A Harmonized Risk Management System for the OECS Customs Union Project Launched

On Tuesday, October 11, 2022, the Organisation of Eastern Caribbean States (OECS) Commission officially launched a project that will contribute to bringing to full operation an OECS Customs Union with a regime for the free circulation of goods. This Project is titled: “Building the Institutional and Regulatory Capacity for a Regional Risk Management System for the OECS Economic Union.” The OECS has contracted the services of a team of Customs and Border Security experts from DT Global to lead this initiative, which is funded by the European Union under the Regional Integration through Growth, Harmonization and Technology (RIGHT) Programme of the 11th EDF. ​

The undertaking will run for nine months and will facilitate the development of a harmonized border management structure among participating OECS Member States. Specifically, it will assist in enhancing risk analysis and management associated with the importation of goods into the OECS Single economic space in two ways. Firstly, the consultancy team will identify capacity gaps within the operations of customs and other border control agencies in their risk management functions at the national level, and secondly, develop solutions for strengthening and integrating the institutional and regulatory frameworks of the national and regional risk management functions.

Risk Management is a well-known trade facilitation tool, which seeks to enable compliance with Customs rules and regulations, including the protection of plant, animal, and environmental health, food safety, standards and quality, and the collection of government revenue. Risk management must therefore be a key component of the harmonised border management structure of the ECEU and the Customs Union. Risk management is also a key measure for implementation under the WTO Trade Facilitation Agreement.

Once implemented, the OECS Customs Union with Free Circulation of Goods will ensure that goods entering any port of entry from third countries will be able to circulate freely within the union space once they have complied with all border formalities and regulatory requirements, and duly cleared and released by customs. These goods will not be subject to any further barriers, including inspections, additional duties and charges, or movement restrictions. Goods manufactured within the union will also be able to circulate freely.

In his remarks at the launch, Dr. Didacus Jules, OECS Director General noted that:

“The impact and the benefit of this for business, trade, and the personal movement of OECS citizens and residents will be tremendous. A choice to relocate within the Economic Union in pursuit of a better job opportunity will be made easier as the shipping of one’s belongings, including their vehicles, will not face the hurdle of having to again pay import duties and taxes when those belongings enter the other destination OECS country. Importers, wholesalers and retailers in the OECS would be able to explore more consolidated approaches to distribution of goods across the region built upon what is hoped to be an accompanying improvement in regional maritime and air cargo transport network and services.”

Mr. Anthony Regisford, Member of the OECS Business Council Executive Committee stated that:

“The regional risk management system is an excellent trade facilitation tool that will enable compliance with customs rules and regulations, as well as other important quality requirements.” He added, “A proper functioning OECS Customs Union is very vital for seamless and free circulation of goods among Member States and therefore an important driver of economic growth. The OECS Business Council looks forward to be a partner in this project”.

Mr. Bernard Black, Senior Customs and Trade Policy Project Officer at the CARICOM Secretariat commended the OECS for the initiative to undertake reform on risk management, noting that the issue of risk to trade has been at the forefront of trade policy formulation at CARICOM. He pointed to the protection of government revenue as a key concern for the Member States and recommended that the work to be done pay particular attention to risks associated with revenue leakage related to undervalued declarations, and the circumvention of rules of origin for duty-free status.

The imperative for this project stems from the Revised Treaty of Basseterre and the Protocol of the Eastern Caribbean Economic Union, which established the Economic Union as a single economic and financial space (Protocol Article 1.1), and that the Economic Union shall constitute a Customs Union (Protocol Article 4.1) with Free Circulation (Protocol Article 10).