Jordan Customs’ Compliance Approach Needs Overhaul

Introduction

The current compliance approach used by Jordan Customs has some elements of the voluntary compliance model already in place, including the production of information materials, pre-importation advice, a broker licensing system, and audit and risk management activities. However, experts say that more needs to be done to reduce revenue leakage and improve the overall effectiveness of the customs agency.

Challenges with Current Approach

• The current approach has some limitations, such as:
  • Revenue leakage: there is a real problem of undeclared revenue
  • Lack of consistency and objectivity in decision-making
  • Port shopping: trying to obtain a more favorable decision from an officer handling entry
• The agency’s advisory services process can be improved by providing rulings and advice on valuation matters before goods are imported

Recommendations for Improvement

• Provide quick and easy access to a database of tariff classifications and valuations to prevent subterfuge
• Develop a database of values to assist staff in determining transaction values and feed this into the rulings process
• Implement post-transaction auditing with effective penalties and intelligence gathering
• Address obstacles such as lack of competence and knowledge among brokers and importers

The Way Forward

• Focus on providing rulings and advice on valuation matters before goods are imported, similar to its approach for tariff classification issues
• Develop a comprehensive database of values to assist staff in determining transaction values
• Improve the advisory services process by providing clear guidance on valuation and classification
• Enhance post-transaction auditing with effective penalties and intelligence gathering

Conclusion

Jordan Customs needs to overhaul its compliance approach to reduce revenue leakage, improve effectiveness, and enhance facilitation. By implementing these recommendations, the agency can move forward and achieve its goals.