TRANSPORTATION SECURITY ADMINISTRATION – Progress and Challenges Faced in Strengthening Three Key Security Programs, GAO, March 2012 (CORE1004)

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Summary: The report discusses status and future challenges of the Transportation Security Administration’s three key security programs: The Advanced Imaging Technology (AIT), the Screening of Passengers by Observation Techniques (SPOT) and the Transportation Worker Identification Credential (TWIC) program. The two earlier programs are related to the passenger security, which not in the scope of the CORE project. The third TWIC program – an initiative for vetting backgrounds of maritime workers that require access to regulated maritime facilities and vessels – is the only program on supply chain security. The report recommends that the Department of Homeland Security (DHS) would improve its internal procedures (e.g., enrolment practices, background checking and quality control) and define and measure performance criteria for assessing the TWIC program’s efficiency and effectiveness. This GAO report discusses mainly passenger security programs that are not interesting for the CORE and for most of the project partners. However, learning about the TWIC program might be useful for at least those CORE demonstrations on maritime supply chain security. The document is available for download at: http://www.gao.gov/assets/590/589587.pdf (accessed 12.3.2016)

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Full review: This GAO report has only a limited use in the CORE project because of its emphasis on passenger security programs (the Transportation Worker Identification Credentials (TWIC) program is the only program discussed in the report that has something to do with supply chain security). The CORE’s maritime demonstrations may find it useful to learn about the US way for managing credentials and access to regulated maritime facilities and vessels. The CORE’s risk cluster might learn something about conducting risk-based background checks for logistics workers, and the CORE’s educational cluster might use the description of CWIT, that this report provides, to produce training material and guidebooks on how to implement and maintain access control schemes.

CORE1004

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Annexes to the COMMISSION IMPLEMENTING DECISION concerning the adoption of annual work programmes for 2015 for the Customs 2020 and Fiscalis 2020 programmes and the financing for the implementation of those Programmes, 13.2.2015 (CORE1002)

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Summary: This document contains two annexes. Annex 1 covers the Customs 2020 Work Programme for 2015. It describes the activities and the budget breakdown for the year 2015 for pursuing the objectives laid down in Regulation 1294/2013 that establishes an action programme for customs in the European Union between 2014 and 2020. Annex 2 covers Fiscalis 2020 Work Programme for 2015. It covers the action plans and the budget breakdown for 2015 in relation to Regulation 1286/2013 establishing an action programme to improve the operation of taxation systems in the European Union for the period 2014-2020. The activities and financial coverage are based on three main items-action grants, procurement and other actions. The document is available for download at:  http://ec.europa.eu/taxation_customs/resources/documents/taxation/tax_cooperation/fiscalis_programme/legal_texts_docs/awp_2015_en.pdf  (accessed on 12.3.2016)

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Full review: The overall objective of the Customs 2020 programme is to facilitate the functioning and modernisation of the customs union in order to strengthen the internal market by means of cooperation between participating countries, their customs authorities and their officials. It is designed to support the shaping and implementation of the UCC (Union Customs Code).

The overarching objective of Fiscalis 2020 programme is to support the fight against tax fraud, tax evasion and aggressive tax planning and the implementation of Union law in the field of taxation. The Fiscalis 2020 programme is a tool, which supports and implements the overall tax policy at the European Union level.

In the Customs 2020 programme, action grants cover grants for joint actions, grant for expert team on new Import Control System (ICS) and grant for expert team on Automated Export System / New Computerised Transit System (AES/NCTS). The Joint Actions grants will fund activities related to the implementation of Union law and policy in the field of customs; improving the European Information Systems for customs, the adoption of best working practices, enhancing the expertise of customs officials, and improving cooperation between relevant organizations both on the EU and international levels. The grant for the expert teams on ICS and AES/NCTS will help achieve the objectives of the year. These objectives include the implementation of the UCC and the required Customs Information Systems in particular, and imposing a tight schedule in terms of IT systems implementation until 2020.

Under Fiscalis 2020 programme, the action grants only cover joint actions that will fund activities related to improving the European Information Systems for taxation, the administrative cooperation, the competence of tax officials, the implementation of Union law in the field of taxation, and for streamlining administrative procedures.

Procurement activities for both the programmes cover IT Capacity Building Actions and Joint and Competency Building Actions. The contracts for public procurement related to IT Capacity building concern the development, maintenance, operation, and quality control of Union components of the existing and new European Information Systems. Procurement activities related to Customs 2020 aim at interconnecting customs authorities, whereas as those associated with Fiscalis 2020 aim at interconnecting taxation administrations. The Joint and Competency Building procurement contracts concern the development, maintenance, support and dissemination of common customs (for Customs 2020) or taxation training (Fiscalis 2020); online collaboration services; staff performance building services; scientific studies, and communication support.

Other expenditures include the funding of external experts who may be invited to contribute to selected activities for achieving the overarching objectives of the two programmes.

CORE1002

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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.

blog10.03.161

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.

blog10.03.162

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 )

Revisiting the Yemen bomb plot of 2010

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blog_070316This CBRA blog revisits the Yemen bomb plot from 2010, the most decisive turning point in modern air cargo security. More than five years after the events, this blog discusses the plot’s implications to the contemporary air cargo security and outlines CBRA’s recommendations for future security work. Parts of this blog text have already been published in the doctoral thesis of CBRA researcher Toni Männistö.

Two explosive devices aboard passenger planes: The series of events, that we call the Yemen bomb plot, took place on 29 October in 2010. On that day, al-Qaeda terrorists almost destroyed two passenger airplanes with a pair of express courier parcels, each enclosing plastic explosives hidden inside a printer toner cartridge. The explosive parcels where sent to Chicago from the capital of Yemen, Sana’a, via two different express courier operators.

Both parcel bombs were eventually intercepted and defused, without fatalities or injuries. But before the interception, the bombs had already travelled onboard multiple air freighters and passenger planes. Many people flew that day with a fully functional explosive device under their seat! Though the parcels were addressed to Chicago, officials think that terrorists wanted to detonate the bombs mid-air, just before landing using cell phone timer alarms.

A Lockerbie-style mayhem was slightly avoided, largely thanks to a timely piece of intelligence. The bomb plot started to uncover when a suspected double agent tipped Saudi-Arabian intelligence that al-Qaeda terrorists had shipped two parcel bombs from Yemen to the US via the express courier service. The Saudi intelligence forwarded the tracking numbers of the suspected explosive devices to their US and German colleagues and told them to look for printer toner cartridges.

The first parcel was intercepted in Dubai, and the second one at the East Midlands airport, nearly 200 km to the northwest from London. In the UK, a bomb squad did not first recognize anything suspicious when they screened the suspected parcel. “It looked like a printer cartridge – there were no wires or anything,” one of CBRA’s contacts at World Customs Organization (WCO) recounts. “But of course, what the cartridge did contain was explosive that current technologies couldn’t detect.” Later laboratory tests revealed that each parcel contained 300 to 400 grams of PETN, military grade plastic explosive, wirings, and a detonator hidden inside a printer’s toner cartridge. The bombs were so meticulously concealed that they had not only passed the standard air cargo and safety screening but also the special screening of the bomb squad.

Aftermaths: The Yemen incident was rude reminder of the vulnerability of the air cargo logistics to terrorism. Sure, the day was saved by old-school, field intelligence work and prompt government response. But before interception, the first parcel travelled aboard three different flights: Sana’a – Dubai, Dubai – Cologne, and Cologne – East Midlands Airport. The second explosive parcel flew first from Sana’a to Doha and then to Dubai where it was intercepted.

In the immediate aftermaths of the events, aviation security authorities in the US and many European countries stopped accepting freight shipments from Yemen. Germany also cancelled all passenger flights from Yemen for more than two weeks. “As often happens in these situations,” the WCO’s air cargo specialist remarks, “the first reaction was stopping anything coming from this part of the world – any plane for any reason.” The new security rules changed the air cargo operations virtually overnight, seriously disrupting the air cargo and mail service. Delays were widespread and lengthy, but the worst aspect of the disruption was that no one knew when the new apparently transient security regime was to be revoked.

Eventually, once the precautionary stoppage was ended, new unprecedentedly stringent security requirements entered into force, disrupting the air cargo and mail service further. The US Transportation Security Administration, TSA, introduced the most stringent rules: any mail originating or transiting through Somalia or Yemen was banned, as well as printers or printer toner cartridges from high-risk locations. Moreover, parcels originating from any business partners had to be screened up to high-risk screening standards, piece by piece, if such shipment did not accompany a tendering statement, a document assuring that cargo comes from a known and trusted shipper. The new regime disrupted seriously international air cargo logistics, causing air cargo shippers worldwide to accumulate huge backlogs of US-bound shipments. Annoyed and surprised about the turn of events, the air cargo industry reacted to the US rules with a barrage of criticism, calling the measures superfluous and impractical. Over the following weeks, the reactive security rules were gradually relaxed to enable clearing of the backlog of US-bound air cargo.

In the long term, the Yemen events put air cargo security into a spotlight, securing political commitment and spurring further reforms for years to come. The International Civil Aviation Organization, ICAO, for example, included advanced security, concepts such as the “secure supply chain” principle, the concept of high-risk cargo and mail, and the consignment security declaration, CSD, into the new edition of the Annex 17 of the Chicago Convention. Also the European Union expanded the EU air cargo regime to cover airlines operating into the EU aviation security area – EU-28 plus Switzerland, Norway and Iceland – from third country airports. The amendment also specified criteria for identifying and screening high-risk cargo and mail, known as HRCM.

CBRA considerations for future air cargo security: The modern air cargo security has taken major leaps since the Yemen incident, but the work towards higher air cargo security still continues. The CBRA research team considers that, like in any other area of supply chains, it is crucial both to facilitate cross-border logistics and to ensure adequate security. This classic dilemma of striking the balance between trade facilitation and supply chain security is not easy to solve, but we believe that there are some promising ways to promote logistics-friendly air cargo security.

Governments should normally consult the air cargo industry before introducing new security rules. New security rules should avoid reducing speed, on-time reliability, or cost-efficiency of the air cargo service. There are often ways to integrate new security requirements seamlessly into the sequence of day-to-day logistics activities, but this requires close government-business coordination.

One promising way forward is to improve capabilities of pre-loading risk assessment, so that the riskiest air cargo shipments can be identified early on and subjected to a more stringent screening. Many projects on this matter are under way, most notably the Air Cargo Advance Screening (ACAS) in the US and Pre-loading Consignment Information for Secure Entry
 (PRECISE) in the European Union. The CBRA team applauds these efforts of advancing risk assessment and reminds of the importance of proactive updating of risk-scoring algorithms.

EU’s decision of forcing flights from third countries into EU to comply with EU’s air cargo security regime makes also good sense. It is reasonable to secure air cargo up to an adequate standard sooner rather than later, preferably before the first flight. More global capacity building – especially training and funds for modern screening equipment – are needed in developing countries. Also, auditing activities in third countries would benefit from further resources.

Harmonization and mutual recognition is another key theme for years to come. In the EU, civil aviation and customs authorities might find some synergies if they harmonized their respective Known Consignor (KC) and Authorized Economic Operator (AEO) programs. Air cargo companies would also benefit if types and performance requirements of screening methods would be uniform across the members of the European Union.

Bibliography:

BBC, Q&A: Air freight bomb plot, 2 November 2010

European Commission, Regulation 173/2012, amending 185/2010

International Civil Aviation Organization, Chicago convention, Annex 17, 9th edition

Koolloos M.F.J., Männistö T., van der Jagt O.C., Jezierska M.M., Hintsa J., Kähäri P. and Tsikolenko V. (2015), Security Screening for the Air Express Cargo Industry, Final Report, Brussels, Belgium.

Männistö, T., 2015. Mitigating Crime and Security Risks in the International Logistics Network: the Case of Swiss Post. Doctoral thesis, École Polytechnique Fédérale de Lausanne (EPFL).

CBRA Blog by Dr. Toni Männistö

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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C-TPAT Best Practices Catalog Addendum, 2009 (CORE1031)

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Summary: This addendum document lists cargo security best practices with focus on prevention of weapons of mass effect, terrorists, and/or contraband from infiltrating into the international supply chain. Each best practice is linked to a specific business entity, such as a Manufacturing Company, a Highway Carrier, an Importer or a Foreign Consolidator but these may apply to other business types as well. The document is available at: https://www.cbp.gov/sites/default/files/documents/ctpat_bpa_2009_0.pdf (link tested on 3 March 2016)

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Full review: The best practices are outlined as follows:

Risk assessment: Programs are in place to enable the identification of the most vulnerable supply chain areas, to grade suppliers supply chain security criteria. Specific processes have been developed to manage the supplier’s products, software and services and internal monitoring systems to enhance the safety and security procedures.

Business partner requirements: Several security measures have been taken by entities. These include conducting supply chain security audits to ensure compliance of non-C-TPAT business partners; carrying out security audits of a foreign manufacturer; making security self-assessments, conducting onsite inspections to ensure freight security; shipping cargo only through accredited ports and steamship lines; monitoring compliance of manufacturing facilities; screening procurements to identify ineligible status of suppliers, and performing audits of business partners.

Conveyance/Container/Trailer Security: Examples of such security practices are: integrating special security features in the GPS (global positioning system); using laser beams to protect trailers; using colour codes for matching consignments; installing infrared sensors in docks to prevent unauthorized access; using special codes to identify correct shipments; documenting all seal changes for shipments in transit; ensuring delivery by authorized Company drivers; sealing containers; operating through C-TPAT carriers; using only “seaworthy” containers; installing in-transit temperature data sensors to ensure product quality; enclosing container storage area; conducting non-intrusive inspection prior to loading a vessel; establishing specific inspection points; using multiple security devices on each container; using automated container yards; instructing foreign suppliers to provide inspection checklists; using dock locking arms for container storage; installing motion sensors in a trailer; operating through contracted highway carriers and security services; documenting a seal destruction policy, and so forth.

Physical Access Controls: Some practices by Importers include establishing multiple security stations within the building; using metal detectors for employees; installing an electronic swipe card/ lock box systems for access control for sensitive documents; conducting electronic scanning of visitors’ drivers licenses; utilizing a third-party software system to manage key inventory; and providing panic buttons for company employees.

Physical Security: Several innovative solutions have been designed to ensure physical security, such as electronically closing gates and activating tire puncturing devices to prevent vehicle exits; using an electronic security information reporting system, installing invisible electronic fences; installing laser sensors; setting up optical light beams to detect intruders; fitting double locks on doors; Installing infrared sensors on fences; using body alarm functions for emergencies; appointing patrolling guards, using multiple glass meeting rooms; using multiple interior infrared security alarm beams to detect unauthorized access; and installing security guard view towers.

Personnel Security: An Importer requires business partners to provide a monthly master list of employees and immediately notify when their employees are hired or terminated, in order to ensure that only authorized business partner’s employees enter the manufacturing facilities.

Security Training/Threat Awareness/Outreach: Business entities have invested in a wide range of training programs. One such initiative is the four-tier C-TPAT training targeted for management and supervisors, shipping and receiving personnel, internal personnel dealing with contractors and hourly staff. Other businesses use different approaches, like establishing an online training portal;; offering general security training and of site-specific training for security guards; issuing security advisories; making regular security awareness assessments; establishing a situation matrix chart to address possible incidents; establishing a direct communication channel between the president of the company and employees; putting in place a toll free hotline for company personnel; conducting security drills and exercises; establishing a web-based security awareness training; documenting security incidents in a central database; and establishing a global communication system to contact all employees and contractors remotely.

Procedural Security: Instances of this type of security measures include a bio-thermal intrusion alarm system; a global SAP network to generate all written orders for import and export; automatic screening procedures of purchase orders for restricted parties; lock boxes for sensitive documentation; an automated loading module called the Automatic Truck Loading System (ATLS); a container seal number as the shipment tracking (invoice/bill of lading) number, and so forth.

Information Technology (IT) Security: Such security practices include a biometric fingerprint door lock; a remote data backup center; a retina scanning system for access to the computer system; requiring supervisory approval to copy data; use of electronic password protected purchase orders; establishing a daily “e-test” for employees to access computers, and so forth.

CORE1031

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CEN Supply Chain Security — Good Practice Guide for Small and Medium Sized Operators, 2012 (CORE1030)

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Summary: This is a guidance document for small and medium sized enterprises, SMEs. on how to apply a supply chain security approach to their operations in order to mitigate the risk of criminal activities. It gives an overview of the main crime types occurring in the supply chain along with some countermeasures, as well as the supply chain security initiatives, and the compliance requirements thereof. The document is available for purchase e.g. at:   http://shop.bsigroup.com/ProductDetail/?pid=000000000030258778  (link tested on 3 March 2016)

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Full review: The recommended supply chain strategy rests on a six-step approach. The first step is to define a context for the supply chain, crime prevention and security management activities taking into consideration the security sensitiveness, the geography and transport modes, and the main stakeholders involved in the supply chain operation. The second step is to make a threat and vulnerability analysis with regard to terrorist and other criminal threats in the supply chain. The main criteria included are the gaps existing in enhanced security, the high-risk crime types, and the potential consequences of crime occurrences. The third step covers the regulatory framework, the major aspects being the regulations and programs required for successful business operations, expectations of customers and suppliers, requirements laid down by insurance providers, and relevant government authorities. The fourth step refers to an overall security plan, taking into account the physical security, data security, human resources security (including selection, training, and exit procedures), business partner security (including selection, and auditing), and process control and monitoring of deviations. The fifth step involves implementing into practice concrete security measures, investment in technologies, procurement of services, in-house solutions and so forth. The final step is to monitor and measure the security performance and take appropriate corrective actions.

Five supply chain crime types have been elucidated in this guide. These include:  Property theft (cargo theft, intellectual property breaches); targeted damage (terrorism, sabotage); cross-border duty and tax fraud; illegitimate transporting, exporting and/or importing (smuggling of prohibited and restricted goods, people smuggling); and crime facilitation (document forgery, bogus companies, cybercrime). For each crime type, the main focus should be on the issue (main features and typical sectors/products involved), scope of the problem and actions to mitigate risks.

This guidebook has chosen eight security initiatives for illustration purposes. It explains the context of each initiative, whom it is meant for, and some basic requirements and the implications. These are as follows:

  • Import Control System (ICS) in the EU (a systems tool meant for the lodging and processing of Entry Summary Declarations, and for the exchange of messages across national customs agencies, economic operators and the European Commission).
  • Export Control System (ECS) in the EU (introduces EU procedures to computerize and control indirect exports and to implement the EU safety and security regulations);
  • Maritime Security Legislation, International Ship and Port Facility Security (ISPS) Code in the EU (International regulations to ensure the security of maritime transportation are being issued by the International Maritime Organization, IMO, in the International Ship and Port Facility Security Code);
  • Aviation Security Legislation, Air Cargo Supply Chains in the EU (three categories of aviation security legislation exist in the EU- Framework regulation, supplementing regulations, and implementing regulations-all targeted towards civil aviation security).
  • European Union Authorized Economic Operator, EU AEO (operators involved in international trade of goods certified as complying with WCO or equivalent supply chain security standards);
  • Regulated agent, Known consignor and Account consignor in the EU (Specific “trusted trader” status existing in the European air cargo supply chains);
  • ISO 28000 Series of Standards on Supply Chain Security Management Systems (address potential security issues at all stages of the supply process, e.g. terrorism, fraud and piracy);
  • Transported Asset Protection Association (TAPA) in Europe (fighting cargo crime using real-time intelligence and the latest preventative measures).

CORE1030

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MoU between HEC UNIL and CBRA

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This CBRA Interview is with Professor Ari-Pekka Hameri from HEC University of Lausanne.

Hi Ari-Pekka, and thanks for joining a CBRA interview. Can you please first tell a bit about yourself, and what you do here in Switzerland?

Since 2001 I have been full professor in operations and supply chain management at the Faculty of Business and Economics at University of Lausanne. I have been doing numerous research projects with local and international industry on reducing inventories and speeding up value adding processes.

The two of us first met around 1993-94 at Helsinki University Technology, Finland, where you were lecturing in production management (and I was (still) an innocent M.Sc. student of industrial management and artificial intelligence). And then we met again in 2002 at HEC University of Lausanne, where you kindly accepted me as a doctoral assistant. “Post 2001 supply chain security and it´s impacts on the private sector” turned out to be quite challenging topic for a doctoral thesis, I must admit. Do you recall challenging moments between 2003-2010 on putting the thesis together?

Little did I know where that thesis work would lead! Turning a consultant into a researcher is always challenging, especially with you. It took a while for you to understand that it does not matter what you think – it’s the data, methodology and results that count. The numerous surveys, field studies and consulting type problem solving projects did delay your thesis project, yet they built already the network for the CBRA’s future. Eventually, I think what we did together was something that was ahead of time in supply chain management, with the special focus on security. Boy, do I remember our SCSM2008 Conference at Interlaken…

HEC University of Lau1234sanne and CBRA started practical cooperation in supply chain security and trade facilitation research and education fields in December 2005, right when CBRA was registered in Canton Vaud Registry of Commerce… How would you characterize all the joint work – and, the outcomes – from the past 10 years?

This has been single most productive practical research initiative with huge diversity in a focused area that I have been involved with. It has produced numerous academic papers, master theses, doctoral dissertations, plenary reports, conferences, and under graduate and MBA lectures – not to mention the numerous organizations and companies that have been involved. Also the work has had a global dimension and not only focusing Europe.

Just recently, in February 2016, HEC UNIL and CBRA also signed a Memorandum of Understanding, formalizing the collaborative work for the coming years. Would you have any comments on the MoU?

This is something we should have done earlier. The speed has been too fast to concentrate on formalities.

I fully agree to that! Thanks Ari-Pekka for the interview – and see you next on 19 March, 8.30am, at the annual HEC UNIL Executive MBA lecture (btw, too early lecturing hour, on a Saturday morning…)!  Juha  J