Importers and exporters in Madagascar are benefiting from this customs project that has introduced a system of advance rulings on tariff classification and customs origin.
Traders can now request an advance ruling on the application of customs regulations knowing that the resulting legal opinion will be binding, uniformly applied by Customs, and valid for a set period, usually several years.
The advance ruling model gives companies the confidence to conduct trade with a clear legal opinion covering their goods before they ship, reducing the chance of disputes during processing by Customs officers. The ruling is also binding on the importing or exporting business, which is obliged to use the decision provided as part of its declaration at customs clearance.
WHAT WE DID
With support from the Alliance, Customs implemented a paperless mechanism for issuing written rulings that sets out the main characteristics of the shipment in advance, including the applicable fees. Companies can now apply for an advance ruling on Customs’ website and consult the issued rulings online. A dedicated team within Customs analyses the requests from companies and issues rulings.
As part of the project, Customs’ officers received in-depth training on the application of tariff classification and rules of origin. Also, the Alliance held several awareness-raising workshops in the country’s main cities to inform companies about the new system.
This project was implemented in cooperation with Madagascar’s National Trade Facilitation Committee, which comprises both public and private sector representatives, and the Director General of Customs.
The introduction of advance rulings:
- reduces delays and costs borne by traders in having to resolve clearance disputes
- encourages compliance with customs regulations
- improves practices within both Madagascar’s Customs and trading companies
- gives companies clarity on trade-related fees and, for the government, boost customs revenues
- improves relations between traders and Customs
- bolsters Madagascar’s trade competitiveness
The greater transparency, predictability, and ease that result from the introduction of advance rulings also encourages small and medium enterprises to engage in trade activities for the first time or expand them further if they are already in international markets.
As soon as a sufficient number of advance rulings is reached, the Alliance will measure:
- the reductions in hold times for imports and exports that have obtained advance rulings versus those without
- the reduction in costs for businesses using the new system
The Alliance will also conduct field surveys to determine the extent to which advance rulings improve relations between businesses and Customs. The number of requests issued by businesses will also be tracked by Customs and the decisions will be published in a database accessible to business.
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