AEO system reaping success at Customs
'When we get to that stage, I want Customs to be a meritocracy.'
The Authorised Economic Operator (AEO) system introduced by the Jamaica Customs Department in May last year has been yielding rewards, Commissioner of Customs, Danville Walker said.
According to Walker, some importers have benefited from some 70 per cent of cargo being issued without being opened, due to the usage of risk management procedures. The plan, he said, is to expand the programme to include reefer boxes (refrigerated containers).
The AEO system replaced the fast-track system that was previously set up for brokers who had a five per cent error rating. Under the new system, importers must: be fully tax compliant; ensure that import documents clearly outline the contents of each shipment; have a good track record in providing proper invoices/non-fictitious invoices; have a permanent address; always make records available for audit by Customs and adhere to the Customs Act.
Walker noted that having more AEO type cargo will lessen the cost of doing business in Jamaica as some of the costs associated with stripping a container will be eliminated.
He was speaking at the CMA CGM-sponsored, Shipping Association of Jamaica, (SAJ) Lunch and Learn seminar recently. The Lunch and Learn sessions are held monthly to inform industry members about changes affecting the industry.
Walker was addressing industry members on the topic 'The Way Forward for the Jamaica Customs Department'. He outlined several key strategies to enhance trade that Customs will be focussing on in the coming year.
One of the first steps he said will be to understand the way businesses in the industry make money. This will provide terms of reference for the department to address the concerns of stakeholders.
"When you understand the businesses, when you get the request from those businesses, you have a frame of reference to decide whether or not what they are asking for is reasonable or unreasonable. Too many times Customs' response is 'no', based on history," Walker said.
He added that other areas to be addressed include: improving import and export procedures, a culture change within the Customs Department, a renewed focus on Information Communication Technology (ICT), the implementation of the Cargo Community System (also referred to as the Port Community System) and converting Customs to an executive Agency.
The AEO system, he said, is addressing some import issues. He cited a recent study which showed that Customs was better at exports than it is at imports in terms of procedures. Notwithstanding however, over this calendar year, he said the Customs Department will also focus on export oriented items. The intention he noted, will be to streamline the procedures for export, so that side of trade will be made easier.
"Customs is ready to engage business to examine the areas of difficulty which may arise in exports, so that we can put ourselves on the proper footing," Walker said.
To that end, he encouraged stakeholders to bring their suggestions to the table to allow for the change to continue.
On the issue of culture change at the Customs Department, Walker said that managers in the department will be held to a higher standard. "Managers must not only quote sections of the Customs Act, but give me options and come up with solutions so we can fix the problem that is at hand," Walker said. Additionally, the Customs Department is aiming to change the mindset of Customs Officers, to ensure that they understand how to address customers, and to facilitate trade.
However, Walker was quick to point out that Customs will be looking to eliminate the human element in some cases through the use of ICT. Referring to the E-manifest system, the Commissioner said this was one use of ICT that will benefit those involved in trade. The aim, he said, is to integrate the E-manifest in all areas in which it is used, and as such, all problems within the system will have to be fixed.
In addition to improving Customs through the use of ICT, Walker said that the planned implementation of the Cargo Community System (also referred to as the Port Community System) will further propel the Departments modernisation plans.
"One of the steps we are taking now is to get documented the procedures that the Cargo Community System will be used to replace," Walker said. He pointed out that other countries have gone out and tried such systems and have made mistakes. The Jamaican team, he added, toured several countries, examining their systems and has benefited from it. "We are at a point now when Jamaica shouldn't make any mistakes in this implementation," Walker opined. The only issue with the system he said, was sourcing the necessary funding to make it a reality.
By 2012, the Customs Department should become an executive agency, Walker said. He informed that consultants were already in-house and a contract has been signed.
However, Walker pointed out that the process is a long one as over one thousand employees have to be taken into consideration; new organisational charts will have to be constructed and terms of employment changed.
"Hopefully by April 1st next year, we will begin what we call the transition year. By 2012, Customs should be an executive agency," Walker said.
"When we get to that stage, I want Customs to be a meritocracy," he concluded.
CMA CGM is the world's third largest container shipping company and is ranked number one in France. The Group offers a complete range of activities including shipping, handling facilities in port, as well as logistics on land.