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WCO global workshop shares experiences of Customs in supporting processing trade

28 mayo 2019

Held in the WCO Headquarters in Brussels from 22 to 24 May 2019, the WCO Global Experience-Sharing Workshop on Inward and Outward Processing Procedures (IP/OP procedures) brought together almost 40 experienced officers from all six WCO regions. The Customs Cooperation Fund (CCF) Reserves supported participation of 22 Member representatives; others participants included self-funded delegates from the capitals, as well as Brussels-based Customs attaches.

In his opening remarks, Mr. Stefan Kirsch, Deputy Director for Compliance and Enforcement in the WCO, stressed the importance of better connectedness of economies to Global Value Chains (GVCs). This goal can be achieved not only by implementing trade and investment policy reforms, but also by improving Customs procedures, especially processing procedures (inward and outward processing, drawback, processing for home use, as well as processing in free zones and other economic zones). As goods now cross borders many times, first as inputs and then as final products, fast and efficient Customs procedures are essential for the smooth operation of supply chains. A country where inputs can be imported and exported (or placed under another Customs procedure) within a quick and reliable time frame is a more attractive location for foreign firms seeking to outsource production stages.

Processing procedures are currently being explored more from a facilitation perspective. However, Mr. Kirsch invited the participants to share some of their experiences, if any, in the misuse of IP/OP procedures to disguise fraudulent activities.

The objective of this Workshop was to explore processing procedures by sharing WCO standards (in particular Specific Annex F of the Revised Kyoto Convention (RKC)) and supporting WCO tools, Members’ examples of legislation, procedures, IT solutions, the private sector perspective, governance frameworks, links with Special Customs Zones and Temporary Admission, and other aspects. Ultimately, the outcomes of this Global Workshop will contribute to the update of the WCO Handbook on Inward and Outward Processing Procedures, which was developed in 2017, based on the results of a dedicated survey.

The Workshop raised a lot of interest, especially since this topic was not dealt with in detail at WCO level recently. Members’ experiences showed an interesting mix of different types of processing procedures, under different names used. On the other hand, under the term of inward processing procedures, different concepts and frameworks have been identified. The workshop revealed a great deal of variety in what is available to the economic operators in terms of benefitting from total or partial duty exemption for goods that are temporarily imported and then exported to a third country (or placed under another Customs procedure). A need for more clarity and definitions for the terms used in processing procedures was agreed amongst the participants. In addition, the private sector representatives shared a number of use cases to illustrate the benefits, as well as some of the key areas of attention and challenges faced.

IT support has been identified as a critical prerequisite for successful managing of processing procedures by economic operators, but also for the monitoring of their discharge by Customs. A pilot project on the use of blockchain technology to support inward processing procedures in Customs has also been presented to the Workshop participants.

Finally, the delegates were acquainted with the RKC review process and had an opportunity to already share some potential areas to be considered under the Specific Annex F, including: the scope of compensating products; IT support for automated matching of imported/exported goods with compensating products; obligation of economic operators to use IT tools to manage their IP and OP procedures; introducing benefits for AEOs, such as shorter period for the issuance of authorizations and lower guarantees; more specificity in the period of validity of the authorization; more specificity for the rate of yield and the nature of the production waste and the tax regime to be applied; more clarity on what is considered to be repair etc.

The Workshop participants expressed their appreciation for this event, which was considered to be timely, especially in terms of broadening the knowledge and strengthening the international network of the respective experts in this important area of Customs business.