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Border management considerations in fragile states
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Use transparent competitive bidding procedures to select PSI service providers and to renew their contracts.21 Contract a single PSI company for only a few years and, if needed, renew the contract under competitive conditions. Avoid split contracts—supervising multiple companies adds complexity and tends to increase contracting costs, while the country represents a smaller profit for each company so that headquarters supervises activities somewhat less carefully. Also, split contracts have led importers to adjust their import patterns to benefit from the inspection service providers they fi nd to be most helpful. Ensure that PSI contracts are fully endorsed by customs, not imposed on customs by the finance ministry or central bank. Achieving this may require a change of management at customs. Link the PSI contracts with a customs modernization project that clearly delineates the responsibilities of customs and those of the PSI company. Make the PSI contract explicit: • Clarify the services to be rendered (price, classification, duties paid, special import regimes). • Provide for a time limit without automatic extensions. • List the goods to be inspected, with exceptions detailed. • Require assistance to customs in setting up valuation databases. • Set clear performance criteria that will allow the government to verify PSI performance, with penalties for failing to adhere to the retained criteria. • Commit the company to training customs staff and transfering technology. • Set reporting requirements including the numbers of inspections of irregularities addressed, of adjustments made to values, and of resulting additional assessments—as well as the number of complaints received.22 Record the PSI inspection fi ndings in the customs declaration as well as in the automated customs management system. Reconcile the data, explain any difference, and take appropriate action. 23
B O R D E R M A N A G E M E N T M O D E R N I Z AT I O N
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Apply the penalties provided in the law for undervaluation offenses—to enhance importers’ compliance. Set up an arbitration or appeals procedure—to provide importers with an avenue to contest PSI assessments. Create a steering committee—located outside customs, but with customs participation—to oversee and audit PSI activities and to determine on an ongoing basis whether the contract provides value for money. Periodic reports should be made available to civil society. The WTO guidelines for a dedicated PSI audit service (WTO 1999) should be consulted. Commit to an exit strategy ensuring a smooth transition when customs fully assumes valuation responsibilities. A PSI company, following its exit, could be retained to assist in dealing with fraud sensitive goods or in other cases where valuation poses particular problems. Manage a good publicity campaign—to inform traders and the public about the PSI system.
Heavy reliance on ICT
Customs control and clearance all over the world have come to rely heavily on ICT for more efficient revenue mobilization, trade facilitation, and security. 24 Customs management systems assist traders and customs through the clearance process; the Internet and intranets are used to connect with traders and staff; and scanners provide information on the contents of a container, information that can be used for security and to confirm elements important for calculating duties and taxes. Transit systems at times are supported by truck tracking systems for the central monitoring of transit truck locations, supplemented by mobile customs response teams ready to intervene when irregularities are detected. Trucks also may be fitted with electronic seals or with other electronic devices, such as special motion detectors and cameras that permit transit authorities to verify whether seals have been tampered with. And a single window—a new generation of ICT—permits declarants to electronically submit declarations containing all data required by the border agencies concerned, while providing a mechanism for these agencies to issue permits and clearances online (chapter 8).