THE Bureau of Customs (BoC) has already announced that the Revised Kyoto Conven-tion (RKC) will be adopted before the end of the year and will be implemented in the coming months and years. Known formally as the “The International Convention on the Simplification and Harmonization of Customs procedures (Kyoto Convention)”, the original conven-tion entered into force in 1974.
In order to meet the growing demands of governments and the international trading community, the original convention was subsequently revised and updated in June 1999. The World Customs Organization (WCO) Council adopted the RKC as the model for efficient and modern customs procedures in the 21st century. To date, there are at least 46 countries which are signatories to the convention.
Customs Best Practices. RKC was designed by the WCO to standardize and harmonize customs policies and procedures worldwide. RKC likewise serves to implement customs-related principles developed by the WTO, such as the agreements contained in Article V (Freedom of Transit), Article VIII (Fees & Formalities Connected with Importation and Exportation) and Article X (Publication & Administration of Trade Regulations) of the GATT 1994.
RKC consists of the Body of the Convention, the General Annex, and the Specific Annexes. The Convention and the General Annex are obligatory to all signatories while the Specific Annex, which contains standards and recommended practices, is not obligatory. Accession to the Specific Annex is therefore optional. As a whole, the convention provides a comprehensive set of over 600 legal and technical provisions outlining the basic principles of modern customs procedures and practices.
International Standards. Foremost among the governing principles of the RKC is the requirement that customs should provide transparency and predictability for the importing, exporting, logistics, transport and forwarding industries. The convention promotes trade facilitation and effective controls through its legal provisions that detail the application of simple yet efficient procedures.
Specifically, the RKC provides core principles for the following:
- Predictability (standard principles for customs processing of goods, conveyances and persons moving across borders – clearance procedures)
- Transparency (provides all information relating to customs)
- Legal (prevents arbitrary or unfair actions by customs)
- Use of information technology
Present State of Play. BoC has already created an RKC Management Team to push for accession to the convention and to lead the implementation of the RKC by implementing measures to ensure compliance with the international agreement. Based on a study conducted, it is said that only about 55% of existing customs laws and regulations are compliant with international customs standards.
Among the measures identified for the RKC implementation strategy are as follows:
- Support for the Senate ratification of the RKC and approval of legislative measures
- Drafting of the omnibus bill to amend the Tariff and Customs Code of the Philippines (TCCP)
- Drafting of the Manuals of Operations to govern the main areas in customs operations (entry processing, customs bonded warehouse, administrative and judicial proceedings, transit goods, etc.)
- Infrastructure support (e.g. Information and Communication Technology)
- Provision for human resource training, capacity building and change management
What to Expect. Obviously, the overhaul of customs laws and regulations will have wide-ranging effect on almost all aspects of customs operations. While the changes will not come overnight, the effect on the business community will be substantial and far reaching, to say the least. In general, the changes in the customs laws, regulations and procedures should result in:
- Clarification on the role and function of the declarant and the customs broker (effectively amending RA 9280)
- Transparency and predictability in the disposition of customs cases
- Automation of almost all aspect of the customs clearance and declaration process (duty payment, assessment and releasing)
- Simplified forms, documents and procedures
- Special facilities for low-risk and compliant importers
- Minimal control and intervention at the border (enhancement of risk management and post entry audit)
The author is an international trade consultant, and a licensed customs broker. He is a lecturer on logistics, indirect tax, customs and supply chain. Please contact firstname.lastname@example.org for your comments.