Customs Risk Management Research Articles

“Assess in advance, control where required”. Risk, privatisation and data in EU customs security

ABSTRACT International relations and security studies scholars have produced groundbreaking analyses that shed light on the control of transnational human mobility, which emerges as a central governmental problematisation that security apparatuses in the EU and elsewhere deal with. However, scholars tend to pay less attention to non-human, cargomobilities. In this paper, I explore how cargomobilities are controlled by focusing on two case studies: the EU’s Authorised Economic Operator (AEO) programme and the Import Control System (ICS2). Both initiatives support the operationalisation of the principle “assess in advance, control where required”, which lies at the core of the EU’s common framework for customs risk management. While the AEO programme requires the outsourcing of advance security controls to trusted economic operators involved in supply chains (e.g. manufacturers, exporters, carriers and importers), the ICS2 allows customs authorities to perform risk analysis through the automated processing of pre-loading cargo data. Borrowing conceptual tools from actor-network theory and governmentality research, I develop an associational understanding of risky cargo, investigate the rationalities that inform the control of cargomobilities in the EU, and attend to both the hi- and low-tech tactics through which these rationalities materialise within the AEO programme and ICS2.

Challenges for Customs Risk Management Today: A Literature Review

Changes and uncertainty in the customs operating environment and the growth of trade and travel volumes have affected how customs administrations manage and approach their tasks. As a result of technological development, the role of customs in border control has changed dramatically. Thus, the massive volume of goods, the way they are traded worldwide, and the speed of such transactions create additional fiscal, security, financial, and safety risks, affecting the resources available to customs services. The current geopolitical situation has significantly impacted the role of customs services. The topic is relevant to simultaneously assure both the quality of the services provided by the customs and compliance with the requirements set in the framework of limited resources. This study focuses on customs risk management (CRM) issues. It acknowledges that the customs services must continuously improve their operational methods, including promoting a more structured, integrated, and systematic way to manage customs risks. Based on the literature review, we examine the CRM-related challenges and how scholars address them in the scientific literature. This study aims to identify and analyse the contemporary challenges in CRM from its effectiveness point of view. We employ a systematic literature review, searching in most recognised databases and covering the period of 2005–2024. We follow this with a qualitative content analysis and synthesis, summarising and discussing the study results. We identify and discuss relevant key factors contributing to effective CRM. Finally, we conclude with the implications of the findings for CRM practice and policy, as well as with various potential developments in CRM that we suggest for further work.

STRENGTHENING COOPERATION FOR CUSTOMS RISKS MANAGEMENT AT EUROPEAN BORDERS IN THE NEW REGIONAL SECURITY CONTEXT

In the current security context of the Black Sea region, trade relations are affected by the imperative of international sanctions, which have imposed a series of restrictions that make it difficult for professionals to carry out commercial contracts. Through the 12 packages of restrictions established by the EU, following Russia's invasion of Ukraine, the supply of raw materials from the East and exports to these destinations are largely blocked. The risk of fraud is evident as long as production facilities are designed for the use of certain categories of goods in the supply chain, which are currently under economic embargo or directed toward specific markets. Integrated border management is a priority for authorities, and consolidating cooperation for customs risk management involves adopting exceptional measures. This study aims to identify the gaps in the Union's regulatory framework regarding risks and the critical knowledge of control authorities regarding the processes defined for processing customs and commercial documents within import-export operations at the Union's external eastern border. The scope, interpretation, and effects of European and international legal provisions constitute a separate analysis of the exceptional nature of international sanctions.

Model-based project management using artificial intelligence tools

Subject. The article addresses project management issues. Objectives. The aim is to reveal the main directions of development of the theory and practice of model-based project management, using artificial intelligence tools. Methods. The study rests on the methodology of systems analysis and process-oriented approach, employs methods of modeling and comparative analysis. Results. We define the current technology of decision-making to minimize risk, describe ideas of creating a decision support system with elements of artificial intelligence, present an experiment on implementing a model of operational monitoring of risk objects at the stage of documentary customs control. The paper identifies expedient priority organizational solutions in the customs risk management system, provides proposals on the structure of the customs risk service, describes the concept of hybrid intelligence, implemented on the basis of a neural network, to be integrated in the process of collective decision-making. We present artificial intelligence technologies used in the practice of project management, disclose their advantages and disadvantages. Conclusions. The decision-making process is described as a process of structuring the vision of strategic perspective by the head and/or experts, the formation and adaptation of knowledge to real conditions of customs construction, or as a process of project management. The paper introduces the concept and reveals the technology of collective work of experts (technology of expert-analytical modeling) during the formulation of problems and preparation of managerial, methodological, technological, and other solutions. Within the technology, a multi-valued logic of phased transformation of experts' vision into a new system of customs organization, with a step-by-step assessment of generated situational alternatives is built on the formed set of conditions.

СУЧАСНІ ПІДХОДИ КРАЇН ЄС ДО ЗДІЙСНЕННЯ УПРАВЛІННЯ МИТНИМИ РИЗИКАМИ ТА ЇХНЄ ВПРОВАДЖЕННЯ У МИТНУ ДІЯЛЬНІСТЬ УКРАЇНИ

The article addresses the pressing issue of enhancing customs risk management in Ukraine, particularly in the context of martial law. Given the destructive impact of endogenous and exogenous factors on Ukraine’s economy, which has led to increased customs risks, the study emphasizes the need to implement international approaches, especially the experience of EU member states. The paper highlights the importance of applying structural-functional modelling through CASE technologies to adapt the European countries’ experience in shaping customs risk management policies. A comprehensive analysis of EU countries’ practices, particularly those of Italy, France, and Sweden, is provided. These countries have implemented advanced automated customs risk management systems (e.g., AIDA in Italy), focusing on selective customs control, post-clearance audit procedures, and real-time risk monitoring. The experience of these countries in reducing customs risks through enhanced digitalization, cooperation between customs authorities and economic operators, and the use of artificial intelligence has proven successful. For example, a joint border control project between Italy and Albania has reduced customs violations, while France’s multifaceted approach to distinguishing between real and potential risks based on large datasets has ensured efficient enforcement of customs regulations. Sweden’s model of inter-agency cooperation has also shown significant improvements in risk management. For Ukraine, which faces substantial challenges due to martial law, the adoption of these European practices could lead to more effective risk management, increased transparency, and higher customs revenues. The recommendations include deeper implementation of automation and the use of artificial intelligence, improvement of post-clearance audit capabilities, strengthening of international cooperation, and the application of effective tools for interaction between customs authorities and economic operators. This will allow Ukraine to align more closely with EU customs standards and reduce customs violations during the period of martial law.

The structure of the customs system of Ukraine in the context of the European customs risk management practice

The structure of the customs system of Ukraine in the context of the European customs risk management practice

Customs Risk Management

Risk analysis remains a key element for the efficiency of customs control, allowing customs authorities to focus their controls in an environment where the increasing volume and pace of trade more than ever requires a selective and targeted approach. The trends and challenges related to the modernization of customs administrations prove the role of customs organization in the effective implementation of the process and the importance of the competence of the authorities (within the object of control). The aim of this research is to present the trends in customs risk management. In the study have been used the descriptive - analytical approach, the methods of comparison, analysis and synthesis.

Risk management system as a tool of Customs Protectionism in the context of changing Economic policy of Russia

Subject/topic. This article examines the development of the risk management system used in customs control by the customs authorities of Russia as an instrument of customs protectionism. Goals/tasks. The purpose of the study is to determine the importance of the risk management system in ensuring the protection of national economic interests in the context of changes in Russia's economic policy. The objectives of the work include: identifying the impact of the risk management system on the transparency of foreign trade operations and economic sustainability; establishing the adaptability of its application for the purposes of economic policy; identifying promising areas for its improvement. Methodology. The work uses general scientific methods (collection, analysis, synthesis) of information. To obtain intermediate conclusions, the method of structural-dynamic analysis, structural analysis, and analysis of the source base was applied. The conclusions obtained in the results are due to the use of logical research methods. Results. It has been established that customs risk management is carried out in accordance with international standards involving the reduction of administrative barriers in the implementation of foreign economic activity and ensuring trade security, as well as national standards in the field of risk management. The effectiveness and expediency of applying a modern risk management system in order to increase the transparency of foreign trade operations and the stability of the economy is proved. It is revealed that the risk management system is effectively used as a tool to protect Russian foreign trade participants under international restrictions. The expediency of modernizing the risk management system in terms of expanding and unifying its application within the framework of the Eurasian Economic Union, as well as through the introduction of artificial intelligence methods into its algorithms, is argued. Conclusions/significance. The authors conclude that the risk management system is of significant importance as a tool of customs protectionism in the context of changes in Russia's economic policy. The results obtained on the adaptability of the risk management system to modern goals and objectives of economic policy can be taken into account when developing mechanisms for implementing state regulation of economic processes both in the aspect of domestic economy and in the aspect of international economic interaction.

Customs Risk Management in Vietnam During Digital Transformation: Toward an Intelligent Customs Model

In the face of increasing international trade activities, Customs authorities and other government authorities cannot control 100% of all crossborder transactions. The main challenge is the limited resources of the Customs authorities who must address the challenges in applying traditional customs control methods. On the other hand, along with the pressure of the international community to reduce the interference by the government in trade, customs authorities must innovate to achieve an appropriate balance between trade facilitation and strict control of import and export in accordance with the law. In this setting, the tools of risk management present the optimal solution. We study the process and progress of applying risk management in the operation of Vietnam Customs over the past fifteen years, including an in-depth analysis of risk management models over this period. We then propose customs risk management solutions and models for consideration during this period of digital transformation and the movement to so-called, ‘Smart Customs’.

Channel risks as a development factor of the risk management system in the customs sphere

Subject. The article addresses the customs risk management system. Objectives. The aim is to reveal the main characteristics of a new class of customs risk, i.e. a channel one. Methods. The research rests on the methodology of systems analysis and process-oriented approach, applies methods of modeling and comparative analysis. Results. We describe the current technology of decision-making to minimize risk, unveil the ideas of creating a decision support system with elements of artificial intelligence, present an experiment on model implementation for operational monitoring of risk objects at the stage of documentary customs control. We also define high-priority organizational solutions in the customs risk management system, give proposals on the structure of the customs risk service. The developed models can be used in research and analytical structural units of State authorities, including the Federal Customs Service, which exercise customs control using risk management systems. Conclusions. The study substantiates a new class of risks in the customs sphere, reveals limitations inherent in the risk-based approach methodology practiced in customs risk management, offers directions of modernization of the existing risk management system for a new class of customs risks, namely the introduction of end-to-end process of customs control; operational monitoring of the flow of commodity volumes; formation of profiles specific to channel risks; implementation of a multi-profile model of customs risk management; the use of OLAP technology for complex multidimensional data analysis under a specially developed methodology.

Retraction Note: Institutional and legal framework of development of customs risk management

The Guest Editor(s) and the authors have retracted this article. Actually, due to an unintentional oversight, the authors failed to disclose a conflict of interest that might have affected interpretations of the work and recommendations by peer reviewers. The Publisher approved to the retraction.

МИТНИЙ СТАТУС АВІАЦІЙНОГО КОМПЛЕКСУ УКРАЇНИ ТА НАПРЯМИ ЙОГО ЄВРОІНТЕГРАЦІЙНОЇ ТРАНСФОРМАЦІЇ

The article defines the features and directions of transformation of the tax and customs status of the aviation complex of Ukraine in the conditions of European integration. An analysis of the content of the Customs Code of Ukraine and normative acts specifying the content of its provisions was carried out. A conclusion was made about a more detailed regulation of customs control and registration of commercial aircraft and goods transported by them compared to the procedures for customs control and declaration of passengers. The content of customs formalities for air transport in international traffic has been systematized: customs control and customs clearance of aircraft, control over their re-export / re-import, customs control and customs clearance of passengers and goods when they cross the customs border of Ukraine. The directions of harmonization of the Customs Codes of Ukraine and the EU in terms of detailing the provisions on the customs risk management system, prior information about passengers, countering terrorism, algorithms of interaction between customs, border, law enforcement agencies, security services of Ukraine and airports are substantiated. The necessity of developing methodical recommendations for assessing customs risks based on formalized and informal data, using automated and intellectual analysis by officials of responsible bodies is shown. To ensure the customs security of Ukraine, two lines of protection are proposed: the first – representatives of border, customs authorities, airport security services, who collect information about suspicious persons, their luggage, etc.; the second – initiating bodies that process information and carry out control both by software methods and by means of personal communication (interpersonal contacts, telephone, electronic communication, etc.). The main task of the further development of automation and informatization of processes in customs affairs is the creation of a multifunctional, complex system, an important element of which is preliminary information about aircraft, the goods they move, passengers and luggage.

«Customs visa-free travel» in the fight against money laundering and optimization of customs risks

Ukraine constantly continues to move towards the consolidation of economic processes with the European Union, and the issue of rapid European integration as a whole is extremely relevant. Currently, a number of simplified procedures have been introduced with EU countries: «economic visa-free travel», transport and energy «visa-free travel» (all this contributes to the abolition of tariffs and quotas to simplify documentation, save money, avoid corruption and money laundering). Customs innovations allow Ukrainian businesses to get tools to take advantage of the benefits and simplifications of the joint transit procedure. The article defines that Ukraine’s accession in 2022 to the convention on the procedure of joint transit, the so-called «customs visa-free», will contribute not only to the simplification of customs procedures, but also to strengthening the security of customs transportation, the development of international trade, strengthening the fight against money laundering, transparency of export-import operations and ensuring the payment of customs payments to the budget. The use of a computerized transit system (NCTS) for «customs visa-free travel», in addition to simplifying customs clearance, allows for customs risk analysis, which generally contributes to improving the efficiency of customs risk management and combating money laundering.

Administrative and legal characteristics of digitization in the field of customs affairs

Customs procedures for the crossing of goods and vehicles across the border play an important role in the system of customs policy instruments. Ukraine’s international trade is developing at a rapid pace, in particular, there is an increase in the volume of imports of goods into Ukraine, in view of this, international organizations are increasing the requirements for the unhindered entry of foreign goods into the domestic market of Ukraine, therefore there is a need for constant improvement of customs control procedures in Ukraine in the field of digitalization of the customs space state
 Thus, the World Customs Organization defined approaches to speeding up and simplifying customs procedures in its program documents – the International Convention on the Simplification and Harmonization of Customs Procedures, Framework Standards for Security and Facilitation of World Trade. Since Ukraine aspires to full membership in the EU, the course of its customs policy should be aimed at improving the digitalization system atcustoms.
 It is quite obvious that speeding up and simplifying customs procedures is not possible with the use of old technologies based on paper documents. Here, information customs technologies come to the fore, the basis of which is electronic document flow. The introduction of electronic document circulation makes it possible to significantly reduce the time for receipt, processing and decision-making regarding the movement of goods across the customs border of Ukraine, the release of goods into free circulation, reduce the risks associated with customs offenses and smuggling, which in turn will ensure the growth of goods turnover, and therefore, an increase in revenues to the state budget.
 Therefore, today there is an urgent need to speed up the process of digitalization of customs policy in order to improve the effectiveness of customs procedures in Ukraine, review approaches to ensure their effectiveness and form an effective customs risk management system. The customs structure of the state must have powerful information support in the form of a qualitatively built system of information and analytical support. This can be achieved by creating a system of information modules. That is why the new stage of development of the customs system of Ukraine is impossible without the development of network information support. Information digitization of customs procedures should correspond to electronic business, trade and electronic foreign economic documents.

FEATURES OF THE FUNCTIONING MECHANISM OF THE ENTRY SUMMARY DECLARATION IN UKRAINE

The article examines the issue of the introduction of the institution of the Entry Summary Declaration in Ukraine and reveals the peculiarities of the mechanism of its functioning. It has been established that the implementation of the procedure for the submission of the Entry Summary Declaration by carriers for passage through the customs border of Ukraine corresponds to the understanding of its tasks and place in ensuring the security of international supply chains accepted in European practice, and the provided data format fully meets the requirements of European customs legislation. The structural and logical scheme of the procedure for the passage of cargo through the customs border of Ukraine using the Entry Summary Declaration is characterized. It was concluded that the main difference between the Entry Summary Declaration in relation to other customs declarations is that the information from it is subject to processing through risk analysis for the purpose of protection and security before the goods arrive on the territory of Ukraine, and not for calculating the amount of customs payments. Based on the analysis of domestic legal acts, it was established that the implementation of such a tool in the national customs legislation is aimed at identifying batches of goods with a high degree of risk, automating customs procedures to reduce subjectivity, facilitating the work of customs officials in order to achieve greater predictability and predictability of the system customs risk management. Attention is focused on the gradual implementation by the customs authorities of format-logical control (automated verification) of the correctness of filling in the data of the Entry Summary Declaration. It was found that currently, customs authorities apply a limited number of risk profiles, in particular security risks for non-tariff regulation: goods from the Russian Federation (conducting an inspection); non-tariff methods – drugs, precursors, waste. The need for further research in the direction of the development of tools for the detection of cases of violation of customs legislation and assessment of customs risks under the Entry Summary Declaration by profiling customs risks in the automated system of customs clearance is emphasized.

The Concept and Model of the “Soft Component” of the Customs Risk Management System

The article considers the tasks of developing the risk management system of the customs authorities of the Republic of Uzbekistan. The regulatory and legal framework for regulating the activities of customs authorities and the information model of the management of customs authorities are investigated. A trigger model of foreign trade operations management and the concept of reengineering the foreign trade risk management process by improving it as a three-stage risk management system of customs authorities have been developed. A subsystem for notifying an entrepreneur about a threat to business security is proposed, functioning in accordance with algorithms for controlling the reliability of a cargo customs declaration in the form of a “soft component” of a risk management system. As a “rigid component” of the risk management system, a system for notifying the relevant departments of customs authorities about the risks associated with the human factor in decision-making is recommended. This system will help to strengthen human resources and reduce corruption in the customs authorities.

Manifest Monitoring Model as Support for Customs Risk Management: Evidence From Taiwan

This study constructs a feature prediction model in border smuggling inspection using the Artificial Neural Networks technique. We extracted six input variables relevant to smuggling through an iterated learning process on 176,869 import manifests. By adopting logistic regression, we also revealed that the six identified factors are significantly related to the occurrence of smuggling. We further used the six seizure factors to predict smuggling in 2019 and obtained an average accuracy rate of nearly 83 per cent. The accuracy rate was much higher around Fridays and holidays. The results will help provide cost-effective screening during customs clearance inspection and effectively manage border risks.

СУТНІСТЬ ТА ТЕОРЕТИЧНІ ЗАСАДИ УПРАВЛІННЯ РИЗИКАМИ В МИТНІЙ СПРАВІ

The article examines the essence and theoretical foundations of risk management in customs. It is proved that in the scientific literature there is no unified approach to the interpretation of the concepts of "customs risk", "management of customs risks", which is explained by the versatility of the concept of "risk". The scientific results of the study of the theoretical foundations of risk management in customs are based on the basis of international agreements, conventions and other legislative acts in the field of foreign economic activity, international and methodological documents of international trade and using monographic and abstract logical methods, as well as methods of comparison, analogy, analysis , synthesis and generalization. Based on the results of the generalization of the study, it was determined that the risk is a violation of the established procedure for the execution of normatively regulated activities, encroaches on social standards in a particular area of public relations. It is argued that the fundamental property of all risks is uncertainty, characterized by insufficient provision of the decision-making process with knowledge about a certain problem situation. Risks in the customs business are inherent in a certain specificity, due to the scope of their occurrence and certain forms of expression. It has been substantiated that in the context of the annual growth of the intensity of foreign economic activity between countries and enterprises, the need to create and constantly improve customs risk management systems is becoming more urgent, confirmed by international and national customs legislation, since the development of an effective risk management system in customs will help protect the national and customs interests of Ukraine. The study confirms that by the risk management system the activities of customs authorities in analyzing risks are meant, identifying and assessing risks, developing measures to neutralize possible risks associated with the implementation of professional activities and is part of the overall process of predicting and neutralizing negative consequences associated with the identification of goods. vehicles, documents and persons subject to customs control, forms of customs control applied to such goods, vehicles, documents and persons, as well as the scope of customs control.

Способи гарантування економічної безпеки держави з використанням практичного досвіду митних служб деяких країн світу

Annotation. Introduction. As fraudulent trade on the whole and misdeclaration peculiarly are regarded to be the most negative factors influencing national and world economics, the effective measures to counteract their disadvantageous impact are of great importance. Problem of misinvoicing has been studied by many researchers including special investigations undertaken by international anti-fraud organizations such as European Anti-Fraud Office, Global Integrity and others. Scientific theoretical and empirical methods of research are usually used, such as comparative analysis and mathematical statistics, which illuminated a lot of evidence facts of over and under invoicing by export and import used to move money across the borders, evade taxes or reduce tax liabilities. Purposee. The objective of this research is to analyze promising approaches of different countries used to combat fraud and ensure safe international trade as well as define the most effective instruments which should be implemented by the State Customs Service of Ukraine to ensure enhancing the customs valuation control measures. Methods. To accomplish the research task, general scientific methods were applied, such as inductive logic, comparative analysis, classification and generalisation. Results. The World Customs Organization concept of effective and transparent revenue collection is comprehensively examined in this paper focusing special attention on the implementation of international requirements to customs valuation procedure in Ukraine. Certain practical instruments were proposed to diminish the destructive effects and enhance the efficiency of customs control facilities. The main stages of creation and introduction of the national customs valuation database of goods as an effective tool of risks-oriented customs control are investigated. Shortcomings of the existing mechanisms affecting the feasibility of practical implementation of such elements in Ukraine are identified. The necessity of transformation of the existing system of customs value control is evidenced in the view of ensuring economic and customs security of the state and simplifying foreign trade procedures. Good practices of other countries on overcoming and stopping fraudulent importers’ activities are examined and the possibility of introducing their elements into customs authorities of Ukraine is studied. Conclusions. The article identifies the main directions of ensuring the effective functioning of the customs risk management system in the field of customs valuation control in Ukraine. The possibilities of the implementation model proposed by WCO has been estimated. The advantages and disadvantages of different types of price databases used by customs authorities of other countries have been revealed in the article. The main assumptions concerning the development of customs valuation control strategies have been evidenced by good practice cases. As a result a promising strategy is outlined for the development of new methods of customs valuation control in Ukraine. Keywords: customs valuation; control, fair prices; national customs declarations database.

УПРАВЛІННЯ РИЗИКАМИ В МИТНОМУ КОНТРОЛІ

The article discusses the features of implementation a risk management system in the framework of customs control. The relevance of the problems under consideration is due to the fact that the activities of customs authorities in practice, like no other area, are directly related to various risk zones. The main task of the customs authorities is very closely intertwined with the goals of risk management. This is a systematic identification and, most importantly, prevention and leveling of risks and threats arising in various fields of activity at any stage of crossing the customs border. Customs activity in the risk management system is not only a process of identifying risks, but also a way of thinking, without which the customs authorities may not react to various situations and provide for the necessary initiatives, and this process is usually called “risk analysis”. Of particular interest in this vein is the construction of a structured system by the risk management process. This is due to the need for a clear passage of all stages of customs control of goods when crossing the customs border while meeting all standards. The unification of such a process is necessary. Clarifies the concept of risk management in relation to the customs control system from an operational and practical point of view. The article considers such elements of the risk management system as: statistics, implementation of the risk management system in various countries, the advantages of customs risk management, the process of risk management in customs control. Particular attention is paid to the benefits of customs risk management. The elements of the risk management system are highlighted; the effectiveness of risk management in customs control is assessed. Analyzed the problems of the risk management system in customs control. Particular attention is paid to the advantages of customs risk management, which are classified according to the following criteria: achievement of the organization’s goals; improved management processes; improved public and business profile. Proposals for improving the risk management system in customs control are presented.