Central American Customs Committee. A quick look at the customs institutions of the Central American region

The Central American Integration System (SICA) is the institutional framework for Regional Integration in Central America. The actions of the integration process are developed in 5 pillars: Democratic Security, Climate Change and Comprehensive Risk Management, Economic Integration, Social Integration and Institutional Strengthening. The Economic Integration Subsystem, through the institutionality of the Guatemala Protocol, is responsible for executing the decisions of the Meeting of Presidents on economic integration and promoting integrationist economic policy in the region.

The Subsystem was created by the Guatemala Protocol of October 28, 1993, with the purpose of achieving equitable and sustainable economic and social development of the Central American countries through a gradual and flexible process, which is in charge of the Ministers of each State Party of the 6 countries that have under their jurisdiction the matters of economic integration, who in a collegial manner integrate the Council of Ministers of Economic Integration (COMIECO) as the governing body of the process and in charge of following up on presidential decisions on economic matters, supported by technical and administrative assistance through the Secretariat of Central American Economic Integration (SIECA). It is noteworthy in this Protocol that, unlike the General Treaty of Economic Integration, it marks the stage in which Central America, after having maximized the development of the Central American common market (expanded market, but more protectionist), takes advantage of it to insert itself in a more efficient and dynamic way in the international economy (less protectionist) (1). 

Within the Economic Integration pillar, there is the Central American Customs Committee, whose origin is based on Article 10 of the Convention on the Central American Tariff and Customs Regime of 1984, hereinafter the Convention, created in order to address the various specialized aspects of the Regime and to provide support to the Council of Ministers in the area of ​​the regional customs regime. Its nature defines it as a permanent specialized technical body by mandate granted by the Convention, it can issue administrative acts by delegation of COMIECO. It is made up of General Directors of Customs as high-level representatives of the Central American States and among its main functions are:

• Submit to COMIECO technical proposals on matters within its jurisdiction that require its decision, approval or endorsement;
• Submit regional regulatory proposals on customs procedures for COMIECO approval; 
• In the field of International Cooperation, request support from cooperating entities in matters of regional interest in customs matters; 
• Organize and require the technical groups under its charge to prepare studies, opinions, technical proposals and other work related to regional customs integration; 
• Develop Central American strategies with the aim of strengthening the capacity of the Customs Services and instructing technical groups for their effective implementation in each of their institutions; 
• Establish Regional Mutual Recognition Agreements that allow for improvements in customs operations. 

It meets at least three times a semester on an ordinary basis and as many times as necessary on an extraordinary basis. Its sessions are chaired by the country that holds the Pro Tempore Presidency for 3 months, which is assigned based on geographic order. Its decisions are based on the consensus rule, embodied in the Guatemala Protocol. Under its leadership, the Technical Groups are organized in the following different customs branches: Regulatory, Information Technology, Risk and Authorized Economic Operator. It also guides and gives guidelines for the Central American Value Commission, Ad Hoc Groups for the Study of Clearance Times and Customs Modernization. 

Among its other functions, the Central American Customs Committee has currently guided the work of the Drafting Commission for the updating of the regional customs regulations contained in the Central American Uniform Customs Code and its Regulations, deliberates on specialized matters in the field of updating customs regulations and provides negotiation alternatives for the members of said Commission.  

The Central American Uniform Customs Code (CAUCA) and its Regulations are an integral part of the Central American Tariff and Customs Regime established in Articles 1 and 3 of the Convention on the Central American Tariff and Customs Regime. Its purpose is to establish the basic customs legislation of the signatory countries in accordance with the requirements of the Central American Common Market and regional integration instruments.  

Its background dates back to 1932 with the Customs Code, later in 1963, by Decree-Law 169, the first version was adopted, which came into force on February 6, 1965. It was applied together with the Customs Code 2000 Decree 105-97, CAUCA II of October 15, 1997, later by Resolution 85-2002 of the Central American Tariff and Customs Council of June 19, 2002, CAUCA III was approved, finally by Resolution 223-2008 (COMIECO-XLIX) of the Council of Ministers of Economic Integration (COMIECO) version IV was approved as of April 25, 2008, in force to the present date.

Due to its versatility and rapid response to the region's requirements, the Central American Customs Committee is considered a reference for other schemes that are gradually moving towards a model of economic integration, since the Central American Customs Committee has been responsible for energizing the work assigned to it in the region in the area of ​​regional regulations, trade facilitation, as well as customs control.

During the COVID pandemic, the Central American Customs Committee played a very important role. Virtuality was the mechanism that allowed us to continue advancing in the work agenda with a focus on generating favorable conditions to respond to the crisis generated worldwide.

Its leadership in key areas with the support of the Secretariat for Central American Economic Integration has enabled progress in the implementation of technological components, has fostered the appropriate scenario for the signing of a Regional Mutual Recognition Arrangement, and the implementation of Central America's regional commitments in the customs area contained in the framework of the Association Agreement with the European Union.

The Central American customs community has reached figures distributed in different areas (2), which directly or indirectly have a relationship with the matters that the Central American Customs Committee generates from the work organized under its leadership. Thus, the Central American Customs Committee is a fundamental institutional body in the region, which under a modernizing vision approved in the economic plane of each of the Member States, represents a qualitative advantage within the process of economic integration, committed to continue strengthening the competencies of the customs of the region, in order to promote greater degrees of trade facilitation, without losing customs control.

In accordance with the above, the work of the Central American Customs Committee has been organized under four pillars with positive results, these being the following:

I. Normative:

Customs regulations update:

• CAUCA and its Regulation V are being negotiated, with principles based on the Revised Kyoto Convention of the World Customs Organization and the Trade Facilitation Agreement of the World Trade Organization. 
• Update of the Regulation on the International Land Customs Transit Regime.
• Single Central American Declaration (DUCA)
• Biosecurity Guidelines, in light of COVID-19, applicable to the Central American Land Transportation Sector.
• Central American Procedure for Facilitation of Land Transit of Relief Shipments.
• Regional Humanitarian Assistance Drills coordinated at intersectoral level.

II. Trade facilitation:

a) Central American Trade Facilitation and Competitiveness Strategy with an emphasis on Coordinated Border Management.

Measure 1: Advance Declaration of Goods.

Benefits:

• Gradual progress has been made in the digitalisation of processes, progressively eliminating the unnecessary use of printed support documents for users.
• Reduction of queues and clearance times for means of transport at border customs.
• Reduction of logistics costs when crossing borders.
• Obtaining advance electronic payment of taxes.
• Management and advance dispatch of the import operation, which allows the exporter and importer to have better logistics planning.
• Security and traceability of foreign trade operations.

Source: Prepared by the authors based on the phases of the measure, 2023.

Measure 4: Records by means of Radio Frequency Devices (RFID)

Enrollment of means of transport with RFID tags in the 6 countries, Guatemala, El Salvador and Nicaragua, followed by Honduras are the ones that register the most enrolled means, compared to the remaining 2 countries, which demonstrates a greater participation of means of transport that move goods for these countries.

Source: SIECA, August 16, 2023.

a) Central American Digital Trade Platform (PDCC).

Source: SIECA, August 16, 2023.

b) Guatemala-Honduras and El Salvador Customs Union.

First Customs Union of the American continent.

Positive aspects of Integrated Border Posts.

• Promote greater circulation of goods in the shortest possible time and a reduction in logistics costs.
• Facilitation of procedures and reduction of border times, Guatemalan Customs Services are part of the benefits of these peripheral customs offices, carrying out two customs operations at the same time: definitive imports for the two Member States and community transit operations.
• Greater competitiveness.
• Agile steps at borders.

The single customs territory comprises:

• Mobility of goods at borders, streamlining of procedures, reduction of transaction costs for all exporters and other users at border posts.
• Electronic phytosanitary and zoosanitary export certificates.
• It represents 57% of the territory of Central America.
• It covers 73% of the Central American population. 
• 39% of total goods exports. 
• 43% of intraregional exports in the region.

c) OAS Programs in the Central American Region

• 177 OAS at the Central American level, of which Guatemala represents 55% of companies authorized as OAS Central America.
• A Mutual Recognition Arrangement at the Central American level made up of: OAS Program Costa Rica, El Salvador, Guatemala, Honduras and Panama.

d) Regional Dispatch Time Study a milestone worldwide

• The regional ETD identified 6 areas of opportunity for improvement, including infrastructure, staff allocation, inter-institutional coordination, automation and digitization of documents, use of advance declarations, and streamlining the flow of means of transport at borders.
• Currently there are 11 regional actions and 68 national ones.
• Where the DUCA-F in the selected customs offices represent 49.1% of intraregional trade for originating goods.
• Likewise, the DUCA-T in the selected customs offices represent 46.5% of the goods moved in international land customs transit.

e) Compliance by countries with the Trade Facilitation Agreement in Central America.

Regarding the percentage of compliance by country in the Central American region, the following is true:

Regarding the percentage of compliance by country in the Central American region, the following is true:

f) Adherence of countries in the region to the WCO SAFE Regulatory Framework.

The following table demonstrates the commitment of Central American customs to continue adopting facilitation measures that are effective for intraregional and extraregional trade, applying security standards for the logistics chain and the comprehensive management of goods, based on efficient good customs practices.

g) Revised Kyoto Convention of the WCO

The process of adoption of this instrument by each of the countries in the region is illustrated as follows:

III. Customs control:

a) Regional Strategy for Integrated Customs Risk Management (ERGIRA)

1. Facilitation of lawful foreign trade in goods

2. Improve tax compliance in foreign trade operations

3.Strengthen capacity development.

4.Protect society, public health and safety and combat crime and terrorism.

b) RILO Central America Office (RILO CEN) of the World Customs Organization with headquarters and Secretariat in Guatemala.

1. Use of the WCO CEN tool by all countries in the region

2.Exchange of alerts between customs administrations.

3. Facilitation of coordination in regional operations.

4. Capacity building for the National Contact Points of the countries in the region

IV. Adoption of the Declaration of Ethics and Transparency of the Customs Administrations of Central America, based on the principles of the WCO Revised Arusha Declaration

• Adoption of the Declaration on Ethics and Transparency of Customs Administrations of Central America, based on the principles of the WCO Revised Arusha Declaration.
• Gender Equity Study: Conducted by the Regional Technical Assistance Center of the International Monetary Fund (IMF) for Central America, Panama and the Dominican Republic (CAPTAC-DR) in collaboration with the customs of Central America, Panama and the Dominican Republic.

V. Challenges and Challenges:

It is necessary to have intersectoral regulations that provide regional solutions to implement coordinated border management, which allows for the simplification of processes in favor of trade facilitation, through the management of financial resources for the development of civil works, refurbishment, equipment, technology for the modernization of customs, among others.

It is also important to continue strengthening joint efforts between the public and private sectors to promote trade facilitation based on the recommendations of international instruments on customs matters; associating technological components with the processes of clearance of goods (RFID/ LPR/ ELECTRONIC MARKET), maximizing the interoperability of computer platforms.

To deepen and increase the exchange of information between Customs Administrations to improve customs risk management and, finally, as a component with transversality in the Central American region, generate conditions to strengthen and promote the Authorized Economic Operator programs.

Conclusions:

The Central American Customs Committee is a dynamic body that has the capacity to adapt to the needs of the Central American region in an international context. It works based on high international standards, seeking to simplify foreign trade operations, constant innovation in the area of ​​regional regulations, and uses the tools and methodologies suggested by international organizations specialized in customs matters and trade facilitation. Its vision is always innovative and tends to delve into current customs issues, for this reason, it generates actions that position the Central American region in an updated and harmonized context. 

The Customs of Central America, with the support of the Central American Customs Committee in the field of foreign trade, play a fundamental role as the collecting entity of the Member States and as a customs control entity for the passage of people, goods and means of transport that enter, leave or transit through customs, maintaining coordination between the Customs Services of Central America, applying trade facilitation and customs modernization measures, in accordance with regional customs regulations and strategies, to streamline customs operations, which has allowed the region to position itself as one of the most competitive in Latin America.

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1.  Articles 1 and 3 of the Guatemala Protocol.
2. Customs Officials: Guatemala 1969, El Salvador 766, Honduras 1607, Nicaragua 1572, Costa Rica 510 and Panama with 1450; The collection for Guatemala $3,875,830.00, El Salvador $2,331,057.00, Honduras $2,044,316.00, Nicaragua (no data), Costa Rica $2,109,934.81 and Panama with $1,354,946.84; the number of land border customs by country are: for Guatemala 9 border customs, 1 land crossing and 3 PFI with Honduras, El Salvador 6 border customs, Honduras 5 border customs and 3 PFI with Guatemala, Nicaragua 5 border customs, Costa Rica 5 border customs and Panama with 3 border customs; The number of air customs by country is: Guatemala 3, El Salvador 1, Honduras 5 guards, Nicaragua 2, Costa Rica 4 and Panama 6; the number of maritime customs by country is: Guatemala 3, El Salvador 3, Honduras 3, Nicaragua 4, Costa Rica 4 and Panama 5