The impact of the global economic crisis on customs

Abstract

The world financial crisis which started in the United States (US) in July 2007, has already had a spill-over effect on the world economy turning it into a global, synchronised recession. The associated unprecedented collapse in world trade was due to a number of reasons including the fall in aggregate demand, increasing protectionist measures, and withdrawal of trade credits. The recession has concurrently adversely affected all tax revenues including taxes/duties collected by customs agencies. In response to the crisis, the World Customs Organization (WCO) has recommended a number of processes to reduce the negative effects of reduction in trade and to promote best practices in sustaining the global trading system. The impact of the crisis has been particularly severe on export-driven economies such as Mauritius. Beyond an Additional Stimulus Package, the Mauritius Customs Department has been developing and introducing various administrative measures aimed at facilitating trade and managing risk to mitigate the impact of the recession.