Enhancing Trade Security Through Efficient Governance Models

1. Trade Facilitation and Security Modeling Facilitating Trade in a Secure Environment Geneva, Nov 13-14

2. Rudolf J Bauer: Security includes general customs management issues to protect govt. Revenue collection, detect smuggling ... Background • UNECE‘s UN/CEFACT working groups – International Trade Procedures and Business Process Analysis - decided to use the International Supply Chain Reference Model to • Illustrate the impact of currently discussed security measures on the international supply chain • Analyze potential overlaps of different initiatives, that might have a negative impact on the fluidity of trade • Identify gaps between different initiatives, jeopardizing the overall security of the international supply chain

3. UN/CEFACT

4. UN/CEFACT Sub Processes of the Ship Use Case – Original ISC model

5. Status of Modeling Activities • Included the activities described in WCO‘s ACI Guidelines in the proper sub-processes and added more details on actors • Included the activities of US Customs 24-Hour Rule • Modeled the requirements of IMO‘s ISPS framework at a high level (use cases) • Added further detail to the „Transport“ sub-process using work from UN/CEFACTS Transport working group (MIST) • Positioned the European Commission communication on „a simple and paperless environment for Customs and Trade“ vs. the expanded ISC model.

6. Sub Processes of the Ship Use Case – Security & Trade Facilitation Model

7. UN/CEFACT Transport Service Buyer Carrier Customs (COO)

8. Business Collaboration: Carrier & Customs Carrier Customs (COO)

9. 24 – Hour Rule Observations • Impacts identified exclusively in „export“ & „prepare for import“ sub-processes • CF1302 (cargo declaration) • CF3171 (unload permit) • Effects „Carrier“ and „Customs Office Outward“(in case of maritime transport) • Carrier has to issue „cargo declaration“ (24hours in advance) • Carrier has to query Customs Office Inland (COIN) for „unload permit“ • Customs Office Inland (COIN) (COIN) has to issue „unload permit“

10. ACI Guideline Observations • Several points along the ship sub-process where security compliance can be checked • Either the information in advance and/or the goods on arrival • Provides for simplification in the case of „authorized traders“ • Single declaration by the Exporter is sufficient; neither Carrier, nor Buyer need to submit import documents • Customs authorities (COI) can eliminate double checking documents • Adopts a „Single Window“ approach • It allows traders to lodge documents to one single agency • Information is subsequently forwarded or shared with other customs organizations or goverment agencies • Predicated on the adoption of a Unique Consignment Reference Number (UCR)

11. Potential Security Compliance Checks

12. International Ship And Port Facility Security Code (ISPS)

13. ISPS – Observations • A security framework for Vessels and Ports • Introducing new actors (Security officers, govt. Authorities) • Introducing notions of security plans, certificates • Most provisions are outside the scope of the ISC • Development and certification of port facility and ship security plans • Provisions to safeguard and monitor access to cargo aboard ships and in ports. • By definition it effects maritime transport only • Set security level, request declaration of security, manage different security levels

14. Modelling is a useful tool for identifying how existing security initiatives line up and integrate. However, work completed to date covers only a selection of the current security initiatives. Completion of this work should reveal areas where the overall security gaps and overlaps exist in the international supply chain. Initiatives modelled so far indicate that in the transport sub-process, only the ship modality is being considered (by virtue of the ISPS) The model also shows that the European Commissions proposal is aligned with the WCO‘s ACI Guidelines and includes provisions similar to US Customs 24 Hour Rule Participation of other organisations in the modelling work would serve to both enhance the model and also allow participants to analyse how their proposals integrate with other initiatives in the international supply chain. Conclusions supported by the current model • Analyzed initiatives apply only to portions of the international supply chain • In the transport sub-process, the focus is onmaritime transport security (ISPS provisions) • In all other sub-processes customs seems well positioned to exercise security compliance checking • European Commissions proposal is aligned with the WCO‘s ACI Guidelines and includes provisions similar to US Customs 24 Hour Rule • Completion of this work should reveal areas where the overall security gaps and overlaps exist in the international supply chain.

15. ISC & Security Modeling Proposed Future Work • Review and complete Sub-Processes to • Include document information (class diagrams) • Incorporate work on UNeDocs, the WCO data model • show which information is required or referred to in which activity • assess the cost & time impact of critical activities • Provide further model detail to ISPS • Activity diagrams of „Request declaration of security“ and „Manage different security levels“ • Include measures of the Single Window Initiative

16. ISC & Security Modeling Proposed Future Work (cont.) • Analyze the impact of the future Security Management Standard using the present model • Model Trade Facilitation Recommendations and Measures • Encourage participation of other organizations in the modelling effort • To enhance the model and consequently increase its value • allow participants to analyse how their proposals integrate with other initiatives in the international supply chain

17. Reflections on the use of modeling in Trade Facilitation and Supply Chain Security • First Experiences focussed on security dominated initiatives exclusively • ISPS, ACI Guidelines, 24 Hour Rule and the EC Recommendations • Modelling is a useful tool for identifying how existing security initiatives line up and integrate. • Although the current model covers only a selection of the current security initiatives. • Value of the model to assess the interactions and combination of different security and trade facilitation measures

18. Reflections on the use of modeling in Trade Facilitation and Supply Chain Security (Cont.) • The assessment of the impact of either trade facilitation or security related measures requires sufficient detail • Business collaboration level • Detail and volume of business information • Continued maintenance of the model is tantamount to be of value • Business Process modeling is a valuable approach, however not sufficient to assess all potential impacts • No forecast on changes in trade volume resulting from i.e. new regulatory requirements or their abolition

19. References • The BPAWG Reference Model of the International Supply Chain. UN/CEFACT/BPA/BP044, March 2003 • Customs Guidelines on Advance Cargo Information (ACI Guidelines). World Customs Organization. V0.6, May 2003 • Report of the Multi Industry Scenarios for Transport (MIST)Version 2001, DRAFT 22 June 2001 • Proposal for Standards Development in support of Trade Facilitation and Security-A collaborative approach, UNECE/TRADE/2003/22, April 2003 • COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, a simple and paperless environment for Customs and Trade, Brussels, 24.07.2003 COM(2003) 452 final