Customs+Automation

** Definition/Scope **
Customs automation describes the application of information and communication technologies (ICT) for accomplishing the mission of Customs. It may support the entire clearance process - from lodging, acceptance and processing of cargo and goods declarations for import, export and transit, payment of applicable duties and taxes, to release of the goods from Customs control - or only part of it. Customs automation offers new possibilities to administrations such as pre-arrival processing and automated release of securities and guarantees. It can facilitate the use of risk management and risk-based selectivity and the collection of data for reporting external trade statistics.

** Problem statement **
The list of problems associated with insufficient Customs automation or Customs automation projects is long. The most relevant problems affecting trade facilitation are:
 * 1) The manual processing of paper-based cargo and goods declarations is very time consuming. Since such administrations lack a sufficient number of well-trained staff, such manual processing will not cope with growing volumes of international trade.
 * 2) The many occasions for manual intervention and face-to-face over the counter touch points between traders/brokers and Customs officials, in addition to the payment of duties and taxes in cash, often create opportunities for corrupt practices thus hampering trade and development. Consequently, Customs administrations operating manually without automation hinder the economic development of a country.
 * 3) Customs administrations which apply IT systems often still require the subsequent submission of a paper declaration, because they continue to require a handwritten signature. Instead of providing the benefits of a paperless environment, these administrations are duplicating the requirements (and cost) by asking for paper in addition to the electronic declaration.
 * 4) Customs automation projects are very complex undertakings, requiring the necessary analytical and project management skills to properly specify and manage user and technical requirements, and to develop an achievable implementation and roll-out plan and keep the overall project on track. In many countries Customs administrations lack the skills to manage well such large-scale transformation projects. Consequently, projects are often not completed and systems not operated on time and within budget.

**Implementation guidance**
Standards 3.18 (supporting documents), 3.21 (declaration), 6.9 (Customs control) and 7.1 (general) of the Revised Kyoto Convention (RKC) require the use of IT and electronic means for Customs operations. Standard 7.4 of the RKC also requires Customs to establish the necessary enabling legal framework, including electronic authentication methods (e.g. digital signatures). The Kyoto Convention ICT Guidelines provide great detail about Customs automation and project management. The list of topics covered in these Guidelines includes: application areas of ICT (e.g. declaration processing, release, e-payment, transit, trade statistics, enforcement); system development process, project and change management; IT security; outsourcing in Customs; IT-related legal aspects; and many more. Any Customs automation project aiming to implement the Revised Kyoto Convention should also apply the WCO Data Model as the standard for electronic messages and data standards. Such a project will require a review and in most cases a redesign of existing Customs processes and procedures, as well as harmonization of the various data requirements of all relevant national border agencies into a single national data set. Above all, these projects require leadership to manage the changes.

However, very few Customs administations have the skills and technical man power to conduct a Customs automation project on their own. It is indispensable for any Customs administration to establish a professional IT team that is in a position to manage the user and technical requirements and to have the necessary skills of project and contract management in order to provide the leadership and overall responsibility for the IT project. Also Customs should consider inviting stakeholders from the national and international IT industry and service provider markets to offer support for the timely development and implementation of a Customs IT system. A number of commercial off-the-shelf (COTS) Customs IT solutions are now available in the market. While these solutions may require some customization to specific domestic requirements, they will help to reduce the significant project risks of "from scratch" developments.

There are many successful examples of increased performance due to Customs automation and modernization. For example, the " eDouane " project in Luxemburg started in 2007 and was completed in 2009/10. During that time Luxemburg Customs has moved from 15th place in 2007 to 1st place in 2010 in the Logistics Performance Index of the World Bank.

** Additional information (references, examples, etc.) **
The WCO has published the Kyoto ICT Guidelines on a password-protected members' website. Interested parties should contact its national Customs administration //.// The WCO is organizing regular international ICT exhibitions, where Customs IT solution providers present their systems.  . It may support the entire clearance process - from lodging of goods declaration to release of goods from Customs control - or part of it only.Customs automation offers new possibilities to administrations such as pre-arrival processing and automated release of securities and guarantees. It can facilitate the use of risk management and selectivity criteria and the reporting of trade statistics.