Project Summary

Nearly all 183 parties to CITES still use the original 1970s paper-based permit system, even if those permits may be issued via a computer or the Internet. The problem with the CITES permit system is that it is completely stand-alone: it does not integrate with customs systems and it does not have a central repository of permits that would allow real-time verification.

The result is that the system is not only open to corruption, but also to fraud. Permits can be easily forged, copied, altered or reused and such fraud is hard to detect given the lack of security inherent in the system. This lack of security is used by rampant illegal wildlife trade and we will not be able successfully tackle the illegal trade without closing this massive loophole in the legal trade.

A solution exists – a fully electronic permitting system that integrates with Customs called aCITES. The reason it has not been implemented is down to cost – under CITES rules every country is responsible for its own national implementation. Wildlife trade or wildlife crime are not a priority for most governments, including in rich countries.

Electronic Permits – The Whole Story

CITES was conceived in 1973, long before personal computers and smartphones. Consequently, the permit system developed to manage exports and imports under CITES was paper based and quite simple. Unfortunately, the system has seen few updates in the last 45 years. Whereas individuals and businesses have mostly gone fully digital, CITES permits are still mostly paper based, often still written on typewriters. This may seems quaint, but is actually a huge problem as it enables traffickers to forge permits, reuse them or alter them with minimal effort. There is currently no central repository of CITES permits against which a custom official could check if the permit presented to them is valid as shown.

In addition, the permits contain very limited information. For example (see image of a recent permit), the default quantity is ‘units’, which is completely open to interpretation. CITES has guidelines for how quantities should be stated, but they are often not followed. Even if they are followed, they can be ambiguous. In the image above, we outline the ongoing issue of labeling lion bones exported from South Africa. CITES allows the terms ‘bone’, ‘skeleton’ and ‘body’. Is a lion carcass without the skull a ‘set of bones’ a ‘skeleton’ or a ‘body’? This leads to inconsistencies in labeling, which in turn lead to poor data quality in the CITES trade database.

Beyond the generally poor quality of the data submitted to the CITES trade database, the data is only submitted once a year and usually late. By the time the data appears in the database, it is 12-24 months old. In most years, some parties fail to submit data altogether. Yet it is this trade database that is used to decide if, for example, a species should be uplisted from Appendix II to Appendix I.

As a result, researchers often turn to customs data to try to validate the data in the CITES trade database. Because there is no integration between the CITES permits and customs records, it is not possible to reconcile shipments. CITES permits only state the maximum quantity that can be exported, not the actual quantity. Whilst permits contain a section at the bottom for customs reconciliation and entry of a waybill number, this section is not always filled out.

The current system also does not provide for traceability, despite tracing specimens being a critical aspect of CITES enforcement. CITES listings may prohibit the trade in a species from one particular population, but allow trade in a nearby population. If specimens cannot be tracked, how does anyone know if a shipment contains specimens from the prohibited population?

To summarise, the current CITES permit system is hopelessly out of date, open to fraud and abuse and generates poor quality data for decision making. It is also not integrated with customs systems, making verification impossible and thereby creating further loopholes exploited by the illegal wildlife trade.

The Solution – aCITES and Trade Levy

aCITES

The United Nations Conference on Trade and Development (UNCTAD) has developed the necessary software to integrate CITES permitting, certification, control and montoring into its ASYCUDA global solution for customs software. The relevant MoU between UNCTAD and CITES was signed in 2010 and the software has been available since 2014.

aCITES inter-operates with any customs IT system and is be based upon the CITES Appendices, which contain the listed species of wild fauna and flora. The resulting harmonization of CITES electronic permit standards (e-permitting) with ASYCUDA also helps CITES parties to trace traded species throughout their business chain. aCITES covers all functions related to application for, issuance, control and monitoring of CITES ePermits.

The software module is free to use for CITES parties under the terms of the MoU and a training package has also been developed. The actual costs of implementing aCITES in a country are equipment, integration and maintenance costs. It has been estimated that rolling out aCITES across all 183 parties would cost in the range of US$10-20 million.

Trade Levy

Because CITES receives core funding of just US$6 million per year, it is not in a position to support parties to implement and maintain an electronic permit and reporting system. Relying on signatory governments to put up the funding is also not an option, as this hasn’t happened in the nearly 20 years a transition to electronic permitting and integration with customs has been discussed. So where should the funding come from?

CITES is in effect an industry regulator and if governments aren’t willing to pay the cost of regulation via taxation, then the normal practice is to ask the businesses to pay the cost. This is the case in many industries and a wide variety of schemes exist to offload the costs, ranging from annual ‘membership’ fees to registration/certification charges to levies based on volume of production and so on.

Taking into account that most producers in CITES are relatively small and located in third-world countries and most consumers are large businesses in developed countries, the most appropriate mechanism for financing a fully integrated electronic permitting and reporting system is via an import levy or registration charge in the main consumer economies (EU, US, China, Japan).