Designing a new methodology for customs risk models
Date
2019Author
Hoffman, Alwyn
Grater, Sonja
Venter, Willem C.
Maree, Juanita
Liebenberg, David
Metadata
Show full item recordAbstract
Effective risk management is a prerequisite to find an acceptable balance between the
objectives of a customs operation and the streamlined flow of goods. The customs
operations in many developing countries are characterised by high levels of physical
inspections, with resulting disruption of trade flows, but with little positive impact for
the regional economy. Most developed economies have moved towards customs risk
management models based on the analysis of rich datasets that can be used to accurately
determine the risk represented by a cargo consignment without physically stopping it.
The use of such models can result in reduced physical inspections without increasing
the risk to Customs of either losing income or allowing the influx of illegal contraband.
It, therefore, represents a more optimal compromise between the interests of customs
and those of trade, reducing the economic cost to the region and making the region more
attractive to global economic partners. In this paper we develop a rigorous methodology
that utilises electronic data transacted between Customs and trade to characterise the
risk attributes of cargo consignments and then extract a model that can be applied in
real time to minimise disruption of trade flows while reducing Customs risks to levels
that are below set thresholds. This paper builds on previous work of Laporte (2011) and
others but extends their results by developing a more detailed methodology to quantify
the impact of a variety of input factors and demonstrating how an optimal set of inputs
can be selected to arrive at an effective risk management model
URI
http://hdl.handle.net/10394/34290https://worldcustomsjournal.org/archive/volume-13-number-1-march-2019/