INDIRECT TAXES
| Global network sought to check export bill frauds Wed, 13 Apr 2011 21:58:56 GMT |
| NEW DELHI: India, US, Belgium and South Africa have pitched for globally networked customs departments to prevent movement of illicit funds through wrong invoicing of exports. The initiative follows increasing realisation that global trade mispricing is now the single biggest means of moving illicit money across national borders. "A globallly networked customs can help both in trade facilitation and enforcement," Central Board of Excise and Customs chairman S Dutt Majumdar told ET. Such a system can prevent loss of revenue to nations and check money laundering by expeditious interchange of crucial data. A detailed policy paper is expected to be taken up at a crucial meeting of the World Customs Organisation in June, said a finance ministry official. A report by Global Financial Integrity says trade mispricing accounted for an average of 54.7% of cumulative illicit flows from developing countries over 2000-2008. Developing country treasuries lose approximately $100 billion every year due to trade mispricing, it added. The global network of custom authorities will facilitate the exchange of information on valuation of goods, rules of origin and intellectual property rights. For instance, if authorities are aware that an importer has declared value of goods lower than the price in the source country, they can promptly act to prevent revenue loss or investigate the reasons for under declaration. Experts say such a system can help create a risk-based model and facilitate trade. For example, if a customs officer in New Delhi knows a baggage or a container of a particular value is to arrive and it does not violate intellectual property rights, the officer could keep necessary documents ready for its immediate clearance, cutting the time taken in the normal process drastically. "In case of a genuine exporter or importer, customs can be sure of the price declared with such a system in place," said Ajay Sahai, director general, Federation of Indian Export Organisations. Though some countries were initially in favour of bilateral arrangements, opinion now seems favouring multilateral system as that would benefit everyone. "There is a view among authorities that a pilot project should be taken up before it is launched on a full flegded basis," the official said and added that the final call may be taken at the June meeting. The idea of a multilateral customs network came about from a concept paper presented by India on customs in the 21st century, or C-21, earlier. Of the five groups constituted to work out details of the project, India heads the one on governance, the European Commission chairs IT, South Africa heads capacity building, Netherlands heads legal and Belgium chairs the group on business processes |
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