International Customs Day

by Gamini Warshapperuma
Assistant Director of Customs
Policy Planning & Research Division Sri Lanaka Customs
Today marks the International Customs Day. International Customs Community under the auspices of the World Customs Organization celebrates the International Customs Day on the 26th January each year. This special day recognizes the efforts of the men and women working in Customs organizations worldwide and also this day marks the contribution of Customs to making the communities safe, secure and prosperous. Traditionally participating countries host domestic events to mark this day and Sri Lanka Customs too celebrates the International Customs Day annually.

The theme for this year 2004 will be ,Custom`EDs role in the Protection of Society`ED. Customs, which traditionally performed fiscal and economic missions based on revenue collection (controlling movements of goods, persons and conveyances), is now involved in a much wider range of activities, thus giving it an important role in areas such as protection of society. Combating terrorism and criminal organizations, protecting markets, society, environment and nature are all examples of this wider role. Through these activities, Customs contributes to nations`ED economic development and ensures that international trade is properly managed.

On this occasion it is important to look back as to how the Customs has evolved over the past. It is not known exactly when and where the concept of Customs originated. Adam Smith indicates in his famous work,Wealth of Nations`ED that Customs, denoting customary payments, has existed since time immemorial. Customs is said to have already existed as early as in the Old kingdom in ancient Egypt in the era BC 2200-2700. Some historical evidence has been found about the Customs tariff in AD 136 in the oasis city of Palmyra in the Syrian Desert. Senators in Palmyra invented a system of Customs tarification, which is still being used widely in the 20th century. This tariff engraved on a huge stone in Greek and Aramaic was discovered in 1881 by a Russian Prince Abamelek Lazarew and is now stored in the Hermitage Museum in St. Petersburg, Russia. Some passages of the tariff are as , The person in charge of the Customs farm himself shall levy a duty of three denarii in respect of each camel load and seven denarii per donkey load at the time of importation and exportation`ED.

It is interesting to note the present Customs valuation system WTO Valuation Agreement has its roots in India a 2000 years ago. From the famous literal work, Artha Sasthra written by Kautilya who was the counsellor to the Indian King Chandraguptha (reigned 321-297 BC), it is clearly seen how Customs Valuation was conducted in ancient times in India. , The merchandise being placed near the flag of the toll- house, the merchants shall declare its quantity and price, cry out thrice, Who will purchase this quantity for this amount of price? Then the bidding takes place and eventually when the goods is purchased the purchaser shall pay the enhanced amount of the price to the King`EDs treasury. This shows that the valuation of goods for the Customs purposes was based on the actual transaction value even 2000 years ago.

Sri Lanka with its ideal geological location has been a trading point over thousand years. Ancient kings exported Pearl, Gems, Elephants and Spices from this country and in return imported Gold, Silver, Silk, and Chinaware. The inscription found at the temple near the port of Godawaya (near Ambalantota) provides the evidence of Customs being in existence during the period of 113-135AD. Here, the ruling king Gamini Abhaya has donated part of the Customs Duty collected at this port to the temple. During the regimes of Portuguese and Dutch, collection of Customs duty was one of the main sources of revenue. The Singhalese word for Customs , reguwa`ED was in fact a Portuguese word. It was British who were responsible for the establishment of the modern Customs organization in Sri Lanka. The Customs Department was established in 1806. The Customs Ordinance came into force in 1869 and it still continues to be the original enactment of the modern customs law, with 48 amendments to date.

Year 1952 saw the creation of a major milestone in the global history of the Customs. The Customs Cooperation Counsel was formed with 13 member states with the intention of simplifying and standardizing Customs formalities in international trade. The inaugural session of the CCC took place in Brussels on 26 January 1953 with 17 member countries. The number of members increased over the years, and the Council subsequently adopted the working name ,World Customs Organization`ED in 1994, in order to better reflect the fact that the Organization was an intergovernmental body, which had genuinely made the transition to worldwide status. Today the WCO speaks for 171 member countries from all over the world and Papua New Guinea became the youngest member of this international Customs family in 2002. Sri Lanka joined the WCO in 1967 as the 52nd member of the organization. The WCO has undertaken various projects to develop the Customs functions of the member administrations over the past and its present Customs Capacity Building Strategy would further ensure the trade facilitation, which is vital to the economic development.

Traditionally the focus of the Sri Lanka Customs was the collection of revenue and the enforcement of laws over smuggling and commercial fraud. With the introduction of automated cargo clearance in 1992 the outlook of the Sri Lanka Customs changed somewhat towards trade facilitation. Cumbersome procedures were simplified and the attitudes of the Customs personnel changed too. Trade facilitation was further enhanced with the introduction the dry port concept for speedy clearance outside the port for both FCL and LCL cargo in year 2000. Implementation of the WTO Valuation Agreement by Sri Lanka Customs in year 2002 was yet another boost for free flowing of trade. Meanwhile the Customs kept on collecting revenue in more efficient manner by achieving the revenue targets set up by the Ministry of Finance. Today Sri Lanka Customs has become the highest revenue-earning agency for the government.

Total Revenue collected by Customs

- in millions (Rs)

2000 111,213.90

2001 126,011.92

2002 130,844.74

2003 144,843.58

For first time, Sri Lanka Customs presented the Import Tariff Guide 2004 in electronic format, in a CD this year. Apart from the Tariff, which features the relevant duties of Customs Duty, VAT, Excise Duty, Ports and Airports Levy, Surcharge and EDB Cess, a number of import related information have been included in this CD. The prime objective of this CD was to give the much-needed assistance to the Importers and the Customs House Agents. Further, recognizing the important role played by the Customs House Agents a special award programme was launched recently. Accordingly the Customs House Agents who meet the stipulated criteria would enjoy a number of benefits that include three-year continuous registration with Customs.

In July 2003 Sri Lanka Customs entered into an agreement with the US Customs and Boarder Protection on Container Security Initiative (CSI). This is a programme which came into effect following the events of September 11,2001,under which the US bound containers will be pre screened for smooth clearance at US ports. According to this agreement Sri Lanka Customs with the assistance of US officials will target and screen the US bound containers on intelligence basis in the port of Colombo. As a result, export cargo destined for US from Sri Lanka, particularly the garment exports will reach US markets without any hindrance. The screening will be done with the help of high-tech scanning equipment scheduled to be purchased. It is intended to use these scanners for the screening of import containers as well and the whole programme will bring multiple benefits to both import and export trade.

In this year Sri Lanka Customs will be providing a major facility to its stakeholders by introducing the new cargo clearance system ,Sri Lanka Automated Cargo Clearance System`ED (SLACCS) based on Electronic Data Interchange (EDI). Under this project the importers, exporters and the other relevant agencies like Sri Lanka Ports Authority (SLPA), Shipping Agents, Air Lines, Statutory Bodies, BOI are electronically connected with the Customs through a service provider. Most of the preliminary work and procedures have been finalized and it is expected to fully implement this project in May this year. Another innovative facility named Gold Card programme will be introduced along with the implementation of the new cargo clearance system. Under the Gold Card programme selected clients who have a proven record of compliance with Customs and meet the eligibility criteria will be able to clear their goods on fast track clearance procedure with minimum human intervention.

This year`EDs theme for the International Customs Day the ,Custom`EDs role in the protection of society`ED has a special emphasis on Sri Lanka Customs. Sri Lanka Customs is very much aware of its obligations towards the society.A considerable number of detections have been made in the areas of narcotics, counterfeit goods, substandard drugs, war related items and fauna and flora in the recent past. Presently Sri Lanka Customs is working with the Ministry of Environment to bring legislation to prohibit and restrict the importation of hazardous waste in to the country. With the assistance of National Ozone Unit, Sri Lanka Customs is conducting a series of training workshops on detection and prevention of the import of Ozone depleting substances, thus extending its responsibility not only to the society around us but also to the world at large.