Facilitating Trade:
Improving Customs Risk Management Systems
In the OIC Member States
25
As indicated above, behavioral risk analysis is often undertaken on an on-demand basis, e.g., for
a specific application to a program, where the objective would be to generate a risk score and
observations that could support the evaluation of the target (e.g., the AEO applicant) concerning
the program. The score would be instrumental in determining the suitability of the candidate
for the program, while the observations could be used to help in deciding on further control
measures that should be completed as part of the program. Behavioral risk analysis is potentially
performed on all available data about the trader – ranging from data reflecting ongoing trading
activities; through to results generated by the execution of previous control measures and
supplemented with third-party data where available.
2.5 International Agreements, Standards and Recommendations
2.5.1 World Trade Organization (WTO) Trade Facilitation Agreement (TFA)
The WTO TFA is the most comprehensive legal instrument on trade facilitation currently
available that have entered into force in February 2017. 126 WTO Members have already
ratified the Agreement13. It contains rules in many areas from transparency, consultation, and
cooperation, appeal and review procedures, Customs procedures, formalities, Customs
cooperation, transit procedures, and formalities. The TFA prohibits practices that are
discriminatory or that create unnecessary burdens to import, export and transit. It encourages
countries to simplify harmonies and standardize laws, formalities, and procedures, and review
and modernize their practices. WTO Members, who ratified the Agreement, are expected to
implement these rules, and the scope of these rules extends to all Government – including
executive agencies such a Customs.
The WTO TFA covers CRM directly and indirectly. It requires WTO Members to implement a
CRM (Article 7.4) and to accept documents and data before arrival to expedite clearance (Article
7.1). The Article 7.4 urges Members to adopt or maintain a CRM system and to concentrate
customs controls on high-risk consignments to expedite the release of low-risk consignments.
The WTO TFA does not define a CRM in the text of the Agreement but suggests MS use selectivity
criteria such as Country of origin, and type of means of transport. Other rules of the WTO TFA
have a functional linkage with CRM without however directly mentioning it. This means that
existing IT infrastructure, processes and operational practices of the CRM can be mobilized for
the implementation of other commitments; i.e., to approve authorized operators using risk
analysis (Article 7.7), and to select a person or consignment for post-clearance audit based on
risk analysis (Article 7.5).
2.5.2 Revised Kyoto Convention on the Simplification of Customs Procedures
The initial International Convention on the Simplification and Harmonization of Customs
Procedures (known as Kyoto Convention) was adopted in 1974, and it brought important
provisions for the establishment of principles of trade facilitation through the implementation
of simple, uniform and transparent customs procedures. In 1999, the WCO Council revised and
updated the Kyoto Convention (known as Revised Kyoto Convention (RKC)) to create a useful
model for customs procedures to further the implementation of simplification and
harmonization of Customs procedures through standards and recommended practices. The
Convention entered into force in 2006 and became the main trade facilitation Customs
13 (Based on information update on 08.12.2017, last checked on 12.01.2018).