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First results from the WCO Cancun AEO benefit survey

In today’s CBRA Blog we provide a sneak preview of the outcomes of the AEO Benefit survey carried out by CBRA research team at the 3rd Global WCO AEO Conference, in Cancun, Mexico, 11-13 May 2016.

We keep today’s Blog very simple. First, we would like to introduce a new test-categorization of Customs granted AEO benefits, with the following five groups:

  1. More streamlined / simplified Customs (and related) procedures
  2. Less frequent interventions by the Customs administration
  3. Increased priority over non-AEO companies (“getting to the front of the queue”)
  4. Increased (positive) attention by the Customs administration
  5. Increased number of other privileges granted by the customs administration

And second, we list the AEO benefits from our survey (only question 2 in the survey form, which focuses explicitly on Customs granted benefits to the supply chain companies, and not benefits for Customs themselves, or any kind of “side benefits” for the companies) under each of the five categories. The order of the benefits per category is based on the survey outcomes, i.e. the first bullet point benefit was the most common one in the survey, followed by the second bullet and so forth. Please note that there are no ranking indications between the five groups, neither when it comes to the groups per se, nor to the individual benefits – these will be included in our academic publications, bit later this year…

Group 1. More streamlined / simplified Customs (and related) procedures

  • Enjoying increased paperless processing of import/export shipments
  • Enjoying an access to / pre-qualification with various simplified customs procedures
  • Enjoying having a reduced number of data elements in the (final) declaration
  • Enjoying having entry/exit summary declarations with reduced data sets
  • Enjoying easier access to other governmental certification in the supply chain (e.g. in aviation security)

Group 2. Less frequent interventions by the Customs administration

  • Enjoying minimum number of cargo security inspections
  • Enjoying the option of audit-based / account-based controls (versus only transaction-based controls)
  • Enjoying access to self-audit or reduced audit programs

Group 3. Increased priority over non-AEO companies (“getting to the front of the queue”)

  • Enjoying priority use of non-intrusive inspection techniques when examination is required
  • Enjoying a priority status in Customs processing during a period of elevated threat conditions
  • Enjoying priority response to requests for ruling from Customs
  • Enjoying expedited processes to resolve post-entry or post-clearance inquiries
  • Enjoying priority treatment of consignments if selected for control
  • Enjoying preferential treatment at border crossings in post-disaster/post-attack situations
  • Enjoying a priority status in exporting to affected countries after a security incident

Group 4. Increased (positive) attention by the Customs administration

  • Privilege to deal with designated Customs contact points / assistance by Customs supply chain security experts
  • Privilege to receive training provided by Customs experts
  • Privilege to be notified of the intention to release goods prior to their arrival (“pre-clearance”)
  • Enjoying special treatment in some non-criminal legal cases
  • Privilege to exploit “extended Customs office opening hours”, during high peak / congestion times

Group 5. Increased number of other privileges granted by the Customs administration

  • Enjoying from tax privileges, such as speedier tax refunds and compensation
  • Enjoying the option to manage clearance formalities, inspections etc. at the business site
  • Enjoying from financial guarantee waivers, reductions or rebates
  • Privilege to self-manage the bonded warehouses
  • Enjoying tangible benefits due to mutual recognition agreements / arrangements (MRAs) with 3rd countries
  • Privilege to choose the place of controls (if selected for control)
  • Enjoying reductions on some Customs fees or charges
  • Privilege to conduct self-assessments when Customs automated systems are not functioning

And that’s about it! Please be reminded again that this CBRA Blog is just a first scratch on the surface to start publishing results from the WCO Cancun 2016 AEO conference… And by the way, we are also working to publish the results from the WCO Madrid 2014 AEO conference, as we have been waiting to publish the full results of the both conferences in a parallel manner / in a same paper. In the meanwhile, please email us any feedback, ideas and/or criticism regarding this Blog!

In Lausanne, 8 June 2016, CBRA Blog Dr. Juha Hintsa

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PS. Our earlier Blog with all the WCO Cancun 2016 AEO survey questions can be read at: http://www.cross-border.org/2016/05/08/aeo-benefits-or-no-benefits-thats-the/

PPS. Related literature by the Cross-border Research Association team and key partners:

Most of these papers are available for download at ResearchGate, https://www.researchgate.net/profile/Juha_Hintsa/publications . And all of them can be naturally requested by email ( cbra@cross-border.org )

Hintsa, J., Mohanty, S., Rudzitis, N., Fossen, C. and Heijmann, F. (2014), “The role and value of customs administrations in minimization of socio-economic negative impacts related to illicit import flows in freight logistics systems- three preliminary cases in Europe – FP7-CORE”, Proceedings of the 9th WCO PICARD Conference, September 17-19, 2014, Puebla.

Hintsa, J. (2013), AEO – MRA Study for RTC- Thailand Europe Cooperation TEC-II, PDSC: Implementation of international standards on Supply Chain Security leading to a secure Trade Environment and to increased Trade Facilitation (Activity Code : TRA 4), Final Report, Bangkok.

Urciuoli, L. and Ekwall, D. (2012), “Possible impacts of supply chain security certifications on efficiency - a survey study about the possible impacts of AEO security certifications on supply chain efficiency”, Proceedings of Nofoma Conference, June 6-8, 2012, Naantali.

Hintsa, J., Männistö, T., Hameri, A.P., Thibedeau, C., Sahlstedt, J., Tsikolenko, V., Finger, M. and Granqvist, M. (2011), Customs Risk Management (CRiM): A Survey of 24 WCO Member Administrations, Study for World Customs Organization (WCO), February 28, 2011, Lausanne

Hintsa, J., Hameri, A.P., Männistö, T., Lazarescu, M., Ahokas, J. and Holmström, J. (2010), ”Conceptual model for measuring benefits of security in global supply chains”, Proceedings of the the 3rd International Conference on Transportation and Logistics (T-LOG), September 6-8, 2010, Fukuoka City.

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, January 15, 2010

Gutiérrez, X., Hintsa, J., Wieser, P. and Hameri, A.P. (2007), “Voluntary supply chain security program impacts: an empirical study with BASC member companies”, World Customs Journal, Vol. 1 No. 2, pp.31-48.

Gutierrez, X. and Hintsa, J. (2006), “Voluntary supply chain security programs: a systematic comparison”, Proceedings of the International Conference on Information Systems, Logistics and Supply Chain (ILS), May 15-17, 2006, Lyon.

Hold on, before blaming it on the OGAs!

It is common since many years already that the global customs community is pointing their “blaming finger” to other government agencies – OGAs – when it comes to identifying root causes behind too long cargo release times at sea ports and other border crossing points, high costs for importers and exporters to conduct international trade, and so forth. Now, without denying this as a plausible scenario, the CBRA research team proposes to take one step backwards, by first building a solid framework for analyzing and deeply understanding what is actually happening at the borders with Customs and all the other agencies, before rushing to conclusions on “who is to be blamed for poor / expensive cross-border performance…”. Therefore - for both educational purposes (FP7-CORE, work package 19.1) and for analytical purposes (Border Agency Cooperation study with the Organization of Islamic Cooperation, OIC), we have produced the following “universal border control task list” - naturally understanding that a perfect single universal list cannot exist. The list is first exploited during April-May 2016 in the OIC Embassy survey (here in Switzerland), to explore who is responsible for specific cross-border controls in various OIC member countries, and to what extent customs is performing tasks on behalf of other (border) agencies. Later, we plan to use the this as a “de-facto border agency control check-list” in our future studies, across the globe.

Again, the first step before analyzing which agencies to blame, is all about understanding what are the typical cross-border control tasks all about, considering all three task categories:

  • Border control tasks which typically cover all commodities;
  • Border control tasks which typically focus on specific commodities; and
  • Other border agency control areas.

 

Now, lets go through all three of them, starting with the first one, and followed by the other two:

Border control tasks which typically cover all commodities:

  • Calculation and collection of indirect border taxes:
    • customs duties
    • sales / value added taxes
    • excise taxes
  • Calculation and collection of other import/ transit/ export fees and taxes (e.g. environmental fee at export)
  • Compilation of trade statistics

Border control tasks which typically focus on specific commodities:

  • Control of import quota restricted products
  • Calculation and granting of export subsidies
  • Control of product safety / conformity of goods / trading standards (please separate agencies per product category, if necessary)
  • Control of food, drinks, cigarettes, pharmaceuticals (including for general health and safety purposes)
  • Control of energy related materials / products (e.g. oil and coal, could be for export taxation purposes etc.)
  • Enforcement of intellectual property rights / fight against copyright infringements / anti-counterfeit
  • Control of plant diseases, pests and extraneous species (i.e., phytosanitary controls)
  • Animal quarantine and controls (i.e. veterinary controls, including pet controls)
  • Control of any biohazards (including deliberate ones)
  • Control of CITES protected species (i.e. endangered fauna and flora)
  • Control of natural resources under license requirements, harvesting quotas etc. (including specific fish, wood, minerals, diamonds etc.)
  • Control of cultural artifacts (stolen / looted, and/or illicitly traded)
  • Control of any stolen goods (including vehicles, machinery, cargo etc.)
  • Fight against drugs / illicit narcotics trafficking (including pre-cursors)
  • Control of waste flows (including those in the Basel Convention on transboundary movements)
  • Control of dual use / strategic goods
  • Control of dangerous goods / hazardous materials
  • Control of explosives and weapons:
    • explosives (including pre-cursors)
    • small arms and light weapons
    • defense / war materials
  • Control of nuclear and radioactive materials

Other border agency control areas:

  • Conveyance / cargo transport security and safety controls:
    • for maritime, including sea ports
    • for aviation, including airports
    • other modes: road, rail, inland waterways etc.
  • Traveler, crew and immigration controls:
    • visa and passport controls
    • trafficking of human beings and people smuggling
    • asylum seekers
    • passenger cars and vehicles in terms of temporary admission
  • Control of weight of cargo (including for road safety purposes)
  • Cash controls (cash smuggling and counterfeit currency)
  • Cyber security (customs and supply chain IT systems, critical infrastructure IT etc.)

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Dear CBRA Blog and CBRA Monthly readers: we kindly invite your inputs to make the list more comprehensive / better in the future, so please send us an email with your ideas, to cbra@cross-border.org . And thanks already now to the multiple experts from national Customs administrations and international organizations for your valuable help so far– it has been great working with you on all these studies, keeping them as pragmatic as possible… (detailed acknowledgements will be published later). And it goes without saying that soon we will start looking on the next-step aspects on customs versus other government agencies, in the context cross-border supply chain costs and delays – please stay tuned for more!

Three calls for journal and conference papers

This CBRA Blog advertises three important calls for papers in 2016: Special Issue for Journal of Transportation Security (to be published in 2017); the 11th WCO Customs-Academia PICARD Conference (Sep.2016); and the 7th European Intelligence and Security Informatics Conference (Aug.2016).

 

1. Journal of Transportation Security, Special Issue: Enhancing supply chain security through government-to-government and government-to-business partnerships and collaboration

Journal of Transportation Security (JTRS): The 9/11 terrorist attacks and the subsequent events have compelled stakeholders to understand transport security as more than a single element of the global networks that move people and goods. Once a routine component of modern transportation, security now represents a vital necessity and an urgent national priority. The Journal of Transportation Security probes the relevant aspects of many critical areas of study, including supply chain and logistics; information technology; public policy; international business; political science; engineering; transportation; economics; and counterterrorism, among others. This journal is the first to take a global, apolitical, and in-depth multidisciplinary look at the field. The mission of the journal is to disseminate new research, thought, and analysis for teachers, researchers, policy makers and practitioners around the world who view transportation security as a critical element in the post 9/11 world.

Partnerships and collaboration play a crucial role in the fight against crime in the global supply chains. Investments in traditional security areas such as physical security, personnel security, and IT security no longer suffice. Both government and business actors should extend their security efforts beyond their organizational boundaries, by fostering relationships with each other. Further government-to-government and government-to-business collaboration has a great potential to improve security of the supply chain and regulatory compliance of the trading community, while facilitating trade and logistics for the legitimate, security aware companies. The scope of collaboration covers a broad range of activities, including sharing of information and data; investing in common resource pools and sharing resources; and agreeing on optimum protocols for conducting inspections and audits in the supply chains. Enhancing the information exchange, for example, would help governments and companies to prevent and detect security breaches in supply chains and to recover faster once the breaches happen. In principle, both government and business actors share a common goal of mitigating crime in the global supply chains. Priorities and procedures, however, differ markedly between various business actors (e.g., shippers, carriers, freight forwarders) and government agencies (e.g., customs, police and transport security authorities).

Call for abstracts for the JTRS Special issue is open until 30 September 2016, please visit: www.springer.com ...   

(CBRA / Dr. Juha Hintsa is the lead guest editor for this special issue; and abstract review panel consists of multiple experts in FP7-CORE project).

 

 

2. The 11th Annual WCO Picard Conference - Manila, Philippines - 27-29 September 2016

The World Customs Organization and the Philippine Bureau of Customs are pleased to announce the 11th annual WCO Picard Conference. You are invited to submit your research for presentation at the conference. Papers should focus on Customs or, more globally, the regulation, dynamics, and practices of international trade. Although not required, writers could consider submitting research on the following topics: Digital Customs; security; taxation and other revenue matters; and illicit trade.

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Call for papers is open until 15 June 2016, please visit: www.wcoomd.org...

(CBRA / Dr. Juha Hintsa is part of the Scientific Board for the conference; and he also belongs to the PICARD Advisory Group).

 

 

 

3. The 7th European Intelligence and Security Informatics Conference (EISIC) - Uppsala, Sweden – 17-19 August 2016

Intelligence and Security Informatics (ISI) research is an interdisciplinary field of research that focuses on the development, use, and evaluation of advanced information technologies, including methodologies, models and algorithms, systems, and tools, for local, national and international security related applications. Over the past decade, the ISI research community has matured and delivered an impressive array of research results that are both technically innovative and practically relevant. The 2016 European ISI Conference is the seventh ISI conference to be organized by the European ISI community. The conference was first held in 2008 and has been organized annually since 2011.

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Call for papers is open until 18 May 2016, please visit: http://www.eisic.eu/call.aspx

(CBRA / Dr. Toni Männistö delivers a keynote presentation on FP7-CORE, focusing on Supply chain security education and training (CORE WP19.1) ).

FP7-CORE Education – Two new diagrams

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.

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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.

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

Revisiting the Yemen bomb plot of 2010

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Bibliography:

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

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

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

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

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

CBRA Blog by Dr. Toni Männistö

Border Agency Cooperation, Part 3 of 3

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)

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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 Department 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 11th, 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.

Border Agency Cooperation, Part 2 of 3

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

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

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

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

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

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

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

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

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

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

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

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

 

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

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

Border Agency Cooperation, Part 1 of 3

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

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

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

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

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

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

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

Chemical Security in Istanbul

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

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

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

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

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

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

 

Cheers, Juha Hintsa

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

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

CORE-Observatory

Supply chain security culture: measure development and validation, 2009 (CORE1200)

Summary: Supply chain security culture (SCSC) is as an overall organizational philosophy embracing norms and values that keep employees vigilant when performing supply chain security practices. The article presents a scale that makes possible to gauge supply chain security culture and its correlation to organization’s ability to respond to unexpected disruptions. Employees are asked to assess two topics: security strategy of the company and impacts of significant supply chain breech to business operations. According the study improved supply chain security culture makes company more resilient against major disruptions. This research helps executives to justify their expenditures on security efforts. The reviewed document can be purchased here: http://dx.doi.org.

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

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.

Estimating the Operational Impact of Container Inspections at International Ports (Bakshi et al. 2011)

Summary

The US government is pushing a new 100 % screening regime for US-bound containers in foreign ports to mitigate the risk of weapons of mass destruction entering US soil. The 100 % regime, however, is a major concern for foreign port operators because the current Container Security Initiative (CSI) regime seems not to be scalable for high inspection rates. The paper of Bakshi et al. (2011) simulate impacts of two container inspection regimes (the CSI and a new one) in terms of port congestion, handling cost and dwell time. To carry out the simulation, the authors use discrete event queuing network simulation with real container movement data from two of the world’s busiest container terminals. The analysis shows that cargo inspections many times disrupt optimized logistics processes at seaports. In particular, inspections extend the transportation leadtime because shipments lose time as they (i) are moved to an inspection site, (ii) queue for inspection to start, (iii) pass inspections themselves. Download the abstract here: http://pubsonline.informs.org.

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

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

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)

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

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)

MARITIME SECURITY – DHS Progress and Challenges in Key Areas of Port Security, GAO, July 2010 (CORE1064)

Summary: This GAO report analyses the progress the US Department of Homeland Security (DHS) has made in maritime supply chain security over the past five to ten years. The report raises problems that the DHS and its component agencies – the Coast Guard and the Customs and Border Protection (CBP) – have encountered regarding improvement of risk management, reduction of the vulnerability to threats of small vessels, implementation of security assessment in foreign ports, and the overall progress in supply chain security.  The report states that so far the Coast Guard has carried out risk assessments, but their results do not allow effective comparison and prioritization of risks across ports. The Coast guard has also identified points of vulnerability related to waterside attacks by small vessels, reached out to the general public to encourage recreational sailors to report anomalies, started tracking of small vessel, tested equipment to screen small vessels for nuclear material and conducted security maneuvers such as vessel escorts. Nevertheless, resource constraints and technical problems prevent the Coast Guard to protect the US coastline and maritime infrastructure from small-vessel threats effectively. Moreover, the Coast Guard has been assessing security in foreign ports, but the lack of the agency’s resources and certain countries’ reluctance to collaborate with the US authorities have slowed down the global security assessment. Finally, as for the general supply chain security, the DHS has been running the Secure Freight Initiative (SFI) in foreign ports to test the feasibility of the 100% scanning of US-bound shipping containers with non-intrusive inspection (NII) technologies and radiation detection equipment. The findings of the SFI pilots indicate that the 100% scanning is not a feasible policy because it would disrupt port logistics, damage international trade and raise healthy concerns, among other things. The report is available for download at: www.gao.gov/assets/660/659087.pdf.

AVIATION SECURITY – Progress Made, but Challenges Persist in Meeting the Screening Mandate for Air Cargo, GAO, March 2011 (CORE1062)

Summary: This GAO report reviews the recent progress of the US air cargo security scheme. The Transportation Security Administration (TSA), the main agency responsible for the US air cargo security, has been working towards the implementation of the 100% screening requirements of the 9/11 Commission Act of 2007. So far TSA has set up a voluntary Certified Cargo Screening Program (CCSP) to allow trusted logistics operators to screen air cargo outside congested airports, launched a program for testing technologies for air cargo screening and expanding its program for approving explosive detection dog teams. The main obstacle in meeting the 100% screening requirement is that TSA has no reliable mechanism for verifying screening data from domestic foreign screening operators, which self-report the data. TSA also struggles in finding resources to employ as many transport security inspectors as it is required to oversee the Certified Cargo Screening Program. The report also points out that the current technologies that TSA has approved for cargo screening cannot screen large cargo units – pallets or unit loading devices (ULDs) – and this incapability reduces speed and cost-efficiency of air cargo screening. Overall, this GAO document provides a general outlook on state and challenges the US air cargo security regime, and therefore those CORE demonstrations that focus on the US-bound or US-origin air transport should consider the report as a key source material. The report is available for download at: www.gao.gov/assets/130/125678.pdf.

TRANSPORTATION SECURITY INFORMATION SHARING – Stakeholder Satisfaction Varies; TSA Could Take Additional Actions to Strengthen Efforts, GAO, June 2014 (CORE1020)

Summary: This report presents and discuses findings of a survey on stakeholders’ satisfaction to the US Transportation Security Administration’s security-related activities and to the way the TSA disseminates information about its activities. The survey’s scope is the overall US transportation system, covering aviation, rail, and highway modalities and transport of passengers and freight. Given the broad scope and the US-centricity of the survey, this report is not very relevant for CORE. The education and training cluster could anyhow learn how security-related user satisfaction surveys are done and how to establish a mechanism for collecting regular user feedback. The report is available for download at: http://gao.gov/assets/670/664350.pdf.

MARITIME SECURITY – Progress and Challenges with Selected Port Security Programs, GAO, June 2014 (CORE1019)

Summary: The report provides a comprehensive review of progress and challenges of various port security activities and programs the Department of Homeland Security (DHS) has carried out since 9/11. In essence, the report is a summary and an update of a number of more detailed GAO reports on maritime supply chain security. The report states that needs to strengthen further its efforts on maritime domain awareness through intensified communication among maritime stakeholders. Regarding the US domestic port security, the report recommends DHS to reassess its Port Security Grant Program (PSGP) that allows ports to request funds for security projects and to improve quality of vulnerability assessment in US ports. The report also urges DHS to overcome challenges of risk-based targeting and scanning of US-bound shipping containers.  The findings and recommendations of this report help CORE consortium understand the current state of the US maritime security regime. This understanding benefits particularly the demonstrations of WP9 and WP14. Also educational and training as well as risk clusters of CORE may find the report’s information useful. The report is available for download at: www.gao.gov/assets/670/663784.pdf.

MARITIME SECURITY – Progress and Challenges in Key DHS Programs to Secure the Maritime Borders, GAO, November 2013 (CORE1018)

Summary: This report is a summary of previous GAO reports on US maritime supply chain security and border controls. The report focuses on progress and challenges in four main areas of the Department of Homeland Security’s (DHS) activity on the maritime security. The report highlights that DHS and its component Coast Guard agency could improve its maritime domain awareness through increased information sharing and more advanced vessel-tracking systems. The Customs and Border Protection (CBP) in turn could step up its role in securing US-bound container traffic by conducting more frequent risk assessment audits in key foreign ports that ship cargo into the US and by fostering more close relationship with foreign authorities. The GAO report also recommends the Coast Guard to rethink its maritime surveillance, interdiction and security operations because current protection and support is not adequate in high priority locations. The report also calls for more collaboration and coordination among maritime authorities, port operators and ocean carriers. Finally, the report encourages the DHS to develop performance metrics and data collection procedures the agency uses to assess and monitor its maritime security programs and activities. This report gives a recent update on the US maritime security activities that might be helpful for CORE demonstrations and clusters. The report is available for download at: www.gao.gov/assets/660/659087.pdf.