10 years. That was the time it took us to reach an Agreement on Cooperation and Mutual Administrative Assistance in Customs Matters with the People's Republic of China. What seemed impossible became a reality on February 24, when we received the First Vice Minister of the General Administration of Customs of the People's Republic of CHINA Customs, Lu Peijun, in the Carlos Tacchi Hall.
As I signed the documents, I could not help but feel a certain nostalgia when I recalled the first contacts aimed at bringing the two customs administrations closer together, at the beginning of my management at the head of the Argentine Customs in 2004.
As Federal Administrator, since 2009 I have promoted management aimed at increasing the network of tax and customs information exchange agreements, an objective that was accompanied by a new organizational structure of AFIP in line with the clear purpose established, which allowed strengthening the process of negotiation and signing of agreements.
In this way, and in view of the insistence on negotiations with China, I signed a Tax Information Exchange Agreement in Beijing in December 2010, which has been effectively applied since September 2011. This fact proved to be a demonstration to the Chinese government of the strategic interest in moving forward with the customs agreement, managing to strongly resume the negotiation that year.
In January 2013, I met with YU Guangzhou, Minister of Customs of China, in Beijing, in order to finalize the final text of the agreement on the exchange of customs information between the two countries. On that occasion, the Chinese minister said that the future implementation of the exchange and cooperation constitutes an important step towards the participation and expansion of trade between both countries.
The agreement, which was finally signed in Buenos Aires on February 24, aims to promote safe and transparent bilateral foreign trade and prevent the commission of illegal acts that harm the economic, fiscal and commercial interests of both countries.
This is a new agreement reached with an important commercial partner of Argentina. This type of agreement allows strengthening the transparency and security of international trade, which represents a benefit for both the State and the private sector.
The customs agreement will allow us to eradicate the distortions caused by harmful tax planning used by large concentrated groups by placing traders or intermediaries without economic substance. Both customs offices will exchange documentation regarding import, export and other customs procedures, in order to ensure the correct application of the legislation between the two nations, providing the Argentine State with an efficient tool to specify, with high technical rigor, the commercial volumes between both countries. AFIP has prioritized the need to strengthen the transparency of the commercial flow with the Asian country given that during the development of control actions of the different operational areas, triangulation maneuvers were detected through invoicing from jurisdictions that offer tax advantages and commercial opacity.
The customs agreement, together with the tax agreement with China, will allow us to tackle unfair tax schemes that erode the tax base and the payment of customs duties globally. Without a doubt, the signed customs agreement will allow us to complement and strengthen the use of the tax agreement, producing the corresponding synergies in the strategic management model of international taxation that I have implemented in the organization.
With regard to customs offences, in particular the fight against illegal trafficking in narcotic drugs and psychotropic substances, can be made more effective through close cooperation between customs administrations. The agreement emphasises the damage that customs offences represent for the economic, commercial, financial, social, environmental and cultural interests of countries, as well as for the security of the international community.
In numbers, we can exemplify the trade relationship with the data corresponding to 2013, in which Argentina exported more than 5.500 billion dollars to China, which meant an increase of 9% compared to 2012. Meanwhile, in the same period, it imported more than 11.000 billion dollars, which represented an increase of 12%. Soybeans are the main merchandise exported from Argentina to China, followed by crude oil and soybean oil. Regarding the merchandise imported by Argentina, cell phones occupy the first place, followed by parts of digital cameras, radars, TVs and monitors, in second place, and computers, in third place.
The new agreement strengthens the existing relationship between the two countries through mutual assistance and cooperation between their Customs.
Following up on the strategic decision adopted in 2009 to increase the network of AFIP information exchange agreements, we have signed similar Agreements on Cooperation and Mutual Administrative Assistance in Customs Matters with the administrations of Korea, India, Ukraine, the Netherlands, Armenia, Vietnam, Nigeria, Angola, South Africa, Morocco and the United Arab Emirates. The agreements already concluded with the Customs of Mexico, Thailand, Turkey, Canada and Israel will be signed shortly; negotiations are in an advanced state with the Customs of Georgia, Finland, Japan, among others.
Continuity in strategic policies allows for obtaining concrete results of the type indicated here.
Author Ricardo Echegaray
Aduana News is the first Argentine customs newspaper to launch its digital version. With 20 years of experience, its publications and initiatives aim to provide the most relevant knowledge on customs issues in order to contribute to safe trade in the region.
