Strengthening customs industry trust in a changing economy

As the economy continues to evolve and present new challenges, integrating the private sector into the World Customs Organization’s standards-setting processes will ensure secure and efficient supply chains

For over 70 years, the World Customs Organization has been the global leader in providing the clarity of procedure and consistency of approaches fundamental to creating an environment of trust among stakeholders. Although our 186 members administer the cross-border flows of international trade, they neither determine what these flows consist of nor do they control the market forces that propel them.

Balancing the various roles played by customs requires us to be able to decide what is allowed to cross the border, taking into consideration market dynamics, local needs and demands, and the fact that, being responsible for managing both trade and the security of the border, governments and industry must act in concert to achieve the shared objectives of economic prosperity through secure, stable supply chains. Creating an environment where all of this is feasible depends on trust – trust among all stakeholders in international trade.

Recognising this reality, the WCO has long integrated the private sector into its standards-setting processes. Private sector representatives contribute to policy discussions in the WCO’s high-level working bodies. By providing a customer’s view of the impact of proposed changes to WCO international standards, industry ensures that the organisation develops practical and achievable solutions for all stakeholders.

The SAFE Framework

A key driver for solidifying this relationship was the need to improve supply chain security in a post-2001 environment. A vulnerability in just one link of the supply chain can result in major disruptions globally. The WCO took the lead in addressing this issue, inviting stakeholders to collaborate on developing a comprehensive response. The result was the World Customs Organization SAFE Framework of Standards to Secure and Facilitate Global Trade, better known as the SAFE Framework.

Adopted by the WCO Council in 2005, the SAFE Framework establishes supply chain security standards that, if achieved, strengthen border security while providing efficiencies for the private sector in the form of faster clearance of their products through customs. The private sector’s expertise proved invaluable to the development of the SAFE Framework. The document recognises that contribution by dedicating one of its three pillars to customs-business partnerships.

Based on the trust developed with the private sector during the development of the SAFE Framework, the WCO formalised its relationship with industry experts through the Private Sector Consultative Group in 2005. For almost 20 years, the PSCG has advised the WCO secretary general and members on customs and international trade matters by providing valuable private sector perspectives.

Cross-border e-commerce

The WCO’s relationship with the PSCG was again relied upon when the rapid growth of e-commerce exposed the need for novel approaches to clearance and security of small-parcel, low-value goods. For its part, customs needed to adjust its processes to handle the increased volumes without compromising safety, security and revenue. For industry, e-commerce increased market diversity in the number and size of market participants, which was not accompanied by the requisite support to navigate international trade regulations and processes.

Under the auspices of the WCO, governments, the private sector, international organisations and academia joined together to develop solutions and share best practices to respond to this new reality. The result of this collaboration was the WCO E-Commerce Package. It provides the standards for the effective management of cross-border e-commerce from both facilitation and security perspectives, accompanied by the real-world experience of WCO members to help both customs and industry meet their goals.

We, as customs, focus primarily on intent. The private sector lives in a world of effect. By cultivating and institutionalising trust between customs and industry, we can employ known methods – and find new methods – to reconcile economic security and free trade and realise the safety and prosperity that trade makes possible, even as circumstances continue to change.

To this end, the WCO will continue to bring the critical actors together, enabled by a tradition of collaboration, an appreciation of the challenges of a changing landscape and a shared recognition of the need for trust, so that trade can move with both the speed and security the world needs.