Customs and the use of technology to secure global supply chain

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1 Customs and the use of technology to secure global supply chain European Commission Directorate General for Wil van Heeswijk Unit B2 Risk management and Security 1

2 Facts & Figures control officers throughout the EU overseeing movements of goods crossing the EU border and inland offices In million customs declarations were dealt with in the EU 16 million containers in worldwide circulation (source: World Bank SCS Guide) used in annual worldwide container Traffic of roughly 153 million of TEUs (2008)." Bulk & break bulk cargo 76% Share of containerised cargo in the world's total dry cargo Containerised cargo 24% 2

3 Traditionally responsible for collection of duties and taxes Role of Customs Objectives Broadened to: Emphasis on protection of society Security of the supply chain Trade facilitation Challenge: Win-win solution to ensure effective customs controls & trade facilitation 3

4 Role of Customs - Means Common Risk management approach Information sharing (C2C & B2C) Partnership Trade Customs Enhanced use of modern technologies International cooperation 4

5 Global Security : the context September 11 : the starting point for increased security controls. Recent incidents prove that terrorism is not confined to one place and is still high on the international agenda. In 2009 approx terrorist attacks in 83 countries resulting in over victims Terrorist and criminal organisations have close links and exploit weaknesses wherever they can be found. Threat is global and may have various aspects (WMD, chemical, biological) 5

6 Security amendments to the EU Customs Legislation Security amendments to EU customs legislation: (Regulation 648/2005 and IP 1875/2006) - Pre arrival and pre departure information - Risk management - Authorised Economic Operator The EU and its 27 Member States are committed to implementing the global standard set by the WCO SAFE Framework and its end-to-end supply chain security concept. 6

7 Use of modern Technology - Policy and Approach 7

8 The role of technology Technologies are essential tools for border and supply chain security - from a customs point of view, the following areas are of particular interest: Techniques for advanced and high speed data analysis Techniques for ensuring container integrity (e.g. E-seals, Container Security Device (CSD) and smart containers) Techniques for supervision and monitoring maritime and air container transport (tracking/tracing) Detection and radiation equipment 8

9 100% scanning - Efficient & effective? 1/2 Results of recent Commission studies: Investment costs in EU ports = up to 430 million (2012) Operation costs in EU ports = annual costs up to 200 million (2012) Additional direct transport costs = 10% per consignment Aggregate worldwide welfare loss due to 100% scanning requirement = 17 billion annually Total cost of worldwide introduction = approximately 150 billion annually 9

10 100% scanning - Efficient & effective? 2/2 100% scanning does not guarantee 100% security Does not address biological and chemicals threats Does not eliminate the possibility of tampering with cargo after the scan was performed. Focused on one transport mode only Logistic & technological difficulty to meet 100% scanning requirements (barges, transshipment boxes) Overreliance on one form of technology Risk of diverting scarce resources 10

11 Use of modern Technology - Policy and Approach Security is top policy priority for EU customs Modern technology is one of the cornerstones to enable Customs to adopt modern risk management working methods EU advocates comprehensive and effective multi layered risk management approach using a range of methods and technologies to focus on the risk associated with specific consignments Results in increased freight screening, reduction of physical inspections and a better deployment of sources to risk

12 Use of modern Technology - Policy and Approach Customs administrations are encouraged to take advantage of emerging technologies to enhance security in the supply chain. NII and radiation detection equipment is necessary to inspect high-risk containers quickly without disrupting the flow of legitimate trade Customs community should monitor R&D of technologies and innovations and monitor the benefits customs can extract from its usage

13 Use of modern Technology - Policy and Approach Set up of EU detection technology expert group under Customs 2013 programme. Provide a platform for information sharing between customs technology experts Explore and define the needs for new and improved tools or equipment Work expected to start early 2011

14 Smart and Secure Trade Lanes SSTL State of Play recommendations Ask the WCO to support an expansion of the Scientific Committee, to incorporate the analysis of relevant technology. Within that group, the issue of CSDs needs to be discussed in an open forum of all the member administrations, in particular the member administrations participating in the SSTL project, and all the key operators in the Supply Chain to develop common standards, procedures and interoperability.

15 Supply Chain Security 15

16 THANK YOU FOR YOUR ATTENTION For up-to to-date information about the European Union Customs Security Programme, visit our website: /customs/policy_issues/customs_security/ index_en.htm ec.europa.eu 16

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