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| 7th Report of Market Access Ombudsman Council (March 18, 2002) |
1. Complainant: Hiroshima Chamber of Commerce and Industry
2. Ministry concerned:Ministry of Finance
3. Complaint:
The simplified declaration system allows importers who have been qualified beforehand by the Director-General of Customs to receive duly identified import cargoes before making tariff declaration.
Under the system, "cargo receipt security" equivalent to the estimated amount of customs duty on the identified cargoes or equivalent to 1/12 of the customs duty paid in the previous year, whichever is larger, must be deposited by the end of the preceding month. On the other hand, the deadline for tariff declarations is at the end of the following month. However, if an importer files a written request for extension of the deadline, the payment of such customs duty may be deferred for a period not exceeding two months. Therefore, the importer can pay customs duty three months after he imports the cargoes.
For small and medium-sized enterprises, depositing security is a burden as it means they have to tie up capital. This is one of the reasons why the system is not utilized widely.
Therefore, the amount of the "cargo receipt security" that must be deposited by the end of the month preceding the month when import is to be made should be set at the monthly average of the customs duty paid in the previous year and the payment should be deferred for one year. If importers are allowed to make duty declarations every three months without having to file a request for a deadline extension, they will more positively utilize the simplified declaration system.
4. Corresponding Policy of the Ministries concerned:
(1) Under the system, security (or so-called cargo-receipt security) equivalent to 1/12 of the amount of customs duty on the identified cargoes paid in the previous year (or the monthly average of duty paid in the previous year) or equivalent to the estimated amount of the customs duty on the identified cargoes to be imported in the month, whichever is larger, must be deposited by the end of the preceding month. This is designed to secure the claims, such as customs duty, by requiring a deposit of security equivalent to the customs duty, as the simplified declaration system allows importers to receive cargoes without paying customs duty. (Article 7-8-1 of the Customs Law)
Any person intending to have the deadline extended for the payment of customs duty on identified cargoes shall deposit security equivalent in amount to the customs duty. Then, a time limit of payment of such customs duty may be deferred for a period not exceeding two months. This is designed to secure the claims, such as customs duty, by requiring a deposit of security equivalent to the amount of customs duty of which payment has been deferred. (Article 9-2-3 of the Customs Law)
(2) Since the system proposed by the complainant requires a deposit of cargo receipt security equivalent to only a one-month amount of customs duty, it is tantamount to proposing the following system:
1] For import in a certain month (for example September, hereinafter to be referred to as "the month"), the importer utilizes the simplified declaration system by depositing cargo receipt security (1/12 of the amount of duty paid in the previous year) and extends the deadline of payment for two more months by using the security.
2] For import the following month (October), the importer utilizes the simplified declaration system without depositing cargo receipt security and extends the deadline of payment for one more month without depositing security.
3] For import two months later (November), the importer utilizes the simplified declaration system without depositing cargo receipt security.
4] For import in three months later (December), the importer utilizes the simplified declaration system without depositing cargo receipt security and extends the deadline of payment for two more months without depositing security.
(For import in four months later (January), the importer can use the cargo receipt security deposited in 1], as the customs duty for the month (September) is paid at the end of the third month (December) after the month.)
(3) Therefore, the importer can utilize the simplified declaration system and the payment deadline extension system for four months by depositing cargo receipt security for only one month. Since this makes it impossible to secure claims, such as customs duty, for at least three months, we cannot introduce the system proposed by the complainant.
5. Remarks
The complainant accepted this policy.