In In Jama amaica ca A new in A new initiative itiative of the - PowerPoint PPT Presentation

In In Jama amaica ca A new in A new initiative itiative of the of the Jamaica Jamaica Customs Customs Departme Department nt 1

Authorised Economic Operator System The AEO System was introduced at the annual review in April 2009 by the Commissioner of Customs. An AEO committee was formed consisting of Persons from several units within the Customs Department. All these Units were given specific mandates to begin the AEO process in Jamaica.

Purposes oses of Introdu duci cing g the AEO 1. To enhance client relations, trade facilitation and compliance with tax laws; Underlying Concepts – To serve the Importing Entities in a more professional and customer-oriented manner – To reward compliant importers by making the clearance process smoother and more efficient – To encourage and develop a working partner relationship with these Entities. 3

Purposes oses of Introdu duci cing g the AEO Th The introduction oduction of AE AEO O wi will allow ow the Custom toms s Departm rtment ent to focus s scarc rce e inspectio ction capacity acity on potentially ntially unsafe e operators rators. The Departm rtment ent will receive ive complian liance ce with revenue enue payme ments nts Improved oved communicatio ication resultin ulting g in report rts s of suspicions picions Minim imizing izing corrup rupti tion on 4

Pur urpo poses ses of of Int ntrod oducing ucing the e AE AEO To imp To mprove ove business ess processes cesses for both h Custom toms s and Importing rting Entities. ties. Less Le s Smu muggling ling Simplified lified Customs oms Procedures edures To To encourage rage the full comp mpliance iance of Importer rters s in all spheres res of governm rnment ent – GC GCT T Re Returns, ns, Income me Ta Tax Re Returns rns and Custom toms s Duties 5

Implementation Process & Progress The Post audit Division during the months of May to early June sent out approximately 1800 letters island wide to Importing Entities to invite them to become Authorised Economic Operators. 6

Implementation Process & Progress Authorised Economic Operator System The Post audit Division during the months of June to early July made presentations to 6 Associations and the Directors and Managers of approx 400 Importing Entities informing and inviting them to become Authorised Economic Operators. Overall the Unit conducted 85 sessions island wide 7

Implementation Process & Progress The following Associations were sensitized: Jamaica Chamber of Commerce Private Sector Organisation of Jamaica Customs Brokers and Freight Forwarders Association Shipping Association of Jamaica Jamaica Manufacturers Association 8

AUTHORISED ECONOMIC OPERATOR SYSTEM PRESENTATION 9

DEFI DE FINITION NITION The he fi first st ph phase se of f th the Auth thori rised sed Econom nomic ic Op Operators tors (AEO) (A O) Syst stem em to to be be impl plemented mented by by th the Jam amai aica ca Customs stoms Depa partm rtment ent. DEFINITION OF AEO (BY WCO) An AEO is defined as: “a party involved in the international movement of goods in whatever function that has been approved by or on behalf of a national Customs administration as complying with WCO or equivalent supply chain security standards. 10

Definition Cont’d Authorized Economic Operators include inter alia manufacturers, importers , exporters, brokers, carriers, consolidators, intermediaries, ports, airports, terminal operators, integrated operators, warehouses and distributors” For Jamaica Customs Department the current focus is on importers. 11

Attaining AEO Status The essence of the AEO-concept can be found in the Customs-to-Business partnerships. Operators can be accredited by Customs as AEOs when they prove to have high quality internal processes that will prevent goods in international transport to be tampered with. I.e.: Ensure the integrity of the information, i.e. what is said to be in a container/shipment, really is in the container and nothing else, more, or less; 12

Attaining AEO Status Ensure the integrity of its employees, that they will not put goods in the container that should not be there; and Secure access to its premises, to prevent unauthorized persons to put goods in the container. 13

CRITERIA FOR AEO MAINTENANCE OF PROPER BOOKS & RECORDS MUST BE A REGISTERED LEGAL ENTITY ACCURATE INFORMATION TO FACILITATE A 2-YEAR REVIEW UNRESTRICTED ACCESS TO PREMISES, DOCUMENTS & RECORDS. 14

CRITERIA FOR AEO AEO MUST BE FINANCIALLY VIABLE CONTINUOUS EXCHANGE OF INFORMATION WITH CUSTOMS ENSURE SECURITY OF CARGO AND PREMISES REPORT EXCESS GOODS AND PAY THE RELEVANT DUTIES NOTIFY CUSTOMS OF ILLEGAL/ SUSPICIOUS CARGO OR ACTIONS. 15

Countries who have implemented the AEO System Most members of WCO have acceded to the SAFE framework and it can be expected that in the next few years, the majority of customs administrations will introduce AEO- programmes. At present, AEO or similar programmes have been introduced in: The United States, under the name of C-TPAT (Customs-Trade Partnership against Terrorism 16

Countries who have implemented the AEO System The member states of the European Union, (EU) There are 27 Member States within the EU e.g. the UK, Sweden and The Netherlands APEC - Asia-Pacific Economic Cooperation ( APEC ) is a forum for 21 Pacific Rim countries e.g. Australia, Japan, Mexico, Chile, Peru & Canada New Zealand, under the name of Secure Export Scheme (SES) Singapore, under the name of Secure Trade Partnership (STP) 17

AE AEO O Pr Proc ocess ess in in Jam Jamai aica ca The AEO P Pro rocess ss f for or Impor orting g Entitie ies s has s thre ree st steps s : STEP 1 Signing a Memorandum of Understanding (MOU). The MOU for Authorised Economic Operators (AEOs) is a document that will be signed by companies and individuals to become an Authorised Economic Operator (AEO) and enjoy certain privileges as a result. It also outlines the consequences that will result from breaching the agreement 18

Memorandum of Understanding TERMS OF THE CONTRACT 1. DECLARING ACCURATE VALUES 2. SECURING YOUR BUSINESS PREMISES 3. COMPLIANCE WITH REVENUE PAYMENTS 4. COMPLIANCE WITH ALL GOVERNMENTAL AGENCIES 5. PROVIDING DOCUMENTS TO CUSTOMS and ACCESS TO PREMISES WHEN REQUIRED 6. WORKING PARTNERSHIP WITH POST CLEARANCE AUDIT 19

Memorandum of Understanding PRIVILEGES/BENEFITS TO IMPORTING ENTITIES 1. EXPEDITED CLEARANCE 2. FIRST-IN-LINE SERVICE 3. WORKING AS A PARTNER 4. FAST TRACK SERVICE 5. NO PRE-CLEARANCE CHECKS 6. SIIS STATUS FOR COMPLIANT AEOs 20

PRIVILEGES/BENEFITS TO IMPORTING ENTITIES Cont’d Some countries and commercial partners will make AEO status a prerequisite for trade Better protection against the theft of products and intellectual property Better systems to prevent fraud and corruption Better business continuity preparedness Can lead to lower insurance premiums 21

PRIVILEGES/BENEFITS TO IMPORTING ENTITIES Cont’d Perform less or no inspections on goods imported or exported by or via the AEO. Just in Time inventory system Lower transport costs will result. Customs will trust the operator 22

Sanctions for breach of MOU Contract Relevant Penalties raised in accordance with the section(s) of the customs act that has been breached will be applied All shipment will be subjected to pre-verification checks by the relevant Customs Units. 23

Sanctions for the Breach of MOU Contract Cont’d Detention of current shipments Removal from the AEO Listing and placed on the UEO (Unapproved Economic Operators) Listing where all importations will be subjected to pre-clearance verification procedures 24

AEO EO Pr Process ess in in Ja Jamaica aica STEP ST P 2 Mak aking ing ac acco coun unting ting boo ooks ks an and rec ecor ords ds av avai ailable lable to to th the Pos e Post t Aud udit it tea team pr prior ior to to im impl plementati ementation on to to d det eter ermine ine com compli pliance ance an and wh wheth ether er th thes ese e co compani panies es ar are e au audit itable able. 25

Records Required for Audit Records Required for Audit 1. Audited Financial Statements • Balance Sheets • Profit and Loss Accounts/ Income Statements • Cash Flow Statements 2. Trial Balances • These are schedules of year end balances of the various accounts contained in the General Ledger 26

Records Required for Audit (contd.) 3. General Ledger Accounts/ extracts 4. Bank reconciliation statements . These should be accompanied by bank statements and cheque stubs. 5. Contracts and Agreements between importers and suppliers of imported goods 6. Contracts and Agreements between importers and freight forwarders/ freight consolidators 27

AEO EO Pr Process ess in in Ja Jamaica aica • ST STEP EP 3 Fi Final al decisi sion on presi sides s wi with h the he Co Comm mmiss ssion oner r of of Cus Custom oms 28