New ASEAN Trade Facilitation Measure Launched

AWSC will go a long way towards easing of trade within the ASEAN region. Is your business prepared to take advantage of it?

On September 20, 2020, the ASEAN-Wide Self-Certification (AWSC) went live within the member states of the South-East Asian trading bloc. The scheme allows traders and manufacturers in ASEAN member states to register with their respective customs authorities as a Certified Exporter (CE). Once granted CE status, they can self-declare the origins of their merchandise to avail of preferential tariffs under the ASEAN Trade In Goods Agreement (ATIGA).

Self-Certification

Till recently, ATIGA rules required an officially endorsed Certificates of Origin (CO) from a competent authority to secure preferential tariffs.  Exporters needed to file the necessary documentation with the appropriate authorities for each consignment. This took time, added cost, and in case of errors or if incomplete documentation, importers at destination would miss out on the duty savings.

AWSC seeks to solve this issue. Under this scheme, CEs are allowed to declare the origin status of their goods themselves on permitted commercial documents without the need to apply to the authorities for each shipment. Authorities can then query the database and once they are satisfied that the exporter is indeed a CE, allow the importer to claim preferential tariff treatment under the ATIGA.

The Strait Times quoted Singapore Business Federation chief executive Ho Meng Kit as saying the AWSC will improve market access in a more predictable trading environment while retaining rules-based multilateralism. “The scheme will also improve business efficiency and provide added convenience for businesses, as it further streamlines the existing exporting processes within ASEAN,” Mr Ho told The Strait Times.

Going Digital for Informed Compliance

Operationalizing of the AWSC is the latest in a series of measures being undertaken by national customs authorities globally to move towards the concept of ‘Informed Compliance’. Today, there is a recognition in most countries that trade compliance is a shared responsibility. Customs administrations have a responsibility to educate importers on what is expected of them. The business community, in turn, has to take concrete steps to ensure that they are not just complying with applicable laws and regulations, but also seen to be complying.

The move towards ‘Informed Compliance’ has also prompted Customs authorities to increasingly move from a paper-based system to e-documentation to enhance efficiencies.

In response, enterprises are digitizing their global trade management (GTM) using smart software systems that leverage world-class content and technology. Such software increases accuracy, consistency, and speed of operations while driving up company compliance rates and savings delivery.

One critical pain point that Global Trade Management systems address is the lack of access to up-to-date information. With rules and regulations changing frequently, most companies find it almost impossible to keep up. Thomson Reuters ONESOURCETM Global Trade, for example, provides customers with a comprehensive collection of global trade regulations from around the world updated on a real-time basis. This content includes including tariff schedules, denied party lists, munitions lists, import/export requirements and importantly for those wanting to optimise their costs, FTA rules of origin needed to determine FTA eligibility.

The AWSC is a significant trade facilitation measure within ASEAN. To take full advantage of it, companies need to invest in a smart GTM software systems.

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