Module II Customs & Humanitarian Aid Customs Awareness Training Series

Module II

Customs &Humanitarian Aid

Customs Awareness Training Series

Customs & Humanitarian Aid

Customs Awareness Training Series – Module II

Module Overview

This module on ‘Customs and Humanitarian Aid’ will cover the following topics:

International Legal Framework

Customs Impact on the Humanitarian Supply Chain

Customs and Declared Emergencies: Relief

Customs and Non-Declared Emergencies: Reconstruction, Rehabilitation, Development Aid

Optimum Customs Lifecycle




• Each State is sovereign – they decide whether or not to receive aid

• Each State’s authorities control all commodities entering (import), leaving (export) or passing through (transit) their territory

• A number of national laws, Customs Codes, regulations, instructions, procedures, etc. govern the cross-border movement of goods and it is the Customs Administration who enforces these




• As seen in Module I (What is Customs?), in recent decades, trade treaties have emerged (e.g. GATT [WTO], Free Trade Areas, Customs Unions) between different countries. These countries have renounced/given up a part of their original competences when it comes to tariffs and quotas decisions in order to streamline and facilitate the movement of goods, services and people.

• However, there is NO definitive international law laying out legal standards related to disaster response

• It is the country’s own aid policy that dictates all aspects related to aid (whether or not to receive it and under which conditions, and which organizations are able to operate)



Customs and the Humanitarian Supply Chain

Data EntryPick Up TransitApplication to Duties

& Taxes Payer or Exemption Authority

Customs Clearance

Transit Delivery

Vessel arrival Goods released

Two VITAL moments:

Two vital moments when customs has an IMPACT on the humanitarian supply chain!



Duties and Taxes Exemption

• Accepting the importation of humanitarian goods (including support material) duty and tax exempt is up to the authorities.

• This decision depends on certain factors such as:– Current legislation– Type of goods– Receiving organization

• That goods are granted duty and tax free status usually depends on who the receiver is and not the sender. The receiver almost always needs to be qualified by and/or registered with the government.

• Donors and decision-makers should know this to ensure that errors are not made, leading to the burden of duties and taxes

• This usually applies during ‘normal’ times and not during declared emergencies

Note: A duties and taxes exemption certificate (or equivalent) should be obtained prior (can take some time) to the importation of goods

and shown to customs during clearance



Customs Clearance

• Process of obtaining permission from Customs to import goods into a territory

• Every movement and item in and out of a country is controlled using various methods – declaration, documentation (paper or electronic), examination, etc.

• If available, the exemption certificate is shown at this stage in order to clear the goods without paying duties and taxes

• A common mistake is to think that exempted goods (aid) are also free from the clearance formalities – they are not as they still must conform to the Customs Laws

• Failure to have the necessary paperwork ready will delay the process and incur expenses (storage, etc.)



Customs/Supply Chain Reminders

Origin has a key role in providing the right documentation and information needed for both the Exemption Certificate

Application and the Customs Clearance

There is no good import without a good export

It is the origin who has all the cargo information and documents (i.e. donation declarations, certificates of origin, health certificates) – therefore, Customs begins at the origin

Working well in advance in providing the destination with as much assistance as possible is essential in preventing

unforeseen costs, in the form of money and time



Customs and Declared Emergencies

Relief consignments are “…goods such as vehicles or other means of transport, foodstuffs, medicaments, clothing, blankets, tents, prefabricated houses, water purifying and water storage items, or other goods of prime necessity, forwarded as aid to those affected by a disaster…”

- Office for the Coordination of Humanitarian Aid (OCHA)

• Sudden or slow-onset events may cause a disaster, requiring external intervention in the form of humanitarian aid imports

• When this happens there are usually simplified customs procedures (often includes a duty and tax blanket waiver) in place to expedite the importation of goods

• Although there is no definitive international law spelling out the legal standards related to disaster response, there have been two outstanding pieces of work: the Kyoto Convention and the WCO-OCHA Customs Model Agreement




• International agreement that came into force in 1974 and amended in 1999 (info force in 2006), including a chapter specifically dealing with relief consignments

• Annex J, Chapter 5 addresses relief and Article 3 states, “In the case of relief consignments the Customs shall provide for:

- lodging of a simplified Goods declaration or of a provisional or incomplete Goods declaration subject to completion of the declaration within a specified period; - lodging and registering or checking of the Goods declaration and supporting documents prior to the arrival of the goods, and their release upon arrival; - clearance outside the designated hours of business or away from Customs offices and the waiver of any charges in this respect; and - examination and/or sampling of goods only in exceptional circumstances.

• Guidelines to the Annex were published in 2000 and included:- Definition of relief consignments- Three operational standards- Three recommended practices- Appendix I: Customs Cooperation Council Recommendation- Appendix II: Model Agreement

Revised Kyoto Convention




• The Guidelines propose practical measures: streamlining of paperwork, pre-clearance, lodging places and times facilitation, and reducing the physical control of goods

• It includes a ready-to-use document: Customs Model Agreement (see next section)

• As of now, only seven (7) parties of the Revised Kyoto Convention have accepted this Annex J, Chapter 5

• The Revised Kyoto Convention also includes an Annex B3 which deals with relief from import duties and taxes. It contains a list of 11 cases, with one of them being:

Goods such as foodstuffs, medicaments, clothing and blankets sent as gifts to an approved charitable or philanthropic organization for distribution free of charge to needy persons by the organization or under its control;

Note: National legislation should enumerate the cases in which prior authorization is required for relief from import duties and taxes and specify the authorities empowered to grant such authorization.

Revised Kyoto Convention Cont’d




• In 1995, OCHA and WCO collaborated to make a Customs Model Agreement (see attachment) concerning measures to expedite the import, export and transit of relief consignments and possessions of relief personnel in the event of a disaster

• It states definitions and uses simple clauses to set up a framework and guidelines:

• Duties, taxes or levies free status• Paperwork simplification• Inbound and export process facilitation• Pre-arrival clearance submission

• Applies to organizations involved in UN relief operations, working on behalf of or under the UN

• Four (4) countries have singed the Model Agreement: Honduras, Nepal, South Korea, Uzbekistan

WCO-OCHA Customs Model Agreement



Customs and Non-Emergencies

There are four (4) types of non-emergencies:

• End of an emergency phase (local authorities might return to their usual procedures which can include paperwork or steps previously uplifted):

Reconstruction

Rehabilitation

• Development Aid

• Despite a serious event, sometimes governments do not want to declare a state of emergency (Non-declared). If this is the case, relief commodity imports must still follow the usual two step procedure: duties and taxes exemption and customs clearance

! Remember that there are no simplified customs procedures during these times !



Emergency vs. Non-Emergency




• Improve stock control: number, condition and geographical situation of the items in registries. This will help track commodities and provide accurate information about them.

• Customs trainings: specific training on technical functions, terminology, procedures, exemptions, rights, etc.

• Customs-related processes: benchmarking, time indicators (paperwork arrangements, exemption certificate application time, clearance time), cost indicators (brokers’ fees, storage fees)

• Customs information sharing: country-specific practical information gathering and sharing, UNJLC Customs Information Guide – CIG (see Module III)

1) Internally: Customs Awareness within the Organizations

Two directions to improve the efficiency in the supply chain, with a focus on customs




• Negotiations with the authorities• Should not be limited to high-level MoUs, Protocols, etc.• Further work should be done at the ground level to

improve relations and performance• Review and gauge the impact on operational working

plans as they often contain duties and taxes clauses• Consider that the authorities usually work on three (3)

levels: Ministry (decide on legislation), Senior Officials (prepare legislation and instructions), Local Officials (interpret legislation and execute instructions)

• Local approach at each entry point needed to negotiate and implement streamlines clearance processes

2) Externally: Partnering with the Authorities

Two directions to improve the efficiency in the supply chain, with a focus on customs




• Negotiations with the authorities Cont’d




• Capacity Building• Training/workshops for both humanitarian workers and

authorities so they are equally aware of the issues and each other

• Ensure that any Agreement information is explained to those involved

• Develop an Emergency Response Plan with streamlined processes and procedures, paying special attention to the simplification of paperwork requirements

• Partnering with authorities to create a trust-based relationship by facilitating their work

• Sharing technical support (systems, personnel, etc.)

Documents

Module II Customs & Humanitarian Aid Customs Awareness Training Series