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Three new Senior Experts

November 19, 2016/0 Comments/in All partners, All transport modes, Authorized Economic Operator, Blog, Blog, Compliance management, Customs risks, Global, Investigations, Manufacturer, Risk management, Risk-cluster, Supply chain, Supply chain security, TAPA, Theft, WP1 /by Vladlen Tsikolenko

We have the pleasure to announce that the following three top experts in illicit trade and maritime security have recently joined the CBRA’s Consulting Team, as Senior Consultants: Ms. Vittoria Luda di Cortemiglia, Mr. Michael Ellis and Mr. Lars W Lorenzen. We work closely with them in monitoring new calls and preparing project proposals – and, once new projects are funded, they play a key role in executing the actual research, consulting and training work. In the meanwhile, each one of them carries out other “non-CBRA professional activities”. In today’s CBRA Blog we introduce all the three of them, by sharing their short bios below. Please do not hesitate to contact us in case you see interesting joint project opportunities in the future! Have a great weekend everyone, Juha.

Ms. Vittoria Luda di Cortemiglia, Senior Consultant, Illicit Trade and Human Trafficking, Italy

Ms. Luda di Cortemiglia is a senior researcher and consultant with extensive experience on various criminal justice and supply chain security issues at international level. Experience specifically includes applied research and analysis as well as project management and training for professionals, in the field of illicit trafficking and supply chain security, including trafficking in persons, trafficking in counterfeit products, illicit trade in precious metals, illegal waste trade and eco-crimes, cybercrime and misuse of technologies. After graduating in Law at the University of Turin, Italy, 1999, Ms. Luda di Cortemiglia obtained a Master degree in International Relationships and Diplomacy at St. John’s University, New York, USA, in 2001, joining the United Nations in October 2001. Until September 2016 she has coordinated the programs and activities of the Emerging Crimes Unit at the United Nations Interregional Crime and Justice Research Institute (UNICRI). She has acted as UNICRI Focal Point for the United Nations Crime Prevention and Criminal Justice Programme Network (PNI), and from 2009 until 2016 she represented UNICRI within the United Nations Inter-Agency Coordination Group against Human Trafficking (UN-ICAT).

Mr. Michael Ellis, Senior Consultant, Illicit Trade in Global Supply Chains, United Kingdom

Mr. Ellis has nearly 40 years of experience in law enforcement, coming from an operational policing background. He served with the London Metropolitan Police fighting against serious international and organised crime for 20 years, He was then engaged in the corporate security function in multinational firms, dealing with anti-counterfeit and illicit trade issues on a global basis for a further 16 years. Michael was with Universal Music, with IFPI, the music industry’s trade association, and with Beiersdorf. Most recently he was the Assistant Director of Police Services at INTERPOL and the Head of the INTERPOL Program on Traffic in Illicit Goods and Counterfeit. Michael was responsible for managing and coordinating INTERPOL’s global strategy to fight against this criminal activity, and he lead the police organisations international efforts in this area. Michael has a Master’s degree in Social Science, where he specifically researched the extensive links between organised crime and illicit trade and counterfeiting. Michael joined CBRAs consulting team on 1 October, 2016, as a Senior Consultant. He will be involved in various projects related to illicit trade and counterfeit goods in global supply chains.

Mr. Lars W Lorenzen, Senior Consultant, Maritime and Port Security, Denmark

Mr. Lorenzen has had a career with the Maersk Group spanning 37 years within a number of business units, notably within container transportation in the broadest sense. His particular knowledge and expertise covers the operational, equipment management, security, safety, standardization and regulatory sphere. He has been leading the Maersk Group work in obtaining and maintaining US C-TPAT and EU AEO-F supply chain security certifications and validations since the inception of both initiatives, while engaging with customers in shaping their profiles. As part of his security tasks, Lars has built and maintained a security response programme for the Maersk Line organisation, being also the focal point and first responder to security breaches. For a period, he was a member of the WCO PSCG (World Customs Organization Private Sector Consultative Group). During the past 20+ years he has been an appointed national expert in standardization work, mainly within ISO TC104 and TC204, including leadership of working groups – while heading the Danish delegation. Lars has served as a civil expert to NATO and other military initiatives by appointment of the Danish Government for the past 12 years, providing commercial views and factual information relating to logistics, and in the course of this participated in developing and conducting table top and other exercises.

First results from the WCO Cancun AEO benefit survey

June 8, 2016/0 Comments/in Academic, All transport modes, Analytic, Authorized Economic Operator, Blog, CBRA, Customs, Exporter, Express courier, Freight forwarder, Global, Importer, Known Consignor, Mail operator, Manufacturer, Mutual Recognition Agreement, Other-cluster, Regulated Agent, Risk-cluster, Shipper, Supply chain security, Tax evasion, Trafficking, Transport carrier, Transport security agency, Trusted Trader, Uncategorized, Warehouse keeper, WCO, WCO, WP19 /by Vladlen Tsikolenko

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 3^rd 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:

More streamlined / simplified Customs (and related) procedures
Less frequent interventions by the Customs administration
Increased priority over non-AEO companies (“getting to the front of the queue”)
Increased (positive) attention by the Customs administration
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

PS. Our earlier Blog with all the WCO Cancun 2016 AEO survey questions can be read at: https://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.

AEO benefits, or, no benefits, that’s the?

May 8, 2016/0 Comments/in Academic, All transport modes, Analytic, Authorized Economic Operator, Blog, CBRA, Customs, Exporter, Express courier, Freight forwarder, Global, Importer, ISO28000, Known Consignor, Mail operator, Manufacturer, Mutual Recognition Agreement, Other-cluster, Regulated Agent, Retailer, Risk-cluster, Scientific, Shipper, Supply chain security, TAPA, Tax evasion, Trade facilitation, Trafficking, Transport carrier, Trusted Trader, Warehouse keeper, WCO, WCO, WP19 /by Vladlen Tsikolenko

“To be, or not be – that is the question”, was Prince Hamlet wondering already some 412 years ago. 400 years later, the CBRA research team started to raise the question of “AEO benefits, or no AEO benefits – that is the ?”…

Around year 2004, we first started to study the emerging AEO-types of programs in Europe and globally, working intensively with multinational companies (clothing, cigarettes, machinery etc.), and with multiple governments. Initially, we reviewed any data available from C-TPAT, StairSec, BASC and TAPA programs, and later we concentrated on EU AEO and all other AEO programs across the globe. After 12 years of research our intention is to publish an academic journal paper summarizing all the knowledge from the literature as well as from our own research on AEO benefits for Customs administrations and for supply chain companies – focusing on the tangible, realized benefits, instead of “paper tiger / lip service” types of benefit checklists.

As the last step of data collection, we are now launching the study: “Customs Supply Chain Security Programs (AEO, C-TPAT etc.) – Survey on Supply Chain and Government Benefits – WCO 3rd Global AEO Conference, Cancun, Mexico, 11-13 May 2016 – Research project by CBRA, ZLC, UCR, HEC UNIL and FP7-CORE”. This survey is a direct follow-up with the one CBRA did in the 2^nd Global AEO Conference in Madrid two years ago. Ms. Susana Wong Chan from the University of Costa Rica and Cross-border Research Association is presenting the survey in Cancun next week, and collecting as many replies as possible, in person during the conference (and by email after).

We have three main questions in the Cancun AEO survey, each one with multiple sub-questions (all questions are presented with a five-point Likert scale, plus one option for “cannot say”):

Question for Customs administrations, supply chain companies, and all other experts in cross-border supply chains and Customs supply chain security programs: How often are the supply chain security program certified companies in your country benefiting from the following Customs granted incentives?
Question for Customs administrations only: What are the benefits for the Customs administration in your country arising from the supply chain security program?
Question for supply chain companies only: What are the additional benefits for the supply chain companies in your country, arising from the supply chain security program participations / certifications?

The full list of questions and sub-questions is shared at the end of this blog. In addition, you can download the questionnaire in word-format, in English and in Spanish, at: https://www.cross-border.org/downloads/

Why don’t (near) perfect AEO benefit -papers exist yet in the literature? One would think that the topic attracts lots of academics to carry out such research, and to publish their exciting findings, rather sooner than later… Well, it is quite challenging topic to study: where is the objective, non-biased data located, and how do you get access to it? How to deal with all the politics linked to the topic, as maybe many countries would like to be perceived as “leading edge AEO program holders, with a set of fantastic, innovative benefits delivered to the trade and logistics…”? How to differentiate between all the AEO marketing materials and incentive promises from what is actually implemented on the ground, for the real benefit of supply chain companies; and so forth..? To expand on these thoughts, one could revisit our article on the WCO News No 74 of June 2014. The table on page 45 includes a row on challenges and peculiarities with different categories of possible AEO benefits, sharing following observations and notes:

As some of the Customs granted benefits existed in many countries before the AEO era, companies which have enjoyed “such pre-AEO benefits” may fear a potential reduction in existing trade facilitation measures – instead of the introduction of truly new benefits.
Due to the dynamics in the cross-border flow of goods, outcomes might vary considerably over time – ‘seeing is believing’; in particular, the benefits linked to ‘elevated threat’ and ‘post-incident recovery’, may appear quite theoretical until such situations actually emerge (and the benefits materialize – or, not).
Some could also consider that the AEO system may become a technical trade barrier – the ´become an AEO or die´ scenario.
Some might think that an AEO program deters crime, as criminals would rather choose an easy target (i.e. a non-AEO target), for example in the case of warehouse theft; and, alternatively, other might think that an AEO program attracts criminals, as they know there are likely to be fewer Customs interventions – the smuggling of narcotics, for example.

Dear CBRA Blog reader: although this is very challenging research topic, and one should not dream of reaching “one ultimate truth out there” – we kindly ask that if you are in Cancun 11-13 May for the 3^rd Global AEO Conference, please take 10 minutes to reply the questionnaire..! Next to the good vibrations gained from participation in this highly important study, you will join a lucky drawing of a nice Costa Rican souvenir! In Lausanne, 9 May 2016, Juha Hintsa.

PS. List of benefit survey questions, for the CBRA Blog readers:

Customs Supply Chain Security Programs (AEO, C-TPAT etc.) – Survey on Supply Chain and Government Benefits – WCO 3rd Global AEO Conference, Cancun, Mexico, 11-13 May 2016 – Research project by CBRA, ZLC, UCR, HEC UNIL and FP7-CORE

Question for Customs administrations, supply chain companies, and all other experts in cross-border supply chains and Customs supply chain security programs: How often are the supply chain security program (AEO, C-TPAT etc.) certified companies in your country benefiting from the following Customs granted incentives?

Use the following scale: Very frequently – Frequently – Occasionally – Rarely – Never / Not applicable in our country (or, this is nothing specific for certified companies) – Cannot say

Are companies submitting entry/exit summary declarations with reduced data sets?
Are companies benefiting from reduced number of data elements in their final declaration?
Are companies benefiting from increased paperless processing of import/export shipments?
Are companies offered the option of audit-based / account-based controls (versus only transaction-based controls)?
Are companies having access to / pre-qualification with various simplified customs procedures?
Are companies self-managing their bonded warehouses?
Are companies benefiting from tax privileges, such as speedier tax refunds and compensation?
Are companies benefiting from financial guarantee waivers, reductions or rebates?
Are companies benefiting from reduction of any Customs fees or charges?
Are companies benefiting from access to self-audit or reduced audit programs?
Are companies allowed to conduct self-assessments when Customs automated systems are not functioning?
Are companies benefiting from designated Customs contact points / assistance by Customs supply chain security experts?
Are companies benefiting from training provided by Customs experts?
Are companies enjoying easier access to other governmental certification in the supply chain, e.g. in aviation security?
Are companies benefiting from the option to manage clearance formalities, inspections etc. at the business site?
Are companies benefiting from a minimum number of cargo security inspections?
Are companies being notified of the intention to release goods prior to their arrival? (“pre-clearance”)
Are companies benefiting from “extended Customs office opening hours”, during high peak / congestion times?
Are companies benefiting from choice of place of controls, if selected for control?
Are companies benefiting from priority treatment of consignments if selected for control?
Are companies benefiting from priority use of non-intrusive inspection techniques when examination is required?
Are companies guaranteed a priority Customs processing during a period of elevated threat conditions?
Are companies guaranteed preferential treatment at border crossings in post-disaster/post-attack situations?
Are companies guaranteed a priority in exporting to affected countries after a security incident?
Are companies benefiting from expedited processes to resolve post-entry or post-clearance inquiries?
Are companies benefiting from priority response to requests for ruling from Customs?
Are companies benefiting from privileges in any kind of non-criminal legal cases?
Are companies enjoying tangible benefits due to mutual recognition agreements / arrangements (MRAs) with 3rd countries?

Question for Customs administrations only: What are the benefits for the Customs administration in your country arising from the supply chain security program (AEO, C-TPAT etc.)?

Use the following scale: Strongly Agree – Agree – Neither Agree nor Disagree – Disagree – Strongly Disagree – Cannot say

Better overall allocation of governmental resources
Improved indirect tax revenue collection
Improved prevention of trafficking and illicit trade
Improved detection and/or seizures in trafficking and illicit trade
Improved prosecution to judgements -ratio (= higher percentage of successful prosecutions)
Increased confiscations of criminal assets and/or proceeds of crime
Improved collaboration with supply chain companies
Improved collaboration with other national government agencies
Improved international collaboration with Customs administrations in other countries

Question for supply chain companies only: What are the additional benefits for the supply chain companies in your country, arising from the supply chain security program participations / certifications (AEO, C-TPAT etc.)?

Use the following scale: Strongly Agree – Agree – Neither Agree nor Disagree – Disagree – Strongly Disagree – Cannot say

Improved customer service
Improved customs loyalty
Increased market share/ gaining more new customers
Improved security commitment of employees
Improved company image and credibility
Reduced overall vulnerability of the supply chain
Improved supply chain resiliency
Reduced cargo theft incidents
Reduced tax fraud incidents
Reduced illicit trade / trafficking incidents
Reduced insurance fees
Improved inventory management
Fewer delayed cross-border shipments
Reduced lead time variability in the cross-border supply chain

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

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

Three calls for journal and conference papers

April 21, 2016/0 Comments/in Academic, All transport modes, Authorized Economic Operator, Blog, CBRA, Coordinated border management, Customs, Cybersecurity, Environmental agency, Exporter, Express courier, Freight forwarder, Global, Importer, ISO28000, Known Consignor, Mail operator, Manufacturer, Mutual Recognition Agreement, Other-cluster, Phytosanitary agency, Police, Regulated Agent, Retailer, Risk-cluster, Scientific, Shipper, Supply chain security, TAPA, Trade facilitation, Transport carrier, Transport security agency, Trusted Trader, Warehouse keeper, WCO, WCO, WP19 /by Vladlen Tsikolenko

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

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 7^th 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.

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

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 )

Revisiting the Yemen bomb plot of 2010

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Bibliography:

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

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

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

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

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

CBRA Blog by Dr. Toni Männistö

Supply chain security education materials

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

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

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

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

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

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

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

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

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

In Lausanne on 29.2.2016 – CBRA Blog by Juha Hintsa

Border Agency Cooperation, Part 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.

Chemical Security in Istanbul

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

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

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

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

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

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

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

Cheers, Juha Hintsa

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

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

CORE-Observatory

Towards Trusted Trade-lanes (CORE1207)

December 6, 2016/0 Comments/in Academic, All products, All transport modes, Analytic, Authorized Economic Operator, BMT, CBRA, CLECAT, Compliance management, CORE-Observatory, CPT, Customs, Customs risks, Data sharing, DCA, Demo-cluster, ESC, Exporter, Freight forwarder, Global, ILS, Importer, IRU, ISL, Manufacturer, Resilience, Risk management, Scientific, Shipper, Supply chain, Supply chain security, Systems based control, Terrorism/destruction, Theft, Trade facilitation, Transport carrier, Trusted Trader, TUD, Warehouse keeper, WCO, WP1, WP10, WP11, WP12, WP13, WP14, WP15, WP16, WP17, WP9 /by Vladlen Tsikolenko

Summary: The paper explores the concept of trusted trade-lane. In trusted trade-lanes operators implement an internal control system that makes possible to detect, handle and report dubious events in a way that meet requirements of customs agencies. Writers identify three essential characteristics of trusted trade-lanes: single partners are considered reliable and trustworthy, collaboration is based on long-term partnerships powered by viable business opportunities and managed by a clear decision-making mechanism, and control systems ensures integrity of traded goods and transferred data. In addition, the paper presents three alternative scenarios how the trusted partnerships can be designed in cross-border trade. The paper can be viewed here: https://pure.uvt.nl.

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Full review: The paper present recent developments in designing forms of partnerships that make possible to manage, predict and reconstruct supply chain operations and events. Customs agencies can use the control system to complete law enforcement and administrative tasks in a way they can reduce or even refrain from physical inspections and checks. The trading partners that have adopted the common control system and expanded it to the needs of regulatory bodies form trusted trade-lanes. Writers identify three essential characteristics of a trusted trade-lane. First, all partners operate transparently, reliable and trustworthy in their business relationships. Second, partners are committed in long-term collaboration that gives all partners opportunities to succeed. The government structure has clear decision making mechanisms and selected legal representative. Third, partners must implement and manage a control system that ensures integrity of transported goods and transformed data within the partners and to the authorities.

The writers design three alternatives how partnerships can evolve into trusted trade-lanes. First, a focal company can act as a supply chain orchestrator and provider technical infrastructure for use of trading partners and logistics operators. The focal company lodges customs declarations and risk information to customs administrations on behalf of the trusted trade-lane partners. In the second alternative, a service provider manages a peer-to-peer information platform that supply chain operators use to communicate between each other and with customs agencies. Data on the platform is reused for both commercial and regulatory purposes (piggy packing). Partners can join and leave the platform as they see appropriate. The platform uses open standards and database management systems. Third, a service provider offers additional ‘assurance’ services for legally independent companies of a specific industrial area. The service provider acts as a trusted trader and defines common rules and requirements for the membership.

The paper demonstrates preliminary results in the CORE project. The project partners adapt trusted trade-lane concept in their own concrete business and logistics processes as well as in their information systems. The models and scenarios are further amended and developed during the project.

Reference: Hulstijn, J., Hofman, W., Zomer, G., & Tan, Y-H. (2016). Towards trusted trade-lanes. In H. J. Scholl, O. Glassey, M. Janssen, & E. (Eds.), Proceedings of the 15th IFIP E-Government conference (EGOV 2016): Electronic Government. (pp. 299-311). (Lecture Notes in Computer Science; Vol. 9820). Guimaraes, Portugal: Springer International Publishing.

CORE1207

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Integrating carrier selection with supplier selection decisions to improve supply chain security (CORE1206)

November 25, 2016/0 Comments/in Academic, All products, All transport modes, Analytic, BMT, CBRA, CLECAT, CORE-Observatory, CPT, Demo-cluster, ESC, Freight forwarder, Global, ILS, IRU, ISL, Manufacturer, Risk management, Risk-cluster, Scientific, Shipper, Supply chain, Supply chain security, Terrorism/destruction, Theft, Trade facilitation, Transport carrier, TUD, Warehouse keeper, WP1 /by Vladlen Tsikolenko

Summary: The paper describes a collaborative decision making process that makes possible to select optimal combination of suppliers and carriers that meet both business operational and security requirements. Security information is quantified in order to create a pool of qualified suppliers and logistics providers. Quantification enables to incorporate security with other business criteria such as price, delivery and quality into an optimization model. Logistics and purchasing managers can use the model to analyze the tradeoff between these criteria. The paper can be viewed here: http://onlinelibrary.wiley.com.

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Full review: Different managers typically carry out security assessments and selections for logistics providers and suppliers separately. The study presents a mechanism for quantifying and measuring supply chain security that justifies removing of suppliers and carriers from further consideration if they fail to meet the minimum required security performance. In the next phase security is incorporated into an optimization model that minimize procurement and quality costs caused by late and rejected deliveries. The optimization model allows selecting a combination of suppliers and logistics providers that best suits their individual situation defined by risks and operational requirements. The study demonstrates how the tradeoff between security and cost can be assessed parallel in a way that the process leads to the better solutions than if assessed separately.

The paper presents a dynamic optimization tool that can be considered both revolutionary and easy to implement in practice. There are security-rating systems that set minimum requirements for suppliers and carriers such as TAPA Facility Security and Trucking Requirements that enable to create a pool of qualified service providers for transportation of high-value goods. However, several manufacturing and logistics companies are outside the TAPA system, because the goods produced and transported are not prone to thefts and hold-ups. For them it is a matter of internal management coordination when choosing suppliers and carriers and willingness to carry out necessary steps to minimize the cost of providing a secure supply chain. It is also a strategic decision, if company aims at minimizing internal costs by managing suppliers and carriers by contracts or operation management principles. Several international companies have chosen the first option by selecting one or two main service providers instead of issuing regularly quotations for materials and transportation services. The paper proves it is more a question of company practices to select suppliers and carries than minimizing internal management costs.

The paper brings very interesting viewpoint to the CORE project. The CORE project focus on managing risks and unexpected events through additional sensors and information systems. However, commercialization and selling of the CORE technologies and data management platforms requires understanding procurement processes in private and public organizations. The presented model embeds security into the selection process of suppliers and carriers. It is essential the CORE project can identify decision-making moments that give opportunity to introduce new technologies and practices and improve collaboration in supply chain network. Only collaboration between logistics managers and purchasing managers as well as among buyers, suppliers, and carriers can result in improved supply chain security performance in the whole network.

Reference: Meixell, M. J., & Norbis, M. (2012). Integrating carrier selection with supplier selection decisions to improve supply chain security. International Transactions in Operational Research, 19(5), 711–732.

CORE1206

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

October 26, 2016/0 Comments/in Academic, All transport modes, Analytic, BMT, Capacity building, CBRA, CLECAT, Consulting, CORE-Observatory, CPT, Customs, Dangerous goods, DCA, Demo-cluster, Dual-use goods, Environmental agency, ESC, Exporter, Express courier, Freight forwarder, Global, High-taxed goods, High-value goods, ILS, Importer, INTERPOL, IRU, ISL, Mail operator, Manufacturer, Perishable goods, Phytosanitary agency, Police, Prohibited goods, Resilience, Restricted goods, Retailer, Risk management, Risk-cluster, Scientific, Shipper, Strategic goods, Supply chain, Supply chain security, Terrorism/destruction, Theft, Time-critical goods, Transport carrier, Transport security agency, TUD, Warehouse keeper, WCO, WP10, WP11, WP12, WP13, WP14, WP15, WP16, WP17, WP18, WP19, WP6 /by Vladlen Tsikolenko

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.

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Full review: Researchers have stressed the importance of having an organizational culture that highlights proactivity and vigilance toward supply chain security breaches. In security-focused supply chain management environment workers are empowered to detected and handle supply chain security threats without seeking formal permission from supervisors and managers. Company security strategy gives specific attention how SCS concepts are embedded into firm processes and procedures. Alignment with organizational culture and business or corporate-level strategies is believed to result in enhanced organizational performance. In addition, organization culture encompasses supply chain continuity management. The paper presents a scale for measuring supply chain security culture defined as the overall organizational philosophy that creates supply chain security as a priority among its employees through embracing and projecting norms and values to support secure activities and to be vigilant with security efforts.

The study makes possible to assess how implemented FP7-CORE security technologies, tools and practices influence on supply chain resilience based on the perception of company managers and employees. The article gives also guidelines how to develop survey forms and protocols in order to assess the influence of implemented security measures on other KPIs such as supply chain visibility and reliability. The survey tools based on perceived operational and organizational changes complete toolbox to measure impacts of introduced security interventions.

Reference: Zachary Williams, Nicole Ponder, Chad W. Autry, “Supply chain security culture: measure development and validation”, The International Journal of Logistics Management, Vol. 20 Iss: 2, pp.243 – 260

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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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Supply chain security orientation: conceptual development and a proposed framework (Autry and Bobbit 2008)

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

Summary

Even though supply chain security has become an increasingly important managerial domain, there is little understanding about what security aware firms are, what enables and drives security awareness, and what are the outcomes of supply chain security (SCS) orientation. Autry and Bobbit (2008) set out conceptualize, validate and operationalize the construct of SCS orientation. Based on 31 interviews with US-based managers, they conclude that SCS orientation comprises four general categories of security solutions: security preparation and planning, security-related partnerships, organizational adaptation and security-dedicated communications and technology. The authors write that these security solutions “could result in supply chain risk management-related efficiencies, such as decreased lead times to customers, greater product reliability, waste reduction, and increased delivery reliability, due to the lessened need for operations workers to perform security-related tasks such as redundant container checking, securing shipments, or other similar tasks.” The abstract is available at: http://www.emeraldinsight.com.

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

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Full review

The CORE demonstrators could a learn lesson from the research paper of Autry and Bobbit (2008) that organizational commitment to security plays a critical role in the fight against supply chain crime. Ideas and findings of the research paper also contribute to the development of the CORE educational and training material (WP19). The article shows that top management support, employee security attitudes, employee integrity/loyalty are key internal factors that strengthen the SCS orientation. External contributing factors include political political/legal factors/support, partner cooperation, and partner support. Strong SCS orientation is expected to translate into higher business performance, customer satisfaction and supply chain chain continuity.

Reference

Autry, C.W. & Bobbitt, L.M., 2008. Supply chain security orientation: conceptual development and a proposed framework. The International Journal of Logistics Management, 19(1), pp.42–64.

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

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

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

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

Reference

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Detailed analysis and relevance for CORE:

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

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

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

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

Cross-references:

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

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

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C-TPAT Program Benefits Reference Guide, 2014 (CORE1032)

March 6, 2016/0 Comments/in Air, Airport, All transport modes, All-clusters, C-TPAT, CBP, CBRA, Contraband, CORE-Observatory, Counter-terrorism, Demo-cluster, Exporter, Express courier, Freight forwarder, Government, Guidebook, Importer, Inland waterway, IT-cluster, Mail operator, Manufacturer, Maritime, Multi-modal, Other-cluster, Rail, Retailer, Risk-cluster, Road, Sea port, Shipper, Supply chain security, Trafficking, Transport carrier, Trusted Trader, USA, Warehouse keeper, WP1, WP10, WP11, WP12, WP13, WP14, WP15, WP16, WP17, WP18, WP19, WP2, WP20, WP21, WP22, WP3, WP4, WP5, WP6, WP7, WP8, WP9 /by Vladlen Tsikolenko

Summary: This guidebook outlines the key elements and benefits of the Customs-Trade Partnership Against Terrorism (C-TPAT) program that is designed to secure global supply chains and to improve United States border security. Document is available at: https://www.cbp.gov/sites/default/files/documents/C-TPAT%20Program%20Benefits%20Guide.pdf (link tested on 3 March 2016)

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Full review: C-TPAT partners receive a wide range of benefits listed below:

C-TPAT Partners are examined at a considerably lower rate than non-C-TPAT Partners.
C-TPAT certified/validated highway carrier Partners are granted expedited border crossing privileges. C-TPAT Partners at many Canada/Mexico land border ports of entry have access to Free and Secure Trade (FAST) Lanes.
Some categories of C-TPAT importer Partners are exempt from stratified exams.
C-TPAT shipments subject to examination are moved ahead of any non-C-TPAT shipments, to the extent possible.
In the event of a significant disruption/delay in cargo processing operations, actions are taken to maintain communication and coordination with C-TPAT Partners for business resumption.
C-TPAT Partners’ trade compliance issues are given priority over those issues related to non-C-TPAT Partners.
Each C-TPAT Partner is assigned a Supply Chain Security Specialist (SCSS) who coordinates between the C-TPAT Partner and the US Customs and Border Protection agency (CBP). The Specialist also assists the Partner with supply chain security issues.
Partners have access to the C-TPAT’s automated Portal system, to communicate with CBP and exchange program related information in a secure manner.
C-TPAT Partners are eligible to attend C-TPAT events like the annual Conference and other training seminars organized by the program.
C-TPAT importer Partners are eligible to participate in the Importer Self-Assessment (ISA) Program.
The Penalty Mitigation benefit is granted to sea carriers for late submission of data required under the Importer Security Filing requirements.
C-TPAT members are eligible to participate in other U.S. Government pilot programs, such as the Food and Drug Administration’s Secure Supply Chain program.

In addition, some benefits are associated with Mutual Recognition Arrangements (MRAs) when two customs authorities formally acknowledge the security requirements or standards of one program, as being equivalent to the other program. Some of the resulting benefits to the trade community are illustrated below:

C-TPAT importer Partners that also conduct export operations and Partners of the foreign Customs Administration programs (manufacturers and exporters of record) are granted a reduction in their overall cargo risk score, implying fewer examinations at export and import ports.
A C-TPAT validation for an overseas partner is not required if an MRA is in place because CBP recognizes the status of the Partner in the foreign partnership program.
Companies covered by MRAs need only to comply with a common set of security requirements, avoiding the hassle of following multiple sets of requirements from one partnership program to another.
MRAs lead to more transparency in international commerce. Mutual exchange of information between these partners facilitates trade across Mutual Recognition Partner nations.

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Interviews

Interview with Mr. Boley, SC Johnson, Switzerland

November 17, 2016/0 Comments/in All partners, All transport modes, Authorized Economic Operator, Compliance management, Customs risks, Global, Interview, Interviews, Investigations, Manufacturer, Risk management, Risk-cluster, Supply chain, Supply chain security, TAPA, Theft, WP1 /by Vladlen Tsikolenko

17.11.2016: Today’s CBRA Interview with Mr. Bill Boley focuses on supply chain security management at SC Johnson

Hi Bill, and thanks for joining CBRA Interview, here at the TAPA EMEA Conference in Noordwijk, the Netherlands.

Good afternoon Juha, first I want to thank you and the CBRA team for all the great work you have done for the Supply Chain Security Community over the years. It seems that every time I attend an event CBRA is there…

We first met in 2008, and worked together on the World Bank Supply chain security guidebook, good ol’ times…. In your current job, which supply chain security standards and guidebooks your company follows?

Here at SC Johnson we actually first strive to meet the guidelines laid out in the WCO SAFE Framework of Standards. This is important for us as a global player, global citizen and manufacturer with many supply chains, to do our part in assisting Customs and Law Enforcement Agencies making the Global Supply Chain more safe and secure. At the same time, safe and secure supply chains support the overall optimisation and predictability, helping us to meet the customer and consumer demands. This is why we pursue the various AEO schemes already in place around the world, be it C-TPAT, EU AEO, or Kenyan AEO – in other words, we strive to certify so Customs can focus on the unknowns… At the warehouse level we have adapted the TAPA FSR standard as the “SCJ standard”. As a global company with many different nationalities, languages and moving parts both upstream and downstream a universal standard written for the practitioners is a key for us. It is also a requirement for our service providers and the transporters moving our product. Soon we will start to give preferential consideration to those service providers who have the TAPA TSR certification, as part of the contract award process.

What about information on actual threats and risks with your global supply chain – which sources you use for that?

As you are well aware, we are facing many threats around the world: stowaways, weapons and drug smuggling, hijackings, cyber threats particularly with the Internet of Things, and counterfeiting, just to name a few… At SC Johnson we are fortunate to have a buy-in from our C-Suite on the importance of Supply Chain Security programmes and tools we have been implementing. We have established a Global Security Operations Centre at our World Headquarters and, our Product Supply, Logistics, and Procurement Leaders around the world are very proactive on the topic of supply chain security. SCJ has actually built an own network of information providers such as BSI, IJet, OSAC, and of course Law Enforcement Agencies, as well as select Customs regimes. The TAPA IIS system, FreightWatch International, and yes, even CBRA, also feed into our information portal. Getting involved at every level to develop a community of interest on supply chain security is a key. As they say, it takes a network to defeat a network.

Can you share any stories on how these supply chain security standards and risk information have helped you to do your job as a SC Johnson supply chain security manager better?

Yes absolutely, most recently we fell victim to two separate events. One was facility related while the other was on transport. We conducted an analysis on how our mitigation measures failed, and it became evident that we lacked timely, accurate and relevant information to change our measure to adapt to the latest Modus Operandi of the criminal networks. Delivery times to our facilities, pick-ups, chain of custody, liaison with local Law Enforcement and audits of our service providers have been instrumental. In fact, just last week local Law Enforcement in Nigeria was able to interdict and recover a high value shipment, thanks to our close communication and cooperation with the Government of Nigeria.

Yesterday I briefed you about our on-going TAPA study titled “Total Cost of Cargo Theft (TCCT)”… Would your company be interested to join the study?

SC Johnson would be very receptive to taking part of this study. First, as we have suffered Supply chain losses there is a misunderstanding on what is covered by insurance or not. And, second, if we can then place a more precise value or declaration on what those stolen finished goods will cost outside of the retail value, that would be great. Loss of customers or at least their confidence in a non-delivery, recovering our full costs of production, investigative costs, etc. are just some of the cascading effects and costs we encounter.

Great news, thanks a lot Bill, for both the interview and for agreeing to join the TCCT-study! Juha.

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!

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

Three new Senior Experts

First results from the WCO Cancun AEO benefit survey

AEO benefits, or, no benefits, that’s the?

Three calls for journal and conference papers

FP7-CORE Education – Two new diagrams

Chemical Security in Istanbul

CORE-Observatory

Integrating carrier selection with supplier selection decisions to improve supply chain security (CORE1206)

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

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

Supply chain security orientation: conceptual development and a proposed framework (Autry and Bobbit 2008)

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

Interviews

Interview with Mr. Boley, SC Johnson, Switzerland

Interview with Mr. Thorsten Neumann on TAPA EMEA

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

Criminalization of global supply chains, by Mr. Hamon

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