Customs and Global Trade Services – Southeast Asia
With its growing regional economy, wide array of incentives to encourage foreign investment and Free Trade Agreement network, multi-national companies are increasingly turning to Southeast Asia for new market opportunities. Nevertheless, rapidly changing requirements, transparency of laws, and aggressive stances toward revenue collection continue to present challenges as investment grows.
Deloitte’s Southeast Asia Customs & Global Trade team can help your company navigate the complex web of regulatory requirements while efficiently moving goods through this important region. Our team of customs practitioners provide services in the following areas:
- Tariff classification
- Free trade agreements
- Customs valuation
- Strategic export controls
- Duty reliefs and exemptions
- Free trade zones / bonded warehouse / export processing zones
- Supply chain security programs
- Customs compliance
- Audit defense
- Dispute resolution
- Non-tariff barriers
- Customs duty management
- Customs automated solutions
- Training / on-site support
Selecting the correct tariff classification for products moving cross-border is critical to not only determining excise, customs and anti-dumping duties payable on import or export, but also in determining whether the goods are eligible for preferential duty rates under FTAs, subject to import / export controls, and / or subject quotas and restrictions. To support companies to interpret the tariff classification rules, determine duty liabilities and other exposures, Deloitte can provide a full range of technical and operational services as follows:
- Review and determination of appropriate tariff classification codes;
- Mass classification diagnostics;
- Secure classification rulings from customs authorities on the acceptance of tariff classification codes
- Assist with adoption of recommended tariff classification codes.
The increasing number of Free Trade Agreements (FTAs) covering goods traded with and within the Asia Pacific region present significant opportunities for businesses to reduce the landed cost of goods and increase their competitiveness in the global marketplace. To support businesses to identify the availability of preferential duty rates, maximise the duty saving benefits, and navigate the often complex rules of origin and certification procedures, Deloitte can provide a full range of technical and operational support as follows:
- Research the availability of FTAs based on current supply chain;
- Analyse FTAs preferential duty and rules of origin criteria;
- Review product eligibility to meet rules of origin;
- Assist with applications to authorities;
- Develop procedure manuals for FTA implementation;
- Provide workshops on the utilisation of FTAs.
The customs value of imported goods is the basis on which customs authorities assess customs duties and other taxes linked to imports. It is important that the declared values for imported goods are determined in accordance with the local valuation laws and regulations to ensure correct duty and tax payment. Deloitte can provide a full range of technical and operational support as follows:
- Provide guidance on structuring transactions for customs valuation purposes;
- Assist with reviewing or justifying the appropriateness of intercompany transfer pricing policies from a customs valuation perspective;
- Secure a customs ruling from the customs authorities.
With heightened concerns over global safety and security, governments worldwide have increasingly introduced export controls on both tangible goods and intangible technologies that could have military application. Principally affected are companies in the aerospace and defence, biotechnology / chemicals and information security / encryption sectors, but controls also impact products defined as “dual-use.” As such, semiconductor / electronics, telecommunications and certain manufacturing sectors are increasingly impacted by export controls. To assist businesses to understand whether the various export control-oriented multilateral agreements and international conventions could impact the movement of their products, as well as obtain the appropriate licenses / permits and establish required control programs, Deloitte can provide a full range of technical and operational support as follows:
- Assess the impact of strategic export controls;
- Determine product classification under the strategic export controls regime;
- Support to secure appropriate strategic export controls approvals with the authority(ies);
- Assist with development and implementation of an Internal Compliance Program (ICP);
- Review existing internal control procedures to evaluate compliance and advise on internal control improvements as needed.
Many countries have established a variety of duty/tax relief and exemption programs designed to ensure that certain goods imported for further manufacturing or for other prescribed purposes are not assessed duty/tax or receive duty/tax suspension while the goods are in the country. Such programs can present significant savings to companies. Nevertheless, it is vital that companies not only identify available duty relief and exemption programs, but also fully understand the complex regulations governing them to ensure compliance. Deloitte can provide a full range of technical and operational support as follows:
- Advise on programs offering relief from duty and import VAT/GST for qualifying imported materials, finished goods and/or machinery and equipment;
- Assist with establishing appropriate internal controls for duty relief and exemption program usage;
- Assist with application to customs authorities for program implementation;
- Conduct periodic health checks of the duty relief and exemption program operations.
The utilisation of free trade zones, bonded warehouses, export processing zones and other trade facilitation programs can minimise or defer duties and import taxes on cross border transactions, as well as maximise efficiency in supply chain management. Deloitte can provide a full range of technical and operational support as follows:
- Provide guidance on availability and benefits of free trade zones, bonded warehouses, export processing zones and other trade facilitation programs to facilitate supply chain management and minimize or defer duties and import VAT/GST;
- Advise on what controls must be in place to track the receipt, processing and export of goods;
- Assist with planning and designing export processing trade models;
- Advise on the requirements and internal controls that must be in place to utilise trade facilitation programs;
- Assist with establishing appropriate internal controls for trade facilitation operations;
- Assist with the application to customs authorities for program implementation;
- Conduct periodic health checks of trade facilitation operations.
The growth of global trade has resulted in increases in security threats to the cross border movement of goods. Recognising this and to secure the supply chain, many customs authorities have introduced supply chain security programs (e.g. ‘Authorized economic operator’ and ‘Secure trade partnership’). These programs encourage companies to increase the safety and security in their own global supply chains in exchange for having speedier clearance through customs border controls. This can result in significant reductions in transport and demurrage charges, as well as providing opportunities to reduce inventory levels. To assist companies to attain the benefits associated with supply chain security programs, Deloitte can provide a full range of technical and operational support as follows:
- Assess readiness to participate in the supply chain security program (high-level);
- Review operations to qualify for the supply chain security program (detailed level);
- Develop supply chain security framework;
- Assist with applications to the authority(ies);
- Periodic review to monitor compliance;
- Provide a workshop on the local program guidelines.
Efficient integration of customs and international trade processes into a company’s overall business goals, tax planning and supply chain management is crucial to success. Failure to comply with local trade and customs regulations can impose significant compliance and tax risks. As such, efficient management of customs compliance is integral to effective trade management. Companies need to develop adequate resources and procedures to manage their customs function. Deloitte can provide a full range of technical and operational support as follows:
- Conduct compliance health-check diagnosis (high level);
- Conduct in-depth review of operations to assess ccompliance with all applicable customs regulations (detailed level);
- Perform focused review of a specific area/topic of operations to assess compliance with all applicable customs regulations.
There is growing evidence that customs authorities across the region are increasing their audit activity with heightened focus on accuracy of the customs declarations made for imported goods. While it is imperative that companies make accurate declarations for their imports, it is equally essential to demonstrate appropriate controls and procedures to ensure compliance with customs regulations when audited by customs authorities. Deloitte can provide a full range of technical and operational support as follows:
- Support before, during and after a customs audit;
- Assist with planning for future customs audits, including target reviews to determine levels of exposure from non-compliance and advice on risk and corrective action;
- Establish effective communication with customs authorities to defend against challenges, as well as follow-up on customs authorities’ information requests.
The increasing complexity of customs regulations and the variations of their local interpretation have contributed to the growth of disputes with customs authorities. To understand the strength of a company’s position on a disputed matter, as well as full support during the dispute proceedings, Deloitte can provide a full range of technical and operational support as follows:
- Assist in resolving customs disputes or making voluntary disclosures with the customs authorities;
- Support in identification and presentation of arguments to defend position against challenges;
- Support with discussions and follow-up with customs authorities.
Apart from duties and other import-related taxes, non-tariff barriers such as anti-dumping duties and countervailing duties, special licenses / quotas may also be imposed to restrict imports of certain commodities into the domestic market. Prior determination of applicable non-tariff barriers is important to ensure that appropriate licenses are secured and additional requirements are met before importation of the goods. Deloitte can provide a full range of technical and operational support as follows:
- Advice on the non-tariff barriers applicable to the export and import of goods;
- Support in securing the appropriate licenses and permits required from the customs authorities prior to importation.
In order to optimise customs duty spend, companies should review their business arrangements to explore if there are options available within the regulatory framework to save on duties and taxes. Deloitte can provide a full range of technical and operational support as follows:
- Strategic planning for duty reduction and cost savings through periodic (high-level and targeted) process reviews;
- Support in reviewing the company’s supply chain business model for customs duty / tax optimisation.
In order to manage growing volumes of imported and exported goods and also ensure compliance with the complex web of customs and other government agency regulations, companies are increasingly turning to automated customs solutions to support their customs and logistics operations. While software providers continue to produce more and more robust solution packages, effectively linking these solutions with existing ERP systems and import / export processes can be a challenging task. Deloitte can provide a full range of technical and operational support as follows:
- Map existing ERP and other support systems and their linkages with existing import / export processes;
- Provide recommendations on system and process improvements to address potential efficiency and compliance gaps;
- Assist with development of proposed system and process changes as part of customs automated solution implementation;
- Provide on-site assistance leading to “go-live” status with post “go-live” support.
With the high volume of goods traded through the SEA/AP region and a competitive labour market, importers are increasingly encountering limited resources to manage their customs operations. Disruptions due to staff turnover and new hire training can result in delays and compliance risks. From training for new hire customs personnel to outsourced customs operations assistance, Deloitte can provide a full range of support as follows:
- Conduct initial new hire onboarding and periodic follow-up training for customs personnel, tailored to the company’s unique import/export operations and business model;
- Assist with the recruitment, training and initial oversight of new hire customs personnel;
- Provide temporary on-site support for customs operations.