19 August 2009
Pradit launches major Customs Department reforms to facilitate trade
; Biggest reform package since establishment of the Customs
Department in 1874
; Promises to make dealing with the Customs Department easier,
more transparent, and more predictable for importers and exporters
; To provide advance rulings on product classification and valuation
methods to help businesses better estimate importation costs
; Prepares new law to submit to Parliament: proposed new law to
make it easier for importers to get impartial, judicial review of
Customs Department rulings and force transparency and
Bangkok, (19 August 2009) – Deputy Finance Minister Pradit Phataraprasit, who oversees the Customs Department, today announced the biggest overhaul of the way the Customs Department works since its establishment, over 135 years ago. The reforms are designed to make the Customs Department increasingly a service provider facilitating trade, and less of a collector of duties.
“My vision is for the Customs Department to transition from „duty collector to trade facilitator‟. The world is moving to a free-trade environment and we have to adjust to those realities,” said Deputy Finance Minister Pradit. “Not only that, with 70% of
Thailand‟s GDP generated by foreign trade, the Customs Department must become
easier to deal with if we want to boost foreign trade and accelerate economic recovery,”
He said, “The Customs Department must not be a burden on importers and exporters
who are making us a successful trading nation. Importers and exporters need consistency and predictability, as well as transparency and speed in their dealings with the Department, and that‟s what these reforms are designed to provide.”
Mr. Pradit said that he had conducted eight meetings with representatives of various trade associations and Chambers of Commerce.
“The most common complaint is that companies cannot get the Customs Department
to confirm exactly how a particular product will be classified and its duty calculated prior to the product being ordered or arriving at Customs. This is a huge disincentive to
trade since businesses cannot calculate their real costs until after they have already committed to investing in a piece of machinery or to ordering a product.
“Currently, people dealing with Customs may even find that the same product can have its dutiable value calculated differently from shipment to shipment. Another common problem is that, after goods arrive, importers may discover that they need special certificates or other permits to import the product, which may be complex or time-consuming to obtain,” he said.
Fundamentally important issues
“These are fundamentally important issues and are completely in line with my vision to
make the Customs Department a service provider to facilitate trade. I recently appointed a new Director-General of the Customs Department, Mr. Wisut Srisuphan, who can help me deliver on these needs based on his deep knowledge of our Customs system, and his impeccable integrity. We have been working together and have found a way to solve these problems,” he said.
“The Customs Department will, in future, be able to provide businesses advance rulings on products and materials that they would like to import. The Department will
confirm the duty classification and valuation method of products in advance of their importation. It will also commit to a single, consistent valuation method for customs duties on a product, regardless of when and how it is imported. In addition, officers will also be able to inform importers of all the relevant permits that are needed to import a product into the country. These are services that we will provide our customers as a
stway of facilitating trade, beginning 1 September,” Mr. Pradit noted.
Mr. Pradit said that he would also be seeking Cabinet permission to submit to Parliament a new draft Customs Law that will make the rulings of the Customs Department more open to scrutiny by the judiciary.
According to Mr. Pradit, “We also frequently hear complaints of how judgements by
Customs seem to be arbitrary. The new law can help encourage transparency and consistency in all rulings by allowing citizens to appeal for independent judicial review more easily. The previous draft of the law required a fixed, „five-times import value‟
penalty to be imposed on an importer if he lost a case in court, while the penalty would be substantially lower if the importer settled at Customs. This made any decision to go to court a difficult one. Now, we are proposing to reduce the ceiling to be „four-times
import value, as well as give judges complete flexibility on assessing penalties to be anything up to four times value so that they can recognise genuine mistakes.”
Mr. Pradit added that the Customs Department will also introduce a new website that
can provide citizens practical information that they need.
“Many of the Chambers and trade associations with which I have spoken have cited the
Singapore Customs website as the region‟s gold-standard for a Customs website. We
are studying ways to reapply the features of that website and have our new website operational within September 2009,” he said.
The Director-General of the Customs Department, Mr. Wisut Srisuphan, said, “We are
also making many process improvements that will cut out a lot of re-work that wastes the time of shippers by eliminating redundant forms that duplicate information
submission to the Department, such as the Cargo Control Form used at Suvarnabhumi Airport.”
He said that the Customs Department would also make amendments to the draft law to allow importers bond-based monthly payments so that they do not have to waste time
on repetitive processes for each shipment, but can consolidate their payments to the Customs Department through a single payment at the end of the month from a bond that they post with the Department.
“Additionally, we are now accelerating the implementation of a „Single Window‟ for
paperwork that involves multiple agencies and ministries. Shippers will be able to work with a single point of contact at the Customs Department to do all their paperwork rather than having to run from one ministry to another,” he said.
More Revenue, too
Mr. Pradit said, “We have already conducted some pilot trials where goods clearances have been facilitated and accelerated, and have found that far from seeing any reduction in revenues, the Customs Department actually ends up collecting more.”
“As a result of these reforms, I expect the Customs Department also to increase its revenues for the State by around 15%, showing how working transparently to facilitate trade can be a win-win arrangement where the private sector can work with greater convenience, while the State can also increases its revenues,” he said.
The Next Big Thing
“Once we have implemented these reforms, the next big thing on a three-to-five year
horizon is to support international trade at our land border crossings. We will improve the skills of Customs officers at border posts that are now dealing with over-land imports and exports with neighbouring countries. We need to ensure that they will have the know-how to deal with more complex transactions that involve trade in goods originating from countries beyond our neighbours, such as from China and Vietnam,”
“Next to these, we will also work with our ASEAN neighbours to encourage them to set up a „Single Window‟ system, too That should make trade easier for our exporters,”
said Mr. Pradit.
He said that these will require changes in laws, the training of people, and the installation of systems which will be the Customs Department‟s next priority after the current reforms have been implemented.
For further information please call:
02-271 2759, Ministry of Finance / 081-700 8489, Khun Pairoj