Customs and Trade updates
September 2008
Singapore and New Zealand’s Supply Chain Security programmes to strive for mutual recognition
Singapore Customs and the New Zealand Customs Service have signed a Statement of Intent (SOI) in July 2008 to work towards mutually recognising each party’s supply chain security programmes. As these countries are among the frontrunners to push for supply chain security within the Asian region, the signing of the SOI gave a strong signal to all supply chain stakeholders that customs authorities from both Singapore and New Zealand are committed to enhancing the level of supply chain security within their respective territories while facilitating trade concurrently.
In accordance with the World Customs Organisation Framework of Standards to Secure and Facilitate Trade (WCO SAFE Framework), Singapore and New Zealand have the Secure Trade Partnership (STP) Programme and the Secure Export Scheme (SES) Programme respectively, both of which are “Authorised Economic Operator” type schemes.
Launched in May 2007, the Singapore’s STP Programme is a voluntary programme for supply chain stakeholders. It provides various benefits if companies decide to take up the programme along with compliance to certain conditions stipulated by Singapore Customs. Companies can benefit from the following measures:
- Less cargo inspections by Singapore Customs locally.
- Recognition as a low risk company with a robust and secure supply chain which can enhance their branding.
- Reduced inspection or expedited clearance of cargo in other countries whereby the certified status under STP Programme is recognised through the mutual recognition agreements between the customs authorities of other countries and Singapore.
Similar to Singapore’s STP, the SES administrated by New Zealand Customs, is voluntary and seeks to ensure that goods to be exported are packaged, shipped and conveyed to the place of shipment securely without any unacceptable interference.
To qualify for the SES, measures have to be put in place by an exporter to protect goods against tampering, sabotage or smuggling from the point of packing to the point of delivery at a site for export loading. The exporter has to also demonstrate commitment in an approval document supported by a self-prepared security plan.
The SES has already been recognised by the US Customs authorities. This means that New Zealand exporters will enjoy border clearance privileges in the US, provided the US importer is a member of the US C-TPAT (Customs Trade Partnership Against Terrorism) scheme.
As mentioned in the Singapore country report in our May – June 2007 issue regarding the STP Programme, mutual recognition will likely be most valuable out of the three above mentioned benefits for most certified companies in either Singapore under the STP or New Zealand under the SES. This is even more so for multinational companies with cross border supply chains in both countries. Mutual recognition of both the STP and SES will reduce the amount of paperwork needed from companies. It is also likely to reduce the turnaround time of their shipments, which will lead to cost savings and a possible competitive advantage.
After more than a year since its official launch, 22 companies have signed up for the STP Programme as of July 2008. Whilst 22 is not a very large number, this latest development towards the STP Programme being recognised in other countries makes it a more attractive and feasible option for companies to join. To date, New Zealand is the first country that Singapore Customs has signed an SOI for a future mutual recognition arrangement of its STP programme. Discussions are ongoing with the United States and Australia.
Implementation of new Certificate of Origin Form for Common Effective Preferential Tariff (CEPT) Scheme in Singapore
In line with ASEAN’s recently revised Rules of Origin (see also our Feature Article), Singapore Customs has implemented the new Certificate of Origin (Form D) on 1 August 2008.
The two main changes are:
- The new origin criterion in Box 8 in which applicants need to state the method used to conclude that their products are originating from ASEAN i.e. wholly obtained, the value-added criterion of 40% originating content, change in tariff classification heading or product specific rules.
- The additional information (Box 13) to be completed by the applicants to inform the relevant authorities whether or not some of the conditions of their transactions are in line with the RoO such as the presence of third party invoices.
In addition, applicants are only required to give three copies to Singapore Customs (instead of the original four copies) to the importer, issuing authority and exporter.
In order to facilitate the change of the CEPT Form D, applicants are allowed a transitional period from 1 August 2008 to 31 December 2008 whereby they can use either the old or the new Form D issued overseas. With effect from 1 January 2009 however, only the new CEPT Form D should be used for new exports from other ASEAN countries. Original CEPT Form Ds from overseas importers which have validity periods running beyond 1 January 2009 will continue to be accepted.
It is to be noted that exports from Singapore that seek to enjoy the preferential CEPT by exporting ASEAN-originating goods into other ASEAN member states should use the new Form D issued by Singapore Customs.
Singapore Business Environment to be further streamlined
As part of the Singapore Government’s iGov2010 initiative to connecting citizens and companies though the usage of infocomm, Singapore Customs has stipulated businesses to use the Unique Entity Number (UEN) in place of the Central Registration (CR) Number with effect from 1 January 2009.
Currently each importer is issued a CR Number, which is a compulsory field to fill in for all import / export declarations and license applications to Singapore Customs. From the company’s point of view, the CR Number is just one of the multiple identification numbers that it is required to use for various transactions with different government agencies, which is inefficient. With the implementation of the UEN, each company will just need to use just one unique identification number to transact with 51 government agencies including the Inland Revenue Authority of Singapore (IRAS) and the Accounting and Corporate Regulatory Authority (ACRA).
The Apex Scheme – combining the best of all licenses?
Singapore Customs has launched the ‘Apex Scheme’. This scheme offers a single licensing platform for traders supporting manufacturing, storage and retail services for both non-dutiable and dutiable products. Prior to the implementation of the Apex Scheme, traders were required to hold multiple licenses such as for the Licensed Warehouse Scheme, Zero GST-Warehouse Scheme or Excise Factory scheme for relevant activities. Under the Apex Scheme, traders with various business operations and in multiple locations will be able to move goods freely from one licensed premise to another. This translates into minimal 'red tape' and enhanced supply chain functionality.
Under the Apex Scheme, businesses previously using different warehousing schemes can save on overall license fees payable to Singapore Customs.
Existing license holders who are keen to take up the Apex Scheme are eligible to benefit from the scheme if they maintain a positive track record with Singapore Customs, besides having a secure and stable single-inventory accounting system. The inventory accounting system is essential for tracking, tracing and accounting for inventories across different locations under the premium license to ease reporting and documentation requirements. In addition to the above, Singapore Customs will assess an applicant on the following criteria:
1. Business continuity and financial stability;
2. Adherence to procedures and proper segregation of duties;
3. System transparency and accountability; and
4. Security.
For further details, please call your usual PricewaterhouseCoopers contact.
