RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/W/233
23 October 2000
(00-4374)
Council for Trade in Goods Original:  English
TRADE FACILITATION
Australia's Experience with Customs Facilitation
The following communication, dated 20 October 2000, has been received from the Permanent
Mission of Australia.
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I. INTRODUCTION
1. This paper summarises Australia’s national experience with customs facilitation.  It outlines
current, and planned measures, which contribute to the facilitation of international trade.  The purposeof the paper is to contribute to discussions on trade facilitation at the informal meetings of the Council
for Trade and Goods.
2. Trade facilitation is a broad concept but the following outline covers processes which will
meet traders’ expectations in their dealings with re gulatory authorities.  In Australia's experience key
expectations are:
(a) government intervention by exception and minimal special government data requirements;
 
(b) fast, reliable, adaptable, flexible, paperless, cost-efficient processes; and
 
(c) transparency, predictability and consistency in procedures developed and adopted by
government in consultation with traders.
II. INTERVENTION BY EXCEPTION
3. Australia’s customs clearance procedures are based on a self-assessment regime.  Traders can
electronically access customs clearance systems from their premises and complete clearanceinformation requirements well in advance of the arrival of cargo. By applying risk management
techniques and post transaction auditing, regulatory intervention to the cargo flows across Australia’s
borders is minimal.
4. Intervention by exception means that 98% of cargo consignments are provided with customs
clearance almost immediately after the trader ha s electronically completed information requirements.
Where supporting documents are called for before clearance, with the exemption of certain permits
required for community protection purposes, the documents will be those generated in the normal
course of the commercial transaction, such as the commercial invoice or the Bill of Lading.
5. Customs information requirements are kept to the minimum necessary for risk management
and statistical purposes.G/C/W/233
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III. BEST PRACTICE PROCESSES
A. RISK MANAGEMENT
6. Customs administrations around the world are under increasing pressure to `do more with
less' and to minimize intervention in the legitimate movement of cargo or people across their borders.
In Australia, Customs relies on risk management to help balance its dual role of facilitation andenforcement.
7. Customs uses risk management techniques to target those goods or people considered a high
risk.  Transactions assessed as low risk attract minimal attention and intervention from Customs and
are processed quickly.  Risk management ensures that any physical intervention to inspect goods only
affects a minority of consignments.
8. Risk management is a valuable tool to assist Customs allocate limited resources for maximum
benefit.  However, its effectiveness depends on the quality of the intelligence data informing the
decision making process.  Good risk management relies on good intelligence data.  The challenge for
Customs is to continually improve access to timely, accurate and relevant information about the cargo
and people crossing the Australian border.
B. P
OST-TRANSACTION AUDITING
9. The import or export of some goods can impose an economic risk to the community.
Australia’s experience is that appropriate compliance st rategies mean there is little need for regulatory
risk treatments that might interrupt cargo flows acro ss borders to deal with evasion or under collection
of revenue.
10. Australia’s processes invite traders to self-assess duties and taxes payable.  Our compliance
improvement strategy is directed towards overall compliance rather than transactional verification.
11. Auditing activities are conducted after the import transaction, thus ensuring cargo deliveries
are not impacted. Client advisory, and support services, development and support for Customs staff,
and appropriate administrative sanctions, complement audit activities.
C. PRE-ARRIVAL DETAILS
12. Australia controls goods landing by relying on advanced information provided by the
operators of vessels and aircraft.  This advanced reporting allows Customs to clear goods before theirarrival.
13. We have recently identified weaknesses in the current reporting regime.  For example,
indications are that up to 59% of sea cargo is not reported on time.  Indeed, 12% of this cargo is
reported after the vessel arrives.  For air cargo 48% is not reported on time.  Of this, 35% of reportswere received after the aircraft had landed in Australia.  To address this, Australia plans to introduce a
reporting scheme which sheets home the responsibility of reporting cargo to those with the ability to
do so.  At the same time, costs and delays on those who properly report cargo will be reduced.  The
basis of this scheme is to identify responsibility and introduce administrative sanctions for late
reporting.
14. Advance cargo reporting is essential to Customs maintaining its world standard of facilitating
the early release and delivery of legitimate cargo consignments.G/C/W/233
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D. USE OF INFORMATION TECHNOLOGY
15. Since pioneering the use of on-line systems in the early 1970s, Australia has progressed to
almost 100% electronic reporting by industry.
16. Australia has the philosophy that different clients have different technology requirements and
capabilities and has introduced systems to cater for these differences.  Different systems have been
implemented for imports, exports, air and sea cargo reporting.  Some clients use EDI systems, others
submit import declarations through interactive access direct to the Customs mainframe.  This
flexibility allows for the widest use of information technology to communicate with Customs.
17. Brokers or importers who are linked electronically with Customs receive clearance for
imported goods almost immediately after  completing information requirements and making payments.
No paper documents are required.  Australia believes that the use of information technology has
revolutionised customs procedures and allows Customs to meet traders expectations for streamlined
business processes and faster customs clearance.
IV. TRANSPARENCY, PREDICABILITY AND CONSISTENCY AND PARTNERSHIP
WITH TRADE
18. It is vital that traders have the means to ach ieve certainty in assessing their liabilities and
entitlements when their goods cross national borders.  This is even more important under a self-
assessment regime, as traders need to be able to conduct subsequent business without additional
imposts after the transaction is complete and the opportunity to recover costs has passed.
19. Australian traders can obtain binding advice from Customs on matters relating to tariff
classification and valuation for Customs purposes.  Where doubt arises, traders can make declarations
that absolve them from any administrative sanction.  Australian Customs publishes a series of
administrative manuals setting out procedures that will apply in import/export transactions and otherCustoms dealings.  These manuals, public notices and other information on customs law and
procedures are published on the Customs web site.
20. Other initiatives include service level charters which mean that traders can achieve
predictability in their relationship with Custom s and a program for the efficient handling of trader
concerns.
V. FUTURE DIRECTIONS
A. C
ARGO MANAGEMENT RE-ENGINEERING
21. Customs is re-engineering its business processes and associated systems that support
importing and exporting cargo to and from Australia. This is called Cargo Management Re-
engineering (CMR).
22. CMR combines changes to government and industry business processes, integration of new
cargo and commercial information technology syst ems and revisions to legislation. CMR will have
significant impact on Customs, other government agencies and the international trading community.
23. The changes will mean:
(a) importers and exporters can generate their own Customs import and export declarations;
calculate duty on imported goods; and process Goods and Services Tax payments through the
Customs e-commerce gateway, which is an  open communication system known as the
Customs Connect Facility (CCF);G/C/W/233
Page 4
 
(b) industry will have a single window to govern ment for importers and exporters through CCF
which provides a common infrastructure to support Customs and Quarantine processes for
screening and border inspection activities;
 
(c) mandatory electronic reporting of inwards and outwards cargo, removing need for paper
manifests; and
 
(d) flexible processes for low risk traders through accreditation arrangements.
24. The new business systems will roll out progre ssively during 2001 - in keeping with Australian
Government directions for all appropriate service delivery over the Internet by the end of 2001.
25. The CCF will be an integral part of CMR and will facilitate flexible, open and secure
communications channels to the new Integrated Cargo System that will underpin CMR.  The CCF
will support direct connection to Customs systems for selected high volume users as well as access
via the Internet and WWW access to other Customs business systems.
26. As part of CMR, Customs will assess G7 customs harmonisation work with a view to
adopting the G7 Customs Data Model and electronic messages.  In this way, the Australian trading
community will be able to upgrade their systems and processes to take advantage of this work aimed
at reducing the number of data elements required for customs clearance.   This G7 initiative raises  the
prospect of a global standardised electronic declaration for the clearance of international movements
of goods, which could have significant benefits through the reduction of non-tariff barriers and the
facilitation of global trade.
27. Australia will also evaluate the latest developments with internet technology and assess its
application to Customs and industry processes.
B. BUSINESS PARTNERSHIPS
28. A major initiative emerging from CMR is the concept of “business partnerships” between
government and industry. This initiative is advancing through the development of an Accredited
Clients Scheme.
29. Accredited Clients will be traders involved in  importing and/or exporting cargo that enter into
an agreement with Customs regarding their systems and control procedures. The development of
individual agreements will allow the parties to tailor arrangements to meet their specific needs.
30. The concept has three key elements:
(a) closer links with clients through tailored arrangements to suit individual client needs;
 
(b) "single window to government" and more co-operation and co-ordination among government
agencies; and
 
(c) maintenance of high levels of compliance with legislation through minimal intervention.
31. Accredited Clients will continue to be subject to Customs community protection requirements
imposed by legislation.G/C/W/233
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VI. WTO RULES
32. Australia's experience with customs facilitation indicates that there is a the strong
compatibility between the basic principles relevant to trade facilitation contained in the WTO, and
developments in the use of technology and best practice principles in customs procedures.  This
experience also suggests a number of questions that need to be posed to help assess the adequacy ofthe existing WTO rules to address current trade facilitation challenges and opportunities.
33. On the one hand, the basic WTO principles relevant to trade facilitation provide an important
framework for ensuring that initiatives to streamline customs procedures are implemented in a manner
that is genuinely trade facilitating and that is fair and non-discriminatory in their treatment of all
parties.  For example, Australia has considered it important to ensure flexibility in the use of
information technology to cater for the fact that different clients have different technologyrequirements and capabilities.  While information technology has provided new opportunities to
streamline customs procedures, and minimise the incidence and complexity of import and export
formalities, if not carefully used it could also cr eate its own obstacles or unfairly disadvantage some
parties.  This raises the question of whether the existing WTO rules adequate to ensure fair, non-
discriminatory and transparent treatment, particular ly in the light of technological developments and
the adoption of new best practice principles?
34. On the other hand, developments in information technology and thinking on best practice
principles for customs procedures may offer new opportunities to realise WTO trade facilitation
principles.  In particular, these may offer opportunities to more concretely identify appropriateinitiatives for minimising the incidence and complexity of import and export formalities and for
ensuring the transparency of the procedures gove rning the trade transaction process.  The `single
window' concept is one example and can be viewed as  analogous, in certain respects, to the enquiry
point concept contained in some WTO agreements (the SPS and TBT Agreements).  The issue of
advance rulings is another area where customs procedures can be important for ensuring appropriatepredictability for traders, particularly under self-assessment regimes, and which also already has
precedence in WTO rules (Agreement on Rules of Origin).  What opportunities are there for better
realising WTO trade facilitation principles, and how can this be achieved?
VII. CAPACITY BUILDING AND TECHNICAL ASSISTANCE
35. There is general recognition of the importance of capacity building and technical assistance
activities in ensuring that developing countries can take advantage of developments aimed atfacilitating the trade transaction process, including in relation to the adoption of information
technology and best practice customs procedures.  Support for activities that are relevant to trade
facilitation is an important part of the trade-related technical assistance provided by Australia to
developing countries.  This includes support for a range of projects that aim to facilitate trade through
institutional strengthening of customs, finance and treasury departments in developing countries.
These projects have included assistance aimed at maximising customs revenue, facilitating trade,
improving the level of service to the trading co mmunity, minimising the possibility of fraud and
providing trade data necessary for developing economic policy.  Australia has also provided funding
for the implementation of the Automated System for Customs Data (ASYCUDA) developed by
UNCTAD in several South Pacific countries that are currently WTO Members or in the process ofaccession.
VIII.  CONCLUDING REMARKS
36. Australia believes that facilitation of international trade involves a range of measures.  In
many cases the effectiveness of a measure depends on the implementation of associated measures.This is certainly the case with information technology which has revolutionised customs procedures.
Simply introducing information technology alone would not achieve the same level of intervention byG/C/W/233
Page 6
exception without the introduction of risk management and post-transaction auditing techniques.
This, together with pre-arrival details, reduced data requirements and transparency of procedures,
benefits industry and results in more efficient use of customs resources and enhanced customs control.
37. These types of  modern measures are incorporated in the General Annex of the revised Kyoto
Convention.  The Convention provides the tools to assist global customs procedures by incorporating
appropriate minimum standards and encouraging signatories to introduce more measures to facilitate
international trade.  Australia will accept the revised Convention and encourages others to do the
same to ensure the widest implementation of its provisions.
38. Australia considers these modern measures the best available in today's environment.  They
aim to ensure compliance with customs and other relevant laws, while at the same time maximisingthe facilitation of international trade.  They also respond to the opportunities presented by
developments in information technology to improve the trade transaction process.
39. WTO rules already provide important principles to guide the implementation of best practice
procedures and technology-based innovations in a ma nner that aims to safeguard the interests of all
countries.  National experience should provide an important basis for assessing the adequacy of the
existing WTO rules for responding to the opportunities and the challenges presented by these
developments.  The national experience of developing countries will be particularly useful in
assessing the important role which technical assistance and capacity-building initiatives will need to
play in ensuring that all countries can participate in the opportunities presented by trade facilitationwork.
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