South African Revenue Service (Sars) commissioner Edward Kieswetter called for an urgent “bias for action” among customs and excise authorities of the BRICS countries to prevent criminal syndicates from infiltrating the economic bloc’s growing trade ties.
Kieswetter was speaking at a meeting of the BRICS heads of customs administration in Cape Town on Friday. The meeting gathered the tax and customs regulatory heads of Brazil, Russia, India, China, and South Africa a month ahead of the BRICS Summit set to take place in Johannesburg next month.
The BRICS customs heads meeting seeks to develop a joint action plan for integrated and synchronised customs procedures across all five nations, which is expected to be signed either by the end of the Cape Town meeting or at the summit.
Kieswetter said while the development of the bloc and its growing trade ties presented opportunities for economic and social development in member countries, it also presented an opportunity for criminal syndicates to extend their operations beyond domestic borders if left unchecked.
“Between the five countries, intra-BRICS value is over $1.4-trillion, according to the 2023 UN Trade report. So BRICS, the co-operation, and the purpose of why we are gathered here is essential to our economic prosperity,” he said.
“Being 14-years-old, we’re a teenager; it is nice to reflect on that with sentiment, with romanticism, but it is not enough. The burning question is, why do we exist as a group? What should we do better, and how can we improve the value proposition to our member countries?”
The meeting comes amid a current of trepidation regarding South Africa’s relationship with Russia and reports that a Russian cargo ship that docked in Simon’s Town may have had loaded weapons to aid its ongoing military campaign in Ukraine.
Kieswetter warned that illicit trade was growing globally, according to global financial institutions. He urged customs and tax authorities of the BRICS nations to be proactive in responding to this grim reality.
“At least $2.2-trillion of trade is illicit, and it is growing. It comes with a warning that this number is probably understated because we don’t know what we don’t know, through the clandestine nature of these illicit activities.”
He noted that an increase in trade, co-operation, and travel between BRICS nations could have mutual benefits for their economies and their people and customs authorities must be equal to the task of facilitating the growing connection.
“Just in the past five years the trade volumes of South Africa have increased by compounded annual growth rate of about 12% with exports growing at about 12.4%, resulting in a positive trade balance for South Africa,” he said.
“The real question is, how far are we behind and how slow are we to implement as a collective?” he asked.
BRICS technical customs experts previously agreed to collaborate on combined enforcement operations, recognising each other’s authorised economic operator (AEO) programmes and working together to build capacity.
“We cannot make progress in these areas unless the enabling legislative frameworks of customs, mutual administrative agreements, and mutual AEO admission programmes are in place. It allows for the safe exchange of information. It allows for greater collaboration in programmes of enforcement and capacity building,” he said.
Kieswetter challenged technical teams to move beyond workshops and agreements and avoid having progressive discussions that have no positive effect on the economies and societies of the BRICS nations.
“We need a greater bias for action. It is not agreements or workshops that bring about change. Execution and implementation bring about change that will impact the material conditions of the people that we serve,” he said.
With the increase in the volume of trade travel and transport across the world, the global supply chains have become more complex and also associated with growth in the use for purposes of transnational crimes. Hence, co-operation has assumed more importance
— Rajiv Talwar, Member of India’s Central Indirect Taxes and Customs
Russia's head of the federal customs service Vladimir Bulavin said as the world continued to adopt new technologies in its trade and financial systems, the BRICS countries needed to co-operate to bring innovation to the forefront of their trade ties.
“The future of the world will be shaped by our countries and the customs administrations will help build new trade systems. The topics we discuss are going to be important in the coming years, and we must get ahead of the curve,” said Bulavin.
Member of India’s Central Indirect Taxes and Customs Rajiv Talwar said effective customs control has created the need for instruments such as capacity building, exchange of information and the enhancement of supply chain security.
“With the increase in the volume of trade travel and transport across the world, the global supply chains have become more complex and also associated with growth in the use for purposes of transnational crimes. Hence, co-operation has assumed more importance,” said Talwar.
Kieswetter said Sars saw 7.5-million customs declarations, a 34% increase year-on-year, with about 700,000 traders on its register. He was elected chair of the World Customs Organisation Council in June.
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