Publican’s Trade Series – Exploring How Technology, Data & Analytics Redefine Fraud Detection, Minimize Revenue Leakage & Bridge Inspection Gaps
Chapter 03 / Empower Authorities To Stop Revenue Leakage In Its Tracks!
Customs agencies globally face staggering revenue losses, with nearly $900 billion annually slipping through the cracks. In 2020 alone, the EU suffered a €93 billion loss, Malaysia reported a missing RM1.5 billion, and Nigeria found itself in a N20 trillion revenue hole. The complexity of customs fraud, fueled by subtle manipulations of goods declarations, limited insights, and sophisticated fraud techniques, has impeded finding a comprehensive solution.
Key areas of concern contributing to revenue leaks include misdeclared goods, undervaluation, and the influx of counterfeit products. Misdeclaration often involves inaccurate HS codes, leading to unpaid duties. Undervaluation, comprising over half of Africa’s customs fraud, manipulates product pricing to secure lower tax rates. Counterfeit goods, constituting a half-trillion-dollar industry, further compound losses by pricing below legitimate products.
In response to these challenges, technology emerges as a vital tool for customs authorities. Publican’s Digital Vetting Technology presents a revolutionary approach, utilizing billions of data points, supply chain visibility, and advanced detection mechanisms. This technology enables real-time tracking of every shipment, exposing misdeclared and undervalued goods, undisclosed CIF values, and providing accurate incremental income assessments.
Unlike traditional checks that catch only obvious misdeclarations, Digital Vetting employs multi-dimensional analysis of tariff classifications, HS codes, and product declarations to unveil subtle anomalies. For instance, it recently identified discrepancies in a ‘flavored molasses’ shipment, exposing a higher-taxed product used for tobacco production.
The technology extends its transformative impact to undervaluation detection by employing smart automated mechanisms that analyze every facet connected to the value of goods. In a case study involving Pulsar motorcycles, Digital Vetting cross-checked the entire product catalog, revealing gaps between declared and actual prices and calculating the exact owed revenues.
Digital Vetting stands as the first-of-its-kind technology, empowering authorities to halt endemic revenue leakages, providing real-time insights into the true nature of goods, applicable codes, tariffs, and exact revenues for each shipment. By preventing customs fraud, this technology supports economic development by maximizing revenues.