Contribution on a success example in the regional capacity building activities from Papua New Guinea Customs Service


Contribution on a success example in the regional capacity building activities from Papua New Guinea Customs Service
“My administration’s experience in reform and modernization on PCA”

Author: Mr. John B Sam
Assistant Commissioner
Commercial, Trade & Compliance
Papua New Guinea Customs Service

Papua New Guinea (PNG) became a Member of the World Customs Organization (WCO) in 2002 and in keeping with its commitments as a Member PNG Customs Service (PNGCS) strives to achieve international standards and best practices. PNGCS as a merged entity with the PNG Internal Revenue Commission (IRC) began its modernization program in 2004, using the Revised Kyoto Convention (RKC) as a basis. The Compliance and Post Clearance Audit (PCA) program is a key area of the modernization program as PNG moves from the traditional transaction base customs control to the new account base control.  

The PNGCS modernization program was driven by: (1) PNG government’s Medium Term Development Strategy (MTDS) and Vision 2050, which outline the government’s social and economic development strategies; (2) PNG’s obligations to APEC Bogor Goals of free and open trade by 2020; and (3) need for increased activity in the extractive industries. In order for the PNGCS to achieve the government’s development objectives and to increase foreign investment, it had to facilitate trade while maintaining efficient and effective border controls. With full support of the government in the PNGCS’s modernization program, the government demerged the PNGCS from the IRC in 2009 to be a standalone government entity. In October 2014, the government approved for the PNGCS to be a statutory authority to be effective by February 2015.  

In 2004, when the modernization program began as an APEC Pathfinder Initiative, a Kyoto Project Management Team, which comprised of senior Customs experts and legal professionals, was established. This team was later changed to the Customs Modernization Management Team (CMMT). The CMMT approach was to modernize the PNGCS using the RKC as a basis. The first stage was to see if the PNG’s current legislation was compliant with the RKC. The second stage was to seek assistance from the WCO by signing the letter of intent to implement the SAFE FoS, which resulted in a Diagnostic Mission to PNG in June 2007. The CMMT was headed by an Assistance Commissioner and had the full support of the Commissioner. Support also came for the Treasury and Finance departments who approved the modernization program to be funded under Customs annual recurrent budget. 
The WCO Asia/Pacific Regional Office for Capacity Building(ROCB A/P) assisted the CMMT to draw up the PNGCS Strategic Modernization Action Plan, which was endorsed by the PNGCS management in December 2009 and assisted arrangement of a meeting with various aid donors.  

WCO national workshop on PCA September 2014

The WCO, the APEC and the OCO provided the PNGCS with support for the PCA program. A good example of such support is the WCO/OCO sub-regional workshops, which lead to the development of the PCA Implementation Guidelines. This was further complemented by the WCO national workshop on PCA, which took place in September 2014, with the aim of further operational enhancement.  

Support for the PCA program also came from the PNG-Australian programs funded by Ausaid. This support was in the form of deployment of short term advisors to the PNGCS and placement of PNG Customs officers in Australia.  

As a result of above-mentioned endeavors, the following achievements are made to date.  
1. A PCA General Orders (GO) and Standard Operating Procedures (SOP) for PNG Customs officers’ use were developed.  
2. Workshops were conducted for reviewing the GO and SOP in 2012.  
3. The PCA GO/SOP reviewed to suit the organization’s restructure in 2014.  
4. Decentralization of PCA functions to field operations.  
5. Introduction of the Administrative Penalty regime and Desk Audit.  

These efforts are being further enhanced taking into account of recommendations made through the recent WCO Phase 3 monitoring mission and the WCO National Workshop on PCA in September 2014 respectively.  

Through these modernization initiatives of the PNGCS with PCA focus, where it now facilitates trade more efficiently by allowing 80% of customs entries on green lane subject to PCA, PNG sees an increase of voluntary compliance by traders, reduced cargo clearance time to 48 hours, and increasedrevenue collection.  

The PNGCS appreciates assistance made for capacity building and looks forward to continued assistance in this modernization avenue.  

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