1ST ASEAN-EU Business SummitInfrastructure Sector Dialogue

Wilson TanDirector of Corporate Responsibility,Legal & Public Affairs5 May 2011Jakarta

Supporting ASEAN’s Move Up the Economic Value Chain

De Minimis ThresholdsDe Minimis ThresholdsSmall money amounts cost more to collect than what is Small money amounts cost more to collect than what is brought in revenuebrought in revenue

Improve customs clearance efficiency by adopting appropriate de minimis thresholds for low value shipments, allowing duties to be waived and customs procedures to be simplified

Facilitates trade, promotes e-commerce and lightens the workload for customs clearance by adopting a more focused approach towards higher value and higher risk shipments

Does not mean that Governments forego their right to police borders. Such shipments continue to be subject to inspection, detention or seizure if suspected to be illegal or contraband items

De minimis levels in the Asia Pacific region currently range from US$0.20 in the Philippines, to US$30 in Thailand, US$50 in Indonesia, US$150 in Malaysia, US$300 in Singapore, up to as high as US$1000 in Australia

De Minimis ThresholdsDe Minimis ThresholdsSmall money amounts cost more to collect than what is Small money amounts cost more to collect than what is brought in revenuebrought in revenue

Recommendation:

Establishment of a common baseline de minimis threshold in ASEAN

Setting an appropriate common baseline de minimis threshold (e.g. US$50) would not only facilitate trade within the ASEAN region, but increase the region’s trade and investment attractiveness vis-à-vis the rest of the world

By encouraging individual ASEAN member countries to set higher de minimis thresholds above this baseline, we would maintain competitive neutrality by continuing to promote efficient competition between ASEAN member countries

Pre-Arrival Import ClearancePre-Arrival Import ClearanceAugmented by electronic data interchange capabilitiesAugmented by electronic data interchange capabilities

Ability to receive, profile and clear the majority of shipments prior to arrival only the required shipments are flagged for non-intrusive screening

Benefits: Streamlines customs clearance and provides greater

transparency Strengthens Customs’ risk profiling and management

capabilities Speeds up the flow in the supply chain and improves

economic competitiveness

Currently, only half of ASEAN member countries allow electronic submission of manifest and/or declarations prior to arrival for risk management, which in some cases may apply only for selected categories of shipments or air mode

European Union has a Customs Single Administration Document (SAD), Common EU Customs Transit System, Pre-Arrival Import Declaration and Clearance

Recommendation:

For all ASEAN members countries to establish pre-arrival import clearance systems, augmented by electronic data interchange capabilities

European Union has a well developed Customs Pre-Arrival Import Clearance process and systems which could be adapted for ASEAN

Pre-Arrival Import ClearancePre-Arrival Import ClearanceAugmented by electronic data interchange capabilitiesAugmented by electronic data interchange capabilities

Recommendation:

To expeditiously implement the agreements and measures listed in the ASEAN Logistics Roadmap (Section II)

The implementation of these agreements and measures would make it cheaper (less cost involved in regulatory processes), faster (less time to obtain regulatory approval) and easier (less procedures to deal with) to do business in the ASEAN region

Priority Areas for Implementation in the Priority Areas for Implementation in the ASEAN Logistics RoadmapASEAN Logistics Roadmap

The World Economic Forum The World Economic Forum Enabling Trade in the Greater ASEAN Region Report (2010)Enabling Trade in the Greater ASEAN Region Report (2010)

Report identified four main enablers of trade:

Market Access Border Administration including customs Transport and communication Business environment including regulatory

Tariffs & non-tariff measures are no longer the main obstacles to trade following substantial reductions

Focus now on unnecessarily complex customs, at-the-border procedures, inefficient transit arrangements and underdeveloped trade-related infrastructure. Border Administration costs represent 7-10% of the value of global trade (ADB).

Reducing time to market is critical in today’s “just-in-time” world. Each 1-day delay in the export process reduces exports of time-sensitive products by 7% and less time-sensitive products by 1%.

Working Together = Everybody Benefits

European Commission /

Taxation and Customs Union

Thank you Thank you