Ease of doing business
THE Fiji Revenue & Customs Service (FRCS) has undertaken major reforms through its transformation journey in the past few years to facilitate cross border trade and expedite movement, release and clearance of goods.
These measures have had a beneficial effect to the overall transaction cost and the time associated with import, export and transshipment of goods through our borders. Trade facilitation is particularly important for developing countries like Fiji, enhancing smooth flow of goods and people. It not only directly impacts economic activity and multiplier effects but helps grow the economy and tax base.
This week we look back at some of the major initiatives undertaken by FRCS to improve trade facilitation as well as modernisation of its laws for ease of doing business in Fiji.
Setting up of Customs clearance facilitation committee
A high level border agency committee has been setup at every major Customs seaport and airport under the leadership of the CEO. The members include senior officials from our key stakeholders including government officials.
WTO TFA implementation and NTFC
In order to effectively engage and progress the implementation of the agreement of trade facilitation, a National Trade Facilitation Committee (NTFC) has been formed.
It is chaired by the Minister for Industry, Trade and Tourism and includes various stakeholders from the government and private sector involved in the cross border supply chain. A national trade facilitation action plan has been formed as a road map. The committee is also engaged with the World Bank for technical support on the implementation of various articles of the Trade Facilitation Agreement (TFA) concisely with category A, commitments where standards of implementation can be enhanced, category B - commitments which need administrative, legal and IT changes for the implementation and other partners in logistics industry which are enablers for effective implementation of TFA.
Introduction of Authorized Economic Operators Program (AEO)
The Fiji AEO program seeks to provide tangible benefits in the form of faster Customs clearance and simplified Customs procedures. Business entities are entrusted to offer a high degree of confidence in compliance and security in respect of their role in the supply chain. As a further step towards voluntary compliance, FRCS has introduced the AEO program where extensive benefits including greater facilitation and self-certification has been provided to those entities who have demonstrated a strong internal control system and compliance with tax and Customs laws.
Benefits to AEOs are:
1) Deferred payment of import duties through deferred payment system to all the AEOs. Importers accredited under AEO Program have been notified of the benefits under these facilities.
2) Bond guarantee waiver to all operators under AEO whereby all banks or bond guarantees have been waived. These includes bonded warehouses, tanks and private bond facilities.
3) Inspection fee waiver for all inspection of goods under Customs profiles where extra Customs officers are required to attend has been waived. These charges have been absorbed by FRCS for smooth facilitation of trade.
FRCS Customs integrated risk management with key border partners
FRCS has introduced a swift integrated data exchange program in conjunction with the Ministry of Health and Biosecurity Authority of Fiji for seamless and legitimate facilitation of trade through the ASYCUDA system. This will ensure ease of exchange of information between governmental organisations.
The key agencies have a real time cargo profiling with realtime visibility and intervention to high risk cargo and allowing low or no risk cargoes to freely flow through our borders. This is a step towards an expansion and systematic scope to approach a single window scheme, reduction in the cost of doing business, greater transparency, elimination of multiple submission of documents and optimal utilisation of resources.
Promotion of direct port delivery (DPD)
Direct port delivery (DPD) is an initiative that allows traders to lodge entry with Customs before the arrival of cargo. The scheme allows importers and Customs agents to complete Customs clearance under self-assessment facilities at the port of entries and take the container directly to the factory without going through the container freight stations (CFS).
In order to ensure DPD services are available to importers and agents, Customs has introduced on the wheel examination within the port terminal facilities. Priority verification of assessment is done for DPD importers to assist early release of containers. This will enhance overall speed and efficiency in clearance of shipments and consignments at all times.
Enhanced facilitation through risk management system
The risk management system has been strengthened to bring down interdictions and inspection processes resulting in earlier clearance of goods.
Cargo selectivity module is enhanced through compliance improvement strategy (CIS) and periodic review of cargoes and traders with targeted interceptions through virtual, physical and post interventions to deter incorrect declaration. This will be further upgraded to comprehend risk parameters of partner government agencies through systematic approach.
Implementation of detector dog unit
FRCS through International Cooperation and under Customs mutual administrative assistance with the Australian and New Zealand Customs has successfully commissioned Fiji’s Detector Dog Unit (FDDU).
This unit has been instrumental in intercepting millions of dollars' worth of illicit goods at our borders. The FDDU team not only assists at the border but has significantly contributed in community protection through intercepting illicit drugs, narcotics and undeclared cash raids to suppress illegal activities and promote safe and stable economic environment.
The Customs Act has been amended to include provisions to examine cargo/people in the Customs control areas using the Customs dog, a chemical substance, X-ray or imaging equipment or any other mechanical, electrical or electronic devices.
On-line lodgment and self-assessment of SAD
The upgrading of clearance system has contributed to paperless processing and lodging of single administrative document (SAD) online.
Traders and Customs agents can simply lodge scanned SAD and mandatory documents online without being physically present at Customs office.
The online lodgement supports all types of documents including export and domestic excise duties. This process has resulted in substantial reduction in time and cost to traders, importers, exporters, Customs agents and other regulatory agencies.
Email notification of service request
The ASYCUDA system has been enhanced to provide email notification of service request from clients on any import and export clearance application.
Pre-arrival clearance process
Pre-arrival clearance is one of the key milestone for any trader to register and pay duties before the arrival of the goods. This is the most common clearance method through airfreight, express courier and air mail service providers. This allows for low value and high volume clearance of goods at the borders.
Importers and traders both have immensely appreciated the door to door delivery of goods with logistics operators and express courier service providers. The Customs Nadi Airport facility continuously provides 24/7 service to operators to ensure timely facilitation of goods and services.
Three-year approval for all licensed operators under FRCS
To encourage and support business activities, FRCS has increased the validity of Customs licence to three (3) years.
However, a good compliance record and audit of the agents performance will continue annually to detect and prevent any fraudulent and non-compliant behaviour. This has provided ease for many Customs agents and bonded warehouse operators who can now spend more time on their business operations while Customs carry out audits through system records of inventories and declarations.
Non-intrusive inspection equipment (NII)
The Revenue and Customs and Biosecurity Authority of Fiji (BAF) have established a joint inspection facility to expedite inspection of goods both for inbound and outbound shipments. This will significantly reduce cost and time for many traders and logistics operators as more interventions will be conducted through the NII container scanning machine to detect and prevent any goods concealed in the container is not being declared at the point of clearance. This will also harness and simplify processes for both BAF and FRCS officers to detect irregulatries in the containers.
New Customs and Excise Act
FRCS has undertaken a comprehensive review of the Customs Act. The draft law is now consolidated with Customs and Excise laws.
This work is currently before the fundamental change programme in Customs Administration focusing greater aspects of compliance improvement strategies. The legislation now reflects modern business practices and supply chains, and provides for greater cross-agency collaboration.
It will also offer benefits to industries by reducing compliance costs and creating better alignment with other Government agencies that operate at our borders. The insertion of the new provision of infringement notices for any offences committed under the Customs and Excise laws will be a new mechanism for compliance management.
The fixed penalty regime is structured for better control to monitor trader, taxpayer and traveller behaviour.
Establishment of concession monitoring team
In order to facilitate the Government policy in relation to duty and tax concessions, FRCS ensures that duty exemptions are solely utilised for the purpose of the policy and does not divert from the policy intent.
These concessions are made available to a number of economic players in the industry for the purpose of tangible economic benefits. FRCS Policy and Monitoring team has successfully reviewed and implemented the duty concessions.
FRCS - Integrated Audit and Compliance Management (IRM)
First time ever in the history of FRCS, an Integrated Audit System has been introduced. This unit also communicates and enables FRCS to audit Customs and tax declaration subsequent to clearance of goods, thereby improving compliance and confidence to the national economy with zero tolerance on duty and tax evaders.
Warehousing record based control
The warehousing of goods is becoming an emerging instrument to facilitate under bond goods. This serves traders to pay duty and taxes once they are ready for the sale of goods either domestically or internationally.
This is now benefiting the traders with legitimate facilitation with proper declaration of goods ensuring turnaround of stock within the bond period.
The establishment of a full audit team for warehousing is not only adding value to warehouse processes but it also focuses on entire goods manifest and its destined traders in Fiji.
This also allows FRCS to have a better control of every single commodity that is uncleared within the stipulated timeframe in the Customs control area which later proceeds to sale of goods.
Tariff simulator and duty estimator
The introduction of tariff simulator is another achievement for FRCS where traders and individuals can calculate the import duty and value added tax (VAT) payable to FRCS at the clearance point. The data requisition is less compared with normal processes. The use of simulator makes it easy to calculate estimate tax payable.
FIJI REVENUE AND CUSTOMS SERVICE