One of the most common questions policy-makers ask customs practitioners is how to help companies export and import. What are the main challenges that companies face when using customs simplifications, trade agreements and navigating border formalities?
The answer is simple – provide good customs guidance.
Now, you could argue that it is not the only piece of the puzzle. And that is true. But it is one of the most fundamental elements. One that often gets overlooked.
Customs guidance is a set of notices, guidelines and instructions which allow users (traders, customs brokers, logistics providers etc) to understand customs rules that apply in a given customs territory as well as to goods imported and exported in and out of it.
The function of this guidance is to provide an interpretation of domestic customs legislation. It explains how customs legislation should be understood, interpreted and applied in practice. It translates the legal language into practical, operational terms. Customs guidance tells users what to do in order to be compliant, which forms to submit and where to get help. It is the main, and often the only, source of information for companies wishing to engage in international trade.
Or at least that is what it is supposed to do.
Lack of good customs guidance can become an unintentional non-tariff barrier to trade. In some cases, guidance is simply unclear, confusing and unusable. Even if there is a lot of it published.
The lack of clear, practical and actionable advice on customs provided by local customs authorities leaves companies with a limited number of options. They will either be unable to apply customs rules properly or will need to seek external, paid advice. That’s a choice between risking being non-compliant, being inefficient and potentially overpaying duty and spending money on external advice. Either way, the outcome is less than ideal.
Lack of good guidance can have other implications. It can create an environment where larger companies have access to additional information and resources and are often able to get clarification directly from customs authorities, while smaller companies with limited resources are not.
Elements of good customs guidance
1. Start with some context
One of the most challenging parts of writing customs guidance is that it needs to work for different types of users – beginners, experienced practitioners and everyone in between.
Some users may not have much experience or knowledge of customs and international trade. Guidance can help them understand how it all works by providing a brief introduction, putting the topic in context and linking it to other relevant information. That can help to prevent public guidance from feeling disjointed and difficult to navigate. What is this guidance about? Where does the topic fit in in terms of a wider import/export process? Who is responsible and liable for these activities: traders, customs brokers? What are the benefits or risks related to this topic?
It would be particularly helpful if this introduction went beyond a list of links to click through and involved providing information that can help companies understand the wider picture.
2. Don’t forget experienced users
Practitioners, brokers, and experienced traders are some of the most frequent users of customs guidance. They look up specific details, check for updates or remind themselves of procedures they haven’t used in a while. Guidance needs to include enough detailed, technical information to be useful for them.
Ideally, it should provide the right level of information for each type of audience. This is obviously, easier said than done. But the worst possible scenario is guidance that aims for the lowest common denominator and ends up working for no one. One that’s not technically incorrect but is not accessible for beginners while also missing key pieces of information that other users look for.
3. Prioritise the important parts
This is related to the previous point. There is often a bit of a mismatch between the information customs authorities provide and what users look for on a regular basis. It would be helpful to ensure that the information users are most likely looking for is easily accessible.
For example, if the user is looking up trade agreements, chances are they want to find the product-specific rule of origin for their product. This should be possible in a couple of easy steps.
Checklists and steps can be really useful, provided that they are the actual steps businesses need.
It can also be a good idea to include a “where to find additional information” section. Of course, provided that the content in the links matches the description.
4. Keep it business-friendly
It is no surprise that the language used by the private sector differs from the one used in legislation or even by the civil service. That is the case for all areas including customs. Even the terms are often different. Since guidance translates customs into practical terms it should use language and terminology that users can recognise. While also being specific and not oversimplifying the language to the point where all technical terms end up being removed. Often guidance that is meant to be accessible ends up being generic and vague. That is not helpful.
5. Keep it in one place
It should be possible to find the information you are looking for without clicking through multiple screens of guidance covering a similar topic. Especially if you end up not being able to find the relevant information. For example, guidance on special procedures could cover all aspects, such as application, benefits, discharge etc.
Multiple pieces of guidance with high-level descriptions and missing key practical information create confusion. Even more so if there is no consistency in terms of language and information provided.
6. Be clear on what the rules are
Customs can be complex and even tricky. One of the most important elements of being able to provide good guidance is being clear on what the rules actually are. This may sound odd but it is actually a common challenge. Whether it is domestic customs arrangements or the implementation of international agreements such as free trade deals, many areas of customs require additional interpretation by local customs authorities. This involves decision making on how to bridge the gap between legislation and practice. However, sometimes these decisions have not been made. Local authorities simply don’t have a view. Again, this may seem odd but there are more examples of such cases than you’d expect.
As a result, guidance tends to simply avoid addressing these topics. And it is understandable – customs authorities prefer not to offer guidance on areas which are not clear. Unfortunately, users still need to know the answers to practical questions in order to trade. The interpretation needs to be clarified and included in the guidance. Again, guidance that doesn’t answer practical day-to-day questions is not ideal.
We need information about common practices, workarounds and options that traders can use.
7. Get someone from the private sector to read it
It is normal that in most cases customs guidance is written by civil servants who often do not have a practical experience with imports and exports. It can be helpful to get someone from the private sector to read the draft guidance and provide comments on whether it is clear, practical and actionable.
This kind of review can also offer useful feedback on the overall flow of the guidance and how the guidance “steers” the users through different topics.
8. Use guidance to promote best practice
Finally, one of the most common mistakes is not using customs guidance to promote behaviours you would like to see users display – mainly, not promoting compliance.
High-level, generic guidance does not help to educate traders or help them to overcome common challenges. Guidance is a way to tell users about opportunities and benefits. But it can also be an opportunity to ensure they know what their liabilities and obligations are. Tell traders what you would like them to know. For example, if they are legally liable for the correctness of information submitted to customs, perhaps it would be better not to say that all they need to do is get a customs broker to handle customs for them.
Similarly, if the section entitled “find out more about rules of origin” talks about how to provide an origin certificate and not about what you need to do to ensure you are compliant before you get a certificate you shouldn’t be surprised by low levels of compliance and understanding.
The good news is that guidance is something each country has full control over. There is no need to negotiate it with your trading partners. It is up to the local government to provide guidance, to constantly update and improve it. Clear and actionable customs guidance can help users to become more efficient, save time and money and be more competitive on international markets.
Providing such guidance should be an integral element of any trade facilitation, export promotion or trade agreements utilisation effort and policy.