The Risk Management Model is one such tool, which if used effectively can provide value to Customs as well as the customer.
Introduction
Due to the reasons explained above, it is clear that there is a need to adopt a consistent Risk Management model that guarantees a better choice of operations with greater emphasis on the probabilities of fraud and smuggling, as a result the enabling selection of fewer volumes without compromising the security of controls.
Literature Review
The RMP mythology adopted by various customs administrations around the world is essentially the same. Factors such as political, legal, economic and social elements of the environment influence the context of RMP.
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The Importance and Objectives of the Research
The strategy that is delivering this needed improvement around the world in other customs authorities, such as the US and Brazil, is the risk management approach to customs brokerage. Therefore, the purpose of the study is to determine whether the trade compliance and risk management approach will be an affective approach to maintain a balance between trade facilitation and enforcement by examining the proposal from both the customers' and customs' perspectives.
Ethical Considerations
Limitations
- Nature and form of Results
The first part of the dissertation will be the case study itself, consisting of a strategic analysis. In conducting the strategic analysis, a review will be conducted of existing research and customs administrations that currently use a risk-based approach to trade compliance.
Structure of The study
The study will document the effectiveness of a risk-based trade compliance model in achieving trade facilitation and compliance and an appropriate procedure that can present as a way forward. This chapter will outline a strategy to close the gap and outline the recommendation and conclusion based on the findings of the study.
Summary
THEORETICAL MODEL OF STRATEGY
- Introduction
- What Is A Strategy?
- Stakeholder Importance
- The Strategic Management Process
- The Importance of Studying The Environment
- Industry Analysis
- Key Success Factors In the Industry
- Analysis of the Competitive Environment
- Internal Analysis
- Resource Based Analysis
- SWOT Analysis
- Value Chain Analysis
- Developing Strategic Options
- Porters Positioning Approach
- Generic Competitive strategies
- The Expansion Matrix Option
- The Resource and Competence Based Approach
- Resource based strategy option: Cost Reduction
- Combined Approach
- The Long-term Objective as the Best Strategic Option
- Strategy Evaluation
- Strategy Implementation and Execution
- Change Management
- Cultural consideration To Successful Strategy Implementation
- Strategic Management Style
- Background
- SARS Leadership
- Analysis of the Environment
- Economic Environment
- Social
One of the main analytical tools for strategic cost analysis is the value chain. A comprehensive implementation program is used when a major change in the strategic direction of the organization is required.
Customs Demographics
Region
African
Coloured
Asian
White
- Trade in Endangered Species
- International Relations
- The Impact of Globalization
- Competitors Analysis
- The Exchange Rate Impact on Competitiveness
Although the purpose of customs is primarily to collect revenue, it also plays a crucial role in protecting the South African economy. The Customs and Excise Act 91 of 1964 regulates the activities of the customs administration in South Africa. SARS is particularly fortunate in that several donor interventions in support of the government's socio-economic objectives were extended to customs.
The exchange rate is one of the most important variables affecting international trade initiatives.
Category Gold
Source: IDC, 2000
Internal Analysis
- Strengths
- Revenue Performance
- SARS Worsening Debt Situation
During the periods from 1995 to the 2003/4 tax periods, SARS provided substantial tax relief to consumers. In establishing this office, SARS uses the rapid resolution of complaints that could not be resolved through the normal channel of operations. Although the SMO does not report to parliament, it operates independently of local branches and reports directly to the Commissioner.
However, while SARS has focused its attention on the deteriorating debt situation, it has not done enough.
Weakness in Internal Control
4 Receipts were unprocessed or unallocated to the relevant account - all amounts were not allocated to the customer from whom the payment was received. Although these funds have been used by the treasury, the amounts are still recorded as outstanding amounts.
SARS Culture
Customs has made significant efforts to transform its traditional manual operations by implementing the following systems that will provide greater flexibility in providing a high quality service to its customers in the future. This system acts as a tool to interface between the Cape Phase 2 system and the customers' electronic systems. It is envisaged that this system will later "talk" to systems from the (NPA) National Port Authority (COSMOS), depot operators and shipping lines.
The principle of DAS systems allows SARS to assess excise duties at the point of production.
Threats
As railways constitute one of the most vital parts of the cross-modal export chain, this creates barriers to success in achieving the new industrial strategy. The lack of alignment within the supply chain shown in Figure 3.19 shows the amount of time an average export container spends at each step of the transport chain, 83 percent of which is spent traveling to its destination. Based on this distance from the markets, the cost of goods for container loads constitutes 68 percent of the transport cost on the import side, while on the export side it constitutes 60 percent of the transport cost.
The growth of cross-border crime, such as narcotics smuggling, money laundering and the use of firearms, is increasing due to the complexity of the types of cargo flowing through ports and the volume constantly increasing.
Core Competencies
The Graduate Institute of Technology has been appointed as a partner for the implementation of the organisation's Leadership Development Program (LDP). This program is one of the projects for leadership development and talent creation within SARS. The customs service has made use of the Danish system around which they have developed ICRAS, which is a computerized risk management tool.
It is this aspect of risk management that will be the focus of the previous chapter.
Customs Current Risk Management Strategy
Customs began in earnest to deploy technology to speed up processing and subsequently adopted a risk management system to effectively profile cargo for inspection and audit. Comparisons between these two structures show that the old structure relied heavily on the individual to perform most functions, including the core function of risk profiling. The modified structure, as shown in Figure 3.21, encouraged specialization of jobs and team effort in achieving organizational goals.
After this SARS has further modified the grouping structure as shown in figure 3.22, removing risk analysts from within different teams and placing all risk analysts in one collective team.
Relationship between Risk Management and Intelligence
However, risk management decisions must reflect a balance between the level of risk in terms of adverse social and economic impacts against the benefits versus costs associated with control activities. Risk management requires SARS to have a combination of compliance research and intelligence to provide an objective and comprehensive picture of the risk posed to SARS by internal and external threats. Results of these inspections can be entered into the case management and tracking system for further action and tracking.
Audit planning provides additional support for case processing and tracking by standardizing results and ensuring uniform storage of information.
SARS Resource Plan (Budget!
Measuring the Success of Implementation
SARS corporate objectives are annually managed and monitored through the submission of an annual report to the Minister of Finance, the Portfolio Committee on Finance in the National Assembly and a select committee in the National Council of Provinces. Further, SARS will enhance performance review through a Metrics Unit in the Commissioner's office, which has been established to monitor and review the implementation of business plans, as well as the implementation of initiatives and projects against stated goals and objectives. For the past three years SARS has used the Interim Performance Management System.
By adopting the principles of the Kyoto Convention on Trade, SARS has effectively committed itself to a process that revitalizes its activities and the way it does business.
Introduction
- Global Context
- National Context
4 Globalization, reflected in the integration of financial markets, revolution in information technology, distribution of products to developed regions of the world, leading to massive growth in global trade. 4> A changing structure of the economy indicating a move away from civil service, construction, mining to internal trade and finance, real estate and business service sectors. 4 Significant growth in a parallel economy, it consists of a sophisticated formal sector operating alongside an informal economy.
This can only be achieved by optimizing revenue collection, increasing trade and creating an efficient and effective administration.
Strategic Analysis of Other Customs Administrations using the Risk Management Process
The United States Trade Compliance and Risk Management Process
The APIS is used by US Customs to obtain travel information prior to aircraft arrival.. for airport risk management. The results, whether positive or negative, are correlated and reported back into the risk management process. For a good and effective risk management process, suitable tools are required together with skilled people.
In step 1, the context is actually the environment in which the risk management process is carried out, which is represented in Figure 4.6.
Risk Analysis
Low risks are acceptable risks and assessed by standard or routine procedures in some cases no actions are taken. Control actions can be (documentary and physical) on the spot or at the trader's premises. It may be decided to undertake a posteriori checks such as audit to reduce the burden on trade at the border or for more detailed checks.
Control actions can be documentary and physical at the time of entry of the shipment or at the trader's premises.
Monitoring and reviewing
- Brazilian Model
- Evaluation of SARS Present Strategy
- The Affect of Tariffs and Quota's on Consumers
- Key Success Factors
- Benefits that will accrue from Trade Facilitation
- Internal Environment
- Other Institutions and Measures that affect Trade
- Gap Analysis
- Strategic Analysis of SARS Risk Management and intelligence Unit
4> The gray channel means that the customs value of the goods must also be checked. The selection of operations to be examined in the customs clearances will be determined using an algorithm that establishes a ranking hierarchy among the different components and dimensions of the identified customs risks. Transnet is instrumental in the awakening of the "African giants" that provide the infrastructure necessary for the movement of goods.
4> The results of the risk analysis must be stored in the "Risk Profile Management Database".
Recommendations and Conclusions
- Introduction
- Strategic Outcomes
- Installing Total Quality Management within the Process
The risk management process is only as effective as the intelligence that goes into the system. In this regard, Customs has implemented the first phase of the risk management process within SARS. 4 Publish risk management to make employees understand their role in the organization's overall risk management strategy.
This system essentially forms an effective communication channel between the risk management team, the post audit team and the intelligence team.
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