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MODERNIZATION OF CUSTOMS ADMINISTRATION – CONTRIBUTION TO THE ESTABLISHMENT OF OPTIMAL BUSINESS ENVIRONMENT

MODERNIZATION OF CUSTOMS ADMINISTRATION –  CONTRIBUTION TO THE ESTABLISHMENT OF OPTIMAL BUSINESS ENVIRONMENT
Published date: 25.12.2014 14:31 | Author: G.Ć.

Ispis Print


Improvement and simplification of customs procedures requires the joint effort of all parties involved in the process.
In doing so, there is no single model that can be implemented in all customs administrations in the same way. How each country approaches this task depends on many factors: the level of its development and infrastructure, legal framework, type and volume of trade, human resources, etc. These factors vary from country to country and are unique to each customs administration. Therefore, efforts for reform will be unique and require tailored solutions.
GĆ
As part of its continuous efforts to improve the operating environment for businesses and streamline the conditions for cross border trade, the Customs Administration of Montenegro (MCA) strives to balance to seemingly opposing goals: trade facilitation on the one hand and enforcement of the collection of fiscal obligations, protection of society, public health, environmental and cultural heritage, on the other.

In June 2012, the MCA conducted a detailed analysis of the supply chain and key clearance proceses and procedures in the selected chain, with the objective of reducing the time needed to release goods for free circulation at BCP's and inland terminals.

The analysis showed that on average, clearance times from the time a customs officer began the processing of a declaration, were as follows:

- 4 hours and 45 minutes, when there is no physical control of the goods,
- 5 hours and 15 minutes in case of physical control and
- 7 hours and 30 minutes in case of detailed physical control.
The analysis further showed that clearance times could be reduced if the practice of manually assigning the declaration to a particular customs officer by the head of the customs office was eliminated, and a direct, on-line communication link established between the declarant and the customs inspector processing the declaration.

MCA decided to introduce these changes by making improvements to its customs information system (CIS). New software modules were developed that enabled the removal of these bottlenecks not only in the procedure of release of goods for free circulation, but in other customs procedures as well.

This upgrade of the CIS began in October 2013, and the new module was put into operation in April 2014. Declarations that were previously manually assigned are now automatically assigned to a designated front desk in the respective customs office, and then, on the basis of random selection, assigned to a customs officer responsible for a given desk. The new software also enables on-line communication between the processing officer and the declarant regarding the status of the declarations throughout the process. The exchange of information includes all important notification arising in the course of declaration processing, such as: notification about the assigned desk, notification about the declaration registration number and payment reference number , notification about possible examination of the goods, as well as notification on the completion of the procedure.
In June 2014, processing times were analyzed again, to evaluate the impact of the improved procedures. The findings clearly demonstrate that significant time savings have been achieved, and the average clearance times were as follows:

- 2 hours and 47 minutes, when there is no physical control of the goods,
- 3 hours and 30 minutes in case of physical control and
- 7 hours in case of detailed physical control of the consignment.

According to these results, the average clearance time, when no physical inspection takes place, was reduced by a significant 45%; the time reduction for clearance that includes physical inspection is 36%, and for clearance that includes a detailed physical examination, 5%.

At the same time, the new module strengthened MCA’s ability to monitor performance and perform its supervisory function. It contains data log which records all declaration related changes as well as time of all changes made. Namely, each action taken by any officer in connection with the processing of a declaration is registered, and can be can be adequately monitored. This new monitoring capability is an important tool in strengthening transparency and fighting corruption.

Another priority of MCA is the facilitation and speeding up the flow of legitimate trade with a minimum of intervention necessary while still exercising the protective role of customs. To preserve this needed balance, the Customs Administration of Montenegro has introduced more sophisticated risk management techniques that enable it to identify high-risk shipments. Also in this area, information technologies have played an important role. In March 2013, the new electronic risk management system (RMS) was put into operation. Its objective is to conduct risk analysis quickly and efficiently, in order to reduce the holding time of goods at customs terminals to the greatest possible extent, as well as associated costs, which are burdensome for the business operators.

Therefore, in parallel with the development of new IT solutions, MCA embarked on a comprehensive re-evaluation of existing risk profiles, with an emphasis on excise goods. MCA gathered relevant information from all customs departments. Tables of probability and consequence were developed, which helped to carry out the analysis and to evaluate and treat established risk. Information was also gathered from domestic and international sources, including other national border agencies, foreign customs administrations and international organizations such as the World Customs Organization, OLAF, EUROPOL, INTERPOL, SELEC etc. This initiative has implemented in practice and resulted in a significant drop in the percentage of physical examination of excise goods, from previously 100% to approximately 25%. The holding time of shipments carrying excise goods was reduced by almost 50%, as per data processed on a quarterly basis.

GĆ


The above mentioned improvements in border clearance and risk management systems have brought the following benefits to the business community:

- The time period for releasing goods for free circulation has been shortened;
- The number of physical inspections has been reduced, resulting in shorter dwell time of shipments at border crossings and customs terminals;
- The transaction costs of importers and freight forwarders have been reduced.


The Customs Administration of Montenegro is fully committed to collaborating with the business community and holds consultations with the private sector on a regular basis. It takes into account recommendations made by companies involved in international trade, and, in accordance with international standards and recommended practices, continuously works to improve the efficiency and quality of its operations, including further development of its information system and automation of customs procedures.

MCA is currently updating its existing IT solutions in order to provide electronic support for simplified procedures of declaration of goods on the basis of accounting records, which will enable electronic monitoring of simplified procedures, and further accelerate the flow of goods, reduce costs and relieve customs terminals.