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The Conference of Asia Pacific Express Carriers (CAPEC) is open to a dialogue with the Philippine government to discuss best practices for express operators. This is according to a recent CAPEC presentation to Board of Investment officials on a study visit to Singapore.

CAPEC represents the interests in Asia of major integrated express delivery companies, including DHL, FedEx, TNT and UPS.

At its presentation, CAPEC said it would be “happy to discuss win-win solutions for the Philippine Government and the industry” in order to help adopt best practices.

CAPEC noted that “express shipments require express customs clearance processes” to “meet expedited deliveries of time-sensitive shipments”, adding that express customs clearance processes should have the “ability to clear and release large volumes of shipments at the fastest possible time without compromising customs control”.

Specifically, express shipments should have “simplified clearance requirements for low-value shipments, i.e. de minimis threshold; pre-arrival clearance; augmented EDI capabilities; risk assessment and management to minimize physical inspections; efficient duty and tax settlement schemes, e.g. electronic fund transfers; and 24×7 Customs availability.”

The adoption of best practices mean that Customs will have greater control, collection and security; the logistics industry will enjoy simplified procedures and automated systems; and businesses will benefit from more competitive and lower costs, CAPEC said.

The organization used the Singapore model as a case study for best practices. Singapore has in place, among others, the ACCESS (Advance Clearance for Courier and Express Shipments) system that facilitates pre-clearance of air express shipments. With the system, air express companies are able to submit shipment information electronically to Customs and receive pre-clearance inspection advice in advance, resulting in faster clearance at the checkpoints.

Another best practice is the TradeNet platform, a Singapore-wide EDI system that electronically links more than 15 agencies and organizations.

According to the Singapore Customs website http://www.customs.gov.sg/leftNav/trad/TradeNet.htm, “The TradeNet System has integrated the import, export and transhipment documentation processing procedures. It reduces the cost and turnaround time for the preparation, submission and processing of trade and shipping documents and expedites the clearance of the cargo.”

CAPEC said the platform “cuts down unnecessary paperwork when traders submit permit applications to government agencies” while “approval for trade declarations can be granted within minutes.”

Singapore’s de minimis threshold (S$400) also helps make trading easy, according to CAPEC.

On the CAPEC website http://www.capec.org/content.php?10-83, organization executive director Dave Tan said, “a commercially useful de minimis value facilitates trade through cost savings and frees up resources without jeopardizing security.”

CAPC added, “Establishing a higher, commercially useful, baseline de minimis value is beneficial, since the large volume of low-value shipments incur high processing costs that outweigh the value of the tariffs collected from those shipments. They also create transit delays that reduce demand for such products.”

As an outcome of its November 2011 Honolulu meeting, 10 Asia-Pacific Economic Cooperation members agreed to implement a de minimis value of at least US$100.

In contrast, the Philippines’ de minimis threshold is P15 (about US$0.36). This compares with Vietnam’s $60, which was increased from $48 in 2011.

Other tax exemption schemes in Singapore that reduce costs and facilitate transshipments/trade, according to CAPEC, are: “Temporary Import Scheme – Duty and GST (goods and services tax) suspension for goods to be re-exported within 3 months from date of importation; Licensed Warehouse Scheme – Designated area approved and licensed by Customs for storage of imported dutiable goods without need to pay duty and GST until such time when they are released for local consumption; and Zero GST Warehouse Scheme – Suspends GST on imported non-dutiable goods, and allows licensees to move goods freely between Zero GST warehouse locations. GST only payable when goods are released for local consumption.”

CAPEC also pointed to Singapore’s simplified transshipment procedures as an example of a best practice. Goods transshipped through Singapore are allowed to be deposited into free trade zones (FTZs) until these are loaded onto another vessel or aircraft.

“For air cargo, the Changi Airfreight Centre operates a 24-hour one-stop service centre, which is also designated as a FTZ, making it easier to tranship goods. Cargo going from airline to airline need not leave the terminal, eliminating or reducing customs requirements,” CAPEC said.

Singapore also implements the Secure Trade Partnership that includes a national Authorized Economic Operator (AEO) program and a “voluntary certification program that encourages companies to adopt robust security measures in their trading operations”.

In contrast, the Philippines has a long-pending program to implement the AEO but no one at the Bureau of Customs seems to have the adequate technical knowhow to operationalize the system.

Finally, CAPEC pointed to public-private partnership in the formulation of policies as a best practice in Singapore. Customs regularly conducts dialogues with the industry with a view to fine tuning regulatory procedures.

“For example, prior to launch of Secure Trade Partnership in 2007, Singapore Customs conducted industry consultations and dialogue sessions with companies to raise awareness of supply chain security and gather feedback for the development of the program,” CAPEC said.

Image courtesy of Naypong / FreeDigitalPhotos.net

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