Performance measurement of the KCS customs selectivity system
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Customs uses risk management as the core philosophy to balance regulatory control and trade facilitation. To deal with emerging and evolving risks, Customs should regularly adjust their risk management techniques and develop new approaches when necessary. This article examines the performance of the Korea Customs Service (KCS) selectivity system, drawing on practices used in the fields of taxation and insurance that deal with similar kinds of risk or fraud. This article focuses on the relationship between selection and detection rather than scrutinizing selection and detection rates independently in order to alleviate concerns about smugglers possibly exploiting revealed selectivity performance data. The KCS currently uses three selection methods: manual selection, rule-based selection and random selection. During the study, manual selection surprisingly showed the highest detection rate and the best efficiency. The rule-based selection appears to play an important role in deterring fraud techniques and opens the way for Customs officers to use their experience, knowledge and skills to adopt manual selection to keep up with smugglers' evolving approaches. Random selection also appears to have a deterrent effect because its unpredictability overcomes smugglers evolving predictions on selection patterns. 2014 Macmillan Publishers Ltd.
