June 2016 | n° 80 | www.wcoomd.org WCO news Stopping Illicit Trade World Customs Organization picard 2016 EN copy.pdf 1 18/05/2016 12:30:31 PICARD MANILA 2016 C M Y CM MY CY CMY K Want to contribute to research on Customs, borders, and trade? Interested in the latest analysis from leading academics and policymakers? Join us at the WCO’S 11th ANNUAL PICARD CONFERENCE in collaboration with the Philippine Bureau of Customs and make your voice heard 27-29 September 2016 Manila, Philippines See you there! Register at: http://tinyurl.com/picard2016 Photo courtesy of Serbian Customs / Design by Myriam Boyer picard 2016 EN copy.pdf 1 18/05/2016 12:30:31 WCO news N° 80 June 2016 PICARD MANILA 2016 Content 04 Flash info 06 Dossier 36 Focus 16 26 42 Point of view Switzerland addresses the traffic in cultural Illegal fishing, another 48 Panorama goods form of wildlife crime 63 Events C 32 44 M Tracking the illicit traffic Y Quantifying the illicit in weapons trade in tobacco CM MY CY DOSSIER: ILLICIT TRADE PANORAMA FOCUS CMY K Want to contribute to research on Customs, borders, and trade? 06 The Secretary General gives an 48 Dubai Customs’ Journey 36 The power of pollen: overview of WCO enforcement-related towards a ‘Customs of the how CBP is at the forefront Interested in the latest analysis from leading academics and policymakers? initiatives future’ of using pollen as a new forensic tool 10 Review of the COPES Project and 54 Publishing TRS results in nCEN application the public domain: Poland’s positive experience 12 Malaysia destroys huge ivory trove 59 Customs-Police Join us at the 20 Hong Kong Customs: equipped to tackle cooperation – the Canadian cybercrime experience 22 Highlights on the trade in non- WCO’S 11th ANNUAL PICARD CONFERENCE 61 Overview of Australian Border authorized and counterfeit pesticides in collaboration with the Philippine Bureau of Customs Force’s counter terrorism 34 Automatic detection tools: from capabilities and make your voice heard concept to reality Editor-in-Chief Advertising Editorial note Copyright © World Customs Organization Grant Busby WCO News is distributed free of charge in English All rights reserved. Requests and enquiries concerning and in French to Customs administrations, international translation, reproduction and adaptation rights should be Writer / Editor organizations, non-governmental organizations, the addressed to [email protected]. 27-29 September 2016 Laure Tempier Bernard Bessis business community and other interested readers. Opinions [email protected] expressed in WCO News are those of the contributors and Acknowledgements: The Editorial Team wishes to express its Manila, Philippines Editorial Assistant do not necessarily reflect the official views of the World sincere thanks to all who contributed to this publication. Sylvie Degryse Publisher Customs Organization. Contributions in English or French World Customs Organization are welcome but should be submitted no later than 15 August Illustrations: Our thanks also extend to all who provided Head, Research and Communications Rue du Marché, 30 2016 for consideration. 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Please email [email protected] [email protected]. www.wcoomd.org Photo courtesy of Serbian Customs / Design by Myriam Boyer 3 FLASH INFO Trans-Pacific Partnership Agreement added to WCO Comparative Study on Preferential Rules of Origin overall understanding of preferential rules of origin is the main aim of the WCO Canada Comparative Study. USA Japan The section of the WCO Comparative Study dealing with the TPP explains and analyses some special features contained Viet Nam Mexico in the Agreement, such as full cumula- tion, provisions on regional value content, Malaysia including the new ‘focused value method,’ Brunei remanufactured goods, the provision on Singapore the updating of the rules of origin to reflect Peru amendments to the Harmonized System (HS), as well as the specific chapter on tex- Australia tile and apparel goods. Chile Recurrent themes apply to virtually all New Zealand existing models on rules of origin legis- lation. The comparison between the dif- ferent agreements contained in the WCO Comparative Study is made at a topic level – certification of origin, advance rulings, TPP Market Snapshot concept of originating goods or cumula- tion, for example. Gross Domestic Population TPP % of TPP % of world TPP % of Any questions, comments or enquiries on Product (GDP) 806 million world GDP population world trade the WCO Comparative Study should be 28 trillion $ 36.2% 11.2% 25.6% addressed to the WCO Secretariat’s Origin Source: Australian Department of Foreign Affairs and Trade Sub-Directorate. THE TRANS-PACIFIC PARTNERSHIP (TPP) The WCO issued a first analysis of the More information Agreement was signed on 4 February 2016. main features of the origin provisions [email protected] It aims to establish a more seamless trade contained in the TPP Agreement back in and investment environment through December 2015 (see http://www.wcoomd. commonly-agreed rules and the promo- org/en/topics/origin/activities-and-pro- Latest accessions tion of transparent laws and regulations, grammes/preferential-origin.aspx). It is providing greater certainty for businesses, now about to publish a detailed analysis to WCO instruments reducing costs and red tape, and facili- of the TPP rules of origin and a compari- tating participation in regional supply son between the new agreement and exis- Revised Kyoto Convention chains. ting origin models as part of the WCO Comparative Study on Preferential Rules Iceland The TPP is the first of the so-called ‘mega- of Origin. This new section of the Study Date of accession: 8 October 2015 regional’ free trade agreements (FTAs), will be available in July 2016. 103rd Contracting Party a term which refers to deep integration between countries, or regions with a Rules of origin are important legal instru- Harmonized System Convention major share of world trade and foreign ments for the application of preferential direct investment (FDI). The 12 Parties trade agreements. But, with the prolifera- Oman to the Agreement are Australia, Brunei tion of these agreements comes a plethora Date of accession: 12 May 2016 Darussalam, Canada, Chile, Japan, of divergent and often overlapping prefe- 154th Contracting Party Mexico, Malaysia, New Zealand, Peru, rential rules of origin, a situation which Singapore, United States of America, and presents challenges, both to the business More information Viet Nam. community and the authorities implemen- [email protected] ting origin legislation. Thus, enhancing 4 WCO news N° 80 June 2016 WCO releases new instrument on transfer pricing and Customs valuation AN IMPORTANT NEW instrument was fina- ICO imports the relays and does not pur- In view of the strong interest in the busi- lized at the April 2016 session of the chase any products from sellers unrelated ness community, the WCO has made WCO Technical Committee on Customs to its parent company. Likewise, XCO does Case Study 14.1 available via its website. It Valuation (TCCV). The instrument is Case not sell relays or similar goods to unrelated will be published in the WCO Valuation Study 14.1, illustrating a specific scenario buyers. This then led to the question: how Compendium, subject to approval by the where Customs took into account trans- can one estimate whether ICO and XCO WCO Council, in July 2016. Further infor- fer pricing information in the course were buying and selling at a ‘real’ price mation on this topic can be found in the of verifying the Customs value, which which was not influenced by the fact that WCO Guide to Customs Valuation and should benefit Customs authorities and XCO and ICO are related? Transfer Pricing, which is also available business alike. Transfer pricing refers on the WCO website. to the price for goods and services sold The answer is found in the case study. between controlled or related legal enti- By using the company’s transfer pricing The Guide, designed to be accessible to ties. Multinational companies determine information based on the transactional both experts and non-experts in both a transfer price in order to allocate profits net margin method – that is, by compa- fields, sets out the relevant methodology among their different parts, which in turn ring ICO’s operating margin with those for both regimes, and explores the linkages determines how much tax it pays and in of similar, but unrelated companies doing and the possibilities for Customs to use which country. similar business in the country. On the transfer pricing information in examining basis of this information, Customs accep- related party transactions. Most tax administrations require com- ted that the sale price in question had not panies to calculate the price following been influenced by the relationship. The Both the WCO and the OECD advocate ‘the arm’s-length principle.’ Broadly, this conclusion notes that the use of a transfer closer cooperation between Customs and means that operations should be priced by pricing study for examining the circums- tax administrations in order to streng- comparing them with similar operations tances surrounding a sale must be consi- then the ability of governments to iden- carried out on a commercial basis at market dered on a case-by-case basis.