ANALYSIS OF THE DIGITAL CUSTOMS WORK PROGRAM OF THE WORLD CUSTOMS ORGANIZATION

Sergei Mozer

РУССКИЙ

Sergei MozerPh.D. at law

Deputy Head of Division of Advanced Customs Technologies, Department of Customs Legislation of the Eurasian Economic Commission; Contact Person for Communication with the World Customs Organization.

Senior Researcher in the Research Institute of the Russian Customs Academy.

e-mail: moser@teloneum.net

Web: http://customs-academy.net/?page_id=10398

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Published: Social and Political Sciences. — № 5 (October). — 2019. — pages 166-174. © S.V. Mozer, 2019

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Abstract

Purpose. To analyze the Digital Customs Work Program of the World Customs Organization (WCO, Organization). To consider the practical aspects of the work of the WCO working bodies to create this Program.

Design/methodology/approach. The research article is devoted to the issues of modernization of legal instruments of customs regulation within the framework of the functioning of the Secretariat, the Policy Commission, the Permanent Technical Committee, and the Information Management Sub-Committee of the World Customs Organization. The subject of the study is the Digital Customs Law Institute, as well as the WCO Digital Customs Work Program (Program). It is comprehensively considered the approaches of the international customs community to the formation of the Program as part of the WCO Strategic Plan. The key capabilities, main tasks, strategic goals of the Program are analyzed, its structure is revealed. The tasks of the WCO Digital Customs Work Program are highlighted here; practical examples of the activities of the working bodies of the Organization are also represented.

Social implications. The development of the digital customs institute, as well as its introduction into the customs legislation of the WCO Member Countries, is aimed at optimizing customs operations and simplifying trade procedures.

Practical meaning. The results of the study are of interest to the Customs block of the Eurasian Economic Commission (EEC), can be used to organize the work of the Information Management Sub-Committee, Permanent Technical Committee, Capacity Building Committee of the World customs Organization, in terms of generating working analytical materials for the digital customs institute, as well as for creating scientific and practical basis for customs officials training in accordance with the WCO capacity building programs.

Originality/value. The research material is based on an analysis of the practical aspects of the WCO’s activities and is a continuation of scientific and practical publications on the development of the digital customs institute within the framework of the WCO’s activities.

Keywords: The World Customs Organization, the WCO, the Eurasian Economic Union, EEU, the Eurasian Economic Commission, EEC, Permanent Technical Committee, Information Management Sub-Committee, e-Customs, digital Customs, Work Program on Digital Customs, customs regulation, customs administration, international customs law, customs.

         End of 2015 and the beginning of 2016 was marked by the work of the WCO to develop the Concept of digital customs. At that time, the WCO had a sufficient volume of proposals from the parties for the development of scientific and methodological approaches to the formation of the institution of digital customs. In this regard, experts of the WCO Secretariat developed a draft IMSC Work Programme on Digital Customs (hereinafter referred to as the Work Program) for 2016-2018, which is based on the WCO Strategic Plan and the key objectives of the Information Management Sub-Committee. These goals are defined and clarified in the Rules of Procedure. In particular, to fulfill its mandate, the Sub-Committee should develop and improve instruments and tools related to digital customs and electronic commerce, supporting, among other things, the implementation of the provisions of the Revised Kyoto Convention and the WTO Trade Facilitation Agreement.[1]

      It should be noted that on March 4, 2016, the WCO Secretariat sent a letter[2] to Member States to submit ideas, opinions and background data on the Agenda and work programs of the Sub-Committee related to digital customs. Based on the responses received, the Secretariat prepared a draft Work Program on Digital Customs. Our study shows that practically any question of improving customs administration at the WCO is tentatively sent by the Secretariat for consideration by the Customs administrations of the Member states.

         The Work Program, as noted in the WCO materials, aims to bring together the topics with which the Information Management Sub-Committee will deal with

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 over the next biennium (2016-2018).[3] It was very important to discuss this document in breakout and plenary sessions on the basis of a draft prepared by the Secretariat. In this paragraph we will cover the main aspects of the draft WCO Work Program on Digital Customs. It is obvious that the analyzed draft program should take into account and reflect the conceptual approaches, vision, proposals of the WCO Member states to the development of the digital customs institution. In other words, the creation of a program should be preceded by analyzing digital (electronic) customs and transforming the research results into an independent concept. And only after that you can proceed to the formation of the Work Program.

         It should be recalled that by this time the concept of digital customs was proposed (at the 74th meeting of the Policy Commission), which is set out on one page in the form of a figure presented by the 6 blocks.[4] The concept is intended to provide a thematic overview of existing WCO instruments and tools. We believe that this concept does not determine the path of transition from the current position of customs to the desired — digital customs in accordance with the goals set by the subject of management; there is no general description and assessment of the state of digital customs and its position in the external environment; problems and tasks that should be solved to achieve strategic goals are not identified; there is no description of the management system that ensures the achievement of the strategic goals of digital customs, etc.

         For the sake of objectivity, we note that the WCO Secretariat and representatives of the WCO Member states have done an excellent job and considered most of the issues related to the formation of the necessary concept of digital customs. At the same time, the consolidated position was not set forth in an independent document entitled «The Concept of Digital Customs», which reflects the expanded vision of the analyzed institution and the prospects for its development. So, let’s proceed to the consideration of the draft Digital Customs Work Program.

As noted above, in March 2016 the WCO Secretariat at the joint session of the permanent Technical Committee and the Enforcement Committee presented the Digital Customs Work Programme under the WCO Strategic Plan. This document was brought to the attention of the international customs community by Mr. Sergio Mujica, the WCO Deputy Secretary General. The High Representative of the WCO explained that digital customs is a cross-cutting issue that is relevant and supports all four pillars of the WCO Strategic Plan:

  1. Trade facilitation and security.
  2. Honest and efficient revenue collection.
  3. Protection of society and the fight against crime and terrorism.
  4. Institutional development as well as human resource development.

         At the same time, according to the presentation of the WCO Secretariat, digital customs is necessary to support the customs management border (CMB) and information exchange.[5] In other words, besides the information exchange, the second priority is border management. And here we find confirmation of our thesis about the complex nature of digital customs.

Continuing the study, we note that the Work Program for Digital Customs, in the understanding of the WCO, should focus on a number of areas:

  • The Observatory, the repository of innovative practices that will be collected and show not only what is being done today, but also where the Customs administrations are moving in the future. The Secretariat will request regional Vice-Chairmen to contribute on this issue.
  • Development and maintenance of the WCO instruments and tools.
  • Improving interaction with other stakeholders.
  • Introduction of electronic services, such as mobile applications.
  • ICT competence management, etc.[6]

             In its presentation devoted to the consideration of this issue, the WCO connected two sets of questions in one coordinate system. The first is related to the activities of the working bodies of the Organization on the formation of the digital customs institution and includes (1) the development of standards, (2) cooperation and coordination, and (3) capacity building. The second block is connected with such important elements of the program as key opportunities, main objectives and strategic goals. Let’s clarify these elements.

         key opportunities: digital strategy, legal framework, governance structure, ICT infrastructure.

        main tasks: support the implementation of the Bali Agreement; improved customs border and «single window» management; updating the WCO Data model and other relevant tools; e-commerce problem solving; Big data analysis; facilitating the exchange of information; performance measurement; support sustainable development goals.

       strategic goals, in our opinion, are linked to the pillars of the WCO Strategic Plan for 2016-2019 and include: security and facilitation of international trade; fair, efficient and effective revenue collection; protection of society, public health and safety; organizational development.

The second time, the Work Program on Digital Customs was presented to the international customs community at a meeting of the Information Management Sub-Committee in May 2016. The analytical report of the WCO Secretariat prepared for the 70th session of the Information Management Sub-Committee (12-13 May 2016) reflects the fact of the active participation of the WCO in expanding and consolidating the implementation of various digital solutions together with government partners and other stakeholders as well as further implementation of technologies such as Big data, telematics, artificial intelligence and Cloud to increase operational efficiency, transparency and reduce administrative burden. According to the WCO, the holistic nature of the Digital customs concept includes facilitating, enforcing, and generating revenue from both strategic and operational points of view.[7]

In this context, the IMSC, as expected, will guide current work from a more technical and operational point of view as well as contribute to the further development and consolidation of the digital customs concept by updating and

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improving existing tools. At the same time, the Information Management Sub-Committee needs to explore the development of new instruments, where necessary, to support the introduction of new information technologies, and to conduct research and development aimed at improving the understanding of new and emerging trends, including through monitoring and disseminating relevant best practices.

To this end, the Secretariat developed the draft Work Program of the Information Management Subcommittee for 2016-2018 based on the WCO Strategic Plan and the key objectives of the IMSC, which are defined and developed in its Rules of Procedure.[8] As noted above, the Work Program aims to bring together topics that the IMSC will consider over the next two years. It reflects the key tasks arising from discussions in PTC and other WCO bodies. The Digital Customs Work Program should be viewed as a living document and updated as necessary to reflect new opportunities and changes in the customs environment, expectations, requirements of Member countries and (or) decisions of the Policy Commission, the Council as well as new developments in the field of ICT.[9]

Due to its cross-cutting nature, based on the survey, as noted above, digital customs supports the four key strategic objectives of the WCO — trade facilitation and security; fair and efficient revenue collection; protection of society; and capacity and human resource development. With this in mind, the draft WCO Strategic Plan for 2016-2019 provides for the improvement, enhancement of the existing Strategic Objective 5 (Promoting information exchange and cooperation) «Assisting the digital customs in supporting, in particular, coordinated border management and information exchange among all interested parties», and also identifies relevant tactical actions and performance indicators.       

I. Structure of the Digital Customs Program

Let’s consider the structure of the draft Digital Customs Program presented at the 70th meeting of the Information Management Sub-Committee at the WCO Headquarters on May 12-13, 2016. The analyzed program consists of eight blocks, and each of them has tasks (actions) and an approximate deadline:

  1. Support the implementation of the WTO Trade Facilitation Agreement (TFA).
  2. Review, update relevant WCO instruments and tools.
  3. Management, development, support, updating and promotion of the WCO Data model.
  4. To promote the introduction, consolidation of electronic services.
  5. Promote connectivity, interoperability with government partner agencies and other stakeholders.
  6. Monitor new and emerging technological developments from a customs point of view and, if necessary, develop appropriate solutions.
  7. Create a repository of managed innovation processes (operations), ICT services.
  8. Facilitate the implementation of the «single window» and create a repository of national practices.

From a scientific and practical point of view, the content of each of the listed activities of the Information Management Sub-Committee is a matter of interest. Consider them in detail.

1. Support the implementation of the WTO Trade Facilitation Agreement (TFA)

To implement the first theme of the Digital Customs Program, such a task was proposed as improving the preliminary mapping of the WCO ICT instruments and tools supporting the effective and coordinated implementation of the WTO Trade Facilitation Agreement measures (Bali Agreement).

We need to note that the Bali Agreement is in no way related to the concept of digital customs, considered at the 74th meeting of the Policy Commission (December 7-9, 2015). Similarly, the materials of the 209/210 meeting of the Permanent Technical Committee (October 14-16, 2015) do not contain any recommendations for mapping the WCO instruments and tools through the prism of the Bali Agreement. In this regard, the positioning of the Bali Agreement, developed by another international organization, by number one in the Digital Customs Program, is very controversial. For reference, we note that the WCO has no competence to make any recommendations on the application of the Bali Agreement. This competence belongs only to the World Trade Organization. We add that during the discussions of the 74th meeting of the Policy Commission, a particular point of view was expressed about the relevance of the digital customs theme for 2016 and the need to focus on these issues for the effective implementation of the Agreement on Trade Facilitation.

However, there are no Policy Commission instructions on this issue. We consider it erroneous to establish a priority for any instrument developed by other international organizations over WCO instruments and tools.

The problem, in our opinion, lies in maintaining a balance between the WCO instruments and the individual norms of the Bali Agreement. It is important to understand that the WCO tools are primary in relation to the Bali Agreement, and the Agreement is derivative to all WCO developments. It is obvious that for the development of the AEO institute, the «single window» mechanism, the institute of customs transit, the original source is the entire SAFE package, the WCO AEO Compendium, and also the WCO Transit Guide, and not 2-3 articles of the Bali Agreement. And for any Customs administration, it is obvious that the WCO instruments and tools, and not an agreement developed by another international organization, are in priority for the development of these institutions. If we remove the political context of the Agreement on Trade Facilitation as well as lobbying for its promotion, everything will fall into its place.

For the author of this article the WCO is a modern and the only institution that develops international standards in the field of customs administration (regulation).

 

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In our opinion, the issue of creating a fundamental concept of digital customs in terms of importance can be put on a par with the Revised Kyoto Convention and the WCO’s developments on the creation of a «single window» mechanism. We believe that the institution of digital customs permeates the majority of customs operations (business processes), and in this regard it is advisable to set the task of analyzing all WCO customs administration instruments and tools for correlation with the concept of digital customs. At the same time, the object of analysis should not be limited only to ICT. And in the future, when developing new WCO instruments, they should be analyzed as well as mapping for compliance with the Concept of digital customs, and not the Bali Agreement.

2. Review, update relevant instruments and tools of the World Customs Organization

For the second topic, the following tasks (actions) were proposed:

  1. Update Information Technology Guide for Executives.
  2. Update Compendium on a «single window».
  3. Update the ICT Guidelines of the Revised Kyoto Convention to reflect new developments aimed at better meeting the needs of all WCO Members, in particular, bridging the «digital divide».
  4. Update the Business Continuity Planning Guidebook and Collection of WCO Member Practices.
  5. The work on the use of WWW by Customs authorities — a potential development of the Manual.
  6. Review, update the WCO ICT recommendations.
  7. Gather national experiences and explore the technical aspects of implementing an information / data security management system.

We believe that since the developers of the Program consider digital customs in a narrow sense and actually limit it to the scope of ICT, the study of other WCO instruments was not planned. For example, in terms of the formation of the digital customs institute, it is of interest to analyze the WCO instruments associated with the optimization (reengineering) of customs operations (business processes), the customs control institute, the risk management system, goods declaration, release, post-clearance audit, customs transit, the institution of an authorized economic operator, management mechanism in customs, interaction with small, medium and large enterprises, etc. Accordingly, the national, advanced practice of customs regulation must be analyzed in the same way, but are not limited to ICT. Only with such an approach we can expect a serious result in terms of forming practical recommendations for the Customs administrations of the world on the development of the digital customs institution (based on the WCO instruments).

3. Management, development, support, updating and promotion of the WCO Data model.

In the draft Digital Customs Program, the following actions are planned:

  1. Release of version 3.6.
  2. Work on version 3.7.
  3. Work on a potential transition to version 4.0.
  4. Update of the report on the global adoption of the WCO Data model.
  5. Develop a management structure and promotion strategy (including non-technical guidance) of the WCO Data Model.
  6. Continue to work on data quality — data mapping to include information about who is delivering data to customs.[10]

4. To promote the introduction, consolidation of electronic services.

  1. Carry out further work on electronic services, for example, integrated electronic payments, electronic processing of permits / authorizations, electronic authorizations / validation checks, electronic refund, mobile applications.
  2. Cooperate under the International Plant Protection Convention[11] in developing a solution for obtaining an E-Phyto certificate based on the WCO Data Model.

5. Promote connectivity, interoperability with government partners and other stakeholders.

  1. Promote the Global Network of Customs (GNC) and the development of Utility blocks.
  2. Examine the work in the field of integrated supply chain management (ISCM).
  3. Continue work on the Trader Identification Number (TIN).
  4. Continue working with the WCO Unique Consignment Reference (UCR).[12]
  5. Research work on the development of standards / guidelines on connectivity and information exchange with e-commerce / economic operators, such as electronic providers, postal operators, online payment service, Internet service providers (ISP).

6. Monitor new and emerging technological developments from a customs point of view and, if necessary, develop appropriate solutions.

Explore new topics, for example, Big Data — Data Mining and Predictive analytics.

7. Create repository of ICT Driven Innovative Processes / Services

Collection, analysis and dissemination of the practice of Member countries.

8. Promote the implementation of the «single window» and create a repository of national practices[13]

Collection, analysis and dissemination of the practice of Member countries.

 

II. The main objectives of the Digital Customs Program.

Based on the foregoing, it was expected that the Digital Customs Work Program will provide broad support for achieving the strategic goals of the WCO Strategic Plan for 2016/2017 — 2018/2019. According to the WCO, the key tasks identified so far include:

a) ICTs enabled the implementation of the WTO Trade Facilitation Agreement (TFA). First of all, we note that the Bali Agreement does not contain a word about digital or electronic customs. It must be understood that at the time of the formation of the Digital Customs Program, there is no clear definition of the concept (term) of digital customs, both a complex phenomenon (institution, mechanism, technology, etc.) and the system of elements that characterize it as a digital customs. The «attraction» («pull») of digital customs to the Bali Agreement is based on the identification of digital customs with information and communication technologies.

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It is noted in the materials for the meeting of the Information Management Sub-Committee that immediately after the conclusion of the Bali Agreement, at the WTO in December 2013, at the 67th meeting of the Sub-Committee, it was  considered the issue of preliminary article-by-article analysis of the consequences of information and communication technologies for the Bali Agreement. Since the WCO Member Countries actively participated in the preparation and implementation of the Bali Agreement measures, this analysis, according to the Organization, can be further developed, improved along with mapping and cross-referencing of ICT instruments and tools of the World Customs Organization that support each simplification measure, as well as provide guidance on corporate oversight of the implementation, consolidation of ICTs in accordance with the specific implementation requirements of the Bali Agreement.

In our opinion, the accession of the WCO Member Countries to the Bali Agreement is not the basis for linking (creating cross-references) instruments and ICTs to the Bali Agreement. Again, the WCO does not have the competence to comment and interpret the articles of the Bali Agreement. This is purely the competence of the WTO. Accordingly, the creation, for example, of the WCO Guide on the implementation of the Agreement in the context of the previously created WCO tools (ICT) looks contradictory.

b) ICT Guide for Executives. Given the focus on digital customs and related work, the Digital Customs Concept will, according to the WCO, be integrated into the Information Technology Guide for Executives. This will provide an institutional and brief reference to how the WCO instruments, tools, guidelines and recommendations can support ICT modernization programs of Member Countries, in terms of a strategic, political and operational perspective.[14]

c) «Single window» Compendium. At the time of the review of the Program, it was planned that the Single Window Compendium would be updated during 2016–2017 to cover the latest advances in law and technology to support paperless trade, the Bali Agreement, which have direct implications for the implementation of the Single Window all over the world, as well as recent developments regarding the implementation of the «single window» with specific examples for inclusion in the text. In addition, as discussed at the 66th meeting of the Information Management Sub-Committee, the updates can potentially include data quality issues in a single window; innovation in business processes; assessment of performance and sustainability; solving the problem of optimizing business processes at the design stage; and risk assessment: the prospect of a «single window».[15]

         In addition, it is provided key legal considerations for the movement of electronic information between regulatory authorities governing the movement of goods across borders, legal obligations and responsibilities of such regulatory authorities in the field of data processing, obligations and obligations of a service provider regarding data processing and data confidentiality. The listed positions, according to the WCO, should be included in the Compendium.

d) The WCO Data Model. The WCO materials note that since the Data Model has been formed and is on a stable development path, it is time to consider and develop a reliable and scalable management, development and promotion strategy for its deeper understanding and widespread adoption, including among the high leadership of WCO Member Countries, non-technical audience, international organizations and other interested parties. There is a need for greater transparency in the development of the WCO Data Model, including compliance with the standards, the process of ensuring the quality and accessibility of information to the public in order to promote and raise awareness of the work. This issue was widely discussed at a meeting of the Permanent Technical Committee in March 2016.

e) Data Security. The WCO Secretariat draws attention to the fact that with the increasing use of ICT and data exchange between customs, partner government agencies and private sector stakeholders, data security issues are in the spotlight to ensure digital trust and operational efficiency. Data security was also discussed at the PTC meeting in March 2016, which instructed the Information Management Sub-Committee to collect national experience and further study the technical aspects of implementing information security management.[16]

e) Integrated Supply Chain Management (ISCM). The PTC and SAFE Working Group[17] discuss the industrialization of the WCO Integrated Supply Chain Management Guidelines from a strategic and operational point of view. The PTC was expected to continue to discuss related strategic issues, and the SAFE Working Group would continue to work on operational issues, including a potential review as part of the 2018 SAFE review cycle, especially in the context of the Bali Agreement and other recent developments. The topic of integrated supply chain management is very closely related to the ICT aspects that the Information Management Sub-Committee deals with, and, in particular, with such an important concept as UCR; TIN, as well as ICT-enabled business processes.

g) E-commerce. The WCO believes that in the context of growing e-commerce and the changing dynamics of the supply chain of goods, to simplify

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 volume growth and ensure effective control, the Information Management Sub-Committee may wish to conduct research work on the development of standards, guidance on the coherence and exchange of information with e-commerce stakeholders, economic operators, for example, electronic providers, postal operators, real-time payment services, delivery Internet service providers.[18]      

III. Actual issues of the Digital Customs Work Program.

It is no secret that the procedural aspects of holding meetings of the WCO working bodies are little known in the scientific community. Not all organizational procedures are spelled out in the Rules of Procedure of the working bodies, however, they are applied by virtue of established practice and traditions. As an example, the 70th meeting of the Information Management Sub-Committee, held at the WCO Headquarters on 12-13 May 2016, can be cited. In particular, during the session of the Sub-Committee, its Chairman suggested that delegates be divided into two groups depending on the language that will be used during the discussions. The first group was intended for English-speaking participants, and the second — for French-speaking delegates

The English-speaking group reported on the results of their discussions, stating that the draft Work Program is very useful. However, in order to understand the process of reasoning prior to the development of the Work Program, more information is needed about the background history in terms of including each program element in the project. In addition, delegates suggested that the Secretariat improve the presentation of WCO IT related instruments and tools on the Organization’s web site. In their opinion, the WCO web-page should be made more user-friendly and accessible to Member countries. In addition, further study is needed on the relationship between the political context of topics in the draft Work Program and their practical implementation in the field of IT.

The members of the group welcomed the initiative of the Secretariat to make a presentation at the next meeting of the Sub-Committee on how the WCO instruments are related to each other. In addition, the delegates stressed the importance of allowing the Administration to allocate sufficient time to contribute more and increase the value of the work of the Sub-Committee as a whole, so that it can benefit from the ongoing work on setting standards in the IMSC. To this end, the group proposed to establish a more transparent, joint working relationship between the WCO Secretariat and the Administrations of the Member states in order to maintain, implement the Work Program on Digital Customs. In addition, in order for these efforts to become sustainable, it is needed a structured approach to the development and maintenance of WCO instruments and tools.[19]

In turn, the members of the French-speaking group also reported on the results of their discussions, noting the need to add information about who should be responsible for coordinating the implementation of each work item in the project. In addition, appropriate performance indicators are needed to assess progress made at any time. In this context, it is necessary to provide clearer deadlines for some work items that have been marked as «continuous». The group also noted that some of the work items are relevant to the workload of the Sub-Committee, while others are related to the work of the Data Model Project Group (DMPT). Therefore, to carry out the work, a clear division of mandates is required.

The view was expressed that it was necessary to clearly define the Concept of digital customs in order to clarify the scope of work in this area.[20] With regard to prioritization, group members concluded that topics related to Big data need further study so that Customs administrations can benefit from this concept. As before, it was important to give priority attention to the «single window» and electronic coordinated border management.

As part of the discussions, it was clarified that the draft Work Program on Digital Customs will be submitted to the Policy Commission in July 2016.  For reference, we note that the theme of the Work Program on Digital Customs was later considered at the 75th meeting of the Policy Commission, and the program itself was modernized. We will reveal the main approaches and elements of modernization in subsequent publications.

 

In the light of the above, we formulate the conclusions.

  1. In March 2016 at the joint session of the Permanent Technical Committee and the Enforcement Committee, the draft Digital Customs Work Program was presented under the WCO Strategic Plan. Somewhat later, the Work Program was brought to the attention of the international customs community at a meeting of the Information Management Sub-Committee in May 2016. Looking ahead we will add that this draft document was modernized and formed by the 75th meeting of the WCO Policy Commission.
  2. By the time of the development of the draft Work Program on digital customs, there was no official definition of the term «digital customs», its competence and main characteristics were not defined. The ongoing work on the development of the digital customs institution continues to be coupled with the development of ICT and the corresponding instruments and tools. The Concept of digital customs formed by this time does not cover the conceptual apparatus, functionality, characteristics, competence of digital customs; it is identified with information customs technology.

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  1. The first Digital Customs Work Program was initially intended for the work of the Information Management Sub-Committee. Given the importance of the digital customs project, this program (75th meeting of the Policy Commission) was subsequently transformed into the WCO Work Plan for Digital Customs. Among the implementers (performers) of the Working Plan were the Permanent Technical Committee, the Information Management Sub-Committee, the Revised Kyoto Convention Management Committee, the Enforcement Committee, the Data Model Project Team, the WCO Secretariat Research Unit, the Single Window Working Group (SWG), the Capacity Building Committee, the WCO — International Postal Union Contact Committee.
  2. According to the WCO, digital customs is a cross-cutting issue that is relevant and supports all four pillars of the WCO Strategic Plan. In a different way, digital customs supports the four key strategic objectives of the WCO — trade facilitation and security; fair and efficient revenue collection; protection of society; and capacity building and human resource development.

         We believe that the «single window» mechanism is a cross-cutting issue that also supports the 4 pillars of the same strategic plan. Accordingly, the actual question can be called what are the differences between digital customs and the «single window» mechanism? To date, there are no scientific and practical explanations of the WCO Member states on this subject.

         Digital customs is needed to support customs border management (CMB) and information exchange.

  1. The WCO’s Digital Customs Work Program is focused on 5 areas:
  • the creation of an observatory, a repository of innovative practices that will collect and show not only what is being done today, but also where the Customs administrations are moving in the future;
  • development and maintenance of WCO instruments and tools;
  • improved interaction with other stakeholders;
  • introduction of electronic services, such as mobile applications;
  • ICT competence management, etc.
  1. The WCO’s Digital Customs Work Program covers the following elements:

Key enablers (features):

  • digital strategy;
  • legal basis;
  • management structure;
  • ICT infrastructure.

Main tasks:

  • support the implementation of the Bali Agreement;
  • improving the management of the customs border and a «single window»;
  • updating the WCO Data model and other relevant tools;
  • solving e-commerce problems;
  • Big data analysis;
  • facilitating the exchange of information;
  • performance measurement;
  • support for sustainable development goals.

Strategic goals:

  • security and facilitation of international trade;
  • fair, efficient and effective revenue collection;
  • protection of society, public health and safety;
  • organizational development.
  1. The Work Program consists of eight themes (blocks), and each of them has tasks (actions) and an approximate deadline:
  • Support the implementation of the WTO Trade Facilitation Agreement (TFA).
  • Review, update relevant WCO instruments and tools.
  • Management, development, support, updating and promotion of the WCO Data model.
  • To promote the introduction, consolidation of electronic services.
  • Promote connectivity, interoperability with government partner agencies and other stakeholders.
  • Monitor new and emerging technological developments from a customs point of view and, if necessary, develop appropriate solutions.
  • Create a repository of managed innovation processes (operations), ICT services.
  • Facilitate the implementation of the «single window» and create a repository of national practices.
  1. For the preparation of the Digital Customs Work Program, it is necessary to study the relationship between the political context of the topics in the draft Work Program and their practical implementation in the field of digital customs. An equally important aspect is the analysis of the history of the issue in terms of the inclusion of each program element in the project.
  2. The first theme of the Digital Customs Work Program is related to supporting the implementation of the Bali Agreement.

The Bali Agreement does not contain the concept of digital customs.

The WCO has no competence to comment and interpret the articles of the Bali Agreement. This question is strictly the competence of the World Trade Organization.

The Bali Agreement is not related to the concept of digital customs, considered at the 74th meeting of the Policy Commission. Similarly, the proceedings of the 209/210 meeting of the Permanent Technical Committee do not contain any recommendations for mapping instruments and tools on the WCO ICT through the lens of the Bali Agreement.

The WCO instruments in the field of customs regulation are primary to the WTO Agreement on Trade Facilitation.

The accession of the WCO Member countries to the WTO Agreement on Trade Facilitation is not a basis for linking (creating cross-references) tools and ICT to this Agreement.

         It is erroneous to set a priority for any tools in the field of customs administration developed by other international organizations over the WCO tools.

        

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         In the light of the above the WCO Guidelines for the implementation of the Bali Agreement in the context of previously created WCO tools (ICT) looks contradictory.

  1. The institute of digital customs permeates most customs operations (business processes).

         To date, it is advisable to set a task — to analyze all WCO instruments in the field of customs administration for correlation with the Concept of digital customs. At the same time, the object of analysis should not be limited only to ICT.

         When developing WCO instruments, they should be analyzed and mapped for compliance with the Concept to digital customs, and not the Bali Agreement.

         During the session of the Information Management Sub-Committee, the WCO Secretariat launched an initiative to prepare a presentation on how the WCO instruments are related to each other. It is very interesting to get acquainted with the results of such work.

  1. Developers of the Digital Customs Work Program consider digital customs in the narrow sense and in fact limit it to the scope of ICT, and the research of other WCO instruments has not been conducted.

         When forming scientific and methodological approaches for creating an institution of digital customs, it is necessary to analyze the WCO instruments associated with the optimization (reengineering) of customs operations (business processes), the institution of customs control, the risk management system, goods declaration, release, post-entry audit, customs transit, authorized economic operator institution, management mechanism in customs, interaction with small, medium and large enterprises, etc.

  1. Positive aspects of the work of the Information Management Sub-Committee include the intention to conduct research on the development of standards, guidelines on relatedness and information exchange with e-commerce stakeholders, economic operators, such as electronic providers, postal operators, online payment services, internet services suppliers.
  2. The maintenance and implementation of the Digital Customs Work Plan requires the establishment of an effective management mechanism as well as a more transparent, collaborative working relationship between the WCO Secretariat and the Administrations of the Member countries.
  3. The Concept of digital customs should be clearly defined to clarify the scope of work in this area.

 

OTHER PUBLICATIONS

 

LIST OF SOURCED USED 

  1. Information Management Sub-Committee. World customs Organization. URL: http://www.wcoomd.org/en/about-us/wco-working-bodies/procedures_and_facilitation/information_management_sub_committee.aspx
  1. A letter of the WCO Secretariat of March 2016 № 16.FL-0092/T.K.
  2. Summary Report. 70th Meeting of the Information Management Sub-Committee. PM0398E1a. Brussels, 22 August 2016.
  3. Mujica Sergio. Digital Customs Work Programme under the WCO Strategic Plan. Digital Customs: Progressive Engagement. Presentation of the World Customs Organization. Joint Session of the 211th/212th Sessions of the Permanent Technical Committee (PTC) and the 35th Session of the Enforcement Committee (EC) on 4 March 2016.
  4. Summary Report. 211th/212th Sessions of the Permanent Technical Committee, 2-3 March 2016. Doc. PC0449E1a. Brussels, 11 March 2016.
  5. IMSC Work Programme on Digital Customs. (Item IV of the Agenda). Secretariat Note. Information Management Sub-Committee. 70th Meeting, 12 – 13 May 2016. Doc. PM0391E1a, Brussels, 14 April 2016.
  6. IMSC Work Programme on Digital Customs (2016-2018). Annex I to Doc. PM0391E1 // IMSC Work Programme on Digital Customs. (Item IV of the Agenda). Secretariat Note. Information Management Sub-Committee. 70th Meeting, 12 – 13 May 2016. Doc. PM0391E1a, Brussels, 14 April 2016.
  7. International Plant Protection Convention (New Revised Text approved by the FAO Conference at its 29th Session — November 1997) URL: http://www.fsvps.ru/fsvps-docs/ru/laws/standarts/ispm/mkkzr.pdf
  8. WCO Unique Consignment Reference (UCR).World Customs Organization. URL: http://www.wcoomd.org/en/topics/facilitation/resources/~/media/633F01FC1783462EA9DBDE125AF48834.as
  9. SAFE Working Group. World Customs Organization. URL: http://www.wcoomd.org/en/about-us/wco-working-bodies/procedures_and_facilitation/safe_working_group.aspx
  10. Summary Report. 70th Meeting of the Information Management Sub-Committee. Doc. PM0398E1a. Brussels, 22 August 2016.

 

[1] Item 3 (ii). Information Management Sub-Committee. World customs Organization. URL:

www.wcoomd.org/About%20Us/WCO%20Working%20Bodies/Procedures_and_Facilitation/Information_Management_Sub_Committee (date of the request: 30.03.2019).

[2] A letter of the WCO Secretariat of March 2016 № 16.FL-0092/T.K.

[3] Summary Report. 70th Meeting of the Information Management Sub-Committee. Doc. PM0398E1a. Brussels, 22 August 2016. – P.3.

[4] Leadership; legal basis; modernization and reform; protection of society; communication; coordinated border management.

[5] Mujica Sergio. Digital Customs Work Programme under the WCO Strategic Plan. Digital Customs: Progressive Engagement. Presentation of the World Customs Organization. Joint Session of the 211th/212th Sessions of the Permanent Technical Committee (PTC) and the 35th Session of the Enforcement Committee (EC) on 4 March 2016. – Slide 2.

[6] Item 130. Summary Report. 211th/212th Sessions of the Permanent Technical Committee, 2-3 March 2016. Doc.  PC0449E1a. Brussels, 11 March 2016. – P. 21.

[7] Item 2. IMSC Work Programme on Digital Customs. (Item IV of the Agenda). Secretariat Note. Information Management Sub-Committee. 70th Meeting, 12 – 13 May 2016. Doc.  PM0391E1a, Brussels, 14 April 2016. – P. 1.

[8] Information Management Sub-Committee. World Customs Organization.  URL: http://www.wcoomd.org/en/about-us/wco-working-bodies/procedures_and_facilitation/information_management_sub_committee.aspx (date of the request: 23.03.2019).

[9] Item 2. IMSC Work Programme on Digital Customs. (Item IV of the Agenda). Secretariat Note. Information Management Sub-Committee. 70th Meeting, 12 – 13 May 2016. Doc.  PM0391E1a, Brussels, 14 April 2016. – P. 1.

[10] IMSC Work Programme on Digital Customs (2016-2018). Annex I to Doc. PM0391E1 // IMSC Work Programme on Digital Customs. (Item IV of the Agenda). Secretariat Note. Information Management Sub-Committee. 70th Meeting, 12 – 13 May 2016. Doc.  PM0391E1a, Brussels, 14 April 2016. – P. I/2.

[11] International Plant Protection Convention (New Revised Text approved by the FAO Conference at its 29th Session — November 1997). URL: http://www.fsvps.ru/fsvps-docs/ru/laws/standarts/ispm/mkkzr.pdf (date of the request: 23.03.2019).

[12] WCO Unique Consignment Reference (UCR).World Customs Organization. URL: http://www.wcoomd.org/en/topics/facilitation/resources/~/media/633F01FC1783462EA9DBDE125AF48834.as (date of the request: 01.03.2019).

[13] IMSC Work Programme on Digital Customs (2016-2018). Annex I to Doc. PM0391E1 // IMSC Work Programme on Digital Customs. (Item IV of the Agenda). Secretariat Note. Information Management Sub-Committee. 70th Meeting, 12 – 13 May 2016. Doc.  PM0391E1a, Brussels, 14 April 2016. – P. I/1.- I/3.

[14] Ibid.  –P. 2.

[15] Ibid. – P. 3.

[16] IMSC Work Programme on Digital Customs. (Item IV of the Agenda). Secretariat Note. Information Management Sub-Committee. 70th Meeting, 12 – 13 May 2016. Doc. PM0391E1a, Brussels, 14 April 2016.  subparagraph v of paragraph 6

[17] SAFE Working Group. World Customs Organization. URL: http://www.wcoomd.org/en/about-us/wco-working-bodies/procedures_and_facilitation/safe_working_group.aspx

[18] IMSC Work Programme on Digital Customs. (Item IV of the Agenda). Secretariat Note. Information Management Sub-Committee. 70th Meeting, 12 – 13 May 2016. Doc. PM0391E1a, Brussels, 14 April 2016.  Subparagraph vii of paragraph 6

[19] Summary Report. 70th Meeting of the Information Management Sub-Committee. Doc. PM0398E1a. Brussels, 22 August 2016. – P. I/4.

[20] Ibid.