APEC Meeting Documents s6

2005/SOM3/SCCP2/036

REPORT OF THE SECOND MEETING OF THE 2005 APEC SUB-COMMITTEE ON CUSTOMS PROCEDURES Gyeongju, KOREA 7-9 SEPTEMBER, 2005

INTRODUCTION

1. The APEC Sub-Committee on Customs Procedures (SCCP) held its second Meeting for 2005 on 7-9 September at the Hotel Hyundai Gyeongju, Korea.

2. Delegates from Australia; Brunei Darussalam; Canada; People’s Republic of China (China); Hong Kong, China; Indonesia; Japan; Republic of Korea (Korea); Mexico; New Zealand; Papua New Guinea (PNG); Republic of the Philippines (Philippines); Russia; Singapore; Chinese Taipei; Thailand; United States of America (USA); and Viet Nam attended the Meeting. APEC Secretariat also attended the Meeting. The List of Participants appears as doc.no.2005/SOM3/SCCP2/037.

3. Mr. Chin-Heon Park, Deputy Commissioner of the Korea Customs Service (KCS) delivered a keynote speech to open the 2nd SCCP Meeting in 2005, starting by welcoming all of the delegates to the Meeting.

4. He praised the SCCP for having since its establishment in 1994 been considered as one of the most productive sub-committees among the 11 CTI fora, greatly contributing towards increasing security and facilitating trade in the Asia Pacific region.

5. He cautioned against lessened guard and complacency concerning unrelenting terror risks, and various transnational crimes such as money laundering, drug trafficking and infringement on IPRs, constantly posing threat to the security of the APEC region.

6. In particular, for the secure November APEC Economic Leaders' Meeting and related meetings, the Korea Customs Service requested the other Member Economies to share information and join the KCS’s efforts in the fight against terrorism, taking an emphasized note of the adoption at the SCCP I Meeting this year of the APEC Security Framework as a new Collective Action Plan (CAP). 7. He mentioned that KCS has been continuously endeavouring to achieve the twin goals of increasing security and facilitating trade, by introducing Single Window, the Internet-based clearance portal, 24-hour clearance system, the comprehensive surveillance information system as well as container-scanning equipment, and most recently, Customs Modernization Plan, which aims at achieving Invisible Ubiquitous Customs by 2010.

8. Ms. Young-Ran Choi, Director of Trade Cooperation Division of the Korea Customs Service chaired the Meeting.

AGENDA 1:CHAIR’S OPENING REMARKS

9. The Chair welcomed the delegates to the Second SCCP Meeting of 2005 and she, in her opening remarks, briefly highlighted key achievements made in the first SCCP meeting held in Seoul in February, such as creation of two new CAPs, and elevation of five existing CAPs out of 14 to the next stages after successful implementation.

10. She added that our cooperation has intersessionally continued to further and advance the simplification and harmonization of customs procedures, with its outcomes being evident as in the SCCP Chair’s Report to CTI II Meeting held in Jeju, Korea. A brief moment was also taken by her to thank those who spared no efforts and gave useful advice to make the ACBD a resounding success.

11. She also thanked Member Economies for their active contributions through constructive opinions and proposals towards the successful convening of the Workshop on the “Implementation of APEC Framework based on the WCO Framework of Standards to Secure and Facilitate Global Trade,” and the Informal Head of SCCP Delegation Gathering, which addressed “setting SCCP priorities,” the ABAC Customs Handbook, and model measures for trade facilitation in RTAs/FTAs. The Opening Remarks appear as doc.no.2005/SOM3/SCCP2/001.

12. Mr. Kunio Mikuriya, Deputy Secretary General of the World Customs Organization, was invited to the SCCP Meeting on September 7, 2005. His contributory remarks focused on

 2 WCO’s current four priorities: i) the enhanced security and facilitation of supply chain, and the WCO Framework; ii) WTO negotiations on trade facilitation; ii) capacity building; and iv) anti-counterfeit activities. He appreciated the well-established close linkage between WCO and SCCP, the latter of which has endeavoured to assure the consistency with WCO standards and related internationally accepted standards, leading to its significant contribution to the global customs community.

13. He encouraged the APEC forum to support to the utmost extent the aforementioned four WCO agenda items. In particular, WCO is willing to assist and coordinate with the APEC Members in carrying out the APEC Framework Capacity Building Questionnaire, which is a parallel exercise to WCO’s self-assessment checklist. While he emphasized enhanced cooperation with trade community, strengthened understanding of customs requirements and improved compliance, and deepened cooperation with other border agencies, he urged the SCCP Members to continue to be actively involved in the WTO negotiations in providing trade negotiators with inputs on the need for enhanced cooperation between WCO and WTO, and capacity building.

14. Informing the Meeting of the creation of the new Directorate of Capacity Building in WCO, he conveyed WCO’s readiness to continue its cooperation and coordination with the APEC in a coherent manner in the important agenda. The other area, where the enhanced cooperation of WCO with the APEC is essential, is combating against counterfeiting, taking into account the past seizure record that the border enforcement measures against counterfeited and pirated goods are most efficient.

AGENDA 2: ADOPTION OF THE AGENDA

15. The agenda was revised as shown in doc.no. 2005/SOM3/SCCP2/002.

AGENDA 3: REPORTS AND DISCUSSIONS OF THE RELATED MEETINGS

 3 3.1 Report on APEC Meetings during Intersession.

3.1.1 Second Meeting of SOM/CTI of 2005 (APEC Secretariat)

16. APEC Secretariat briefed on the key SCCP-relevant outcomes of the 2nd Committee on Trade and Investment Meeting (CTI II) held in Jeju, Korea, which appears as doc.no.2005/SOM3/SCCP2/003.

17. CTI’s discussion on trade facilitation centered on the following key areas: i) To draw up a roadmap to meet the APEC trade facilitation objectives by 2006; ii) To develop tools to help Economies to better monitor and implement trade facilitation actions and measures; iii) To identify common capacity building needs in trade facilitation; and iv) To improve annual trade facilitation reporting template. CTI also agreed that CTI and/or some of its sub-fora including SCCP should try to participate in anti-corruption and transparency endeavours.

18. CTI took note of the intersessional work undertaken by the SCCP since CTI 1 in support of the CTI 2005 priorities in such work areas as national workshops on WTO and trade facilitation issues; Development of an in-depth paper and a capacity building program to follow up on the in-principle adoption of the “Implementation of an APEC framework based on the WCO framework of standards to secure and facilitate global trade” as a new Collective Action Plan (CAP); Workshop on the Implementation of WCO Data Model in March in Singapore; and SCCP’s on-going work with ABAC to develop a customs handbook that would contain business-critical information on advance rulings and administrative reviews.

19. In particular, the CTI Chair thanked the SCCP Chair for responding positively to ABAC’s request on the customs handbook, and he also noted great interests by ABAC in proposed “new” CAP on the implementation of an APEC framework based on the WCO framework of standards to secure and facilitate global trade. The CTI endorsed the four budget proposals submitted by the SCCP for BMC II. The Meeting was informed that the schedule of APEC hosts to 2010 has been finalized (Viet Nam next year and subsequently Australia, Peru, Singapore and Japan).

 4 3.2 Report on Other SCCP-related Meetings

3.2.1. WCO (Asia-Pacific) Regional Activities (China)

20. The Meeting was briefed on the significant work and achievements of WCO and the Asia Pacific region since the last SCCP meeting this year by China, Vice Chair for the WCO Asia Pacific (AP) Region.

21. The WCO Council met on 23-25 June for their 105th /106th Council Sessions, and adopted the Framework of Standards to Secure and Facilitate Global Trade (FoS), which provides for a platform to fight against the global threat of terrorism and facilitate legitimate global trade, and consists of the 17 standards that form an integral part of the Framework. Approximately 100 WCO Members signalled their intent to implement the Framework by depositing Declarations of Intent with the Secretariat. Amongst them there are 15 WCO Asia Pacific Regional Members.

22. The 3rd High Level Strategic Group (HLSG) meeting was held on 25-26 April 2005 in Brussels, and it finalized the presentation of the Framework to be submitted to the Policy Commission (PC). Other highlights of the meeting included the future of the HLSG after the Council Sessions in June, the management mechanism for the FoS and capacity building strategy.

23. The WCO Regional Consultative High-level Meeting on Framework of Standards was held in Hong Kong on 22 & 23 March 2005, attended by representatives from 24 regional Member administrations and the business representatives. Some of participants requested for more clarity to coordinate the two pillars and all modes of transport, and many delegates suggested that capacity building and technical assistance would be required and pilot projects in sub-regions may be a good way forward.

24. The 53rd Policy Commission Session was held from 20-22 June, and the meeting discussed the importance of capacity building strategy in support of the FoS, and the PC endorsed the creation of a new directorate for capacity building.

25. The 24th Session of WCO Enforcement Committee was held in

 5 Brussels on 14-18 February 2005, and it adopted the report of the 23rd Session of the Enforcement Committee (EC), and noted the briefings on the progress of HLSG and 52nd Policy Commission meeting in December 2004.

26. The Second Meeting for the Heads of the Regional Training Centers was held on 21 - 22 March 2005 in India, and it was agreed that the development of a compendium of Regional Training Centers is the first step to develop a best practice model for Customs Training Centers. Regional Office for Capacity Building (ROCB) conducted numerous capacity building workshops, seminars and programmes.

27. On 4-22 July, RILO A/P held the second attachment training since its relocation to Beijing, and it also dispatched two expert missions to Pakistan Customs and Indonesia Customs respectively to deliver a Customs Enforcement Network (CEN) training course, with purpose of strengthening information exchange and quality seizure report. Document appears as doc.no.2005/SOM3/SCCP2/004.

3.2.2. APEC Heads of Customs Informal Gathering (Chair)

28. With attendance of 16 APEC Member Economies, the Informal Head of SCCP Delegation Meeting discussed setting SCCP priorities; model measures for trade facilitation in RTAs/FTAs, and the ABAC customs handbook.

29. Following up on the suggestion made by Australia and supported by New Zealand, Hong Kong, China, Japan and Canada at the 1st SCCP Meeting that a paper be prepared for the 2nd SCCP meeting about ways the SCCP can respond to the yearly CTI priorities, Chair invited Australia to elaborate on the proposal, “setting SCCP priorities,” and varied but mostly supporting and additional views and comments were shared among the 16 participating Member Economies.

30. Australia emphasized that SCCP should be closely linked with and relevant to broader APEC priorities through quick identification of latest APEC agendas, instructions and expectations, and that SCCP’s agenda should be flexible and be reshaped to meet these new priorities. To contribute to priority setting, usefulness of a creation of an informal working

 6 group gained majority support of the participating Economies.

31. As to the request for the SCCP’s consolidated views as customs experts on a draft model measures for trade facilitation in RTAs/FTAs from the Australian SOM Members, the draft received a general acceptance from Member Economies, while some Members raised incorporation of reference to security of trade, addition of origin verification process based on risk management principles, unacceptability of point 2 under “Release of Goods,” ‘release of goods within a specified days and hours,’ and “Express Shipments.”

32. Lastly, related to Customs Handbook of APEC Business Advisory Council (ABAC), 9 Member Economies, which did not yet respond to the request from Trade and Investment Liberalization and Facilitation (TILF) Working Group, ABAC for assistance in the publication of the Customs Handbook, a concise one-stop depository of customs and trade facilitation related information which will be distributed to the APEC CEO Summit in Busan, Korea, were encouraged to submit their inputs to the ABAC by the extended cutoff date of September 16, 2005 at the latest. Document appears as doc.no.2005/SOM3/SCCP2/005.

3.2.3. ASEM Customs Activities (Singapore)

33. The 8th ASEM Customs Procedures Working Group (PWG) Meeting was chaired and hosted by Singapore from 27-28 April 2005, with Customs officials from 21 Asian and European countries discussing the Trade Facilitation Action Plan (TFAP) deliverables, trade facilitation, the Revised Kyoto Convention, paperless trading, time release survey (TRS) and integrated clearance systems. Korea highlighted the Seoul Initiative Action Plan which aims at simplifying clearance procedures and strengthening Customs cooperation in East Asia, which was endorsed at the ASEM DG-Commissioners Meeting in June.

34. The Meeting agreed to circulate a questionnaire to collate information on ASEM Customs’ areas of strengths where Member countries could provide expertise on as well as areas of needs where Member countries may need assistance. Results of this questionnaire were presented by Japan at the DG-Commissioner’s Meeting. Poland volunteered to take over

 7 the chairmanship of ASEM PWG for the next 2 years. The next Meeting is likely to be held in the second half of 2006.

35. The European Commission chaired the 8th ASEM Customs Enforcement Working Group (EWG) Meeting on 30 & 31 May 2005 in Brussels, Belgium, separated into two working groups, namely “Fight against Fraud” and “Security, Trade Facilitation and Modern Control Methods (including Intellectual Property Rights (IPRs) and risk analysis),” the latter group of which decided to focus on supply chain security and intellectual property rights for the period 2005-2007.

36. The Meeting emphasized Customs’ important roles in such areas as ensuring security of the supply chain and combating the counterfeiting of goods through close co-operation between administrations, aided by modern working and control techniques. Presentations focused on IPR, security, the evolution of control methods and customs fraud, mutual cooperation and technical assistance. Korea will host and chair the 9th EWG Meeting in 2006.

37. The 6th ASEM Customs DG-Commissioners Meeting took place chaired by UK in Peebles, Scotland from 27-28 June 2005, and presentations therein dealt with customs procedures and trade facilitation, the Seoul Initiative Action Plan, recent developments in the WTO, the Container Security Initiative, the Cocaine Conference and the issue of combating counterfeiting.

38. In particular, the Meeting agreed on a Statement on “Combating Counterfeiting” signifying ASEM Member countries’ intent to clamp down on counterfeiting activities and prosecute offenders, and it also acknowledged the important role the international standards can play in improving risk targeting capabilities and security throughout the international trade supply chain. It was also announced that an Asian country will host the next ASEM DG-Commissioners meeting in 2007. Document appears as doc.no.2005/SOM3/SCCP2/006.

3.2.4. ASEAN Director-General of Customs Meeting (Brunei Darussalam)

39. The Meeting took note of key outcomes of the 13th Meeting of the ASEAN Directors-General of Customs (Customs DGs Meeting) which took place in and hosted by Brunei Darussalam on 6 - 8 June 2005, attended by all ASEAN Member countries.

 8 40. The Strategic Plan of Customs Development Plan (SPCD) of 2005 - 2010 was endorsed by ASEAN Finance Ministers in April 2005, and Country Coordinators are developing 15 specific programs of the SPCD, which were also approved by the ASEAN Directors-General of Customs in establishment of ASEAN e-Customs and ICT applications in Customs.

41. ASEAN Customs Directors-General reiterated their commitments to implement the ASEAN Single Window, and the ASEAN Framework Agreement on the integration of eleven priority sectors through concrete actions by Customs Administrations, with major impetus on the ASEAN Customs Declaration Document and standardization of information requirements by relevant agencies. It also adopted the ASEAN Cargo Clearance Model and its documentation for implementation. The 13th Customs DGs Meeting also conducted consultations with China, Korea, Japan, and Australia to strengthen the collaboration among them, and with the private sector. Document appears as doc.no.2005/SOM3/SCCP2/039.

3.2.5. Regional Customs Cooperation of Latin America

3.2.5.1. Activities of the America's Customs in the WCO Framework (Chile)

No report on this item, due to an unannounced absence of a Chilean delegation.

3.2.5.2. Multilateral Agreement of Cooperation and Mutual Assistance between the Customs National Administrations of Latin America, Spain and Portugal (COMALEP) (Mexico)

42. The Latin American Customs agreed that all countries of the Region will be involved in and committed to the implementation of the WCO Framework on Security, and the Council of the Customs National Directors of Latin America entrusted the Customs Administrations of Chile and Mexico to design a matrix to know the current status of the implementation of all countries in Latin America. The results of the matrix, and the achievements made by each country regarding security, will be analyzed at the next XXVI COMALEP meeting that will be held on 24-27 October 2005, in Pucón, Chile.

 9 43. Besides the security issue, the XXVI COMALEP meeting will compose two parallel fora: Customs- Business Partnership, and Chiefs Meeting of Fight Division against Fraud. Document appears as doc.no.2005/SOM3/SCCP2/008.

3.2.6 Other Reports (if any)

No report on this item

AGENDA 4: REPORTS ON STAGE 1 CAP

4.1 Simplification and Harmonization of Customs Procedures based on the (Revised) Kyoto Convention (New Zealand)

44. New Zealand presented a summary status report on this CAP item, which appears as doc.no.2005/SOM3/SCCP2/009. As of August 2005, 38 WCO Members including six APEC Economies have acceded to the Revised Kyoto Convention (RKC). The six APEC Economies that have acceded to the Body and General Annexes are Australia, Canada, China, Japan, Korea and New Zealand.

45. Two more WCO Members have yet to accede to the RKC for it to come into effect, and both Malaysia and Thailand have stated that they are close to completing the accession process.

46. In view of the lack of recent activity under the Pathfinder, New Zealand proposes that when the revised Kyoto Convention enters into force, the Pathfinder is rolled into the RKC CAP, and all future assistance is carried out as part of the CAP.

4.2 Common Data Elements

4.2.1 Harmonized Data Elements: Workshop on Implementation of World Customs Organization Data Model (Canada); and 4.2.2 Report of the meeting of SCCP Common Data Elements Working Group (Canada)

47. The 5-day APEC Workshop on the Implementation of the World Customs Organization (WCO) Customs Data Model (CDM) was held to assist APEC Economies in their efforts to implement harmonized and simplified data sets in accordance with

 10 international standards, at APEC Secretariat in Singapore from March 7 – 11, 2005.

48. Co-sponsored by Canada, Australia and Japan, the highly successful workshop brought together a group of thirty-one customs import/export policy and systems experts representing 17 APEC Economies for presentations and practical examples of the activities required to implement the WCO Customs Data Model in their respective administrations.

49. The key outcomes of the workshop, including ensuring that APEC Economies are involved in the development of the third version of the WCO Customs Data Model by having Economies map their Customs data requirements against the WCO CDM V2.0 to determine and define any additional data requirements for customs processing by APEC Economies, and to develop standardized data sets or single windows in collaboration with other government agencies to map their data requirements to the WCO CDM, which includes co-operatively mapping the E- cert Export Health Certification data requirements.

50. Member Economies were encouraged to work towards developing and implementing the WCO Customs Data Model and updating their information for the CAP item 10 on the CAP matrix. E-mail working group as a recourse is also available for obtaining assistance for Economies facing difficulties in data- mapping exercise and information sharing.

51. With regard to some Member Economies’ development/progress since the last SCCP Meeting, Australia is extending its data set project to all other agencies involved in the trade process, while Korea stated that they had begun the study project to compare CDM V2.0 to their current system which will require some changes to accommodate the WCO CDM, and they have begun introducing Single Window. Canada indicated that it will expand the use of WCO data set and messages in its commercial processes in December 2005 with introduction of Cargo Report Import Message for the reporting of all cargo shipments as part of the Advance Commercial Information Initiative. Documents appear as doc.no.2005/SOM3/SCCP2/010 & 011.

4.3 Time Release Survey (TRS) (Japan)

 11 52. Japan briefed the Meeting on status update on technical assistance activities for the CAP, “Time Release Survey. Time Release Survey (TRS) is a useful tool to identify and resolve the bottlenecks in the customs-related procedures in order to improve their efficiency and effectiveness. The implementation of TRS, as a meaningful means for self-assessment and to find a prescription for further trade facilitation, directly links to trade facilitation and enables business people to reduce costs and time in the transaction of goods.

53. Three APEC/WCO workshops were carried out between the end of April and the beginning of May 2005 as follows with participation of the WCO experts: i) workshop on TRS in Malaysia (25-26 April 2005); ii) workshop on TRS in Thailand (28-29 April 2005); and iii) workshop on TRS in Indonesia (2 May 2005). A total of 147 participants from not only Customs but also Port Authority, other related agencies and private sector attended the workshops. This project met the needs of the targeted beneficiaries of the three Economies and provided them with clearer insights on the merits and other various aspects of TRS.

54. Japan proposed a new technical assistance project on TRS at the 2nd BMC Meeting 2005 for four national workshops; China, Philippines, Papua New Guinea and Peru. After obtaining approval of the APEC Ministers Meeting, the new project can be launched from 2006. Document appears as doc.no.2005/SOM3/SCCP2/012.

4.4 Implementation of APEC Framework based on the WCO Framework of Standards to Secure and Facilitate Global Trade (USA); and 4.4.1 Report of the SCCP Workshop on the WCO Framework (USA)

55. The USA briefed the Meeting on the implementation process of APEC Framework based on the WCO Framework of Standards to Secure and Facilitate Global Trade, which was adopted as a new CAP in principle at the 1st SCCP Meeting. The USA intersessionally developed and circulated an in-depth paper along with APEC Framework Capacity Building Questionnaire to gather Members’ comments. No comment prompted the USA to suggest moving forward with the CAP item, leading to removal of “in-principle.” Document appears as

 12 doc.no.2005/SOM3/SCCP2/013 & 040.

56. To further advance and develop the APEC Framework for its eventual full implementation, a workshop took place arranged by the USA on 6 September 2005 to deepen the Members’ understanding of it, with participants including the Deputy Secretary General of the WCO and the private sector representative sharing experiences and knowledge. Economies who gave presentation on how they have implemented aspects of the Framework were Mexico under the “Use of Technology,” Canada “Advance Information Requirements,” New Zealand “Secure Export Partnership Program,” Korea “Enhancements to Port Security and Container-handling Procedures to Meet Requirements, in particular as emanating from 11 Standards of the Pillar 1,” and Australia “Targeting and Profiling of Cargo.”

57. Hong Kong, China, noting that not every economy is able to implement all the standards in the WCO Framework, recapitulated the remarks made by the Deputy Secretary General of the WCO concerning the timeframe for implementing the WCO Framework. Members are aware that they will be able to adopt the ‘best endeavour’ approach for the compliance of each standard, and there is no fixed timeframe for the Framework implementation.

58. Hong Kong, China noted the need for better understanding of the readiness as well as difficulties of economies in taking forward the APEC Framework as a Collective Action Plan of the SCCP.

59. The next step will be the completion of the APEC Framework Capacity Building Questionnaire circulated immediately before the Meeting to evaluate Member Economies’ implementation capacity of the WCO Framework. Taking note that thoroughly- answered questionnaire will provide important input to the CAP coordinators, the USA requested Member Economies to submit the completed questionnaire by 1 November 2005, on a voluntary basis, since it will lay the groundwork for a multi-year capacity building program.

60. To further emphasize the importance of the WCO Framework, the USA referred to the June 2005 Statement of Ministers Responsible for Trade (MRT) in which they welcomed the in- principle adoption of and support the implementation of the

 13 APEC Framework, and showed their commitment to the implementation of the Framework to report the progress to Leaders in November, 2005. The USA concluded its report by mentioning ABAC’s support for the APEC Framework, which will be included in their report to Leaders this November.

4.5 Volunteer Presentations on Stage 1 CAP by Members

61. No report on this item

4.6 Technical Assistance Overview/ Strategic Planning

4.6.1 CAP Management (APEC Secretariat)

62. APEC Secretariat reported on the status of on-going and completed APEC-funded SCCP-related projects for 2003 – 2005 and of current CTI project proposals. The BMC which convened on 23 - 24 August 2005 approved and passed onto the CTI all of the four project proposals including the SCCP 2006 Blueprint which was moved to the TILF project proposal. Projects in 2005 showed smooth progress, with 2 in preparation stage, 3 being in progress, and one finalized.

63. Eight out of ten 2004 and 2003 APEC-funded projects were completed, with the other two at being in progress. A table to illustrate the status of the ongoing and concluded projects appears as doc.no.2005/SOM3/SCCP2/014.

64. Canada encouraged Member Economies to check the correctness and accurateness of the CAP Evaluation and Assessment Matrix to keep it most updated, while informing the Meeting that the two new CAPs adopted at the 1st SCCP Meeting will be added to the matrix. Document appears as doc.no.2005/SOM3/SCCP2/014.

65. Viet Nam announced that it would accede to the Body and General Annex of the Revised Kyoto Convention at the end of this year.

AGENDA 5: STAGE 2 CAP ACTIVITIES

 14 5.1 Harmonization of Tariff Structure with the HS Convention (Japan)

66. By the year 2000, all APEC Member Economies had applied the HS 1996 Version to their tariff schedule, and the 2002 Version of the HS Convention has already been adopted by all of APEC Member Economies. The 2007 Version of HS Convention adopted in June 2004 would be put into effect starting January 2007; therefore, this CAP item should be modified to implement HS 2007 in the near future, and with further discussion to be at the SCCP in 2006.

67. For the technical assistance for smooth implementation of the HS Convention, Japan has implemented many technical assistance projects based on the requests from Member Economies as follows:

. In 1998, HS-1996 regional workshop in the Philippines with 10 Economies . In 1999, national workshops in PNG and Viet Nam . In 2000, national workshops in Brunei and the Philippines . In 2001, HS-2002 regional workshop in Thailand with 11 Economies . In 2002, national workshops for customs laboratories in Viet Nam, China, Chinese Taipei, and Peru . In 2003, national workshops for customs laboratories in Thailand and Indonesia

68. To further promote capacity building in developing Economies for the smooth implementation of the HS Convention, Japan will hold four national workshops; Chile, Indonesia, Malaysia and Peru, in year 2005/2006, and it is also in the process of scheduling two workshops in Chile and Peru in mid November 2005, and also preparations for other two workshops in Indonesia and Malaysia are now in progress. Document appears as doc.no.2005/SOM3/SCCP2/015.

5.2 Public Availability of Information on Customs Laws, Regulations, Administrative Guidelines and Ruling provided to the business sector on an ongoing basis (Hong Kong, China)

69. To update Members’ progress in disseminating Customs information to the public, a survey was conducted in May 2005, with 16 Members having responded to the survey, which are

 15 summarized as follows:

. 13 out of 16 respondents have enhanced their dissemination instruments, such as setting up specific telephone lines, provision of free-of-charge publications on customs formalities, rules and regulations, and increasing meeting sessions with the business sector. . 2 more Members have established their Customs websites, making the total of 16 having a Customs website. . 12 Members have provided contact points on their websites. . Dissemination instruments commonly used by Members are Customs website, followed by pamphlets and signboards, and telephone service.

70. In particular, the establishment of Customs website is an essential step to fulfil the Transparency Standards on Customs Procedures, and Members which have not yet established their Customs websites are encouraged to develop one as soon as possible.

71. The “Best Practices” handbook has been updated, and Canada will be requested to upload the revised handbook onto the SCCP website. Document appears as doc.no.2005/SOM3/SCCP2/016.

5.3 Paperless Trading (Australia)

72. Australia delivered a presentation on the Standardized Data Set (SDS) Project. The Australian Customs is undertaking as a first step towards building Single Window for international trade. Benefits of Single Window are well understood across the world to the extent that it was included in the agenda of many international organizations such as UN/CEFACT, APEC, and WCO, and is being considered in the WTO negotiation on Trade Facilitation.

73. In Australia, a single international shipment may require submission of similar data to many different government agencies, Commonwealth and State, which in turn may pass the data element to other agencies. To address this inefficiency, the Australian government endorsed in August 2004 the SDS Project, which is being coordinated by Australian Customs as a government agency most closely related with trade, and consists of two deliverables: the Australian Standardised Data Set (Australian SDS) and the development of business options

 16 for a domestic Single Window for international trade building on the Australian SDS.

74. The Australian SDS is under development for the submission of data related to Australia’s requirements for international trade based on the WCO Data Model. The SDS will provide many benefits including improved interoperability among participating agencies since they use the same data, and the possibility of using one country’s export data as the other’s import data. As the 2nd deliverable, viable, cost-effective, and beneficial options for domestic Single Window are being developed based on the consultation between the government agencies and the industry.

75. Since its initiation in January 2005, the SDS Project has progressed significantly resulting in development of SDS methodologies in cooperation with other government agencies, compiling of business cases, agency-industry workshop, study visits to Singapore and Malaysia, drafting of Australianized Data Set, etc. Document appears as doc.no.2005/SOM3/SCCP2/017.

5.3.1 Internet-based Clearance Portal System (Korea)

76. Korea made a presentation at the meeting on its automation system launched in 1974 to meet the needs of changing Customs environment. The automation of Customs was adopted as a five-stage plan on the following: Computerization of trade statistics, cargo clearance system, EDI system, Information management system, and Internet-based clearance system.

77. Korean delegate pointed out that the concept of the portal system is easy-access and the provision of useful and in-time information to traders. The expected benefits are lower clearance time and logistics costs, reduced expenses on document transmission, increased effectiveness by providing customized information and the establishment of the basis for introducing Single Window System. As traders can easily make an import/export declaration and check the process through web browser, the System is user-friendly, especially for SMEs.

78. The Internet-based automation system was set up as a three-

 17 year plan starting from January 2003. The plan will be completed in 2005 to establish an integrated service network with other government agencies related to Customs matters. Document appears as doc.no.2005/SOM3/SCCP2/018.

79. China also briefly mentioned its E-port system, which was developed by Chinese government with China Customs administrations playing a leading role, and a DVD on this project was distributed for Member Economies’ reference.

5.4 Implementation of Clear Appeals (Canada)

80. Canada and the Philippines proposed moving CAP item # 7, “Introduction to Clear Appeals Provision” from Stage 2 to Stage 3, taking into accounts that following the call for updates to the CAP both in January 2005 and in August 2005, there were no requests for changes/updates/action for this CAP item, which is well reflected in the CAP matrix.

81. After reviewing of the status of CAP #7 in the Assessment/Evaluation Matrix and according to the definitions for completed (Stage 3) CAP items, both Customs Administrations from Canada and the Philippines believe that this CAP item should be moved to Stage 3. New requests for activity can be made, but it will be the responsibility of the requesting Economy to formulate a proposal. Both co- shepherds of this CAP item proposed to submit a joint final progress report on this CAP item, for presentation at the first 2006 SCCP meeting. The Meeting reached the agreement to elevation of this CAP from Stage 2 to Stage 3. Document appears as doc.no.2005/SOM3/SCCP2/019.

5.5 Integrity (Hong Kong, China)

82. Hong Kong, China briefed on its experience in promoting customs integrity, which is recognized as an important factor in and directly relevant to the STAR initiatives and Leaders’ declaration for fighting terrorism and promoting growth. Hong Kong Customs shared with the Meeting its experience in educating its officers on proper conduct and discipline.

83. Hong Kong Customs has published a guidebook entitled, “Code

 18 on Conduct and Discipline.” The book is now in its 4th edition, in which contents concerning acceptance of advantages, conflict of interests, and staff indebtedness have been expanded and clarified. An educational video produced in 2005 by Hong Kong, China to promote a culture of integrity was shown during the Meeting. Document appears as doc.no.2005/SOM3/SCCP2/020.

No report on this item

84. 5.6.1 Self-Assessment Program (Korea)

85. Korea introduced the Meeting to its Self-Assessment System starting with the explanation on its background. The Economic expansion led to the increased number of transactions to be audited by customs for duty collection, while the customs staff to deal with the job did not increase as much. Besides, the old way of auditing in which a customs officer visits a trading company to audit its duty payment created tension between customs and audited traders and had a possibility to lead customs officers to be corrupt.

86. Unlike the old system where customs select the companies to be audited and imposed heavy penalty of 20% for unpaid duties, under the new system, traders voluntarily report to customs their unpaid duty amount and pay only 10% of penalty for that. The initial resistance and doubt in the new system were addressed by continuous dialogue and consultation between customs and traders.

87. The Self-Assessment System proved to be a win-win measure for both customs and traders, which is evident by increased revenue and improved efficiency in auditing for customs, and reduced amount of penalty for traders. The system is evaluated to have enhanced business stability by strengthening companies’ autonomy, while eliminating corruption factors of customs officers by improving transparency in audit procedures. The system will be applied to more businesses if it goes well, which will facilitate the customs-business cooperation and contribute to building a corruption-free society. Document appears as doc.no.2005/SOM3/SCCP2/021.

 19 AGENDA 6: Stage 3 CAP Activities

6.1.1 Seminar on Customs Clearance Facilitation of CAPEC and China Customs (China)

88. China briefed on the Seminar on Customs Clearance Facilitation of CAPEC and China Customs which was held from 1-3 June 2005 in Dalian, China. It was co-hosted by the General Administration of China Customs (GACC) and the Conference of Asia Pacific Express Carriers (CAPEC), with participants from the GACC, Customs Districts, major express enterprises, and the WCO attending.

89. Various topics were discussed at the seminar including: Control & Inspection on Express Shipments Conducted by China Customs; Bonded Logistics System Implemented by China Customs; E-Port Operation and Development of China Customs; WCO Immediate Release Guidelines and Their Relationship with the Revised Kyoto Convention; Australia Customs Compliance System; Evolution of the Air Express Industry and Their Role in International Trade; Benchmarks and Best Practices in Clearance of Air Express Consignments; Customs and Trade Facilitation - Securing and Facilitating Trade in Global Economy; and Future of Trade Facilitation for Express Shipments in China.

90. The seminar was a resounding success due to good organization and planning, resulting in deepened mutual understanding and partnership between customs and express enterprises. The both side shared the need that the seminar should be a fixed event and further promoted to learn from each other, improve the work level, accelerate express clearance facilitation, and push the level of compliance and partnership forward.

91. For customs, the seminar provided a good chance to explain its laws, rules, and regulations to the express carriers, whose inputs will in turn contribute towards developing and advancing customs work. On the other hand, the express enterprises

 20 used the opportunity to update customs on the industry’s latest trend and development, while acquainting themselves further with customs provisions, procedures, and requirement. Document appears as doc.no.2005/SOM3/SCCP2/022

AGENDA 7: SCCP MECHANISM ON IMPLEMENTATION OF CUSTOMS-RELATED WTO AGREEMENTS (JAPAN)

92. Japan briefed on the SCCP mechanism on implementation of customs-related WTO agreements established in 2001 to provide sufficient technical assistance and capacity building to Member Economies for smooth implementation, towards the expedited international trade, of such customs-related WTO agreements as Customs Valuation (CV), Trade-Related Aspects of IPRs (TRIPs), and Rules of Origin (ROO).

93. Following the approval by the SCCP and in response to Economies’ assistance requests, Japan designed a multi-year technical assistance project, consisting of four phases of Phase 1 (Jul. 2001 – Dec. 2002), Phase 2 (Jul. 2002 – Jun. 2004), Phase 3 (Jul. 2003 – Dec. 2004) and Phase 4 (Jan. 2004 – Dec. 2005). Phase 1 and Phase 2 were already completed.

94. The two intersessionally implemented technical assistance projects are national workshop on the ROO Agreement in Malaysia on April 11 – 15, 2005, with four experts from Canada and Japan; and national workshop on the TRIPs Agreement in Thailand on April 25 – 28, 2005, with three experts from the USA and Japan. Three more national workshops on WTO CV, ROO, and TRIPs are scheduled to be held by the end of 2005 under the Phase 4.

95. Japan informed the Meeting of its new project proposal, made at the 2nd BMC Meeting 2005, for a three-day seminar for the expected completion of the WTO negotiations on trade facilitation. The new project will be able to start from 2006 after approval of the APEC Ministers Meeting. Document appears as doc.no.2005/SOM3/SCCP2/023.

AGENDA 8: CAP ASSESSMENT AND EVALUATION

8.1 SCCP Peer Review (USA)

 21 96. The USA reported that the SCCP Peer Review process is at a critical juncture. Moving forward with this process is dependent on Economies volunteering to undergo this process, and the TILF funding would be available through 2006. Taking shared note of the emphasis this project takes on in higher-level fora such as SOM and CTI, Australia offered to work with the USA intersessionally towards the peer review. Mexico and Chile as past peer reviewees will be a good reference source for any questions and queries regarding the peer review. Document appears as doc.no.2005/SOM3/SCCP2/025.

AGENDA 9: TRADE FACILITATION DISCUSSIONS

9.1 Report of the Trade Facilitation Working Group (TFWG) (Australia (Lead) and Singapore)

97. As Chair of the TFWG, Australia delivered a brief report on the TFWG session that took place immediately prior to the SCCP Meeting. Reaffirmation was made of the Working Group’s original mandate bestowed by the SCCP, and views were shared to identify its future priorities.

98. Referring to the CTI Expanded Dialogue on Trade Facilitation held on 1 October 2004 in Santiago, Chile on APEC’s progress in reaching the target of cutting transaction cost by 5%, the TFWG Chair noted on the dialogue’s assessment that the overall result is satisfactory but further work might be needed to identify the benefits to business.

99. Taking note that the ABAC pointed to reform of customs procedures as critical to achieving trade facilitation, the Chair suggested refining the SCCP trade facilitation report tabled at CTI Ⅲ 2004 to better incorporate the ABAC’s recommended elements in the report.

100. The TFWG agreed to meet again right before the SCCP meeting next year to develop further the report and to finalize it by the mandated deadline of the second SCCP meeting in 2006. Document appears as doc.no.2005/SOM3/SCCP2/026.

9.2 Trade Facilitation Initiatives in WTO (Volunteer(s))

 22 No report on this item

9.3 Model Measures for Trade Facilitation in RTAs/FTAs (Chair and Other Volunteers)

101. For the purpose of reporting back to the Australian SOM delegates’ request for the SCCP’s views as customs experts’ group on a draft of model measures for trade facilitation in RTAs/FTAs, the Meeting prepared the SCCP’s Statement to SOM on draft Model Measures on Trade Facilitation for RTAs/FTAs.

102. The Meeting heard some concerns raised by individual Economies with regard to specific draft model measures, and that the intent and drafting of some model measures was unclear, while the SCCP supports the draft Model Measures as elements in RTAs/FTAs to be negotiated in the APEC region.

103. The SCCP Members had issue with model measures coming under “Release of Goods,” “Express Shipments,” and “Advance Rulings.” The suggestion by some Member Economies that trade security and verification of origin be incorporated into the Model Measures failed to garner the all-participatory SCCP consensual support. The Meeting noted that some SCCP Members undertook to raise areas of difficulty with particular model measures with their Senior Officials. The Statement appears as doc.no.2005/SOM3/SCCP2/027.

AGENDA 10: Business Outreach

10.1 APEC Customs-Business Dialogue in 2005 (Chair)

104. The Chair reported on the APEC Customs-Business Dialogue 2005 which was held in Gyeongju, Korea, on 5 September, attended by 350 participants from customs community, the business and the academia.

105. Under the theme of “Re-Engineering Customs-Business Cooperative Engagement for Facilitation and Seamless Movement of Goods in the Transparent and Secure Transaction Environment”, the meeting was divided into two panels. The first panel dealt with Trade Facilitation: Enhancing Freer and

 23 Facilitated Global Trade through the Effective, Efficient and E- Friendly Customs and the Strengthened Customs-Private Sector Partnership attended by Mr. Yang Jun-sok, Professor of Catholic University, Korea; Mr. Kunio Mikuriya, Deputy Secretary General of the WCO; Mrs. LEE Ju Song, Director of the International Chamber of Commerce ASIA; Mr. SUN Yibiao, Director General of Shanghai Customs, China; Mr. Andrew Hudson, Partner of Hunt & Hunt Ltd., Australia; and Mr. Mohamed Khalid Yusuf , Director of Selangor Customs, Malaysia.

106. The second panel was on Trade Security: Improving Security in the Global Supply Chain and International Trade Environment, which was handled by Mr. James Goh, Vice President of the Asia Pacific HQ of United Parcel Service, Co., Ltd.; Mr. Murray Edwards, Counselor of Australia Customs Service; Mr. Andrew P. Jackson, Government Program Executive, IBM Australia Ltd.; Mr. John Leahy, Representative of PricewaterhouseCoopers; and Mr. Michael Mullen, Director of Trade Relations of US Customs & Border Protection.

107. At the meeting, various issues concerning cooperation between Customs and Businesses were brought forward, among which are: Trade Facilitation Negotiation in the WTO and the Role of Customs-Private Sector Partnership; Recent Efforts related to Trade Facilitation & Security by Customs in close cooperation with business; Strengthening Customs-Private Sector Partnership; and Improving Security in the Global Supply Chain & International Trade Environment.

108. The ABAC Chair, Mr. Hyun Jae-hyun, emphasized the importance of cooperation between customs and businesses in the development and implementation of the APEC Framework for Security and Facilitation of Global Trade. Document appears as doc.no.2005/SOM3/SCCP2/028.

10.2 Progress of APEC-SCCP 2005 Blueprint (Chair)

109. The Meeting was briefed on the progress of the SCCP 2005 Blueprint, and was also informed that a draft copy of it will soon be forwarded to the other Member Economies for additional suggestions and comments, after incorporation into it of key business-significant outcomes and activities of the ACBD and

 24 the 2nd SCCP Meeting.

110. The Blueprint will be featured with, inter alia, greater content- wise enhancements in business-readership-friendly ways to elicit as much support from and participation by the business in the customs-related activities; strengthened relevance to the business by insertion of endorsements or testimonials from important industry or business representatives; clear communication to the business of what have been tangibly achieved with focuses placed on the business benefits; and maximization of the Blueprint’s purposeful usefulness as a convenient and regular consultation vehicle between the trade & business community and the APEC customs administrations. Document appears as doc.no.2005/SOM3/SCCP2/029.

AGENDA 11: SPECIAL CONSIDERATION OF THE SUB-COMMITTEE

11.1 APEC Tariff Data Base (APEC Secretariat)

111. APEC Secretariat briefly reported on the system usage records of the APEC Tariff Data Base (TDB), which has been maintained and updated by collaboration between the Federal Express and APEC Secretariat, such as number of tariff heading lookups for January – June 2005, and users’ suggestions and recommendations.

112. APEC Secretariat pointed out that one of the key complaints about the TDB is lack of up-to-date and useful tariff data and information on the database, and urged the Economies who have not submitted their updated TDB to do so. All the Economies were also encouraged to update it on an as- required and regular basis. Document appears as doc.no.2005/SOM3/SCCP2/030.

AGENDA 12: OTHER INITIATIVES

12.1 Setting SCCP Priorities (Australia)

113. Arising from supports, which was given to the establishment of an informal working group to identify ways to achieve setting of SCCP priorities, from the 16 Member Economies who

 25 participated in the informal head of delegation gathering prior to the Meeting, Australia prepared a draft Terms of Reference (TOR) for the group during the period of the 2nd SCCP Meeting for distribution to Member Economies to facilitate discussion on this agenda. The TOR which consists of Mandate, Outputs and Means of operation.

114. The informal group, working under the direction of the APEC SCCP, will consider ways to closely align the SCCP’s work and activities with APEC priorities and responsive to emerging issues. The group will develop options and make recommendations to the SCCP about i) mechanisms of quick identification and adoption of APEC priorities and translating of these into SCCP deliverables; ii) ways to create a flexible agenda, and reshaping of existing SCCP CAP items; and refinement and improvement of any SCCP working methods

115. The group will comprise SCCP chairs of 2005 (Korea), 2006 (Viet Nam), 2007 (Australia) and volunteer Economies (Hong Kong China, Japan, New Zealand, Singapore); elect its chair from among its Members; meet in the margins of SCCP meetings during 2006, and in the meantime consult intersessionally by electronic means; not seek APEC funding; and conclude its operation at the 2nd SCCP meeting of 2006.

116. At the first SCCP meeting in 2006, the group will provide an update on its progress, and it will prepare and submit a report to the SCCP by the end of July 2006 and in time for consideration at the second meeting of the SCCP 2006. Document appears as doc.no.2005/SOM3/SCCP2/032.

117. Chinese Taipei took a brief opportunity to remind Member Economies of the 2005 APEC Amity Customs (AAC) Workshop which will be held in Taipei on October 18 – 27, 2005, and funded by Chinese Taipei, in particular for those Economies who did not yet register; namely, Brunei Darussalam, Canada, Chile, Malaysia, New Zealand, the Philippines, Russia, and Viet Nam. The host Economy will provide round-trip economy class airfares not exceeding USD 800, dormitory accommodation and meals for Member Economies’ participants.

118. This 10-day self-funded workshop aims to assist SCCP Member Economies with effective management of customs policies and practices in trade facilitation and border control. Chinese Taipei

 26 urged each Member’s Customs administration to send one mid- high-level customs official to the Workshop, which will also be attended by about 20 local participants. The Meeting was informed that an electronic registration form will be available through direct contact with delegates from Chinese Taipei to the Meeting, or can be downloadable from the website, “www.mofti.gov.tw.”

AGENDA 13: FINAL BUSINESS

13.1 Document Access (Chair and APEC Secretariat)

A The Chair and APEC Secretariat concluded that none of the documents distributed in this meeting are confidential, therefore they can be released to the public. Document appears as doc.no.2005/SOM3/SCCP2/033.

13.2 Time and Venue of the Next SCCP Meeting

119. The first SCCP 2006 is scheduled to be held in Ha Noi, the capital city of Viet Nam, in early March 2006. The detailed date and other administrative information will be communicated in due course.

13. 3 Closing Remarks (Chair)

The Chair thanked all the delegates and the support staff and highlighted the contribution by all the Economies to the very active and dynamic discussions that took place during the Meeting. Document appears as doc.no.2005/SOM3/SCCP2/035.

AGENDA 14: ADOPTION OF THE REPORT OF THE SECOND SCCP MEETING OF 2005

The Meeting adopted the Report of the 2nd SCCP Meeting. Document appears as doc.no.2005/SOM3/SCCP2/036.

 27