One of out of every three customs lines entered by exporters globally is misclassified with governments owed as much as $22 billion a year. That is the rather astonishing claim made by HM Revenue & Customs senior business manager David Hesketh, while speaking to an audience at London's Supply Chain Academy last week.
As reported by The Loadstar logistics news magazine, the customs expert described HMRC as “a system that has failed to keep up with a world in which trade has rapidly globalised – with huge financial wastage as a result.” In that regard, Hesketh estimated that maritime fraud amounted to around $31 billion a year with data inaccuracy on customs documents in the U.K. alone “costing as much as £1.4 billion a year.”
“Customs needs to be less piecemeal; while the system of cargo and buying and selling goods is not fit for purpose," said Hesketh. “The exporter is normally outside the jurisdiction of the importing country, so the authorities have to turn to the carriers and importers, and one of the traps we have fallen into is that customs uses transport data and not commercial data.”
To address the problems of inaccurate data and fragmented IT systems, Hesketh suggested it was in business’s best interest to try and develop more integrated solutions in tandem with customs authorities.
“We haven’t got enough money or people, so we have to move a lot of responsibility into the commercial sector – we have to move compliance into the commercial sector with a system that makes it a cost benefit rather than a stick.”