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Efficiency of Customs Clearance Process

Discuss About The Guidelines Operations Customs Departments?

WCO Times Release Studies (TRS) has provided various guidelines and recommendations on the operations customs departments. There are TRS guidelines that have been conducted will the aim of ensuring customs regulation and management. One such guideline is called TRS on Efficiency of Customs Clearance Process (WCO TRS, 2011). These can also be compared to United states for instance, release studies on the customs regulation citing various items that can be carried into the country and the regulation compliance required (www.travel.state.gov). One of the methodology used to access the compliance include the times it take for the goods to be inspect, pay the duty and cleared are important part of the operation and compliance management system. The result was the adoption of good technological practices couple with proper legislations guiding customs compliance. These TRS regulations can also be compared to New Zealand for instance publishes the entire regulatory requirement for customs operation (www.legislation.govt.nz, 2017). The TRS also provides the structural standards that can give the overview of structure that need to be in place. The coordination between various players as part of custom system for instance between custom, agriculture and treasury play an important role in regulatory compliance management system since it eliminate any unnecessary delays in clearance. World customs organization on moreover, has release recommendations for the customs regulations and activities guidelines for member’s states. For instance, the TRS recommendations on modern technologies that can be applied in customs operations (World Customs Organization, 2017). Therefore, adoption of modern technologies in inspection, monitoring and documentation of cargo or containers has potential to improve efficiencies. Structural development, resource allocation and improve human resource is another important aspect of custom department improvement strategy (Bonazzi, Hussami & Pigneur, 2009).


The current Catdom Custom Department has much inefficiency and ineffective that jeopardizes the operation of the department leading to uncompetitive clearance. Some of the problems that can be identified are inefficiency caused by lack of straddle carriers thereby causing delays, the inexperience of staffs at the airport, ineffective payment system.

Firstly, there is minimal coordination between the agricultural department and custom reducing the physical inspection of imports and exports. The improper coordination between the two departments operating at the same point though with different office location is the main source of delay in clearing goods. The regulatory requirement from the TRS for products to undergo strict screening and in order to do thorough screening the coordination of agricultural department and customs department has been low leading to delay clearance (World Customs Organization, 2011).

Customs Regulations Citing Various Items

Secondly, lack of straddle carrier is another problem that causes much delay in the clearance of goods at the seaport. The country has been reluctant to invest in new modern straddle carriers that ease loading and offloading of containers at the seaport to reduce the detrimental delay in the department. The straddle carriers are part of the modern operating system that smoothens operation at the clearance department that is not the case of CCD. The customs department is therefore considered weaker as per the international standards that currently set in the WCO TRS. The weakness of the Catdom Customs system is visible on its inability to load and offload goods at the point of entry into the country and this is detrimental to the department and the government as it reduces global competitiveness or international trade (World Customs Organisation, 2012).

Thirdly, lack of enough and qualify staffs at the clearance point is another problem that is causing delay and inefficiencies at the CCD. The problem revealed by current systems shows that only two experienced staff are serving the airport custom as more the staffs are transferred to Seaport to assist few staffs at the seaport. The overall result is the few inexperienced staffs at the airport are left to handle cargo in the direction of two experienced staffs. This implies that the operation is ineffective as this staff deficit results in delay and low-quality service. The human resource is not properly constituted leading to imbalance and employees deficit in the customs department. The poor remuneration system that only concentrates on awarding senior management leaving out junior staffs is also part of staffs challenge or problem that is experienced in the country particularly in the Customs Department (Burns, 2014).

Fourthly, the department is using old procedures and payment method within the department. The old procedures that were developed long time ago do not correspond to the number of customers and amount of service that need to be performed at the same time (Chowdhury, 2006). In addition, lack of modernization of the procedures followed in clearing when compared with those set by WCO TRS reported by World Bank (World Bank, 2011). Moreover, the current payment method that uses cheque has proved ineffective or inefficient since it leads to delay or failure to comply with payment regulations. Cheque payment delay release of good in custody leading to overall delay and this exposes the failure of changing payment method. Furthermore, another method of payment is cash method which may be compromised and reduce accountability as it may support corruption and fraud (Australian Productivity Commission, 2011). 

Coordination between Various Players

Finally, poor employees’ remuneration and motivation strategy that relies on bonus that accrues from the department. The method that currently is used in motivating senior employees or the executive includes the bonus that the management gets due to their performance. This implies that failure or the general delays result in no bonus for senior management employees and can lead to underperformance. This strategy for remuneration can reduce morale since delays and payment failure has lead to no bonuses.  Furthermore, motivation method should not rely on the services performed within the department as total failure may result in the demoralization of employees leading to poor performance of the whole system. Therefore, the method of 10% bonus given to senior employees also causes wage discrimination as junior employees feel discriminated in the payment plan (Mayer, Daleen & Bots, 2004).

In order for the Catdom Custom Department to be competitive and provide quality services that are characterized by effectiveness and efficiencies, there are a number of strategies that the department needs to do or implement. Some of the solution for problems includes a change of procedures, structural development, and adoption of WCO TRS recommendations on customs regulation compliance.

The current inspection procedures increase the delays and this is due to old inspection method used. There is need to modernize the procedures that are used to inspect the containers or cargo at the airport or seaport. According to Burns (2014), current modern custom departs incorporate ICT as major part of the system that eases operations. The current method that is used in the department is purely manual and in order to ease the congestion and delay within the department due to manual inspections, there is need to change laws or regulations that guide the whole process to introduce the ICT. This implies the whole system needs review and modernization that aims at using current advanced surveillance and inspection technology with the capability of automatically inspect the container. This ICT system also has incorporated modern payment system that uses electronic payment methods to reduce issues with a cheque or cash payment. Moreover, modernization of the department will also solve the issue of few inexperienced employees are some work will specifically do using computers instead of manual. Nevertheless, for effective technological application in clearance and customs operations management laws guiding the department and operation must be amended (United Nations Conference on Trade and Development, 2008).

Recommendations for Customs Regulations and Activities Guidelines

Another solution to the delay and uncompetitive custom system is the structural development of the department. For instance, the department of agriculture and customs departments at the seaport does not share same office leading to uncoordinated operations at the seaport (Burns, 2014). This means that there is limited structure or offices to contain all the employees or officers that are needed to perform a smooth operation. The government needs to improve structure so as to help increase the efficiencies in the department. Still, on the structural development, the development will focus on development and installation of loading and offloading straddle carriers fitted with modern inspection devices that will automatically do several work at the same time.  This is most likely to reduce the number of hours that it take queuing to be assessed. Therefore, upgrading and improving structure within the department to accommodate the expansion and increasing number of customer available in the department. The airport needs to be structurally upgraded to include modern scrutiny and quality of the cross border trade (Racz, Weippl & Seufert, 2010).

The customs department needs resources especially financial resources and this is evidence by senior executive management. Failure of the payment system has resulted in no 10% bonus payment offered to management and this reflects the poor payment strategy and limited financial resource available for remuneration for employees. The Custom Treasury Department needs to consider the current remuneration system for all employees and review the conditions that lead to remuneration coupled with increase financial resources. The budgetary allocation when improved will help strengthen the department since the financial resources are used to develop structure and upgrade of operating systems. Financial resources are also used as risk mitigation or prevention method as failure does not lead to the collapse of the whole custom department (Hans, 2002).

The government of Catdom needs to introduce and formulate risk management system that will assist in risk management that is consistency with World Customs Organization (WCO) (World Customs Organisation, 2012). The government should consider developing risk management procedures that include risk assessment, risk evaluation, and risk mitigation or prevention measures. As highlighted by WCO, identification of potential risk associated with the inspection and payment of duties at the airport or seaport is important for efficiencies of the department (Tarantino, 2008). The government needs also to develop laws or regulations that ensure risk practices are reduced. This implies that the government coming up with risk assessment and evaluation procedures will help identify risk and develop strategies to mitigate them. In addition, risk prevention or mitigation procedures also are important for risk management. For instance, the risk that is associated with poor payment methods lead to useless cheques yet risk management system can help tackle such problem well before the problem actually happen (Mallik, 2010).

Challenges Faced by the Catdom Custom Department

World customs organizations through its TRS has provided some of the guidelines that ensure full compliance with the regulations citing some measures to streamline the trans-boarder movement of goods. These guidelines if adopted by the Catdom Customs Department will ensure good competitive department. Firstly, application modern technologies as outlined in the WCO TRS may rectify the situation currently experienced in the customs department. This takes into considerations of the performance measurement systems. The WCO also provides the software that was developed jointly with the World Bank called TRS software that provides efficient technological application in the customs system. The system gives the IT applications in the system to smoothen the clearance time (World Customs Organization TRS, 2011).

Apart from structural development that also includes technological development; current modern technological application is an important aspect of the custom department. TC-SCAN system is one of the modern systems that scan or inspect the cargo and containers automatically reducing the time it takes for manual inspection (Silveira, et al, 2012). The system automatically inspects the content of the container without opening hence ensures that there is full compliance with the customs requirement. TC-SCAN system utilizes the records of goods transported as part of the inspection to ensure that when storing containers there is limited time in locating specific containers. Secondly, loading and offloading are fitted with TC-SCAN system devices that ensure that record and documentation of location or content of containers are consistency with requirement. TC-SCAN system, therefore, needs to be included in structural development that reduces delay.  This system has successfully used in seaport such as seaport of Shanghai in China (Luc & José, 2005).

Conclusion

In conclusion, Catdom Custom Department has experience delays that not only affects the competitiveness of the department but also international trade. The current procedure and laws that guide the port operation within the customs department are the cause of delays and therefore need changes and review. This will increase resource allocation to the department, structural development, implementation of modern information system and upgrading of the customs system to meet international standards which have TIR system. The overall need for changes in the handling of import and exports has to hand in improving custom regulatory compliance management

Reference

Australian Productivity Commission (2011), Identifying and Evaluating Regulation Reforms https://www.pc.gov.au/projects/study/regulation-reforms/report 2011

Bonazzi, R., Hussami, L. & Pigneur, Y. (2009), Compliance Management is Becoming a Major Issue in IS Design, in D'atri, Alessandro; Saccà, Domenico, Information Systems: People, Organizations, Institutions, and Technologies (PDF), Springer, pp. 391–398,

Chowdhury, F. L. (2006), Corrupt bureaucracy and privatization of Customs in Bangladesh, Pathok Samabesh, Dhaka.

Gill, D. (2011), Regulatory Management in New Zealand: What How and Why Learning from the Past Adapting for the Future Regulatory Reform in New Zealand. Lexus Nexus

The government of Canada, (2009), Handbook for Regulatory Proposals: Performance Measurement and Evaluation Plan. https://www.tbs-sct.gc.ca/rtrap-parfa/pmep-pmre/pmep-pmretb-eng.asp

Hans, C. (2002), Foreign Direct Investment for Development: Making Globalization  Work for the Poor, Retrieved from https://www.oecdtokyo2.org/pdf/events/021018EN01.pdf  on 20

Haworth P. M. (1995), Foreign Trade Law of the EU, New York: Ocean

Luc D. W & José B. Sokol (2005), World Bank Customs Modernization Handbook,
Retrieved from: https://learnonline.canberra.edu.au/course/view.php?id=8167 on 20 October 2012.

Burns, M. (2014), Port Management and Operations, published by CRC, T&F, Routledge

Mayer, IS. van Daleen, CE & Bots, P. (2004), Perspectives on Policy Analysis: A framework for understanding and design. International Journal of Technology Policy and Management (4):169.

Mallik, S. (2010), Customer Service in Supply Chain Management. In Hossein Bidgoil. The Handbook of Technology Management: Supply Chain Management, Marketing and Advertising, and Global Management, vol 2 (1 ed.). Hoboken, New Jersey: John Wiley & Sons. p. 104 

Racz, N., Weippl, E. & Seufert, A. (2010), Bart De Decker; Ingrid Schaumüller-Bichl, eds., A frame of reference for research of integrated GRC, Communications and Multimedia Security, 11th IFIP TC 6/TC 11 International Conference, CMS 2010 Proceedings, Berlin: Springer, pp. 106–117,

Silveira, P., et al, (2012), Aiding Compliance Governance in Service-Based Business Processes, IGI Global, pp. 524–548

Tarantino, A. (2008-02-25), Governance, Risk, and Compliance Handbook Taxation and the Customs Union from https://ec.europa.eu/taxation_customs/customs/index_en.htm

United Nations Conference on Trade and Development (2008), Technical Note No. 21 Automated System for Customs Data ASYCUDA, Retrieved from https://r0.unctad.org/ttl/technical-notes/tn21_asycuda.pdf  on 20 October 2012

World Bank, (2011), world customs organization Times Release Study. Brussels; World Customs Organization.

World Customs Organization (2012), Guidelines For Post-Clearance Audit (PCA) Volume 1,
Retrieved from https://r0.unctad.org/ttl/technical-notes/TN05_PostClearanceAudit.pdf on 20 October 2012

World Customs Organization TRS, (2011), To Measure the Time Required For The Release of Goods, Brussels: World Customs Organization.

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