“Inward Processing Relieve” is a trade facility that offers a company the possibility to temporary import raw materials without paying import duties, use these raw materials in the production of finished products and then re-export the finished products. For temporary, duty free storage of raw materials and finished products another facility can be used, which is called “Bonded Warehouse”. These trade facilities are of importance for Macedonia, because (as an example) there are lots of factories engaged in temporary importing textiles, producing clothing and re-exporting these clothing to other countries. The use of the Inward Processing Relieve and Bonded Warehouse facilities have to be granted by special customs licences. Before issuing the licences customs performs an “initial review”. The goal of this review is to assess if customs can rely on the internal control environment and the accounting system of the company. The company has to guarantee that all imported raw materials are indeed applied in the production process and that finished products are indeed re-exported. If risks are detected, the initial review will line out the measures customs can take to reduce these risks.

It is important to state that these licences, together with some simplified procedures can lead to huge benefits for both companies and customs, in terms of faster clearing of goods, faster processing of declarations and substantially reducing the administrative burden.

However, in order to realize these benefits the companies have to invest in their accounting system and control environment and customs has to invest in another audit approach towards the companies. In 1990 this also happened in the Netherlands. Dutch customs had to adept to a new way of auditing. They transformed from a purely physical approach to an approach mainly based on administrative audits with some additional physical audits. It took the Dutch companies and Dutch customs some time to get used to this new approach.

In the Training on Auditing, which is part of an overall Technical Assistance Program, 4 trainers from the Netherlands share their experiences with initial review and administrative audit in general and the audit of Inward Processing Relieve and Bonded Warehouse in particular, with their Macedonian collegues. From january 21 to february 1, 80 Macedonian collegues will attend the first part of the training that focusses on the preparation and planning fase of an audit. The training consists of a mix of presentations and practical case studies. In the second and third part in the second half of 2008, the training will focus on the execution fase of an audit and on the communication skills needed when performing administrative audits.

On a longer term these activities and investments in experience with the mentioned type of trade facilitations will be an advantage in the current developments of the so called authorised economic operator. The status of authorised economic operator is the base for further national and international trade facilitation and arrangements in the field of safety and security measurements connected.