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Facilitating Trade:

Improving Customs Risk Management Systems

In the OIC Member States

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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 Agreement

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. 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

convention. The RKC is a binding agreement, and until today 112 contracting parties

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of the

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http://www.tfafacility.org/ratifications

(Based on information update on 08.12.2017, last checked on 12.01.2018).

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List of the Contracting Parties to the Revised Kyoto Convention:

http://www.wcoomd.org/en/topics/facilitation/instrument-and-

tools/conventions/pf_revised_kyoto_conv/instruments.aspx Last checked: September 24th, 2017