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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.

FP7-CORE Education – Two new diagrams

March 10, 2016/0 Comments/in All transport modes, Blog, CBRA, Corruption, Counterfeiting, Customs, Customs risks, Cybercrime, Demo-cluster, Document forgery, Dual-use goods, Environmental agency, Environmental crime, Exporter, Express courier, Fraud, Freight forwarder, Global, Hijacking, Human trafficking, Identity theft, Importer, Mail operator, Manufacturer, Money laundry, Other-cluster, Phytosanitary agency, Police, Prohibited goods, Restricted goods, Retailer, Risk management, Risk-cluster, Shipper, Socio-economic impacts, Strategic goods, Supply chain security, Tax evasion, Terrorism/destruction, Theft, Trafficking, Transport carrier, Transport security agency, Violence, Warehouse keeper, WP10, WP11, WP12, WP13, WP14, WP15, WP16, WP17, WP18, WP19, WP3, WP4, WP9 /by Vladlen Tsikolenko

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

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

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

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

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

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

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

Border Agency Cooperation, Part 3 of 3

February 20, 2016/0 Comments/in All transport modes, Blog, CBRA, Coordinated border management, Counter-terrorism, Customs, Customs risks, Data sharing, Demo-cluster, Environmental agency, Exporter, Freight forwarder, Global, Human trafficking, Importer, IT-cluster, Manufacturer, Mutual Recognition Agreement, Phytosanitary agency, Police, Retailer, Risk management, Risk-cluster, Scanning, Screening, Shipper, Single window, Supply chain security, Tax evasion, Terrorism/destruction, Trade facilitation, Trafficking, Transport carrier, Transport security agency, WP10, WP11, WP12, WP13, WP14, WP15, WP16, WP17, WP2, WP3, WP6, WP9 /by Vladlen Tsikolenko

The last blog in our three-part series on Border Agency Cooperation introduces a conceptual framework capturing the essential dimensions of Border Agency Coordination: three levels of collaboration, four areas of integration and four objects for sharing. We hope that the framework helps the customs and other border agency communities to see all levels of Border Agency Cooperation (BAC) so that they can move from isolated coexistence towards more active cooperation at the borders. Higher levels of cooperation are likely to translate into higher levels of trade facilitation, control over cross-border cargo flows and resource efficiency, simultaneously. Compared with the previous BAC Blog Part 2, this BAC Blog Part 3 intends to present a comprehensive framework surrounding BAC ambitions, plans, implementations and monitoring activities – while the previous BAC Bloc 2 focused purely on a set of 15 key BAC actions, grouped according to the main beneficiary groups. This final BAC Blog has been written by Dr. Toni Männistö of CBRA.

Let’s start by first presenting the BAC diagram: Conceptual framework on Border Agency Cooperation (source: Männistö, T., and Hintsa J., 2015; inspired by Polner, 2011 and by Institute of Policy Studies, 2008)

Levels of cooperation

Intra-agency cooperation is about aligning goals and work within one organization, either horizontally between departments or vertically between headquarters and local branches, in particular border-crossing offices / stations. Ways to foster horizontal intra-agency cooperation include development of intranet networks, cross-training, inter-departmental rotation of staff, and establishment of joint task forces that tackle multifaceted challenges like transnational terrorism. Ideally, the vertical cooperation would be bi-directional: headquarters would define priorities and objectives and then communicate them to local branches. The branches would, reciprocally, send back status reports and suggest improvements to the general policies. Solving intra-agency cooperation lays a basis for broader cooperation: it’s hard for any organization to cooperate efficiently with external stakeholders if it struggles with internal problems. The logical first step in coordinated border management is therefore breaking departmental silos and building a culture of cooperation within boundaries of one organization.

Inter-agency cooperation, at the operational level, concerns relationships among a broad range of border agencies that play a role in controlling cross-border trade and travel. In many countries, primary agencies present at the borders include customs, border guards, immigration authorities and transport security agencies. However, also police organizations, health authorities, and phytosanitary and veterinary controllers, among others, take part in border management. According to a recent study, typical areas of customs- border guard inter-agency cooperation can include strategic planning, communication and information exchange, coordination of workflow of border crossing points, risk analysis, criminal investigations, joint operations, control outside border control points, mobile units, contingency/emergency, infrastructure and equipment sharing, and training and human resource management (CSD, 2011). Governmental inter-agency cooperation occurs between border control agencies and ministries and policy making bodies that are responsible for oversight and financing of border management activities.

International cooperation may take place locally at both sides of a border. One Stop Border Posts, OSBPs – border crossings managed jointly by two neighboring countries – are prime examples of such cooperation. One Stop Border Posts can involve various forms of collaboration: harmonization of documentation, shared maintenance of the infrastructure, joint or mutually recognized controls, exchange of data and information and common investments in infrastructure and so forth. Operational arrangements between the Norwegian, Finnish and Swedish customs illustrate advanced international cross-border cooperation that save time and money of border control authorities and trading companies. The cooperation builds on division of labor, where the national border authorities of each country are allowed to provide services and exercise legal powers of their home country and neighboring countries. For instance, when goods are exported from Norway, all paperwork related to both exports and imports may be attended by either Swedish, Finnish or Norwegian customs office (Norwegian Customs, 2011). At the political level, this requires international cooperation between authorities and policy makers in two or more countries. Operational cooperation (e.g., mutual recognition of controls or regional Single Window), often bringing tangible trade facilitation benefits, usually follows from political, supranational decisions (e.g., the WCO’s Revised Kyoto Convention and SAFE Framework of Standards).

Areas of integration

Technical integration often entails improving connectivity and interoperability of information and communication technology systems within and across organizations. Single Window solutions are typical outcomes of technical cooperation as they enable automatic exchange of electronic trade information among border control agencies. The UN Centre for Trade Facilitation and Electronic Business, UN/CEFACT, is an important international organization helping to build connectivity across countries and between business and governmental stakeholders. UN/CEFACT, for instance, develops and maintains globally recognized standards for EDI messages.

Operational integration is largely about coordination of inspection and auditing activities among border control agencies. Benefits of synchronized activities are evident: organizing necessary controls at one place and at the same time reduces delays and administrative burden that trading companies and travelers face at borders. A simple and powerful example of operational integration is coordination of opening hours and days of customs offices at the both sides of a border. Operational integration also covers provision of mutual administrative assistance, joint criminal investigations and prosecution, and sharing of customs intelligence and other information.

Legislative integration seeks to remove legal barriers and ambiguities that prevent border control agencies from exchanging information, sharing responsibilities or otherwise deepening their cooperation. Essentially, most forms of Border Agency Coordination require some degree of legislative harmonization and political commitment. For example, Article 8 of the WTO/TFA to the WTO Members requires that national authorities and agencies responsible for border controls and dealing with the importation, exportation and transit of goods must cooperate with one another and coordinate their activities in order to facilitate trade.

Institutional integration is about restructuring roles and responsibilities of border controls agencies. An example of a major restructuring is the annexing of US border control agencies – including the US Customs and Border Protection, Transportation Security Administration and Coast Guard – into the Depart ment of Homeland Security, DHS, a body that took over the key governmental functions involved in the US non-military counter-terrorism efforts in the aftermaths of the September 11^th, 2001, terrorist attacks.

Objects of sharing

Sharing of information – data, knowledge and intelligence – reduce duplicate work (e.g., sharing of audit findings), enable operational coordination (e.g., synchronized border controls) and facilitate development of common agenda for future border agency coordination. At the global level, the WCO’s Customs Enforcement Network CEN is an example of a trusted communication system for exchanging information and intelligence, especially seizure records, between customs officials worldwide. Another WCO initiative, the Globally Networked Customs, analyzes potential to further “rationalize, harmonize and standardize the secure and efficient exchange of information between WCO Members” (WCO 2015).

Resource sharing involves multi-agency joint investments in equipment, facilities, IT systems, databases, expertise and other common resources. The joint investment activities are likely to result in higher resource utilization and bulk purchasing discounts. For example, national and regional Single Window solutions are often outcomes of joint development and investment activities of various government agencies.

Sharing of work is mostly about rationalization of overlapping border control activities, controls and formalities. If two border control agencies, for instance, agree to recognize each other’s controls, there is no need to control the same goods more than once. Combining forces to investigate and prosecute crime also often help border control agencies to use their limited resources more efficiently.

Sharing of responsibilities is about coordinating and streamlining administrative and control tasks among border control agencies. Norway, again, sets a good example of sharing the responsibilities. The Norwegian customs represents all other border control agencies – except the veterinary office – at the frontier. Customs officers are responsible for routine border formalities, and they summon representatives of other border control agencies as and when the officers need assistance. Internationally, the Norwegian customs cooperates closely with Swedish and Finnish border control authorities at the Northern Scandinavian border posts. Bilateral agreements between its neighbors allow Norwegian customs officers authority to perform most customs checks and formalities for and on behalf of their Swedish and Finnish colleagues. The coordination decreases border-crossing times and lowers administrative costs for trading companies and the border control agencies in the three countries.

This concludes now our three-part series on Border Agency Cooperation. In Part 1, we shared 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. In Part 2, we presented a conceptual BAC model with 15 key actions to improve the degree of cooperation in a given country or region – for the direct benefit of supply chain companies, or government agencies, or both. And in this Part 3, we finally presented our comprehensive BAC framework, which hopefully helps government policy makers and border agencies to design, implement and monitor their future BAC programs and initiatives in an effective and transparent manner. Toni Männistö and Juha Hintsa.

Bibliography:

Center for the Study of Democracy (CSD), 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.

Institute of Policy Studies 2008, Better connected services for Kiwis: a discussion document for managers and front-line staff on better joining up the horizontal and vertical, Institute of Policy Studies, Wellington, NZ.

Männistö, T., and Hintsa J., “Theory of Border Agency Cooperation”, CBRA working paper 2015, Lausanne, Switzerland.

Norwegian Customs, 2011. Case Study on Border Agency Cooperation Submitted by Norway for the November Symposium.

Polner, M. (2011). Coordinated border management: from theory to practice. World Customs Journal, 5(2), 49-61.

United Nations Conference on Trade and Development (UNCTAD), 2011 Border Agency Coordination”, UNCTAD Trust Fund for Trade Facilitation Negotiations Technical Note No. 14.

CORE-Observatory

Analytical method to identify the number of containers to inspect at U.S. ports to deter terrorist attacks (CORE1204)

November 11, 2016/0 Comments/in Academic, All transport modes, Analytic, Coordinated border management, CORE-Observatory, Customs, Customs risks, Dangerous goods, Demo-cluster, Dual-use goods, Environmental agency, Global, High-taxed goods, Investigations, Organized crime groups, Phytosanitary agency, Police, Prohibited goods, Restricted goods, Risk management, Risk-cluster, Scanning, Scientific, Screening, Socio-economic impacts, Strategic goods, Supply chain, Supply chain security, Trafficking, WCO, WP1, WP3 /by Vladlen Tsikolenko

Summary: The requirement for 100% container scanning has been a burning topic, since U.S. Department of Homeland Security issued the initiative in order to prevent terrorists from smuggling weapons of mass destructions into the U.S. The paper explores how much it is reasonable to come down from the 100% inspection rate, if deterrence and cost of retaliation are considered in the model. Deterrence means the power to dissuade an attacker from attempting to smuggle weapons as opposite to use coerce or compel. Retaliation cost describes the cost incurred by an attacker e.g. due to dismantling the attacker’s network. It is assumed the defender discloses in advance how many containers are inspected. The paper can be viewed here: https://www.researchgate.net.

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Full review: The study provides an economical model based on the game theory to estimate the optimal inspection rates in order to deter perpetrators from smuggling weapons into the U.S. The model assumes the customs or Border agency aims at minimizing the expected damages and cost of inspections while perpetrators are simultaneously trying to maximize their rewards. The used parameters are number of attackers, estimated damages, the cost of inspecting a container, the cost of a smuggling attempt, the cost of retaliation and the probability of detecting weapons. Retaliation cost describes the cost incurred e.g. due to dismantling the attacker’s network. Cost of a smuggling attempt are the costs of acquiring, developing or manufacturing the weapons, and any logistical costs required to smuggle them into the U.S. It is assumed the government agency announces publicly the inspection level and set of retaliation policies. Retaliation policy must pose a credible threat that means the governmental agency would retaliate even if that were not economically justified.

The study has four main limitations. First, the paper does not describe under what conditions the model works well or poorly. The quality of strategic and tactical intelligence, the efficiency of criminal investigation and prosecution processes, the extent of inter-agency cooperation and information sharing, the degree of private sector involvement and successfulness of awareness campaigns on retaliation policies are probably factors that influence on the model and its parameters. Second, the study does not provide numerical estimates to the parameters such as detection rates and cost of retaliation. Third, it is very unlikely that weapons of mass destructions are transported in containers into the U.S., what makes it difficult to assess the usefulness of the model in real life cases. Forth, costs of retaliation are not calculated and published by law enforcement agencies, thus criminals cannot make decision based on financial risks.

Despite of these limitations the CORE project can adapt the game theory and benefit from the paper. Traditionally law enforcement agencies highlight the number of seizures, arrests and successful prosecutions to measure operations and their impacts. The presented model brings two interesting components, a cost of crime attempt and a cost of retaliation. If criminal activities are financed and managed based on the same principles like legal ones, expected losses due to seizures of illicit goods or drugs are very likely calculated in the criminal business models. Consequently, making criminal business unprofitable is key to stop criminal activities. The approach enables to model the dynamic between costs and rewards from viewpoints of both law enforcement and criminal actors. In the other words, the model makes possible to study two dimensions in the Innovation Agenda, societal costs and friction costs caused by implemented security measures.

Reference: Bier, Vicki M. & Haphuriwat, N. (2011). Analytical method to identify the number of containers to inspect at U.S. ports to deter terrorist attacks. Annals of Operations Research, 187(1), 137–158.

CORE1204

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Global supply chain design considerations: Mitigating product safety and security risks (Speier et al. 2011)

June 30, 2016/0 Comments/in Academic, All transport modes, CBRA, CORE-Observatory, Counter-terrorism, Demo-cluster, Freight forwarder, Global, IT, Manufacturer, Optimization, Other-cluster, Retailer, Risk management, Risk-cluster, Scientific, Shipper, Supply chain security, Terrorism/destruction, Theft, Transport carrier, USA, WP10, WP11, WP12, WP13, WP14, WP15, WP16, WP17, WP19, WP2, WP3, WP9 /by Vladlen Tsikolenko

Summary

There is a broad consensus among supply chain professionals that supply chain disruptions are very bad for business: supply chain glitches commonly lower operational performance and reduce shareholder value. Regardless of this, there is surprisingly little research on supply chain design strategies that have the highest potential to mitigate the risk of disruptions. Based on interviews with 75 US-based managers, an industry survey and a case study, Speier et al. (2011) identify types of SCS strategies and examine how contextual factors influence business managers to select a set of SCS design strategies. They argue that the depth and breadth of security initiatives depend mainly on top management mindfulness, operational complexity, product risk and coupling. The abstract is available at: http://www.sciencedirect.com.

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

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Full review

The paper of Speier et al. (2011) is quite theoretical and it has therefore only a limited impact on CORE work. It is useful for people for the CORE demonstrators to be aware of various supply chain design strategies and factors that support their selection. All in all, the paper introduces an interesting table that shows what supply chain factors typically affect selection of certain supply chain design strategies (see table below). The paper also includes a useful discussion about the nature of supply chain security risks. The authors point out that supply chain security covers risks of contamination, damage and destruction of products or other supply chain assets, and that these risks may arise from intentional or unintentional activities.

Reference

Speier, C., Whipple, J. M., Closs, D. J., & Voss, M. D. (2011). Global supply chain design considerations: mitigating product safety and security risks. Journal of Operations Management, 29(7), 721-736.

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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. 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

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CASSANDRA compendium. Private sector perspectives on risk management (Ch. 5) and crime prevention and security management in supply chains (Ch. 6)

June 8, 2016/0 Comments/in All transport modes, Authorized Economic Operator, CBRA, CORE-Observatory, Corruption, Counter-terrorism, Counterfeiting, Customs, Customs risks, Cybercrime, Deliverable, Document forgery, Environmental crime, Exporter, FP7, Fraud, Freight forwarder, Global, Hijacking, Human trafficking, Identity theft, Importer, Manufacturer, Money laundry, Other-cluster, Police, Retailer, Risk management, Risk-cluster, Shipper, Supply chain security, Tax evasion, Terrorism/destruction, Theft, Trade facilitation, Trafficking, Transport carrier, Transport security agency, Trusted Trader, Violence, Warehouse keeper, WP18, WP19, WP2, WP3, WP4 /by Vladlen Tsikolenko

Summary: Chapters 5 & 6 of the CASSANDRA compendium provide a general overview on supply chain security risk management from the private sector perspective. Explaining the essentials of supply chain risk management, Chapter 5 introduces commonly used risk management models and tools (e.g., risk matrices and risk registers), discusses various classifications of supply chain risks, and elaborates current trends of risks and risk management in the supply chain context. Chapter 6 focuses on specific challenges of supply chain security risks – the risks that arise from intentional, man-made criminal activities such as terrorism, theft, trafficking, and sabotage. The chapter explains a few early classifications of supply chain security risks (e.g., motive-based typology and taxonomies based on private sector perspectives). Following the classifications of security risks, the chapter puts forth a few models for managing security risks in the supply chain context (e.g., the 8-layer model for supply chain security management). The chapter concludes with a detailed case study on security management of an international security company and a comparison of supply chain security management and the total quality management (TQM) management philosophy. The CASSANDRA compendium is available for download: www.cassandra-project.eu. Review by Toni Männistö (CBRA)

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Full review: Previous observatory entries have already shown the relevance of the CASSANDRA compendium to the community of supply chain management professionals. The compendium’s chapters 5 & 6 give a brief summary of risk management and security risk management in the context of international supply chains. The contents of the chapters are relevant and useful for people involved in FP7 CORE project, especially for those involved in work packages 3 (Multi-method Threat and Vulnerability Analysis Suite) and 4 (SC Situational Awareness Tools & Maps).

Chapter 5 elaborates a set of common supply chain risk management tools. The model of Waters (2007) summarises rather obvious three steps of the risk management process: identifying risks, analysing risks and responding to risks. The model proposes, for example, that managers can identify supply chain risks through analysis of past events, collection of opinions, and through operational analysis. The model also calls for managerial attention to prerequisites of successful risk management – mutual trust, cooperation and information exchange among relevant stakeholders involved in supply chain management – and highlights importance of continuous monitoring and controlling the risk management process. The chapter concludes with the four classic approaches to risk management: risk avoidance, risk reduction, risk transfer (e.g., insurance and contractual agreements), and acceptance. The classifications of supply chain risks include typologies focusing on risk sources (natural hazards operational failure and terrorism), risk consequences (e.g., risk to operations, risk to reputation and risk to profits), and objects of vulnerability (e.g., information, materials, personnel and financial flows).

The chapter on crime prevention and security management (Ch. 6) in supply chains provides a concise summary on supply chain security management from the private sector perspective. The chapter starts by describing some early classifications of supply chain security risks. A motive-based taxonomy classifies such risks into the three categories: economic crime (profit as motive), other crime types (ideological, emotional and other reasons as motive) and facilitating crime that covers activities that do not bring direct crime benefits but help committing other rewarding crime crimes later on. (e.g., document fraud, bribery and use of intimidation). The chapter’s next section elaborates ways to mitigate security risks in the global supply chains, highlighting the key ideas of the so-called 8-layer model for supply chain security management (the model incorporates multiple aspects of risk assessment, hands-on design and planning, implementation of a variety of technologies, procedures, and incentives as well as preparation for dealing with the consequences of supply chain crime). The chapter provides also a case study with an international tobacco company that runs high security risk supply chain operations. The section also contrasts, rather interestingly, principles of security management against the fundaments of the total quality management (TQM) management philosophy. The chapter continues with a brief review of regulations (e.g., EU customs security and aviation security regulations) and standards on supply chain security management (World Customs Organization’s SAFE framework of standards, and industry standards of the Transported Asset Protection Association).

Reference

Hintsa, J. and Uronen, K. (Eds.) (2012), “Common assessment and analysis of risk in global supply chains “, Compendium of FP7-project CASSANDRA, Chapters 5 & 6

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PORT SECURITY GRANT PROGRAM, Risk Model, Grant Management, and Effectiveness Measures Could Be Strengthened, GAO, November 2011 (CORE1060)

May 26, 2016/0 Comments/in Analytic, CBRA, CORE-Observatory, Counter-terrorism, Demo-cluster, GAO, Global, Government, Maritime, Risk-cluster, Sea port, Supply chain security, Terrorism/destruction, USA, WP14, WP3, WP9 /by Vladlen Tsikolenko

Summary: The Department of Homeland Security (DHS) has granted almost 1.7 billion USD to port security through the Port Security Grant Program (PSGP). The program is administered by a component agency of DHS, Federal Emergency Management Agency (FEMA). This GAO reports highlights some problems that the grant program has encountered. The first issue is that the risk assessment the FEMA uses to assess risk levels and assign grants to different ports does not take into account how security improvements affect the vulnerability of the ports to terrorist attacks. The report recommends the FEMA to design a vulnerability index that accounts for security improvement and to coordinate with the Coast Guard to get access to the most accurate vulnerability and threat information. The second issue with the grant program is that much of the grant money does not get used and translate into practical port security projects. The GAO report proposes acceleration of the grant granting process with updated administrative procedures and with more administrative staff. Finally, this GAO report recommends the FEMA to develop performance metrics to assess its administration in relation to the Port Security Grant Program. The contents of this GAO report is not very relevant to CORE because no US seaports are partners in the project. The report is available for download at: www.gao.gov/assets/590/587142.pdf.

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Full review: This document has only a limited relevance for CORE because the consortium does not involve any US seaport operators. The demonstrations of WP9 and WP14 that cover shipping of goods from and into the US through local seaports might find it useful to learn about how US ports can apply for funds to improve the security. Otherwise, other demonstrations do not benefit much of this information. However, the CORE’s risk cluster can benefit from the rather detailed description of the risk analysis model in the report’s Appendix II.

Cross-references:

Maritime Security: Actions Needed to Assess and Update Plan And Enhance Collaboration among Partners Involved in Countering Piracy off the Horn of Africa. GAO-10-856. Washington, D.C.: September 24, 2010.
Critical Infrastructure Protection: Update to National Infrastructure Protection Plan Includes Increased Emphasis on Risk Management and Resilience. GAO-10-296. Washington, D.C.: March 5, 2010.
Quadrennial Homeland Security Review: 2010 Reports Addressed Many Required Elements, but Budget Planning Not Yet Completed. GAO-11-153R. Washington, D.C.: December 16, 2010.

Additional keywords: Critical infrastructure protection (CIP), maritime security and security of supply, Port Security Grant Program (PSGP)

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SUPPLY CHAIN SECURITY – CBP Needs to Enhance Its Guidance and Oversight of High-Risk Maritime Cargo Shipments, GAO, January 2015 (CORE1059)

May 26, 2016/0 Comments/in Analytic, CBRA, Coordinated border management, CORE-Observatory, Counter-terrorism, Customs, Customs risks, Data quality, Data sharing, GAO, Global, Government, IT-cluster, Maritime, Risk management, Scanning, Screening, Sea port, Supply chain security, Terrorism/destruction, Trade facilitation, USA, WP10, WP11, WP19, WP3, WP4, WP9 /by Vladlen Tsikolenko

Summary: The report reviews the US Customs and Border Protection’s (CPB) approach to risk assessment and targeting of maritime shipping containers. The report’s highlights that CPB does not have clear decision rules and reporting procedures to monitor percentage of containers that the risk assessment system flags high-risk and that get eventually examined. The source of this problem is that the CPB’s officials (targeters) may waive examination of the high-risk containers if the container (i) falls within a predetermined category (standard exception), or (ii) the targeters can articulate why the shipment should not be considered high risk. The targeting units have currently differing definitions of “standard exceptions” and differing views on what constitutes the “articulate reasons.” The GAO report recommends the CPB to clarify, harmonize and enforce the rules and the procedures for waiving the high-risk containers from examination. As for CORE, this report provides a detailed and recent outlook on the US maritime risk assessment and targeting scheme, and this information is going to support work of the CORE’s risk cluster and the demonstrations that involve shipping of sea containers into the US. The report is available for download at: www.gao.gov/assets/670/668098.pdf.

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Full review: This GAO reports contains crucial information about the US risk assessment and container targeting systems that benefit the CORE’s risk cluster. The report outlines principles, procedures, datasets and scanning methods that constitute the world’s most advanced risk assessment system for maritime shipping containers. The CORE’s IT cluster might also benefit from the report’s description of the CPB’s Automated Targeting System (ATS) that is used to compute risk scores for shipping containers and flag the ones with the highest score as high-risk. Regarding the CORE demonstrations, the GM demon (WP19) must comply with data requirements (24-hour rule and the “10+2” rule) that enable the US risk assessment and targeting system. Also the demos involving customs controls, especially WP11.2 and WP10.1, may learn something from the ways how the US border control authorities are assessing risk levels of incoming containers.

Cross-references:

Supply Chain Security: CBP Needs to Conduct Regular Assessments of Its Cargo Targeting System. GAO-13-9. Washington, D.C.: October 25, 2012.
Maritime Security: Progress and Challenges in Key DHS Programs to Secure the Maritime Borders. GAO-14-196T. Washington, D.C.: November 19, 2013.
Supply Chain Security: Feasibility and Cost-Benefit Analysis Would Assist DHS and Congress in Assessing and Implementing the Requirement to Scan 100 Percent of U.S.-Bound Containers. GAO-10-12. Washington, D.C.: October 30, 2009.

Additional keywords: Security Filing and Additional Carrier Requirements (known as the 10+2 rule), 24-hour rule, risk assessment

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MARITIME SECURITY – Ongoing U.S. Counterpiracy Efforts Would Benefit From Agency Assessments, GAO, June 2014 (CORE1017)

May 26, 2016/0 Comments/in Africa, Analytic, Capacity building, CORE-Observatory, Customs, Demo-cluster, GAO, Government, Hijacking, Maritime, Other-cluster, Police, Risk management, Risk-cluster, Supply chain security, Transport carrier, USA, WP10, WP11, WP13, WP14, WP15, WP19, WP3, WP4, WP9 /by Vladlen Tsikolenko

Summary: This GAO report explains how the US government agencies have fought sea piracy around the Horn of Africa and at the Gulf of Guinea since 2010. The report also describes the current state of sea piracy threats in these two areas, and it urges US government agencies to reconsider their resource allocations, strategies and tactics related to the counterpiracy efforts. The report points out that the number of annual piracy incidents at the Gulf of Guinea has surpassed the yearly incidents off the Horn of Africa. This shift in pirate attacks prompt changes in the US counterpiracy operations. However, as the report points out, the US government agencies responsible for the counterpiracy activities have not recently conducted reassessments of their actions, despite the changing conditions. The report therefore recommends the US government agencies to re-evaluate the counterpiracy efforts, especially at the Gulf of Guinea that is becoming the most important hotspot of the international sea piracy. This GAO report provides information about modern sea piracy from which CORE’s maritime demonstrations might benefit. The report is available for download at: www.gao.gov/assets/670/664268.pdf.

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Full review: This GAO report delivers a comprehensive analysis of the current state of sea piracy at the two African hotspots and the US government’s counterpiracy efforts. This information benefits those CORE demonstrations that involve maritime shipping. The detailed description of the US counterpiracy efforts might also inspire the risk cluster to find effective and efficient risk-based solutions to protect maritime logistics and transport from sea piracy.

Cross-references:

Maritime Security: Federal Efforts Needed to Address Challenges in Preventing and Responding to Terrorist Attacks on Energy Commodity Tankers. GAO-08-141. Washington, D.C.: December 10, 2007.
Maritime Security: Actions Needed to Assess and Update Plan and Enhance Collaboration among Partners Involved in Countering Piracy off the Horn of Africa. GAO-10-856. Washington, D.C.: September 24, 2010.

Additional keywords: Maritime security, sea piracy

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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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Interviews

Interview with Mr. Thorsten Neumann on TAPA EMEA

June 21, 2016/0 Comments/in All transport modes, CBRA, Exporter, Freight forwarder, Global, High-value goods, Importer, Interviews, Manufacturer, Retailer, Risk management, Risk-cluster, Shipper, Supply chain security, TAPA, Theft, Transport carrier, Warehouse keeper, WP3, WP4, WP5 /by Vladlen Tsikolenko

21.6.2016: Today’s CBRA Interview is with Mr. Thorsten Neumann, from TAPA EMEA and Microsoft.

Hey Thorsten, can you first tell a bit about yourself and what you do?

Hey Juha, thanks for the opportunity to give an interview for the CBRA. First of all, my name is Thorsten Neumann, and I’m the chair of the Transport Assets Protection Association TAPA Europe, Middle East and Africa. I’m leading the board of directors in EMEA and I am the representative in the TAPA Worldwide Council. Furthermore, I’m the director for channel security management at Microsoft within the ANTIPIRACY services department, and I’m leading all our risk management-related Original Equipment Manufacturer (OEM) and Volume Licensing (VL) efforts inside our company. I’m in charge of business resilience, as well.

Can you tell more on TAPA EMEA: What are your main activities in the field of supply chain security?

Since TAPA was founded in 1997 in the US by four major global manufacturing companies, the organization has transformed into a completely new business model. And what we mainly do is, that we connect the dots within the end-to-end supply chain security world. In TAPA EMEA, we have people who are experts in various technologies, industries and countries. If you take a look what we’ve achieved in the last ten to twenty years, you can see that our security certification model has been very successful. It is today one of the most important pillars within the TAPA organization globally. The certification program covers mainly the Freight Security Requirements (FSR) and the Truck Security Requirements (TSR). We are now also working on new Parking Security Requirements (PSR). We also offer a lot of other services and systems, like the Incident Information Service (IIS) that provide tremendous benefits to our members. TAPA is involved in regulatory affairs, as well: we are interacting with the European Commission, the United Nations, the World Customs Organization and other great institutions – they all see us as the leading industry association fighting cargo theft in the global supply chain.

How would you describe both the benefits and challenges of conducting industry-academia research in the field of supply chain security?

Considering the ongoing TAPA-CBRA work, I think increased transparency and the opportunity to identify and fix the weakest security links in the supply chain are the main benefits. I do strongly believe in proactive partnerships with research experts who are capable of identifying and analysing return on investment linked to the great work we are doing as an association. I trust on CBRA’s professional skills and their outstanding network. I’m convinced that, with inputs from TAPA members, CBRA will build the most robust model possible for estimating the total cost of cargo theft. From the study point of view, I’m looking forward to work with you guys.

Can you elaborate a bit on the “Total Cost of Cargo Theft” study background and the expected outcomes of it?

In the first kick-off phase, we try to estimate the total cost of cargo theft in all three TAPA regions – EMEA, Americas and APAC. This study gives us a unique, global overview on the total cost of cargo theft and estimates on various cost components that account for the total cost. I’m proud to work together with CBRA, the Borås University in Sweden and Texas A&M in the US. The plan is also to engage the Singapore Institute for Materials Management (SIMM) in the study.

The background and motive of this study is the following: we are operating in a very competitive business environment, and therefore security managers need to justify and explain budget that they spend on cargo security. With this study, we could underline how dramatic impact cargo theft has not only on company profits but also on the entire economy of a country. If you take a look on what is happening right now for example in Germany, Italy, Netherlands, France, but also in South Africa, Brazil, Malaysia and so forth, you realize the seriousness of modern cargo crime. The study would give us the analytical background and results we need to sell what we do also to the government, to our own companies, to the CEO, CFO, but also of course the WCO, as one of the driving factors of fight against criminals within the supply chain.

Thanks a lot for this interview, Thorsten! By the way, HEC University of Lausanne Executive MBA students learn every spring about the latest & greatest in supply chain security management, including from “TAPA activists” like our buddy Gilad…. Maybe next year you could also join as a guest lecturer at the UNIL eMBA class?

I would be really happy and proud to be a guest lecturer at your university. This fits quite nicely my current activities as I’m already running lectures at the University in Bremen. Count me in and see you in the class room next year. Thanks!

Interview with Dr. Vittoria Luda di Cortemiglia

March 21, 2016/0 Comments/in All transport modes, Capacity building, Corruption, Counterfeiting, Customs, Cybercrime, Document forgery, Environmental agency, Environmental crime, Fraud, Global, Human trafficking, Identity theft, Interviews, Investigations, Judicial system, Money laundry, Other-cluster, Phytosanitary agency, Police, Prohibited goods, Restricted goods, Risk management, Risk-cluster, Socio-economic impacts, Supply chain security, Tax evasion, Terrorism/destruction, Trafficking, Transport security agency, UN, Violence, WP18, WP19, WP3, WP4 /by Vladlen Tsikolenko

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Mr. Mike Ellis, INTERPOL, on illicit trade and counterfeiting

February 10, 2016/0 Comments/in All transport modes, Capacity building, CBRA, Counter-terrorism, Counterfeiting, Customs, Customs risks, Fraud, Global, High-taxed goods, High-value goods, INTERPOL, Interviews, Manufacturer, Organized crime groups, Police, Safety, Shipper, Socio-economic impacts, Tax evasion, Terrorism/destruction, Theft, Trafficking, WP10, WP11, WP12, WP13, WP14, WP15, WP16, WP17, WP18, WP3, WP4, WP9 /by Vladlen Tsikolenko

Today’s CBRA Interview is with Mr. Mike Ellis who is the Assistant Director of Illicit Trade and Anti-counterfeit Sub-crime Directorate at INTERPOL, Lyon, France.

Hi Mike, can you first tell a bit who are you and what you do?

I am the Assistant Director for Police Services at INTERPOL, based in Lyon France. INTERPOL is the world’s largest international police organization. Our role is to assist law enforcement agencies in our 190 member countries to combat all forms of transnational crime. We work to help police across the world meet the growing challenges of crime in the 21st century by providing a high-tech infrastructure of technical and operational support. Our services include targeted training, expert investigative support, specialized databases and secure police communications channels. I am responsible for the coordination of all activities related to illicit trade, smuggling of illicit goods and counterfeiting for the organization and police forces within our 190 member countries. I lead a team of expert officers who are engaged in training, capacity building, and operational support who operate along with my analytical support who manage risk awareness and intelligence handling.

From your perspective, how bad is the current situation with counterfeit and other illicit trade in global supply chains? Can one for example see links between illicit trade and transnational organized crime groups; or, even terrorist organizations?

For many years the clear link has been established between the trafficking of illicit goods and transnational organized crime. Criminal organizations are attracted by the lucrative profits involved in trading counterfeit or fake goods, or in trading legitimate goods through illicit channels. The criminals involved manufacture and trade illicit goods on a regional and increasingly global scale. It is well documented that they use the profits to fund other criminal activities such as drug trafficking and people smuggling, and for investment into funding subversive political groups. Selling fake or counterfeit products is one aspect of illicit trade, as is selling genuine goods on the black market to avoid paying taxes. By avoiding regulatory controls, the criminals behind these activities peddle dangerous and illicit goods with a complete disregard for the health and safety of consumers. The phenomenon has grown to an unprecedented level, posing tremendous risks to society and the global economy. Counterfeiting harms businesses which produce and sell legitimate products, governments lose tax revenue from products manufactured or sold on the black market, and consumers are at risk from substandard products.

By the way, we met first time about one year ago in Lyon at an INTERPOL workshop linked to FP7-Project CORE. One of the main objectives of CORE-project is to develop leading edge education and training materials on supply chain security – for the benefit of law enforcement agencies, supply chain practitioners, and academics alike. Can you share your views about law enforcement – academia – industry cooperation in education material development, as well as in the broader field of supply chain security management?

One of our principle functions is capacity building and training. At INTERPOL we recognize that capacity building brings with it raised identification of the impact of illicit cross-border trade and counterfeiting and all our new operations, or established operations in new regions, are preceded by a capacity building workshop. The public domain is represented by police, customs, border control officials, and prosecutors, as well as representatives from various regulatory bodies including trading standards. In addition, INTERPOL TIGC, the Trafficking in Illicit Goods and Counterfeiting program which I am heading, has developed a Mentoring Program which aims to increase cross-border, cross-industry law enforcement operational interventions by: strengthening capacity to deal with all types of cross-border trafficking in illicit and counterfeit products. We have also developed an online International Intellectual Property Crime Investigator’s College and have built already a robust network of over 10.000 law enforcement officers, and partner stakeholders with specialist knowledge and skillset. This online training course provides specialist knowledge on transnational organized crime. It is aimed at all law enforcement officials, regulatory authorities and private sector investigators who are committed in the fight against illicit trade and intellectual property crime. We aim to provide crime professionals with specialist awareness and learning on the subject of transnational organized intellectual property, IP, crime, and illicit trade, by delivery of leading-edge training that meets international standards and allows crime investigators from any discipline to quickly identify other certified investigators. Through this learning platform we also facilitate cooperation between the public and private sectors in the fight against IP crime, and ensure all public and private sector crime investigators have a common understanding of the problems facing them, while being aware of each other’s competencies and roles. We seek to promote knowledge on what intervention strategies and tactics work, in order that all stakeholders are better able to work together in partnership in enforcement operations.

Thank you Mike for this highly interesting interview. It complements well our previous interviews on similar themes – with non-law enforcement experts including Mr. David Hamon and Mr. Tony Barone. CBRA and the whole FP7-CORE consortium, around 70 partners in total, wishes to continue the great cooperation in research and education material development with INTERPOL, throughout the CORE-project, until April 2018 – and beyond! Juha.

Criminalization of global supply chains, by Mr. Hamon

February 4, 2016/0 Comments/in All transport modes, CBRA, Counter-terrorism, Customs, Customs risks, Cybersecurity, Dual-use goods, Global, Interviews, Manufacturer, Money laundry, Organized crime groups, Other-cluster, Police, Prohibited goods, Restricted goods, Risk-cluster, Shipper, Strategic goods, Supply chain security, Terrorism/destruction, Trafficking, Transport carrier, Transport security agency, Violence, WP17, WP3, WP4 /by Vladlen Tsikolenko

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

I served in the US Army as a logistician, served with the United Nations Peacekeeping Department as well as work with the UN humanitarian organizations. I recently retired from a not-for-profit government contractor to pursue more creative work. Whilst at the latter position I was seconded to the US Defense Department, first in African Affairs, and then as Research and Studies Director for a strategic studies office within a US Defense Agency. I currently work, mostly independently, on a great many things related to future threats and re-defining of security/stability as it pertains and impacts diplomacy, development, defense, society, and economics/finance.

We met first time in Lausanne, Switzerland, around 2005 – what was that roundtable event again about?

Many years before cyber based terror threats were on the radar, we launched an inquiry into what we termed “Economic/Financial Terrorism” and whether security threats emanating from terrorism in the future would take the form of attacks on the Western system of finance and the economy. We brought in a host of experts from the US and Europe to debate the changing face of terrorism and likely goals of future terror groups. We examined everything from evolving ideology, motivation and intent, culture and identity to strategy, tactics, targets, weapons, and groups. It was an extremely interesting event with industry admitting – at the time – they were not prepared for this phenomenon and governments largely split on the issue. Additionally, experts and think tanks disagreed on whether economic terrorism was tangible. It was very forward-looking for its time. All participants came away with greater awareness on the subject as we went above and beyond what is currently called “financial crimes,” exploring potential kinetic based threats terror groups would use against the economic and financial machinery that included physical attacks on the supply chain, tourist industry, psychological undermining of the Western economic system to disrupt the normal provision of goods and services.

Can you tell more about your views on ´criminalization of global supply chains´?

I take similar views on the subject as Dr. Moisés Naim, in his 2005 book ‘Illicit: How smugglers, traffickers, and copycats are hijacking the global economy.’ He addresses several tenants that remain true today including the role of governments, technology, the Illicit traders mimicking licit trade and logistics actors – while simultaneously collaborating with many of them, and criminal groups seek high-profit opportunities as opposed to any other attribution (see CBRA Blog 21 October 2014). Terror groups care less about profit but when thinking about logistics networks, what if the two groups collaborated? Today logistics systems are more complex and move faster than ever in history, have less margin to fail, are far less ‘hands-on’ and offer many ways and places to hide illegal activity. Detection and interdiction of this activity isn’t exclusively in the realm of governments. Industry has a role to play if it wishes to minimize new regulations, taxes, deter corruption, and other drains on efficiency and profit. Experts, both public and private, rarely take a systems approach to detecting criminal activity with much throughput going undetected. Both parties want to specialize on one aspect and miss the big picture. A good example was the AQ Khan network. How long has it been since industry has undertaken an assessment of whether there is a new “Khan” network out there? Do trade organizations war-game with governments on criminality within supply chains?

Interesting! What are your views on ‘multi-commodity trafficking / crime portfolios’?

At the last corporate organization where I worked my team did some analysis on unregulated, illegal fishing as a security threat to Pacific Island nations. In the course of this analysis, we discovered it was the same actors doing the illegal fishing as doing illegal dumping, illegal smuggling, illegal trafficking, among other illicit activities. The criminality was only one aspect of the supply chain as the “demand” side as well as the delivery side was entirely legal and within businesses who conduct practically all business legally. The same boats as platforms – and their crews – were used to conduct all activity legal and illegal and to the local authorities – as well as donor nations attempting to help – it was impossible to project accurately when the activity would switch between licit and illicit. We couldn’t analyze if this was a regional or global phenomena but I guess it was a widely copied practice. As Anthony Barone has pointed out, border management and controls are not the panacea of containment but need to be part of a larger practice (see CBRA Interview 18 December 2015). Criminals use technology just as effectively! His idea of assembling a group of independent experts to rethink new approaches to border management – and I might add, redefining the meaning of borders and how thinking differently about borders per se – is a good start. Using strategic foresight come up with several alternative futures to present to a dedicated [supply chain] private-public partnership empowered to make changes would be my overarching recommendation

Sounds that the global supply chain community is facing increasingly more threats and risks! Any other suggestions on how to improve the situation, both short term and long term?

In the short term, as I mentioned, conduct a public-private-partnership exercise to rethink the concept supply chain surveillance for illicit activity and anticipating new and emerging illicit activity. In the long run, we don’t give enough thought to knowledge as a part of the supply chain. Using the supply chain for illicit activity begins with motivation and intent getting out in front of those who may do harm. To address alternative futures will take some innovation and creativity, but the stakes are high. The next AQ Khan Network may bring very bad things into Europe (and beyond!) compliments of ISIS. We don’t know what knowledge the current refugee population possesses that may be part of some future attack on the financial and economic system of the EU or if some refugees worked on chemical or biological programs in their countries of origin.

Thanks David for this interview – and let´s start working towards a joint project on these topics of common professional and research interest!

Web-links:

https://www.cross-border.org/2014/10/21/dr-naim-on-illicit-trade/

https://www.cross-border.org/interviews/new-approaches-to-border-management/

Posts

FP7-CORE Education – Two new diagrams

CORE-Observatory

Analytical method to identify the number of containers to inspect at U.S. ports to deter terrorist attacks (CORE1204)

Global supply chain design considerations: Mitigating product safety and security risks (Speier et al. 2011)

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

The displacement effect in cargo theft (Ekwall 2009)

CASSANDRA compendium. Private sector perspectives on risk management (Ch. 5) and crime prevention and security management in supply chains (Ch. 6)

PORT SECURITY GRANT PROGRAM, Risk Model, Grant Management, and Effectiveness Measures Could Be Strengthened, GAO, November 2011 (CORE1060)

MARITIME SECURITY – Ongoing U.S. Counterpiracy Efforts Would Benefit From Agency Assessments, GAO, June 2014 (CORE1017)

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

Interviews

Interview with Mr. Thorsten Neumann on TAPA EMEA

Interview with Dr. Vittoria Luda di Cortemiglia

Mr. Mike Ellis, INTERPOL, on illicit trade and counterfeiting

Criminalization of global supply chains, by Mr. Hamon

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