WTOSymposium on Practical Experience of

Implementing Trade Facilitation Measures

Post-Clearance Audit Case Study

July 10, 2012Judith Han

Director, Department of Valuation, DGOCChinese Taipei

Outline • Brief overview of PCA • Application of IT systems • Case study• Costs and outcomes of implementing

PCA• Continuing improvements • Conclusions

Brief overview of PCA • Implemented from 2002• Establish PCA framework• Identify targets for auditing; e.g. incorrect

classification, valuation, country of origin • Recover evaded duties; impose fine and/or

penalty• Place traders acting abnormally on watch list• Refer to competent agencies for further

investigation

Application of IT systems• Tariff operation system • Valuation database• Customs information system• Import/export trade statistics

management system • PCA management and operation

system• Others

Case StudyBackground—target at high-risk imported goodsAlert--undervaluationRisk Identification-no transaction documentsAnalysis--possible customs fraud Procedures--check with bank and foreign attachés Key Issues: different wire transfer amount, falsified invoices Outcome: US$208,200 evaded duties & fines to be leviedLessons taken: enrich valuation database, enhance scrutiny, instruct importers

Costs of implementing PCA (for fiscal year 2010 - ’11)

Number of auditors 40

Personnel expenses US$ 2.610,900

Training expenses US$ 11,000

Total cost 2010 – ‘11 US$ 2,621,900

Outcomes from implementing PCA (for fiscal year 2010 – ‘11)

Audits completed 583

Discrepancies found 454

Estimated value of evaded duties and fines recovered US$ 26 mill.

By type of discrepancy found: - Valuation 49.57% - Tariff classification 18.70% - Origin 1.72% - Description of goods and specification 1.20% - Concealment in imported goods 0.17% - Others 6.52%

Continuing Improvements

• Integrating related IT systems and valuation database• Strengthening ability to analyse and identify risk

Conclusions

Efficiency Effectiveness Cost & Benefit; Ensure Compliance Trade Facilitation Monitor of non-Com.

3Es

Enlightenment Experience Sharing

- Domestically - Within WTO

Thank you for your attention !