Facilitating Trade:
Improving Customs Risk Management Systems
In the OIC Member States
33
different types of information exchange: transaction-related information, such as the goods
declaration data and movement information; and risk management information.
Transaction-related information exchange takes the form of data exchanges between CAs using
IT. Several examples of systematic electronic exchange of customs data exist, including
Systematic Electronic Exchange Data (SEED) EU-China Smart and Secure Trade Lanes23 (SSTL),
Intercambio de Información de los Registros Aduaneros (INDIRA) of Mercosur24, ASEAN SW,
and bilateral initiatives such as the Canada/US Smart Border Agreement25.
3.1.1.2 Risk Averse Principles - Risk Management Principles
The traditional style of risk-averse principles is characterized by the customs intervention or a
100% physical check. On the other hand, the CRM approach, however, outlines the identification
of high-risk areas, with resources allocation according to the risk relevance. The CRM require
minimum customs control on identified low-risk areas.
3.1.1.3 Collaborative Border Management
A critical segment of CRM is the collaboration between all stakeholders – participants in cross-
border movement of passengers and consignments. Collaborative Border Management is a
modern cross-border management strategy based on a strong relationship between the traders
and the border authorities. An essential part of this concept is the intelligence-driven risk
management, using information related to goods and passengers electronically in advance of
their physical arrival at the border summarizes the key aspects of this concept.
Table 5: Key aspects of Collaborative Border Management
Practice type Common practice Collaborative border management practice
Policy
Balance between facilitation and control Optimization of both facilitation and control
Mistrust of supply chain actors Trusted collaboration of supply and transport
chain partners
Limited customer segmentation Customer treatment based on differentiation and
service culture
Limited incentives for compliance Strong incentives for compliance
Focus on physical border controls Focus on virtual border controls
Adversarial relationship with trade Constructive partnership with trade
Limited cooperation and data exchange Extensive collaboration and information sharing
Processes
Output-based functional model Outcome-based process model
Focus on goods and revenue Focus on information
Single treatment for all clients Flexible solutions for different clients
Agency specific risk management Cross-agency, intelligence-driven risk
management
High levels of physical inspection Intervention by exception
Transaction-based procedures Exception-based procedures and audit based
control
23
sstl_en
24
25 The Smart Border Declaration contains 30-point Action Plan related to four objectives: secure flow of people, flow of
goods, secure infrastructure, and coordination and information sharing between law enforcement agencieshttps://2001-
2009.state.gov/p/wha/rls/fs/18128.htm