customs presentation to h.e. pradit apr 24, 09

8/6/2019 Customs Presentation to H.E. Pradit Apr 24, 09

1/9

THE AMERICAN CHAMBER OFTHE AMERICAN CHAMBER OF

COMMERCE IN THAILANDCOMMERCE IN THAILAND

Customs MeetingCustoms Meetingwithwith

Deputy Minister of FinanceDeputy Minister of FinanceH.E. Mr. Pradit PhataraprasitH.E. Mr. Pradit Phataraprasit

April 24, 2009April 24, 2009


2/9

AMCHAM DelegationAMCHAM Delegation

Mr. David Alden Board Liaison-Customs AMCHAM / President Ford ThailandMr. Phil Bell Chair-Customs AMCHAM / Director Ernst & YoungMr. Dennis Grover Co-Chair-Customs AMCHAM / General Manager DHL Express InternationalMr. Paul Sumner Co-Chair-Customs AMCHAM / Director PricewaterhouseCoopersMr. Pongsathorn Ansusinha Committee-Customs AMCHAM / Manager Fiscal Affairs Philips Morris

Ms. Judy Benn Executive Director AMCHAM


3/9

Overview of U.S. Trading Relationship with ThailandOverview of U.S. Trading Relationship with Thailand

- Long lasting relationship since 1833 (176 years)

- U.S. investment in Thailand of more than USD 35 Billion

- U.S. exports to Thailand in 2008: USD 9.06 Billion

- U.S. is Thailand 3rd largest Trading Partner

- Constructive dialogue and AMCHAM working to

develop a closer partnership with The Royal Thai Customson behalf of Joint Foreign Chambers of Commerce


4/9

Key Competitiveness Issues Currently facedKey Competitiveness Issues Currently faced

by business in their dealings with the Customsby business in their dealings with the CustomsDepartmentDepartment

Transparency

Certainty &Predictability

International Standards/

Simplified Procedures

Penalty and dispute settlement

Custom Valuation

Audit Process

Penalty and dispute settlement Custom Valuation

Audit Process

Appeal Process

Licenses Complexities

Guidance to business

Operational Issue

Appeal Process

Licenses Complexities

Guidance to business

Operational Issue

International Customs Standards

Simplified Procedures

International Customs Standards Simplified Procedures


5/9

Key Competitiveness IssuesKey Competitiveness Issues

Penalty and Dispute Settlement Excessive and inappropriate Inconsistent with WCO minimum standards (Revised Kyoto Convention) and

international best practice Reward/incentive system impairs fair and impartial decision-making Fundamental roadblock to Customs aim of achieving World-Class

Customs Valuation Customs valuation procedures sometimes constitute a serious import barrier

(eg. Arbitrary re-determination of import values, at both port and post audit levels)

Collection of import duties on the IP content (most countries only levy duty onthe value of the carrier medium eg. Business documentation and software)

Audit Process Lack of consistent processes and procedures Impact on Importers/Exporters rights, as no timeframes, findings and formal signoffs

are provided Excessive audit periods (10 years) inconsistent with document retention requirements

(5 years)

Transparency


6/9


Appeal Process Lack of consistent processes and procedures Impact on Importers/Exporters rights, as no timeframes, generally

behind-closed-doors considerations, no detailed notification of the basis forthe findings

System deters independent appeals due to punitive penalties

License Complexities Multiple licensing authorities - Lack of clarity and consistency Lack of clear guidance on license requirements

Guidance to business Lack of written rulings Non availability of decision publication

Operational differences Inconsistent interpretations decisions between Customs operational units

Certainty & Predictability


7/9


International Customs Standards (WTO/WCO-Revised Kyoto Convention)

Many Customs procedures do not meet the minimum standards Missed opportunity for new Customs Law to implement all WCO minimum standards Lack of appropriate public consultation process a further missed opportunity to move

Customs to World Class

Simplified Procedures Air Express Clearance

o Inefficient process for express shipments, including the payment of customs

fees, tax and duty, non-standard enforcement of Exporter of Record, formalentry paperless procedures for informal export shipments.

Drawbacko Manual and bureaucratic procedures eg. obtaining drawback of import duty

on exports; minor differences in description impede clearance delivery ofBOI promoted goods,

Temporary Import

o Lack of appropriate procedures for temporary imports eg. returnable/reusable containers; goods imported for testing purposes

International Standards/Simplified Procedures


8/9

Customs Penalty Regime Survey 2009

Survey recently conducted 116 respondees to date, from Traders (Importers/Exporters),

Manufacturers (Importers/Exporters) and Shipping/Airline Companies, Customs Brokers/Freight Forwarders

Key Preliminary Findings* Overwhelmingly respondees believe that:- Impartial decisions may not be reached if the decision-maker shares in any penalties-

The system of sharing of penalties may impair the proper use of Customs discretion todetermine matters in favour of importers- The Customs Penalty Regime is a barrier to fair trade and is a disincentive to investment inThailand

- Standard penalty calculations of the kind typically applied under the Customs penaltysystem may result in penalties that are not proportionate to the circumstances of each matter

- Penalty system forces companies into settlements with Customs even though thosecompanies may believe they have done nothing wrong.

- While a Court is more likely to reach a fair judgment, companies would never appeal toCourt under the current penalty system. In contrast:

* Respondees indicated they would choose the court route if there was no threat of

increased penalties* In other countries, Respondees would go to court on principle if they felt they had a strong

position


9/9

RecommendationsRecommendations

Proposed Customs Law Defer the submission of proposed Customs Law to Cabinet Establish a Customs Law Review Advisory Committee consisting of all stakeholders and

reporting to the Minister of Finance, to review the current Draft and recommendappropriate changes

Penalty and Reward System As a priority, set up a Committee reporting to the Minister of Finance to recommend

an appropriate penalty and reward system that reflects international best practiceand the WCO Standards including:o Penalties that are effective and proportionateo Level of penalties reflect the circumstances and culpability levelo Removal of disincentives to pursue external court appealso Reward system that is appropriate and does not prevent impartial decision-making

Simplify Processes and Procedures

Convene Committee of Cooperation between Customs and Business Community to rectifyinefficient Customs processes and procedures. Suggested priority issues for early action:o Eliminate the Goods Control List for air cargo.o Gold card exporters / importers to sign an agreement on transparency and

anti-corruptiono

Temporary import procedureso Coordination problems with other government authoritieso Drawbacks

customs presentation to h.e. pradit apr 24, 09

Documents