CHAPTER ONE

INTRODUCTION

1.1 Background of the study

During the past 60 years, the volume of international trade has increased exponentially. Resources that Customs can mobilize to handle the increasing trade have been, however, limited and their reinforcement have not caught up with the pace of international trade growth (Keen, 2003). The expansion of international trade and pressure from the international trading community to minimize government intervention increased Customs’ interest in trade facilitation. To harmonize regulatory control and trade facilitation. Many Customs have adopted risk management as their dominant philosophy and this was embedded in the WCO’s Revised Kyoto Convention (Harrison and Holloway, 2007). The extensive use of risk management in Customs administration was reflected in a risk management survey conducted by the WCO in 2010 where 84percent of respondents answered they have adopted risk management in their administration (WCO, 2010).

For Customs, the most prominent risks are non-compliant or illegitimate trade transactions undermining government revenue and dangerous goods threatening society, although risks that Customs should address are all events and activities that hinder Customs from achieving their objectives (WCO, 2011; Widdowson, 2005). Risk management to Customs is a process to mitigate and avoid risks hampering achievement of Customs objectives. The introduction of risk management in Customs administrations has brought a change in Customs’ approach to risk. While putting risk management in place, many Customs have kept away from their traditional stringent gatekeeper role at borders. They have lessened their regulatory control-oriented administration and minimized unnecessary disruption and cost to legitimate trade and passengers (Widdowson, 2007). Customs have re-engineered their strategies and tactics against risk so to concentrate their resources on the high-risk end of the risk continuum (WCO, 2011) and have launched various forms of risk management programs fitting their environments, such as cargo selectivity systems, post-clearance audit programs, and Authorized Economic Operator programs (Closs and McGarrell, 2004). Yet, whereas there have been many upper-level discourses advocating the adoption of risk management in Customs administration, there have been few studies to present substantial methodologies necessary to operate the introduced risk management programs (Hinsta et al, 2011). The lack of research to examine the feasibility, effectiveness, and efficiency of risk management programs (Laporte, 2011) has hampered improving the existing programs and devising new ones. The problem may be influenced by many factors, such as political and administrative culture, fiscal situation, and information and telecommunication infrastructure where Customs undertake their daily tasks.

From a research perspective, however, two reasons seem to be prominent. First, few theories have been formulated so as to assist the embedding of risk management in Customs administrations. Theoretical frameworks are important in operating risk management programs because theories play a role in seeking and providing logically.

 harmonization of the two distinct objectives does not just take into account trade facilitation more and regulatory control less than before and achieve an appropriate balance between them but also prevent the influx of high risk cargo without interfering with trade facilitation.

According to Deloach (2000), there are four ways in dealing with risk: avoid, reduce, transfer, and retain or accept. Plausible explanations necessary for the operation of risk management programs and helping to predict their outcomes based on the formulated mechanisms (Babbie, 2007). Second, limited data is available for research on Customs risk management. Customs are reluctant to share their data with researchers because they fear traders are likely to exploit such statistics to avoid examination and inspection. Thus, risk management techniques have not been much vetted theoretically and empirically, despite their importance to all Customs administrations.

This paper focuses on Customs selectivity systems, which is generally regarded as a type of Customs risk management technique. In particular, this study analyzes the  effectiveness and efficiency of selection methods that the selectivity systems employ and derives important factors in operating the selectivity systems, with data supplied by the KCS and drawing on theories developed in other domains.

1.2 Delimitation of the Study

It shows the areas where the researcher could reach.

This study is intended to cover particularly the warehouse management department and the relationship of the function of the department of customs clearance on importation.

The study receive all the activities been carry out in the warehouse management such as, storage of good, inventory control, receipt and issuing, importation of finished goods and other related activities.

The important area of study includes the warehousing management and its contribution to the organization. The research is supposed to cover a wide range of the organization but due to financial problem, poor response and time constraints the researcher decided to use the notable.

1.2.1 Spartial delimitation of the study

This research was carried out in the south west region of Cameroon in the Fako division.

That is Bota Customs in Limbe, Tiko customs in Tiko wharf, SONARA and Idenau. The distance covered from the University of Bamenda  to the Tiko Customs is about 364km.

1.2.2 Time delimitation

The research study lasted for a period of three months, from the 17th of March to the 17th of June.

1.2.3 Delimitation theme

The research can be seen  in some of the courses taught like the Custom Litigation, Custom Procedures and regimes and the CAMCIS Practices . Custom litigation explains that any one that violates the  law shall face the law and pay some penalties if found guilty.

Customs Procedures and regimes. It talks about the procedures that are required to follow before loading or offloading is carried out.

CAMCIS Practices. Meaning Cameroon Customs Information System. This is a system where custom uses modern method of declaration through and declares goods online

1.4 Statement of the problem

In far too many countries, Customs still applies a 100% physical inspection regime, i.e. every shipment is stopped and physically examined (partially or completely), causing significant delays at border crossings, ports and airports. Such 100% inspection regime also creates an enabling environment for informal payments to speed up the process. According to the Customs Capability Reports published in 2009 by the Global Express Association, only 37 out of 114 administrations surveyed applied a risk-based selectivity approach, 18 examined 100% of all shipments, and the remaining countries selected shipments for inspection randomly or at the sole discretion of the inspection officer.

1.4 Research Questions

The research question is formulated in order to give precise direction to readers and other researchers and planners who may wish to research more on this topic and provide a basic for the conclusion of this research work on why CRiM is a survey to the WCO.

1.4.1 Main Research question

Based on the study mandate, on the literature review carried out, and on the definition of the study scope, following one main research questions were formulated by the research team:

– What are the impacts of risk management to the WCO

1.4.2 Specific research problem

– What is the effect of risk management to the WCO.

– What are the challenges faced in risk management control to the WCO.

– What are the impacts of risk management to the WCO.

1.4 Research objectives

The objective of the study is now apparent having clearly stated the problems. Therefore the prime objectives are:

1.4.1 Main research objective

– To examine the overall relevance of each type of threat that the administration has to deal with regarding imports to the country.

1.4.2 Specific research objective

– To examine the overall relevance of each type of threat that the administration has to deal with regarding imports to the country.

-To identify the type of risk management documents ( or electronic document) that have had an impact on the setting up of risk management

– To determine the  impacts of  CRiM to the WCO.