6th Report of Market Access Ombudsman Council (March 16, 2000)

4-(1) Improvement of customs inspection system for containerized cargo

1. Complainant: Tokyo Chamber of Commerce and Industry

2. Ministry concerned: Ministry of Finance

3. Background:

When cargo is imported, the importer or the customs broker as the importer's proxy (referred to hereafter as "customs broker") uses NACCS (Nippon Automated Cargo Clearance System) to make an import declaration to customs. Customs examines the contents of the declaration and conducts physical examinations if necessary. When the import cargo is containerized (cargo imported loaded in a container), there are three types of physical examinations: sample examination, sampling examination and whole examination involving removal of cargo from the container.
When containerized cargo is subject to physical examination, customs informs the customs broker of the examination via NACCS. The customs broker transports the container to the examination place specified by customs; when whole examination is carried out, the entire contents of the container are removed and examined. In such cases, if the customs broker is not licensed to conduct transport operations within port areas, the broker delegates a port transport operator to transport the cargo to the examination place, unload the container and open the cargo.
The charges for these operations are borne by the importer. Whole examination of the cargo also takes time, delaying pick up of the cargo by the importer.

4. Complaint:

When a whole examination of containerized cargo is carried out, the container must be transported to an examination place specified by customs, and the cargo removed from the container, and if necessary, opened for inspection; however, all the expenses involved must be borne by the consignee (importer). In addition, since only licensed port transport operators may carry out these operations, there is little competition, leading to inefficiency in operations; customs examinations take two or three days, and delays in customs clearance results in losses that must be borne by the importer as well.
If the purpose of physical examinations is to control smuggling and check offenses of declaration by fraud, no time should be allowed to move the container. Instead, customs officials should carry out random checks on the spot. If physical examinations are carried out for these purposes, there is no point in having the container moved and carrying out whole examination.
If the container is in fact moved and a whole examination carried out, the expense involved should be borne by customs. Also, in addition to shortening the time needed for examination, the importer should be notified in writing of the reason for whole examination beforehand, and results of the physical examination should be reported afterward.

5. Results of deliberation:

Since whole examination of containerized cargo are carried out without indicating the reason for examining the cargo and on a compulsory basis, importers have complained, in cases where the cargo was in order, "Even though there were no problems with the cargo in the end, we were forced to unilaterally bear the costs related to physical examination and resulting delays". Similar dissatisfaction have also been received in the past.
On the other hand, contraband like drugs, guns and other socially undesirable cargo are uncovered mainly through whole examinations (in 1999, customs confiscated a record 2.2 tons of illegal drugs before they were released, and of this amount 1.1 tons were discovered during whole examination). Although it is true that a much larger proportion of total cargo targeted for whole examination was legal cargo compared to the illicit cargo discovered, the socially undesirable cargo would not have been discovered at all if whole examinations did not exist, and accordingly whole examination have great socially redeeming value.
According to the ministry concerned, since providing information concerning physical examinations other than the number of cases of contraband caught, such as reasons for examination or the number of examinations carried out, could reveal customs examination methods to smugglers and have a negative impact on future examinations. Accordingly, no information on examination can be provided, and furthermore no other country provides similar information. Regarding having the importer bear examination expenses, this is the commonly accepted practice in other countries, but care should be exercised so that these expenses are not excessive compared to cases where no examinations are carried out.
Given the above, in terms of a policy which can fulfill both the need to detect socially undesirable cargo and reduce the burden on importers, use of large X-ray apparatus to examine containers while loaded on transport vehicles to permit examination of the contents, a method already adopted in other countries, would be useful.
Regarding shortening of customs processing time, the pre-arrival examination system will be useful, when used in conjunction with the simplified declaration procedures scheduled to be introduced during FY2000, and efforts should be made to inform the parties involved and encourage them to use these systems.

Based on the above, the ministry concerned should take the measures described below to improve the customs examination system relating to containerized cargo.

(1) Where whole examination is concerned, large X-ray apparatus used to examine containers while loaded on transport vehicles to permit examination of the contents should be introduced as soon as possible, to fulfill the two aims of reducing the burden of examination expenses and shortening examination time, as well as of detecting socially undesirable cargo.

(2) To help reduce the time needed for customs clearance of imported cargo, the ministry should endeavor to inform the parties involved about the pre-arrival examination system and the simplified declaration procedures scheduled to be introduced during FY2000, and encourage them to use these systems.

Government decision (March 21, 2000)

4-(1) Improvement of customs inspection system for containerized cargo

The following measures will be taken to improve the customs inspection system for containerized cargo.

(1) For complete inspections, large X-ray apparatus capable of inspecting containers while loaded on transport vehicles will be introduced as soon as possible, to fulfill the two aims of reducing the burden of inspection expenses and shortening inspection time, as well as of detecting socially undesirable cargo.

(2) To help reduce the time needed for customs clearance of imported cargo, parties concerned will be informed about the prior inspection system and the simplified declaration system scheduled to be introduced during FY2000, and encourage them to use these systems.