Lae businesspeople express concern at abuse of customs importing system

Lae businesspeople have told a Customs Department forum they are deeply concerned about some importers abusing the system by under-reporting the value of their imports, or simply not declaring them. Lae Chamber of Commerce Executive member Keith Kingston says another issue highlighted was trade in counterfeit goods.

Wharf facilities at Lae Port. Credit: Asian Development Bank

The Customs Service called the rent meeting to update local businesspeople about how the Service is improving its ability to counteract smuggling activities with a new IT system.

It was also intended to enlist local help, according to Keith Kingston, Executive member of the Lae Chamber of Commerce and Industry.

‘It was organised to communicate the changes in the way Customs works, importantly bringing it to the attention of business executives how Customs can serve them better, get input from businesses on issues which we see, highlight the new hotline where information can be relayed in a confidential manner,’ PNG Customs Commissioner, Ray Paul, told Business Advantage PNG.

Among the new Customs initiatives is a K5 million upgrade of its Asycuda software program – Automated System for Customs Data – which was introduced to Lae in May.

Moving online

All transactions with Customs will be done online through this platform, particularly by brokers, according to Project Manager John Nakiria.

‘Last October, K20 million worth of cigarettes was reportedly seized on board two containers.’

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Used in 93 countries, Asycuda also generates trade data that can be used for statistical economic analysis, he noted.

The potential benefits were seen in Solomon Islands earlier this year, when Solomon Islands Customs and Excise Division reported it had collected more than $1 billion in revenue in 2017 for the first time in its history, as a result of the new IT system.

Automated customs operations now allow, for example, Solomon Island importers to pre-clear their goods online and avoid queuing for hours at the port or airport.

Illegal imports

It’s difficult to estimate the amount of revenue lost either to under-reporting or straight out smuggling.

Last October, K20 million worth of cigarettes was reportedly seized on board two containers, bound for Port Moresby from Malaysia to a Chinese company.

Some of the Lae businesspeople at the seminar were ’very passionate’ about certain importers abusing the system, according to Kingston.

‘The state is not receiving the revenues it should.’

These importers were accused of either undervaluing, or failing to declare their goods, he said.

‘Customs were very keen to have more information and they have established a hotline number (7091 9000), where the conversation is confidential.

‘It goes straight to a senior intelligence gathering officer—similar to the Australian system.

Lae Port. Credit: ADB

‘Issues of counterfeit were discussed at length as Customs have made numerous successful raids in the past year. It’s been recommended there be much more publicity given to these successes,’ says Kingston.

‘Undoubtedly, the State is not receiving the revenues it should. Not just at a Customs level either, but at the GST, payroll tax, tax on profits, licensing—at various other levels too.’

Australian help

The Australian Government last month gave three ‘Port Class’ vessels and an air cargo pallet X-ray scanner to the PNG Customs Service.

‘The three vessels will be deployed across PNG’s vast maritime domain to enhance border security measures,’ the Deputy Commissioner of the Australian Border Force, Mandy Newton, was reported as saying.

‘The air cargo pallet X-ray will enhance the ability to detect, deter and disrupt unlawful and restricted goods moving through PNG’s air cargo stream.’

She added it will also provide additional ways to collect revenue at the border from illicit and falsely declared goods.

Container scanning

The delay in the construction of the container examination facility (CEF) in Lae was also raised during the forum.

Assistant Commissioner, Modernisation, William Sapak, says the Customs Service is working closely with the Morobe government and PNG Ports, and he hopes the CEF will commence before the end of 2018.

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