International Anti Corruption Conference
The participants in the Customs workshop (attacking opportunities and incentives for
corruption in Customs) included:





Kunio Mikuriya, Deputy Secretary of the World Customs Organization,
chairperson,
Boris Begovic, vice-president of the Center for Liberal Democratic Studies
(Serbia), panelist
Shahid Sheikh, World Customs Organization, coordinator
Herve Loriod, director of French Customs, advisor to the Center for the
Prevention of Corruption (France), panelist, and
Michel Zarnowiecki, World Bank, Senior Regional Coordinator, Customs
specialist, coordinator and rapporteur of the workshop.
*
The panel presentations covered Corruption in the Customs: Two Stages and the Turning
Point in Serbia (Boris Begovic), How to Promote Ethics in Customs administrations
(Herve Loriod), and Recent Developments and Future Initiatives (Kunio Mikuriya). A
further presentation by Madhab Prasad Ghimire, Secretary, CIAA, Nepal, on Managing
Integrity in Customs in Nepal was discussed during the workshop.
1. How it started.



The theme of corruption in Customs can be misleading: Customs are often
singled out when integrity is at issue partly because of the high visibility of border
procedures, while corruption in Customs often reflects similar problems
throughout the parent society. In addition, there is a generalized tendency to
associate Customs with all wrongdoings surrounding international travel and
exchanges, although the role of other agencies should not be overlooked. All over
the world, Customs are more vulnerable than other comparable agencies, because
Customs officials have direct, real time, discretionary access to tangible wealth,
while they are often underpaid.
Poverty of the civil servants (Customs officials) generates corruption – salaries
below survival level are complemented with bribes – and corruption affects
mostly the poor who cannot pay bribes to access services. In Nepal, corrupt
officers would receive in a few months’ bribes what it would have taken them one
thousand years of official salary to earn.
Corruption can appear very rapidly, but the situation can improve in a short time
through political changes and a strong political will to reverse the trend (Yugoslav
Customs, at one time a western-oriented administration, became in a few years a
stronghold of the Milosevic clan, but after his departure the integrity situation has
dramatically improved). Transition provided an enormous stimulus to corruption

(the liberalization of travel and the emergence of free trade in an environment that
was not yet adapted to it).
As a result, corruption in Customs damages legitimacy, image, and is the main
obstacle to international trade and development.
However, many Customs administrations are aware of the situation, and have started to
discuss it openly. There is often a keen motivation to fight corruption, because of the
better recognition that an efficient and effective Customs administration can make a
major contribution to effective revenue mobilization and can assist governments in
promoting trade, attracting investment, and increasing confidence in the quality and
integrity of government institutions. Corruption in Customs takes a new significance in
the current security environment, as well. Governments often take strong disciplinary and
preventive measures. France has introduced a Central Service for Preventing Corruption.
In Nepal, the government introduced a special commission, with wide powers of
investigation, and in a matter of weeks jailed many of the most corrupt officials.
2. What is necessary.




Reforms must be accompanied with incentives. However, salaries and other
financial incentives can only work once the administration has started to clean up.
(Large-scale dismissals were not considered in Serbia, but there was a significant
managerial reshuffle. However, due to the lack of transparency, a recent survey
showed that a majority of Serbian Customs officials did not even know how much
they were earning.) This justifies a distinction between negative prevention (fear
of disciplinary or penal measures) and active prevention (encourage officials to
want to keep their jobs).
In most countries, removing the entire staff will have limited effect unless the job
process and the environment are reformed. Modern Customs procedures and
administration based on the international standard is indispensable.
A strong champion at both political and Customs management levels is essential.
Too frequent changes at the top of the administration do not allow a clear signal
to be sent out, and damage credibility vis a vis the private sector. An adequate
political framework and strong commitment of the government as well as the
support of the business are essential.
There is a need for feedback, that can be provided by performance indicators, user
surveys, consultation with the business community.
3. What can be done.

The right of appeal against arbitrary decisions is essential, but it can be restrained
through misinterpretation. (Pending a ruling on the valuation of goods, importers
can request conditional release, but to obtain a refund of the extra duty deposited,
they must prove that the declared value was correct – or pay a bribe; this is a
reversal of the burden of proof, is contrary to international agreements, but
supports a corrupt administration in its claim that it provides a right of appeal.)



Customs officers should be proud of their job. This creates an esprit de corps
which makes corruption less likely. All over the world, Customs suffer from a
besieged complex. A high profile attitude, good communication, social welfare,
and real care by management for their staff will help. In Yugoslavia, the previous
regime blackmailed Customs officers: In exchange for their discretion over statearranged smuggling, they were allowed to extort small bribes on regular
transactions.
Customs officers at the borders do more or less the same type of work as border
guards, yet they are often (i) less paid, (ii) less respected, (iii) yet more educated,
and (iv) very often subordinated to the police, the latter considering that their role
is to fight corruption and smuggling. Limiting Customs to revenue collection
without enforcement power is an error, that creates irresponsible behaviors.
Integration of functions, making Customs responsible for regulating cross-border
movement of goods and people (integrated border management) can improve the
situation. More generally, enhanced cooperation with other government
ministries and agencies is necessary, because Customs, unlike other
administrations, have to directly enforce legislation and regulations of other
ministries and agencies, with often limited awareness of the issues at stake.
IT offers solutions to minimize the opportunities for corruption, because
procedures are predictable, and there is a documented trail. Sometimes, corrupt
officials turn off the power when they want to allow a discreet transaction or
employ commuter hackers to change the data in the IT system. IT also facilitates
data exchanges, although there are strong reservations in many countries about
sharing intelligence with corrupt administrations.
4. Some of the tools.




The WCO has developed a road map for assessing the level of corruption in the
administration. International instruments, such as the revised Arusha declaration
that contains essential elements of an effective anti-corruption strategy discussed
above, the Revised Kyoto Convention that provides international standard for
modern Customs procedures, or the OECD convention, set guidelines. The
Integrity Development Guide, recently developed by the WCO, provides an
ongoing process of continuous review and improvement of integrity strategies,
comprising self-assessment and action planning.
Audit mechanisms work when coordinated. In France, management is
responsible for internal audit, but it is complemented by an independent body
within the central government services.
A regional approach to Customs reform enables peer pressure, benchmarks, and
use of best practice. The WCO has developed the Regional Peer Review and
Information Sharing Practice to help Customs achieve meaningful results in
integrity.
The focus tends now to move on institutions and performance rather than
individuals.
5. How to evaluate the results.







Performance indicators are available, as well as the results of user surveys. 1
The participation of the private sector in the evaluation of administrations can
play a major role.
Hotlines, when well managed, provide management with both the ability to
respond immediately to user concerns, and a feedback.
Customs in South East Europe are starting soon a collective self-assessment of the
corruption issue.
The WCO Peer Review will start later this year: participation is highly
encouraged but voluntary.
While some participants advocated for the establishment of standards
corresponding to an ISO one, others suggested that each Customs sets its own
verifiable performance indicator rather than a “one size fits all” standard, taking
into account the need for flexibility to accommodate the different circumstances
of individual Customs administration.
Some participants expressed a strong view that in addition to the best practice, the
entire result of peer review should be made available, particularly for the
evaluation of capacity building activities for donors and lending institutions.
*
All the participants agreed that the effective implementation of available tools to enhance
integrity now requires their effective implementation. The Chairperson was tasked to
relay the message and views expressed during the workshop to the relevant forum of the
Global Forum III that would be held later in the same week jointly with the private
sector.
1
See http://www.seerecon.org/RegionalInitiatives/TTFSE/ for a description of performance indicators and
surveys used in South East Europe under the World Bank supported Trade and Transport Facilitation
program. The WCO Integrity Development Guide also provides guidance to develop an integrity action
plan for Customs that includes establishment of its own performance indicators.