At the World Customs Organisation Policy Commission meeting in Buenos Aires, the WCO’s Private Sector Consultative Group (PSCG) was tasked to provide a business view on the impact of the global financial crisis. Its report, which was acclaimed by the Policy Commission, noted that as demand declined a ripple effect could be observed through the supply chain with companies reconsidering priorities, cancelling projects and giving increased emphasis to the returns on investment. One immediate impact would be that the benefits associated with the investment in Authorised Economic Operator and other security programmes would become vitally important.
In addition, as sources of finance tightened up, global trade would inevitably become difficult: letters of credit would become more restrictive or difficult to obtain; underwriting criteria for surety in countries with release prior to payment systems would become more stringent and the cost of surety would increas. One outcome would be that, with cash flow critical, more companies might not be able to meet their financial obligations to Customs resulting in more claims against surety and possible suspension of importing privileges.
The PSCG however recognised that it was not just businesses that were affected by the financial crisis and a downturn in trade. They expressed concern that, with the consequent reduction in government revenues, the focus of Customs would shift away from trade facilitation towards enforcement and penalty assessment. Consequently, they called on the WCO and its members to take constructive action and refrain from raising new barriers to investment or trade in goods including new customs or security measures that might serve as disguised protectionism.
The PSCG recommended that WCO members should:
- strengthen the facilitation objectives of the SAFE Framework and the revised Kyoto Convention,
- avoid reliance on scanning technologies that are not based on risk management (the PSCG has previously spoken against US proposal for 100% scanning),
- introduce a range of meaningful, measurable and reportable trade facilitation benefits for AEOs and work to conclude mutual recognition agreements that offer direct benefits to the trade and customs alike.
This meeting marked the retirement of Secretary General Michel Danet and members of the PSCG added their thanks to those of the various Heads of Customs particularly for his vision in establishing the group and for his steadfast support of its efforts.
Return to SITPRO News: Issue 67, Winter 2008/2009
