illicit-trade-wco-2013

Photo courtesy of Lithuanian Customs
SECTION 4. REVENUE
Revenue risks in the Customs context include leakage through the smuggling of highly taxed
goods such as tobacco, alcohol and motor spirits. They also include commercial fraud activities
such as undervaluation, misuse of origin and preferential duties, misclassification and drawback
fraud. The ability to effectively assess and collect legally due revenue remains a high priority for
Customs administrations across the globe.
INTRODUCTION
Trade liberalisation and the increasing number of freetrade
agreements and free-trade zones have added
complexity to the international trading system. Every
day more perpetrators of commercial fraud are taking
advantage of vulnerabilities presented in the multimodal
transportation systems and emerging compound
trade patterns to execute a variety of schemes, causing
not only significant financial damage to the
government’s budget, but also inhibiting the economic
competitiveness of compliant traders. The proceeds of
these crimes can also serve as a potential source to
finance terrorist or other trans-national criminal
activities.
Customs is therefore required to implement effective
risk management and control strategies to mitigate
threats that may hinder fair and efficient revenue collection
and result in increased smuggling. In order to
effectively prevent and detect commercial fraud and
other forms of illicit trade, a strategic and multi-faceted
approach, including capacity building and international
cooperation, needs to be implemented.
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ILLICIT TRADE REPORT 2013