13 - 15 November 2012

SARS Customs Modernisation

WTO Trade Facilitation Symposium

For African Countries
Michael Velile Lekala
Customs Modernisation Strategy & Design

From SARS Vision to Customs Delivery

The Customs Mandate
To be an innovative Revenue and Customs agency

SARS that enhances economic growth and social

Vision development, and that supports the countrys
integration into the global economy in a way that
benefits all South Africans.

SARS
Mandate

Collect
Collect all
all revenues
revenues due
due
Ensure
Ensure efficient
efficient &
& effective
effective revenue
revenue collection
collection

Advise
Advise the
the Ministers
Ministers of
of Finance
Finance and
and Trade
Trade
Ensure
Ensure efficient
efficient &
& effective
effective control
control over
over the
the movement
movement and
and manufacturing
manufacturing
of
of goods
goods
First line of defence at borders to secure the

Customs supply chain and to protect the economy and

Mandate society by controlling movement of goods into,
from, through and between SA ports of entry
2

From SARS Vision to Customs Delivery

Delivery Strategy: Enhanced Compliance
TRADE ADMINISTRATION

Efficient trade
administration
Assist with compliance
Provide trade policy support
Collect duties and taxes
lawfully
Managing incentive
schemes & Free Trade
Agreements

CUSTOMS STRATEGIC
OUTCOMES
ECONOMIC & COMMUNITY
PROTECTION

Prevent harm to the community,

the economy and environment
Protect industry from harmful,
and unfair trade practice

BORDER SECURITY

Prevent smuggling
Ensure confidence in trade
and travel channels
Promote SA as secure
trading partner

DELIVERY STRATEGY
IMPROVE SERVICE
MAKE IT AS EASY AS POSSIBLE
FOR THOSE TRYING TO
COMPLY

IMPROVE
ENFORCEMENT
MAKE IT AS HARD AS POSSIBLE

FOR THOSE
TRYING TO AVOID PAYING THEIR
FAIR SHARE

ENHANCED COMPLIANCE

to this approach is ensuring that taxpayers/traders understand their obligations

3

The Need to Change

The SARS Reality - Our Vision!
SARS vision is to transform the administration system to:
Make it simpler, quicker and hassle free for Tax
Payers and Traders
Make the process less labour intensive and less
cumbersome.
Improve the service offered to clients,
BUT...
Ensure maximum compliance.

This vision implied a clear path for Customs

Modernisation
4

Customs Tomorrow
Strategic Reality

Trade Facilitation
High levels of transparency and predictability of
policy, legislation and supply chain impact;
Preferential treatment of compliant and trusted
traders;

Economic Security

Development of a mature organisation with high

Protect domestic industry

skill levels and efficient, effective systems and

through application of trade

processes; and

tariffs;

Facilitate Regional Economic Integration.

Collect all trade taxes due to

the fiscus; and
Apply trade policy and all

Safety and Security

Creation of a data rich environment with
mandatory advanced information to facilitate
effective targeting;
Implement an approach dependent on high
levels of trust and compliance and selfregulation; and
Assure consumer and trade protection from
illicit and dangerous goods.
5

international

trade

customs commitments.

and

Customs Tomorrow
Modernised risk-based approach for Customs

Resource Distribution

Accreditation
/ Entity
assurance
audits

Entity based

Periodic
declarations &
Simplifications

Proactive
client
management Removing

Post
Modernisation
resource
distribution

Automated
processing
through integrated
risk assessment

Inspection

mandatory
checks

Value-Adding Activities

performanc
e audits
Compliance audits (systems &
(customs regimes)
process)

Current
resource
distribution

Customs Tomorrow
Cover the Supply Chain!
Premovement
Registrati
on
/
Licensing
/ AEO

E-filing
3rd Party Data
Centralised
Trader
Segmentation

Port of
Export

C2C Data
Sharing

Internation
al
Transport

EDI Manifest
Risk +
Targeting for
security and
contraband
3rd Part Data
Single Window

OPERATING MODELPRINCIPLES
1. Electronic Data / Paperless
2. Integrated Risk Engine (Manifest,
declarations, 3PD and C2C)
3. Control Model (inspect, audit and
investigate)
4. Trade Segmentation
5. Centralised Processing:
Registration
Risk
Assessment
Audit

PostMovement

Cargo Movement

SA Port

Customs
front-line

E-Declaration E-Release
2D Barcode CBCU
CCA
EDI
Gate
Web
Patrol
channel
Rummages
Risk
Search
+Targeting
CBCU
Inspections
NII
Detector
Dog
Transit
document
with 2D
barcode

Customs
ops.

Centralised

Assessment
Analytics for
valuation,
classificatio
n and origin
Suspense
Regimes
controls
Bond acquittal
(centralised)
Intelligence
and
Investigations

Inland /
Regional
Transport

Transit
controls
Documents
Bond
controls
Seals
Controlled
delivery

Importer /
Distributo
r

PCI / PCA
Compliance
Measurement

The Journey
Declaration Form(s)!
DA 500
Bill of Entry

DA 510
Transfer of
liability

DA 550
Bill of Entry
Export

DA 600
Bill of Entry Ex
Warehouse

DA 610
Bill of Entry SA
Products Ex
Warehouse
CCA1
Common Customs
Area
8

SARS Customs Tomorrow

Customs - The Process Automation!
CHANNEL
S

ORCHESTRATI
ON

BACK-END
Permit
System

EDI / XML

Rules of
Origin
(ROO)
Reporting &
Trade Stats
(CEI &
CES)
Tariff Admin
&
Publishing
(LLT)
In Bond
Acquittal
System
(IBAS)

E-Filing
E@syFile
Hand
Held
Scanners
Disk
(XML
format) *
Service
Manage
r

Manual
Forms

Documen
t
Scanning

Customs
Risk
Engine
(CRE)

DOCUMENTU
M

LEGEND

Chann
el

Financial
Accountin
g (SAP)

ATP

Contact
Centre

U3TM

Existing
Customs
System

Replace
d

Enterpri
se
System

Passenger
Processing
(PPS)
State
Warehouse
Mngt
(SWM)
Manifest
Acquittal
(MAS)

CAPE
(Partial
Payments)
EXPORTS

CCA1
WH
Inventory
Mngt
System
(WIMS)
Drawbacks
(CER)
Registration
&
Accreditatio
n System
(RAS)
Value
Determinati
on System
(VDN)
Tariff
Determinati
on System
(TDN)

Customs Tomorrow
From Gate-keeping to Risk Managing

10

11

Customs Modernisation: Customs Inspection

On 10 June 2011, a new inspection process was introduced at four Customs
offices: JHB, ORTIA, Durban and Cape Town. It will be introduced in a phased
approach to other Customs offices throughout this year.
Electronic Case Management Workflow
Submit
Declaration

Validation
Risk
Analysis

Version Control

Payment

Release

Stopped
Call for
Docs

Create
Case

Await
Docs

Electronic Submission of Supporting

Docs

Docs
Received
Assess
Case

Payment

Stopped
For
Inspection

Electronic Dashboard Status Tracking

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Release

Electronic Release

Land Border Process Overview

Customs Declaration

EDI
EDI
Gateway
Gateway

Request
Request for
for
Supporting
Supporting
Documents
Documents

Risk
Risk
Engine
Engine

e-Documents
e-Documents

13

2
Review
Review of
of Electronic
Electronic
Supporting
Supporting Documents
Documents
at
at Centralised
Centralised
Processing
Processing Centre
Centre

14

Consignment
Consignment marked
marked for
for Examination
Examination
from
from Processing
Processing Centre
Centre
15

Clearance
Clearance received
received
and
and Carrier
Carrier proceeds
proceeds
to
to Border
Border

4
16

Manifest
Manifest number
number
presented
presented on
on arrival
arrival

Record
Record arrival
arrival of
of Truck
Truck
at
at Border
Border Post
Post using
using
Manifest
Manifest Number
Number

17

Examination
Examination conducted
conducted
and
and finalised
finalised at
at Border.
Border.
18

Record
Record exit
exit of
of Truck
Truck
at
at Border
Border Post
Post
19

END
END

2
0

Customs Notification 1 (CN1)

20

2
1

Customs Notification 2 (CN2)

21

Trader

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Overview Accreditation & Preferred

SARS aims to assist key strategic industries and traders to become
complaint, and subsequently, improve service and reduce cost of doing
business.
By working with compliant clients, SARS can refocus resources on high
risk

Release 2 & 3
Modernisation Journey
Release Two of Customs modernisation mainly introduced the Service Manager front-end for
officers and the electronic supporting documents process for traders, high speed bulk scanning
to free up branch operations from processing bulk documents.

Delivery

Challenges from Traders

1. Service Manager Front-End for Inspection Case

Management
2. Get next inspection workflow
3. Electronic Supporting Document- e@syScan
4. Removal of the 70707070 code
5. Centralisation of all back-end processing
6. Enhanced vehicle movement control at the
border post (CN2)
7. Export and VOC Risk Engine
8. TBK testing has started

1. Ensuring that all pages are A4

size
2. Ensuring that all pages are
clearly printed not faded
3. Ensure that the case number is
clearly indicated on the first
page
4. Inclusion of SAD500 as a
supporting doc , when
supporting docs are requested
5. Paperclips, staples or any other
binding material from the pages
6. Torn, folded, crumpled or
smeared with any liquid or dirt
pages
7. Bulk pages more than 10 pages
8. Training on the use of SARS e@
scan

Highlights
1. An electronic release system, reducing the
need for paper and authorising stamps at
branches.
2. Enhanced traffic flow of trucks through
the control area,.
3. Move L&R to Alberton

and the modernisation journey continues

23

Passenger Processing System (PPS)

Modernisation Journey
The purpose of this project is to enhance the traveller experience when entering or leaving the
country as well as ensuring enhanced security and data exchange between the different
border agencies.

Delivery

Highlights

1. Passenger Processing System

(PPS) deployed on top of the
existing Movement Control System
(MCS) platform
2. The Traveller Card which will be
completed by all passengers
entering South Africa and it will be
scanned at the Ports of Entry.
3. The Risk Engine will determine if
a passenger needs to be directed
through the Green or Red channel
and processing a customs
declaration, automatically compute
duties payable.
4. The Assessment (Invoice) to be
handed to travellers, are also being
redesigned to make it more user
friendly..

1. Discontinuation of the printing

of form (DA331) automated
process
2. Signature pads for digital
signature.
3. Passport scanner.
4. Development of a Informal
Trader portfolio (70707070)

Challenges'
1. The bandwidth at remote land
borders

and the modernisation journey continues

24

Automated Cargo Management(ACM)

Modernisation Journey
ACM is SARSs automated solution for the receipt and processing of prescribed reports in
respect of imported cargo and the means of transport with which those goods are imported
from abroad. It is necessary because ; in line with international practices, that cargo be
reported to it prior to arrival for the purposes of screening and risk assessment.

Delivery

Highlights

1. New system will ensure the receipt

of clean data that meets
appropriate standards
2. Process and validate cargo reports
at a much faster rate than what
was possible before
3. Allow the holistic and automated
risk profiling of goods by subjecting
both the goods declaration and the
cargo declaration to the SARS
Customs Risk Engine (CRE)
4. Allow for the resolution of
mismatches (entry to manifest and
outturn) on a formal case
management basis.

1. Replacing MAS with ACM

and the
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Challenges From Trade

1. Registration of shipping lines,

airlines, freight forwarders,
groupage operators,
consolidators and other parties
that transport goods on behalf
of foreign shippers on bills of
lading and air waybills to South
Africa (by sea and air), or their
local agents, to register as soon
possible. continues
modernisationasjourney

Preferred Trader
Modernisation Journey
SARS Preferred Trader project aims to assist key strategic industries and traders to become complaint, and
subsequently, improve service and reduce cost of doing business. By working with compliant clients, SARS
can refocus resources on high risk.

Delivery

Highlights

1. Engage top 200+ by invitation /

application
2. List of Top 300 traders created to
enable next set of clients
3. Ongoing work on Audit / Accounts
(push to complete top 100 clients)
Review Board
4. Ongoing Client communication on
PT process
5. Next generation Audit Training
plans underwayBenefits
with Academy

1. Segment clients based on their

demonstrated competency to
perform Customs procedures
2. SARS validate via Assurance Audit
3. Client compliance rated
4. Accreditation status and relevant
Benefits will awarded befit their
compliance standing
5. Manage client compliance,
relationship & service

1.

26

Appointment of a Customs Relationship Manager

tasked with facilitating the relationship between the
client and customs;
2. Reduction of the amount of any security required for
compliance with a customs procedure;
3. Fewer routine documentary and physical inspections;
4. Prioritising a request for tariff and valuation
determinations;
5. Prioritising access to non-intrusive inspection
techniques
when goods are journey
stopped or detained
for
and the
modernisation
continues

The End
For Now!

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Thank You !

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