Balancing and optimising trade facilitation and border integrity

A complex set of external drivers influence the modernisation strategies for customs agencies.

The heightened focus on physical security threats and transnational crime affects operational priorities. The private sector expects customs to improve clearance efficiencies and reduce the burden of trade to support their integrated, just-in-time supply chain requirements. Increased global trade and international travel strains the current customs infrastructure, procedures and available resources.

Rapid advances in technology available to customs agencies push investments to replace antiquated systems with more sophisticated tools and processes. Agency missions are rapidly expanding to manage these complex processes, organisation and technology challenges.

However, to achieve long term success, modernisation approaches need to focus on creating stakeholder value in this dynamic environment -- not just pursue ad hoc, non-value added projects. These approaches focus on developing strategies to simultaneously balance and optimise the twin goals of trade facilitation for economic development and enhanced border integrity to protect national interests and public safety.

The dynamic, global economic, political and security setting creates multi- dimensional charters and complex management challenges for customs agencies. Increasing trade volumes -- a necessary component for economic growth -- complicates the traditional compliance mission of regulatory enforcement and revenue collection. In addition to the normal roles, many customs agencies have been given responsibility to administer all indirect taxes, including value-added tax (VAT) and excise duties. Political leaders are further looking for customs to become more involved with managing physical security threats. Added organisational complexity also exists because customs work often requires strong working relationships with multiple private sector parties, as well as collaborative interactions with other government agencies. Combining this environment with stagnant levels of human and financial resources often forces customs leaders into difficult operational decisions.

While the influence of these factors varies by national priorities and sophistication of current systems, these challenges all centre on resolving a key strategic question: How does customs simultaneously balance and optimise the twin goals of trade facilitation and border integrity? Balance requires involving the various stakeholders and making resource trade-offs within program areas. Optimisation requires focus on high-value producing areas and collaboration with other government departments and private sector partners. In a survey of global customs leaders, the IBM Institute for Business Value found that customs agencies think they can achieve an appropriate balance for these goals, given their individual national priorities and economic objectives. However, they struggle to simultaneously improve both goals.

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