The International Express Carriers Conference is the international representative body for the global express industry, including UPS, Federal Express and TNT.

  This industry, along with post offices and major martime container operators, manages world-wide rapid reliable delivery systems. Our performance and profits stand or fall in accordance with the quality of Customs services, two of which, at least, enter into every international movement.

  Time-sensitive deliveries are now a fundamental working element in the third or more of world trade which relies on multinational companies managing integrated supply, production and distribution systems.

  My members are established in over 200 countries and are significant users of Customs services in all of them.

  Express operators are easily the largest single source of Customs declarations in the UK.

  We are, therefore, especially interested in, and concerned at, the possibility, being examined by the Sub-Committee, that HM Customs may be brought within a common Revenue Department.

  We can, of course, see that VAT falls naturally alongside other domestic taxes, but there are, however, many other regulatory requirements, entirely divorced from revenue collection, which fall to Customs simply because they are dealing with goods which are entering or leaving the national territory.

  Responsibilities, under this head, in many countries, include the repression of illicit drugs, pornography and paedophilia, enforcement of trade policy, checks on security, nuclear substances, noxious wastes, dangerous goods, agricultural and horticultural standards, protection of intellectual property rights and endangered species and collection of statistics.

  The administration of such formalities should interface as easily and effectively as possible with the movement of the goods to which they relate. When, as in express operations, permissible time-limits, for purely commercial purposes, can be counted in minutes, practical experience of trade requirements, by the officers concerned is essential to ensure that full control goes hand in hand with all necessary facilitation.

  Apart from this general argument in favour of preserving an identifiable and expert Customs service, with a well-defined career structure, we see two specific developments which mark out the international connections and experience of Customs as a major component in future trade expansion.

  The first, now generally known as Convergence of Official Controls, is the need to focus and rationalise the range of border-crossing controls mentioned above, so that all the numerous Departments, which have a finger in the total regulatory pie, can be persuaded to concentrate their interventions at a single administrative point, preferably Customs.

  The convenience of such an arrangement to legitimate traders and carriers is self-evident.

  Modern practice tends more and more to automated risk-assessment systems and there seems little sense or economy, to us, in splitting the operation and use of the relevant data and the primary identification of suspect consignments and persons between a number of separate state services.

  We believe that Customs are particularly well-fitted, by experience, and daily contact with trade and transport operations, to manage this comprehensive risk-assessment system. We realise of course that once identification is in hand substantive investigations and judgements will pass to security, law enforcement, phyto-sanitary, veterinary or other experts.

  Looking at this situation, the Sub-Committee might also wish to take the further, logical step of recommending that some of the relatively small agencies concerned with these controls, should be brought, together with immigration services, into a much larger, unitary Border Management Department, in which Customs would be the leading partner.

  The second reform, which will be very difficult if Customs are clasped in the potentially stifling arms of the Inland Revenue, is to bring the unified simplicity of the domestic transaction to large sections of international trading.

  For centuries Customs have divided international transactions into two entirely unrelated export and import halves, each administered by a differently uniformed service, applying differently constructed legal requirements.

  IBM or ICI, wanting to move materials, components or semi-finished product across national boundaries, from branch to branch, within their own business systems, are obliged to enter into a costly charade in which they are obliged, by successive Customs interventions, to pretend to be an exporter dealing with an alien importer, and then a notional, separate importer quite unconnected with itself at the other end of the physical movement.

  For the past ten years the IECC has promoted the concept of an Integrated International Transaction, in which all official control needs—assuming the necessary Convergence of Controls—are met by the single submission of a minimal set of stipulated standard data.

  Our main encouragement, so far, has come from co-operation between the EU (in practice UK) Customs and their US counterparts to work on a prototype Integrated Transaction, within the scope of the EU/US Business Dialogue.

  This is an ideal example of the reconciliation of control with facilitation because, while greatly simplifying commercial life for the ligitimate trader, it also gives each Customs authority invaluable origin-destination information, in place of the meagre half-share currently available at export and import.

  This is only one example of the broad IECC belief that in all aspects of non-fiscal controls (and in some commercial frauds, also), future efficiencies and economies lie in a multilateral Customs co-operative network, in which the Integrated Transaction, in various forms, should be an early, but by no means the most important, activity.

  We wonder how that essential outward movement of Customs, beyond their own traditional and now inappropriate administrative back-yard would be possible once amalgamated with Revenue. Ambitious and able people will tend to look to promotion and reward in the overall, senior management of the unitary Department and such operational rump as may be left to Customs would speedily lose its resources of strategical management.

  Such changes would be singularly ill-timed at a moment when inland revenue departments, in many countries, are encountering a growing, inconvenient tendency of people, companies and funds to seek shelter in international mobility. These departments have little or no broad experience of cross-border co-operation, outside such formal groupings as the EU, and no consultative organisation such as the well-established and highly regarded World Customs Organisation, In the UK, Customs experience, through its International Division, could be most helpful to Inland Revenue in helping to develop multilateral information, intelligence and enforcement connections and networks. Such assistance, over a reasonable period, will come better from Customs, with a sustained Customs corporate self-confidence, than from an anonymous sub-section in Revenue.

  Support for, and extension of, the current international role of HM Customs is particularly important to us and a number of other organisations concerned with global trading.

  Customs reform is moving into place as a major item in any trade liberalisation agenda. We understand that the Department of Trade and Industry supports the EU Commission in its strenuous efforts to secure a place for this subject in the next WTO negotiating round. We know that OECD, UNCTAD, the G8 and APEC are also developing significant practical work under this head.

  HM Customs are a key player within the international Customs community. They have led the recent revision of the Kyoto Facilitation Convention within the World Customs Organisation and will certainly be a focal point for progress in any Commonwealth Customs Group which may be set up by the Commonwealth Finance Ministers when they meet early next year. Their procedures, in our own trade sector, are a model of simplicity and effectiveness. We are very conscious of the extent to which they bring useful innovation and rationalisation to bear within the often inertial decision-making of the EU Customs services.

  For all these reasons we would ask the Sub-Committee to consider most carefully any proposal to take steps which could not just merge, but submerge Customs in what is still essentially an introspective domestic tax raising activity.

  Moving domestic VAT transactions to the Inland Revenue, simultaneously with the establishment of a linked, but still independent Border Management Department, with Customs in the lead role, would, we believe, be a better bargain for all concerned.

November 1999