National Customs Service - The National Customs Service and its History

Customs History

The National Customs Service and its History

Historically, and on a global scale, Customs Administrations were created to prevent the entrance of products to a specific territory, task which subsequently gave way to a significant concern in light of the potential financial implications.

In time, Latin American countries have defined Customs as the agency in charge of enforcing legislation related to import and export of goods and other customs procedures; collect and instruct the collection of applicable taxes and carry out other functions that may be entrusted to it".

The etymology of the word allows us to determine that Aduana (Customs) originates from the arab word adayuan , translated as registry or account book. Nevertheless, if we follow the concept behind this term in ancient times, Aduana (Customs) was understood as the place from where a person sees, inspects or registers everything that enters.

With the discovery and conquest of America, the Spanish Crown was faced with the need to make a statement regarding the taxes that could affect those who chose to reside in the new Continent. Thus, in 1497, a Royal Document exempted trade in the Indies from any type of taxes and duties. This measure was aimed at increasing and facilitating trade in American soil.

Nevertheless, such measure had a short duration, since in 1543 another Royal provision, signed by Charles V, taxed this trade with what was called "Almojarifazgo", which applied a 5% rate over the value of the goods.

In that period, taxes were not applied in Chile. The first goods imported through Valparaíso, in September,1543, were brought by don Diego García de Villalón, on board the Santiaguillo, of which considerable use was made.

Although in Chile and in America- Customs exists since colonial times, known under different names, the creation of the Royal Customs and the reorganization carried out in 1774, in Santiago, under the mandate of Governor Agustín de Jáuregui, is considered as a milestone.

The Valparaíso Customs Office, which was reorganized by Governor Ambrosio O Higgins in 1795, exists, at least, since 1738. Although various documents evidence its presence prior to that year. Among these, a Rendering of Accounts was found and is presently kept in the National Registry, signed by the Administrator of the Royal Valparaíso Customs, Gonzalo Fernández de Valdivieso, addressed in 1789 to the Treasury in Santiago and the Customs Office in Santiago.

In a Customs Act dated 1811, the importance of the agency can be appreciated, since the first legislation promulgated by the young Republic is related to foreign trade and the powers granted to Customs. Thus, Article 232 makes reference to the trustworthiness of Customs Inspectors:

"The determination of the position s obligations and seizures made, plus the portion that belongs to them, shall be a unique merit of the Customs Inspectors and proof of their honor and loyalty, thus good faith regarding these principal uses of revenue, shall decide upon the benefit of the Public Treasury or produce irreparable damage, as the State s trust lies in them".

Dates related to the Chilean Customs Service

1497	A Royal Decree exempted The Indias from any kind of trade tax and duty.
1503	The “Casa de Contratación” –the House of Trade-- is created by Royal Letter of 20 January 1503 and the city of Sevilla in Spain is assigned as Headquarters.
1543	Customs duties are set out under the name of “Almojarifazgo” with a 5% rate over the value of goods.
1544	Don Pedro de Valdivia officially declares Valparaiso as the port for Santiago, textually stating: “In the port of Valparaiso, which is in this Valley of Quintil, end and jurisdiction of the City of Santiago, after three days of the month of September of 1544, I now re-name and indicate this port of Valparaiso for the treatment of this land and of the city of Santiago”.
1547	The Almojarifazgo was collected by the Cabildo of Santiago.
1554	A Royal Decree dated 21 February temporarily reduced the royal fifth to a half, a situation which is repeatedly found in differents moments of colonial times.
1566	A Royal Decree increased the almojarifazgo duty to 10%; an additional tax of 2.5% was established on that same year.
1578	A Royal Decree dated 10 December ordered duty reduction, mainly covering the Royal fifth and, to a lower extent, the almojarifazgo and the alcabala.
1639	Under the express order of the Spanish Court, the Marques of Baides re-establishes the taxes of Alcabala and Almojarifazgo which had been suspended after the disaster of Curalaba in 1598. It may be stated that, from such moment, the Almojarifazgo was regularly collected.
1640	On 7 September, the Cabildo de Santiago went in charge of the collection of the Almojarifazgo and the Alcabala for a period of 15 years, committed to provide the amount of $17,000, corresponding $12,500 of them to the Alcabala and $4,500 to the Almojarifazgo.
1647	The Almojarifazgo collection is termporarily stopped due to an earthquake occured that same year.
1653	By Order of the King, on 12 August, it is determined that an officer shall reside at the port and supervise the movement of ships.
1674	Both the Alcabala and Almojarifazgo taxes are established on a regular basis.
1704	A Royal Document, dated 11 March, signed by King Philip V orders the repression of contraband, mainly carried out by French ships that regularly operate in Chile, without the implementation of measures by the authorities.
1725	Governor Gabriel Cano y Aponte attempts to repress contraband, without complete success, due to the wit and skills of the French and Dutch merchants and the complicity of some of the Kingdom’s influential citizens.
1770	By means of a Royal Order, issued in 15 November, 1770, the Royal Peruvian Customs is created. This Order, implemented by Viceroy Manuel Amatt y Junient, also creates the Royal Chilean Customs.
1772	The Head of the Treasury, Silvestre García, assigned Ramón del Pedregal as Customs Manager at Santiago, who would later become his successor in title.
1774	The Santiago Customs Administration is reorganized. Governor Agustín de Jáuregui establishes Customs definitively, putting an end to the auction of government revenues. terminando con el remate de las rentas públicas. Consequently, this high ranked dignitary was tasked with the organization of the first Chilean Customs Service, he joined the Customs Offices and established the main headquarters in Santiago, under the name of Customs Administration Office or Tax Administration Office. It is also known at that time as the Royal Customs, located on Santo Domingo street.
1778	King Charles III promulgates a Royal Document, titled “Rules and Tariffs for Free Trade between Spain and the Indies". The document provided for free trade between Spain and some important American ports.
1789	In a note prepared in light of a visit to the northern provinces, Governor Ambrosio O'Higgins, referring to Valparaíso expreses that: “After this first and most important duty, I decided to inspect the Royal Revenue Offices in order to verify the performance and conduct of their Employees, and their security, consequently, I shall endeavor to place them comfortably, and orderly arrange the service of their institutes, and the proper clearance of the Public, mainly regarding Customs, equally saving expenses".
1795	Governor Ambrosio O'Higgins reorganized the Valparaíso Royal Customs.
1809	Manuel Manso, son of Manuel Manso, once Governor of Chile and Viceroy of Peru, is designated as the Santiago Customs Administrator.
1811	On 21 February, the Law on Freedom of Trade is promulgated, which is considered the first Law of the Republic and contains interesting Customs and Foreign Trade related Articles. This Law resolved the freedom of trade for the ports of Valparaíso, Coquimbo, Talcahuano and Valdivia.
1811	The first Customs Act was established, allowing trade with neutral or friend nations from 21 February of that year.
1831	The Customs Administration or Superintendence is transferred to Valparaíso.
1832	A set of laws is enacted to exempt some goods such as hemp, linen and their seeds from exporting duties, and tariff duties for the importation of cattle. Another law exempted from importing and exporting duty any kind of raw fishing carried out by national vessels.
1833	A law was enacted to rule on the operation of free warehouses in Valparaiso which enabled the deposit of merchandise for a period of three years under the payment of duty on an annual basis. On 30 August that year, the Law on Assessment Tariff was enacted under which Customs should carry out the aforo (valuation for customs purposes) of national and foreign merchandise. This law established the creation of a Commission to determine such tariff which should enter into force a month after the law being approbed and published by the Government and should last for an initial period of 3 years.
1834	On 8 January, a law decree regulating foreign trade was enacted and the Ad Valorem duty was introduced with rates of 5%, 10%, 15%, 30%, and 35%. Some special duties for certain goods were established, plus specific duties for levying tea, wine, liquors and some other few merchandises. The law enabled the importation of all kinds of goods, regardless of origin or source, provided the importation be carried out via the main Customs offices of the Republic and considering the taxes and rules covered by such law. The President of the Republic is authorized by the law to purchase of build premises for the operation of Customs in the Port of Coquimbo.
1835	On 22 October, the Coasting Trade law is enacted and the Chilean ports are classified in major, minor and eligible. An Ordinance on Exportations is issued on 23 October 1835 and the existing one is annuled.
1836	The General Law for the Confiscation of Goods is enacted.
1837	The Customs office of Santiago is closed, and a Customs office is established in Santa Rosa of The Andes. The reason for this closing of Santiago office is a law promulgated on 10 January 1829.
1841	A Customs Ordinance is issued for the Customs office of Valparaiso on 5 June 1841, under three authorizations by the Parliament to restructure that Customs office.
1842	A new Customs Ordinance is issued which comes to be the ruling procedure for the foreign trade and transshipment regimes. Such ruling was registered, circulated and issued on 2 June. A new law on Assessment Tariff is enacted which indicates that as from 1 January 1843, such tariff could be amended on an annual basis, under request of the President of Republic. This law derogated Art. 4 of Law Decree dated 30 August 1833.
1843	Funds are asigned to purchase premises and buildings close to Valparaiso Customs.
1844	The construction of the current building of Valparaiso Customs is started, headed by Engineer Augusto Charme.
1846	An authorization of two years is given by the Executive for amending the Customs regime of the Republic as well as other related legislation and the Customs Ordinance.
1848	The construction of the first Fiscal Warehouses for Valparaiso Customs is begun, headed by Engineer Augusto Charme. This included three buildings inaugurated in 1851, 1852 and 1854, respectively.
1850	Law Decree dated 26 December 1850 authorizes the Executive to amend the Customs regime and related legislation, the Customs Ordinance and other Customs rules and regulations. This authorization is in force through 7 September 1851.
1851	On 23 August the Customs Ordinance is promulgated under the authorization provided on 26 December 1850.
1852	The location belonging to The Sofia family, located close to Valparaiso Customs, is declared under public property. Valparaiso Town Hall payed for the expropriation expenses. The law enacted on 7 October 1852 estipulated about the staff, salaries and departments of Customs and Control office in Valparaiso. Besides, the Tax and Revenue, Mayor’s Office, the office of Control and Customs inspectors were mentioned. Treasury and Customs were linked by the Constitution.
1855	The Valparaíso Customs building was officially inaugurated on 1 September this year. The work had been started by Engineer Augusto Charme and was concluded by Architect Juan Brown Diffin. A new building for Coquimbo Customs office is constructed. The General Law on Store Duties is enacted on 24 December.
1857	On 1 November, the Law establishing the way in which importing and exporting duies shall be levied is enacted. On 17 November, the Law establishing the salaries for Customs officers and border Customs officers of the Republic of Chile is enacted.
1858	Customs and Treasury of Tomé are created; staff and salaries are established, and Talcahuano Customs is given the character of united treasury.
1859	The Law dated 13 August authorized the Government a 6-months deadline for the amendment of Customs Ordinance.
1860	The Law dated 14 June provides for the post of Chief of Customs Inspectors for the Inspector’s Office of Valparaiso Customs; also, two other posts or Customs Inspector are appointed for that same Customs.
1861	Llanquihue is declared a Major Port.
1863	The Customs and Treasury of Mejillones is established. A Law Decree dated 10 June provides for the uniform that Customs officers of Valparaiso Customs office shall wear.
1864	As per Law of the Republic dated 31 October, a new Customs Ordinance is enacted on the grounds of an authorization given by Law dated 25 July that year.
1865	Melipulli Customs is established.
1866	A Law provides for Customs duties to be paid in chash.
1867	A pier and Fiscal Warehouses of Valparaiso are built. A Law provides for the commerce register of Valparaiso to be in charge of the functions of scribe and notary of Valparaiso Customs, participating as such in every seizure, claim, Customs auction and contracts of any character.
1870	The Customs of Carrizal Bajo is established.
1871	Animals entering the country through Mountain border crossings are exempted from payment of Customs duty.
1872	On 24 December, ports of Chile are classified, the fiscal responsability is determined and that of Customs employees for the goods stored in warehouses; duties on exportation of goods is established, and the criteria for seizure of goods and other provisions are created. On 24 December, a Law provides for a public bidding to be carried out for construction of storing warehouses and other annexed premises for Valparaiso Customs taking due consideration of the plan submitted by Engineer Juan Hughes.
1873	A Law dated 5 December estipulates for staff and salaries for the Customs office of Major Port of Chañaral. The same provides for the tenures depending upon that Customs.
1875	The Treasury offices along the country are organized including what is concerned to the National Direction of Customs.
1877	On 18 January, a Law is enacted stipulating on the addition of one additional tenth for those goods levied on importation. Such Law is published in “El Araucano”, under Number 4830. A list is included with a series of goods which are not affected by this additional levy which would be in force for 18 months. This measure was extended for several years.
1878	On 8 July that year, the Law establishing 25% of duties on foreign goods imported to the country is enacted. Other goods were levied with 35%, 15% and 4%. Besides, over one hundred articles were levied with specific duties. Another Law is enacted providing for import duties for asorted goods imported on a bundle. Tomé Customs is eliminated. A customs tenancy is established.
1879	An export duty is set on Niter which is determined on 40 cents per hundred kilograms. However, that Niter produced south of Parallel 24 should be free of duty for two years as from enacting of this Law. On 7 April, a Decree of Law indicates that any commercial communication between the Republic of Chile and those of Bolivia and Peru should be stopped. Article 2 set a prohibition to export supplies, cereals and other related goods to any port destination in those Republics or any place occupied by their squadron. In order to export, a guarantee should be rendered for the same value of load.
1880	Customs and United Treasury of Arica is temporarily established and organized with a total of 47 officers.
1881	Decree of 29 March provides that those goods imported via Tocopilla Port should be temporarily warehoused inside Customs premises for their inspection and valuation by customs inspectors being the time allowed not over 15 days. On 14 September, it is ordered by Decree that Arica Customs should be from that moment under supervision of the Superintendency of Customs. Customs and united Treasury of Taltal is established. On 29 August that year, the Customs Regulations, including 382 articles, is approved by Decree of 5 December 1881, in force as from 1 January 1882.
1882	Four posts of Fiscal Inspector of Treasury were created. One of them should visit Customs and Frontier Customs offices.
1883	The President of the Republic of Chile is authorized to enact a new Valuation Tariff under the provisions set by the Customs Ordinance. Such Law was enacted on 2 January. On 8 May a Supreme Decree amends the badge for uniform to be worn by Customs inspectors of Valparaiso Customs office. A similar Decree of 5 June extended the provisions of this Decree to every Frontier Customs Office of the Republic. A Law is enacted establishing the Customs Staff Rules providing for salaries and introducing criteria about bonds, awards, retirement, substitutions, and secondements; it indicates who may be considered senior officers. It is decreed that Chilean law shall rule the Customs Office of Arica, including Customs Ordinance of the Republic. Duties for Fiscal Pier of Valparaiso are set, as well as the Customs Staff and salaries for such which shall depend upon the ‘Alcaidía’ (Administration) of Valparaiso Customs.
1884	The Organic Law of Fiscal Pier of Valparaiso is enacted on 19 January, which under Article 9° estipulated that “the Department of ‘Alcaidía’ of Valparaiso Customs shall be in charge of the administration of such Pier…”.
1886	On 24 July, Nicaraguan poet Rubén DARÍO arrives in Valparaiso.
1887	Rubén Darío is appointed Cargo Inspector at the Fiscal Pier of Valparaiso, being the latter one section of Valparaiso Customs. This Pier, as indicated above, depended upon the Administration of Valparaiso.
1897	The Customs Ordinance is amended. The post of Administrator of Valparaiso Customs is created, together with his powers and salary. The salary for the National Customs Superintendent and his powers are also established. The Customs Inspectors Corps of Iquique, Antofagasta, Valparaiso, Talcahuano, Coronel and Valdivia Customs are organized. Their salaries and rules of promotion and awards are also ruled upon.
1910	On 17 June, the Protection Society of Customs Officers is funded, which is currently known as the National Association of Customs Officers of Chile (ANFACH).
1916	On 1 March, the “Tariff Law” is enacted.
1922	On 20 January, Law N°3852 is enacted, which would deal with Loading and Unloading of Goods.
1927	The Honorable General Board of Customs is created upon the reorganization of Customs Services of the Republic. Statutory Decree N° 305 of 21 April enacted the Customs Ordinance. Statutory Decree N° 1665 bis set the definite text of the Ordinance which entered in force as from 1 September that year.
1928	Law 4321 of 27 February 1928 is enacted which would be well known as the Customs Tariff.
1929	The Customs School is created upon suggestion of the Kemmerer Mission. The School started working that same year with a Provisional Set of Rules.
1930	On 31 January, Law 4815 is enacted, ruling on the Consular Tariff of Chile
1931	Statutory Decree N° 314 of 20 May enacted the new Customs Ordinance.
1932	Finance Decree N° 4023 of 17 December established the Definite Set of Rules for the Customs School. In April, the International Exchange Law was enacted; Article 16 of such Law estipulated that every duty collected by Customs should be paid with a surcharge determined by the Central Bank of Chile.
1934	The Customs Inspection and Examination Department is created under Resolution Nº 289 of 13 April in the National Customs Superintendency. The Customs Superintendency propused the Ministry of Finance about the construction of a building and premises for the National Customs Superintendency and for the Frontier Customs Office of Valparaiso Customs. The location of such building is the current HQ of Chile Customs. An initial contribution of 1 million Chilean pesos was consulted to start the building.
1936	The construction of the current HQ of the National Direction of Customs is started. A National Conference of Customs Administrators of Chile was held from 21 thru 26 December under the provisions of Article 41, numeral m) of the Customs Ordinance. This was the first meeting of this nature which was subsequently held each year.
1953	Statutory Decree Nº 30, published on the Official Gazette of 13 April 1953, enacted the text of the Customs Ordinance in force for 15 years. 1960 On 18 February 1960, in the city of Montevideo, the Treaty of Montevideo was signed according to which the Contracting Parties agreed on the creation of the Latin American Association of Free Trade. On that event, Argentina, Brazil, Chile, Mexico, Paraguay, Peru and Uruguay signed the Treaty; Colombia (30 Sept.1961), Ecuador (3 Nov.1961), Venezuela (31 Aug.1966) and Bolivia (8 Feb.1967) joined afterwards.
1969	The Andean Agreement (also known as the Cartagena Agreement) is signed on 26 May 1969 in Cartagena, Colombia. The organ of the Agreement is officially named as the Commission of the Cartagena Agreement. Currently, after withdrawal of Chile in 1976, Bolivia, Peru, Ecuador, Colombia y Venezuela are Member countries of the Community.
1975	Supreme Decree N° 927, published on the Official Gazette of 29 March, Osorno Customs was created. The Cardenal Samore Border Crossing, located at the Chile-Argentina border, 97 kilometers from the city of Osorno, depend upon this Customs Administration.
1978	Law Decree 2345 is published on the Official Gazette on 20 Oct. The purpose of this Decree was to speed up foreign trade operations, reduce time deadlines for Customs formalities and eliminating the requirement for certain documentation to be submitted, etc.
1979	The Customs Operations Rules enters into force by Statutory Decree 3-2345, published on the Official Gazette of 13 February, introducing some amendments, assigning tasks to Customs Brokers, reducing deadlines and simplifying Customs operations related to the clearance of goods. Law Decree N°2554, published on 10 March, gives the Head of Customs Service the power to interpret, in the exclusive way, the legal and regulatory provisions of technical and tax nature which are applied and/or enforced by the Customs Service. The text of the Organic Law of the National Customs Service is estipulated in the Official Gazette of 20 June 1979. This being ordered by Finance Decree N°329 of 16 April 1979.
1980	On 12 August, Chile joins the ALADI.
1983	The 26 of January is established as the International Customs Day, in attention to the fact that 30 years before that, the Inaugural Session of the Customs Cooperation Council had taken place in Brussels, Belgium. This international organization is currently known as the World Customs Organization (WCO). On 13 April, the Customs Ordinance is published in the Official Gazette. This Ordinance would be in force until 1988, bearing important amendments during that period. This legal text was funded on Statutory Decree N°30 of 13 October 1982.
1989	Statutory Decree Nº 2, dated 15 February 1989 and published in the Official Gazette of 21 August, replaced as from 1 Jan.1990, the Customs Tariff Code by that of the International Convention of the Harmonized System for the Description and Coding of Goods, which is known as the Harmonized System and is currently in force.
1990	Decree N° 309 of the Ministry of Finance, published in the Official Gazette of 7 May, set the exchange value between the US dollar and other foreign currencies.
1993	The Economic Complementation Agreements (ACE) N° 22 with Bolivia, N° 23 with Venezuela and N° 24 with Colombia are concluded.
1994	En Noviembre, Chile se incorpora a APEC, Foro de Cooperación del Asia Pacífico, entidad que reúne a 21 economías de dicha zona geográfica. Ese mismo año se concreta el ACE N° 32 con Ecuador, firmándose el 20 de Diciembre para empezar a regir el 1° de Enero de 2005
1996	On 25 June, in the frame of ALADI, the Economic Complementation Agreement is signed, which shall establish a commercial association between Chile and the Common Market of the South, MERCOSUR, by ACE N° 35, signed on 25 June and entered into force on 1 October that same year. On 21 November, Law N° 19479 is published in the Official Gazette. This rule introduces amendments to the Customs Ordinance and the Organic Law of the National Customs Service, and it rules about management and Customs staff; it also replaced the Customs Staffing.
1997	The Free Trade Agreement with Canada enters into force on 5 July which had been signed on 5 Dec. 1996.
1998	The Economic Complementation Agreement with Peru (ACE N°38) is signed on 22 June, which enters into force on 1 July that same year.
1999	The FTA with Central America enters into force on 18 October.
2002	The Association Agreement between Chile and the European Union is signed in Brussels on 18 November, which enters into force on 1 February 2003.
2003	The FTA between Chile and the USA is signed on 6 June, in Miami, USA, after 14 negotiation rounds which took two years. On 15 February, the Governments of Chile and South Korea sign a FTA in Seoul, which enters in force on 1 April 2004.
2004	The Chile-USA Free Trade Agreement enters into force though the protocol negotiation was not concluded. In December, the FTA between Chile and EFTA enters in force, grouping Iceland, Liechtenstein, Norway and Switzerland.