Introduction
The role of customs administrations in the contemporary economy goes beyond the traditional functions of revenue collection and border control. In an environment marked by the intensification of international trade, the growing complexity of global value chains, and the advancement of digital technologies, there is a pressing need for balanced customs action that reconciles the objectives of protecting society and the economy with the imperatives of intervention and trade facilitation.
This reflection aims to analyze a possible strengthening of the institutional capacities of customs administrations in the face of the growing sophistication of transnational criminal organizations, which frequently resort to illicit practices associated with foreign trade—such as smuggling, money laundering, international drug trafficking, and aggravated tax evasion—which exceed the limits of ordinary customs control procedures.
In this context, it is necessary to effectively consider whether or not there is a need to expand the legal powers of customs authorities to allow for the conduct of special operations and confidential investigations aimed at dismantling complex criminal structures and effectively applying the penalty of confiscation of illicit assets linked to organized crime.
This is because such actions involve a high degree of technical, legal, and operational complexity, requiring not only the work of highly trained professionals but also a continuous investment in human and technological resources.
Effectively combating these threats, therefore, requires an approach that combines the rigor of qualified repression with the legality and legitimacy of state intervention in international trade.
That is the proposal for reflection for the readers of the prestigious column Customs News, which I had the privilege and joy of being invited to be a part of as a columnist in 2025.
Good reading!
Modern customs functions
Since ancient times, customs administrations have performed important functions that are fundamental to the organization, control, and stimulation of the development of national economies and, consequently, the global economy. With the rapid transformation of social structures, new phenomena have emerged that directly impact the configuration of current legal systems, especially the customs legal system, which is forced to adapt to this new reality.
Among the main changes are the digitalization of trade and customs processes, the incorporation of new technologies and business models, and the increase in concerns related to national security, the protection of society, and neo-protectionism. These realities cannot go unnoticed; on the contrary, they must be seen as reflections of the social, economic, political, commercial, and technological advancement of life in an organized society.
In response to changing times, customs administrations are simultaneously tasked with monitoring the entry and exit of goods into customs territories and meeting the growing and successive demands of society for greater facilitation of international trade through the simplification, transparency, and predictability of procedures, in line with the principles of administrative efficiency and economic competitiveness.
These aspirations, from our perspective, appear to be intrinsically linked and complementary to the evolution and dynamism of customs law itself. The historical development of these institutions initially identifies the application of customs tariffs as a rudimentary fiscal instrument; then, the establishment of customs as specialized bodies for the control and oversight of international trade; and, finally, the consolidation of customs law as an autonomous, technical, and systematized branch of the legal system, oriented toward the regulation of foreign trade activities and the protection of the State's economic and sovereign interests.
Hence the importance of understanding customs law, which, as defined by Andres Rohde Ponce (1), it is the "set of institutions and principles that are expressed in legal norms that regulate the customs activity of the State, the relations between the State and the individuals involved in said activity, the violations of these norms, their corresponding sanctions and the means of defense of individuals before the customs authorities of the State. (2), with the objective of establishing, operating and guaranteeing customs control over its territory (3)«.
These activities, according to Ponce, can be considered those carried out or executed by the State, establishing places to allow the entry and exit of goods or things, means of transport and people into and out of the national territory; executing and verifying the acts and formalities that must be carried out before customs; establishing and executing acts of control over goods or things and means of transport during their stay in the national territory or abroad. (4).
Thus, it is evident that customs can be characterized as an institution or authority of a public state nature, constituting itself as an administrative service. (5) and a geographical location linked to the point of entry and exit of goods.
It is structured to support foreign trade operations, promoting the control of international merchandise traffic through administration, control, oversight, and tax collection, in addition to preventing customs violations.
Intervention and facilitation: the necessary review of customs powers to achieve the desired balance
In recent times, the rise of organized crime has increased the role of customs in combating illicit practices such as smuggling, drug trafficking, currency evasion, and money laundering. According to the Financial Action Task Force (FATF), (6), there are various ways to launder illicit financial assets (7), including the transfer of monetary values through international trade in the purchase and sale of goods.
This type of money laundering is known worldwide by the acronym TBML (Trade Based Money Laundering), which is the process of concealing criminal activities by using international trade transactions to legitimize their illicit origin.
Joe Henry Thompson Argüello considers this mechanism as an abuse of the international trade system, since it aims at the transfer of values and the concealment of the illicit origin of the money. (8).
Argüello points out that the process of concealing criminal activities through international commercial transactions develops in different stages of the materialization of the crime. The first is placement, which consists of the introduction of resources derived from illicit activities into a formally legitimate company, with the objective of converting that capital into assets that appear legitimate and transferable. The second stage is called layering, characterized by the dispersion of values through multiple transactions—often involving different jurisdictions—in order to make it difficult to trace the illicit origin of the resources. Finally, the third stage is integration, which manifests itself in the reintroduction of values into the formal economy through the simulation of regular commercial operations, such as the sale of products or the provision of services, with the purpose of giving the previously tainted capital an appearance of legality. (9).
In addition to that, resource mobilization under the appearance of legality can also occur through the practice known as Trade Misinvoicing, a technique defined by Diogo Bianchi Fazolo as a form of adulteration in commercial invoicing (10)This practice, according to the author, consists of the deliberate manipulation of declared values in import or export transactions, with the aim of illicitly transferring financial resources between countries, concealing their true origin or destination. In practice, companies falsify the prices of goods on commercial invoices and customs declarations, either by inflating or under-invoicing values, in order to conceal illicit financial flows under the guise of legitimate commercial transactions.
In this context, the fight against the aforementioned illicit activities should not be limited to strengthening traditional intelligence and customs control capabilities. In various situations, it is therefore necessary to promote the expansion of the legal powers of customs authorities in order to facilitate the conduct of special operations and confidential investigations, with the goal of dismantling complex criminal organizations and effectively applying the penalty of forfeiture of capital derived from organized crime. It should also be noted that such investigations and special operations entail a high degree of complexity and confidentiality, ultimately requiring the intervention of highly qualified professionals and investment in specific human and material resources.
Gilles Montagnat-Rentier and Christian Bremeersch describe, as a recent innovation in the fight against this criminal sector, the granting of legal authority to certain customs authorities to monitor social media to detect purchase and delivery orders addressed to individuals. This measure has proven effective in combating money laundering linked to drug trafficking, expanding the tools for monitoring and rapid and effective response to illicit trade. (11).
János Nagy and Willian Ledrew also assert that the principles underlying effective customs control and compliance strategies have been developed based on the specific experiences of administrations that have undergone modernization and reform processes in their control programs. Such principles must, of course, be aligned and compatible with the objectives, priorities, and institutional guidelines of customs administrations, as well as, more broadly, with the strategic policies of national governments. (12)
The principles mentioned can be listed as follows:
a) the recognition that voluntary compliance and effective customs control are complementary and interdependent elements;
b) the consolidation of an institutional culture oriented towards risk management;
(c) the existence of customs legislation that provides appropriate authority and power to the control functions;
d) the effective institutional cooperation and coordination between various bodies and entities involved in customs operations;
e) integration and articulation with tax administrations;
f) the adoption of a proportional, coherent and effective sanctioning system;
g) the availability of transparent, rapid and objective administrative appeal mechanisms;
h) the valorization of qualified, professionalized and motivated customs officers;
(i) the strategic and efficient use of modern information and communication technologies, including for the purposes of detecting illicit activities and combating smuggling;
j) recognition that customs control constitutes a collective responsibility, with a direct impact on the public interest; and
k) adherence to international standards and established best practices in the field of customs control (13).
As can be seen, such state actions can—and should—be carried out in a precise and coordinated manner, ensuring that the exchange of goods is carried out under strengthened and advanced customs regulations, sufficient for the development of customs control and, ultimately, that those same goods have regular access to the customs territory. This is, therefore, an action that aims to safeguard the interests of legitimate trade and the global economy, preventing the contamination of trade chains by customs fraud originating from the economic model sustained by organized crime. (14).
In line with the new times, Raquel Segalla Reis maintains that the traditional conception of customs control as a manifestation of classic police power is revealed to be incompatible with the principles of the Democratic State of Law. (15). Alternatively, from a more contemporary perspective, the author argues for the need to redirect customs control toward a concept of activity oriented toward social and economic order. In this context, customs control should not only impose restrictions but also establish individual rights, observing the limits and possibilities established by the Constitution. (16).
Customs control should not be understood solely as a manifestation of restrictive police power, but as an activity aimed at social and economic order. Thus, in addition to imposing limits and regulating the flow of goods within the customs territory, customs control and its procedures must also reflect individual rights, ensuring compatibility between state action and the constitutional principles that guarantee individual and collective rights, free initiative, legal certainty, and due process.
Conclusion
The modernization of customs administrations represents a legal, technical, and political imperative in response to the demands imposed by economic globalization, digital transformation, and the international commitments assumed by States.
As has been demonstrated, building an effective customs system requires the combination of multiple factors: the adoption of legislation consistent with the functions of control and facilitation; the valorization of qualified and ethical public servants; the development of interoperable technological systems; and adherence to international principles of transparency, proportionality, and cooperation.
In this scenario, the duality between the functions of intervention and facilitation constitutes, above all, one of the greatest challenges faced by customs administrations in the exercise of their institutional powers. The demand for rigorous control, aimed at protecting the national economy, maintaining social security, and suppressing illicit activities, particularly those committed by organized crime, coexists with the need to promote an environment favorable to legitimate trade.
This functional tension imposes a redefinition of the role of customs, requiring the expansion of the legal powers of customs administrations, especially with regard to the possibility of carrying out special operations and confidential investigations. Ultimately, this is proving to be an indispensable measure for the effective suppression of customs offenses committed by criminal organizations.
More than a public policy choice, strengthening the legal powers of customs should be understood as an expression of the State's commitment to protecting the legal order and promoting a safe, ethical business environment free from the influence of systemic illicit practices.
1.PONCE, Andrés Rohde. Mexican customs law: Fundamentals and regulations of customs activity. Mexico City: Tirant lo Blanch, 2021, pp. 67-68.
2.PONCE, Andrés Rohde. Mexican customs law: Fundamentals and regulations of customs activity. Mexico City: ISEF Publishing House, 2013, p. 55.
3.PONCE, Andrés Rohde. Mexican customs law: Fundamentals and regulations of customs activity. Mexico City: Tirant lo Blanch, 2021, pp. 67-68.
4.PONCE, Andrés Rohde. Mexican customs law: Fundamentals and regulations of customs activity. Mexico City: ISEF Publishing House, 2013, p. 56.
5. The expression used by Professor Germán Pardo Carrero.
6. The Financial Action Task Force (FATF) is an intergovernmental organization created in 1989 at the G7 meeting in Paris. The FATF's objectives are to protect the financial system and the economy in general against the threats of money laundering, terrorist financing, and the proliferation of weapons of mass destruction by developing and promoting international standards for preventing money laundering and combating the financing of terrorism (AML/CFT).
7. THOMPSON ARGÜELLO, Joe Henry. Tax and customs evasion as precursor offenses to money laundering: typology of money laundering. Managua: Nicaragua, 2024, p. 01.
8.THOMPSON ARGÜELLO, Joe Henry. Tax and customs evasion as precursor offenses to money laundering: typology of money laundering. Managua: Nicaragua, 2024, p. 01.
9.THOMPSON ARGÜELLO, Joe Henry. Tax and customs evasion as precursor offenses to money laundering: typology of money laundering. Managua: Nicaragua, 2024, p. 01.
10. FAZOLO, Diogo Bianchi. Customs infringements in light of international customs regulations. São Paulo: Caput Libris Editora/NSM Editora, 2024, p. 139.
11.MONTAGNAT-RENTIER, Gilles; BREMEERSCH, Christian. The Multiple Functions of Customs and Their Importance for the Economy and Society. In: International Monetary Fund. 2022. Pérez Azcárraga, Agusto Azael, Tadatsugu Matsudaira, Gilles Montagnat-Rentier, János Nagy, and R. James Clark. Customs, a key institution: Strengthening customs administration in a changing world. Washington DC: International Monetary Fund, p. 18.
12. NAGY, János; LEDREW, William. Customs Control and Cooperation with Other Administrations. In: International Monetary Fund. 2022. Pérez Azcárraga, Agusto Azael, Tadatsugu Matsudaira, Gilles Montagnat-Rentier, János Nagy, and R. James Clark. Customs, a key institution: Strengthening customs administration in a changing world. Washington DC: International Monetary Fund, p. 200.
13.NAGY, János; LEDREW, William. Customs Control and Cooperation with Other Administrations. In: International Monetary Fund. 2022. Pérez Azcárraga, Agusto Azael, Tadatsugu Matsudaira, Gilles Montagnat-Rentier, János Nagy, and R. James Clark. Customs, a key institution: Strengthening customs administration in a changing world. Washington DC: International Monetary Fund, p. 200.
14.On the topic: FAZOLO, Diogo Bianchi. Customs infringements in light of international customs regulations. São Paulo: Caput Libris Editora/NSM Editora, 2024, p. 139 and following.
15.REIS, Raquel Segalla. Management of risks in customs clearance of import: Artificial intelligence as a control instrument and agent. São Paulo: Caput Libris Editora, 2024, p. 214.
16.REIS, Raquel Segalla. Management of risks in customs clearance of import: Artificial intelligence as a control instrument and agent. São Paulo: Caput Libris Editora, 2024, p. 214.
Advocate. Postgraduate in Tax Administration from the University of São Paulo - USP/SP. Master in Philosophy of Government and State for the Pontifical Catholic University of São Paulo - PUC/SP. Doutor em Direito Constitucional Tributário pela Pontifícia Universidade Católica de São Paulo - PUC/SP. Professor of the Post Graduation Course of Customs Administration of the Pontifical Catholic University of Minas Gerais - PUC/MG. Invited Professor of the Post-Graduation Course of the Customs Directorate of the Vale University of Itajaí - UNIVALI. Guest Professor of the Foreign Trade Customs Administration Course of the Paulista Association of Tributary Studies - APET. Invited professor of the International Trade Customs and Tax Administration Course of the Brazilian Institute of Tributary Studies - IBDT. Former Councilor of the Administrative Council of Fiscal Resources - CARF (2011-2016). Former Councilor of the Municipal Tax Council of the Prefeitura of the Municipality of São Paulo - CMT (2006-2016). Organizer of collective works: Customs Direito Tests I and Customs Direito Tests.
