In developed countries, customs automation is one of the most powerful tools known to have increased customs efficiency and exposed loopholes where corruption dwells. Trade facilitation aims at making trade across borders faster, simpler and cheaper while ensuring its safety and security.
In recent times, advanced countries have effectively implemented, maintained and successfully saved billions of dollars during the era of customs automation. The World Trade Organisation (WTO) defines trade facilitation thus: “Simplification and harmonization of international trade procedures. Trade procedures include the activities, practices, and formalities involved in collecting, presenting, communicating and processing data and other information required for the movement of goods in international trade.” By implication, it is not only the physical movement of goods that is important in the supply chain but also the associated information that flows from the relevant governmental agencies and the private sector.
There is a general consensus that automation will efficiently serve both public and private interests. Automation has the potential to facilitate trade while also helping to meet objectives related to the maintenance of national and social security. Smooth trade flows are also recorded in many advanced and developing countries that are dependent on just-in-time delivery and global supply chain systems. Predictable border services, customs clearance time and trade transaction costs are important factors when customs administrations consider in opting-in for the single window program. From a public sector perspective, limited human resources and rapidly growing trade volumes have led to the recognition of automation as essential to safeguard and meet budgetary, health, environmental and other social goals. Heightened national security concerns relating to the international movement of cargo following the 9/11 terrorist attacks have also encouraged further use of automation and ICT at borders. Automation serves other purposes than facilitating movement of goods and people: added benefits may include reduced levels of smuggling, corruption, increased productivity in customs operations, and improvements in valuation methods which may have the added benefit of increasing government revenue.
In Africa for example, the Single Window will bring about rapid development and more collaboration amongst neighbouring countries, giving it a voice in ensuring that poverty is fully eradicated and government can effectively implement policies that make free trade zone and the Common External Tariff a reality.
Automation of any kind is a powerful tool to facilitate trade making life easy for both the users and stakeholders to enjoy seamlessly without the need to pay for unnecessary costs incurred in clearing of goods during the era of destination inspection.
It is also key to mention that the very great majority of WTO members have already implemented such systems (Customs Automation) and past experiences show that the financial benefits in many cases have exceeded the costs over time. Among the various lessons learned from successful implementation of automated customs systems, two are particularly worth highlighting. First, automation should be considered a panacea for trade facilitation; and second, commitment and financial sustainability are prerequisites for successful customs modernisation involving automation.
The reasons countries have to adopt trade facilitation is the hidden advantage that has since been unlocked by Nigeria Customs Service modernization introduced in December 2013. The customs modernization comes with paperless environments, internet-based systems, single window environments and harmonisation/standardisation are a few of the observed trends. There is also the Multi-tier means of communication and the interoperability between different automated systems are other important developments.
In studying how Nigeria Customs Service successfully maintained a high level of deliverables after taking over the destination in December, 2013, it can be said that Customs automation gives rise to costs for customs authorities upwardly, thereby allowing internally generated revenue to soar high, automation of customs procedures needs to be part of an overall modernisation project.
Caroline Nottage is a Freelance Reporter for Customs Administration.
