Mike Bing on the Challenges and Changes Facing Customs Compliance

  Mike Bing Diageo Customs Compliance Pillars TradeMike Bing started his career in Customs in 1984 with the Israeli department of Customs and Excise. After working across various positions for 8 years, he returned to his native Holland and worked for several logistic companies, including UPS and NEC Logistics. Mike returned to customs consultancy at Port Support International and was then employed by Delphi Automative as the European Customs Process Manager. He then moved to GE, working as both the Customs Centre of Excellence Leader and then as the Manager of Trade Compliance Projects, also functioning as GE’s Global Operations Customs Risk Leader Europe. Currently, he brings his wealth of experience and knowledge to Diageo taking on the role of Director of Global Indirect Tax (Customs). A select group of attendees were also able to benefit from Mike’s knowledge and insight at C5’s training course on the Pillars Of Customs Compliance In advance of this anticipated course, Mike conducted a short interview with us to address the challenges, changes and training opportunities for those working in customs…

1. What Are The Top Customs Compliance Challenges Facing Companies Right Now?

  Some of the greatest challenges facing companies with a truly global supply-chain is the pressure, especially in developing countries in Africa, SEA and Latin-America, to generate more government revenue through valuation uplifts and classification challenges. As there is a considerable gap between transfer pricing regulations for direct taxation and customs WTO/GATT valuation methodologies, less sophisticated Customs authorities will often apply reference prices or entirely haphazard uplifts in bound goods while the importers have limited means to challenge these policies. The increased pressure on self-auditing, constant evaluation of overseas transactions, 3PL oversight all come into conflict with budgetary constraints traders (multinationals especially) experience within their indirect tax and Customs departments. Defending a Global Trade Management function often becomes an uphill battle in the focus on cost-savings rather than a must-have in the fight for reputational and shareholder value. The requirement for vigilance on Customs transactions form an improper payment and ethics perspective remains as it has been for quite a long time and, with 70% of the world’s markets classified as high-risk in the Transparency International CPI that pressure does not seem diminished. The existing and new regulations in exporting markets (such as the new UK foreign tax evasion regulations) steadily increase the pressure on traders to self-police their transactions more effectively and increase visibility to international transactions through risk-assessment activities and ongoing monitoring.

2. What Are The Most Exciting Changes Happening In Customs?

  New EU Customs regulations such as the recently introduced UCC and its accompanying acts (May ’16) have created a level of uncertainty and the call for Brussels to become more aware of actual trading practices such as in the discussion around the “who can be an exporter” article, the unofficial guidance provided by the EU and the wide variance of interpretation within the EU28. The increased focus on the AEO SAFE framework which has until now not shown any true benefits has now taken root in the UCC with the big question becoming “how can Customs organisations which are under heavy pressure to shed FTE’s still provide proper service?’. With BREXIT looming on the horizon, traders are focused on the negative impact of increased transit times, cost of border-crossing far more than merely on the issue of potential tariffs alone. New free trade agreements still have not led to more effective or easily applied rules of origin with the discussion at WCO level not progressing beyond small changes and adjustments within the trade facilitation arena. Non fiscal trade barriers are taking the place of the duty barriers cloaked as measures to protect the health and safety of consumers.

3. What Are The Key Benefits To Attending Customs Training Courses?

  With Customs authorities all over the world struggling to retain qualified personnel under pressure of cost-reduction, mostly unable to continue functioning as a “knowledge backbone” but focused on increasing raw revenue income, businesses are forced to increased their focus on setting up qualified GTM groups who have the in-depth and legally balanced understanding of how the competing Customs regulations of export and import markets can be effectively managed to minimise audit risk and maximise cross-border operations of the supply chain. Through this event, you will gain deeper insights into the Harmonised System and its inner design concepts to better enable you to challenge classification decisions intended to bring your product into a higher duty & excise category, You will learn how to balance the perceived benefits of free trade agreements against the operational cost in systems and manpower required to qualify your products for those benefits without increasing financial exposure for the future. Having finished the event, you will be equipped to make better choices in order to defend the valuation of your border-crossing trade and you will be able to minimise the logistical, reputational and financial risks that come with valuation challenges in overseas markets. This event will look beyond the mere regulatory framework available, provide a practical and deep insight “behind the curtain” and will enable you to become more effective as a Customs subject matter expert, allowing you to review your company’s reliance on 3rd parties such as 3PL’s, agents, localised law firms and the “big 5”.