Draft SADC guidelines for Coordinated Border Management: A Practical Guide on Best Practices and Tools for Implementation, 2011 (CORE1115)

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Summary: The 15 member states of the Southern African Development Community (SADC) are looking ways to ease the transition of their regional Free Trade Area towards a more integrated Customs Union where people and cargo would cross borders without excessive delays and administrative burden. The countries expect that the smoother cross-border traffic would contribute to the economic growth in the region. Central to the integration effort is coordinated border management, i.e., closer collaboration among various border control agencies, both nationally and internationally. The SADC guidelines provides a comprehensive catalogue and description of best practices of border agency cooperation and guidance how to implement them in the Southern-African context. Besides the guidelines, the document also features a comprehensive glossary of coordinated border management vocabulary. You can download the guidelines here: http://www.sadc.int. Review by Toni Männistö (CBRA)

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Full review: The guideline document suggests that coordinated border management depends on three levels of coordination: 1) intra-agency coordination within boundaries of one organization, 2) inter-agency cooperation between separate border control agencies or between the agencies and associated ministries and other policy-making bodies, and 3) international cooperation among border control agencies at both sides of a border or among governments at various supranational political forums.

The guideline document discusses in detail six key areas of coordinated border management. The most fundamental of the management areas is the legal and regulatory framework that defines a necessary legal basis for inter-agency and international cooperation and exchange of information. The second key management area is the institutional framework that is about governance and organizational structures underlying border control operations and high-level decision-making. The third management area concerns the procedures for cooperation at the borders. The fourth management area focuses on human resources and training, and the fifth on exchange of data, information, and intelligence. The sixth and the last management area is about providing infrastructure and equipment that supports other areas of coordinated border management.

Reference: Southern-African Development Community, 2011. “Draft SADC guidelines for Coordinated Border Management: A Practical Guide on Best Practices and Tools for Implementation”

 

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Governmental actors in supply chains & Governmental procedures, compliance and risk management – CASSANDRA Compendium Chapters 4 & 7, 2012 (CORE2007c)

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Summary: The fourth and seventh chapters of the CASSANDRA compendium elaborate on the roles of government agencies in international logistics and supply chain security (SCS). A broad range of government actors – customs, police agencies, border guards and many others – play a crucial role in enforcing and facilitating cross-border traffic through the global supply chains. These government agencies are critical stakeholders to be involved in the development, design and implementation of the two central CASSANRA concepts: the end-to-end data pipeline and the risk-based approach to cargo inspections and company audits. The CASSANDRA compendium highlights that there are important differences in the national laws and regulations, even within the European Union, that complicate international government collaboration. The differences in the legal framework and organisational cultures must be taken into account when designing new SCS solutions in the CASSANDRA and other projects. The CASSANDRA compendium is available for download: www.cassandra-project.eu. Review by Toni Männistö (CBRA)

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Full review: The CASSANDRA compendium describes how the role of government agencies in the cross-border supply chain operations is changing. The trading community and high-level policy-makers are strongly advocating trade facilitation, to make international commerce faster, more cost-efficient and less cumbersome. To address the demand for trade facilitation, many border control agencies are adopting risk-based approaches for controlling cross-border trade and travel. They exploit information increasingly to identify and target high-risk cross-border movements while facilitating low-risk traffic. To further lowering administrative hurdles to the cross-border trade, many government agencies are eliminating duplicative and redundant reporting requirements and building modern ICT systems to enable fast and reliable digital exchange of data and information.

Many law enforcement agencies are also facing budget cuts and increasing work loads, which forces them to look for new ways to increase productivity. Increased collaboration among border control agencies has been proposed as a solution for boosting productivity. The efforts towards further coordinated border management (CBM) are clearly manifested as joint-border control posts, regional single window systems (an online interface enabling trading companies, customs and other border control agencies to exchange trade-related information) and mutual recognition agreements (MRA) that harmonize customs and security related regulatory requirements across jurisdictions.

Reference: Hintsa, J. and Uronen, K. (Eds.) (2012), “Common assessment and analysis of risk in global supply chains “, Compendium of FP7-project CASSANDRA, Chapters 4 & 7

 

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Three calls for journal and conference papers

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This CBRA Blog advertises three important calls for papers in 2016: Special Issue for Journal of Transportation Security (to be published in 2017); the 11th WCO Customs-Academia PICARD Conference (Sep.2016); and the 7th European Intelligence and Security Informatics Conference (Aug.2016).

 

1. Journal of Transportation Security, Special Issue: Enhancing supply chain security through government-to-government and government-to-business partnerships and collaboration

Journal of Transportation Security (JTRS): The 9/11 terrorist attacks and the subsequent events have compelled stakeholders to understand transport security as more than a single element of the global networks that move people and goods. Once a routine component of modern transportation, security now represents a vital necessity and an urgent national priority. The Journal of Transportation Security probes the relevant aspects of many critical areas of study, including supply chain and logistics; information technology; public policy; international business; political science; engineering; transportation; economics; and counterterrorism, among others. This journal is the first to take a global, apolitical, and in-depth multidisciplinary look at the field. The mission of the journal is to disseminate new research, thought, and analysis for teachers, researchers, policy makers and practitioners around the world who view transportation security as a critical element in the post 9/11 world.

Partnerships and collaboration play a crucial role in the fight against crime in the global supply chains. Investments in traditional security areas such as physical security, personnel security, and IT security no longer suffice. Both government and business actors should extend their security efforts beyond their organizational boundaries, by fostering relationships with each other. Further government-to-government and government-to-business collaboration has a great potential to improve security of the supply chain and regulatory compliance of the trading community, while facilitating trade and logistics for the legitimate, security aware companies. The scope of collaboration covers a broad range of activities, including sharing of information and data; investing in common resource pools and sharing resources; and agreeing on optimum protocols for conducting inspections and audits in the supply chains. Enhancing the information exchange, for example, would help governments and companies to prevent and detect security breaches in supply chains and to recover faster once the breaches happen. In principle, both government and business actors share a common goal of mitigating crime in the global supply chains. Priorities and procedures, however, differ markedly between various business actors (e.g., shippers, carriers, freight forwarders) and government agencies (e.g., customs, police and transport security authorities).

Call for abstracts for the JTRS Special issue is open until 30 September 2016, please visit: www.springer.com …   

(CBRA / Dr. Juha Hintsa is the lead guest editor for this special issue; and abstract review panel consists of multiple experts in FP7-CORE project).

 

 

2. The 11th Annual WCO Picard Conference – Manila, Philippines – 27-29 September 2016

The World Customs Organization and the Philippine Bureau of Customs are pleased to announce the 11th annual WCO Picard Conference. You are invited to submit your research for presentation at the conference. Papers should focus on Customs or, more globally, the regulation, dynamics, and practices of international trade. Although not required, writers could consider submitting research on the following topics: Digital Customs; security; taxation and other revenue matters; and illicit trade.

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Call for papers is open until 15 June 2016, please visit: www.wcoomd.org…

(CBRA / Dr. Juha Hintsa is part of the Scientific Board for the conference; and he also belongs to the PICARD Advisory Group).

 

 

 

3. The 7th European Intelligence and Security Informatics Conference (EISIC) – Uppsala, Sweden – 17-19 August 2016

Intelligence and Security Informatics (ISI) research is an interdisciplinary field of research that focuses on the development, use, and evaluation of advanced information technologies, including methodologies, models and algorithms, systems, and tools, for local, national and international security related applications. Over the past decade, the ISI research community has matured and delivered an impressive array of research results that are both technically innovative and practically relevant. The 2016 European ISI Conference is the seventh ISI conference to be organized by the European ISI community. The conference was first held in 2008 and has been organized annually since 2011.

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Call for papers is open until 18 May 2016, please visit: http://www.eisic.eu/call.aspx

(CBRA / Dr. Toni Männistö delivers a keynote presentation on FP7-CORE, focusing on Supply chain security education and training (CORE WP19.1) ).

SIECA delegation visiting Europe in June 2015

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I had a great pleasure to be the lead host for a 12 person SIECA delegation visit to Europe in June 2015. We spent two days in the Netherlands, one day in Belgium and two days in Switzerland in an action-packed tour, visiting several border areas, governmental offices and beyond.

The idea to organize a one-week customs and international trade visit tour to Europe first came when Mr. Roman Stoll from the Federal Customs Administration of Switzerland and I paid a four-day visit at the SIECA Secretariat in Guatemala City in March 2015. There we had several meetings and discussions on World Trade Organization´s Trade Facilitation Agreement, WTO TFA, implementation plans with the SIECA management – Ms. Carmen Gisela Vergara Mas and Mr. Javier Gutierrez; with Customs management and experts from all the six SIECA member countries; and with representatives of the Intra-American Development Bank. Some weeks after the Guatemala-visit, SIECA and IDB confirmed the willingness to come over to Europe, to learn about good practices in international trade, supply chain and border management in the Netherlands, Belgium and Switzerland. And after couple of hundreds of emails and phone calls – myself acting as the focal point in arranging the visit – we were ready to welcome the SIECA Delegation to Europe between Monday 1 June and Friday 5 June, 2015.

blog 22.03.20161Monday-Tuesday we had a full agenda in the Netherlands. Monday started by presentations on Dutch Customs in general, and Schiphol Customs in specific, focusing on risk management, coordinated border management, and the SmartGate solutions at the Schiphol Airport. This was followed by a roundtable discussion with representatives from the Dutch Ministries of Foreign Affairs and Economic Affairs, as well as with an expert from the air cargo industry. During Monday the SIECA delegation gained firsthand knowledge for example on One-Stop Shop (OSS) implementation steps in the Netherlands: Step 1. Information exchange; 2. Joint inspections; 3. Training specialists; 4. Joint risk analysis by both inspections and selection by Customs; and Step 5. One inspection inspects for the other. The program on Tuesday consisted of a tour in Port of Rotterdam, at the APM 2 Container terminal; as well as a visit to the Central command post of nuclear detection and an X-ray container scanner. In between we had a typical “Dutch sandwich” lunch, kindly offered by the hosts. The delegation enjoyed seeing the ultimate high level of automation at the new container terminal, as well as visiting a pragmatic “one stop inspection room”, where multiple border agencies work together inspecting containers flagged for manual inspections.

Wednesday was spent in Brussels, Belgium. In the morning, the trade representatives of the SIECA Delegation went to the European Commission, DG TRADE, for EU-SIECA related discussions. In the afternoon, most of the delegation visited the World Customs Organization, where the meeting started with discussions with the WCO Secretary General Dr. Kunio Mikuriya and the WCO Deputy Secretary General Mr. Sergio Mujica. This was followed by a presentation on WTO Trade Facilitation Agreement and the linked WCO Instruments, by Ms. Heike Barczyk, the Deputy Director of Compliance and Facilitation Directorate at the WCO. Lastly, we had a brief presentation and roundtable discussions on the European Flagship Supply Chain Security Research, Development and Demonstrations project called FP7-CORE. This discussion was joined by Mr. Nik Delmeire, the Secretary General of the European Shippers Council; Ms. Nicolette van der Jagt, the Secretary General of CLECAT, the European association for forwarding, transport, logistics and customs services; and myself, Dr. Juha Hintsa, Founder of the Cross-border Research Association. After the meeting at WCO, it was time to fly from Brussels to Basel, Switzerland.

blog 22.03.20162Thursday-Friday we had a packed program in Switzerland. Despite some “navigation challenges” with our three-car convoy, we arrived on time from Basel to Bern at the Directorate General of the Federal Customs Administration. We heard several interesting presentations focusing on performance mandate, tasks and strategy of Swiss Customs; on international affairs section and it’s relevant international cooperation program; on shifts from traditional revenue collection to environmental and incentive taxes; and on strategy and challenges regarding future customs clearance systems and platforms – all this by three top experts from Swiss Customs. I presented the outcomes of Swiss Customs and Cross-border Research Association -visit to SIECA in March 2015, suggesting some specific areas and priorities for future co-operation activities. Next, the Delegation visited the Federal Department of Foreign Affairs, where the discussions focused on Swiss foreign policy in Central America and bilateral cooperation Switzerland – Central America; as well as on political and economic regional integration in Central America. After a quick photo session on the Bundeshaus terrace facing over River Aare, our journey continued towards the Swiss Customs facilities at the Zurich Airport. Again, there were some “logistics challenges” on the way to Zurich, when one of our three cars suddenly lost all engine coolant – fortunately a gas station was close by, and a road service company (car + mechanic) happened to be there. At the Zurich Airport, the SIECA Delegation learned a lot of details about Swiss Customs operations with air cargo and passenger flows. And as the last agenda item, we met a cute black Labrador retriever, who together with his trainer showed how effortlessly he finds illicit goods hidden in air cargo boxes and pallets…

On Friday morning – last day of the journey – we had again an early wake-up call at our hotel in Basel. We were warmly welcomed by Swiss Customs Officers at the Basel/Weil- Motorway border-crossing point – the highest volume customs clearance point in Switzerland. First the hosts explained about facts and figures on Basel/Weil, topped with interesting information on customs risk management processes and IT-systems. Now we all know that on average 3500 trucks cross the Basel/Weil border per day, and that around 600 million CHF is collected annually as indirect taxes at that border crossing point. After that we took a rooftop view over the border area premises, discussing further Import/Export/Transit -procedures, as well as visited the Swiss Transito-Cabins / Checkpoints. From the motorway we drove to the Swiss Customs House at the Basel Port, visiting the famous tri-border-point between Switzerland, Germany and France. There the Delegation learned about the barge traffic on River Rhine – the same river we saw three days earlier at Port of Rotterdam. From the Basel Port, we drove again to Bern, this time to visit the State Secretariat for Economic Affairs, SECO. Lively discussions took place on the SECO rooftop meeting room on topics including EFTA – Central American FTA, as well as Bilateral Economic Relations Switzerland – Central America. And after lunch kindly offered by SECO, we headed towards Geneva for the final meeting of the week: World Economic Forum, WEF, where we all arrived just in time to learn about the organization and the key activities of WEF, including: the work of the WEF in Latin America, with updates from the Latin American Summit; and, the work of the WEF on trade and investment policy and implementation, including Policy Directions, Enabling Trade Index, Enabling Trade implementations. The United Nations Economic Commission for Europe, UNECE, was kind enough to explain about latest developments and trends in single window projects and implementations. And lastly, I shared briefly select work on trade facilitation and supply chain security research and education materials by the Cross-border Research Association and HEC University of Lausanne.  I highlighted the important developments taking place within the FP7-CORE project – referring naturally to our meeting two days earlier at the World Customs Organization.

This concludes the brief summary of the SIECA week in Europe, and now I would like to thank all the SIECA Delegation members for coming over and spending the five days with us, here on the old continent:

  • Costa Rica: Mr. Jhon Fonseca, Vice Minister Foreign Trade; and Mr. Luis Fernando Vasquez Castillo, Costa Rica Customs.
  • El Salvador: Mrs. Luz Estrella Rodriguez, Vice Minister Foreign Trade
  • Guatemala: María Luisa Flores Villagran, Vice Minister Foreign Trade; and Mrs. Maria Elisa Chang, Guatemala Customs.
  • Honduras: Jeronima Urbina, Director of Economic Integration
  • Nicaragua: Eddy Aldolfo Artola Garciá, Director Risk Management of Nicaragua Customs.
  • Panama: Melitón Arrocha. Minister Foreign Trade; Mrs. Diana Salazar, Vice Minister Foreign Trade; and Mr. José Gómez Núnez DG of Panama Customs.
  • SIECA Secretariat: Carmen Gisela Vergara Mas, Secretary General
  • Intra-American Development Bank: Mr. Jaime Granados

And last but not least, warmest thanks to all the local hosts: Dutch Customs Administration; Dutch Ministry of Foreign Affairs; Dutch Ministry of Economic Affairs; European Commission DG TRADE; World Customs Organization; Federal Customs Administration of Switzerland; Federal Department of Foreign Affairs of Switzerland; State Secretariat for Economic Affairs of Switzerland; and World Economic Forum.

CBRA Blog by Juha Hintsa

blog 22.03.20163PS. If your country / region would be interested on a similar European field visit, please contact us – we could organize the practical details for the next delegation, possibly every 1-2 years (of course the actual hosts need to agree to the visit in the first place, that goes without saying…). And one final note: next time a bus and a professional driver need to be rented, please!

 

Interview with Dr. Vittoria Luda di Cortemiglia

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CBRA Interview with Dr. Vittoria Luda di Cortemiglia, Program Coordinator with the Emerging Crimes Unit at the United Nations Interregional Crime and Justice Research Institute, UNICRI, Torino, Italy.

Hi Vittoria, and thanks for joining a CBRA Interview – can you first tell a bit who are you and what you do?

I am the Programme Coordinator of the UNICRI Emerging Crimes Unit. Since joined the U.N. in 2001, I have been in charge of the coordination of a number of applied-research programmes in the field of illicit trafficking and emerging crimes, including environmental crimes, cybercrimes, counterfeiting, and organized crime in general.  I am UNICRI Focal Point for Strategic Approach to International Chemicals Management, SAICM, as well as UNICRI Focal Point within the UN Inter-Agency Coordination Group on Human Trafficking, ICAT.

Can you explain us bit more about UNICRI, including the governance model and the research areas?

UNICRI is a United Nations entity created by the Economic and Social Council of the United Nations, ECOSOC, in 1967 to assist Intergovernmental, Governmental and Non-Governmental Organizations in formulating and implementing improved policies in the field of criminal justice. The Institute is part of the United Nations Crime Prevention and Criminal Justice Program, which report annually through the UN Commission on Crime Prevention and Criminal Justice, CCPCJ, to the ECOSOC.

UNICRI is involved in research projects and capacity building activities in a broad number of areas, ranging from environmental crimes; human trafficking; trafficking in goods and products – including precious metals, pesticides, counterfeiting as well as chemicals, biological, radiological and nuclear risks; terrorism and foreign fighters; hate crimes and hate speech; cyber-security; urban security; violence against women; and, maritime piracy.

UNICRI, CBRA and other partners have just finished a 2-year FP7-project called CWIT, focusing on identifying and quantifying criminal and non-compliance problems and proposing solutions against illicit trade and logistics in electronic waste materials. What was the biggest thing you learned during the project, and which of our recommendations you find as most important when moving to the future?

The CWIT project has been a great experience from a personal as well as professional point of view, as gave me the possibility to work side by side with a number of wonderful professionals from the WEEE industry, enforcement agencies, international organisations, lawyers, academia and consultants specialised in supply chain security.

The objectives of the project were quite ambitious, as CWIT aimed at identifying the policy, regulatory, procedural and technical gaps as observed in today’s business environment, and at suggesting tangible improvements. The CWIT team produced set of recommendations to support the European Commission, law enforcement authorities and industry practitioners in countering the illegal trade of WEEE in and from Europe.

With regards to the recommendations which I consider particularly important are the ones related to the necessity of establishing robust and uniform legal framework and relevant implementation. As mentioned in the final CWIT report, without a clear and comprehensive legislative base, enforcers and prosecutors are powerless to address illegal WEEE flows. At the very minimum, a clear and global definition of what constitutes WEEE is the basis for improving detection, inspection, and enforcement and sentencing rates related to illegal WEEE trade.

In parallel, harmonisation and enhancement of penalty system is needed to increase the effectiveness of the existing legal framework.  In fact, penalties for the illegal trade in e-waste vary greatly in terms of monetary fines and prison durations. Today, the participation in WEEE illegal activities does not appear risky to offenders due to the low probability of being prosecuted and sentenced. Even when successfully prosecuted, penalties foreseen in legislation and penalties applied in court decisions are typically very low. For these reasons, it is important to also enhance prosecuting and sentencing, so that WEEE trade and environmental crimes in general are not considered a low- priority/low sentenced area.

UNICRI kindly invited CBRA to Torino last October to join a 2-day workshop on “Illicit Pesticides, Organized Crime and Supply Chain Integrity”. Can you elaborate on this emerging supply chain crime area, including about the estimated size and the negative socio-economic consequences of the problem?

Illicit pesticides cover a wide variety of products, including obsolete pesticides, unauthorized imports, counterfeit or fake pesticides; re- or up-labelled pesticides and refilled containers. Estimates of the illicit pesticides penetration of the legal market range from 10 to 25% – both in the EU and at international level-, representing several billion annually (USD 6-10 billion at global level and USD 1.1 billion at European level).

Besides the evident risks for human safety and health and environmental risks, illicit pesticides also pose serious threats to the economies and security. The agricultural market is extremely important for a large number of countries and companies and might be jeopardize by the introduction of illicit pesticides which can deeply affect the local and national economies. The economic losses have multiple sources and victims and long-term consequences, in particular possible loss of harvest/crop, soil and water contamination affecting the cultivable lands, decrease in innovation, reputation challenges with a decrease of exports, etc. The penetration of the pesticides market by criminal actors, including organised crime groups attracted by high profits and low risk of detection, prosecution and sentencing is another worrying trend.

Do you foresee opportunities for future research projects in the field of illicit pesticides?

Many national and international actors are becoming more and more aware of the threats posed by illicit pesticides to the legal supply chain. The attention and awareness of the problem is increasing at international level. In particular, the World Customs Organisation and the Organisation for Economic Co-operation and Development are becoming increasingly active in the field and it would be interesting to establish joint actions so as to raise awareness, capacities and response to secure the legal supply chain of such products. Indeed, through this research, we realised that the issue of illicit pesticide is neither well acknowledged nor well-documented. Our study is one of the first detailing the mechanisms and trends in the trafficking of illicit pesticides, the involvement of criminal actors, networks and organised crime groups and related criminal activities, as well as identifying the risks for the supply chain and pesticide markets.

UNICRI is very interested in continue working with partners, including CBRA, on this issue. The report details a number of initiatives which UNICRI stands ready to launch supporting countries in addressing the challenges of illicit pesticides, in particular research, raising stakeholders’ awareness, training and technical assistance programmes, supporting in capacity building activities and reinforcing national and international cooperation.

Thanks Vittoria for this interview – and we are of course more than willing to join a project-team on this highly important illicit pesticides trade and supply chains -topic

SUPPLY CHAIN SECURITY – DHS Could Improve Cargo Security by Periodically Assessing Risks from Foreign Ports, GAO, September 2013 (CORE1007)

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Summary: This GAO report reviews maritime supply chain security programs that the Department of Homeland Security and its component agencies – mainly the Customs and Border Protection (CBP) and the Coast Guard – have implemented since 2001. The report examines (1) the extent to which DHS has assessed risk levels of foreign ports and allocated security resources accordingly and (2) activities DHS has taken to monitor and improve efficiency and effectiveness of its security initiatives. Drawing on numerous interviews of key stakeholders and examination of key documents, the report recommends CBP to consider expansion of its Container Security Initiative (CSI) into new ports based on a periodic risk assessment of foreign ports. The report also highlights opportunities for further harmonization of the US maritime security initiatives with their foreign counterparts through mutual recognition agreements. Since this report contains fundamental information about the US maritime security programs, many CORE work packages are likely to benefit from the insights this report provides. Especially, the demonstrations, which involve ocean shipping, as well as the risk cluster, can use this information to support and guide their work. The document is available for download at: http://www.gao.gov/assets/660/657893.pdf (accessed 13.3.2016)

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Full review: The report provides a comprehensive outlook on the US maritime supply chain security initiatives that the DHS and its component agencies – mainly CBP and Coast Guard – have implemented since 2001. The report features some interesting figures that map the security initiatives on the global supply chain and that illustrate current solutions the US government employs to screen and examine US-bound shipping containers. The CORE’s demonstrations that involve maritime shipping are likely to benefit from the information this report provides. Also the risk cluster can use the information, and especially the mapping of the US maritime security initiatives over the global supply chain, to design risk-based, layered approaches to maritime supply chain security. The education cluster can also reuse the contents of this report to produce relevant and informative training material for various supply chain stakeholders that are involved in the seaborne trade and logistics.

Cross-references:

  • Maritime Security: Progress and Challenges 10 Years after the Maritime Transportation Security Act. GAO-12-1009T. Washington, D.C.: September 11, 2012.
  • Supply Chain Security: Container Security Programs Have Matured, but Uncertainty Persists over the Future of 100 Percent Scanning. GAO-12-422T. Washington, D.C.: February 7, 2012.
  • Homeland Security: DHS Could Strengthen Acquisitions and Development of New Technologies. GAO-11-829T. Washington, D.C.: July 15, 2011.
  • Maritime Security: Responses to Questions for the Record. GAO-11-140R. Washington, D.C.: October 22, 2010.
  • Supply Chain Security: DHS Should Test and Evaluate Container Security Technologies Consistent with All Identified Operational Scenarios to Ensure the Technologies Will Function as Intended. GAO-10-887. Washington, D.C.: September 29, 2010.
  • Supply Chain Security: CBP Has Made Progress in Assisting the Trade Industry in Implementing the New Importer Security Filing Requirements, but Some Challenges Remain. GAO-10-841. Washington, D.C.: September 10, 2010.

Additional keywords: Mutual recognition, Customs-trade partnership against Terrorism (C-TPAT), Container Security Initiative (CSI), maritime security, counter-terrorism

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FP7-CORE Education – Two new diagrams

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Today’s CBRA Blog presents two new diagrams which have been recently designed and developed in the context of FP7-CORE Education and training work (Work package 19.1). The information visualized in the diagram is based on CBRA’s supply chain security research work since year 2001, particularly from the past 5-6 years.

Some background information on the first diagram of crime types in global supply chains has been presented before for example in CBRA’s Blog of 13 October 2014 – Crime taxonomies from Athens. In the center of this diagram we list the crime types – including document fraud and cybercrime – which in the supply chain criminal context are performed in order to succeed with the actual economic or ideological crime, e.g. cargo theft or terrorism.

The left area of the circle lists four examples of crime types, which typically are of primary concern for supply chain companies: cargo theft, sabotage, parallel trade and product specification fraud. With such crime types it is commonly up to the companies to prevent, to detect and to react – of course, law enforcement agencies can be called for any time there is reasonable suspicion of such activities (and naturally in certain cases the government agencies may even be the first ones to detect and react, e.g. in case of armed robberies and truck hijackings).

The right area of the circle deals with supply chain incidents where the authorities typically focus on prevention, detection and reaction: fraud in indirect border taxes; trafficking / violations in cross-border restrictions and prohibitions; human trafficking; and exploitation of illicit labor. From supply chain perspective one can characterize them as “a priori non-disruptive illegal activities – only if / after authorities detect the violations, the supply chain is disrupted and the involved supply chain companies can get in trouble”.

Lastly, on the bottom area of the circle, we list four supply chain crime areas where the prevention typically is in strong interest of both supply chain companies and governmental agencies – and, the detection and (instant) reaction varies on case-by-case basis: counterfeiting, sales channel violations, sea piracy and terrorism. Counterfeiting hits revenues on both sides of the equation, and, with many products can also be health damaging or even lethal. Not having proper sales licenses, and/or selling to unauthorized buyers – for example cigarettes and alcohol, dual use and strategic goods etc. – can again harm both the involved companies and the society as a whole. And of course, sea pirates hijacking cargo ships; bombs exploding and bringing planes down; and terrorists attacking critical supply chain infrastructures, all are in the best interest of both companies and government agencies to prevent, to detect, and to react – in the fastest and most effective possible manner.

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The second new educational diagram below depicts the negative socio-economic impact areas – six in total – caused by twelve typical smuggling and trafficking activities. The data behind it has been presented before e.g. in CBRA’s Blog of 14 January 2015 – Socio-economic damages. Inside the square we present the six societal impact areas – the larger the area, the more links there are between the trafficking activities and the negative impacts. As an example of a “big area”, seven different types of trafficking typically lead into increasing market place distortions and/or unfair competition. In the other extreme, only trafficking in stolen cultural products leads to losses in cultural heritage.

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That’s all for the CBRA Blog today – please let us know if you see this type of visualization as beneficial when teaching and learning about the big picture of supply chain security!  Thanks, Juha Hintsa ( email: cbra@cross-border.org )

COSO. Enterprise Risk Management — Integrated Framework – Executive Summary. Committee of Sponsoring Organizations of the Treadway Commission. September 2004. (CORE1106)

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Summary: The Committee of Sponsoring Organizations of the Treadway Commission, COSO, defines Enterprise Risk Management, ERM, as a process, effected by an entity’s board of directors, management and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives. The entity objectives are set forth in following four categories: (i) Strategic – high-level goals, aligned with and supporting its mission; (ii) Operations – effective and efficient use of its resources; (iii) Reporting – reliability of reporting; and (iv) Compliance – compliance with applicable laws and regulations. According to COSO, ERM enables management to effectively deal with uncertainty and associated risk and opportunity, enhancing the capacity to build value. Within the context of FP7-CORE project – and, supply chain security management in general – ERM can be seen as a useful approach particularly when it comes to aligning security risk appetite and strategy; to enhancing security risk response decisions; and to reducing security related operational surprises and losses. Some other ERM aspects such as seizing opportunities (“positive risks”) may not apply in supply chain security management context. One more interesting note, which could also be applied for supply chain security: everyone in an entity has some responsibility for ERM. This executive summary document is available for download at: http://www.coso.org/documents/coso_erm_executivesummary.pdf

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Full review:
Background: The first version of the “Internal Control – Integrated Framework” was issued by the Committee of Sponsoring Organizations of the Treadway Commission, COSO, in early 1990s, to help businesses and other entities assess and enhance their internal control systems. The change of the millennium saw heightened concern and focus on risk management, and it became clear that a need exists for a robust framework to effectively identify, assess, and manage risk.  In 2001, COSO initiated a project, and engaged PricewaterhouseCoopers, to develop a framework that would be readily usable by managements to evaluate and improve their organizations’ enterprise risk management.
According to COSO (p.1), Enterprise Risk Management, ERM, encompasses:
•    Aligning risk appetite and strategy – Management considers the entity’s risk appetite in evaluating strategic alternatives, setting related objectives, and developing mechanisms to manage related risks.
•    Enhancing risk response decisions –Enterprise risk management provides the rigor to identify and select among alternative risk responses – risk avoidance, reduction, sharing, and acceptance.
•    Reducing operational surprises and losses – Entities gain enhanced capability to identify potential events and establish responses, reducing surprises and associated costs or losses.
•    Identifying and managing multiple and cross-enterprise risks – Every enterprise faces a myriad of risks affecting different parts of the organization, and enterprise risk management facilitates effective response to the interrelated impacts, and integrated responses to multiple risks.
•    Seizing opportunities – By considering a full range of potential events, management is positioned to identify and proactively realize opportunities.
•    Improving deployment of capital – Obtaining robust risk information allows management to effectively assess overall capital needs and enhance capital allocation.
COSO (pp.3-4) states that ERM consists of eight interrelated components, derived from the way management runs an enterprise and are integrated with the management process:
•    Internal Environment – The internal environment encompasses the tone of an organization, and sets the basis for how risk is viewed and addressed by an entity’s people, including risk management philosophy and risk appetite, integrity and ethical values, and the environment in which they operate.
•    Objective Setting – Objectives must exist before management can identify potential events affecting their achievement.  Enterprise risk management ensures that management has in place a process to set objectives and that the chosen objectives support and align with the entity’s mission and are consistent with its risk appetite.
•    Event Identification – Internal and external events affecting achievement of an entity’s objectives must be identified, distinguishing between risks and opportunities. Opportunities are channeled back to management’s strategy or objective-setting processes.
•    Risk Assessment – Risks are analyzed, considering likelihood and impact, as a basis for determining how they should be managed.  Risks are assessed on an inherent and a residual basis.
•    Risk Response – Management selects risk responses – avoiding, accepting, reducing, or sharing risk – developing a set of actions to align risks with the entity’s risk tolerances and risk appetite.
•    Control Activities – Policies and procedures are established and implemented to help ensure the risk responses are effectively carried out.
•    Information and Communication – Relevant information is identified, captured, and communicated in a form and timeframe that enable people to carry out their responsibilities.  Effective communication also occurs in a broader sense, flowing down, across, and up the entity.
•    Monitoring – The entirety of enterprise risk management is monitored and modifications made as necessary.  Monitoring is accomplished through ongoing management activities, separate evaluations, or both.
Lastly, as potential readers / users of this report, COSO suggests following: Board of Directors; Senior Management; Managers and other personnel; Regulators; Professional Organizations; and Educators.
CORE1106
https://www.dropbox.com/s/aetbp8jr6dr4z31/CORE1106-coso_erm_executivesummary.pdf?dl=0

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COSO. Enterprise Risk Management — Integrated Framework – Executive Summary. Committee of Sponsoring Organizations of the Treadway Commission. September 2004. (CORE1106)

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Summary: The Committee of Sponsoring Organizations of the Treadway Commission, COSO, defines Enterprise Risk Management, ERM, as a process, effected by an entity’s board of directors, management and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives. The entity objectives are set forth in following four categories: (i) Strategic – high-level goals, aligned with and supporting its mission; (ii) Operations – effective and efficient use of its resources; (iii) Reporting – reliability of reporting; and (iv) Compliance – compliance with applicable laws and regulations. According to COSO, ERM enables management to effectively deal with uncertainty and associated risk and opportunity, enhancing the capacity to build value. Within the context of FP7-CORE project – and, supply chain security management in general – ERM can be seen as a useful approach particularly when it comes to aligning security risk appetite and strategy; to enhancing security risk response decisions; and to reducing security related operational surprises and losses. Some other ERM aspects such as seizing opportunities (“positive risks”) may not apply in supply chain security management context. One more interesting note, which could also be applied for supply chain security: everyone in an entity has some responsibility for ERM. This executive summary document is available for download at: http://www.coso.org/documents/coso_erm_executivesummary.pdf

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Full review:

Background: The first version of the “Internal Control – Integrated Framework” was issued by the Committee of Sponsoring Organizations of the Treadway Commission, COSO, in early 1990s, to help businesses and other entities assess and enhance their internal control systems. The change of the millennium saw heightened concern and focus on risk management, and it became clear that a need exists for a robust framework to effectively identify, assess, and manage risk. In 2001, COSO initiated a project, and engaged PricewaterhouseCoopers, to develop a framework that would be readily usable by managements to evaluate and improve their organizations’ enterprise risk management.

According to COSO (p.1), Enterprise Risk Management, ERM, encompasses:

  • Aligning risk appetite and strategy – Management considers the entity’s risk appetite in evaluating strategic alternatives, setting related objectives, and developing mechanisms to manage related risks.
  • Enhancing risk response decisions –Enterprise risk management provides the rigor to identify and select among alternative risk responses – risk avoidance, reduction, sharing, and acceptance.
  • Reducing operational surprises and losses – Entities gain enhanced capability to identify potential events and establish responses, reducing surprises and associated costs or losses.
  • Identifying and managing multiple and cross-enterprise risks – Every enterprise faces a myriad of risks affecting different parts of the organization, and enterprise risk management facilitates effective response to the interrelated impacts, and integrated responses to multiple risks.
  • Seizing opportunities – By considering a full range of potential events, management is positioned to identify and proactively realize opportunities.
  • Improving deployment of capital – Obtaining robust risk information allows management to effectively assess overall capital needs and enhance capital allocation.

COSO (pp.3-4) states that ERM consists of eight interrelated components, derived from the way management runs an enterprise and are integrated with the management process:

  • Internal Environment – The internal environment encompasses the tone of an organization, and sets the basis for how risk is viewed and addressed by an entity’s people, including risk management philosophy and risk appetite, integrity and ethical values, and the environment in which they operate.
  • Objective Setting – Objectives must exist before management can identify potential events affecting their achievement. Enterprise risk management ensures that management has in place a process to set objectives and that the chosen objectives support and align with the entity’s mission and are consistent with its risk appetite.
  • Event Identification – Internal and external events affecting achievement of an entity’s objectives must be identified, distinguishing between risks and opportunities. Opportunities are channeled back to management’s strategy or objective-setting processes.
  • Risk Assessment – Risks are analyzed, considering likelihood and impact, as a basis for determining how they should be managed. Risks are assessed on an inherent and a residual basis.
  • Risk Response – Management selects risk responses – avoiding, accepting, reducing, or sharing risk – developing a set of actions to align risks with the entity’s risk tolerances and risk appetite.
  • Control Activities – Policies and procedures are established and implemented to help ensure the risk responses are effectively carried out.
  • Information and Communication – Relevant information is identified, captured, and communicated in a form and timeframe that enable people to carry out their responsibilities. Effective communication also occurs in a broader sense, flowing down, across, and up the entity.
  • Monitoring – The entirety of enterprise risk management is monitored and modifications made as necessary. Monitoring is accomplished through ongoing management activities, separate evaluations, or both.

Lastly, as potential readers / users of this report, COSO suggests following: Board of Directors; Senior Management; Managers and other personnel; Regulators; Professional Organizations; and Educators.

CORE1106

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C-TPAT Program Benefits Reference Guide, 2014 (CORE1032)

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Summary: This guidebook outlines the key elements and benefits of the Customs-Trade Partnership Against Terrorism (C-TPAT) program that is designed to secure global supply chains and to improve United States border security. Document is available at: https://www.cbp.gov/sites/default/files/documents/C-TPAT%20Program%20Benefits%20Guide.pdf (link tested on 3 March 2016)

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Full review: C-TPAT partners receive a wide range of benefits listed below:

  • C-TPAT Partners are examined at a considerably lower rate than non-C-TPAT Partners.
  • C-TPAT certified/validated highway carrier Partners are granted expedited border crossing privileges. C-TPAT Partners at many Canada/Mexico land border ports of entry have access to Free and Secure Trade (FAST) Lanes.
  • Some categories of C-TPAT importer Partners are exempt from stratified exams.
  • C-TPAT shipments subject to examination are moved ahead of any non-C-TPAT shipments, to the extent possible.
  • In the event of a significant disruption/delay in cargo processing operations, actions are taken to maintain communication and coordination with C-TPAT Partners for business resumption.
  • C-TPAT Partners’ trade compliance issues are given priority over those issues related to non-C-TPAT Partners.
  • Each C-TPAT Partner is assigned a Supply Chain Security Specialist (SCSS) who coordinates between the C-TPAT Partner and the US Customs and Border Protection agency (CBP). The Specialist also assists the Partner with supply chain security issues.
  • Partners have access to the C-TPAT’s automated Portal system, to communicate with CBP and exchange program related information in a secure manner.
  • C-TPAT Partners are eligible to attend C-TPAT events like the annual Conference and other training seminars organized by the program.
  • C-TPAT importer Partners are eligible to participate in the Importer Self-Assessment (ISA) Program.
  • The Penalty Mitigation benefit is granted to sea carriers for late submission of data required under the Importer Security Filing requirements.
  • C-TPAT members are eligible to participate in other U.S. Government pilot programs, such as the Food and Drug Administration’s Secure Supply Chain program.

In addition, some benefits are associated with Mutual Recognition Arrangements (MRAs) when two customs authorities formally acknowledge the security requirements or standards of one program, as being equivalent to the other program. Some of the resulting benefits to the trade community are illustrated below:

  • C-TPAT importer Partners that also conduct export operations and Partners of the foreign Customs Administration programs (manufacturers and exporters of record) are granted a reduction in their overall cargo risk score, implying fewer examinations at export and import ports.
  • A C-TPAT validation for an overseas partner is not required if an MRA is in place because CBP recognizes the status of the Partner in the foreign partnership program.
  • Companies covered by MRAs need only to comply with a common set of security requirements, avoiding the hassle of following multiple sets of requirements from one partnership program to another.
  • MRAs lead to more transparency in international commerce. Mutual exchange of information between these partners facilitates trade across Mutual Recognition Partner nations.

CORE1032

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