ACTS: The Unfair Advantage

Using ACTS, City Zone Express Malaysia enjoys the benefit of no physical checking at the border.

ASEAN Customs Transit System (ACTS) implementation brings hope for recovery of the supply chain in ASEAN. ACTS went live operation in November 2020 following the commitments from the 6 Participating Member States namely, Singapore, Malaysia, Thailand, Lao PDR, Cambodia, and Viet Nam. Arguably, due to pandemics, countries established restrictions on international trade, and are imposing measures to protect the health of the front-line workers.

City Zone Express (CZE) which was involved in the early pilot movement of ACTS partnered with DHL Singapore has taken a giant leap to stick with the new way of transiting goods. They claimed that it has significantly reduced the transiting time at the customs offices, therefore, cutting the operation costs in general.

The cost savings in using ACTS are in excess of 25% and may reach 40%

- Raj, CZE.

First of all, what is ACTS?

ASEAN (Association of Southeast Asian Nations) despite its various political views is steadily moving to deeper economic integration. One of the long, bumpy journeys was the implementation of the ASEAN Framework Agreement on the Facilitation of Goods in Transit (AFAFGIT) which was signed by ASEAN leaders back in 1998 in Ha Noi.

“ASEAN Customs Transit System (ACTS) is a computerized Customs transit management system available to operators who move goods across borders without paying the required duties and taxes otherwise due when the goods enter (or leave) the country thus requiring only one (final) Customs formality. It offers an administratively simple and cost advantageous procedure to carry goods across Customs territories outside the normal import and export Customs regimes. “

*- acts.asean.org*

So where are the unfair aspects of ACTS?

ACTS enable endless possibility for International traders, land logistic operator, and customs broker. Currently, only 500 trucks are going to be granted for ACTS operation, so better be quick to join the train.

Following are the key ACTS features that somehow make companies that have joined the project have significant advantages over others:

One Declaration for the whole transit Journey

Companies that have registered in the ACTS will be given access to the trader portal, which gives powerful tools to electronically declare their goods for Customs Authority. The company would be able to declare the goods, the transit routes that are planned to be used, and where the transit would end. The declared transit journey will be received by all of the customs offices that you will be passing, therefore they should be able to anticipate your arrival and decide whether any physical inspection is necessary. Remember that the truck driver is required to bring the printout of the declaration for barcode verification and acquiring customs stamps.

The flexibility of transit operation

Using a special permit issued by the Transport Authority for ACTS would enable your truck to drive across the transit country until the final destination. Thanks to the solid commitment of ASEAN Leaders, foreign trucks are allowed to stay over, filling gas and having enough rest. if you like, you can also change your truck at the border or any declared customs office that you have arranged with your 3PL partner. Moreover, the truck could exchange containers on spot with another ACTS declaration so that truck will be returning to the warehouse in full capacity.

Minimum physical checks

As stated in the legal framework, Customs are discouraged to do physical checks at every border or Customs office. Members of ASEAN Customs have agreed to mutually recognize each other work ethics and standards, therefore, repeated physical checking was not necessary, meaning less time at the Customs office waiting and more efficient logistic operation.

Suspension of duty and tax

The ACTS duty and tax process are not required in the transit country. Thanks to the multiple-journey guarantee, international traders no longer need to deposit over the amount of duty for a rebate at the next customs office. The guarantee will be issued by the bank of the departure country if they have your good financial and business records, the guarantee would be even lower for the traders.

Network = Net Worth

With all the unique ACTS features, logistic companies and international traders should be thinking beyond competition, yes, Collaboration. Talk to another logistic business to simplify the way you can both benefit from arranged scheduling and advanced cost calculation. The international trucking company that has a wider network and can leverage its data analytics surely will have no resource wasted for operation.

Given the background, the AFAFGIT comprises of 9 Protocols that facilitate the required rules and regulations of goods in transit within ASEAN especially under the land border territory. Protocols 1, 3, and 4 of the AFAFGIT regulate the transport requirements and routes facilitation such as the available highway and facilities to serve the purposes, allowed types of the trucks to be used, and the general requirements of the trucks to run the transit operations. Protocol 5 gave clear compulsory needs of 3rd party vehicle insurance for ACTS movements.

However, some Protocols are currently excluded in the transit facilitation namely Protocol 6 about transit using railways interchange stations, Protocol 8 and 9 about sanitary-phytosanitary, and subsequently the provision of dangerous goods in transit.