Managing Risk in the Customs Context

In recent years the international trading environment has been transformed dramatically in terms of the manner in which goods are carried and traded, the speed of such transactions, and the sheer volume of goods now being traded around the globe. This, together with mounting pressure from the international trading community to minimize government intervention, has caused customs authorities to place an increasing emphasis on the facilitation of trade.

In an effort to achieve an appropriate balance between trade facilitation and regulatory control, customs administrations are generally abandoning their traditional, routine "gateway" checks and are now applying the principles of risk management, with varying degrees of sophistication and success.

This chapter examines the basic principles of risk management and identifies practical ways of putting the theory into practice. The first section discusses the importance of managing risk in customs. The second section examines the two key objectives of customs-facilitation and control. The third section identifies risk management as the means of achieving a balanced approach to facilitation and control. The fourth section deals with managing compliance and describes a risk-based compliance management strategy. The ...

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