Pushing Boundaries: innovating under the hood
Dutch Customs is faced with the challenging task of ensuring full monitoring of the ever-increasing flows of goods. In 2014, under the motto of ‘Pushing Boundaries’, the organisation put a dot on the horizon: an innovative, smart way of working, aimed at realising an appropriate balance between enforcement and trade facilitation. Numerous initiatives have been developed in the past years to put this vision into practice. A (sometimes difficult) development in which the service also explicitly wants to include the business community.
On Thursday 20 June, dozens of representatives of trade and logistics interest groups made their way to The Hague for a VNO-NCW theme day organised by Customs, entirely devoted to Pushing Boundaries. “We’ve already initiated many things under this motto”, Bert Wiersema, director Enforcement Policy, explains. “Such as in the field of our inspection approach, our system-oriented monitoring, scanning and sensor technologies and the accessibility and use of data. Yet these innovative processes mainly take place under the hood; certainly the outside world, including our customers, can’t look in. Whereas we did, in fact, start this initiative with the business community in mind.”
“Through Pushing Boundaries, we’ve set out a future vision and are constantly taking concrete steps in that direction,” Wiersema continues. “We’re not always satisfied with the pace at which we progress and sometimes, we do experience some impatience in trade and logistics. It often turns out that making the transition from the drawing board to implementing in practice isn’t easy for Customs, which is understandable. On the one hand, you work on all kinds of investigations and pilot projects while thinking many years ahead, whereas on the other, our service remains, in essence, an operational enforcement service, set up to monitor the here and now. This can create the necessary friction here and there, but overall, we’re definitely making progress. The introduction of the advance declaration in our declaration system AGS for import goods is one such example, technically allowing to complete customs formalities even before the shipment arrives.”
“By the way, the Pushing Boundaries vision document isn’t a blueprint, but rather a compass by which our administration heads for an intended, ideal situation,” Frank Heijmann, Head of Trade Relations, explains. “A layered enforcement model is central: we apply different methods of enforcement, depending on our knowledge of goods, actors and trade chains. This results in less drastic logistics interventions at trusted companies and more checks at unknown economic operators. For this, we divide freight traffic into three streams. In the case of the first stream, the blue flow of goods for unknown economic operators, our service basically checks at the border, based on risk selection and analysis. In the case of the green flow of goods for market participants with a proven track record of compliance, we make observations, where possible outside of the logistics process, to test the legitimacy of a company’s actions. Finally, in the case of the yellow flow of goods, we’re working on making entire logistics chains safe, partly based on the automated exchange of all forms of inspection information within such a chain. This is sometimes also referred to as smart and secure trade lanes.”
“The distinction between blue, green and yellow flows of goods is, in fact, a visualisation of ideas that has been decisive for our actions for some time,” Heijmann continues. “Issues such as a risk-based approach, working based on proven reliability and giving customers the attention they deserve. As explained earlier, the quality and reliability of the available information on goods, market parties and logistics chains are vital in all this. If we don’t know which economic operator is responsible for a shipment, then it makes sense to check those goods at the border. Yet in other cases, in addition to information on goods, we do also have data about the economic operator concerned. And if they demonstrate that their company can be labelled as a trusted operator, we can organise the monitoring of that flow of goods in a different way.”
Through layered enforcement, Customs aims to achieve the best possible balance between monitoring and trade facilitation. The objective is to reduce the administrative burden and inspection pressure, as well as any logistical delays for trade and industry, to a minimum. Heijmann: “We’ve asked the business community in what way they would be served best. Three issues emerged from this (see also text box, ed.). First, organise customs controls at logical places and moments in the logistics chain and, where possible, outside thereof. Second, coordinate the checks and procedures of the various inspection services. And third, rely on the mechanisms of the internal control systems of companies and the guarantees that they offer, as much as possible.”
“As to the latter, there are certainly possibilities. Such as in the pharmaceutical sector, for instance. Given their commercial interests, pharmaceutical manufacturers have built in numerous safeguards into their business processes. One of the reasons for this is that buyers from this industry set very high quality requirements for the transport of medicines. Customs can use these strict criteria in its inspection approach.”
Naturally, during the VNO-NCW theme day, a frequently heard question was when the Pushing Boundaries’ innovations would become more visible in daily practice. Wiersema: “That question from economic operators is justified. My answer is that much of that innovation has already been implemented in Customs operations in an organic kind of way. And this development is ongoing. If we look at our organisation over time, you will see that the engine has been almost completely overhauled. And more importantly, that our service moves through freight traffic smartly and smoothly. But until then, we certainly still have a lot of work to do.”
This issue of ‘Customs NL inSight’ is largely devoted to the future vision Pushing Boundaries. In a series of articles, you can read about developments in the blue, green and yellow flows of goods and the efforts of Customs in the area of social innovation.
Within the framework of Pushing Boundaries, issues have been identified that are important for the entire business community and that have been endorsed by the Customs-Business Consultation forum:
* Pushing control out of the border. Goods inspections are arranged at logical moments and places in the trade chain. In the case of reliable shippers, for example, supervision can be exercised whilst unpacking the cargo, instead of at the border. And in the case of trusted chains, Customs can re-use departure control data.
* Coordinated border management. Different inspection services coordinate their checks and carry out these interventions at the same place and in the same time frame (one-stop shop). The data required for these services can be supplied once, followed by one, joint instance of feedback (Single Window).
* System-based approach. Where possible, Customs uses the internal control systems and mechanisms set up by companies themselves.