Facilitating Trade:
Improving Customs Risk Management Systems
In the OIC Member States
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Figure 3: Risk management cycle
Source: WCO Risk Management Compendium
2.2.2.1 Risk Identification
The first step is risk identification. To identify risks, CA first needs to define the critical risk areas.
Risk areas can be detected in the existing national legislation that deals with customs controls.
This stage in the CMR cycle requires categorization of possible risks for the administration. The
main risk areas can be identified at the most sensitive challenges for customs officers, for
example, the potential non-compliance with the correct tariff measure, or legislative
requirements. Risk indicators, on the other hand, are the factors that can increase or decrease
the level or degree of risk within each risk area. Depending on the risk area, several risk
indicators are used for risk assessment. The ISO Standard 31010:2009 recommends techniques
that can be used in a risk identification stage: Brainstorming; the Delphi technique; structured
or semi-structured interviews; use of check-lists; primary hazard analysis; Hazard and
Operability Studies (HAZOP); Hazard Analysis and Critical Control (HACCP); environmental risk
assessment, scenario analysis, Structure “What if?” (SWIFT); Failure mode effect analysis
(FMEA); and Cause-and-effect analysis (Fishbone analysis).
2.2.2.2 Risk Analysis
During the risk analysis stage of the CRM cycle, the probability of the risk and consequences of
the risks are determined. CA quantifies the level of risks combining probability and
consequences in the analysis. Risk analysis techniques attempt to quantify these risks to develop
control procedures, for example, selection for documentary check or physical examination, and
to concentrate control efforts by customs officers on those risk areas where breaches of the
regulations are most likely to occur - whether deliberate or not. All identified risk areas and
indicators that in this stage have a small probability to occur and small consequences for the
customs can become part of the trade facilitation process (release without customs control –
green channel).
present the Business Process Model of the Risk Management Cycle: