In the last decades, the team of Latona Development has been supporting Customs administrations in overcoming the challenges of the ever-changing environment and the growing amount and complexity of trading operations. At Latona, we are focused on the Customs modernization and thus we put our efforts in providing solutions for enhanced security risk management in the trade of goods across borders.
Therefore, we created our comprehensive Risk Management Solution, which is easily integrated into different customs operations in order to support trade facilitation, national security, public safety and revenue collection. It strengthens Customs Administrations capabilities and improves visibility, agility, and control over operations.
By implementing LATONA Risk Management Solution, customs administrations benefit from a compatible with the UCC requirements risk management system, which provides exhaustive analytical information and takes into consideration the WCO Security Standards. Hereby, administrations take advantage of the most innovative risk analysis methods and models and make a step towards higher security and enhanced revenue collection.
Risk Assessment
The Risk Assessment System includes also Risk criteria management and scoring. The logistic regression method is used to calculate a risk level assessment model, thus assigning scores to risk indicators and calculating the optimal division line between high and low-risk levels. The main steps for development of a risk level assessment model include Creating, adjusting or modification risk indicators; Creating training and control data samples; Calculating risk indicators; Entering risk level adjustment rules counting trader categories; Probability indicator visualization of “risky” and “non-risky” consignments.
Risk Backlisting
In this module, a register of traders is created and trader performance indicators are calculated. The reliability of traders is also assessed.
Risk Profiling
In this module, risk profiles are developed by listing a number of risk indicators. If a certain declaration meets at least one of those risk criteria, the goods are considered for physical inspection on the border. Pre-defined sets of rules are developed in order risk profiles to be established. The rules could be both simple and complex, and they should be updated on a regular basis. The Risk profiling module provides also instructions for carrying the physical inspections out.
Random Selection
Except for the risk profiles, shipments are subject to random checks, which provides a fair approach for all traders.
It is important to retain an element of surprise by carrying out random checks because companies that are in regular contact with Customs will be aware of profiling methods or even the profiles themselves. These random checks provide cost-effective means of identifying other types of risk and monitoring or estimating their significance, as well as any changes in the risk pattern.
“Compliance measurement” is a phrase used when statistically valid random sampling techniques are used to determine the degree to which traders, carriers, imported goods, etc. conform to Customs rules and procedures. When designed in a systematic and appropriate manner, compliance measurement methodologies provide objective and statistically valid results. Compliance measurement can be used as a diagnostic tool to identify areas of non-compliance.
Predictive Analytics & Post Clearance Risk Analysis
Post Clearance risk analysis is carried out to verify the accuracy and authenticity of Customs declarations through the examination of the relevant documents, books, records, and other business information systems that are kept in accordance with the provision of the law. The data is used for calculating and developing algorithms for predictive analytics in future, based on the results.
Enhanced Risk Analysis
Enhanced risk analysis is performed based on the integration with external sources such as:
- Credit registers;
- WCO data model;
- Rating agencies;
- Trade associations;
- Statistics agencies;
- Import/export prohibitions and restrictions (e.g. CITES);
- National quotas for import/export;
- Commercial policy measures (e.g. IPR, GSP).
Risk indicators are emerging all the time. Customs should keep them up to date by accessing various information sources such as the WCO Enforcement Bulletin, international databases on trader information (e.g. Dun & Bradstreet, Lloyd’s Shipping register), etc.
Data Analytics and Executive Reporting
Transforming clearance data into interactive statistics and Key Performance Indicators (KPIs) through comprehensive dashboards is of great importance. This ensures complete visibility and data-driven decision-making while evaluating risk and making decisions of great importance.