Supply chain security education materials

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Blog-29.02.16FP7-CORE is the European flagship research and development project in supply chain security and trade facilitation, running from May 2014 to April 2018. In today´s CBRA Blog we focus on education and training material development – Work package 19, Task 19.1 – in the CORE-project.

The CORE Task 19.1 – Education and training materials development – has an impressive set of partners: INTERPOL, World Customs Organization (WCO), European Shippers Council (ESC), European association for forwarding, transport, logistics and customs services (CLECAT), International Road Union (IRU), and Technical University of Delft (TU Delft) as the established big players; ourselves Cross-border Research Association (CBRA) as the Task leader (and an enthusiastic lecturing body in supply chain security and trade facilitation); as well as the BMT Group, as the Work package 19 leader. We first started interaction with the entire Task 19.1 team during summer 2014, when the CORE-project had just been kicked off, and everything was still in it´s infancy.

Today, at the end of February 2016 – near two years into the project – we are about to launch the full scale production of the CORE education and training materials. We vision content to be produced in three parallel categories: CORE Flagship Handbook (CFH); Partner-specific materials; and Other education content. Content which is considered to be near-final can be published on-the-fly for example at CBRA´s web-portal, www.cross-border.org , where a new section is planned for the “CORE Education” (like the “CORE Observatory” which has been live since last autumn). Having just over two years left with the CORE-project, we are right on schedule to start the full production of education and training materials!

CORE Flagship Handbook (CFH) will be the main joint outcome of Task 19.1, thus we welcome INTERPOL, WCO, ESC, CLECAT, IRU, TU Delft and BMT to work closely with us in the production, review and piloting of the Handbook. In our current plans the Flagship Handbook has the following four sections, each section having multiple chapters (typically between two and six chapters per section):

  1. Introduction to CORE innovation agenda; including explaining key CORE themes and concepts; and frameworks and models.
  2. CORE outcomes, findings and results – written primarily in the context of the 16 CORE-Demonstrations.
  3. Interpretation of CORE results per key stakeholder group: customs, police, cargo owners, logistics sector, security sector and academics
  4. Future research and development roadmap – focusing on gaps and shortcomings; critical assessment on what works and what doesn’t by the end of CORE-project.

Partner specific materials typically fall into two sub-categories. First one is generic, introductory materials which would be of relevance to 1-2 stakeholder groups – for example Supply chain management 101 for police officers. Such materials can quite easily be developed within Task 19.1, using CORE supply chains and trade lanes as examples. At the same time, such basic education material would not be of relevance for supply chain companies, thus it should not be published in the CORE Flagship Handbook, CFH. Second sub-category is on detailed technical content, which again would be relevant to 1-2 stakeholder groups. An example could be technical review on risk management tools for the logistics sector.

Other education material may consist of the following content buckets, listed in a rough “simple to more complex” -order: Factsheets; Quizzes; Basic case studies; Comprehensive case studies; Videos and animations; Serious games, and so forth. It is still early days to decide what makes sense to develop – and for what we have adequate resources, skills and budgets. Maybe we will start with some simple factsheets, quizzes and basic case studies – this is still to be discussed among Task 19.1 partners.

Finally, the plans regarding the CORE Education web-portal are still in a preliminary stage. We could have a simple dropdown menu at www.cross-border.org , for example with the following selection options: Introductory materials; Technical sections; and Factsheets & quizzes. In the last category we could share first outcomes of Task 19.1 work. Here, just like in all other aspects of CORE Task 19.1, we welcome ideas and feedback from the Task 19.1 team, and from the whole CORE Consortium – and even beyond, from any interested stakeholders and potential future users of CORE Education materials!

In Lausanne on 29.2.2016 – CBRA Blog by Juha Hintsa

Professor Guido Palazzo on illicit waste supply chains

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Today we interview Professor Guido Palazzo on illicit waste supply chains.

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

I am a Professor of Business Ethics at the University of Lausanne since 2003. In my research I focus on the dark side of the force. I examine human rights problems in global supply chains, the driving forces of unethical decision making in organizations and the interface of business and organized crime. In the early 2000s, when I started with my research, business ethics was largely marginalized and perceived as rather irrelevant for both business schools and companies. This has changed dramatically in recent years. Ethical questions have moved center stage.

One of your research project focuses on illicit waste supply chains, particularly in Italy. How bad is the situation there?

Since 25 years, organized crime, in particular Camorra and Ndrangheta are involved in the business of toxic waste recycling. This business is ideal from the perspective of a Mafia organization: Legal risks are negligible and profits are huge. Operating with straw firms they offer their services across Europe up to 90% below the prices of their legal competitors. Obviously, they do not really recycle the waste but simply dump it in South Italy mainly in Campania province, but also in Africa and Eastern Europe. We are talking here about slag and chemicals and tire and other forms of waste from hospitals, garment industry, chemical industry, nuclear industry and so on. The waste includes toxins like cyanide, dioxin, asbestos, chlorines and includes also nuclear waste. Since 25 years, millions of cubic meters of such waste have been dumped in a region which the Romans once called Campania Felix for its fruitful soil. Billions of Euros of profit have been made and laundered by banks in Zurich, London and New York. And the most amazing think is that until recently, this destruction of one of the most beautiful regions of Italy occurred in complete silence. Now, toxins have arrived at the ground water and cancer rates of people living around the waste dumps explode.

Sad and interesting – at the same time – to hear about this… If I recall correctly, I gave you couple of months ago a copy of the FP7-CWIT project´s final report – with recommendations and a tangible roadmap to better mitigate risks of illegal activities in electronic waste… Do you foresee opportunities for similar research projects in the field of toxic waste trade, supply chains and logistics?

We do indeed need a similar research project in order to better understand the journey of illegal waste through Europe and the critical points in the supply chain of toxic waste recycling where organized crime interferes. We need public awareness for the urgency of the problem, develop a better regulatory governance around waste recycling and impose a compliance system on companies so that the existing silent collusion can be stopped.

Thanks Guido for this enlightening interview; and let´s start working together – as UNIL, CBRA and other partners – towards future research funding & project, on this crucial environmental and human health protection topic!

Updates on Customs brokers, by Ms. Carol West

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int-300116-1Hi Carol, and thanks for joining a CBRA Interview – can you first tell a bit who are you and what you do?

I am the President of the Canadian Society of Customs Brokers and the Secretary of the International Federation of Customs Brokers Associations, IFCBA. My office is in Ottawa, Canada. I have spent my professional life in the world of Customs, border management and trade facilitation. I am an advocate for the value and importance of customs brokers and I am passionate about the possibilities of Customs-business partnership, in Canada and worldwide. I believe strongly that building knowledge, investing in technology and managing relationships are critical to effective border management.

IFCBA and CBRA produced jointly the first survey study on future roles of customs brokers around 2004-2005. Looking now, in 2016, at the study outcomes: do you see that anything has changed or evolved in the “world of customs brokers” the way we anticipated a decade ago?

It is difficult to generalize as the role of a customs broker still differs so much between countries. The regulatory framework for licensing customs brokers and their scope of practice may be different, and the level of automation of a country’s Customs administration may influence the role of customs brokers in effective border management. Having said that, I believe that in the last decade the role of a customs broker as a trade facilitator has been even more effective than we had anticipated. Both importers and Customs recognize that knowledgeable, regulated customs brokers not only provide expedited navigation through and compliance with complex Customs requirements, they are widely used by businesses looking to reach new markets, with a minimum of cost and delay.

With Customs administrations automating their systems for risk management and implementing coordinated border management processes, there is also more focus on gathering information on the goods being imported prior to arrival, for admissibility and security purposes. In this context, the automation of carrier and cargo information is more important than it was ten years ago. With that in mind, the role of a customs broker is even more crucial today as the broker acts as a hub for all the data relating to a client’s transaction, ensuring its accuracy and compliance with Customs requirements.

Ten years ago, we thought that, by now, we would have made more progress with consistency of data requirements globally. There has been great work done by the World Customs Organization with its data model, but we still find that data requirements are not as harmonized or standardized as they could or should be.

From a business process standpoint, where licensed customs brokers exist they are used by the majority of importers – large multinational companies as well as small to medium enterprises. In a competitive marketplace, customs brokers are seeing more emphasis on performance measurement and key performance indications during the procurement process as well as in standard operations. Today, there is greater uncertainty in the business environment and increased complexity of the global supply chain. We think this also reflects the maturation of the brokerage industry where business managers focus on continuing improvements to their processes to reach maximum efficiencies in delivering value to clients.

By the way, are you aware of any recent research focusing on customs brokers, either on global or on national level?

The World Customs Organization, WCO conducted a survey of its members in 2015 on the subject of customs broker regulation and had an outstanding response rate. With many models of customs broker regulatory regimes among the WCO members, from no regulation to the mandatory use of a licensed customs broker, the results of the survey point to some opportunities for cooperation between Customs administrations and customs brokers, and, based on existing best practices, suggests considerations for a model for establishing a broker licensing system, particularly valuable where none exists today. It also offers ideas on engagement with customs brokers and other private sector players to enhance compliance and trade facilitation. We see this as a positive indicator of interest in issues that are of critical importance to the international customs broker community, and a sign that there is value in doing some additional work in this area.

From a customs broker’s perspective, which areas of global trade facilitation and supply chain security do you see as most important in 2016? What about the most difficult or challenging ones?

A very important development that might impact global trade is the Trans-Pacific Partnership, TTP. I say might because coming into force depends on the US Congress ratification of the agreement, and currently the rhetoric coming from Washington shows little support for it. I guess we’ll have to wait and see what happens. But assuming the TPP is ratified by the 12 signatories, even though it means elimination of tariffs and tariff barriers, it also means a more complex environment to navigate the multiple free trade agreements for the multi-national importers. Customs brokers as experts in rules of origin and compliance, in general will continue playing a very important role in the trade chain.

Looking a bit further out, one of the most challenging issues of the next 5 years will be the immense growth in e-commerce globally, and the pressure put on governments world-wide by online retailers to increase the de-minimis thresholds. It is projected that the online sales will reach US $3.5 trillion by 2020. That represents a lot of import duties that may not be collected and remitted if the de-minimis thresholds are increased or standardized. We expect that the impact of this will be seen differently depending on positions taken by national administrations given their own economic situations and pressures for competitiveness. Customs brokers will no doubt integrate any such changes into their compliance models and service offerings, keeping their clients’ interests and obligations foremost.

We can’t speak of challenges without mentioning the global trade slowdown we’ve experienced since the 2008 global financial crisis. Many factors seem to be contributing to the continued sluggishness which some consider cyclical others structural in nature. Regardless, governments have to remember that trade can be a powerful tool in their policy toolkit and customs brokers are natural allies in promoting its growth.

Any other greetings you would like to send to the CBRA Interview and Blog readers?

IFCBA will be holding its next World Conference in Shanghai 17-21 May, 2016, and the theme is “Facilitating Trade Through the Customs-Business Connection”. Hundreds of delegates from all regions of the world will be in attendance representing national customs brokers associations, international customs organizations such as the WCO, freight forwarding firms, shipping companies, cross-border e-commerce associations, world logistics enterprises, and many more. Our conferences are held only every two years, and we are very excited about sharing ideas and strategies for success with business and government colleagues from around the world.

Thanks a lot Carol for this concluding note – we just added the IFCBA World Conference to CBRA´s Events calendar – and thanks for the whole interview; maybe we can explore bit later this year on joint research, training or other project opportunities…!

 

Web-resources:

http://ifcba.org/

http://www.wcoomd.org/en/topics/facilitation/resources/~/~/media/234D5143B2344B918496C93F24B48586.ashx

https://www.internetretailer.com/2015/07/29/global-e-commerce-set-grow-25-2015

http://bruegel.org/2015/08/the-global-trade-slowdown-puzzle/

https://www.wto.org/english/news_e/pres15_e/pr752_e.htm

https://globalconnections.hsbc.com/global/en/tools-data/trade-forecasts/global

https://www.imf.org/external/pubs/ft/weo/2016/update/01/pdf/0116.pdf 

Related CBRA studies:  

Gutierrez, X., Hintsa, J., Wieser, P. and Hameri, A.P. (2005), “New roles for customs brokers in international supply chain”, Proceedings of First International Conference on Transportation Logistics (T-LOG), July 27-29, 2005, Singapore.

Hintsa, J., Mohanty, S., Tsikolenko, V., Ivens, B., Leischnig, A., Kähäri, P., Hameri, A.P., and Cadot, O. (2014), The import VAT and duty de-minimis in the European Union – Where should they be and what will be the impact? Final Report, Brussels, Belgium.

Border Agency Cooperation, Part 2 of 3

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Our second blog on Border Agency Cooperation (BAC) focuses on a conceptual model developed by CBRA. We have crafted this “CBRA-BAC15” diagram to visualize a set of key BAC actions and primary beneficiaries, with contributions by Dr. Toni Männistö (supply chain security post-doc researcher at CBRA), Mr. Gerwin Zomer (TNO, technical manager for the FP7-CORE project) and by Ms. Susana Wong Chan (education and training materials developer at CBRA).BAC-1

The diagram is cut to three sectors: on left side, the supply chain companies are the primary beneficiaries of BAC actions; on the right side, the government agencies form the primary beneficiary group; and on the bottom area, both supply chain companies as well as government agencies benefit from BAC actions. Each of these three sectors contains five examples of concrete border agency cooperation actions – 15 in total – explained in a moment by using real examples, whenever available in the literature or by expert suggestions. In the center of the diagram lies a circle with the more generic “smart cross-border improvement actions”, applicable to virtually any work in global trade facilitation.

The diagram should not be considered exhaustive, when it comes to all optional actions to improve BAC in a given country or region or globally. Some of the 15 key actions may be strongly interconnected, or, partially overlapping. Some of them may apply mainly on national multi-agency environment, and some of them mainly on international e.g. customs-to-customs environment. Also, the division of the key actions into the three beneficiary groups can and should be challenged, by the interested audiences. But, let´s start now by listing and illustrating the key 15 BAC actions:

Supply chain companies as the primary beneficiary (left sector in the diagram). The following five BAC actions can bring immediate benefits to the companies operating in supply chains, in terms of saving administrative costs and speeding up the supply chain – less work dealing with various certifications and audit visits, less variation and IT costs with import/export data filing and less waiting times at the borders.

  • Harmonized ´trusted trader´ & other certification programs: In the European Union, the European Commission´s implementing regulation (No. 889/2014) updates the references to the aviation security legislation in force, including recognition of the Known Consignor (KC) status and its relevance to Authorized Economic Operator (AEO), and framing the scope of recognition of the common requirements between the respective programs.
  • Coordinated company visits & audits: Closely linked to the previous BAC-action, in the Netherlands, the Dutch Customs executes joint audits on AEO security (customs) and known consignor/regulated agent (air cargo) with the Dutch Immigration and air-police agency – during the application phase, as well as during periodical audits.
  • Harmonized data filing requirements: Despite a global, harmonized data model, harmonized tariff codes and standards on clearance procedures, there are many differences in operational import, export and transit procedures and information requirements between countries. This results in additional complexity of IT systems for globally operating traders and logistic service providers. An example is the pre-arrival security declarations, where harmonization would be most useful e.g. between the Importer Security Filing, “10+2” in the US and the Entry Summary Declaration in Europe – Multiple Filing, supported by Standard Trader Interface, under development within the Union Customs Code, UCC.
  • Synchronized border interventions & inspections: The Article 4 of the Greater Mekong Sub-region Cross Border Transport Agreement on Facilitation of Border Crossing Formalities calls upon the contracting parties to progressively adopt measures to simplify and expedite border formalities by carrying out joint and simultaneous inspection of goods and people by respective competent authorities of agencies such as customs, immigration, trade, agriculture, and health. It further provides for single-stop inspection and urges the national authorities of adjacent countries to carry out joint and simultaneous inspections.
  • Harmonized operating hours: This applies particularly in the context of two neighboring country customs offices – having same opening hours across the border helps to maximize the daily throughput volumes. As the Article 8 of the World Trade Organization´s Trade Facilitation Agreement puts it, “Each Member shall, to the extent possible and practicable, cooperate on mutually agreed terms with other Members with whom it shares a common border with a view to coordinating procedures at border crossings to facilitate cross-border trade. Such cooperation and coordination may include: … alignment of working days and hours … “. In the ASEAN region, the Article 7 of the ASEAN Framework Agreement on the Facilitation of Goods in Transit urges the contracting parties to “coordinate working hours of the adjacent border posts”.

Government agencies themselves as the primary beneficiary (right sector in the diagram). The following five BAC actions can provide instant benefits for the cooperating government agencies, in terms of cost savings and improved efficiency – in other words, identifying more violations and catching more bad guys with less total spending.

  • Sharing of agency intelligence, information & data: Customs Mutual Assistance Agreements (CMAAS), signed bilaterally by Canada Border Services Agency (CBSA) and eight counterparties during years 1979-2010 (European Community, France, Germany, Mexico, the Netherlands, South Africa, South Korea and the United States) provide Canada with a legal basis to share customs information to prevent, investigate and combat customs offences, particularly customs fraud, and to provide reciprocal mutual assistance to ensure the proper application of customs laws. Under CMAAs Canada may share customs information pertaining to: persons, goods and means of transport; activities planned, on-going, or completed, that constitute or appear to constitute a customs offence in the territory of the country requesting the data; proven law enforcement techniques; new and emerging trends, means or methods of committing customs offences; and facilitation of risk assessment activities, within the mandate and authority of the CBSA.
  • Joint investments in common resource pools (equipment, facilities etc.): In Finland the Customs Administration and the Border Guard share common premises and equipment. Each authority has a designated role in the servicing and maintenance of the equipment. X-ray machines are largely the responsibility of Customs. Road-testing equipment, such as lorry brake-testing pads, is also maintained by Customs. All equipment can be shared and operated by each agency upon request. Thus, although the equipment belongs to one agency, it can be easily relocated to the other agency, enabling smoother processing of the workflow without unnecessary and lengthy administrative procedures, thereby reducing costs.
  • Joint teams: In the Netherlands, “HARC” – Hit and Run Cargo Rotterdam team, is a joint operation of Dutch Maritime Police, Dutch Customs, the Fiscal and Economic Crime Agency and the Ministry of Justice collaborating operationally in narcotics enforcement. Joint teams differ from Joint operations below by being a long-term / permanent set-up; while Joint operations “come and go”.
  • Joint operations: A joint operation Meerkat, (23-27 July 2012) involving the World Customs Organization and INTERPOL against the illicit trafficking of cigarettes, tobacco and alcohol in East and Southern Africa, resulted in the seizure of tons of illicitly traded products in seven countries. Operation Meerkat saw Customs and police authorities carry out some 40 raids at seaports, inland border crossing points, markets and shops in Angola, Kenya, Mozambique, Namibia, South Africa, Tanzania and Zimbabwe. More than 32 million cigarettes – equivalent to 1.6 million packets, 134 tons of raw tobacco and almost 3,000 liters of alcohol were seized, resulting in national authorities initiating a number of administrative investigations into tax evasion and other potential criminal offences.
  • Collaborative criminal investigations & prosecutions: In the United States the Border Enforcement Security Task Force (BEST) units gather officers from more than 100 different law enforcement agencies under one roof. The objective is to identify, investigate, disrupt and dismantle transnational organizations posing the greatest threat to border security, public safety and national security, by employing the full range of federal, state, local, tribal and international law enforcement resources. Over the years, the BEST has become a successful interagency law enforcement collaboration model that’s keeping the US safer.

Both supply chain companies as well as government agencies as beneficiaries (bottom sector). The five BAC actions can bring instant benefits to all parties in cross-border supply chains, in terms of lowering costs and improving performance, from supply chain company and from governmental agency perspectives.

  • ‘Single window’ -type import/ export/ transit data submissions: In the Netherlands, the authorities have designed Digipoort, the government’s ‘electronic post office’ for businesses. It provides the communication infrastructure for the exchange of digital information between companies and government authorities. Digipoort enables companies to submit import and export information at a single entry point aimed at multiple government authorities.
  • Common risk indicators, risk profiles & targeting systems: In Finland, common databases are linked to the different agencies’ operational and risk management databases, leading to a common approach when a ‘signal’ is recorded. Some control and enforcement officers have access to each other’s systems on a need-to-know basis, with levels of restricted access determined by rank and functional responsibility.
  • Mutual recognition of supply chain inspection procedures & outcomes: As part of the European Union funded research and development project FP7-CORE ( http://www.coreproject.eu/ ), the phytosanitary and customs administrations in Kenya and the Netherlands are working towards mutual recognition of controls carried out by Kenyan authorities, as well as the exploitation of digital phytosanitary certificates and other trade documents, between the two countries. Outside of the research world, mutual recognitions (MR) of customs inspections are being explored in the context of EU MR Agreements, for example with Japan.
  • Cross-training and empowering manpower: In Finland, Customs officers have been trained by the Border Guard to inspect identification documents and visas, among other procedures. Border guards have, in turn, received basic Customs training, which includes the search of vehicles and the recognition of prohibited and restricted goods, such as drugs, alcohol, and counterfeit items.
  • Joint public-private partnership arrangements, training sessions etc.: In 2011 in Hong Kong, the Customs and Excise Department established a Joint Liaison Group with the representatives of shippers, freight forwarders and truck drivers for exchanging operational views and comments on the Road Cargo System “ROCARS”. Moreover, Customs also launched an extensive publicity program and established outreach teams to assist the industry stakeholders to get used to the ROCARS. Following other government departments are listed on the ROCARS web-site http://www.rocars.gov.hk/ : Commerce and Economic Development Bureau, Census and Statistics Department, and Transport Department.

Finally, the center circle of the CBRA-BAC15 diagram highlights the basic, classical principles of trade facilitation – naturally in the context of multiple agencies dealing with cross-border regulations, procedures, IT-systems and data requirements:

  • Simplification & Harmonization: agencies work together with the first aim to streamline certification requirements and procedures, to minimize the number of data elements required from traders etc.; and the second aim to unify the rules and requirements facing supply chain companies.
  • Interoperability & Synchronization: agencies invest in improving interoperability between their inspection technologies, IT-systems etc.; they also work together to better synchronize their supervision and control processes, particularly for the benefit of supply chain companies.
  • Transparency & Predictability: agencies keep each other well informed of their current regulations, procedures, operations etc., as well as planned future changes – such proactive approach helps to minimize surprises and related hassles.

This concludes the second of three parts of our Border Agency Cooperation (BAC) blog. In Part 3 – to be published sometime in February – we focus on the overarching institutional arrangements on Border Agency Cooperation, including establishment of single border agencies (e.g. in the US and Australia); creation of one-stop border posts, OSBPs (multiple examples across the world); carrying work permanently on behalf of other agencies etc. We also plan to discuss bit more on the benefits and costs of BAC, as well as the main challenges and obstacles in BAC-projects across the globe. Talk to you again in February, Juha Hintsa.

 

Bibliography / sources for the examples and cases attached to the 15 BAC key actions:

  • Harmonized ´trusted trader´ & other certification programs: Commission Implementing Regulation (EU) No 889/2014 of 14 August 2014 amending Regulation (EEC) No 2454/93, as regards recognition of the common security requirements under the regulated agent and known consignor programme and the Authorised Economic Operator programme.
  • Coordinated company visits & audits: Email exchange with a Dutch Customs expert
  • Harmonized data filing arrangements: Interview with a Dutch supply chain and trade facilitation expert (29 January 2016); and AnNa Master Plan Extended Collaboration Project Book, December 2015. Available for download at: http://www.annamsw.eu/
  • Synchronized border interventions & inspections: Jain, S.R. (2012), “Coordinated Border Management: The Experience of Asia and the Pacific Region”, World Customs Journal, Vol. 6 No.1. (CBM25).
  • Harmonized operating hours: Article 8 (Border Agency Cooperation) of the WTO Agreement on Trade Facilitation of 15 July 2014; and Jain, S.R. (2012), “Coordinated Border Management: The Experience of Asia and the Pacific Region”, World Customs Journal, Vol. 6 No.1.
  • Sharing of agency intelligence, information & data: “Customs Cooperation Case Study for Canada”, paper submitted by Canada (Canada Border Services Agency – CBSA) for the July 2012 WTO Symposium on Trade Facilitation.
  • Joint investments in common resource pools (equipment, facilities etc.): “Coordinated Border Management”, WCO News, February 2015, No. 76.
  • Joint teams: “Customs find cocaine buried in cocoa bean shipment”, NL Times 25.5.2015, Available online at: http://www.nltimes.nl/2015/05/25/customs-finds-cocaine-buried-in-cocoa-bean-shipment/ (accessed 28 January 2016).
  • Joint operations: “WCO and INTERPOL joint operation against illicit trafficking in Africa leads to tobacco and alcohol seizures”, WCO Press Release, 27 August 2012. Available online at:   http://www.wcoomd.org/en/media/newsroom/2012/august/operation-meerkat.aspx (accessed 28 January 2016).
  • Collaborative criminal investigations & prosecutions: “Coordinated Border Management”, WCO News, February 2015, No. 76
  • ‘Single window’ –type import/ export/ transit data submissions: “Coordinated Border Management”, WCO News, February 2015, No. 76.
  • Common risk indicators, risk profiles & targeting systems: “Coordinated Border Management”, WCO News, February 2015, No. 76.
  • Mutual recognition of supply chain inspection procedures & outcomes: The Consistently Optimised REsilient ecosystem, CORE FP7 project, EU. See online at: http://www.coreproject.eu/ (accessed 28 January 2016).
  • Cross-training and empowering manpower: “Coordinated Border Management”, WCO News, February 2015, No. 76.
  • Joint public-private partnership arrangements, training sessions etc.: “Road Cargo System (ROCARS) (Hong Kong China)”. Available online at: http://www.wcoomd.org/en/topics/wco-implementing-the-wto-atf/atf/border-agency-cooperation.aspx (accessed 28 January 2016).

COMMISSION IMPLEMENTING REGULATION (EU) No 889/2014 of 14 August 2014 amending Regulation (EEC) No 2454/93, as regards recognition of the common security requirements under the regulated agent and known consignor programme and the Authorised Economic Operator programme, 2014 (CORE1069)

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Summary: Existing customs Regulation ((EEC) No 2913/92 establishing the Community Customs Code) and aviation legislation (Regulation (EC) No 300/2008) provides for certain recognition of the certifications under the respective programmes, in particular with regard to the security examinations done for each of them. Regulation (EU) No 889/2014 is necessary for the recognition of the known consignor status with its relevance for the AEO as well, frame the scope of recognition of the common requirements between the respective programmes and allow for the necessary exchange of information between customs and aviation authorities. The 889/2014 is available for download at: http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014R0889&from=EN.

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Full review: Commission Regulation (EEC) No 2454/93 now provides that if the applicant for Authorised Economic Operator (AEO) status is already a regulated agent or a known consignor, the criterion on ‘appropriate security and safety standards’ shall be deemed to be met in relation to the premises for which the economic operator obtained the status of regulated agent or known consignor. Points 6.3.1.2 and 6.4.1.2 of the Annex to Commission Regulation (EU) No 185/2010 (4) provide that the appropriate authority, or independent validator acting on its behalf, should take into account whether or not the applicant for regulated agent or known consignor is a holder of an AEO certificate.

The practical implementation of both the customs legislation governing the AEO status and the aviation legislation governing the regulated agent and known consignor has shown that the existing recognition between the programmes is not sufficient to ensure the highest possible synergies between the respective security programmes. The security requirements for both the aviation security regulated agent and known consignor programme and for the customs AEO programme are equivalent to such an extent that both programmes may be aligned further.

Further alignment of both programmes in terms of equal level of recognition, including required exchange of information is necessary in order to decrease the administrative burden for the economic sector concerned and government authorities (both customs and civil aviation) while strengthening further the current level of security.

Regulation (EU) No 889/2014 is necessary for the recognition of the known consignor status with its relevance for the AEO as well, frame the scope of recognition of the common requirements between the respective programmes and allow for the necessary exchange of information between customs and aviation authorities.

The issuing customs authority shall immediately make available to the appropriate national authority responsible for civil aviation security the following minimum information related to the status of authorised economic operator which it has at its disposal:

  • the AEO certificate – security and safety (AEOS) and AEO certificate – customs simplifications/security and safety (AEOF) including the name of the holder of the certificate and, where applicable, their amendment or revocation or the suspension of the status of authorised economic operator and the reasons therefore;
  • information about whether the specific site concerned has been visited by customs authorities, the date of the last visit and the purpose for the visit (authorisation process, reassessment, monitoring); and
  • any reassessments of AEOS and AEOF certificates and the results thereof.

Relevance for CORE: The CORE implementation objectives, which specify what will be done and how to reach the vision, are all subject to the Policies, Regulations, and Standards that exist within the Security Domain of the Global Supply Chain. The following Work Packages are directly impacted by the implementing regulation (EU) No 889/2014:

  • Research and Analysis: Undertake requirements analysis and impact assessment. The project will undertake requirements analysis from different perspectives. In WP1 we will consolidate reviews of SCS regulations policies and standards from Reference Projects and specify implementation support requirements.
  • The Demonstrators: The CORE demonstrators will validate the applicability and benefits of the CORE approach in representative operating scenarios characteristic of the global supply chain. They will specifically show the way towards a Global Secure Supply Chain. The overriding goal is to demonstrate substantial gains in security and facilitation covering every major facet of the supply chain security sector.

The CORE demonstrators affected by the implementing regulation (EU) No 889/2014 are:

  • WP12: Demonstrator Schiphol – apply global data pipeline concept to air cargo supply chains, managing air freight specific trade compliance requirements, and offering supply chain visibility in dashboards. Trade lanes with e.g. Africa, involving multiple inspection authorities.
  • WP17: DHL Demonstrator – managing airfreight trade compliance requirements EU-US in the context of fast supplying of parts.

Also, WP19 is affected here: Stakeholder Engagement – Knowledge Diffusion and Sustainable Development. Specify and apply an inclusive Stakeholder Engagement Strategy emphasizing international co-operation to promote harmonization of regulations, and to support further development and implementation of international standards.

Cross-references and citations:

  • http://ec.europa.eu/transport/modes/air/security/
  • Regulation (EEC) No 2913/92. EU Regulation establishing the Community Customs Code.
  • Regulation (EC) No 300/2008. EU Regulation on common rules in the field of civil aviation security allows that entities complying with certain conditions and requirements may be certified to ensure and contribute to a secure supply chain.
  • Barosso, J. (2014), “COMMISSION IMPLEMENTING REGULATION (EU) No 889/2014 of 14 August 2014 amending Regulation (EEC) No 2454/93, as regards recognition of the common security requirements under the regulated agent and known consignor programme and the Authorised Economic Operator programme”, available at: http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014R0889&from=EN.

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Border Agency Cooperation, Part 1 of 3

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“A beloved child has many names”, goes an old Finnish proverb. This saying applies quite well in the conblog-210116text of ´smart cooperation between multiple agencies when dealing with cross-border supply chains, goods movements and transports´. The World Customs Organization talks about Coordinated Border Management (CBM); the European Union about Integrated Border Management (IBM); the World Bank about Collaborative Border Management (CBM); and Organization for Security and Cooperation in Europe about Comprehensive Border Management (CBM). Cross-border Research Association is aligning with a fifth term: Border Agency Cooperation (BAC), a term used in the Trade Facilitation Agreement of the World Trade Organization. Despite minor differences in scope, priorities, underlying principles and philosophies among these five terms (and possibly even more), one can easily agree that the work carried out under any and all of them aims to coordinate activities across and within various border control agencies, for the benefit of both governmental agencies themselves as well as supply chain companies.

Our first blog on Border Agency Cooperation, BAC, provides an illustrative worst case example on how complex, slow and expensive a cross-border supply chain execution comes when no cooperation takes place between relevant government agencies, neither nationally nor internationally. The illustration is about meat export from Latin America (Country X) to the European Union (Country Y), with maritime transport in reefer containers.

A well-known beef producer in country X– also the first Authorized Economic Operator (AEO) beef producing company in the region – has just signed an annual contract with a beef importer and distributor in country Y. As this is the producer ‘s first export deal to the EU, the producer needs to ensure that all licenses and certificates are up to the EU standard. Organizing health certificates, certificates of origin, sanitary certificates, export licenses – and what have we – takes weeks and weeks of time. There is no communication or procedures in place between the various agencies and officials to facilitate the process, no coordinated company visits or audits, no sharing of information, and no mutual recognition of inspections.

When all documents are finally in place, and regular exports can start, the beef producer and it´s forwarding agent face the burden of filing export data to customs, to sanitary agencies, and to national security agencies – with somewhat similar datasets, but with no single-window filing opportunity. And when export controls and inspections take place – which happens often – there is no synchronization of inspection times between the different agencies. One agency might come to inspect the reefer container on Monday noon, second one on Wednesday morning, and third on Friday afternoon – another week lost in the beef supply chain lead-time.

Once the consignment is happily on board towards the EU, one continues to experience lost BAC opportunities: no data is passed from country X customs or sanitary agencies to their counterparties in country Y, to enable pre-arrival compliance control and risk assessment. In case of criminal suspicions – e.g. when supply chain insiders exploit beef shipments for cocaine smuggling – no intelligence is shared between police and customs, from country X to country Y. The option of joint law enforcement operations between country X and Y police and customs agencies has never been even considered. Even on national level, both in country X and Y, the agencies are not co-operating neither on risk profiling and targeting systems, nor during criminal investigations and prosecutions – what a waste of resources when it comes to catching and convicting the bad guys…

In the meanwhile, some ten days later, the ship arrives at a major sea port in country Y. For the importer, there is no option for single-window data filing; instead, import data must be transferred separately to all different agencies in country Y. As the customs administration in country Y has no Mutual Recognition Agreement (MRA) in place with country X customs – neither when it comes to AEO certificates nor when it comes to recognizing inspections carried out at export – it treats the import as a “medium to high risk” one, calling for physical inspections. And as the sanitary agency does not share any common resources with the customs administration – particularly no joint inspection facilities and equipment, including x-ray machines – and even the daily opening hours are different from the customs hours, the sanitary agency carries out their own inspections only two days after the customs intervention. And finally, improving the situation does not seem likely, as there are no joint public-private partnerships, and no export/import compliance training sessions or similar in place, neither in country Y nor in country X.

This concludes the first of three parts of our Border Agency Cooperation (BAC) blog. In Part 2 – to be published next week – we will present CBRA´s conceptual model (Hintsa J., Dec.2015) on BAC key actions and beneficiaries: which key actions to take in order to speed up the logistics chain, to save costs with all actors, to increase overall predictability, and to improve government agency performance e.g. in terms of number of seizures and convictions. In the BAC Blog Part 2, we plan to present some preliminary experiences and real-life results from FP7-project CORE. Please stay tuned!

Chemical Security in Istanbul

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2015-12-15 09.02.08I had the most interesting week in Istanbul with the Iraqi government representatives, chemical sector companies and the US State Department Chemical Security Program, CSP.

Security in the chemical supply chain is a major challenge for government agencies and chemical supply chain companies across the globe, including those in the Middle-East and North African (MENA) region. Theft, diversion, trafficking, export violations, counterfeit chemicals, sabotage and terrorism – among other criminal threats – keep the agencies and companies constantly on their toes when considering how to best tackle the vulnerabilities and threats in their respective chemical supply chains.

This was my second time to join as an external expert in a Chemical Security Program (CSP) event in the MENA region. The first time was in Hurghada, Egypt, in March 2015 – thanks again to Professor Andrew Thomas, the Chief Editor of the Journal of Transportation Security, for hooking me up with CRDF Global and the US State Department on this. Now the four day event targeted for the relevant Iraqi government agencies as well as the Iraqi chemical sector companies was held in Istanbul, Turkey, on 14-17 December 2015.

We had a fully packed agenda: Day 1 consisted of several introductory and state-of-play speeches by the workshop facilitators and by Iraqi experts, the latter group sharing key governmental, industry and academic perspectives to the chemical security progress in Iraq.  Day 2 started with a case study presentation on “Post-2001 supply chain security developments at Dow Chemicals”, followed by private-public partnership considerations in chemical supply chain security. During the afternoon of day 2, two more presentations were given on potential threats to materials of interest, as well as on site-physical security. Day 3 started with presentations on international transport of dangerous goods and security rules, followed later by presentations on export control and border security issues, as well as risk assessment methodological aspects.

Interactive sessions, group exercises and other discussions were vivid throughout the four days. On day 1, the main interactive session was about government-industry coordination. On day 2, the focus shifted to identifying key players in Iraqi chemical supply chain security, as well as exploring private sector specific chemical security issues. On day 3, a major interactive session took place to recognize existing vulnerabilities and threats in the chemical supply chain, as well as to identify appropriate countermeasures and other possible means of improvement. And finally, on day 4, a draft table of content for a potential “Iraqi chemical supply chain security master plan and implementation roadmap” was produced in a highly interactive manner, followed ultimately by drafting some actual planning content in areas including chemical transport security and raising security awareness.

The actual workshop outcomes and possible follow-up actions will be worked upon later by the organizing team and some key participants. In the meanwhile, I want to express my warmest thanks for this opportunity and great on-site collaboration in Istanbul to: Ms. Shawn Garcia from the U.S. Department of State, Chemical Security Program (DOS/CSP); Ms. Pelin Kavak and Mr. Nidal Abu Sammour from CRDF Global, US / Jordan; and Dr. Caner Zanbak and Mr. Mustafa Bagan from the Turkish Chemical Manufacturers Association (TCMA). Hope to meet you again in 2016 in Iraq, Algeria and possibly other locations in the MENA region!

 

Cheers, Juha Hintsa

P.S. We also tested two CBRA frameworks / models – CBRA SCS15/16, and CBRA-BAC-Actions and beneficiaries – with the audience during the Istanbul week. Both of them were well perceived, and will be topics for CBRA Blog during the coming couple of months. (SCS = Supply Chain Security, and BAC = Border Agency Cooperation).

PPS. Last but not least I would like to thank Ms. Antonella Di Fazio of Telespazio, Italy, and FP7-project CORE, for excellent inputs on transport of dangerous goods, traceability and monitoring solutions, demonstrators, and practical experiences.

Drug trafficking in the Caribbean – the Full circle (the Economist May 2014, CORE2005)

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Summary

Anti-drug officials report rising cocaine imports into the US through the Caribbean islands. The officials ascribe the increasing popularity of the Caribbean route to the strengthened enforcement of alternative trafficking routes. The South American cocaine smuggling routes have displaced several times over the years due, and now again the Caribbean route is the same one than traffickers used two decades ago. The new wave of trafficking through is expected to increase violence and undermine anti-corruption efforts in the Caribbean.

The drug traffickers move significant amounts of their cocaine from Colombian coca farms and laboratories to Venezuela by jungle trails, riverboats and small aircraft. From the Venezuelan coast, the contraband is smuggled to Caribbean islands by speedboats, planes, sometimes hidden inside commercial cargo. The cocaine traffickers use then yachts, mules, cruise ships, fast boats and commercial cargo vessels to smuggle the illegal drugs into the US and Europe. The new wave of trafficking through is expected to increase violence and undermine anti-corruption efforts in the Caribbean. Review by Toni Männistö (CBRA)

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Full review

Anti-drug officials report rising cocaine imports into the US through the Caribbean islands. The officials ascribe the increasing popularity of the Caribbean route strengthened law enforcement of alternative trafficking routes. Because traffickers prefer smuggling routes that offer the highest profit-to-risk ratios, the South American cocaine smuggling networks are evolving constantly. Routes have displaced several times over the years, and now the route is again the same than two decades ago.

Today, traffickers move again significant amounts of their cocaine from Colombian coca farms and laboratories to Venezuela by jungle trails, riverboats and small aircraft. From the Venezuelan coast, the contraband is smuggled to Caribbean islands by speedboats, planes and sometimes hidden inside commercial cargo. The cocaine traffickers use then yachts, mules, cruise ships, fast boats and commercial cargo vessels to smuggle the illegal drugs into the US and Europe.  The new wave of trafficking through is expected to increase violence and undermine anti-corruption efforts in the Caribbean. The new wave of trafficking through is expected to increase violence and undermine anti-corruption efforts in the Caribbean.

Trends of international drug trafficking often influence intensity of law enforcement efforts in global supply chains. Thus, changes in South American drug trafficking may affect also the two CORE trade lanes that import goods from the region into Europe, (1) imports of fresh cut flowers from Colombia to the Netherlands (WP11) and (2) imports of coffee and cocoa beans from South America to Europe (WP13). These trade lanes may become subject to more intense anti-drug controls over the following years. Besides the CORE demo cluster, also the CORE risk cluster benefit from the insight this article provides on the recent trends in routes, volumes and methods of the South American drug trafficking. This information may be useful for CORE’s activities that are developing educational and training material.

Reference

Drug trafficking in the Caribbean – the Full circle, the Economist, May 24th 2014

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CORE Information Observatory

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cbra_blog_post_040116Please visit FP7-CORE Information Observatory . If you find it useful for your work, please consider registering to become a regular CORE Observatory user and to receive the CBRA Monthly Newsletter!

On behalf of the whole CBRA-team – Sangeeta, Susana, Susan, Phan Hien, Toni, Vladlen, Duayner, Perttu, Matti, Ari-Pekka, Ninoslav, Peter, Andrew, Harri x 2, and David x 2 (https://www.cross-border.org/team/ ) – I would like to wish you the best of success for the year 2016, in your professional as well as private life. In the context of global supply chains, we are ready to work with you towards faster and more predictable global logistics, naturally combined with low crime rates and with high compliance rates. One great tool to support such “common industry-government-academia global supply chain mission” is our new media platform – the recently launched FP7-CORE Information Observatory, which you can find at: https://www.cross-border.org/core-observatory/core-observatory-full-list/

CORE Observatory gives you 10-20 regular reviews and updates per month on supply chain security and trade facilitation policies, regulations, standards, good practices, roadmaps, research papers etc. – for the benefit of FP7-CORE partners, and beyond. Our primary focus is currently on European Union and its main trading partners – global expansion is possible later, depending on user needs and priorities. Each CORE Observatory entry has a title and a summary, visible to every user. At the end of the summary we provide a URL for the source document, whenever an electronic version is available in public domain. Starting 1 January 2016, the title and summary are also translated to Spanish. New languages (e.g. French, Arabic or Russian) may be offered later in 2016 depending on user preferences. The full review text is available only for the registered users, who will also receive the CBRA Monthly Newsletter, tailored to their personal information needs and interests. The CORE Observatory entries are listed in chronological order, the latest entry appearing on the top of the list. Any user – registered or not – can search CORE Observatory entries either via pre-defined keywords and tags (most common ones listed on the right side of the web page), or via free text search.

Again, Happy New Year 2016 everyone – and looking forward to having many new visitors at the FP7-CORE Information Observatory!

Yours, Juha