Customs is an authority or agency in a country responsible for collecting tariffs and for controlling the flow of goods, including animals, transports, personal, and hazardous items, into and out of a country. The movement of people into and out of a country is normally monitored by migration authorities, under a variety of names and arrangements. Immigration authorities normally check for appropriate documentation, verify that a person is entitled to enter the country, apprehend people wanted by domestic or international arrest warrants, and impede the entry of people deemed dangerous to the country. Compare illegal emigration.
Each country has its own laws and regulations for the import and export of goods into and out of a country, which its customs authority enforces. The import or export of some goods may be restricted or forbidden. In most countries, customs are attained through government agreements and international laws. A customs duty is a tariff or tax on the importation (usually) or exportation (unusually) of goods. Commercial goods not yet cleared through customs are held in a customs area, often called a bonded store, until processed. All authorized ports are recognized customs areas.
At airports, customs functions as the point of no return for all passengers; once passengers have cleared customs, they cannot go back.
Customs missions
We can include the missions developed by the customs control agencies in the following:
Fiscal: Through the application and monitoring of the compliance of certain import / export rights (tariffs) to the introduction or exit of goods.
Security: Intimately linked to the previous one, it avoids customs fraud and fights against contraband (be it drugs, weapons, historical heritage, etc.)
Public health: Controls the entry of animals, food, toxic waste, etc. that could pose a danger to the public health of civilians.
Statistics: They prepare foreign trade statistics.
Operation
All import or export of goods is subject to a customs clearance in which the payment of a customs duty may be demanded.
The customs duty is called the customs tariff . At the global level, the vast majority of countries use the Harmonized System for the Designation and Codification of Goods of the World Customs Organization to classify goods and determine the applicable duties for each of them. These rights are for the exclusive use of governments, and represent a profitable source of revenue for public finances .
Customs duties are exercised on foreign products entering the country, on those that leave the country, or on those that come from abroad and pass through national ports temporarily as a re-export . In order to protect domestic production through the increase through these taxes of foreign merchandise. This favors the national product put a brake on the foreigner, given that part in more advantageous conditions at the time of offering a more competitive price in the domestic market . This protection, taken to the extreme, is known as protectionism .
Currently, customs is not only accrued and requires the payment of tariffs, but also non-tariff restrictions and regulations, which are applied in cases of unfair Foreign Trade practice (price discrimination, subsidies, among others), as well as also the indirect taxes on consumption (added value) or on specific consumptions (excises) .
For the collection of taxes and the assignment of regulations and regulations to fulfill the goods or goods must be classified, that is to assign them a numerical code that can go from the 6 digits to the 12 depending precisely on the system of designation and classification of merchandise used, the most used is the HS (Harmonized System), used by most countries affiliated with the OMA, these codes are included in a document called “Tariff” which is a general listing of codes and is based on a methodology based in general and particular established rules, as well as Section, Chapter, sub chapter and explanatory notes that the assignment of the code or classification of the merchandise is carried out.
Customs Agent, Customs Broker, Customs Broker or Customs Broker.
The Customs Agent, Customs Agent, Customs Broker or Customs Broker is the natural or legal person , duly authorized by the respective customs authorities, who acts before the competent bodies (customs , ministries , and other private or public entities) on behalf of and on behalf of a third party that hires its services and grants an authenticated and permanent power, in the procedures of an import , export or transit operation .
According to various legislations, it is constituted as an auxiliary to the customs administration.
This term of Customs Agent is applicable in Chile , Colombia , Peru , Venezuela , Spain , Central America and other countries of the Latin American region.
In Brazil, Uruguay, Paraguay and Argentina the denomination of Dispatcher of Customs for this specialist is used.
In Panama, it is called Customs Broker.
In Mexico , the Customs Agent is defined as the physical person authorized by the Tax Administration Service, through a patent (authorization), to promote the clearance of merchandise in the different customs regimes provided for in the Mexican Customs Law.
Red and green channels
In many countries, customs procedures for arriving passengers at many international airports and some road crossings are separated into red and green channels. Passengers with goods to declare (carrying goods above the permitted customs limits and/or carrying prohibited items) go through the red channel. Passengers with nothing to declare (carrying goods within the permitted customs limits and not carrying prohibited items) go through the green channel. However, entry into a particular channel constitutes a legal declaration, if a passenger going through the green channel is found to be carrying goods above the customs limits or prohibited items, he or she may be prosecuted for making a false declaration to customs, by virtue of having gone through the green channel. Each channel is a point of no return, once a passenger has entered a particular channel, they cannot go back.
Australia, Canada, New Zealand, and the United States do not officially operate a red and green channel system; however, some airports copy this layout.
Blue channel
Airports in EU countries such as Finland, Ireland or the United Kingdom, also have a blue channel. As the EU is a customs union, travellers between EU countries do not have to pay customs duties. Value-added tax and excise duties may be applicable if the goods are subsequently sold, but these are collected when the goods are sold, not at the border. Passengers arriving from other EU countries go through the blue channel, where they may still be subject to checks for prohibited or restricted goods. Luggage tickets for checked luggage travelling within the EU are green-edged so they may be identified. In most EU member states, travellers coming from other EU countries can simply use the green lane.
Red point phone
All airports in the United Kingdom operate a channel system, however some don’t have a red channel, they instead have a red point phone which serves the same purpose.
Privatization of customs
Customs is part of one of the three basic functions of a government, namely: administration; maintenance of law, order, and justice; and collection of revenue. However, in a bid to mitigate corruption, many countries have partly privatised their customs. This has occurred by way of contracting pre-shipment inspection agencies, which examine the cargo and verify the declared value before importation occurs. The country’s customs is obliged to accept the agency’s report for the purpose of assessing duties and taxes at the port of entry.
While engaging a pre-shipment inspection agency may appear justified in a country with an inexperienced or inadequate customs establishment, the measure has not been able to plug the loophole and protect revenue. It has been found that evasion of customs duty escalated when pre-shipment agencies took over. It has also been alleged that involvement of such agencies has caused shipping delays. Privatization of customs has been viewed as a fatal remedy.
Summary of basic custom rules
European Union
The basic customs law is harmonized across Europe within the European Union Customs Union. This includes customs duties and restrictions. Customs tax from €22 to €150. In addition, see regulations of each member state.
For customs declarations in the EU and in Switzerland, Norway and Iceland, the “Single Administrative Document” (SAD) is used as a basis.
Germany
Up to €22, there are no taxes. From €22 up to €150, it is necessary to pay VAT (EUSt in Germany), which is 7% or 19% depending on the goods. From €150 it is necessary to pay VAT and customs.
Romania
Customs may be very strict, especially for goods shipped from anywhere outside the EU. Up to €10 goods/package.
Italy
Customs in Italy takes additional 22% VAT (Value-added tax) for goods imported from outside the European Union even if the VAT is already paid to the origin country sender.
Czech Republic and Slovakia
Up to €22, there are no taxes. From €22 up to €150, it is necessary to pay VAT (DPH in Czech/Slovak), which is 21%. From €150, it is necessary to pay VAT and customs. Customs may range from zero to 10% depending on the type of imported goods.
Russia
In accordance with the legislation of the Russian Federation, declaration of goods is made by means of a declaration to the customs authority in the customs declaration or in any other manner provided for in the Customs Code of the Russian Federation in written, oral, electronic or conclusive form of information on goods, their customs regime and other information required for customs purposes. The Customs Code of the Russian Federation has lost its force
In the Customs Union
With the entry into force of the Customs Code of the Customs Union, Article 179 of the Customs Code of the Customs Union provides for the possibility of customs declaration in written and (or) electronic forms using a customs declaration. Declaring of goods is made by the declarant or by the customs representative at the choice of the declarant.
North America
United States
The United States imposes tariffs or “customs duties” on imports of goods: 3% on average. The duty is levied at the time of import and is paid by the importer of record. Individuals arriving in the United States may be exempt from duty on a limited amount of purchases, and on goods temporarily imported (such as laptop computers) under the ATA Carnet system. Customs duties vary by country of origin and product, with duties ranging from zero to 81% of the value of the goods. Goods from many countries are exempt from duty under various trade agreements. Certain types of goods are exempt from duty regardless of source. Customs rules differ from other import restrictions. Failure to comply with customs rules can result in seizure of goods and civil and criminal penalties against involved parties. The U.S. Customs and Border Protection (CBP) enforces customs rules. All goods entering the United States are subject to inspection by CBP prior to legal entry.
South America
Argentina
Customs may be very strict. Up to u$300 overall, there are no taxes. From u$300 to u$1500, tax is 50% of the value of all acquired goods sumed up.
“Magic mail”
Juan Pablo Escobar writes, in My Father Pablo Escobar, “At the time Pablo Escobar was trafficking cocaine, Colombia’s major airports had what was known as “magic mail”, a sort of parallel customs system that made it possible to bring anything into the country without leaving a paper trail – in exchange for a fat bribe.”
International Organization
The largest international organization in customs matters is the World Customs Organization (World Customs Organization)
The history of the WCO began in 1947 when the thirteen European governments represented in the Committee for European Economic Cooperation agreed to establish a Study Group. This Group examined the possibility of establishing one or several inter-European Customs Unions based on the principles of the General Agreement on Tariffs and Trade (GATT).
In 1948, the Study Group gave rise to the creation of two commissions – an Economic Committee and a Customs Committee. The Economic Committee was the predecessor of the Organization for Economic Cooperation and Development (OECD), the Customs Committee became the Customs Cooperation Council (CCC).
In 1952, the Convention that formally establishes the CCC came into force. The Council is the governing body of the CCC and the inaugural session of the Council was held in Brussels on January 26, 1953.
The first session of the CCC Council was attended by representatives of seventeen European countries.
After years of membership growth, in 1994, the Council adopted the name World Customs Organization, to better reflect its transition to a truly global intergovernmental institution. Now it is the voice of 179 customs administrations that operate on all continents and represent all stages of economic development. Today, the members of the WCO are responsible for processing more than 98% of all international trade.
The mission of the WCO is to provide leadership, guidance and support to national Customs administrations to ensure and facilitate legitimate trade, track income, protect society and develop international trade capabilities.
The WCO currently has its members grouped into six regions.
North America, Central America, South America and the Caribbean.
Europe.
North Africa, Near and Middle East.
Center and West of Africa.
East and South Africa.
Far East, South and Southeast Asia, Australasia and Pacific Islands.
Corruption
The emergence of corruption in the customs service is facilitated by a combination of the following factors:
monopolization of administrative functions;
discretionary power (the power of a person over the distribution of resources that do not belong to him at his own discretion);
ineffective system of control and accountability;
control over the flow of goods, enabling the customs authorities to exert a significant influence on the commercial activities of companies;
the need to prevent the importation of illegal goods and large-scale smuggling of making customs officials vulnerable to organized crime .
low level of wages of customs officials.
weak social protection of customs officials.
Reduction of corruption motives and opportunities can be promoted by such measures as strengthening of professional elitism, creation of conditions for career growth, competitive salary, punishment for corruption behavior; the creation of an understandable legal framework that reduces discretionary powers, strengthens supervision and control, ensures transparency of customs procedures, rotates staff and strengthens internal and external control .
Source from Wikipedia