Customs experts have highlighted the role of certification for "greater efficiency and operability" at the last day of the BA 2019 Summit, held by the World Free Trade Zone Organization (WFZO) at La Usina del Arte, in the Autonomous City of Buenos Aires.
Free zones: trade drivers and investment magnets
The president of the Association of Free Trade Zones of America (AZFA), Gustavo González de Vega, He stated that safe free zones are the most important element in the environment in light of the situation denounced by the OECD, in the sense that “not all Free Zones at an international level carry out activities with the transparency that they should.” González de Vega explained what free zones are doing for security to demonstrate that they are indeed safe spaces, but that they want to be even safer with the help of the World Customs Organization (WCO) and the General Directorates of Customs. There are 600 free zones in the region, 11 thousand companies, which have generated one million direct jobs. Exports show that free zones have become true drivers of trade and magnets for investment, generators of employment and guarantors of security.
Today, all foreign trade revolves around immediacy. Global demand requires the streamlining of commercial traffic. How can this be achieved? With proactive, flexible Customs and technology that guarantees the traceability of the logistics chain. According to González de la Vega, free trade zones are involved in the advance towards e-commerce, but they need to know what level of certification will be required from them by the WCO and the General Directorate of Customs of Argentina, in order to be considered safe elements of the logistics chain.
Customs must interact with each other and with private individuals
To its turn, the President of the Council of the World Customs Organization (WCO) and National Director of Customs of Uruguay, Enrique Canon, He stated the following:
“We have a common ground. We consider free trade zones as development drivers, as stated in Uruguayan law. The world is changing and customs cannot be oblivious to this. The first change is globalization, where the concentration of wealth is still present. Inequality also exists in technological disparity. The IMF says that 60% of the world's population still does not participate in the digital economy. The organization's growth forecast fell by 5%, with a slowdown in the United States, China and Latin America. This framework conditions us to address efficient Customs control.
Free trade zones began in the Middle Ages, but they had their origins in the Phoenicians. Thus, by 2008, there were 3500 free trade zones worldwide, generating 66 million jobs in 130 countries (ILO).
Behind trade is control. Currently, national states have difficulties in acting against organized crime and piracy. Faced with this and the digital economy, the OECD is launching a rethinking of tax principles, highlighting the importance of the exchange of information and joint international and national inspections. The Uruguayan Customs Code allows Customs to inspect free trade zones. Likewise, the European Union Code controls the entry and exit of free trade zones. Where will customs be in the framework of blockchain? Customs must work in relation to each other and to private individuals, facing risk factors. The future of customs also lies in compliance. We must prepare for cross-border trade, which is advancing strongly.
Customs in the world are the organizations that have the most information and can be transformed if the WCO makes it into a commercial hub that serves as a pivot for the exchange of risk analysis. Therefore, customs in the world should be transformed into a global border organization. In our continent, in November 2018 there was an agreement of mutual recognition of our authorized economic operators, signed between 12 countries in the region. In Uruguay we started with a joint validation of the different authorized economic operators.”
Argentine Customs: New regulations, better compliance
Another opinion on the subject was given by Diego Dávila, Director of Customs of Argentina, He explained that one of the biggest challenges was the authorized economic operator. It is the fundamental element by which the development of the economy has come to stay, because it is an overcoming element. “Within the Argentine Customs we did not have a specific area, but we created a division of customs process engineering and four departments, of which one is the authorized economic operator that deals with issues related to the World Customs Organization (WCO) and we have made great progress since then. The first thing we did in 2019 to be able to generate a safe level and reduce logistics costs (which is what we need as a country to develop economically), was to modify General Resolution 4451, which consists of voluntary and free adhesion to this program. The figure of the AEO has been consolidated as the most important tool, through which customs carry out a new role, for the benefit of legitimate trade and the security of logistics chains, facilitating foreign trade.
It is a program that covers 58 companies, an objective that we achieved that we set at the beginning of 2018 with the President of Argentina. With the new regulations, 3 levels of compliance were introduced: compliance, simplification and security; import and export operations were also encouraged; we incorporated SMEs with equal requirements and benefits, and finally, we included all foreign trade actors such as customs brokers, ports, airports, border crossings and free zones, terminals and fiscal warehouses. This new resolution favors a foreign trade system that includes free zones, in the generation of new opportunities. It should not be forgotten that customs is a federal tax agency and control body; as such, it must exercise all the oversight mechanisms. This control has to be intelligent, linked to streamlining and digitalization from customs. This is carried out by the customs engineering division and is related to streamlining customs processes from origin to clearance to ensure the logistics of all merchandise in order to make the operator responsible. Today, free trade zones function as logistics hubs and should function as productive zones. The AEO requirements have to do with security. There is no customs presence. This absence has to be accompanied by technology and security of systems and alerts for each dispatch, so that Customs can be incorporated at any time in the chain.
We are managing a decree for the creation of the Inter-Organic Permanent Committee in order to obtain the OEA certification of third-party organizations and thus ensure that all organizations that have some level of impact on the chain of a merchandise are OEA. The global security of logistics is based on the possibility of establishing mutual recognition agreements between OEA Programs. Our Customs aims to categorize 95 foreign trade actors, sign mutual recognition agreements with Uruguay and Mercosur in December 2019, while the Mercosur-Pacific Alliance Action Plan will be in May 2019. The priority of the Argentine Customs within the multiple issues we have is the OEA because it is the only way to streamline customs from every point of view and not block merchandise at the points of arrival. We need investments, we have money from the IDB for the development of technology, we have just received the first tomograph for postal parcels, part of the intelligent control that we will apply.”
As a summary of what was expressed by the various international personalities who came together at the multitudinous event, it is evident the need to reach agreements between the customs of the region to establish joint security standards and adapt the control systems to the new technologies imposed by e-commerce, establishing traceability of the operations that allow the AEO to be the predominant factor in the commercial chain.
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