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The first Annual SYNCHRO-NET meeting

July 9, 2016/0 Comments/in Air, Airport, All transport modes, Blog, Capacity building, CBRA, EU, FP7, Freight forwarder, Global, Inland waterway, IT, IT-cluster, Maritime, Multi-modal, Optimization, Perishable goods, Rail, Risk management, Risk-cluster, Road, Sea port, Time-critical goods, Tracking, Transport carrier, WP4, WP5, WP6, WP7 /by Vladlen Tsikolenko

The SYNCHRO-NET project had its first annual project meeting in Barcelona in early June. I had a pleasure to take part in the three-day event and enjoy the welcoming atmosphere and sunny weather of the Catalonian capital.

For those who are not yet familiar with the project, SYNCHRO-NET is a three-and-half-year demonstration project on advanced logistics optimization. The project seeks to advance and promote new concepts of synchro-modality and slow steaming for more cost-efficient, less congested and greener intermodal supply chains. The project includes three demonstrations that test slow-steaming and synchro-modal solutions in real international logistics networks. The first demonstrator involves shipping of goods from the Far-East to the ports of Valencia, Algeciras and Barcelona, and subsequent movement by rail inland and final short truck movement. The second demonstrator focuses on regional logistics movements through the Port of Cork. The third demonstrator will address multimodal container movements in major European routes. The project is funded by the European Commission under the Horizon 2020 Programme.

During the two first days of the meeting, the Partner Forum discussed the SYNCHRO-NET work ahead: standardization, development of a tool for logistics optimization, real-world demonstrations, and exploitation and dissemination of the project’s results. The discussion produced some interesting findings and conclusions. The Partner Forum observed that, given the large number and variety of factors, the optimization of shipping and logistics in terms of cost (including CAPEX, crew cost, fuel), duration, environmental impact, reliability and various types of risks is nothing but an easy task. For example, weather, tide and state of the sea affect maritime logistics, its speed, reliability and cost-efficiency. There was also a great deal of discussion about the dimensions of risk in the meeting. The International Organization of Standardization (ISO) defines risk as the “effect of uncertainty on objectives.” In this light, the concept of risk in the SYNCHRO-NET context covers at least damage to cargo, lead time variability, variability of cost, and possibility of theft and piracy. The Forum concluded that cost-efficiency and quality of international logistics depend largely on real-time awareness and visibility over logistics operations: “the sooner you know, the lower the cost will be to solve the problem.”

The three days of SYNCHRO-NET meetings culminated in the International Logistics and Material Handling (SIL) conference, the primary annual industry fair and networking event for logistics professionals in Spain. In the conference, Mr. Santiago Blasco (DHL) introduced SYNCHRO-NET at the “Consumer & Goods” working session for a large audience. Later that day, a group of leading logistics experts from Spain and the rest of Europe debated on pressing topics at three SYNCHRO-NET roundtables. The roundtable sessions focused on the general theme “How to build win-win solutions synchro-modal logistics stakeholders.” Here are brief summaries of the roundtable sessions:

“Smart Steaming – how to build a win-win solution for all stakeholders.” The members of the roundtable raised concerns about organizational, technical and business challenges of future slow steaming. There are obvious draw-back in slow steaming such as longer lead times and lower capacity utilization. However, the panel concluded that smart rather than slow steaming is here to stay: “While maintaining high service level, we can make logistics more cost-efficient.”

”Effective management of synchro-modal logistics.” The panelists of the second session argued that the concept of synchro-modality is not yet very established in the logistics sector. Even so, the panel agreed that synchro-modality builds on real-time optimization, risk analysis and advanced, ITC-enabled logistics planning. Synchro-modality requires visibility over the supply chain, so that logistics planers react to contingencies and can make effective decisions in real time. The panel concluded that collaboration across supply chain operators – especially among shippers, carriers, freight forwarders – is the key to synchronized international logistics.

“Synchro-modal IT tools: innovation and value added to the logistics industry.” The third panel focused on the rather technical topic of leveraging cloud-based IT architecture for advanced logistics planning. The panelists saw a great potential in modern ICT solutions to enable synchro-modality, smart steaming and other ways for optimizing international freight transport. There still remain challenges for bridging a broad array of different computer systems for higher degree of logistics interconnectedness and interoperability.

The SYNCHRO-NET project has had a strong start, and the project progresses on the right track and at the full speed after one year of work. There is still much hard work to do over the next six months, for CBRA and other partners. In autumn, CBRA researchers will be focusing on reviewing policies, legislations, and standards that have an effect on synchro-modality and slow steaming. The CBRA team will also continue promoting the SYNCHRO-NET project and its findings at various events and publications. Stay with SYNCHRO-NET and visit the project website www.synchro-net.org.

CBRA Blog by Dr. Toni Männistö

Figure 1 Santiago Bosco presenting SYNCHRO-NET at the the International Logistics and Material Handling (SIL) conference

New survey on European postal security

June 15, 2016/0 Comments/in Air, Blog, CBRA, Counter-terrorism, Customs risks, EU, FP7, Global, IT, Mail operator, Multi-modal, Rail, Risk management, Road, Scanning, Screening, Supply chain security, Terrorism/destruction, Theft, Tracking, Trade facilitation, Trafficking, UPU, WP2, WP3 /by Vladlen Tsikolenko

PostEurop and Cross-border Research Association have launched a new online survey on postal security management to promote further development and implementation of best security practices in the postal sector. The survey is part of the ongoing SAFEPOST project that the European Commission is co-funding under the Seventh Framework Programme (FP7). SAFEPOST project going to finish in the end of July after four years of work towards higher postal security in the European Union.

The survey studies the current state of postal security management among PostEurop members, 52 postal operators in 49 European countries. The goal is to collect responses mainly from security and safety managers of the PostEurop members, but also postal expert familiar with sorting and distribution processes are welcome to provide their inputs. The first part of the survey focuses on security implementation and security performance, and the second part studies postal managers’ expectations and concerns regarding the following six main SAFEPOST innovations:

Common Postal Security Space:

SAFEPOST has created an online platform for sharing security-related information between postal operators. This Common Postal Security Space provides a digital track record of security controls and related evidence (for example X-ray images) that a postal parcel has encountered over its journey, and facilitates an easy and controlled way to exchange information both with other operators as well as the authorities.

D-tube drug screening station:

SAFEPOST has demonstrated a new screening solution, D-tube, that can be fully integrated into the sorting process. The D-Tube’s prototype detects illegal substances, such as narcotics and explosives, at high accuracy.

Explosive detection system:

SAFEPOST has demonstrated a Raman spectroscopy screening device for detecting trace amounts of explosives and explosive precursors on the outside of postal items. The device is designed to be seamlessly integrated, at the same level as X-ray machines already used today, in the sorting process and detect the explosive threats at a high accuracy and at a low false alarm rate (≈ 1 %).

Image recognition system:

SAFEPOST has developed an Image Recognition solution that photographs five visible sides of a postal parcel at one or more locations in the postal network. The solution compares these images to detect signs of tampering or damage (≈ 92% detection rate). The current solution functions properly when the conveyor belt moves no faster than 0.5 m/s.

Radiological screening:

SAFEPOST has demonstrated detection of radiation in moving parcels, that can be fully integrated into the sorting process. The current version of the detector is able to detect any harmful level of radiation, and identify the radioactive isotope, and when possible to consider effects of possible attempts of hiding the radioactivity with lead or other shielding material by detecting neutron radiation.

Security standard and certificate:

SAFEPOST project is working towards a new European security standard for the postal operators that would give recommendations about use of security inspection technologies, exchange of security-related information, cyber security, and key security performance indicators. This standard would pave the road towards a voluntary security certification program that would help the postal operators to show their commitment to security.

This survey research is expected to produce interesting new insights about postal security activities and security performance among the PostEurop members. If the response rate is high, the survey findings will set a basis for pan-European benchmarking of security activities. The findings would also contribute to smart policy making, legislation, and standardisation in the field of postal security.

Finally, depending on the response rate, CBRA is going to publish an academic journal paper based on the results. Building on solid theory on supply chain security risk management, the journal paper would provide new empirical about how supply chain security implementation is associated operational and security performance. We expect that collaborative security measures improve both on-time delivery performance (a proxy for operational performance) and supply chain security performance simultaneously. Collaborative security measures include survey items such as “we coordinate security activities with our business customers” and “we exchange customs declaration information with customs authorities electronically [for example, ITMATT or CUSITM messages]”. Another hypothesis is that, on the one hand, non-collaborative security contributes to supply chain security performance but decrease on-time delivery performance on the other hand. Examples of such non-collaborative measures include “we use tamper-evident mail bags to transport high-value postal items” and “We perform security controls also on non-airmail items to detect explosives.” The figure below summarises the theory and hypotheses of the research paper.

Figure 1 Theoretical framework of the SAFEPOST survey paper

The survey findings will be presented in the final SAFEPOST meeting in Madrid 5-6 July 2016. After the meeting, we hope that we can expand the scope of the survey to cover the rest of the world, as well. The next step would be to contact representatives of the Universal Postal Union (UPU) and coordinate distribution of the survey into the organisations’ 192 member countries.

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

Supply chain security education materials

February 29, 2016/0 Comments/in All transport modes, Blog, BMT, CBRA, CLECAT, Coordinated border management, Customs, Customs risks, Cybersecurity, Data quality, Data sharing, ESC, EU, FP7, Freight forwarder, Global, INTERPOL, INTERPOL, IRU, Manufacturer, Other-cluster, Police, Resilience, Risk management, Shipper, Single window, Supply chain security, Systems based control, Trade facilitation, Transport carrier, TUD, Warehouse keeper, WCO, WP19 /by Vladlen Tsikolenko

FP7-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):

Introduction to CORE innovation agenda; including explaining key CORE themes and concepts; and frameworks and models.
CORE outcomes, findings and results – written primarily in the context of the 16 CORE-Demonstrations.
Interpretation of CORE results per key stakeholder group: customs, police, cargo owners, logistics sector, security sector and academics
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

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!

Chemical Security in Istanbul

January 9, 2016/0 Comments/in Academic, All transport modes, Blog, CBP, CBRA, Coordinated border management, Counter-terrorism, Counterfeiting, Customs, Customs risks, Cybersecurity, Dangerous goods, Demo-cluster, Environmental agency, Environmental crime, EU, Exporter, Hijacking, Importer, Manufacturer, Middle-East, Police, Retailer, Risk management, Risk-cluster, Safety, Supply chain, Supply chain security, Terrorism/destruction, Theft, Tracking, Trafficking, Transport carrier, Transport security agency, USA, Warehouse keeper, WCO, WP16, WP19 /by Susan Wilander

I 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.

CORE Information Observatory

January 4, 2016/0 Comments/in Academic, All transport modes, Analytic, Blog, CBRA, EU, FP7, Global, Other-cluster, Policy, Regulation, Scientific, Supply chain security, Trade facilitation, WP18, WP19 /by Juha Hintsa

Please 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

CORE-Observatory

Enhancing security through efficiency focus- Insights from a multiple stakeholder pilot implementation (Sternberg et al. 2012)

June 30, 2016/0 Comments/in Academic, CBRA, CORE-Observatory, Customs, Customs risks, Data quality, Data sharing, Demo-cluster, EU, Global, IT, Maritime, Optimization, Other-cluster, Police, Risk management, Road, Satellites, Scientific, Sea port, Shipper, Supply chain security, Tax evasion, Terrorism/destruction, Theft, Tracking, Trade facilitation, Trafficking, Transport carrier, Transport security agency, WP10, WP11, WP13, WP14, WP15, WP17, WP19 /by Vladlen Tsikolenko

Summary

Efficiency and security are said to be opposing goals of logistics operations: when security goes up, efficiency decreases, and vice versa. Yet, it is suggested that information technologies could improve efficiency and security simultaneously. Sternberg et al. (2012) investigate this hypothesis: whether and to what extent increased attention to efficiency results in improved security in carrier operations in a seaport context. In a longitudinal case study, they research carrier operations in connection with port terminals carrying out Roll-in Roll-out (RoRo) operations on trailers at the port of Gothenburg. They find that investments in new ICT solutions, in fact, remove some of the barriers to higher efficiency and improve security against cargo theft and terrorism. In particular, they report that ICT investments increased efficiency in terms of reduced waiting times and increased ability to plan port operations (pre-arrival notification) and fast positioning of trailers in a port. The new ICT solutions also increased security in terms of more secure document handling (decreases the risk that sensitive information falls into the hands of criminals), better anomaly detection (helps customs identify trailers that are most likely tampered in-transit) and increased visibility. The abstract is available at: http://onlinelibrary.wiley.com.

Review by Toni Männistö (CBRA) based on his doctoral thesis.

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Full review

This article is relevant for CORE demonstrations that focus on sea port operations (WP10-11 and WP13-15 and WP17). The research shows how a ‘common information sharing platform’ – an electronic and highly automated communication network among LSPs, carriers, ferry operators, port operators and authorities – increases logistics efficiency and security performance simultaneously. The main components of this platform include information sharing through a common information area, real-time geographical position of truck and trailer, identification technology in truck, RFID tags on transport units and RFID readers mounted on terminals, electronic manifest, and electronic container seals. More specifically, Sternberg et al. (2012) observed that adoption of a set of IT-enabled SCS solutions eliminated logistics efficiency and security issues simultaneously:

Real-time geo-positioning of trucks and trailers enabled the port operator to allocate a vacant spot for a trailer prior to its arrival, which reduced the waiting time at the port entrance. The real-time information enabled also customs to detect anomalies in shipping schedules and routings that would imply a heightened risk of smuggling.
RFID-based identification of drivers, trucks, and trailers automated and accelerated the access formalities at the port entrance and increased reliability of driver authentication.
Digitalization of cargo manifests eliminated the time-consuming manual document handling and reduced the risk of unauthorised access to confidential information.
E-seals enabled customs officers to identify intact containers and spare them from time- consuming inspections.

Reference

Sternberg, H., Nyquist, C., & Nilsson, F. (2012). Enhancing Security Through Efficiency Focus— Insights from a Multiple Stakeholder Pilot Implementation. Journal of Business Logistics, 33(1), 64-73.

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Controlling access to pick-up and delivery vans: the cost of alternative measures (Haelterman et al. 2012)

June 30, 2016/0 Comments/in Academic, CBRA, CORE-Observatory, Counter-terrorism, Demo-cluster, EU, Express courier, Global, High-value goods, IT, Optimization, Risk management, Risk-cluster, Satellites, Scientific, Supply chain security, Terrorism/destruction, Theft, Time-critical goods, Tracking, WP10, WP11, WP12, WP13, WP14, WP15, WP16, WP17, WP19, WP2, WP3, WP9 /by Vladlen Tsikolenko

Summary

The situational crime prevention theory suggests that preventive security measures often backfire. For this reason, it is problematic that many managers do not have a holistic picture which kind of considerations should precede selection of implementation of security measures. A paper by Haelterman et al. (2012) tests the practical feasibility of a new management model that is designed to highlight the most promising preventive security measures given a set of preconditions and costs. The authors apply this model in the context of pick-up and delivery van operations at a Belgian branch of a major express courier company. Such transport operations are subject to risk of theft and terrorism, especially if unauthorized people managed break into pick-up and delivery vans. To test the management model, the authors collect views of of supply chain practitioners in two expert panels and through a survey. Their analysis covers a broad array of preventive security measures including key card, audible alarm, silent alarm + GPS, notification on vehicles, awareness training, no company logos, formal instructions / compliance checks & sanctioning, double drivers, over security escorts. The abstract is available at: http://link.springer.com.

Review by Toni Männistö (CBRA) based on his doctoral thesis.

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Full review

The research of Haelterman et al. (2012) sets a solid theoretical basis for practical supply chain security work. All CORE work packages that cover aspects of road transport benefit from the analysis of this research paper. The research shows that a set of preconditions influence outcomes of preventive security measures: availability (legal, infrastructure), practicability (perceived), required knowledge, required expertise, user awareness, user belief, use commitment (anticipated), and co-operation. Security measures also incur different kinds of costs: financial costs, ethical/social cost (labeling, distrust, civil liberties, inequalities), aesthetical cost. Finally, as the theory on situational crime prevention suggests, security measures may result into various reverse effects, including crime displacement (geographical, temporal, target, tactical, crime types), escalating effects (e.g., use of violence), creative adaptation, and enticement effects.

Reference

Haelterman, H., Callens, M., & Vander Beken, T. (2012). Controlling access to pick-up and delivery vans: the cost of alternative measures. European Journal on Criminal Policy and Research, 18(2), 163-182.

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The displacement effect in cargo theft (Ekwall 2009)

June 30, 2016/0 Comments/in Academic, CBRA, CORE-Observatory, EU, High-value goods, IT, Other-cluster, Risk management, Risk-cluster, Road, Satellites, Scientific, Supply chain security, Theft, Tracking, Transport carrier, Warehouse keeper, WP19, WP2, WP3 /by Vladlen Tsikolenko

Summary

Cargo theft has always been a problem for shippers and logistics service providers. Even so, regardless of the persistent efforts to reduce cargo theft, crime continues to strive. This classic supply chain security paper by Daniel Ekwall analyzes and explains why cargo theft continues to occur in the transport network despite all implemented countermeasures. Focusing on Swedish transport and logistics facilities, the Ekwall’s research builds on interviews with six subject matter experts, survey with four terminal operators, and macro-statistics from TAPA (Transported Asset Protection Association). The paper finds some evidence on crime displacement in terms of method (modus operandi): cargo thieves target increasingly cargo in-transit because logistics facilities are nowadays better protected. However, displacement is likely to be partial in contrast to complete displacement. This means that absolute theft risk can be reduced. Download the abstract here: http://www.emeraldinsight.com.

Review by Toni Männistö (CBRA) based on his doctoral thesis.

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Full review

The Ekwall’s research gives an interesting overview on criminological theories underpinning supply chain security research. The theoretical outlook provides the foundation for the CORE work and all CORE work packages can therefore benefit from the analytical discussion and findings of this research paper. The main lesson is that criminals and terrorists are calculating antagonists who adapt their behavior in response to information on risks and rewards of crime opportunities. More specifically, Ekwall argues that professional cargo thieves seem to target increasingly “cargo on wheels” instead of warehoused goods. He explains this shift in the behavior with the fact that, facility security has improved relatively more than in-transit security over the past decade. However, he stresses that it is hard to establish a causal relationship between security interventions and changes in criminal behavior. He holds further that if displacement occurs, it is likely to be partial rather than complete.

Reference

Ekwall, D. (2009b). The displacement effect in cargo theft. International Journal of Physical Distribution & Logistics Management, 39(1), 47-62.

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CASSANDRA compendium. Standards in supply chain management (Ch. 9)

June 8, 2016/0 Comments/in All transport modes, CBRA, CORE-Observatory, Counter-terrorism, Customs, Customs risks, Data quality, Data sharing, Deliverable, EU, FP7, Freight forwarder, Global, Manufacturer, Other-cluster, Retailer, Shipper, Supply chain security, Trade facilitation, Transport carrier, WP18, WP19 /by Vladlen Tsikolenko

Summary: Chapter 9 of the CASSANDRA compendium lists and discusses various standards that set the context for international supply chain management. The chapter focuses especially on management standards (e.g., ISO28000), technical standards (e.g., RFID, electronic seals and barcodes), standards for exchange of information among supply chain stakeholders (e.g., UN/EDIFACT and XML messaging), and customs security standards (especially the World Customs Organisations’ SAFE Framework of Standards). GS1 Global Visibility Framework and other industry standards are included in the discussion, as well. The chapter points out that because a large variety of standards are already available, the challenge is not a lack of standardisation but the lack of harmonisation between different standards. The section also concludes that even if the diversity of standards was harmonised, the next step would be to ensure that the standards would be consistently implemented in different contexts.

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Full review: The chapter focuses on listing different standards that affect the modern supply chain management. There not much details to be reported in this section. However, especially people working with CORE work package 6 “SCS Reference Framework and Standards” should read the brief listing and general discussion of standards and standardisation. Other chapters of the CASSANDRA compendium provide complementary information about standardisation in the field of supply chain management (e.g., Ch. 5 & 6).

Reference

Hintsa, J. and Uronen, K. (Eds.) (2012), “Common assessment and analysis of risk in global supply chains “, Compendium of FP7-project CASSANDRA, Chapter 9

CORE2007

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CASSANDRA compendium. Technologies for supply chain visibility and security (Ch. 8)

June 8, 2016/0 Comments/in All transport modes, CBRA, CORE-Observatory, Counter-terrorism, Customs, Customs risks, Data quality, Data sharing, Deliverable, EU, Exporter, FP7, Freight forwarder, Global, Importer, IT, Manufacturer, Police, Retailer, Risk management, Risk-cluster, Satellites, Scanning, Screening, Shipper, Supply chain security, Terrorism/destruction, Theft, Tracking, Trade facilitation, Trafficking, Transport carrier, Transport security agency, WP14, WP15, WP16, WP17, WP2, WP3, WP9 /by Vladlen Tsikolenko

Summary: Chapter 8 of the CASSANDRA compendium reviews current and future technologies that help managers to improve visibility and security over global end-to-end supply chains. The supply chain visibility technologies, in essence, provide logistics managers with a variety of information – shipment data, performance metrics, inventory levels, production / delivery schedules and sales forecast, for example – in or close to real time. The chapter’s review on supply chain security technologies focus mainly on security sensors (e.g., motion detectors), container seals, biometric user authentication devices (e.g., fingerprints), and non-intrusive inspection equipment (e.g., X-ray screening stations). The section also elaborates modern ways for sharing information among stakeholders that are concerned about security of the supply chain. The CASSANDRA compendium is available for download: www.cassandra-project.eu. Review by Toni Männistö (CBRA)

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Full review: Chapter 8 includes some interesting details and insights about modern visibility and security technologies, many of which are relevant especially for CORE demonstrations but also for other work packages such as WP2 (SCS controls), WP7 (CORE Connectivity Infrastructure and Solutions Development Environment) and WP8 (CORE Ecosystem).

Many large logistics operators have developed own supply chain visibility systems to coordinate and organise logistics operations. A large logistics service provider, Kühne+Nagel uses its KN login visibility system that allows the company to optimise its complex global operations in terms of speed, time-certainty, security and cost-efficiency and many other relevant metrics. DHL, a German-based international express courier and logistics company, uses its LOGIS software for its operations. Previous EU projects have also developed visibility systems, for example Smart CM SICIS (Shared Intermodal Container Information System).

These visibility systems enable fast response to most operational contingencies that are about cause deviations from original plans. For instance, if a shipper got instant information about a stolen container, a new delivery could be quickly arranged and the consignee could be informed as soon as possible about the reshipment. Moreover, the visibility systems often interface ITC systems of other key stakeholders in the international supply chains. Customs, for example, receive advance cargo information (ACI) automatically from these systems.

The second part of the chapter 8 focuses exclusively on security technologies. The review starts with description of security sensors that are designed to detect tampering, unplanned detours, and other suspicious events in the supply chain. The modern sensor technologies sense at least changes in lighting, acceleration, location (geo-fencing functionality), motion and CO2 levels (used, e.g., to detect stowaways inside shipping containers). The chapter introduces modern user authentication technologies (e.g., fingerprints, face, retina, hand geometry and other unique biometric characteristics). Some information is provided regarding non-intrusive screening solutions that are often considered to be necessary for fast and secure screening operations. The rest of the chapter discusses various technical and institutional solutions for exchanging security-relevant information among supply chain operators and relevant government agencies. Especially interoperability of ICT systems seems to be crucial for effective security efforts in the global supply chains. The CASSANDRA compendium is available for download: www.cassandra-project.eu. Review by Toni Männistö (CBRA)

Reference

Hintsa, J. and Uronen, K. (Eds.) (2012), “Common assessment and analysis of risk in global supply chains “, Compendium of FP7-project CASSANDRA, Chapter 8

CORE2007

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Review of TAPA TACSS – Air Cargo Security Standards, 2012 (CORE1045)

April 27, 2016/0 Comments/in CORE-Observatory, EU, High-value goods, NGO, Other-cluster, Risk management, Risk-cluster, Road, Standards, Supply chain security, TAPA, TAPA, Theft, WP12, WP14, WP15, WP16, WP17, WP19, WP22, WP3, WP4, WP5, WP7 /by Vladlen Tsikolenko

Summary: TAPA TACSS – Air Cargo Security Standards (TACSS) is a certifiable security program for the air cargo industry to close down, as much as possible, all risks for high value freight whilst being handled and transported on the ground. Available to General Public at the TAPA Website, this standard is hyperlinked here: https://www.tapaemea.com

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Full review: The Transported Asset Protection Association (TAPA) is a self-funded industry group comprising of manufacturers, shippers, logistics providers and law enforcement agencies that share the objective to eliminate loss of product by criminal act. The theft of high value, high risk products moving in supply chains in Europe costs businesses in excess of € 8.2 billion a year.

Although the focus of TAPA is to stop the unauthorized removal of items from the logistics chain, many of the methods used by criminals to achieve this are entirely relevant to the other security threats seen within the industry. E.g. unauthorized entry, deception techniques, tampering of shipments etc. TAPA has created a number of certifiable security standards:

FSR (Freight Security Requirements)
TSR (Trucking Security Requirements)
PSR (Parking Security Requirements)
TACSS (TAPA Air Cargo Security Standards)

The latter one, TACSS is a set of security standards designed specifically for Air Cargo Handling Facilities. It takes into account the mode of operation of such terminals often having open doors, and yet often operating inside a secure area within an airport, behind a fence. By providing comprehensive requirements and a certification scheme for the protection of air cargo whilst being transported on the ground, TAPA hopes to provide its own members and industry partners with viable options for improving and/or maintaining an effective air cargo security program.

There are two levels to the Standard. Level 1 & Level 2, with 1 being the higher level of security, and the decision of which Level to certify against is decided by risk assessment which takes into account the geographical location of the facility and crime levels in the area. Certification is by Independent Validator against a checklist and valid for 2 years.

Detailed analysis of 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. Among all Work Packages of the project, some are directly impacted by the project, while others are solely primarily or secondarily contributed. Among these Work Packages, 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 following Work Packages are directly impacted by the TACSS initiative:

WP7: CORE Connectivity Infrastructure and Solutions Development Environment – provide an integrated set of tools for developing solutions for the Demonstrators in line with SCSRF utilizing results from reference projects particularly e-Freight and ICargo.
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. In this demonstrator, TAPA TACSS and mutual recognition with the US will become evident.

The following Work Packages are primarily affected by TAPA TACSS, as airfreight is part of global supply chain:

WP14: Demonstrator FALACUS – FastLAne through CUStoms – implement an extensive supply chain of ceramics products along international corridors between Italy and USA.
WP15: Decathlon Demonstrator – operational and security related Key Performance Indicators (KPIs) within the CORE framework will be applied to monitor the overall level of security within the supply chain for different supply chain actors Taiwan to retail shop destinations across Europe implementation of this new transit modality and the impact it would have on the overall performance of the supply chain.
WP19: 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.

The TACSS Initiative could also help with the following Work Packages, with the following secondary effects:

WP3: Multi-method Threat and Vulnerability Analysis (MTVA) Suite
WP4: SC Situational Awareness Tools & Maps
WP5: Real-time Lean Agile Resilient Green Optimized (LARG+O) SC
WP16: ENI Demonstrator
WP22: Analysis and Testing of a Secure Hybrid Composite Container

CORE Impact anticipation: CORE seeks to give consolidated solutions and develop the resilience, optimization and interoperability of the global supply chain, including Port, Container, Post, Truck, Rail, Maritime and Air. Air freight is thence a part of the global vision of CORE. TAPA TACCS contributes thence directly to CORE vision. Impact?

Cross-references: Air Cargo World on TAPA TACSS and air cargo crimes: www.aircargoworld.com

Full citation: TAPA EMEA Website, TACSS Page, accessed 23 September 2014: https://www.tapaemea.com

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Review of TRANSPark truck parking service (CORE1041)

April 27, 2016/0 Comments/in App, CBRA, CORE-Observatory, Counter-terrorism, EU, Global, IRU, IRU, NGO, Road, Supply chain security, Theft, Transport carrier, Video /by Vladlen Tsikolenko

Summary: As a response to the increasing security concerns surrounding goods transport by road, the IRU Membership has been providing information on safe and secure truck parking areas to road hauliers and truck drivers for more than two decades. Since the early 1990s, this information was disseminated in the form of a printed handbook. In 2007 the online website was launched. In 2013 a smartphone app was launched. Currently initiatives are taken to encourage the use of TRANSPark globally. It does not have much documentation available, except promotional fliers and the website and the app themselves. Available to the General Public at: http://www.iru.org and through the Android and iPhone TRANSPark app, which can be downloaded from the stores. Overall relevance to CORE is high, as truck transports constantly risk being attacked by organised crime with the aim to either steal fuel, cargo or potentially even to use a truck for terrorist purposes. Therefore, ensuring that trucks are parked at safe and secure truck parking areas is essential for drivers, road hauliers, shippers and other stakeholders involved in supply chain security.

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Full review: The current strengths include: Bringing information on safe and secure truck parking areas to drivers and road hauliers; Offering a driver-haulier-shipper-enforcement social network, enabling info sharing on latest road cargo related security threats; and providing flexible platform with expected future expansions to further ensure information sharing between key road haulage actors. Future opportunity is: Using this established communication channel for two-way information sharing with truck drivers, road hauliers, shippers and enforcement. And future threat is: The success of this community, as any other, depends strongly on the uptake by users.

Detailed analysis and relevance for CORE: The CORE implementation objectives depend on securing every element of the supply chain, and ensuring swift information sharing between different actors. TRANSPark could be relevant to following Work Packages:

Research and Analysis: TRANSPark-relevant information could contribute to understanding the amount of crime against road hauliers on roads, such as fuel theft and cargo theft.
Demonstrators: TRANSPark webservice and app(s) could be made available to the CORE demonstrators. Certain TRANSPark functionalities could be amended to suit CORE developments better, in all demonstrators where trucks need to take a rest or stay at truck parking areas.

CORE Impact anticipation: CORE could have a strong impact on future developments of the TRANSPark webservice and the app. The service is constantly evolving and is looking for new ways to improve security of the road haulage for drivers, hauliers, and other relevant stakeholders.

App and video:

Available to General Public at: http://www.iru.org and through the Android and iPhone TRANSPark app, which can be downloaded from the stores.

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

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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

CORE1040

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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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A Decade of GAO’s Supply Chain Security Oversight, 2015 (CORE1113)

April 22, 2016/0 Comments/in Academic, All transport modes, Authorized Economic Operator, CBRA, CORE-Observatory, Corruption, Counter-terrorism, Customs, Customs risks, Data quality, Data sharing, Document forgery, Dual-use goods, EU, GAO, ISO28000, IT, Known Consignor, Mutual Recognition Agreement, Optimization, Police, Prohibited goods, Regulated Agent, Restricted goods, Risk management, Scanning, Scientific, Screening, Strategic goods, Supply chain security, TAPA, Tax evasion, Terrorism/destruction, Tracking, Trade facilitation, Trafficking, Transport security agency, Trusted Trader, USA, Violence, WP1, WP17, WP19, WP2 /by Vladlen Tsikolenko

Summary: The US Government Accountability Office (GAO) is an independent government watchdog organization that has been publishing many reports on the US government’s supply chain security initiatives over the past ten years. This article reviews 25 most relevant GAO’s reports that discuss strengths, weaknesses and future challenges of the US policies and regulations on supply chain security. The review findings reveal interesting facts about similarities and differences of the US and the EU approaches to supply chain security. This comparison opens new venues for further Transatlantic benchmarking as well as harmonisation and mutual recognition of supply chain security programs. This review was conducted as part of European FP7-Project CORE. The reviewed document is available for download here: https://hicl.org. Review by Toni Männistö (CBRA)

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Full review: The GAO reports suggest that the US administration has been struggling with effective performance monitoring and auditing of its supply chain security initiatives. The reports indicate that there is some confusion about costs of security initiatives for the government and for the business community. There is also a lack of common understanding about the actual benefits of many of these programs. The GAO reports also urge US government officials to adopt risk-based approach to supply chain security, for example to use information and intelligence to assess risk levels of specific shipments, people, trading companies, and other entities, and then employ security solutions that are commensurate to the risk level. The GAO reports also emphasize the importance of involving the industry in the process of defining new policies and regulations.

Altogether, the review team found that the GAO documents are not only highly relevant for SCS management and governance but also of high quality. The study concludes that it might be useful for the EU to establish a quality-assurance organization similar to the US GAO. This new EU body would oversee spending of the EU and its member states on supply chain security programs and projects and this way improve efficiency of such investments.

Reference: Männistö, T., and Hintsa J., (2015), “A Decade of GAO’s Supply Chain Security Oversight,” Proceedings of the Hamburg International Conference in Logistics (HICL), September 24-25, 2015, Hamburg

CORE1113

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Interviews

Interview with Mr. Warwick on global security profession

May 20, 2016/0 Comments/in All transport modes, ASIS, Authorized Economic Operator, CBRA, EU, Global, Interviews, Risk management, Supply chain security, WP19 /by Vladlen Tsikolenko

20.5.2016: CBRA had the pleasure to interview Mr. Roger Warwick, who has over 40 years of hands on experience in the European and global security industry.

Hi Roger, and thanks for joining a CBRA interview. Can you first tell a bit about yourself, and your professional background?

I have been active in corporate security for over forty years with a background in both fraud investigations and security consulting. I studied economic crime investigative techniques at Jesus College, Cambridge annual workshops from 1990 to 1995 and certified CPP – protecting people, property and information – in 1999. I am British but for most of my career I have been based in Italy providing services to international corporations with business interests in Italy and Italian organisations operating in other countries. I am a frequent speaker at international security conferences on security and investigations topics.

We first met around 2005 in a CEN, European Committee for Standardization, supply chain security expert group – under CEN/BT/WG161, Protection and Security of the Citizen. I think you joined as the representative of UNI, the Italian Organization for Standardization – do you recall the good old days?

I certainly do. We were discussing a European response to the US C-TPAT and similar supply chain security programs in an attempt to find a unifying, user friendly system, for the secure international flow of goods – beyond the Customs driven EU AEO program. Following that I did more work regarding standards and qualified with RabQsa, now trading as Exemplar Global, as a Lead Auditor for security management systems, including ISO28000 and then as a certified Skill Examiner. By the way I audited, for ISO 28000, the DP World port in Peru. In 2013, on behalf of the Italian Government I developed a Critical Infrastructure Organisational Resilience standard that was later published by UNI.

You are also active in international security organizations and associations, including ASIS International. Can you tell bit more about them?

ASIS is a worldwide association of security professionals, first launched in the US in 1955. It has today over 38,000 members around the globe of which 3,000 in Europe. I put in a lot of work with the ASIS to get the association on the quality management standards track. I am a member of the Standards and Guidelines Commission which has already developed a number of security and organisational resilience standards, which are ISO compliant, including PSC1, Management System for Quality of Private Security Company Operations, which has been adopted by ICoCA, the International Code of Conduct Association for private security operations. We will soon begin to work on a Security Awareness -standard. My role in ASIS in Europe, is to the Chair of the EC Liaison Sub Committee, our aim being the promotion and consolidation of the voice of the security profession and security professionals within the EU.

Your main day job is with Pyramid International and with the TEMI Group, is that correct? Can you tell more about these companies, and the services you offer to your clients?

I am the CEO of Pyramid International ( www.pyramid.it ) which has been based in Italy for over 30 years. It is a corporate security and investigations organisation, which caters mainly for multinational corporations. We have grown to become the security point of reference for corporations trading in southern Europe. In 2008 I formed, together with long term colleagues and friends, each operating in their own jurisdiction around the world, Temi Group ( www.temigroup.com ), which has grown to be what we call the World’s furthest reaching security partnership. Recently we set up TGI, the Temi Group International Verein in Geneva, of which I am proud to be the Chairman. Our individual companies are each members of TGI and each is specialised in various security sectors and geographical areas. Pyramid International, together with Temi Group partners, is the coordinator of our Travel Risk Management services which are now active across the world, in particular Africa and Asia. We provide both management assistance and protective services. Our motto is “Safety for staff abroad means peace of mind for management at home.” We are founder members of ICoCA and have rapidly become a market leader for European companies; our customers are amongst Europe’s largest engineering corporations. They are well aware of the importance of duty of care and operating with organisations, such as ours, that not only are experienced and competent but are also certified and appropriately insured.

Well, good catching up with you Roger, and thanks a lot for the interview. Maybe we could start looking for opportunities regarding joint projects in the future, what do you think?

Thank you Juha very much for the opportunity. That would be great. Although we have moved on from protecting goods in the supply chain to the protection of people travelling and working abroad there are many affinities and I am sure that there are many projects we could work on together, in our usual productive manner!

Web resources:

CPP: https://www.asisonline.org

Exemplar Global: www.exemplarglobal.org

UNI Critical Infrastructure Organisational Resilience standard: http://catalogo.uni.com

ICoCA, the International Code of Conduct Association for private security operations: http://icoca.ch/

Pyramid International: www.pyramid.it

Temi Group: www.temigroup.com

MoU between HEC UNIL and CBRA

March 4, 2016/0 Comments/in CBRA, EU, Global, Interviews, No-cluster, Supply chain security, WP19 /by Vladlen Tsikolenko

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

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

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

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

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

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

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

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

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

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

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!

Updates on Customs brokers, by Ms. Carol West

January 30, 2016/0 Comments/in All transport modes, CBRA, Compliance management, Coordinated border management, Customs, Customs risks, Demo-cluster, EU, Exporter, Freight forwarder, Global, Importer, Interviews, Other-cluster, Shipper, Supply chain security, Trade facilitation, USA, WP1, WP10, WP11, WP12, WP13, WP14, WP15, WP16, WP17, WP19, WP6, WP9 /by Vladlen Tsikolenko

Hi 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.

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The displacement effect in cargo theft (Ekwall 2009)

Review of TAPA TACSS – Air Cargo Security Standards, 2012 (CORE1045)

Review of TRANSPark truck parking service (CORE1041)

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

Interviews

Interview with Mr. Warwick on global security profession

MoU between HEC UNIL and CBRA

Professor Guido Palazzo on illicit waste supply chains

Updates on Customs brokers, by Ms. Carol West

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