WCO briefs trade on initiative for supply chain security

WCO briefs trade on initiative for supply chain security    The framework on global cargo security standards proposed two weeks ago in Jordan by a World Customs Organization policy group goes beyond security and rolls together all the elements of trade facilitation the intergovernmental body has proposed in recent years, according to Michel Danet, the WCO’s secretary general.
   Under the initiative of the United States and several industrial countries, the 22-member policy committee endorsed a framework for developing a global supply chain security regime closely patterned on the U.S. model for identifying suspicious cargo and containers ahead of time and streamlining the cargo exam process for trusted shippers.
   In a meeting with representatives from the U.S. international trade community in Washington Friday, Danet emphasized that organization’s leadership wants to take advantage of the cargo security initiative to jump-start customs authorities to modernize procedures for clearing goods, as previously recommended by the WCO.
   “We want to affect all these modes (of transport), so customs no longer is an impediment or a destabilizing force in world trade,” but rather serves as a “mediator, or referee,” in the cross-border movement of goods, Danet said.
   Danet is working with a high-level group of national customs directors to galvanize international support for a common supply chain security regime based on U.S. antiterrorism programs that countries can adopt without having to go through the time-consuming treaty ratification process. The group hopes peer pressure and economic leverage will get other countries to adopt the security principles out of fear that they won’t receive preferential trading treatment.
   Danet chided the United States for not ratifying the revised 1999 International Convention on the Simplification and Harmonization of Customs Procedures, and suggested progress could be hindered on the cargo security front unless the United States signs onto the Kyoto Convention, designed at the time to help combat trade fraud and drug smuggling.
   “As long as the United States doesn’t give a positive signal” other countries will be slow to adopt the treaty’s main principles of standard and simplified customs procedures, improved customs controls, increased use of computer systems and partnerships between customs administrations and industry, Danet said.
   Under the WCO cargo security framework, national customs authorities would agree to:
   * Collect the same commercial data elements through advance electronic means and share information on inbound, outbound and transshipped cargo.
   * Employ a similar risk management approach for identifying high-risk cargo. An automated system should be used for analyzing data for potential threats and targeting cargo for closer inspection.
   * Perform an outbound inspection of such cargo with large-scale X-ray machines and radiation detectors at the request of the receiving nation.
   * Provide faster processing of goods through reduced levels of exams and other benefits to companies that meet minimum supply chain security standards and best practices.
      The framework is designed to provide consistent, predictable rules so that traders can more efficiently clear their goods, in addition to strengthening security throughout the supply chain.
   The framework agreement is based on the principle that countries will collaborate to help each other to screen or inspect cargo before it arrives at their domestic ports, similar to the U.S. strategy of pushing out inspections beyond its borders. That means border agencies must change from the traditional practice of inspecting imports at the port of arrival to also inspecting exports in an effort to prevent contraband or mass destruction weapons from being smuggled to other countries.
      The key to collaboration is the use of automated data systems that send harmonized messages and are interoperable, according to a copy of the framework agreement. That will enable customs administrations to engage in joint targeting and screening where necessary and eventually to a common system for deciding how to handle shipments with red flags.
   The document also calls on customs administrations to maintain statistics on the number of shipments reviewed, how many are inspected by non-intrusive means or physical exams and other performance measures
   The framework will also spell out how companies should strengthen internal supply chain controls and how customs authorities can validate they are taking appropriate steps to correct vulnerabilities.
      Danet and U.S. officials stressed that the framework agreement is only an outline and that annexes will be completed by the WCO’s annual meeting in June spelling out how the principles can be implemented.
   Danet said he will embark on a world tour to brief the rest of the WCO’s 164 customs directors about the cargo security framework, beginning with a meeting in Cairo, Egypt with Arab customs directors in January. Danet said he will also meet customs directors in Kazakhstan and in South America, and with the trade groups in all five major continents.
   The meeting in Washington was the first in a series of such meetings that the secretary general and the high-level working group of customs directors will conduct to gather the input of the trade on the global supply chain security standards. Danet said it was important for the group to hear from the small business community too because it plays such a large role in world trade.
   Danet said he hopes to get the WCO to sign off on the whole approach in June so that pilot projects can begin to test the elements of a common system.