WORLD CUSTOMS

ORGANISATION
By AD
Overview
• The World Customs Organization (WCO) is an
independent intergovernmental organization that aims to
enhance efficiency, effectiveness, and security of customs
administrations worldwide.
Key facts
• 1. Established: 1953 (as Customs Co-operation Council)
• 2. Renamed: 1994 (World Customs Organization)
• 3. Headquarters: Brussels, Belgium
• 4. Membership: 184 member countries
• 5. Represents: Over 98% of global trade
Key objectives
• 1. Promote international cooperation and harmonization of
customs procedures.
• 2. Simplify and standardize customs procedures.
• 3. Enhance customs efficiency and effectiveness.
• 4. Improve customs security and compliance.
• 5. Support economic development and trade facilitation.
Activities
• 1. Harmonized System (HS) - global standard for tariff
classification.
• 2. Customs valuation and origin marking.
• 3. Simplification and harmonization of customs
procedures.
• 4. Supply chain security and risk management.
• 5. Capacity building and technical assistance.
• 6. International cooperation and information sharing.
Structure
• 1. Council (highest decision-making body)
• 2. Policy Commission (advises on strategic issues)
• 3. Technical Committee (develops customs standards)
• 4. Secretariat (provides administrative support)
Initiatives
• 1. Digital Customs
• 2. Customs-Tax Cooperation
• 3. Cross-Border E-Commerce
• 4. Trade Facilitation
• 5. Security and Compliance
Benefits
• 1. Simplified customs procedures
• 2. Reduced compliance costs
• 3. Increased trade facilitation
• 4. Enhanced security and compliance
• 5. Improved economic development
The HS SYSTEM
• Harmonized System (HS)The Harmonized System (HS) is
an international standardized system of names and
numbers to classify traded products.
• It was developed and is maintained by the World Customs
Organization (WCO).
Key Features:
1. Universal standard: Used by over 200 countries and
economies.
2. Hierarchical structure: Divided into 21 sections, 96 chapters,
and 1,200 headings.
3. 6-digit code: Consists of 2 digits for chapter, 2 digits for
heading, and 2 digits for subheading.
4. Tariff classification: Basis for customs tariffs, trade statistics,
and rules of origin.

HS Codes: Examples:
0101.10.00 (Live horses)
2709.00.00 (Crude petroleum)
8471.49.10 (Computers)
BENEFITS
1. Simplifies international trade
2. Reduces errors in classification
3. Enhances transparency and predictability
4. Facilitates customs clearance
5. Supports trade statistics and analysis
NB:HS Revision: The HS is reviewed and updated every 5-
7 years to reflect changes in technology, trade patterns,
and new products.
Customs valuation
• Customs valuation is the process of determining the value
of imported goods for customs purposes.
Valuation methods
1. Transaction Value Method (TVM)
2. Transaction Value of Identical Goods Method (TVIGM)
3. Transaction Value of Similar Goods Method (TVSGM)
4. Computed Value Method (CVM)
5. Deductive Value Method (DVM)
6. Fallback Method (FM)
Origin Marking
• origin marking is the process of indicating the country of
origin of imported goods.
Types of Origin:
1. Preferential Origin: Goods eligible for reduced tariffs under
free trade agreements.
2. Non-Preferential Origin: Goods not eligible for reduced
tariffs.
Origin Marking Methods:
1. Country of Origin Marking (COM)
2. Made in [Country]
3. Product of [Country]
4. Assembled in [Country
Key Factors:
1. Material composition
2. Production process
3. Assembly operations
Benefits and Challenges
Benefits:
• 1. Accurate customs valuation
• 2. Compliance with trade agreements
• 3. Enhanced transparency
• 4. Simplified customs procedures
Challenges:
• 1. Complex valuation methods
• 2. Discrepancies in origin marking
• 3. Ensuring compliance
Customs security and compliance
• Customs security and compliance are critical components of
international trade, ensuring the safe and secure movement of
goods across borders.
• Customs Security:
• 1. Preventing smuggling and counterfeiting.
• 2. Protecting national security and public health.
• 3. Ensuring compliance with trade regulations.
• 4. Collaborating with other law enforcement agencies.
• Customs Compliance:
• 1. Ensuring accurate declaration and classification.
• 2. Verifying origin and valuation.
• 3. Compliance with trade agreements and regulations.
• 4. Maintaining records and documentation.
Measures
• 1. Risk Management: Identifying high-risk shipments and
consignees.
• 2. Non-Intrusive Inspection (NII): Using technology to
inspect goods.
• 3. Customs-Trade Partnership Against Terrorism (CTPAT):
Collaborating with industry.
• 4. Authorized Economic Operator (AEO): Recognizing
trusted traders.
• 5. Supply Chain Security (SCS): Securing the entire
supply chain.
Benefits of Customs Security and Compliance:
• .1, Reduced risk of smuggling and counterfeiting.
• 2. Enhanced national security and public health.
• 3. Improved trade facilitation and efficiency.
• 4. Increased compliance and reduced penalties.
• 5. Better supply chain management.
• Challenges and Future Directions:
• 1. Emerging technologies (e.g., blockchain, AI).
• 2. Cybersecurity threats.
• 3. Evolving trade agreements and regulations.
• 4. Increasing complexity of global supply chains.
• 5. Balancing security with trade facilitation.
Conclusions
WCO
• 1. Simplify and standardize customs procedures.
• 2. Reduce compliance costs and time.
• 3. Enhance transparency and predictability.
• 4. Improve supply chain security.
• 5. Increase trade efficiency.
WCO Trade Facilitation Instruments:
1. Revised Kyoto Convention (RKC) - Simplifies and harmonizes
customs procedures.
2. World Trade Organization (WTO) Trade Facilitation Agreement
(TFA) - Implements trade facilitation measures.
3. SAFE Framework of Standards to Secure and Facilitate Global
Trade - Enhances supply chain security.
4. Harmonized System (HS) - Standardizes tariff classification.