Sub : Risk Management System - Introduction of Accredited Clients Programme (ACP)- regarding

Kind attention of all members of Trade, Importers and Custom House Agents is invited to Board’s Circular No. 42/2005-Cus, F.No. 450/66/2005-CUS-IV dated 24th Nov., 2005 on the above subject and also to Board's circular letter F.No.450/30/2003-Cus-IV dated 4th April, 2003 on Self Assessment Scheme for Accelerated Clearance of Import/Export Cargo and Board’s Circulars issued vide F. No. 446/ 5/ 97- CUS.IV No. 63/97-Cus dated 21/11/97 on Fast Track Clearance. An Inter Ministerial Group (IMG) headed by Secretary (Revenue) consisting of representatives from Ministry of Shipping, Ministry of Commerce, Planning Commission besides CBEC, deliberated on the issue of internationally accepted method of assessing various types of cargo and prescribing procedure for efficient Customs clearance. IMG recommended to Introduce Risk Management System (RMS) as a measure of trade facilitation and for selective screening of only high risk cargo for customs examination. Such systems would provide for a special customs clearance procedure for authorized persons (Accredited Clients) having good track record and who meet specified criteria identified by the Customs.

2. Accordingly, the Board has decided to introduce the Risk Management System (RMS) with the “Accredited Client’s Programme” (ACP) as its major component. The objective of the programme is to grant assured facilitation to importers who have demonstrated capacity and willingness to comply with the laws Customs department is required to implement. With the implementation of the Risk Management System, this programme will replace all existing schemes for facilitation in the sites where RMS is implemented. The dates for implementation Risk Management System would be announced separately for Mumbai Customs.

3. The goal of the Risk Management System (RMS) is to enable the department to strike an appropriate balance between trade facilitation and enforcement. Under the RMS, Bills of Entry filed by importers in the Indian Customs EDI System will be processed for risk and a larger number of consignments will be allowed clearance based on the importer’s self assessment without examination, after checking the marks and numbers on the packages or in the case of Full Container Load (FCL Cargo), the container numbers and seals, and after taking over the relevant documents from the importers. Other consignments would be selected for Appraisement or Examination or both depending on the evaluation of risk by the RMS.

4. Upon introduction of RMS, Concurrent Audit shall be replaced by Post Clearance Audit for all importers. Post Clearance Audit will be carried out on Bills of Entry selected by the Risk Management System.

5. Importers registered by the department as “Accredited Clients” under the Accredited Clients Programme will form a separate category to which assured facilitation would be provided. Except for a small percentage of consignments selected on a random basis by the RMS, or cases where specific intelligence is available or where a specifically observed pattern of non-compliance is required to be addressed, the Accredited Clients will be allowed clearance on the basis of self assessment i.e. as a matter of course, clearance would be allowed on the basis of their declarations, and without examination of goods. Further, this benefit would be available to the registered Accredited Clients at all the ports in the country where EDI and the RMS are operational. It is expected that this measure will bring about drastic reduction in the dwell time of cargo and transaction costs for such importers.

6. The importers desirous of availing the facility as “Accredited Clients” are required to apply for registration under the scheme using the Application form attached at Annex – 1. Importers meeting the following criteria shall be the eligible under the Accredited Clients Program:

(i) They should have imported goods valued at Rs Ten Crores [assessable value] in the previous financial year; or paid more than Rs One Crore of Customs duty in the previous financial year; or, in the case of importers who are also Central Excise assessees, paid Central Excise Duties over Rs. One Crore from the Personal Ledger Account in the previous financial year.

(ii) They should have filed at least 25 Bills of Entry in the previous financial year in one or more Indian Customs stations.

(iii) They should have no cases of Customs, Central Excise or Service Tax booked against them in the previous three financial years. Cases booked would imply that there should be at least a show cause notice, invoking penal provisions, issued to an importer.

(iv) They should also not have any cases booked under any of the Allied Acts being implemented by Customs.

(v) The quality of the submissions made by the applicants to Customs should be good as measured by the number of amendments made in the bills of entry submitted by them in relation to classification of goods, valuation and claim for exemption benefits. The number of such amendments should not have exceeded 20% of the bills of entry during the previous financial year.

(vi) They should have no duty demands pending on account of non-fulfillment of Export obligation.

(vii) They should have reliable systems of record keeping and internal controls and their accounting systems should conform to recognized standards of accounting. They are required to provide the necessary certificate from their Chartered Accountants in this regard as per format given in the Application form – Annexure - II.

For qualifying for the Accredited Clients Program, the applicants will have to satisfy any one of the criteria set out at serial number (i) and all the other criteria set out above. Further, the accreditation would initially be valid for a period of one year and would be renewable thereafter upon a review of the compliance record of the Accredited Client.

7. The Board is shortly establishing the ‘Risk Management Division’ in the Directorate General of Systems, which will inter alia be administering the Accredited Clients Program. The list of Accredited Clients will be maintained centrally in the Risk Management System. Pending the establishment of the division, the importers may apply to the Commissioners in charge of the ports through which they import goods. The Commissioners will, after scrutiny of the applications, forward them to RMS project team in the Directorate of Systems with their recommendations.

8. The importers who have been granted the status of Accredited Clients will be required to maintain high levels of compliance. It will be closely monitored by the Risk Management Division in co-ordination with the Commissioners of Customs and where compliance levels fall, the importer will first be informed for improvement. In case of persistent non compliance, the importer may be deregistered under the Accredited Client’s Program.

9. In order to ensure that there is no misuse of the program by imposters (persons who assume the Accredited Client’s name and identity), it would be mandatory for the Accredited Clients under the ACP to file bills of entry using digital signatures. Therefore, importers are advised to obtain Digital Signature Certificates being issued by CBEC. Where the Accredited Clients are filing their documents through their Custom House Agents, they must advise their Custom House Agents to file their bills of entry using digital signatures granted to them by the department. For obtaining Digital Signature Certificates, the trade may visit the site at www.icert.gov.in.

10. Additionally, all bills of entry must be filed by Accredited Clients through the ICEGATE facility and duty in respect of these consignments must be paid though such Clients’ bank account at the designated bank. The information brochure for ACP Clients brought out by the DG Systems CBEC New Delhi is also Annexed to this Public Notice for necessary guidance to the trade on the matter.

11. The importers who are registered as Accredited Clients under the ACP scheme would get its benefits at all the locations where RMS is operationalised. To facilitate migration of the eligible importers to the new scheme, it has been decided that its benefits would be automatically extended to importers who are availing of any of the existing facilitation schemes for a period of three months. This is to enable such importers to apply for the Accredited Clients Program and get registered under it. It is also clarified that the existing schemes for facilitation would continue at each of the EDI sites till the RMS is implemented at that site. Arrangements have been made in the New Custom House to receive and acknowledge the applications for Accredited Clients Program and Asstt. Commissioner of Customs, E.D.I., 1st floor, Annex. Bldg., New Custom House, has been specially designated for the purpose.

12. Detailed instructions as regards the other aspects of the Risk Management System will follow.
13. The details of the ACP scheme along with the Application Package are also available at www.cbec.gov.in and www.icegate.gov.in.