The Role of Customs in Cargo Security

Author:Luc De Wulf and Omer Matityahu

    Omer Matityahu is a consultant for ICTS Global Security B.V., whose contribution was financed by a grant from the government of the Netherlands. The contribution of Will Robinson of the World Customs Organization is gratefully acknowledged.

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This chapter is intended to assist customs administrations in dealing with the security challenges faced by international transport and shipping service providers. The guidance and concepts provided here are geared toward helping governments in the development of national security policies and strategies, including preparing a needs assessment and implementing the strategy within the context of an overall risk management approach.

The emergence of international terrorism has caused the issue of security to become one of the major challenges facing customs administrations. In the past, many customs administrations performed most of their preventive operations as goods arrived at seaports, airports, and land borders based upon an entry declaration made at the time of importation. Improving security in the supply chain, however, requires that this traditional method of operating must change. For it to do so, customs now needs to gather information and assess risk in advance of arrival, so that effective action can be taken, preferably before a ship embarks or an aircraft takes off, or at the latest, at the time of its arrival. The information needed for these security processes comes from several sources, but a crucial element is the advance information available from the businesses exporting or transporting the goods. Customs' skill in assessing the information through analytical processes, deployment of resources, and effective communication and decisionmaking, therefore, has become even more important than in the past.

Security is of great importance to governments, but so is facilitating legitimate trade. If applied correctly, security can enhance facilitation by building business confidence, increasing predictability and trade flow, and, as a consequence, improving Page 266 inward investment. The information required by customs can also be enhanced by customs-trade cooperation.

Protecting society in an effective and efficient manner requires the international trade supply chain to become the focus of attention in its entirety, rather than simply when goods are entering, leaving, or transiting a country. This changing environment requires an "all of government" approach. Governments would thus have the opportunity to use customs as a key resource in border security by using customs' experience with managing risks and its knowledge of international trade as important elements in addressing issues of national security. Customs' roles in security and facilitation complement those contributions made by other competent agencies as part of an integrated response. Cooperation and communication between customs and the lead agencies for terrorism; immigration; and policing maritime, aviation, and land transport; and intelligence operations are vital. In this manner, customs can contribute toward the wider security agenda as outlined in the United Nations Security Council Resolutions, particularly 1373 (passed in 2001) and 1456 (passed in 2003), which call for an integrated response to fighting terrorism. Customs' role is therefore changing rapidly.

Developing and implementing security standards across international borders is likely to present a formidable challenge, but doing so is essential to safeguard the integrity of the international supply chain. Efforts to develop international standards are underway on several fronts, but much still remains to be done to standardize these norms and implement them effectively. Due to the number and diversity of nations and stakeholders involved in the international supply chain, achieving consensus on these and other standards could be difficult and time consuming.

This chapter examines some of the operational and management considerations that will be of interest to those establishing or reviewing customs' security arrangements. The first section presents initiatives relating to the areas of border security. The second section analyzes the management implications of the heightened concern for customs security risks. The final section focuses on operational practices for customs in light of these renewed concerns.

Initiatives to Improve Cargo Security

International trade involves many partners and processes that together constitute a logistics chain. Each link in that chain is to some extent subject to security risks. These risks are not new and have historically concerned many professional organizations. The protection of society has always been one of customs' main missions. However, with the events of September 11, 2001, security has attracted renewed focus from governments. Existing initiatives to strengthen security have been revisited and new ones have emerged. Both international and bilateral initiatives have been reviewed and strengthened. This section briefly reviews these initiatives and details what these mean in the context of customs' operations.

World Customs Organization

The WCO's activities in the area of security are undertaken in close cooperation with the specialized international organizations that focus on specific transport modes, such as the International Maritime Organization (IMO), the International Civil Aviation Organization (ICAO), and the International Air Transport Association (IATA). In light of its mandate to enhance the effectiveness and efficiency of customs administrations, the WCO aims at building trade facilitation-appropriate security initiatives, so that world trade is not unduly affected or hindered by enhanced security measures.1

In June 2002, the WCO Council approved a resolution on security and facilitation of the international trade supply chain. This resolution led directly to the formation of an international Task Force on Security and Facilitation of the International Trade Supply Chain, comprising customs administrations, other international organizations, and international trade and transport organizations. The task force has produced a comprehensive package of guidelines and other measures that would enable customs administrations to implement and apply modern risk-based control procedures. The security and facilitation concepts developed by the task force involve the submission of advance electronic information at the earliest Page 267 moment in the supply chain cycle, so that customs administrations can perform risk assessment processes well in advance of shipment. This approach allows customs' security role to be performed at or before export, while goods are in transit, or at or before importation. The information itself is provided by the most appropriate private sector entities involved in the supply chain, that is, the electronic information message is composed of information from exporters, importers, and service providers such as carriers. The procedures are contained in the Advance Cargo Information Guidelines, which form a central part of a comprehensive package of measures. The WCO has developed other instruments to fulfill its security mandate:

* a list of essential data elements required to identify high-risk consignments

* a new multilateral Convention for Customs Administrations, which will provide a mechanism for customs administrations to share relevant information on a bilateral, regional, or multilateral basis

* guidelines for businesses operating in the international trade supply chain that describe the measures and procedures that should be adopted by private sector operators

* guidelines concerning the purchase and operation of container scanning equipment

* a databank of modern technological devices.

The implementation of the guidelines is being managed through an international action plan and by a high-level strategic group of Directors General who provide strategic advice on the further development of security and facilitation methodologies and standards. The WCO relies on voluntary compliance of its members, because it does not have an enforcement mandate.

Sea Cargo: Organization and Initiatives

World trade is dependent on maritime transport and great strides have been made in recent years to render this system as open and frictionless as possible to spur greater economic growth. However, the factors that have allowed maritime transport to contribute to economic prosperity also potentially increase its security risks. The risks range from the possibility of physical breaches in the integrity of shipments and vessels to documentary fraud and illicit money-raising activities by terrorist groups.

International Initiatives Both international organizations and national governments have undertaken initiativestoenhanceseacargosecurity.

International Maritime Organization. The International Maritime Organization2 (IMO) is a specialized organization within the United Nations established to develop international maritime standards, promote safety in shipping, and prevent...

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