles

Individual and Corporate Requirements

Regulation of Entry and Performance

Some Final Thoughts

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Statement of Principle

IFCBA supports the establishment of transparent, accountable and consistent customs broker licensing regimes by relevant government agencies, worldwide.

Failure to do this will negatively affect the customs process, the customs brokerage community, the hundreds of thousands of importers and exporters who depend on a high standard of service from their customs brokers, and countries looking to trade facilitation to enhance competitiveness and prosperity.

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International Federation of Customs Brokers Associations (IFCBA)

Customs brokers handle the vast majority of trade transactions, worldwide.

Legally authorized by importers and exporters to act on their behalf.

IFCBA has members in every region of the world, at various stages of development, operating under various regulatory arrangements.

IFCBA developed best practices for customs broker licensing and a code of conduct.

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What Customs Brokers Do

Customs brokers make borders work

manage data

manage relationships

manage complexity

Save governments money – net transfer of cost from the public to the private sector.

Professional customs brokers plus customs modernization directly supports trade facilitation.

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How Customs Brokers Do What They Do

Highly automated – early adopters of technology.

Challenge the notion of “disintermediation”.

Almost 100% of transactions with Customs in many countries are electronic.

Importance of building capacity of customs brokers nationally to optimize use of trade facilitation measures.

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The Challenges of the Current Business Process Even in automated environment, customs

brokers receive very little information electronically from source.

Information still delivered by email and fax, or delivered by hand – to be validated, re-keyed and transmitted.

Many “new” products are shipped every day.

No single window in most countries.

Expectation of customs administrations - correct tariff classification, valuation, country of origin -important for trade data and collection of revenue

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The Strengths of the Current Business Process

Competence of existing customs brokers –licensed by government, with a knowledge requirement.

Protection of confidentiality of commercial information.

Small business well served.

Relationships developed and nurtured –between customs brokers and clients.

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Customs Broker Licensing: IFCBA Survey

Three objectives:

Establish a database of existing practices concerning licensing of customs brokers in IFCBA member countries.

Provide the basis for submissions on customs broker licensing (WCO, WTO).

Create best practices recommendations on customs broker licensing for Customs administrations.

IFCBA model based on input from: Angola, Australia, Canada, China, Hungary, India, Jamaica, Japan, Korea, Mauritius, Mexico, New Zealand, Philippines, Poland, Portugal, Sri Lanka, Turkey, United States.

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General Principles

Regulation of licensing of customs brokers is the responsibility of government.

Regulation may be for individuals and/or business entities.

Regulatory body most often is the Customs administration.

Need to set out the scope of practice, which may vary from country to country.

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More Specifically…

Economic operators can use only customs brokers as third parties to transact business with Customs.

Economic operators acting on their own behalf to transact business with Customs must meet the same knowledge standards as customs brokers.

Licensed customs brokers may direct and supervise the work of employees performing release and accounting functions.

Customs brokers may wish to assume joint and several liability with their clients for payment of duties and taxes.

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Requirements Applying to Individuals

Be a citizen or permanent resident where such legislation exists.

Have reached the legislated age of majority

Provide records that demonstrate:

the minimum experience requirements, usually three to five years in a customs brokerage environment, or

the successful completion of a training program as required by legislation or regulation.

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Requirements Applying to Individuals

Successfully complete a licensing examination or equivalent procedure.

Pass a credit history check.

Have no violations of a serious nature related to imports/exports.

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…continued

Requirements Applying to Corporations

Evidence of financial stability (such as financial statements).

Financial guarantee or security deposit where payment of duties and taxes is made on behalf of an economic operator.

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Customs brokers should establish standards of professional practice on a national basis to protect clients’ interests.

The knowledge and skills required in customs brokerage are best acquired and developed through ongoing professional development within the industry, and can include: courses, seminars and events provided by customs

brokerage associations

corporate in-house training

informal on-the-job training

tertiary education at recognized national educational institutions

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Regulation of Entry and Regulation of Operation/Performance

Regulation of Entry and Regulation of Operation/Performance

Customs brokers must demonstrate continued financial stability.

Customs brokers must demonstrate high levels of Customs compliance.

Customs brokerage training, including e-learning opportunities, should be widely available.

Suspension or cancellation of a customs brokerage license must be subject to appeal; neither suspension nor cancellation should take place until finalization of the appeal process.

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…continued

The Knowledge Base:CCS Online Course

CCS Online Course…continued

CCS Online Course…continued

CCS Online Course…continued

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CCS Online Course…continued

Some Final Thoughts

Complexity and cost of crossing borders influences investment decisions and directly contributes to prosperity.

Trade facilitation today extends beyond traditional role of Customs, and to parties other than Customs (importance of coordinated border management / single window).

Trade facilitation requires institutional commitment and predictability.

The role of customs brokers can directly promote trade facilitation when transparent, accountable and consistent licensing regimes are in place, with requirements for knowledge and conduct.

IFCBA commitment of expertise and best practices to build capacity.

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THANK YOU!

Carol West

[email protected]

+1 613 562 3543

www.cscb.ca

www.ifcba.org

www.wcopscg.org