Importers and exporters in Madagascar will benefit from this customs project that will introduce a system of advance rulings on tariff classification and customs origin.
Traders will be able to 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 ARE DOING
Alongside Madagascar’s Customs and local and international companies, we are supporting Madagascar to introduce an electronic approach to issuing written rulings that establish in advance key shipment characteristics, including the applicable fees. Traders will be able to make an online application for a ruling, which creates an automated workflow to establish the shipment’s credentials for a defined period. This project is being 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 will:
- reduce delays and costs borne by traders in having to resolve clearance disputes
- encourage compliance with customs regulations
- improve practices within both Madagascar’s Customs and trading companies
- give companies clarity on trade-related fees and, for the government, boost customs revenues
- improve relations between traders and Customs
- bolster Madagascar’s trade competitiveness
The greater transparency, predictability, and ease that will result from the introduction of advance rulings will also encourage small and medium enterprises to engage in trade activities for the first time or expand them further if they are already in international markets.
The project also stands to greatly enhance the relationship between Customs and the business sector, putting it more on a service basis than one built purely on enforcement.
Once the project is complete, the Alliance will measure the reductions in hold times for imports and exports that have obtained advance rulings versus those without and look at how much costs have improved for traders in using the new system. We will also use surveys to determine how advance rulings are benefitting relations between traders and customs. Other indicators for measuring progress will include the number of requests issued by traders and published by Customs on an open database, Custom officers and traders in training activities, as well as communications around the introduction of the new approach.
HOW CAN THE PRIVATE SECTOR GET INVOLVED?
We are looking for businesses to get involved in a wide range of activities, working hand-in-hand with Customs to design and pilot the new systems, collecting and sharing data, communicating on work-in-progress and results to other businesses.
The project is expected to take 10 months. It will commence with a regulatory review to determine any changes necessary to establish the use of advance rulings, and progress through assessment of the required data flows and database designs. Work also focuses on design and implementation of the digitised processes, Customs internal organisation, the training of Customs officers in the new systems, and communications efforts to raise awareness of the new approach.
Find out how to get involved in the wider Alliance by clicking the boxes to the right.