Circular
No.23/2007-Custo
F.No.450/20/2007-Cus.IV
Government
of India
Ministry
of Finance
Department
of Revenue
Central
Board of Excise and Customs
***
New Delhi, June 28th, 2007.
To
All Chief Commissioners of Customs
All Chief Commissioners of Customs & Central Excise
All Commissioners of Customs,
All Commissioners of Customs & Central Excise,
Directorate General of Revenue Intelligence,
Directorate General of Systems & Data Management,
Directorate General of Valuation,
Directorate General of Safeguards,
Director General of Audit,
webmaster.cbec@icegate.gov.in.
Sir,
Subject:-
Risk Management System (RMS)- Charter of functions for Risk
Management Division and constitution of national/local risk management
committee- regarding-
***
The
undersigned is directed to invite attention to Board’s Circular
No.43/05-Customs dated 24.11.2005 introducing Risk Management System as a
significant step in the ongoing Business Process Re-engineering initiative of
the department. In continuation of this initiative, a Risk Management Division (RMD)
has been created in the Directorate of Systems and Data Management, CBEC with
its headquarters in Mumbai.
2.
The objective of the Risk Management System (RMS) is to achieve an
optimal balance between providing appropriate levels of facilitation to the
international trading community and ensuring compliance with regulatory
provisions. With a view to streamlining the operations of the RMS, the Risk
Management Division with the following charter of functions has been created.
3. Charter
of functions for the RMD.
3.1 The RMD will have the overall
responsibility for the management of the RMS which has been designed to address
risks facing Customs, i.e., the
potential for non-compliance with Customs and allied laws and security
regulations, including risks
associated with the potential failure to facilitate international trade.
3.2 The RMD will be the nodal agency
with the overall responsibility for designing and implementation of Risk
Management System using various risk parameters and risk management tools. RMD
will suggest assessment and examination in respect of consignments perceived to
be risky and facilitate the remaining ones.
3.3
The RMD will also
be responsible for collecting and collating information and developing an
intelligence database with a view to effectively implement the RMS and also
carry out effective risk assessment, risk evaluation and risk mitigation
techniques. It will update and
maintain risk parameters in relation to the trade, commodities and all
stakeholders associated or involved with the supply chain logistics.
3.4
The RMD will
be the nodal agency for Accredited Client’s Programme (ACP). It will maintain
a list of accredited clients in the RMS and closely monitor the compliance
standards of these accredited clients.
3.5
The RMD will
closely interact with all Custom Houses, Directorate of Revenue Intelligence (DRI)
and Directorate of Valuation (DOV) to enable it to effectively address national
risks. The local risks will be
largely addressed by RMD in co-operation with the Custom Houses where
import/export clearances are actually effected. Further, the RMD will also
closely interact with Directorate of Valuation (DOV) on all matters pertaining
to the Valuation Risk Assessment Module (VRAM) of RMS. DOV will guide and advise
RMD on all matters pertaining to valuation in RMS. DOV will also supply the list
of Most Sensitive Commodities with value bands, the list of valid valuation
alerts and the list of Unusual Quantity Code(UQC) at agreed intervals.
3.6 The RMD will also review the
performance of the RMS in terms of reviewing the various targets/interventions
inserted by the Local Risk Management (LRM) Committee, make an objective
assessment of the effectiveness of such insertions, and ensure that the
performance is consistent with the objective laid down. For
this purpose, the RMD shall provide necessary advice and guidance to Custom
Houses as and when required, which shall be followed. The RMD will also review
the extent of facilitation being provided to the trade and offer necessary
guidance to the officers in the Custom Houses with a view to providing
appropriate facilitation and also ensuring compliance.
3.7
The RMD will
also coordinate and liaise with other Government Departments (OGDs), in order to
deal with risks relating to the compliance requirements under allied Acts which
the Customs department is required to administer, under the overall direction of
the D.G. (Systems).
3.8 The RMD will work in close
coordination with NACEN in developing training manuals and other documentation
necessary for the implementation of RMS. In addition to this, it will also work out regular training
schedules for training of officers responsible for implementing the RMS in major
customs locations.
3.9 The RMD shall work in close
coordination with Directorate General of Audit (DG Audit), which has the
responsibility for formulating audit policies and procedures, developing
criteria and parameters for selection of cases or documents for audit.
3.10
DG(Systems) will submit periodic reports on the functioning of the RMS to
the Board.
National Risk Management (NRM) Committee
4.1
There shall be established a National Risk Management (NRM) Committee
with the DG(Systems) as the head. The RMD will be the nodal agency responsible
for convening the National Risk Management (NRM) Committee to review the
functioning of the RMS, supervise the implementation of RMS and provide feedback
for improving the effectiveness of RMS. The NRM Committee will be a standing
committee and shall include representatives of Directorate General of Revenue
Intelligence (DGRI), Directorate General of Valuation (DGOV), Directorate
General of Audit (DG Audit), Directorate General of Trade Facilitation (DGSTF)
and Tax Research Unit (TRU).
4.2
The NRM Committee shall be convened at least once every quarter and
will have the following functions:
i)
Review of the performance of the RMS including progress on implementation
of the ACP and reviewing the implementation of PCA (Post Clearance
Audit)
functions;
ii)
Review of Risk parameters and behaviour of important risk indicators;
iii)
Review of economic trends, changes in policies, duty rates, exemptions,
market data etc., that adversely impact on customs functions and processes and
suggesting remedial action thereof;
iv)
Any other matter of import / export which the RMD considers important
enough to engage the NRM Committee’s attention.
Local
Risk Management (LRM) Committee
5.1
A Local Risk Management (LRM) committee shall be constituted in each
Custom House / Air Cargo Complex / ICD and shall be headed by an officer not
below the rank of Commissioner of Customs.
5.2 The
LRM Committee will comprise the Additional / Joint Commissioner in charge of
Special Investigation and Intelligence Branch (SIIB), who will be designated as
the Local Risk Manager, and will also function as the Secretary of the
Committee. The LRM Committee shall
also include the Additional / Joint Commissioner in charge of Audit and a
nominee, not below the rank of a Deputy Director from the regional / zonal unit
of the DRI, and a nominee, not below the rank of Deputy Director from the
Directorate of Valuation, if any.
5.3.
The LRM Committee will meet once every month and will have the following
functions:
i)
Review of trends in imports of major commodities and valuation with a
view to identifying risk indicators
ii)
Decide on the interventions to be put in place at the local level, both
for assessment and examination of goods prior to clearance and for post
clearance audit.
iii)
Review the results of interventions already in place and decide on their
continuation/modification or discontinuance etc.
iv)
Review the performance of the RMS and evaluate the results of the action
taken on the basis of the RMS output.
v)
Any other matter which the LRM Committee considers important to be
brought before the NRM Committee
5.4.
Periodic reports, as may be prescribed by the RMD, will be sent to the
RMD with the approval of the Commissioner of Customs.
6. All field formations
are requested to take note of the charter of functions of RMD and the creation
of NRM / LRM Committees for effective implementation of the Risk Management
System. The above instructions may
be brought to the notice of all concerned.
Yours faithfully,
(Anupam
Prakash)
Under
Secretary to the Government of India
Copy to :
1. PS to Chairman & all Members (CBEC)
2. All Joint Secretaries /Directors/DSs/USs/STOs/TOs in CBEC
3. All Directorate in CBEC
4. Guard file.
(Anupam
Prakash)
Under Secretary to the Government of India
