Department of public administration
Human Resource Policy
In the 21st century the role played by Customs in social and economic development of the country has substantially increased. Besides revenue collection task the Customs has to focus on crucial issues such as safeguarding national security, public healthcare as well as genetic fund, prevention from bioterrorism, control of illicit traffic of drugs, promoting the Green Customs initiative and coordinated border management applying information and communication technology.
In connection with the ever changing trade environment the Mongolian Customs pays greater attention
to capacity building, risk management and latest technology and customs control based on knowledge
sharing and intelligence as well as training of highly-skilled professionals who adhere to the Code of Conduct.
The human resources development top priority issues are defined as follows:
1. to train highly-skilled customs officers, effectively deploy and rotate them;
2. to offer specialized training programs for customs officers to make them able to conduct customs
control based on risk management and provide continuous training and share the best experiences and
best practices with Customs administrations of the WCO member countries and Asia Pacific region;
3. to create a pool of customs managers, offer training on leadership skills, promote to managerial
position and introduce effective methods of leadership and management;
4. to introduce appropriate measures on discipline and accountability as well remuneration;
5. to improve healthcare and welfare system for customs officers and provide occupational safety and proper workplace conditions.
In 1991 Mongolia acceded to the Convention Establishing the Customs Cooperation Council adopted in 1952 in Brussels, Belgium and became a member of the Customs Cooperation Council. The Customs Cooperation Council was renamed in 1994 as the World Customs Organization and at present the World Customs Organization has become one of the well-known inter-governmental organizations having 178 Member-countries.
As a Member of the World Customs Organization Mongolia acceded to its main Conventions such as Convention on Harmonized Commodity Description and Coding System in 1991, Convention on Temporary Admission in 2002 and Kyoto Convention on Simplification and Harmonization of Customs Procedures in 2006.Beside the World Customs Organization, the Mongolian Customs holds close relationship and cooperation with World Trade Organization, ASEAN and a number of United Nations specialized organizations and implements joint programs and projects with the Euro customs, USAID and Asia Pacific Regional customs and customs administrations other regions to introduce required changes and modernize customs in connection with transition to market economy. Moreover, the Mongolian Customs has been broadening bilateral cooperation with a number of customs administrations to share best practice and experiences, conduct training programs and joint workshops and seminars.At present, the Mongolian Customs has concluded inter-governmental agreements and Memorandum of Understanding with the Russian Federation, the People’s Republic of China, the Republic of Korea, Hungary, the United States of America, Poland, the United Kingdom, Bulgaria, the Czech Republic, Turkey, Ukraine, Kazakhstan, Kyrgyz, Vietnam and India. The Mongolian Customs takes an active part in regional economic cooperation programs, the WCO Council Sessions, Regional Contact Points Meetings and RILO meetings CAREC programs funded by the Asian Development Bank.
One of the main objectives of Mongolian Customs is adherence to internationally recognized norms and principle. The Mongolian Government as a member of the World Customs Organization and the World Trade Organization has aligned national customs legislation and procedures with global standard and taken some measures to limit its tariff restrictions and non-tariff barriers according to its
commitments. Mongolia has acceded to such fundamental conventions such as the Convention on the Harmonized System in 1991, the Convention on the International Transport of Goods under cover of TIR carnet in 2001, the Istanbul Convention on Temporary Admission in 2002 and the Revised Kyoto Convention on the Simplification and Harmonization of Customs Procedures in 2006. On the basis of the above mentioned and other international instruments, the Revised Customs Law and Law on Customs Duties and Tariffs were adopted in 2008 and entered into force from 1 July the same year. Application of Information Technology, acceptance of electronic copies of documents, preliminary customs declaration, the use of a customs declaration for several shipments and use of one set of customs declaration for numerous items shipped together become possible when the new Customs legislation provides for the application of risk management system based on modern information technology. In order to facilitate Customs clearance the Revised Customs Law allows the mutual recognition of trade documents, joint customs control on one of the territories of foreign countries, which in turn increased the customs cooperation with foreign countries, enabled the exchange of information for customs purposes, consolidated the legal basis for bilateral and unilateral customs control recognition of customs seal put by foreign customs administrations. However, as enshrined in the Customs Law, customs professionalism, partnerships with allied agencies is the engine for the development of highly skilled customs officers and increased capacity building at customs. It should be noted that in the revised Customs Law and the Law on customs duties and tariffs covered more than 350 standards of the Kyoto Convention on the Simplification and Harmonization of Customs Procedures. The forms of customs tariff was put into the revised Customs Law as advalorem form or a certain amount per item or combination of the above methods or selection of higher tariff and this amendment enables to conduct social and economic policy using tariff arrangements. In order to make customs value issues transparent and accessible the methods of determining the customs value of imported goods were revised and methods of determining the customs value of export goods were added. Besides Mongolian Customs gives to traders wider opportunity to prove declared value of goods and in case of overpayment of customs duties and taxes the Customs refunds the amount exceeding the due payment. In order to eliminate unnecessary delays in release of goods to owner caused by the verification of declared value Mongolian Customs has decided to release goods upon declaration with no value proof. When the goods enter free circulation unpaid duties are recovered as result of post-clearance audit. This practice will definitely will have a positive impact on economic development and prosperity of the country. Thus flexible taxation policy is needed for further economic liberalization and export promotion, import decrease, protection of domestic producers from foreign competition encouraging domestic products to seek foreign market and economic diversification and regionalization. Since the adoption of the customs legislation there have been issued a number of legal regulations and procedures as well as resolutions adopted by the State Great Khural and the Government of Mongolia. The Mongolian Customs terminated around 60 regulations issued since 1991 within the framework of the project on standardization of Administrative Decisions and this measure enabled reduction of unnecessary documents and elimination of red tape and bureaucracy.
Monitoring and evaluation
The Monitoring and Evaluation Division was newly established by the Director General of the Customs General Administration of Mongolia on 6 March 2009 within the Customs structural framework approved by the Minister of Finance Ordinance No.40 of 2009. The Division monitors practical implementation of Customs legislation, policies, objectives and action plans, evaluates overall Customs performances and provides Customs top managers with its careful judgments and accurate deliberations to assist their policy-making or decision-making processes.
Since its establishment, the Division mainly focused on developing automatic monitoring and evaluation software and introduced an on-line self-assessment in-door program consisting of 10 modules to monitor quality of planning, performance and outcome and assignments. Soon the program together with other web-based application programs were combined to the Customs Internal Automated System (the CERP – the Customs Enterprise Resource Planning) which launched last year. Furthermore, the Division by its own initiative had conducted an online training under the title ‘Capacity Building – Monitoring and Evaluation”, some other online trainings and on-the-spot training on application of the Administration of Internal Affairs System. Moreover, the Division had recently carried out a Survey on Clients Satisfaction Index and on the basis of its result the compliance measurement and evaluation of performances of regional Customs administrations and local Customs offices were undertaken.
Department of Compliance and Trade Facilitation
The Mongolian Customs embarked on the road of development control based on risk management system. In other words, a legal basis for implementation of the risk management system was created in compliance with the recommendations, and policy documents of the World Customs Organization as well as the international standards and principles.
Implementation of the risk management system at Mongolian Customs requires complete customs reform and modernization, and coordinated and economical application of resources to minimize, monitor and control the probability of illegal transactions. At the end we could keep the balance between customs control and trade facilitation to support national security, legitimate trade and Customs Laws compliance. Customs control based on risk management system encourages shifting the border control to post clearance audit and contributes extensively to trade to reduce associated cost burdens.
Traditional customs control method of physical inspection of goods and means of transport crossing the border became outdated due to sharp increase of foreign trade turnover. Moreover, it is a commitment of the Mongolian Customs to adhere to international conventions to which Mongolia acceded and share the best practices of Customs control which proved to be efficient and effective in many other administrations.
The Mongolian Customs has taken a number of actions to enhance the risk management system,
- created appropriate legal environment for the risk management system;
- developed software for the risk management system;
- trained risk managers and operational staff;
- conducted training programs for customs officers as well as related stakeholders;
- cooperated with other customs administrations to share their experiences in the field of the risk management system;
- implemented a project with the assistance of the USAID;
- decreased of physical inspection and documentary check up to 10% using risk management system.
Department of Tariffs and Revanue
In addition to its Customs Law enforcement of functions, the Mongolian Customs is responsible for collection of customs duties and taxes on imports and exports. Up to 40% of the state revenue is collected by Customs which is equal to 6% of the GDP. This figure displays the extent of role of Mongolian Customs played in economic development of the country. In 2011 Mongolian Customs collected above one trillion tugrugs for state revenue thanks to mobilizing all potential sources to meet revenue target and implement the Law on State Budget of Mongolia. The revenue collected by Mongolian Customs last year exceeded the total amount of revenue collected in 2004-2007. This sharp increase can be explained by the rise in foreign trade turnover but customs officers contributed extensively to fulfillment of revenue target. In 2011 foreign trade turnover amounted to US$ 11307.2 mln. And trade balance turned to be negative equal to US$1746.2 mln. (In 2010 the foreign trade turnover was US$ 6177.1 mln and trade deficit amounted to US$378.6 mln). In total exports of natural minerals, mining products account for 94.3%, in particular coal - 40%, gold, copper concentrate and iron ores - 34% and products of cashmere and wool - 3.3%. In whole import 34% are oil products, 24.7% - vehicles, and 11.9% - construction and mining equipment and spare parts. In 2011 the GDP amounted to 10,829.7 billion ₮ and in comparison to 2005 data it increased by 4881.4 billion ₮, which means growth up to 17.3%. In 2010 the Customs exempted from customs duties the goods worth of ₮54.6 billion and in 2011the exemption amounted to ₮80.1 billion. In 2011 the Customs exempted the goods of 12 enterprises with foreign investment amounting to ₮12.1 billion according to national Customs Law, 7 companies with the amount of ₮38.4 billion by force of government agreement, goods purchased on loan from international organizations and donor countries for $ 1.6 billion, a non-governmental humanitarian goods coming from 21 countries in the amount of ₮0.92 billion and public humanitarian aid goods of ₮27 billion from 34 countries.
Since the earlier 1990s when Mongolia transferred to market –oriented economic system from the centrally-planned economy, Mongolian customs has started to register all imports and exports and compile foreign trade statistics. With the implementation of ASYCUDA system since 1995, Mongolian customs has officially undertaken responsibilities to create Customs database processing customs declarations, develop statistics compilation methods and techniques, align statistics compilation to the international standard, compile Mongolian foreign trade and administrative statistics, conduct statistical analysis and provide public authorities and non-governmental organizations with foreign trade figures and required information.
The division of Statistics and Analysis at the Customs Headquarters is assigned to carry out this mission as stated in the customs legislation. The Division has amended the statistics compilation procedures and indicators in line with international standard and needs of users, introduced the newest system of data calculation and registration, conducted regular analysis on statistical data, compose dynamic indicators and provide users with needed information. Recent years the Division focuses its effort on analysis of digital information and exchange of statistical data with neighboring countries. Mongolian Customs has signed the protocols on mutual exchange of statistical data with Customs Administrations of China and Russia and since 2010 statistical data and information have been exchanged on a regular basis. The exchange of electronic data enables statistical data comparison and analysis. Customs statistical data comparison plays an important role in data reliability, credibility and use of data for customs pose. The sides agreed to conduct comparative analysis and it enriched the customs cooperation history between customs administrations. At present the Division holds direct cooperation with colleagues of neighboring countries to share experiences and best practices.
The Research and Development Center at Mongolian Customs was founded in 1991 as Customs Research and Training Center. Since that time it has played an important role in development of teaching methodology and curriculum, training of customs officers, offered advanced and basic training programs for customs officers and newly-recruited persons, conducted research and study on various customs matters.
The Center has well-equipped e-learning and training rooms, library, lecture rooms and other teaching facilities enabling customs officers to brush up with their knowledge and skills and become well-educated professionals who adhere strictly to Code of Conduct for customs officers. The Center contributed extensively to human resource development policy as well as capacity building at customs. The Research and Development Center prepared and published around 30 research booklets, textbooks, manuals and guidelines and tens of research papers Besides it offered Bachelor’s degree programs on foreign trade and customs management to 250 graduates, Master’s degree programs to 24 persons and basic and customized training programs to hundreds of people from customs and private sector. The Center at present conducts blended training programs including e-learning and distance learning and self-study and enriches the existing training modules with national legislation and procedures for continuous training of customs officers. The WCO e-learning program which consists of 188 modules and contains materials of 3300 pages was translated into Mongolian from English and French last year. The e-learning program offers customs officers an opportunity to improve their knowledge and skills being at their workplace. It is the most convenient training program for career development and self evaluation.
Departmant of Post Clearance audit
Post-clearance audit is continuation process of customs control after the goods are released to owners following the customs clearance. The post-clearance audit aims at checking authenticity of trade-related documents, accuracy of Customs declarations and compliance with customs legislation when the goods are in free circulation.
The main objective of the post-clearance audit is as follows: - to ensure implementation of customs legislation; - to combat commercial fraud; - to ensure voluntary compliance by traders of the customs legislation; - to provide self-assessment system to traders; - to facilitate trade. Post clearance audit covers: - Traders, importers and exporters; - Economic operators engaged in foreign trade, - Customs brokers; - Operators of customs bonded zone, special zone, free zone and temporary warehouse; - Freight forwarders; - Other stakeholders. During the post-clearance audit customs declaration data and trade related documents are matched and the following items are checked: - Customs value; - Origin country of goods; - Assessment and actual payment of Customs duty and taxes; - Non-tariff restrictions; - Intellectual property rights; - Customs procedures, conditions and requirements; - Exemption or relief of duty and other taxes in accordance with legislation. In order to facilitate the post-clearance audit the Customs may check electronic data. If required, the customs officer entitle to conduct the post-clearance audit shall enter warehouse, office or premises of individuals, economic entities or companies. Individuals, economic entities or companies may evaluate their compliance rate themselves. Self-assessed individuals, economic entities or companies may: - Get consultancy from the Customs; - In case of errors revealed in customs declaration request to correct or inform the Customs before the audit takes place, - If required, request verification by the Customs of the value of goods, classification code, assessment of duties and other taxes.
Customs Central Laboratory aims to conduct analysis and testing when professional skills for verification of goods classification and identification of types of narcotics and psychotropic substances are needed for the customs control of documents, goods or means of transport or settlement of disputes in accordance with customs legislation.
The Customs Central Laboratory plays an important role in customs control and examination. Since 2003, Customs Central Laboratory has been accredited by the National Agency of Standardization and Metrology as an entrusted laboratory for testing the following substances: 1. Narcotics and psychotropic substances 2. Chemical substances 3. Alcohol beverages 4. Tobacco and tobacco products 5. Petroleum products, gasoline, diesel oils 6. Wool, cashmere and animal fibers 7. Minerals 8. Textiles, yarn Conducting experts’ analysis for customs purpose Customs Central Laboratory substantially contributed to the implementation of the Convention on Commodity Describing and Coding System to which Mongolia acceded in 1991. Besides the laboratory assists in verification of goods classification codes which promotes accuracy in value determination, reduction of tax loss caused by mis-classification of goods, classification errors occurred at different customhouse, proper assessment and collection of customs duties and other taxes, compilation of reliable statistics and detection of customs offences and enhancing the customs control on prohibited and restricted goods. According to the Government Resolution 88 adopted in 2007 due to increase of exports of mineral stock in recent years the Customs Central Laboratory started to analyze minerals, iron ores and concentrates, and draws up conclusion to determine accurate customs value of the mining export and to assess taxes for use of mineral resources. Definitely this practice plays an important role in increase of state revenue collection. The Customs Central Laboratory has expanded its activities to decrease release time and delay of goods at border crossing points and established the following six regional laboratories to analyse of commodities such as crude oil and petroleum products, alcoholic beverages, chemicals and drugs at border crossing points: • Zamyn-Uud Customs Laboratory • Altanbulag Customs Laboratory • Bayan-Ulgii Customs Laboratory • Dornod Customs Laboratory • Bichigt Customs Laboratory • Choir Customs Laboratory
Detector Dog Training Center
The Detector Dog Training unit was founded in March 1993 having only one detector dog. 18 years later the Detector Dog Training Center has in total 50 trained dogs and 37 trainers posted in 15 inland and border customhouses and branches. Dogs are mainly spaniels, German shepherds and Labradors which are accustomed to endure harsh weather conditions. Dogs are trained in many cases to detect prohibited and restricted goods as well as narcotics, chemical precursors and psychotropic substances.
During the last 3 years customs detector dogs revealed 310 administrative and criminal cases and 79.3% of offences are related to fur skins and 20.7% are cashmere smuggling cases.
The Detector Dog Training Unit has cooperated recent years with Dog Training Centers of Japan, Hungary, Kazakhstan and Azerbaijan to enhance its capacity to identify and detect all kind of narcotics and psychotropic substances.