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EU logistics security – an interesting decade

May 21, 2016/0 Comments/in Authorized Economic Operator, Blog, CBRA, CEN, CLECAT, CPT, EC, ESC, EU, Freight forwarder, Government, Inland waterway, IRU, Other-cluster, Policy, Rail, Risk management, Risk-cluster, Road, Standardization, Supply chain security, Terrorism/destruction, Theft, Transport carrier, WP19 /by Vladlen Tsikolenko

I had a great pleasure to work intensively on the European surface transport security standardization efforts, some years ago – this CBRA Blog aims to summarize the main work done, and the key objectives achieved.

Couple of years after the US 9/11, 2001 terrorist attacks, the European Commission Directorate General of Transport and Energy, EC DG TREN, started to prepare a proposal for a regulation of the European Parliament and of the Council on enhancing cargo surface transport security. In the meanwhile, 9/11 was already triggering an avalanche of new customs, aviation and maritime supply chain security regulations, programs and standards, in the US, Europe and across the globe. But when it came specifically to surface transport security for road and rail cargo (and inland waterways, to that matter) in Europe, nothing was cooking before the DG TREN initiative “Secure Operator”, first announced in 2004. By 2006, the main goal of the EC proposal for a regulation on enhancing supply chain security (SCS) in the EU was shaped as to achieve greater protection of the European freight transport system against possible terrorist attacks. The specific objectives of the draft regulation were defined as: (i) to increase the level of security along the supply chain without impeding the free flow of trade; (ii) to establish a common framework for a systematic European approach without jeopardizing the common transport market and existing security measures; and (iii) to avoid unnecessary administrative procedures and burdens at European and national levels. In addition, the draft regulation related to the need to prevent a patchwork of various supply chain security standards and solutions across EU.

However, it quickly became clear that there was no common sense of urgency in supply chain security regulations across EU Member States, particularly in the context of threat of terrorism to surface (cargo) transport. One was lacking a commitment towards an integrated approach, which would urge everybody to look at the holistic supply chain picture. The countries and especially stakeholder (or, lobby) organizations clearly focused on their specific interests on a part of the supply chain, thus appearing uncomfortable when trying to identify the “big picture”. Ultimately, the draft regulation was blocked in the European legislative process and finally officially withdrawn by the Commission, in 2010.

In the meanwhile, already in 2005, an expert group in supply chain security was formed under the umbrella of European Committee for Standardization (CEN) – and that’s when Cross-border Research Association started to play a role in the “EU land transport security regulations and standards play”, first as the rapporteur for the expert group, and later as the research party for the technical committee in supply chain security. The expert group was formed technically under the CEN working group “Protection and Security of the Citizen” (CEN/BT/WG161), and the (pre)standardization work was partly based on the Logistics Action Plan of the EC that indicated the need for standardization in the transport security domain for the whole logistic chain.

Following the conclusions and recommendations by the expert group, the CEN Technical Committee in Supply Chain Security (CEN/TC 379) was established in 2008, producing ultimately three tangible outputs: Supply Chain Security Feasibility Study (in 2010); CEN Technical Report “Supply Chain Security — Good Practice Guide for Small and Medium Sized Operators” (in 2012, CEN/TR 16412:2012); and, a European Standard: Logistics – Specifications for reporting crime incidents (in 2013, EN 16352:2013-06). The first of the outcomes is available for free (ask by email: cbra@cross-border.org ), and the latter two you can purchase e.g. from your national standardization institute web shop. All in all, great project experience behind us, couple of good publications, and many new contacts and even few friends for lifetime – thus, no regrets, and if asked, would become rapporteur and lead researcher on these important topics, again and again!

And finally, when it comes to the future of SCS regulation and standardization work in Europe – in particular in the land transport security sector (e.g. the LANDSEC expert group, Commission Decision 2012/286/EU): do not be shy in exploiting the tangible outcomes of a decade of our joint work, in particular the Euronorm EN 16352:2013-06, “Logistics: specifications for reporting crime incidents” – no reason to reinvent the wheel!

CBRA Blog by Dr. Juha Hintsa on 21.5.2016

Summarizing the main milestones of the surface transport security 2004-2014 regulatory and standardization process tracks:

A) Regulatory process -track was largely driven by the European Commission Directorate General for Transport and Energy (EC DG TREN), comprising of the following five sequential steps:
A1. Preparation of the Secure Operator legislation at EC DG TREN (2004-2006)
A2. Publication of the legislative proposal (EC, 2006a)
A3. Publication of an impact assessment study (EC, 2006b)
A4. Announcements and debates at European Parliament and Council (2006-2009)
A5. Withdrawal of the proposal by the Commission, (18.9.2010)

B) Standardization process -track – for which the European Committee for Standardization (CEN) was responsible – consisting of the following seven, chronologically ordered steps:
B1. Establishment of an Expert group in supply chain security, under CEN/BT/WG161, “Protection and Security of the Citizen” (2005)
B2. Publication of the final report of the Expert group, approved by CEN/BT/WG161 (14.11.2006)
B3. Establishment of the CEN Technical Committee in Supply Chain Security, CEN/TC 379 (2008)
B4. Publication of Supply Chain Security Feasibility Study (15.1.2010)
B5. Publication of the CEN Technical Report, CEN/TR 16412:2012 “Supply Chain Security — Good Practice Guide for Small and Medium Sized Operators” (2012)
B6. Publication of a European Standard: Logistics – Specifications for reporting crime incidents, EN 16352:2013-06 (2013)
B7. Closure of the CEN Technical Committee in Supply Chain Security, CEN/TC 379 (2014).

Main references / bibliography:

CEN (2013), “Logistics: specifications for reporting crime incidents”, EN 16352:2013-06
CEN (2012), “Supply chain security (SCS): Good practice guide for small and medium sized operators”, CEN/TR 16412:2012
CEN (2006), “Expert group: Supply chain security”, approved by CEN/BT/WG161, 14.1.2006
EC (2012), “Commission Staff Working Document on Transport Security”, SWD(2012), 143 final.
EC (2006a), COM(2006)79 final, 2006/0025(COD), COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS on enhancing supply chain security Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on enhancing supply chain security, (SEC(2006)251)
EC (2006b), SEC(2006)251 COMMISSION STAFF WORKING DOCUMENT. Annex to the COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS on enhancing supply chain security and Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on enhancing supply chain security – IMPACT ASSESSMENT – {COM(2006)79 final}
Hintsa, J., Ahokas, J., Männistö, T. and Sahlstedt, J. (2010), “CEN supply chain security (SCS) feasibility study”, CEN/TC 379 Supply Chain Security, Final report, 15.12010

SIECA delegation visiting Europe in June 2015

March 22, 2016/0 Comments/in Air, Airport, Blog, Capacity building, CBRA, Coordinated border management, Counter-terrorism, Customs, Customs risks, Data quality, Data sharing, EC, EU, EU, Exporter, Importer, Latin America, Other-cluster, Prohibited goods, Restricted goods, Risk management, Risk-cluster, Screening, Supply chain security, Tax evasion, Terrorism/destruction, Trade facilitation, Trafficking, WCO, WP18, WP19, WP2, WP4 /by Vladlen Tsikolenko

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

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

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

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

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

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

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

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

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

CBRA Blog by Juha Hintsa

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

Revisiting the Yemen bomb plot of 2010

March 7, 2016/0 Comments/in Air, Airport, Authorized Economic Operator, Blog, Capacity building, CBRA, Compliance management, Counter-terrorism, Customs, Data quality, Data sharing, Demo-cluster, DG MOVE, EC, EU, Exporter, Express courier, Freight forwarder, Global, ICAO, Importer, Known Consignor, Mail operator, Manufacturer, Mutual Recognition Agreement, Regulated Agent, Retailer, Risk management, Risk-cluster, Scanning, Screening, Shipper, Supply chain security, Terrorism/destruction, Trade facilitation, Transport carrier, Transport security agency, Trusted Trader, USA, WCO, WP12, WP17, WP18, WP19, WP2, WP6 /by Vladlen Tsikolenko

This 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, 9^th 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

Border Agency Cooperation, Part 2 of 3

January 29, 2016/0 Comments/in Academic, Authorized Economic Operator, Blog, CBRA, Compliance management, Coordinated border management, Customs, Customs risks, Data sharing, EC, EU, Exporter, Global, Importer, Investigations, Latin America, Maritime, Other-cluster, Perishable goods, Phytosanitary agency, Police, Risk-cluster, Scanning, Sea port, Single window, Supply chain security, Trade facilitation, Trafficking, Transport security agency, WCO, WP10, WP11, WP13, WP14, WP15, WP16, WP17, WP19, WP6, WP7, WP8, WP9 /by Vladlen Tsikolenko

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).

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).

Border Agency Cooperation, Part 1 of 3

January 21, 2016/0 Comments/in Academic, Authorized Economic Operator, Blog, CBRA, Compliance management, Coordinated border management, Customs, Customs risks, Data sharing, EC, EU, Exporter, Global, Importer, Investigations, Latin America, Maritime, Other-cluster, Perishable goods, Police, Risk-cluster, Scanning, Sea port, Single window, Supply chain security, Trade facilitation, Trafficking, Transport security agency, WCO, WP10, WP11, WP13, WP14, WP15, WP16, WP17, WP19, WP6, WP7, WP8, WP9 /by Vladlen Tsikolenko

“A beloved child has many names”, goes an old Finnish proverb. This saying applies quite well in the context 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!

CORE-Observatory

Review of the TIR Convention and its accompanying Security and Risk Management electronic tools, 2013 (CORE1040)

April 27, 2016/0 Comments/in CBRA, Compliance management, CORE-Observatory, Customs, Customs risks, Data sharing, Demo-cluster, EC, EU, Freight forwarder, Global, IRU, IRU, IT-cluster, Manufacturer, Mutual Recognition Agreement, NGO, Other-cluster, Road, Shipper, Supply chain security, Tax evasion, Theft, Tracking, Trade facilitation, Trafficking, Transport carrier, WP19 /by Vladlen Tsikolenko

Summary: The Customs Convention on the International Transport of Goods under Cover of TIR Carnets (TIR Convention, 1975) constitutes the international legal framework for the TIR system. TIR is the only universal Customs transit system, today operational in 58 countries, that allows the goods to transit from a country of origin to a country of destination in sealed load compartments with Customs control recognition along the supply chain. This minimizes administrative and financial burdens, while Customs duties and taxes that may become due are covered by an international guarantee (covering more than USD 1 billion worth of international trade every day). In order to ensure the security of the TIR System, electronic controls run in parallel with the security elements already specified in the TIR Convention. TIR handbook can be found at: http://www.unece.org

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Full review: The TIR system is an international Customs transit system for goods. ‘TIR’ stands for Transports Internationaux Routiers (International Road Transport) and is an international harmonized system of Customs control that facilitates trade and transport whilst effectively protecting the revenue of each Country through which goods are carried. It is based on six essential principles and an electronic security and risk management control system composed of four tools:

Secure vehicles or containers: Goods are carried in sealed vehicles or containers which are approved for use by Customs and re-approved every two years.
International chain of guarantee: Duties and taxes due in case of irregularity are secured by an international guarantee chain throughout the journey.
TIR Carnet: The goods are accompanied by the TIR Carnet: a harmonized control document accepted by the Customs authorities of the countries of departure, transit and destination.
Mutual recognition of Customs controls: Control measures taken in the country of departure are accepted by countries of transit and destination.
Controlled access: Access to the TIR system for national issuing and guaranteeing Associations is given by the competent national authorities, and for transport operators, by the national Customs authorities and the national Association.
SafeTIR: An electronic control system for TIR Carnets that provides traceability and risk management, as described in Annex 10 to the TIR Convention.

Real-Time SafeTIR (RTS) allows customs officers to enhance their risk management procedures and comprises following three modules:

SafeTIR data transmission module: Once a TIR operation is terminated, RTS automatically sends a SafeTIR message to the IRU.
TCHQ: TIR Carnet Query Module allows any customs office to obtain immediate information on the status of the Carnet for the prompt detection of any possible irregularities.
SafeTIR Reconciliation Automation module: automates the SafeTIR data reconciliation procedure.

TIR Customs Portal is an online service developed by the IRU, which allows customs officers to:

obtain immediate information on the status of the TIR Carnet for the prompt detection of any possible irregularities; and
transmit SafeTIR data on the termination of the TIR operation.

ASKTIRweb makes it easier for TIR associations to manage the entire life-cycle of the TIR Carnets from the time of order and delivery from IRU until their return to the IRU and the subsequent administrative procedures such as claims and SafeTIR. ASKTIRweb is a mandatory TIR Carnet management system for all new TIR associations.

The TIR-EPD application is intended for submission of advance information on transported goods to Customs Authorities. Fully compliant with WCO SAFE Framework of Standards and with the national regulations of connected countries, TIR-EPD enables Customs Authorities to perform advance risk analysis. TIR Carnet Holders can send advance information free-of-charge simultaneously to the Customs Authorities of the countries according to their itineraries.

In order to ensure the security of the TIR System, electronic controls run in parallel with the security elements already specified in the TIR Convention.

The perceived strengths of the TIR-system include: Access to 58 TIR operational countries; Management of a low cost, high value guarantee; Intermodality; Security in the supply chain; Reduced delays and costs for the international transit of goods; and Trade facilitation – goods move across international borders with minimum interference. Future opportunities include: Increased trust with national Customs; Encouragement of international trade; and Economic benefits for supply chain actors and nations.

Detailed analysis and relevance for CORE:

Research and analysis: The TIR system is based on proven business-to-governments solutions and both CORE and the TIR system could benefit from an investigation and evaluation of the legal, technical and operational feasibility as well as the business benefits of integrating TIR data to the CORE ecosystem and CORE concepts and solutions such as “trusted trade lane”, “data pipeline”, “piggy-backing” for customs and “dashboards”.

Demonstrators: The use of TIR and its security and risk management electronic tools in the framework of CORE demonstrators can have four different types of advantages which meet CORE’s overarching objectives to optimize the security of global supply chain whilst maintaining or improving business performance:

Compliance with customs requirements: customs duties attached to the goods guaranteed by the TIR guarantee chain.
Security of exchanges: transmission of safety and security data, in accordance with e.g. EU Customs legislation, to national customs before the arrival of the goods at borders.
Facilitation of international trade: mutual recognition of customs controls for all TIR countries and reduction of customs formalities at borders.
Visibility of data: use of TIR security and risk management electronic tools to check the status of TIR operations in real-time.

CORE Impact anticipation: CORE can have an important impact on the TIR system by reinforcing its place as a global multimodal logistics and trade solution. The investigation and evaluation of the legal, technical and operational feasibility as well as the business benefits of using the existing features of the TIR system within the CORE ecosystem and opening cargo-related datasets can contribute to improving freight and logistics services provision and operations by shippers, LSPs, transport operators, ports and customs authorities. The efficiency and security upgrades will come by significantly reducing waiting times and administrative burden at borders and at the same time providing a more cost efficient way of improved supply chain visibility and traceability of cargo to the benefit of all private and public stakeholders.

Cross-references:

Application of the TIR Convention in the EU: Council Regulation (EEC) No 2913/92; Commission Regulation (EEC) No 2454/93 and Regulation (EU) No 952/2013 of the European Parliament and of the Council applicable as of 1 May 2016.

Youtube video on TIR: https://www.youtube.com

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Better Management of EU Borders through Cooperation, 2011 (CORE1114)

April 22, 2016/0 Comments/in All transport modes, Analytic, Authorized Economic Operator, CBRA, Compliance management, Consulting, Coordinated border management, CORE-Observatory, Counter-terrorism, Customs, Customs risks, Demo-cluster, EC, EU, Fraud, Investigations, Risk management, Risk-cluster, Scanning, Screening, Supply chain security, Tax evasion, Terrorism/destruction, Trade facilitation, Trafficking, Trusted Trader, WP1, WP10, WP11, WP12, WP19 /by Vladlen Tsikolenko

Summary: This report by the Center for the Study of Democracy investigates existing forms of cooperation between Border Guards and customs administrations in the European Union. The study highlights obstacles to cooperation and proposes solutions and best practices for overcoming them. The study finds that despite the common policy interest on border agency cooperation and the associated pan-European standardisation efforts, the individual Member states decide the extent and forms of customs-border guard co-operation on their own. As a result, the current state of border agency collaboration and potential for improvements differ substantially between the member states. The main differences arise from the institutional set-up (e.g., number and roles of border control agencies), powers and competencies of the border control agencies, and the legislative basis (especially legal differences in terms of privacy, data protection and confidentiality of trade information). Download the report here: http://ec.europa.eu. Review by Toni Männistö (CBRA)

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Full review: The study concludes with a large number of recommendations for the European Union, the member states, and for the customs and border guards. The European Union should generate political will to act upon remaining challenges of border agency cooperation by creating awareness through public debates, communications and impact assessments. The EU bodies should act mediators to reconcile institutional interests of different border control agencies. The EU could also commission pilot projects on border agency cooperation, encourage joint training and increase funding of related research and development activities. Also the mandate of Frontex could be expanded to cover customs cooperation.

The individual member states should, according to the report, also mediate negotiations between border control agencies to overcome possible conflicts of interest. The member states should also evaluate impacts of various forms of customs-border guard cooperation.

The border guards and customs administrations themselves should identify and exchange best practices for strengthening their mutual collaboration. The agencies, the report recommends, should take responsibility for the pilot projects and for evaluating outcomes of the different forms of cooperation. To further improve the cooperation across the entire EU customs union, the customs and border control agencies should use Frontex more as their platform to conduct joint operations at the EU’s external border.

Reference: Center for the Study of Democracy, (2011), “Better Management of EU Borders through Cooperation”, Study to Identify Best Practices on the Cooperation Between Border Guards and Customs Administrations Working at the External Borders of the EU

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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)

March 12, 2016/0 Comments/in All transport modes, CBRA, CORE-Observatory, Customs, DG TAXUD, EC, EU, EU, Government, No-cluster, Policy, Regulation /by Vladlen Tsikolenko

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.

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

March 5, 2016/0 Comments/in Air, Airport, All transport modes, All-clusters, Authorized Economic Operator, CBRA, CORE-Observatory, Corruption, Counterfeiting, Cybercrime, Demo-cluster, DG MOVE, DG TAXUD, Document forgery, EC, Environmental crime, EU, Exporter, Express courier, Fraud, Freight forwarder, Hijacking, Human trafficking, Identity theft, Importer, Inland waterway, ISO28000, IT-cluster, Known Consignor, Mail operator, Manufacturer, Maritime, Money laundry, Multi-modal, Other-cluster, Rail, Regulated Agent, Retailer, Risk-cluster, Road, Sea port, Shipper, Standard, Standardization, Supply chain security, TAPA, Tax evasion, Terrorism/destruction, Theft, Trafficking, Transport carrier, Violence, Warehouse keeper, WP1, WP10, WP11, WP12, WP13, WP14, WP15, WP16, WP17, WP18, WP19, WP2, WP20, WP21, WP22, WP3, WP4, WP5, WP6, WP7, WP8, WP9 /by Vladlen Tsikolenko

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).

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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)

January 26, 2016/0 Comments/in Air, Airport, Authorized Economic Operator, CBRA, Compliance management, Coordinated border management, CORE-Observatory, Counter-terrorism, Customs, Demo-cluster, EC, EU, Exporter, Express courier, Government, Importer, Known Consignor, Mail operator, Manufacturer, Regulation, Risk-cluster, Shipper, Supply chain security, Tax evasion, Terrorism/destruction, Trade facilitation, Trafficking, Transport carrier, Transport security agency, Trusted Trader, Warehouse keeper, WP12, WP17, WP19, WP2, WP6 /by Vladlen Tsikolenko

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.

CORE1069
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Review of Electronic Customs Multi-Annual Strategic Plan 2014 REVISION (CORE1052)

March 1, 2015/0 Comments/in CORE-Observatory /by Vladlen Tsikolenko

Summary: The Electronic Customs Multi-Annual Strategic Plan (MASP) 2014 REVISION is a management and planning tool drawn up by the European Commission in partnership with Member States in accordance with Article 8(2) of the e-Customs decision. All the CORE demonstrators are affected by the MASP. Original review files are coded as CORE1052, in the e-library of the CORE project. Source file at: http://ec.europa.eu/taxation_customs/customs/policy_issues/electronic_customs_initiative/electronic_customs_legislation/index_en.htm
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Review “Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system” [COM (2011) 144 final] (CORE1029).

March 1, 2015/0 Comments/in CORE-Observatory /by Vladlen Tsikolenko

Summary: In this White Paper, the Commission sets out to remove major barriers and bottlenecks in many key areas across the fields of transport infrastructure and investment, innovation and the internal market. The aim is to create a Single European Transport Area with more competition and a fully integrated transport network which links the different modes and allows for a profound shift in transport patterns for passengers and freight. To this purpose, the roadmap puts forward 40 concrete initiatives for the next decade, explained in detail in the Commission Staff Working Document accompanying the White Paper. It has some background relevance for CORE, as it proposes initiatives to build a competitive transport system that will preserve mobility, remove major barriers in key areas and fuel growth and employment. Original files are coded CORE1029, in the CORE e-library.
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Review COM(2014) 527 EU Strategy and Action Plan for customs risk management (CORE1028).

March 1, 2015/0 Comments/in CORE-Observatory /by Vladlen Tsikolenko

Summary: This Communication puts forward a strategy for improving customs risk management and supply chain security (‘the Strategy’) and a table of priority actions (‘the Action Plan’). Original files coded CORE1028, in the CORE e-library.
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Review COM(2012) 793 Customs Risk Management and Security of the Supply Chain. (CORE1001)

March 1, 2015/0 Comments/in CORE-Observatory /by Vladlen Tsikolenko

Summary: The purpose of this Communication is to: (i) review the implementation of customs risk management policy; (ii) put forward a strategic approach for the years ahead; (iii) make recommendations for action with a focus on efficient deployment of resources. Effective risk management of the movement of goods through the international supply chain is critical for security and safety and essential to facilitating legitimate trade and protecting the financial and economic interest of the EU and its Member States. There are critical challenges to be tackled and these cannot be fully resolved at Member State level but require EU action to complement and reinforce the efforts made at national level. Relevant for all of CORE, and specifically for Customs issues, e.g. WP14 Demonstrator FALACUS- FAstLAne through CUStoms. Coding in CORE e-library is CORE1001. Read more

FP7-project e-Freight Report Summary (CORE3003a)

February 28, 2015/0 Comments/in CORE-Observatory /by Vladlen Tsikolenko

Summary: This document is about CORE review of reference projects and specification of reusable outputs, on FP7-project e-Freight. Authors are Marcus Engler and Oliver Klein, both from ISL. The original files can be found in CORE e-library, with coding CORE3003a. More information on the project at: http://www.efreightproject.eu/
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Interviews

Professor Guido Palazzo on illicit waste supply chains

February 25, 2016/0 Comments/in Africa, CBRA, Dangerous goods, EC, Environmental agency, Environmental crime, EU, FP7, Interviews, Maritime, No-cluster, Organized crime groups, Road, Socio-economic impacts, Transport carrier /by Vladlen Tsikolenko

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!

Posts

EU logistics security – an interesting decade

CORE-Observatory

Better Management of EU Borders through Cooperation, 2011 (CORE1114)

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)

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)

Review “Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system” [COM (2011) 144 final] (CORE1029).

Interviews

Professor Guido Palazzo on illicit waste supply chains

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