GLOBAL FORUM V

Trade and Customs Partnership to Fight against Corruption and Safe guarding Integrity
BY Eugene TORERO VICE CHAIR, WCO ESA REGION

Wold Customs Organisation

East and Southern Africa Region

Introduction
The Customs world has to accept that the incentives and opportunities exist in all revenuecollecting agencies to engage in corrupt practices.
Based on this premise, every Customs administration should attempt to provide a framework for legal and administrative procedures that are necessary to detect, punish, and reduce such undesirable behavior.

The trade community has a role to play in promoting integrity

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Building a system to promote integrity in Customs Administration

Building a system to promote integrity in customs administration requires:

Putting in place measures to combat corruption; On-going vigilance to ensure that the measures continue to operate and that corrupt behavior is detected and dealt with. Top Leadership commitment to address the problem and acting as role models. This should go beyond mere statements that corruption will not be tolerated to the actual actions.

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Main elements to promote integrity in Customs administration 1.

2. 3. 4. 5. 6. 7. 8. 9.
Clear legal, regulatory, and administrative framework for Customs Management; simple, transparent procedures; a professional customs administration; performance standards; code of conduct; Effective internal audit systems with independence. Whistle blowing programs Business co-operation Customs co-operation

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Note!!!
In support of these elements, there should also be an atmosphere that encourages the following;

Dialogue with the trade community,

An independent, honest judicial system, and

A press that is interested, able, and allowed to raise issues of
corruption.

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1. Clear legal, regulatory, and administrative framework for Customs Management

From a customs administrators point of view, simple, clear legislation creates the framework for the development of systems and procedures that are easily understood by both the trade community and the officials. Laws and regulations related to Customs should be easily accessible and understandable, and clear criteria should guide administrative discretion in their application.

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Effective penalty system

A good penalty system should provide the administrator with the ability to impose administrative penalties for minor offences. This may include:

fines, for example, for broken seals on vehicles transporting goods in-transit and presentation of declarations with an unacceptable level errors.
Serious cases of fraud, including the bribing of revenue officials, should result in more serious actions, including criminal prosecution

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Provide an independent appeal mechanism

Every customs law, no matter how well written, is capable of being interpreted differently.

In order to preserve the officials and the integrity important that taxpayers challenge decisions and be equitable hearing and that publicized.

independence of the of the system, it is have the ability to assured of a fair and decisions are widely

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2. Simple, transparent procedures

It is the responsibility of the customs administrators to put in place simple, easily understood systems and procedures. The reasons for this approach are twofold.
Firstly, it reduces the compliance costs for the importers and exporters and, Secondly, it reduce: the opportunities for corruption.

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Simple, transparent procedures (contd)

To be effective and to reduce the opportunities for corruption, Customs systems should be based on the following: one step process minimize the information and documentation requirement consistent interpretations, Computerization may reduce customs interventions

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3. Professional customs administrations

The development of professional Customs administrations is important, not only to improve the effectiveness of these administrations but, at the same time, to address issues of corruption. The best way of ensuring fairness and neutrality in the administration of the Customs administration is to develop professional administrations with clearly defined responsibilities and accountability for performance, including :
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Professional management

Customs administration to perform effectively require skilled, knowledgeable supervisors and managers.

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Challenge
Too often the senior officials in the administrations change as governments change and individuals with little or no knowledge of legislation, regulations, systems, and procedures are put in charge of collecting the revenue. In these circumstances, staff may perceive that they have limited career opportunities in the organization, little, if any, "loyalty" to the organization and, perhaps,

consequently be more open to corruption

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Management controls

These are an essential component of well-run customs administrations. This includes: a clear statement of goals and objectives; well documented operating procedures; supervision of day- to-day activities; and a regular review of the outputs of employees. Consideration of results of internal audits. feedback from importers and exporters, and views of employees in evaluating the operations of an office.

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Compensation and working conditions

Customs administrators must be provided with sufficient compensation to reduce the incentive to engage in corrupt practices. While civil service pay can never be at a level that will discourage all corrupt behavior, compensation can be set at a level that provides a good standard of Living and eliminates the need to accept "facilitation fees".

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Appropriate working conditions

The provision of appropriate working conditions is also important. This includes:

1. proper' office space, equipment (e.&, telephones, computers, and transportation), and supplies. 2. The administration should not have to rely on importers, exporters, or their agents to provide any facilities or equipment which could imply that a favor is expected in return.

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Staff rotation

Any regulatory agency is better able to carry out its functions in an impartial manner if it remains at arms length from those it is charged with regulating. Revenue agencies are no different in this regard. Accordingly, it is important that staff rotations take place on a regular basis to reduce opportunities for collusion.

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4. Performance standards

Customs administrations should put in place performance standards that enable policy makers, management, and the public to measure how well an administration is performing.

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Advantages

Firstly, it enables the policy makers including Ministers to hold heads of administrations accountable, if agreed standards are not met. Secondly it enables management to measure the performance of offices and individuals and to identity potential problems.

Thirdly, it makes very clear to the employees that there are expectations and that their performance will be measured against these expectations.
Fourthly, the public is aware of what is expected and, therefore, should be willing and encouraged to bring to the attention of management cases where the standards have not been met.

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NOTE

Too often, the only performance standard established for the administrations is the requirement to meet certain revenue targets. This is not enough, particularly if corruption is a problem.

Performance standards, in Customs administrations, should include the following:

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Service standards

In customs administrations, there should be clearly articulated standards for the various functions that are performed. For importers, it is very important that they know the time that the goods will be under customs control. By establishing service standards and making them known to staff and to importers and exporters, An administration can establish monitoring mechanisms to identify transactions, offices, and officers that do not meet the required standards.

Reports from the monitoring system may also help to identify areas that should be investigated for potential corrupt practices.

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5. Code of conduct

It is important that employees and importers and By clearly articulating expectations, customs

exporters be aware of the conduct that is expected of both parties.

administrators can hold employees accountable for performance and take appropriate action. with these expectations.

Many administrations publish a 'code of conduct" For such a code to be effective; it must also include a
description of the disciplinary actions.
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6. Effective internal audit

While it is the overall responsibility of management to monitor performance and to ensure that operational policies are being followed and performance standards are being met, this must be supplemented by effective internal audit. Internal audit activities should include:compliance with operational procedures Operational procedures should be clearly defined and laid out in manuals or procedure guides.

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7. Whistle blowing program

The customs legislation should provide for a reward to whistle blowers

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8. Business co-operation
The Business community has a role to play in promoting integrity;
Sign a MOUs on facilitating trade as provided for under Pillar 2 of SAFE, Trade associations could help in capacity building such as the accounting associations, Business Associations could also develop integrity codes of conduct, Develop integrity advocacy programs.

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9. Regional perspective
Member administrations are at varying stages of integrity development; Majority of member administrations have;
Signed MOUs amongst themselves thus implementing Pillar 1 of SAFE Examples: Joint Border controls, Information sharing on advance cargo, joint integrity training programs; Developed codes of conducts; Established audit and investigation units Embraced WCO trade facilitation instruments such as the KYOTO convention.

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9. Regional perspective (Contd)

In particular, the WCO ESA region has demonstrated its commitment to promoting integrity through the NAIROBI INTEGRITY RESOLUTION of 24th Feb. 2007. In addition Member administrations AGREED to:

Develop a regional integrity model code of conduct; Undertake peer reviews; Harmonize risk management systems, Embrace integrity development tools of the WCO; Develop a regional pool of experts on integrity, Promote customs to customs co-operation and where possible share infrastructure such as NII. Set up a C2B partnership week

The challenge is walking the talk! Finally, there is no easy or quick solution to the issue of integrity

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Thank you for your attention

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