Risk Management: a Critical Customs Tool Haiti in the Spotlight

No 62 JUNE 2010 W C ONEWS www.wcoomd.org

Risk management: a critical Customs tool

Haiti in the spotlight: Customs' role in an emergency

Customs valuation: 30 years of the GATT/WTO Agreement

World Customs Organization f l a s h i n f o

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2 WCO News – No 62 – June 2010 9737 Cogdill Road, Suite 200N • Knoxville, Tennessee 37932-3350 USA • V: 865 966 9200 F: 865 966 9330 • www.perceptics.com ©2010 Perceptics, Inc. All rights reserved. Content WCO News N° 62 June 2010

4 Calendar 4 3 In conversation • S usanne Aigner and Heike Barczyk; new Deputy Directors 5 Editorial at the WCO Secretariat

6 Buzz 36 Our Members world

9 Flash info 41 Zoom • Colombian Customs administration 15 Special dossier • Getting to grips with risk management 42 Focus • Initial results of the Custom risk management survey • P rotecting cultural heritage • Risk management: what can you really manage? • E mergency humanitarian aid and the Haiti disaster • WCO puts risk management under the microscope • Using statistics to fight corruption Latest developments WCO risk management activities 52 Events • Risk management: key enablers • International Customs Day around the world • Managing risk in practise: South Africa shares her experience • K arl Heinz Matthias, Director of the Zollkriminalamt (ZKA), • How to modernize risk analysis and the selectivity of retires Customs controls in developing countries? • W CO Information Technology Conference, Dublin (Ireland) • Joint risk analysis on cross-border traffic in Bosnia and • T he WCO technical Committee on Customs Valuation Herzegovina celebrates 30 years of the GATT/WTO Agreement • Mexico Customs reports success with risk analysis • N ational and regional Harmonized System Seminars

Director of Publication Electronic addresses Editorial note D/2010/0448/5 Kunio Mikuriya WCO News is distributed free of charge in French and Editorial & Subscriptions in English to Customs administrations, international or- Copyright © 2010 World Customs Organization Editor in Chief [email protected] ganisations, non-governmental organisations, the busi- All rights reserved. Requests and enquiries concerning Danielle Maïano ness community and other interested readers. It should translation, reproduction and adaptation rights should Advertising be mentioned that opinions expressed in WCO News are be addressed to [email protected] Editors [email protected] those of the contributors and do not necessarily reflect Grant Busby the official views of the World Customs Organization. Acknowledgements: The Editorial Team wishes to ex- Laure Tempier Publisher Contributions in English or French are welcome but press its sincere gratitude to all who contributed to this World Customs Organization should be submitted not later than 10 August 2010. In publication. Online subscriptions Rue du Marché, 30 this regard, the WCO reserves the right to publish, not to http://www.wcoomd.org/ B-1210 Brussels publish, or to edit articles to ensure their conformity with Pictures: Our sincere gratitude also goes to all who kindly home_press_wco_news.htm Belgium the magazine’s editorial policy. The WCO Communication provided photos, logos and drawings to illustrate this issue. Service is available to attend to all requests for subscrip- Advertising Tel.: +32 (0)2 209 94 42 tions, submission of contributions for consideration, and Design: www.inextremis.be Fax: +32 (0)2 209 92 62 any other enquiries relating to WCO News. Please e-mail [email protected] [email protected] www.wcoomd.org Bernard Bessis

WCO News – No 62 – June 2010 3 CA l e n D a R

Calendar of Events It should be noted that these meetings are mentioned for information purposes and are not all open to the public. Training workshops are aimed at the private sector. Unless otherwise indicated, all meetings are held in Brussels. Please note that these dates are indicative only and may be subject to change. This document is regularly updated on the WCO Members’ web site, under the “Information for delegates” section, and on the WCO public web site, www.wcoomd.org , under the “Events” section.

June 15 - 16 Training workshop on WCO Data Model version 3.0 15 - 16 Training workshop on Customs Valuation and Transfer Pricing 21 - 23 Policy Commission (63rd Session) 24 - 26 Council (115th/116th Sessions) 26 International Day against Drug Abuse and Illicit Trafficking 26 - 27 G-20 Summit, Toronto (Canada) 28 - 29 WCO Risk Management Forum

September 1 - 2 International Customs Conference : EU-Belgium Pavilion at EXPO 2010, Shanghai (China) 7 - 8 Ad Hoc Group on Globally Networked Customs 9 - 10 Harmonized System Committee Working Party 13 - 24 Harmonized System Committee (46th Session) 20 - 24 Data Model Project Team 27 - 29 Capacity Building Committee (1st Session) 30 - 01/10 Integrity Sub-Committee ( 9th Session)

October 1 Regional Offices for Capacity Building/Regional Training Centres 4 - 8 WCO UNCITRAL Joint Legal Task Force (3rd Meeting) 11 - 12 Private Sector Consultative Group (15th Meeting) 12 SAFE Members Only Meeting 13 Customs - Business event 14 - 15 SAFE Working Group (7th Meeting) 18 - 22 Permanent Technical Committee (189th/190th Sessions) 20 1st World Statistics Day 25 - 29 Technical Committee on Customs Valuation (31st Session)

November 2 - 4 2nd Technology and Innovation Conference (Egypt) 3 - 4 WCO Counterfeiting and Piracy (CAP) Group (3rd Meeting) 9 - 10 Ad Hoc Group on Globally Networked Customs 10 - 13 14th International Anti-Corruption Conference (IACC), Bangkok (Thailand) 15 - 24 Harmonized System Review Sub-Committee (41st Session) 23 - 25 5th WCO Picard Conference, Abu Dhabi (UAE) 29 - 30 Administrative Committee for the Customs Convention on Containers, 1972 (12th Meeting)

December 1 - 3 Revised Kyoto Convention Management Committee (9th Meeting) 6 - 8 Policy Commission (64th Session) 8 - 10 Working Group on Commercial Fraud (6th Meeting)

4 WCO News – No 62 – June 2010 E D I TOR I A L

Dear colleagues and partners,

This edition's special dossier is dedicated to risk management, in preparation for this year’s WCO Council sessions with a panel discussion, followed by an open Forum, both centered on this theme. As Council Chair Martyn Dunne details in his introduction to the special dossier, this concept has been one of the guiding principles of modern Customs administrations, and is embodied in many WCO instruments. Together with other critical building blocks, risk management in- dicates the direction of Customs in the 21st century.

Constantly faced with new challenges, Customs should remain responsive in managing emerging risks. One example is natural and other disasters where Customs is expected to facilitate the expeditious clearance of relief consignments. We still have fresh memories of the recent earthquakes in Haiti and other countries that caused such numerous scenes of human tragedy. An associated risk is that of the illegal trade in cultural heritage, especially illegal outflows from countries that have suffered natural and other disasters. This issue also touches on the WCO's efforts in working closely with the Red Cross, UNESCO and other international organizations to manage these risks.

Another emerging and pressing risk is that of fake medicines and other counterfeit goods that pose direct threats to the health and safety of people. The WCO has been active in raising awareness about this risk and the contribution Customs can make in ensuring that the message about this cruel trade is heard by the public, business and governments. The new partnership with the Chirac Foundation to fight against fake medicines will provide us with an important platform to sensitize the world's political leaders.

Customs needs to cooperate with its partners to effectively manage these risks. The Customs-business partnership, another important building block of the WCO's Customs in the 21st Century strategic policy and the theme of this year’s International Customs Day, is aimed at improving compliance by business which will reduce risk for Customs administrations and facilitate trade. The many activities by our Members on International Customs Day to highlight this important partnership are also captured in this edition.

I hope that you enjoy reading this latest issue and look forward to seeing you at the Council sessions in June!

Kunio Mikuriya Secretary general

WCO News – No 62 – June 2010 5 f l a s h i n f o Buzz • Last minute 26 June 2010. Promotional material (bro- Mujica will take charge of the Directo- The 5th WCO Picard Conference, originally chure, logo package, fact sheet) can be rate until a new Director assumes office. scheduled to take place from 28-30 Sep- downloaded from the UNODC website. Elections for the post will take place at the tember 2010, has been rescheduled and www.unodc.org/unodc/en/about- June 2011 Council sessions. will now take place from 23-25 November unodc/26-June.html www.wcoomd.org 2010. It will be held in Abu Dhabi (UAE) as planned. EU-China International Customs Confer- • Accessions ence with the theme “Modern Customs: The Republic of Mali, the Republic of • Info Building bridges to facilitate legitimate Malta, and the United Arab Emirates de- The WTO Public Forum 2010 with the trade while protecting citizens” will take posited their instrument of accession to theme “The Forces Shaping World Trade” place in the EU-Belgium Pavilion at Expo the International Convention on the Sim- will be held at WTO Headquarters in Ge- 2010 in Shanghai from 1-2 September plification and Harmonization of Customs neva from 15-17 September 2010. This 2010. The event is being organized by the Procedures (Revised Kyoto Convention) Forum provide an opportunity to take European Commission in collaboration with the WCO respectively on 4, 11 and stock of the latest developments at the with Chinese Customs. 31 May 2010. The Convention which en- global level that are having an impact http://ec.europa.eu/taxation_customs tered into force on 3 February 2006 now on the multilateral trading system, and has 69 Contracting Parties. identify steps that will contribute towards Achim Steiner has been re-elected Ex- www.wcoomd.org bolstering international trade flows and ecutive Director of the United Nations strengthening the WTO. Environment Programme (UNEP) for a • Appointments www.wto.org/english/forums_e/ngo_e/ five-year term beginning 15 June 2010. Recently appointed Directors General: forum10_background_e.htm www.unep.org Mrs. Marlene Ardaya Vásquez (Bolivia); Mr. Sang-Goo Byun (Korea, Rep. of); The World Bank Group is providing free John Scanlon has been appointed Secre- Vice-Admiral Pedro Miguel Pérez Betancourt access to more than 2 000 data indicators tary-General of CITES. He was previously (Cuba); Mr. Tális Kravalis (Latvia); on finance, trade, health, and human and Principal Advisor at the United Nations Mrs. Angélique Berg (Netherlands); economic development, most of which Environment Programme (UNEP) and Mrs. Gloria Luque Ramírez (Peru); were previously available only to paying takes over from Willem Wijnstekers who M r. I h o r K a l e t n i k ( U k r a i n e) ; subscribers. retired on 1 May 2010 after being CITES Mr. Enrique Canon Pedragosa (Uruguay). http://data.worldbank.org Secretary-General since 1999. www.cites.org Contrary to our earlier announcement, • Get reading Mr. Erling Andersen is still Denmark’s The European Commission has published • Current events Director General of Customs. a Compliance Risk Management Guide for TheO WC Capacity Building Directorate tax administrations. meetings scheduled for the week of 19 to • For your diary! http://ec.europa.eu/taxation_customs 23 April 2010 were postponed due to the 11 1 June - 2 July 2010: Football World Cup, the ash cloud crisis that affected air travel. South Africa The World Bank has published a new The 1st fSession o the Capacity Building report entitled “Africa Development Committee, the 9th fSession o the Integ- • WCO trophies Indicators 2010”. This report deals, in rity Sub-Committee and the Meeting of For the 5th nyear i succession, the WCO particular, with the issue of “quiet cor- the Regional Offices for Capacity Build- will award the trophy for combating ruption” - minor, everyday malpractices ing and Regional Training Centres will counterfeiting and piracy during the June that nevertheless have huge repercussions now take place from 27 September to 2010 Council sessions. This year the tro- in Africa, particularly for the poor. The re- 1 October 2010. phy will go to a Customs administration port includes more than 450 indicators of which has distinguished itself in the fight macroeconomic, sectoral and social data The posts of Director of Compliance and against the illicit traffic in fake medicines. for 53 African countries. Facilitation and Director of Capacity www.worldbank.org Building in the WCO Secretariat will fall All WCO Members have been invited to vacant on 31 December 2010. The Direc- participate in the second edition of the • Look out for tors General of the WCO’s 176 Member WCO Photo Competition. The trophy The WCO’s annual Reports on Drugs, Customs administrations will elect two will be awarded during the June 2010 Tobacco and Cigarettes, and Intellectual new Directors during their June 2010 Council sessions. Photos will show Cus- Property Rights will be issued in late June Council sessions. They will take up office toms services in action in their day-to-day 2010. on 1 January 2011. work. www.wcoomd.org www.wcoomd.org

• On the front page Following the death of Antoine Manga, International Day against Drug Abuse WCO Director of Tariff and Trade Affairs, and Illicit Trafficking will be marked on the Deputy Secretary General Sergio

6 WCO News – No 62 – June 2010

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HCV, viZual and ARD are trademarks of Smiths Detection Group Ltd. f l a s h i n f o Changes ahead for the WCO

n Saturday 26 June 2010, the It will be the responsibility of the Council Director of Compliance and Facilitation ODirectors General of Customs who to nominate two Directors to take office and Director of Capacity Building. will have gathered in Brussels for the on 1 January 2011 in accordance with the 115th/116th Council Sessions will elect rules in force. A press release on the results of the new Directors to replace Michael Schmitz, elections will be issued by the WCO Director of Compliance and Facilitation, The Secretariat is pleased to announce Secretariat. and Lars Karlsson, Director of Capacity that applications from the following can- Building. didates have been received for the posts of

Director of Compliance and Facilitation Director of Capacity Building

Executive Director, Regulations and Rulings, Office of Interna- tional Trade, Customs and Bor- Head of Computer Section, Ms. Sandra Lee Bell der Protection (United States) Mr. Emad Al Tamimi Customs Department (Jordan)

Minister-Counsellor (Customs Director General, Directorate and Taxation), Embassy of General of Customs and Indi- Mr. Uri Bruck Israel in Brussels (Israel) Mr. Hippolyte Djegou rect Taxes (Benin)

Director General, Directorate General of Customs and Indi- Commissioner, Human Re- Mr. Hippolyte Djegou rect Taxes (Benin) Ms. Christina Felicitas sources and Administration, Msemburi Revenue Authority (Zimbabwe)

APPLICATION FOR THE POST OF CAPACITY BUILDING DIRECTOR WITHIN THE WORLD CUSTOMS ORGANIZATION1 Researcher, International Best Practices Committee, Strate- gic Planning Sector, Customs Group Executive, Customs Mr. Mahmoud El Madna Authority (Egypt) Strategy and Policy, Revenue Mr. Erich1. PARTICULARS Kieck Service (South Africa)

National Administrator of ASY- CUDA++, Directorate General of Customs IT system (Co- Mr. Mmadi Moindjie moros) National Commander, Customs Mr. Janos Nagy and Finance Guard (Hungary)

Family name (in capitals) Maiden name (in capitals)

dr. NAGY -

First name(s) (in capitals) Sex Director General, International x M János □ F Cooperation, General Adminis- Date of birth More informationPlace of birth Mr. Gaozhang Zhu tration of Customs (China)17 April 1956 Budapest www.wcoomd.org 1 Application to be typed, and to be made available in electronic format on request.

WCO News – No 62 – June 2010 9 -1/11- f l a s h i n f o

Farewell Antoine

t is with deep sadness that occupy several high-level posts in the course of his pro- Ithe international Customs fessional career, both in Cameroon and abroad, culminat- community learned of the ing in his appointment as Cameroon’s Director General death of Antoine Marie of Customs in 2005. After that it was once again the turn Manga Massina, Director of of the WCO, its Members and the international Customs Tariff and Trade Affairs in community to benefit from his spirit of openness, his the WCO Secretariat, who ability to listen, his practical Customs knowledge and passed away on 24 April his human qualities. 2010. On behalf of the international Customs community and Since 1 Januar y 2008 the staff of the WCO Secretariat, WCO Secretary General Mr. Manga had been Director of Tariff and Trade Af- Kunio Mikuriya expressed his sincere condolences to fairs, responsible for matters relating to the Harmonized Antoine’s family. System, origin and valuation - core areas of Customs activity. From 1992 to 1999 he was Deputy Director of Messages of condolence may be sent to Valuation at the Secretariat. [email protected].

His experience and tremendous expertise in Customs mat- More information ters were acknowledged by his peers, and enabled him to www.wcoomd.org

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The Cotonou Declaration, a policy strategy for achieving rapid results by Catherine Joubert

These factors have to be placed within a The skills offered by the WCO are crucial regional or even international context. for obtaining rapid results in the latter Traffickers exploit States’ weaknesses as two areas. well as their lack of cooperation and difficulties in harmonizing their regulations. At State level, joint efforts have to be This array of problems requires political made to strengthen Customs’ role as part action that inspires stakeholders and of the mechanism to combat fake medi- unites the structures and administrations cines. Their representatives must enter working in each of the affected areas. into full partnership with health professionals, consumers, police and judicial It is for that reason that Jacques Chirac authorities. and a number of Heads of State issued the ust like any other commodity, medi- Cotonou Declaration against fake medi- On another level, the WCO’s capacity Jcines are now part of the globalization cines in October 2009. The Declaration’s to network with its Members and its ex- process. In developing countries, the free signatories pledge to develop the requisite tremely thorough knowledge of Customs movement of medicines has increased legislative and regulatory provisions and codes in effect could serve the interests of public access to health care, with more genuinely hope for an international legal cooperation between States as well as the people instinctively seeking medical framework giving each party the means establishment of a model legal framework treatment, and has promoted the es- to act in unison. applicable by all countries. This would tablishment of medicine purchasing co- permit the mutual development of tools operatives. The diversification of funding A solution focusing on three areas to combat fake medicines. for development assistance in the health- This scourge can only be eradicated care domain has brought down the cost through a combination of enforcement With the WCO’s assistance, the Chirac of medicines for patients in the world’s activities and better access to quality Foundation has already been able to send poorest countries. medicines, stringent quality controls on a message to Customs officers in Benin products, and enhanced traceability and underscoring the importance of their role These positive results meet the Millen- security of pharmaceutical distribution in this highly ambitious project. We hope nium Development Goals, set almost 10 channels. The success of this enforce- that with national Customs administra- years ago at the United Nations. However, ment approach rests on the joint imple- tions on board, we can continue to make a in parallel with these positive results, the mentation of these strategies, as well as joint call for rapid results in the future. As trade in illicit medicines has been increas- on simultaneous operations at the sub- things currently stand, once a fake medi- ing exponentially. Developing countries regional level. cine has cleared Customs it is impossible are currently under threat from a massive to trace it within a territory. influx of fake and defective medicines ar- The activities undertaken by the Chirac riving through both criminal and official Foundation since the Cotonou Declara- Catherine Joubert has been the Managing Di- distribution channels. These account for tion have focused on three complemen- rector of the Chirac Foundation since 2010 and 30% of medicines brought into develop- tary areas: is responsible for coordinating and developing ing countries. the Foundation’s programmes concerning ac- • Fo llowing up on the Cotonou Dec- cess to quality medication and water, combat- Comprehensive political action is laration commitments made by inter- ing deforestation, and preserving cultural di- required national policymakers versity. During her career she has managed the The causes of this dangerous phenom- French Ministry of Foreign Affairs “Bienvenue en enon are manifold. In addition to pub- • Supporting and advising the com- France Association” which promotes exchange lic health and social security structural mittees being set up to counter “fake and dialogue between cultures, and worked on policies which are costly and seldom im- medicines” within the signatory States the “Connaissance et Vie d’Aujourd’hui” lecture plemented, there are insufficient qual- by ensuring that all the stakeholders series focusing on national, European and inter- ity controls on medicines placed on the are able to voice their opinions therein national challenges. market, problems in ensuring an effective Customs reponse, shortcomings in the • Promoting a binding legal frame- enforcement system, and indisputable work with international scope to flaws in States’ legislative and regulatory wage war against the production of More information frameworks. and trade in fake medicines www.fondationchirac.eu

WCO News – No 62 – June 2010 11 f l a s h i n f o Global system on illicit trafficking in tobacco products makes progress

systems and a global information sharing focal point located at the WHO FCTC Sec- retariat, accessible to all Parties.

The system requires unique, secure and Customs non-removable identification markings, such as codes or stamps, to be affixed to

Australian or form part of all unit packets, packages

© © Australian Customs and any outside packaging of cigarettes and other tobacco products. By using earing in mind the severe health ties, international intergovernmental or- these unique identification markings, one Brisk factors derived from smoking, ganizations (notably the WCO) and non- can access the portal and receive specific the World Health Organization (WHO) governmental organizations (for example information such as the date and loca- launched the idea for an international the Framework Convention Alliance). tion of manufacture and the intended instrument to control tobacco. This shipment route, date and destination. idea resulted in the development of the To date, key elements of the draft proto- The aim is to assist Parties in determin- Framework Convention on Tobacco Con- col include: ing the origin of tobacco products, the trol (FCTC) which came into force in Feb- point of diversion where applicable, and ruary 2005. • measures to control the tobacco prod- to monitor and control the movement of uct supply chain (including tracking tobacco products and their legal status. The Convention which currently has 168 and tracing of tobacco products, li- The implementation of this and other Contracting Parties is a comprehensive censing, anti-money laundering meas- important provisions contained in the legal instrument for tobacco Control. ures, and restrictions on internet sales Protocol will impact on the work of Cus- The aspect related to the illicit trade in of tobacco products) toms significantly. tobacco products is included in Article 15 of the Convention. In this Article, the Par- • measures dealing with criminalization The draft Protocol, the text of which was ties to the Convention recognize that the and enforcement (including the estab- agreed by the INB at its fourth session elimination of all forms of illicit trade in lishment of offences, sanctions, penal- in March 2010, will be considered by the tobacco products, including smuggling, il- ties, destruction, special enforcement COP at its fourth session to be held in licit manufacturing and counterfeiting, is techniques) Uruguay in November 2010. an essential component of global tobacco control. Article 15 states that the Parties • international cooperative measures Bearing in mind that the Framework Con- shall adopt and implement effective leg- (including information sharing, co- vention is one of the most quickly and islative, executive, administrative or other operation in technical matters and in widely ratified international conventions, appropriate measures with a view to elimi- training, and mutual legal and admin- the WCO Secretariat strongly encourages nating illicit trade in tobacco products. istrative assistance) its Members to examine the Protocol’s text and urges Customs administrations At its first session in February 2006, the It is extremely challenging to get con- to actively participate in, or provide inputs Conference of the Parties (COP) noted sensus on binding measures to be imple- to, the work of the next COP as further that Article 15 did not go far enough in mented at an international level in the final negotiations may in fact lead to a facilitating international cooperation to fight against the illicit trade in tobacco binding agreement with strong implica- enable Parties to effectively eliminate products. The fourth session of the INB tions for Customs activities in countering the illicit trade. They decided therefore ended in fact without a final agreement. the illicit trade in tobacco products. to establish an intergovernmental nego- Although the Parties did reach agreement tiating body (INB) to prepare a template on some significant provisions, other pro- The WCO, the FCTC Secretariat and the for a Protocol on Illicit Trade in Tobacco visions were not finalized. WHO are continuing to seek synergies Products which will build upon and com- and complementarities in the relevant plement the provisions of Article 15 of the Among those on which an agreement was areas of the Protocol. FCTC. Since its establishment, the INB has reached was the establishment of a global convened in Geneva four times each year tracking a tracing regime for all tobacco since 2007. products as set out in Article 7; considered the core element of the Protocol. The More information The INB consists of Parties to the FCTC tracking and tracing regime comprises na- www.who.int/gb/fctc and observers which are States non-Par- tional and regional tracking and tracing www.fctc.org

12 WCO News – No 62 – June 2010 f l a s h i n f o Publications get with it!

uring the June 2009 Coun-

Dcil sessions the Secretariat Taxud

undertook to modernize its pub- © lications. Existing tools have been enhanced and new developments envisaged. Customs info in Modernization of publications in 2009/2010, we pulled it a few clicks! off… The new digital version of the HS, tested in June 2009, is now available on …the EC launches CD-Rom and online. It contains many new functions such as the possibility to the first phase key in notes and comments on items and recovers them, to place a personal post-it of the European on a chapter, section, heading, classification opinion or explanatory note, a lin- Customs guistic search engine, etc. which will be launched in September 2011. The HSDB, Alphabetical Index and a new Information Portal WCO Publications available in differ- version of the Compendium of Classifica- ent electronic formats have become an tion Opinions will be available for the first he European Customs Information integral part of Customs information time in all media formats concurrently. TPortal (ECIP) aims to help businesses portals and professional applications. Let us not forget that the Alphabetical through the Customs procedures that They certainly meet users’ expectations Index for the 2007 version of the HS only have to be followed when importing as is demonstrated by increased sales of came out two years after the HS itself goods into and exporting goods from the these media. and the CD-Rom was made available 18 European Union (EU) or when they are months later. We’ve come a long way! merely in transit through the EU. Since the issue of HS Amending Supple- ment No. 7, the use of a new professional Different Directorates within the Secre- The current version of the ECIP consti- editorial tool has meant that publications tariat have also been mulling over pos- tutes a single point of access to relevant are available at the same time via differ- sible ways to modernize all other WCO and practical information on the applica- ent media: in paper; on CD-Rom or on- publications and develop new tools. The tion of the Safety and Security Amend- line. Translations of publications are easily revised Kyoto Convention for example is ment to the Customs Code and related handled whilst ensuring alignment with already available in an internet format procedures. It uses special animated Cus- the original versions. (HTML) and will be equipped with a search toms scenarios to explain each step of the engine by the end of the year. import, export and transit procedures in Improved service to Members in an easy way to economic operators. Fur- 2010/2011, on the way… After adapted its publications to comply thermore it pools information from both As promised, the Secretariat is continu- with new editorial standards, the Secre- EU Member State Customs Portals and ing in its efforts to make publications tariat now wishes to provide its Members European Commission (EC) sources. available in new languages. In the first and the general public with an innovative, half of 2010 Italian, Russian, and Span- cutting-edge service. From 2010, WCO The web portal was jointly developed by ish versions of the HS Data Base (HSDB) publications will be tested on a Nomad the EC, its Trade Contact Group and EU were placed online. New translations in Tablet PC. Hope to see you to try out Member States. It focuses on the effects other languages could be added this year this new medium at the 2011 Council of the entry into force of the Safety and too. The Secretariat is in fact looking for Sessions! Security Amendment to the Customs volunteers for trials with a language using Code on 1 July 2009. The web portal is ideograms and with Arabic. publicly available as part of the Commis- sion’s EUROPA website. 2010/2011 will be devoted to work on the More information publication of the 2012 version of the HS www.wcoomd.org At present, the ECIP contains three main categories of information. First, it gath-

WCO News – No 62 – June 2010 13 f l a s h i n f o

It uses special animated narios”, which take users step-by-step from two sources, namely, the EC and EU through different export, import and Member States. The Commission plans to Customs scenarios to explain transit procedures. These scenarios ex- further develop the portal on the basis of plain each stage of the procedures, list- experience gained and feedback received. each step of the import, export ing responsible authorities and relevant Its coverage and in depth information on documents that have to be filed at each Customs procedures are scheduled to be and transit procedures in an easy stage. Each scenario is accompanied by extended over time. a detailed glossary that links to relevant way to economic operators. documents, databases and legislation. Last but not least, the portal covers the legal framework. ers information from the Customs sites of the Commission and EU Member States. The first phase of the ECIP website is a This information includes databases, forerunner to the comprehensive Customs procedures and assistance services as information portal foreseen at a later well as relevant policy information con- stage. It is a project to test and study the tained in various Commission websites. basic functionalities of a portal approach More information It also features animated “Customs sce- for Customs that combines information http://ec.europa.eu/ecip/

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14 WCO News – No 62 – June 2010 S P E C I A L D O SSI i e R

Special Dossier Risk Management

isk management is the systematic application of manage- Rment policies, procedures and practices in order to identify, analyse, assess, handle, monitor and anticipate risk. Risk management, an integral part of the Revised Kyoto Conven- tion (RKC) and other WCO instruments, offers clear and visible benefits to the international Customs community, which must constantly improve its effectiveness and its performance, and be ever more transparent, responsible and professional.

But what lies behind this concept? How is it reflected in the field? This is the subject of our Special Dossier which, through the experiences of various countries and the many discussions held on this subject, looks at how risk management can be developed in practice.

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Getting to grips with risk management by Martyn Dunne, Chairperson of the Council

s Customs administrations, we are and hence lower transaction costs; and Auniquely positioned to use our knowl- improved cooperation between traders edge and expertise in managing the bor- and Customs. der to implement a risk management approach. In general terms I am sure that the Improved management processes lead to concept and benefits of risk management improved reputation, the capacity to work are well understood. However I think we more effectively with the same or fewer can do more to ensure there is practical resources, a more ‘intelligent’ approach implementation across the full range of and professionalism of staff, and better Customs activity. results overall, leading to Customs achieving organisational and national objectives. What do we mean by risk management? A different way of doing things

As pointed out during the WCO Policy To manage risk, a Customs administration Commission in December last year, risk must move away from traditional meth- management is not just about having ods and adopt a new culture and new ways Convention; the SAFE Framework of good processes; it is a way of thinking of solving problems, including an increase Standards; the Columbus Programme; that moves an administration towards in accountability for decision making. Risk and the Customs in the 21st Century proactive, rather than reactive, manage- management methodology should be strategic policy. The WCO Secretariat ment of the border. On the operational or flexible, adaptable, and take into account is also developing a Risk Management ‘external’ front, risk management is an ef- changes in the operating environment, Compendium. fective and efficient way to deal with large including in processes and legislation. It volumes of people, goods and craft with should be able to be applied to any situ- Kunio Mikuriya, the Secretary General of limited resources and constantly chang- ation where an undesired or unexpected the WCO, is well aware of the importance ing risk, without impinging on legitimate outcome could have a significant impact of risk management and, in particular, the trade flows. or where opportunities are identified. need for practical implementation. We have made risk management a priority for Risk targeting provides us with sharper Risk management in Customs, including 2010 and the WCO is hosting a two-day operational focus. Intelligence analysis intelligence and operations, must rest on Risk Management Forum after the Coun- identifies where the greatest risk lies. modern legislation. Legislation should en- cil Sessions in June. At this meeting we The use of specialist targeting resources able information collection and sharing, will discuss the importance of risk man- like Targeting Centres enables us to ef- including internationally where appro- agement for each of our administrations, fectively deploy our resources and work priate. It should provide a legal basis for identify ways of translating the concept of in an integrated way with other agencies. operations also. Management of customs risk management into action, and ensure Corporate, or internal, risk management is risk also benefits from an international that WCO work programmes, including also very important. It includes concepts component. Working across borders the vital component of capacity building, such as integrity, leadership, legal issues, with other intelligence and enforcement are aligned. and stakeholder relations. agencies enhances risk management by improving information collection and en- The WCO can provide the tools, but it What are the benefits? forcement options. is ultimately the responsibility of individual Customs administrations to make The benefits of a comprehensive risk A key programme for the WCO sure that these tools are implemented management programme include: bet- to help us achieve our objectives. I take ter human resource allocation; increased The WCO has undertaken a lot of good this opportunity to encourage all Direc- revenue; improved compliance with laws work in this area and risk management tors General of Customs to attend the and regulations; reduced release times is an integral part of: the revised Kyoto June Forum.

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Initial results of the Custom risk management survey by Juha Hintsa and Toni Männistö, Cross-border Research Association

The growing volume of global trade, as a long term few efforts to date have formally collected and col- trend, continues to be a significant challenge for lated the right data that can provide a snapshot of the current CRiM environment for systematic many Customs administrations as we all strive to analysis purposes. maintain an ability to protect our socio-economic To help fill this gap, an initial survey study of WCO interests from fiscal and non-fiscal threats. For Member administrations was carried out. The many years, Customs administrations have migrated study focuses on approximately 20 CriM components that deal with establishing and operating towards risk managed approaches in order to CRiM principles and practices from both strategic maintain control over the movement of people, and operational perspectives. It scopes CRiM to cover those risks associated with the movement of goods, and conveyances across borders. Simply put, goods (excluding for example risks with passengers Customs administrations have learned by necessity or with Customs IT projects). The study also explores the level of detailed understanding, insights, to focus their resources on high risk cargo while practical implementations, tangible benefits, and simultaneously facilitating low risk trade. success measurement criteria, amongst other factors, at different administrations. The main part of the study data collection took place between May and August 2009, after a two year intensive prepa- oday, Customs risk management (CriM) has ration phase. The survey replies were provided by Tbecome a discipline for WCO member admin- 24 administrations (out of the 36 invited) from all istrations in the core of their day to day business. six WCO regions, representing GDP per capita of Customs administrations are learning to exploit between 1000 and 40.000 US Dollars. CRiM at both strategic and operational levels, and have proven it’s effectiveness at identifying and Based on all the outcomes of the survey, the fol- interdicting higher priority fiscal and non fiscal lowing 12 recommendations have been made for threats. WCO Members are using the principles all Customs administrations to consider: of CRiM and seeing the benefits, including the recoupment of evaded revenue and 1. Review the current overall CRiM regime, includ- interdictions of security and terrorist ing definitions, core processes, alignment with based threats, narcotics, prohib- overall customs strategic plans, and risk man- ited goods, and food and ag- agement cycles, etc. If gaps or inconsistencies ricultural threats, as exam- exist consider refinement. Try to establish for- ples. An online “Google” mal CRiM strategic and operational processes as search of “Customs part of an established risk management cycle, risk management” with regular updates, based on the changing brings interesting operational, criminal and legal environment. results and many refer- Ensure CRiM is embedded as the core of your ences, including dozens of business and not just “lip service” or another relevant files and news items “paper tiger” within your administration. discussing a variety of lessons learned. At the same time, there is 2. Review and update the current CRiM organi- a gap in the academic CRiM research. zational structure within your administration Survey data is not readily available and with a focus on internal governance. Clearly ©CBRA

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determine and articulate the functions and ing basic import and export processes and find responsibilities which are centralized versus solutions to promote and support risk based de-centralized; and how these functions and decision making. sections of the organization interoperate and collaborate. Consider even establishing inde- 5. Take a close look at a broad set of available pendent risk management (targeting, analysis qualitative and quantitative risk management or risk assessment) units, as a complimentary tools, techniques and standards, and consider operational layer; with emphasis on providing upgrades in your current CRiM toolbox, based a clear mandate, governance, and interoper- on your overall priorities. Seek a balance be- ability with other enforcement or intelligence tween qualitative and quantitative approaches sections. and methodologies without relying entirely on one or the other. 3. Consider updating recruitment and career planning, training programs, recognition and 6. Have an open mind to improve the breadth, rewards for your specialized risk management depth, quality and timing aspects of the com- officers, as this appears to be often the weak mercial data and other supporting contextual spot regarding human resource management. data fed into your CRiM processes; in particu- Make CRiM as an appreciated and recognized lar, consider exploiting more pre-departure and/ job within your administration. or pre-arrival data, as currently it has very low priority globally. Collaborate proactively with 4. Analyze and prioritize the fiscal and non-fiscal your trading community to seek data solutions hazards and risks for your administration and that help to improve end-to-end supply chain country, looking at both strategic and opera- visibility. tional implications of risk realizations. Take a look at how decisions are made on other cus- 7. Check which type of intelligence and other in- toms procedures in your administration includ- formation is shared with other agencies in your

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The study explores the level of detailed country, and abroad, and try to identify and solve any information timing, quality, trust, understanding, insights, practical legal or other hurdles preventing you from managing risks better via proactive informa- implementations, tangible benefits, and tion sharing. From an internal perspective, work closely with your enforcement and intelligence success measurement criteria, amongst divisions so they may feed key information into your risk management units to influence, sup- other factors, at different administrations. port, and drive priorities at strategic and tactical levels. the secure flow of trade, including interoperability 8. Verify if any types of legal restrictions or policy and harmonization with electronic single window barriers exist that may be negating CRiM. If initiatives, international security standards and these exist, consider finding solutions to up- principles, and collaboration with other govern- grade the national legislation and regulations, ment partners, customs administrations, and the local or regional business practices, or any other trading community. root causes behind such hurdles. The full survey study report is scheduled to be pub- 9. Study and apply lessons learned from exist- lished during the last week of June, and a presenta- ing risk management literature (including sup- tion will be given at the WCO Risk Management ply chain and enterprise risk management), Forum on 30 June 2010. Following this event, the risk management standards (including AS/ research team intends to launch approximately 12 NZS 4360 and ISO31000), and WCO material case studies, focusing on detailed enhancements such as the WCO Risk Management Guide, the in CRiM from Customs administrations globally. As Global Information and Intelligence Strategy, the last stage of this multi-year CRiM research pro- Standardized Risk Assessments, the Global High gramme, the team has preliminary plans to develop Risk Indicator document, and WCO e-learning a “CRiM Best Practices” guidebook, consisting of material. short examples on how CRiM aspects have been improved in the past. 10. Establish systematic benefits of CRiM, and build performance measurement indicators More information into your CRiM framework. Actively seek out [email protected] the most cost-efficient CRiM enhancements, and quantitatively measure the success of your risk based decisions at the border.

11. Collaborate and work closely with the private sector in your country. It is important to be open and transparent about CRiM (without revealing security sensitive details, of course) and make them aware of your plans for exploiting CRiM in the future to facilitate low risk compliant trade, and – if feasible - provide tangible benefits for well secured and highly compliant companies and supply chains, via the various CRiM mechanisms you have in place, now and in the future.

12. Last but not least, remind your administration that when moving towards actual CRiM implementations, every region or country looks at risk differently, thus requiring tailored approaches. However, your approach to CRiM should factor in the necessary alignment with regional or global partners to promote © Australian Customs

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Risk management: what can you really manage? By James Giermanski

"Those tasked with risk management duties must here is so much written about risk manage- Tment, it seems that there is nothing left to say. understand three definitive categories: no control; Conceptually, “risk” is used to denote perils, loss, dangerous occurrences, hazards, and even vulnera- direct control; and indirect control." bilities. Those of us who had to teach management at college and university levels know that management from the time of Henri Fayol’s 14 principles in 1916 to current management teaching includes functional principles such as planning, organizing, commanding, controlling, leading, budgeting; principles in human resources like personnel administration, human motivation and relations, training, development and performance appraisals, and operational management. In other words, risk management, involves every aspect of an organization’s status and operations. But what about security in a global supply chain? In the supply chain there are risk elements like third parties, foreign shippers, carriers, weather, foreign government involvement, disruption in the process, timing, language, cargo quality and quantity, and other forces.

Organizations (and firms) need to focus their risk management efforts on what they can control. Therefore, those tasked with risk management duties must understand three definitive categories: no control; direct control; and indirect control with indirect control being the most difficult since the fundamental component of risk is the human element, the most difficult element to manage.

NO control

Global supply chain managers understand there’s not much they can do about the breakout of war or national hostility. What has traditionally been accepted as not under the control of an organization has been expressed in the legal concept of “force majeure”.

“Force majeure literally means “greater force”. These clauses excuse a party from liability if some unforeseen event beyond the control of that party prevents it from performing its obligations under a contract. Typically, force majeure clauses cover natural disasters or other “Acts of God”, war, or the failure of third parties--such as suppliers and subcontractors--to perform their obligations to the contracting party. It is important to remember that force majeure clauses are intended to excuse a party only if the failure to perform could © Inter American Development Bank

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not be avoided by the exercise of due care by that (ii) employment screening – background, party.” (Force Majeure, http://www.library.yale. drug screening; (iii) code of conduct – dis- edu/~llicense/forcegen.shtml) tributed and acknowledged.

DIRECT control • Education, training, and threat assessment: (i) employee requirements, incen- With the incredible volume of risks involved in the tives. security of an international movement of cargo, it seems there should only be one essential focus: • Information technology security: (i) pass- the quality and competency of personnel, from words, usage accountability. managers who have had to develop and make policy to those who have to carry it out. Thus, people • Container security: (i) stuffing and destina- Dr. James R. Giermanski (Jim) is the are the sine qua non of managing risk, especially tion controls; (ii) breach detection devices; Chairman of Powers Global Hold- with respect to security in the supply chain. Con- and (iii) monitoring shipment progress. ings, Inc. and President of Powers International, LLC, an international sequently, organizations must develop and adhere transportation security company. to policies that are carried out by vetted, trustwor- • Container inspection: (a) seven sided in- He was a Regents Professor at Tex- thy people at all levels of the organization. spection (sides, ends/doors, ceiling/floor, as A&M International University undercarriage). (TAMIU) and is a member of the Two examples, one government and one private graduate faculty at the University of sector, can be used to demonstrate the human Each of these involves the actions of people, North Carolina in Charlotte (UNC role in supply chain security: first, US Customs from the proper selection of trade partners Charlotte). Besides having ser ved as and Border Protection (CBP) recognized this in by honest, competent managers, the de- Director of Transportation and Lo- its Customs Trade Partnership Against Terrorism velopment of policies and verifiable proc- gistics Studies at TAMIU’s Center for (C-TPAT); and second, the chain-of-custody con- esses, down to the competent inspection the Study of Western Hemispheric tainer security system now beginning to be used of containers by warehouse dock person- Trade, Jim is a reviewer for the US National Research Council’s Trans- by the private sector. The human factor is obvi- nel. Additionally, good personnel selection, portation Research Board. He has ous in C-TPAT’s core components that include the training, and follow-up review limit fraud authored over 130 articles, books, following: and cargo loss at terminal and distribution and monographs, and has been sites worldwide. Although the private sec- published extensively on transpor- • Business partner security: (a) “Written and tor does not have access to the data mining tation and trade issues in addition verifiable process for the selection including and integrating software used by intelligence to having written the International manufacturers, product suppliers and vendors.” and law enforcement agencies, good back- Insight column in Logistics Manage- ground, criminal, and credit checks must be ment for five years. • Procedural security: (i) protect against un-mani- made on all personnel, especially for firms fested material being introduced into a shipment; involved with handling cargo in a global As a former FBI special agent, OSI (ii) record keeping; (iii) internal controls – invento- supply chain. special agent and a Colonel in ries; (iv) manifest procedures; and (v) documen- the Office of Special Investiga- tions where he handled counter- tation verifications – quantity, quality, marking. INDIRECT control intelligence matters, he currently provides transportation security • Physical security: (i) surveillance and light- Assuming the use of good personnel, there lectures on C-TPAT, and other Cus- ing; (ii) proper communications systems; (iii) is still the issue of theft outside the control toms and Border Protection (CBP) signage considerations; (iv) monitoring pro- of the shipper, consignee, or carrier. There- programmes. Jim holds a Masters gramme for sensors and alarms; (v) facilities fore, systems must be used to track and degree from UNC Charlotte, a – fencing, guards, alarms; (vi) shipping and control cargo from its container stuffing at Masters degree from Florida Inter- receiving controls; and (vii) theft prevention origin to its unloading at destination. Smart national University, and a Doctorate – limited access to shipping areas, back dock container usage that employs control from from the University of Miami. procedures (warehouse related activity in re- origin to destination addresses the “indirect ceiving or sending cargo). control” risk. In effect, the “chain-of-custody” treatment of cargo can be the mirror image • Access controls: (i) identification requirements of the treatment of evidence for prosecution – entry and exit logs, photo id, escorts, pack- purposes – for instance: age scans. • What evidence was found by the law • Personnel security: (i) background checks – enforcement officer = what cargo was criminal, credit, driving, employment history; actually loaded.

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Global supply chain • Identification of the officer who found Thus, like the chain of evidence, supply chain risk the evidence = identification of the ac- management is fundamentally an issue of control. and container countable individual verifying the cargo. What is absolutely clear is that the “human ele- security systems are ment” is the essential core of that issue. Global • Officer’s signature as the first component supply chain and container security systems are inextricably linked to of or link in the evidence chain = an elec- inextricably linked to detailed personnel selection, tronic signature of the person verifying their competence, and performance. Controlling detailed personnel that the proper cargo and quantity was risks in any international supply chain system must selection, their loaded. begin, be executed by, and end with the human component. Therefore, that combination of direct competence, and • The control of evidence by a third party control in personnel selection, and indirect control in the evidence room awaiting use in trial of intermediaries through systems – human quality performance. = third-party command center’s control combined with system quality – is or should be the of cargo movement, breach detection and main focus of risk management within the global notifications. supply chain.

• Receipt and Removal of evidence for trial = receipt and Unloading of the cargo by an identi- More information fied, accountable person at destination. [email protected]

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WCO puts risk management under the microscope Lastest developments

he Customs in the 21st Century(C21) Tstrategic policy approved by the WCO Council during its annual sessions in June 2008, identified the need for a positive and proactive approach to the management of Customs. The third building block in C21 identifies intelligence-driven risk management as one of the 10 key building blocks of a forward-looking strategy for Customs. To give effect to the direction of the Council’s thinking, the Secretariat has been undertaking a review of existing WCO risk management instruments and tools.

Research has identified a wide variety of resources at the WCO that deal with risk management in varying degrees. These include, inter alia, the 2003 WCO Risk Management Guide, the revised Kyoto Convention, the Global Intelligence and Organization (ISO) on risk management ment. However, they also reveal that in Information Strategy and its e-learning standards in general. Links will be drawn many cases it is somewhat limited to risk modules, and the WCO Capacity Build- from documents such as the ISO/IEC 73 - assessment and targeting, mainly focusing Development Compendium. How- Vocabulary, the ISO/IEC 31000 - Principles ing on Customs’ revenue collection role. ever, none of these individual resources and Guidelines on Implementation, and completely explain the implementation of the ISO 31010 - Risk Assessment Tech- From a global perspective, there is a need Customs Risk Management or the detail niques, as well as other relevant references for further development of risk manage- behind the concepts of intelligence-driven and experiences in this field. ment to improve risk prevention, risk risk management or a multi-layered risk mitigation and corresponding allocation management approach. Risk Management has been a priority for of resources based on intelligence-driven WCO capacity building support for many risk decisions. These issues are expected The purpose of the review is to draft a sin- years. The Safe Framework of Standards to be further explored and developed dur- gle compendium that will provide WCO recognizes risk management as one of its ing the coming WCO Risk Management Members with a framework for imple- core components and the Columbus Pro- Forum in June 2010. menting organizational risk management gramme has been providing assistance in systems, together with instructions and different formats to support implemen- methods to apply risk management and tation through diagnostics, development assessment throughout an administration. consultancies, training, seminars, etc.

The new Risk Management Compendium Diagnostic missions conducted under the acknowledges and builds upon existing Columbus Programme reveal that many WCO risk management material with the Customs administrations have already in- scope expanded to include, as appropriate, troduced basic procedures, routines and More information work done by the International Standards solutions for operational risk manage- www.wcoomd.org

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WCO risk management activities

isk management is key to the overall on identifying and examining high-risk rival and post-arrival). These documents Rreconciliation of the requirements of passengers, cargo and conveyances. will be finalized in 2011. enforcement, security and facilitation. One of the biggest challenges Customs In order to assist its Members to more ef- Analysis Guidelines administrations are facing today is to ficiently allocate their resources to identi- determine how to best apply risk man- fied high-risk areas, the WCO Secretariat Risk analysis is an essential part of risk as- agement to identify and mitigate risk at developed several training modules on sessment and provides valuable informa- the operational level. As the only inter- Risk Assessment, Profiling and Selectivity: tion to decision-makers on whether risks national intergovernmental organization Air Cargo and Aircraft for Frontline Cus- under consideration need to be treated that deals with Customs procedures gov- toms Officers; Passengers for Frontline as well as available and most appropriate erning trade between countries, the WCO Customs Officers at Airports; Vessels and treatment possibilities. Within this con- has developed a variety of different tools Sea Cargo for Frontline Officers; Training text, the WCO Secretariat is in the proc- which can assist and facilitate its Mem- in Risk Management for Supervisors; and ess of developing analysis guidelines for bers’ work in managing risk. Frontline Customs Officers at Land Border Members outlining the basic principles, Crossings. Updated versions will be avail- processes and types of risk analysis. These WCO Global Information and able for WCO Members in 2011. Analysis Guidelines will be made available Intelligence Strategy in 2011 also. In addition to the modules, another mod- Intelligence is a key component of risk ule has been developed under the WCO e- CEN - Customs Enforcement management. It is produced from the learning program (Customs Controls, Risk Network collection and processing of information Assessment, Profiling and Selectivity) to and is used primarily by Customs deci- help Customs officers decide how to use Analyzing data on international seizures sion-makers at all levels to support their available resources to select passengers can improve a WCO Member’s under- decision-making processes. and/or goods to be controlled, and how standing of global risks and allow them to thorough the controls should be. refine their profiling and targeting activ- The WCO Global Information and Intelli- ity. Therefore tools such as the Customs gence Strategy (GIIS) sets out what intel- Risk Indicators Enforcement Network (CEN), which offers ligence is, identifies its actual or potential plenty of different features (seizure and source, for whom it is being produced; and Risk profiling is the means by which Cus- concealment picture databases, a com- why it is needed. GIIS also sets out the toms puts risk management into prac- munication network, an alert system, intelligence cycle; fundamental principles tice. It replaces random examination etc.) can be a very useful instrument and and processes that underpin all intelli- of documents and goods with planned assist Members in managing risks espe- gence activity. and targeted working methods, making cially in the field. maximum use of Customs resources. The Risk Assessment, Profiling and profiling process is based on specified se- Annual Reports Selectivity lectivity criteria called risk indicators. The Secretariat prepares annual reports At the operational level, risk assessment, The WCO Secretariat has several instru- on drugs, tobacco and intellectual prop- profiling and selectivity form an impor- ments that identify the most common erty rights which provide a global over- tant part of Customs’ work in relation to risk indicators, enabling WCO Members view of illicit trade in these products. They border controls. The purpose of border to develop their own set of risk indicators assist Customs administrations to better controls is to ensure that all movements for daily use by frontline officers: Stand- understand the latest trends in the risk of goods, conveyances and persons that ardized Risk Assessments; Model Risk environment, enabling them to prepare a cross national borders occur within the Indicators/Profiles; General High-Risk more efficient response to the risks posed laws, regulations and procedures that Indicators; and the Handbook for Cus- by these specific products on society. govern them. toms Officers on Risk Indicators: Factors for Intellectual Property Infringement. Post Clearance Audit A common characteristic of a border Together with WCO Members, the Secre- crossing is the high volume of imports, tariat is also currently producing risk indi- Audit-based controls complement risk exports and passengers, making it impos- cator documents and manuals for air, sea analysis methods. They both contribute sible to check everything and everyone. and land border crossings based on the to maintaining the balance between trade The solution is to concentrate resources different logistical stages (pre-arrival, ar- facilitation and control. Post Clearance

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Audit is regarded as one of the most ef- and are aimed at providing specific guid- Risk Management” section of the WCO fective measures for compliance verifica- ance on essential elements to introduce Risk Management Compendium that the tion and for detecting commercial fraud, PCA. The Guidelines also include a com- Secretariat plans to publish in June 2011 especially valuation fraud. pilation of existing best practices. (see article on page 23).

Considering that a number of Customs A package of essential tools soon administrations are still in need of assistance in this field, WCO Guidelines on Post Most of the tools mentioned in this arti- More information Clearance Audit (PCA) were developed cle will be incorporated into the “Tools for [email protected]

Risk management: key enablers by David Widdowson

Much has been written about the management of risk identified, to avoid the possibility of in- in the Customs context, and there is no shortage of troducing extraneous variables into the subsequent risk management decision- commentary on best practice procedures, operational making process.

guidelines, strategic frameworks, and so on. Rather Appreciate the value of identify- than cover old ground, in this article I will focus on what ing low risks I consider to be some of the more critical yet often It is now widely accepted that traders overlooked enablers of effective risk management. with a good record of compliance require a lower level of scrutiny than those with Understand the true nature of risk had been assigned to address, it became a history of poor compliance, or those apparent that, for many economies, the about which little is known. This concept Whenever I’m asked to provide a com- primary reason for implementing the vari- is integral to the WCO’s SAFE Frame- mentary on risk management, my first ous initiatives had very little to do with work of Standards which promotes a question is, ‘Risk to what?’. Determining mitigating the risk of terrorism attempts range of benefits for Authorised Eco- the answer to this question is not always – it was more concerned with maintain- nomic Operators (AEO) by virtue of their as simple as it sounds. For example, short- ing a healthy trading relationship with the low risk status. Along with other ‘trusted ly after 9/11, I interviewed senior officials United States. Not wishing to debate the trader’ regimes, the AEO programme re- from twenty Customs administrations merits or otherwise of such a standpoint, flects sound principles of risk manage- who had been tasked with implementing the important consideration from a risk ment by identifying low risk members of a range of supply chain security initiatives. management perspective is to ensure the international trading community to In discussing the risks that these officers that the relevant risk has been properly reduce the size of the ‘risk pie’, thereby

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aiding the deployment of resources to- a national level, the mitigation of political Achieve congruence wards potentially high-risk operators. risks translates into government priority setting which is reflected in an economy’s Intervention by exception is a term which I Compare this position to the traditional focus on particular elements of its Cus- first coined in the 80s to describe a regu- Customs audit which is intended to assess toms charter such as revenue collection, latory compliance strategy that is based the degree to which a company is comply- people smuggling, security, or trade fa- on the principles of risk management. ing with the relevant regulatory require- cilitation. I frequently see administrations It implies regulatory intervention when ments and not, as some assume, simply being criticised for directing their efforts there is a legitimate need for it; interven- to detect errors in a company’s regulatory and resources towards certain activities tion based on identified risk. And while dealings. The important point here is that at the direct expense of what other mem- many administrations now espouse a such an assessment, regardless of the re- bers of the international Customs com- policy of intervention by exception, there sult, assists in determining where future munity consider more important Customs is routinely a lack of congruence between compliance resources should be directed. functions. The bottom line is that, in any organisational policy and operational A corollary to this is that an auditor’s economy, the management of political practice. finding of compliance is equally as good risks will always take precedence. a ‘result’ as a finding of non-compliance. I once watched a particular South East This is often overlooked, since a finding of One means of mitigating political risks Asian administration ritually open each non-compliance generally brings with it which is often overlooked, is to secure an and every express consignment that had arrived earlier that morning. I pointed to a passing truck that was carrying a container from the nearby wharf, and asked the Regional Director whether the same level of Customs scrutiny was applied to sea cargo. The answer was a predictable ‘no’, but the reason was not so predictable – ‘risk management’. This explana- tion commonly belies the true operational approach of many administrations, that is, what can be examined will be examined, regardless of the risk. Furthermore, the number of ‘high risk transactions’ tends to be directly proportional to the resources available to conduct the necessary examinations. For example, the inspection rate of cargo shipped by a major forwarder increased significantly during the recent global economic crisis, and I was somewhat bemused to discover that the same number of inspections was being conducted throughout that period de- © CPB spite the fact that the level of trade had plummeted. I doubt, however, that the a tangible revenue return to government active role for Customs in the government trader’s risk rating had changed dramati- whereas the identification of a compliant policy-making process. For example, so cally during that period. trader does not. often revenue targets – a term that I ab- hor – are set in the absence of any appar- Unfortunately, such a state of affairs is Accept that political risks are ent scientific rigour. In many cases, we see not uncommon. Administrations tend a priority politically expedient targets of ‘x per cent to go to great lengths to show they have above last year’s collections’. A Customs introduced a risk management policy but The highest risks facing any organisation, input into the revenue forecasting proc- there is commonly a lack of congruence including Customs administrations, are ess will at the very least help to avoid a between the written policy and what hap- political in nature. Failing to effectively Finance Ministry fait accompli which will pens in practice. A topical example is the manage these risks will significantly un- dominate the administration’s focus for current debate on how best to mitigate dermine the organisation’s credibility. At the following twelve months. security risks. Consider this – if a trader

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demonstrates a commitment to global Managing risk in practise: supply chain security by achieving and maintaining AEO status, does there re- South Africa shares main a genuinely risk-based need for the cargo to be scanned, and for the trader her experience to provide advance information to the authorities who granted that status? According to the WCO Risk Management Guide, Achieve internal congruence all organizations benefits from the application of The issue of congruence also extends to a risk management strategy since this benefits the internal mechanisms of an organisa- organizational performance as a whole. Risk tion. Again and again, I see the situation where an officer has correctly applied management in any organization consists of well- the relevant policy on risk management, defined steps which, when taken in sequence, only to later discover a problem with the consignment or transaction in question. support better decision making by contributing to The result? Managerial displeasure and greater insight into risks and their impact. the allocation of ‘blame’. It is inevitable that some things will slip through the cracks – not even the most effective risk or Customs administrations, the adoption of management system is fail-safe, and Frisk management as an organizational philoso- managers need to recognise and accept phy is essential since it provides quantifiable im- this fact and support their staff in deed as provements in the effectiveness and efficiency of well as in word. It reminds me of a certain the administration as a whole. Risk management politician’s warning to an administration can operate in any organization with manual or that was debating the formal introduc- automated applications ranging from tactical to tion of risk management: ‘I wish you luck strategic approaches. It can be applied to nearly but you will be held accountable if any- every decision-making situation also. Officers must, on a thing goes wrong!’ In the South African context, Customs risk man- daily basis, collect I would like to leave you with this part- agement – the systematic application of manage- ing thought. It is a truism that, even with ment procedures and practices which provide relevant data, the best systems and procedures in place, Customs with the necessary information to ad- things will go wrong from time to time dress movements or consignments which present analyse, compare and it is therefore incumbent on man- a risk – has been part of the operational approach agers to focus not only on how risks are for many years in the form of an enterprise wide and weigh this managed but on how those who manage Business Intelligence Unit, and more recently the the risks are supported. Customs Risk Management Division (CRM) whose data, then make main purpose is the identification, classification, Professor David Wid- dissemination and mitigation of compliance risk. logical deductions dowson is the CEO of the Centre for Customs and Excise Studies at the Various CRM officers (Operational Specialists: and derive findings University of Canberra Risk) are deployed to either the Central Risk Unit in Australia. He is also (CRU) based in ports and offices around the coun- that will focus Editor-in-Chief of the try, or the National Targeting Centre (NTC) which World Customs Journal, was established during 2009. efforts on high risk and the President of the International Network of Customs Universities. Officers in the CRU are responsible mainly for fo- or the highest risk cusing on tactical port and regional specific compliance risk issues and cases, in line with national consignments. strategic parameters, and support port operations More information by performing, on a daily basis, risk identification, [email protected] analysis and product dissemination/mitigation.

WCO News – No 62 – June 2010 27 S P E C I A L D O SSI i e R

The field of risk management is essential

The main recipients of these risk-related products in a resource challenged environment, are the operational cargo teams, the enforcement teams (for example, the Customs Border Control not only from a revenue perspective but Unit), and Post Clearance Audit teams. also from a security perspective. In order to perform their tasks, officers must, on a daily basis, collect relevant data (and this Staff in the National Targeting Centre are responsi- is collected from databases ble for identifying, evaluating, classifying and track- within Customs or external ing compliance risk and must prescribe operational to Customs), analyse, com- responses in relation to harmful goods as well as pare and weigh this data, then activities of individuals and other entities and par- make logical deductions and ticipants in the supply chain responsible for move- derive findings that will fo- ments of goods across South Africa’s borders and cus efforts on high risk or the through its territory where a serious commercial highest risk consignments. An and/or security threat at an international, regional officer therefore follows, on a and/or national level is posed. The Customs NTC daily basis, the steps of estab- is therefore responsible for identifying and inter- lishing the context, identifying preting the international, regional and national the risk, analysing the risk, as- economic and security environment, to align its sessing and prioritising the risk focus according to threats manifested in each and and then addressing the risk. to advise on the implementation of measures in order to mitigate threats in advance in as far as A risk management officer is imported; exported or transit goods are concerned. as such responsible for supporting operations through The NTC aims to ensure that the following are made managing risk and “filling the a reality during the 2010/11 financial year: the pre- gaps” where these may occur. loading of targeting of goods, people and conveyanc- Operational staff have specific es (“Tier 1” targeting based on advance information); skills and must be directed to the development and maintenance of the national focus areas where their skills default weight sets/profiles based on different risk can be optimally used, and this and threat assessments; to support port-level tar- can only be done if they know geting and pre-selection hubs (Note: Pre selection which consignments have been hubs may be developed based on modalities and are identified as potentially being dependent on advanced electronic information); the of high risk. Clearly, operational maintenance of a system of alerts; the development staff should not spend time on and maintenance of national seizure and offence da- performing methodological risk tabases; and to compute risk and threat levels. management steps which are © SARS performed by the CRM. Risk management staff must be inquisitive, understand the business of Customs, and apply system- However, it is essential to note that as risk is atically the knowledge they have in order to derive “owned” by Operations, the mere fact that risk empirical results that will guide operational efforts. management officers perform the daily methodo- From the above examples, it is evident that the logical steps as indicated, does not detract from field of risk management is essential in a resource the fact that Customs officers at all levels and in challenged environment, not only from a revenue all areas support the risk process by for example, perspective but also from a security perspective, reporting on suspicious activities, reporting thor- and all Customs administrations should adopt risk oughly and within required time frames on inci- management principles and establish a risk man- dents and interventions, supply feedback on risks agement capacity in order to ensure focused and that were to be tested, etc. The point of pivotal im- cost effective operations. portance is that risk management officers do not own the process of risk; risk management merely More information fulfils the role of a technical or support experts. www.sars.gov.za

28 WCO News – No 62 – June 2010 S P E C I A L D O SSI i e R

How to modernize risk analysis and the selectivity of Customs controls in developing countries? by Anne-Marie Geourjon, Grégoire Rota Graziosi and Bertrand Laporte

he WCO’s revised Kyoto Convention (RKC) using more sophisticated automatic risk analysis Trecommends that physical controls be limited. methods. This is also one of the proposals being discussed as part of the WTO negotiations on trade facilitation. The idea is to adopt an approach identical to that employed in many sectors (banking, insurance, Also, the promotion of ethical conduct is an im- nuclear energy) for analysing risk, based on the portant aspect of the reforms being undertaken in use of scientific methods, and adapt it to the Cus- developing countries in order to modernize their toms context. This is the approach taken by private Customs services, and limitation of controls is es- firms in particular that market risk analysis systems sential in order to address the risks of collusion (Smartlane, Profiler, SIAR, WebFountain, etc) to between officer and importer, which are greatest Customs administrations. prior to the removal of goods. This means that there can be no alternative to the targeting and The targeting system is based on four different selectivity of controls. However some reluctance approaches: the first consists of checking any op- has been encountered: on the part of staff, who eration that involves unknown qualities (new im- are disinclined to change their working methods porter, for example); the second is based on the and fear that they will lose benefits; and on the inspection of the import declaration and the statis- The selectivity of part of authorities, concerned about their Customs tical study of the overall series and past history of revenues and, therefore, worried by the idea of re- fraud in order to assess the risk; the third involves controls involves leasing goods without physical inspection, as they the systematic control of an operation on the basis represent “security” for the duties and taxes pay- of factors linked to certain characteristics; and the identifying the able. This is why it is necessary to identify optimal fourth consists of a purely random selection, used conditions for targeting operations for controls, so in particular to regulate the rate of controls. It is most high risk that there is no risk of loss of revenue. the second approach which forms the heart of the system and gives it its “rational” (non-subjective) operations and The selectivity of controls involves identifying the character, enabling the entire targeting system to most high risk operations and directing the decla- be automated. directing the rations into different control channels as appropriate. Targeting is performed either using traditional With this approach, each new clearance opera- declarations into methods, or using more innovative methods which tion has a fraud probability (overall score). For employ modern risk analysis tools. this purpose, fraud criteria (for example, importer, different control product, origin, etc) are initially identified using In the traditional methods, targeting is carried historical data; next, weighting coefficients which channels out on a random basis and/or using risk criteria. reflect the relative importance of each criterion The identification of the risk criteria is carried out are applied to them. The relevant fraud criteria and “manually” and relies on the Customs officer’s their weightings are determined using a scientific experience and judgement, based on available method, for example by econometric analysis. Any information on transaction histories, or based new clearance operation will then be given an over- on intelligence. The targeting criteria, validated all score which evaluates the risk of fraud (the pre- by a Committee perhaps, are factored into the IT dicted probability of fraud) with reference to the system’s selectivity module and are, in theory, re- characteristics of the operation (the fraud criteria). viewed periodically. There are two drawbacks to This score enables the declaration to be directed these methods: they rely on human intervention automatically into one of the control channels. and judgement, which constitutes a risk in itself; A proportion of the declarations directed to the and they require a great deal of effort in order green channel are subsequently redirected under to adapt, in real time, to new forms of Customs the fourth approach. Approaches one and three fraud. Hence the attraction of eliminating human can be used to direct operations straight to the red intervention to the greatest extent possible by channel. The results of controls are fed in, continu-

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ously enhancing the data history, and this enables the administration’s com- the fraud criteria and their weighting coefficients mitment to this project to be kept up-to-date. create the synergy which is vital to its success, par- This approach has been tested by two countries1 ticularly in terms of mo- in Africa. Country A employs the services of a pre- bilizing the necessary re- inspection company, whereas country B has never sources and establishing used such services, but records all litigation cases appropriate institutional in its IT system. Intuitively country B’s method structures? should be less effective, because the quality of the available information is lower. The predictive Recourse to private sec- power of the method is evaluated by recalculating, tor services can be en- post-facto, the total score which would have been visaged to help Customs assigned to each operation, and looking at whether use systems of this kind the operation was in fact fraudulent. In country A, which operate on the by controlling just 25% of operations, the method basis of Customs data; picks up 93% of the adjustments carried out by this could involve either the pre-inspection company. In country B, by con- software acquisition and trolling 2.3% of operations, the method picks up start-up (design phase 83.8% of operations giving rise to litigation. Using only), or an outsourcing a private company to “guarantee” that data will be contract (design and im- of “good” quality is not essential when developing plementation). However, a system of this kind. recent work2 based on information theory has Assuming that there is a significant relationship be- highlighted the incom- tween the number of cases of fraud identified and patibility of associating the amount expected to be derived from adjust- within the same contract, © Inter American Development Bank ments, the good predictive power of the method i.e., with the same private ensures that revenues will be stable in the short company, an inspection term. In the medium term, the scientific and au- programme for imports and a Customs moderni- tomatic nature of the method, by reducing the in- zation objective (including risk analysis). This is be- tegrity risk (corrupt behaviour) as well as enabling cause a company which is being paid by a country the quality of controls to be improved will have a to carry out inspections, whether pre-shipment or positive impact on revenue. The impact on trade at destination, has no interest in succeeding with facilitation is immediate! the second objective of Customs modernization, thereby putting an end to a highly lucrative inspec- What technical capabilities are required to put this tion programme. The success of these contracts kind of system into operation? The scientific analy- will depend upon compliance with certain rules3 on sis of historical data calls for post-university level compatibility of the contract objectives, modes of skills in data mining and statistical decision theory. payment, information flows4, and even contracting The system, although automated, does not require parties (Ministry of Finance or Revenue Author- “heavy-duty” programming, but an integrated, ity for an inspection programme, Customs for the open clearance system. Post-clearance controls modernization objective). and investigative and intelligence activities are necessary in order to hunt out new fraud trends and feed the system more rapidly than would be More information the case with the purely random selection of op- CERDI-CNRS, University of Auvergne erations to be controlled. www.u-clermont1.fr

Leving aside the specific skills of data mining and statistical decision theory, Customs has the know-how required. One question remains – can 2 Dequiedt, V., Geourjon, A.-M. and G. Rota-Graziosi, 2009, “Les Programmes de Vérification des Importations (PVI) à la lumière de la théorie de l’agence”, Afrique Contemporaine, 230(2), 151-166 ; Dequiedt, V., Geourjon, A.-M. and

1 G. Rota-Graziosi, 2009, “On the Design of Preshipment Inspection Pro- Geourjon, A-M. and B. Laporte (2005) : “Risk management for targeting cus- grams”, Etudes et Documents du CERDI N° 10. toms controls in developing countries : a risky venture for revenue perform- 3 In economics, the recent branch of “contract theory” aims to identify the ance ?”, Public Administration and Development, 25, p.105-113 ; Geourjon, optimal contract for the Principal, i.e., the contracting public authority. A-M. and B. Laporte (2004) : “L’analyse de risque pour cibler les contrôles 4 In this connection, it is not desirable for contracts relating to import douaniers dans les pays en développement : une aventure risquée pour les inspection programmes to include the task of providing Customs with the recettes ?”, Politique et Management Public, Vol. 22, n°4, p.96-109. risk analysis results to be used for selectivity purposes.

WCO News – No 62 – June 2010 31 S P E C I A L D O SSI i e R

Bosnia and Herzegovina: joint risk analysis on cross-border traffic by Richard Ots The application of risk management processes to the cross-border movement of goods and people in Bosnia and Herzegovina has gone through some remarkable changes over recent years. From a fragmented approach on the fringes of some border management agencies’ operational processes, it is now well on its way to becoming an integral element in the country’s comprehensive approach to border management.

etween 2006 and 2009, the Inter- Bnational Organization for Migration (IOM) led an EC funded project to assist the country in the design and implementation of a national strategy and action plan on integrated border management. Risk analysis formed one of the components of the project, reflecting the authorities’ awareness of the friction between on the one hand, the necessity to establish effective border control and on the other hand, the limited physical means at the relevant agencies’ disposal. Some of the staff from the Joint Analysis Centre The Balkans region is, and always has and to Heathrow’s Joint Border Operation organization’s own analytical purposes. been, an important transit point for goods Center assisted the development of both It is then (partially or wholly) replicated and people to and from the EU. Addition- a shared understanding and the necessary for analysis of possible inter-agency rela- ally, Bosnia and Herzegovina is increas- conceptual buy-in for the idea of cen- tions or trends in data by the JAC. This ingly a source and destination country for tralization and the partial amalgamation required an extensive and ongoing process cross-border traffic as well. The sheer vol- of the analytical functions of the border of standardization and normalization of ume of traffic makes it practically impos- management agencies into a single Joint data in order to be able to establish links sible to carry out 100% checks. However, Analysis Centre (JAC). The agencies then between fields from the databases of the process of determining what to check established the JAC, through an inter- the different organizations, or even from and what to skip was in many respects still agency MOU, as a department within the within one organization. in its infancy. Border Police, but staffed by all agencies on a secondment basis. Confidentiality and privacy of data is From the outset of the project there was protected by synchronized anonymiza- a clear consensus among the stakeholders The objective of the JAC is to supply tion of fields holding personally identifi- (Indirect Taxation Authority, Border Po- participating agencies with actionable able information, in addition to physical, lice, State Veterinary Office, State Plant operational level information as well as procedural and organizational measures. Health Protection Agency, and the Service with strategic level information on gen- The analysts at the JAC are therefore at for Foreigners’ Affairs) that inter-agency eral trends and developments in cross- no point presented with names, addresses cooperation would add significant value border traffic. The work plan of the JAC or telephone numbers of persons of in- to the process of risk analysis. However, is agreed periodically between the partici- terest, but merely with the fact that the the form of this interagency cooperation pating border management agencies. The codes representing the names match be- was less well understood. The Ministry agencies provide the JAC with an updated tween different databases. If that link is of Security and the heads of the border replica of their corporate data through deemed to be of operational significance, management agencies also gradually each agency’s Local Analysis Center then authorized investigators may request grew accustomed to the thought of going (LAC) data warehouse. For example, in- the release of the corresponding personal beyond a mere exchange of liaison offic- formation from a single agency’s various information from the relevant agencies. ers. The convening of senior-level study internal databases is first funneled to its This may result in an updated entry on a visits to Rotterdam harbor, to the WCO, own LAC where it is processed for the watchlist or even a proposal for an inter-

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Mexico Customs reports its progress on applying risk analysis to core processes agency operation. An important part of the work of the analysts does not require this level of detail though. The creation and update of risk profiles for use at border crossing points does not entail actual name or detailed address information. Similarly, for the production of overviews of general trends and developments the coded information provides a sufficient level of detail. Counterfeit brands in electronic goods (Duracell, Motorola, Sony, Sony Ericsson)

The JAC is equipped with industry standard software for risk analysis in law en- s a Customs administration, one of forcement environments, in addition to AMexico’s main priorities is to contrib- sophisticated software for data mining. ute to the strengthening of national secu- Staff have completed advanced training rity by combating criminal organizations. on the use of the software as well as on This, in turn, reflects a major objective of risk analysis, strategic intelligence, ap- the 2007-2012 National Development plied statistics, the collection and use of Plan: to cripple the illicit profits of these open source information, and on report- organizations. ing and presentation. In recent years, the Mexican Tax Adminis- With the creation of the JAC and its tration Service and Mexico Customs have continued development, Bosnia and dedicated considerable financial and hu- Herzegovina is making significant steps man resources to enhancing their pro- to rationalize the allocation of its bor- grammes to detect illicit goods at ports Counterfeit brands in apparel and accessories der management resources. The agen- of entry through a risk analysis and intel- (Lacoste, Puma, Abercrombie, Tous, Mont cies continue to increase the quality and ligence strategy. Blanc, Hugo Boss) quantity of data flowing to its analytical structures by improving the capture of A valuable source to generate intelli- Also in 2009, in 94 of 504 targeted con- data at the border, digitizing existing gence is the advance information Mexico tainers, risk was confirmed and the goods archives and further standardizing and Customs receives on incoming maritime seized. They contained approximately normalizing the structure of their data- shipments. Furthermore, Mexico is com- 1,053 tons of merchandise, representing bases. As Mr. Ermin Pesto, Head of the mitted to the implementation of Pillar 1 of more than 50% of all pirated goods seized Sector for Border and General Security the WCO SAFE Framework of Standards, by Mexico Customs (33 million pirated at the Ministry of Security said, “The JAC which entails the use of advance infor- units). These unprecedented seizures in allows us to better target our efforts, in- mation and risk management systems by 2009 were the direct result of the use of creasing the success rate of checks while WCO Members. Customs intelligence and the application facilitating the legitimate flow of goods of risk analysis as well as the actions taken and people across our borders.” A good example of the effective use of risk by the Mexican government. analysis, based on advance information to target pirated and counterfeit goods, is The Tax Administration Service and Mex- the recent seizures that were carried out ico Customs are permanently committed at the Ports of Lazaro Cardenas, Manza- to enhancing their procedures, infrastruc- nillo, Ensenada, Veracruz and Altamira ture and technology in order to efficiently More information in 2009; in these cases, the ports were fight illicit trade. Richard Ots alerted to the arrival of suspicious ship- International Organization ments by the intelligence unit at Customs More information for Migration headquarters. www.sat.gob.mx [email protected]

WCO News – No 62 – June 2010 33 i n C O N V E R S AT I O N Speed Interviews

Two Deputy Directors have recently been appointed to the WCO Secretariat; Susanne Aigner in the Compliance and Facilitation Directorate, and Heike Barczyk in the Capacity Building Directorate. WCO News conducted a speed interview with these two new members of the management team. Susanne Aigner (left) and Heike Barczyk (right)

WCO News: Tell us about your career to date? Heike Barczyk: Well, in brief: My work life started in the 90’s, when I worked for the German Foreign Service for three years Susanne Aigner: I started to work for customs by accident as (of which I spent one year in Senegal). Then I went back to uni- after my Doctorate in law, I couldn’t find a job in an area I would versity, studied law, passed two national Legal State Exams and really have enjoyed working in, like working for one of the as- became a lawyer. After two years of work mainly on Labour and sociations defending migrants’ rights or pursuing developing Commercial Law, I “rediscovered” the Public Service and went to countries’ interests. The Austrian Ministry of Finance was at the Customs Criminological Office (ZKA) in Cologne, Germany. that time searching for women who spoke English and French, There I worked first as Head of the Anti-Drugs Section and later in particular for roles within the customs branch. As I did not as Head of the Regional Intelligence Liaison Office (RILO) for want to take up a job with a law firm, I decided that I would Western Europe – my first deeper experience with the WCO, by work for Customs until I found something else more to my lik- the way. The last post before my start here in Brussels was within ing. The funny thing was that I liked Customs work from the very the German Ministry of Finance in Bonn, where I was the Deputy beginning. After the obligatory 3 years of training and educa- Head of the Division on International Customs Co-operation. tion in Customs and tax matters, I was asked to work for the Ministry of Finance on International matters WCO News : What prompted you to and Free Trade arrangements, among other Susanne: My new role apply for your new post ? on the General System of Preferences and UNCTAD. After several years as Deputy would have a different S. A.: After more than 5 years in one job Head of Unit, in 1995 I moved to Brussels to and in particular after more than 8 years work for the EU Institutions, including at DG focus, seeing things from of working on security matters, I felt ready TAXUD’s “US/Canada Desk” which involved for a change. When the job at the WCO was responsibility for the negotiation of the EC- the WCO angle and thus published, I thought this would be exactly US Agreement on CSI. In 2005, TAXUD set what I would like to do at this stage of my up a special sector dealing with security, giving me a range of new career: more international than my Europe- which I led, and which had a central role in an-focused activity; even more challenging drafting the customs security legislation and challenging opportunities... as I would have to cooperate with 176 in- the development of the EU Authorized Eco- stead of 27 member administrations; while nomic Operator (AEO). During this time, I was also responsible at the same time not something completely unknown to me for the technical negotiations with third countries like Japan, US as I had been working on the same file at the Commission and and China towards mutual recognition of AEOs, security meas- as I would continue cooperating with many of the colleagues I ures and control results. During 2009, I managed the Unit in knew from previous roles. The new role would however have a charge of Risk Management and Security and while continuing different focus, seeing things from the WCO angle and thus giv- to work on security/AEO, I personally focused a lot on the EC ing me a range of new challenging opportunities and hopefully Risk Management Framework and System and the Convergence a broader perspective. I also think that the DD job will allow me of Controls activities within the EU. to continue building upon my EU experience, sharing this expe-

34 WCO News – No 62 – June 2010 i n C O N V E R S AT I O N

rience with others while enhancing my own understanding of participants of the meetings remains as vivid as demonstrated Member administrations and customs policies and procedures then, is of course one of my primary work objectives. other than those of the EU. I have always enjoyed working with On a more private basis, I still have to settle in here in Brussels. colleagues from different parts of the world, jointly seeking And I would like to improve my Spanish language skills which solutions to common issues and I am therefore delighted to be have not really been trained since my school time… working in a Directorate with very many different nationalities from almost all continents. WCO News : If you had to change career, what job would you choose ? H. B.: I felt the application would be a “natural” step forward for me. Having worked in the international area for quite a while, S. A.: If I had to change career other than building upon my expe- but more or less from a national perspective, I wanted to expand rience gained so far (and thus remaining either in the Customs or my personal experience and work at the WCO on a more global trade area), I would like to do something totally different. During level. In this context, the Capacity Building my studies, I used to work in an art gal- area is in my view one of the most chal- Heike: Having worked in the lery and also for organizers of concerts of lenging tasks within the work of the WCO contemporary classical music. I organized in serving Members’ needs. Moreover, from international area but more or exhibitions and concerts and also selected the past I knew that the team of the Ca- artists for exhibitions/concerts on specific pacity Building Directorate is a very good less from a national perspective, themes as part of a jury or as curator. If and highly motivated one – which was ob- money didn’t matter at all, I would try to viously a bonus, too. I wanted to expand my personal do something similar and organise exhibitions and concerts, in particular for young WCO News: What are your short-term experience and work on a more artists who are often excellent but are not objectives ? given any opportunity to show their work. global level.. When I was younger I wanted to be on the S. A.: The first thing I have to do is to learn stage in theatre; I tried it and seemed to all about the areas I am responsible for as DD; this I will have to have some talent. I am however happy that I never pursued this do very quickly as I am already being sent on mission during the any further and that all I do nowadays is enjoy performances by very first days of April. The second thing I want to do is build a other actors. Anyway, don’t we all act to a certain extent when strong relationship with my excellent team, to discuss and set we chair meetings and negotiate agreements? priorities and goals for the group and then through my collabo- rative leadership style work to ensure the issues that impact on H. B.: Among friends, we have from time to time asked ourselves the whole of the Directorate are addressed in a timely, joined up what we would have liked to become if we had not taken the and coordinated manner now that both Deputy Director posts career path we have taken. One of my favourite answers is that are filled. There are many cross cutting issues (like Coordinated I could have become a – hopefully successful – archeologist… Border Management, Risk Management or Globally Networked In reality, if I had to change my career right now - away from Customs) that touch upon facilitation as well as compliance/ Customs, the international area and the Public Service, I think I enforcement. Early discussions since my arrival should leave would most probably become a lawyer again. you in no doubt the Director and the two Deputies are united in their wish to ensure that the Directorate works as efficiently O. A.: And one final thought …. and effectively as possible and is enabled to make progress on these cross cutting issues. For the rest, I am sure there are many S. A.: I am very happy that I am working as DD Enforcement at challenges waiting for me! WCO ; for the time being I enjoy every day and think that I can actively contribute to the organization’s work and efficiency. H. B.: I arrived at the WCO secretariat when we were still pre- I hope it stays like this and that my staff and the organization paring three important meetings in the Capacity Building area more widely see it in a similar light! scheduled for April this year. It would have been the first meeting of the C.B. Committee ever, the meeting of the Integrity H. B.: I am more than happy that the hypothetical question be- Sub-Committee and the meeting of the Regional Offices on fore does not describe my present situation…, but that right C.B. (ROCBs) and the Regional Training Centers (RTCs). Unfor- now I can really look forward to some exciting years and work tunately, due to the volcanic eruption in Iceland and the stop of to come in the WCO! air traffic to and from Northern Europe at that time, these meetings had to be postponed at the very last moment to autumn this year. Obviously, working on the preparations for these meetings More information and making my personal contribution that the motivation of the www.wcoomd.org

WCO News – No 62 – June 2010 35 O U R M E MB E R S wo r l d

Brazil sets up new detector dog centres

he Brazilian Customs administra- Ttion (Receita Federal do Brasil) has announced the establishment of new detector dog centres in six impor-

tant Customs units. The use of detec- © Brazilian Customs tor dogs will align the administration with global best practices on combating illicit acts related to foreign trade operations, in particular the traffic in © Brazilian Customs illegal drugs and unauthorized posses- sion of currency. ing their “duties” will be singled out for breeding purposes. To ensure the success of the training programme, instructors have to select dogs Using sniffer dogs has proved successful in

that are at least 18 months old and who Brazil. Major seizures in the last two years © Brazilian Customs display drive, good physical resistance include the seizure of 630 kg of cocaine and lots of energy. Once selected, the at the Port of Imbituba in 2008, 300 kg of foreign origin were seized in 2009 by animals will be evaluated periodically of drugs in Victoria and Rio de Janeiro in Customs staff. to fully test their ability. Upon reaching 2009, and 1.5 tons of cocaine bound for the age of seven, the dogs will be retired Europe at the Port of Paranaguá. In the More information from service. Those who demonstrate state of Paraná alone 42 kg of crack, 3.8 [email protected]. excellent natural skills when perform- tons of cocaine, and 3 tons of marijuana gov.br

36 WCO News – No 62 – June 2010 O U R M E MB E R S wo r l d

Algerian Customs: the value of modernization to export promotion

ontinuing its modernization efforts, Cthe Algerian Customs administration has introduced a new facilitation mechanism granted to economic operators,

To promote this new procedure and to perfect the text of the implementing legislation, on 4 March 2010 Algerian Cus- toms organized a “Customs-Business”

© Brazilian Customs meeting in Algiers at the Headquarters of ALGEX (Algerian external trade promotion agency overseen by the Trade Minis- try). In addition to external contributors, Algex-CACI” Agreement this meeting brought together senior at regional level, bring- Customs officials, managers of companies ing together all concerned involved in OPTIMEXPORT (a programme stakeholders, to strengthen designed to build the export capacities of communication between Algerian small and medium businesses), Customs and business at employers organizations and businesses, the national and regional and partners of ALGEX and CACI (Algerian levels, to facilitate access Chamber of Commerce and Industry). to information and to official documents, and fi- Following speeches by ALGEX Director nally to take account of the General Mohammed Bennini, Trade Min- concerns of stakeholders in ister El Hachemi Djaâboub, and Director order to achieve solutions General of Customs Mohamed Abdou which were advantageous Bouderbala, a “Customs-Algex-CACI” to all sides and respected Agreement was signed. Its aim is to pro- the interests of all. mote exports, apart from hydrocarbons, and to establish a lasting partnership so The Customs-Business as to guarantee the success of the AEO partnership established at status. this meeting will translate into the establishment of a The meeting was marked by many inter- consultation body respon- esting contributions covering the new sible for agreeing on the AEO status as laid down in the Algerian terms of the application for Customs Code, the problem of communi- workshop composed of Customs officials AEO status and the award criteria. Eve- cation in business life, AEO status on the and representatives of the business world ryone expressed their satisfaction with basis of French and the wider European debated issues linked to the launch of this the measures taken by Customs as they experience, and the priorities of the OPTI- new approach to businesses. fall within the scope of its moderniza- MEXPORT project, as well as testimonies tion strategy and demonstrate Algerian from two Algerian entrepreneurs on their Participants formulated recommenda- Customs’ evolution towards a service- relations with Customs. The Secretariat tions designed to allow Customs and its oriented organization delivering benefits made a presentation with the theme partners to develop and strengthen this to economic operators. “Modern values at the service of a dynam- partnership through concrete measures. ic and efficient Customs-Business part- They believed in particular that it was More information nership”. On the fringes of the plenary, a necessary to establish the “Customs- www.douane.gov.dz

WCO News – No 62 – June 2010 37 O U R M E MB E R S wo r l d

Cambodia’s Customs-private sector partnership mechanism

n International Customs Day in OPhnom Penh, the Customs-Private Sector Partnership Mechanism (CPPM) was established for the first time in Cam- bodia’s history with the approval of the Royal Government of Cambodia. The official launch was presided over by H.E. Dr. Pen Siman, Delegate of the Royal Govern- ment of Cambodia, Director General of Customs and Excise and also Chairperson of the CPPM. The Customs Management Board and private sector representatives

This historical event was attended by A Public Relations Unit has been es- the Management Board of the General tablished to serve as a Secretariat for Department of Customs and Excise and the CPPM in its daily operations. The representatives of the private sector in- CPPM consists of two hierarchical lev- cluding the Chairpersons of the Cambo- els: a Management Board and three dia Chamber of Commerce, the Garment Technical Working Groups. These Manufacturing Association of Cambodia, working groups are characterized by the Small and Medium Enterprise Associa- types of investments and industry tion, the developer and investors of the sectors: the Customs Export-Orient- Special Economic Zone, the Transport Official launch ed Garment Industry Working Group; Association, the Freight Forwarder Asso- the Customs Export-Oriented Non- ciation, some large taxpayers, and high Garment Industry Working Group; compliance traders. and the Customs Domestic Market- Oriented Business Working Group. The main purpose of the CPPM is to raise awareness among all stakeholders, to ac- Although the Cambodia Develop- celerate better cooperation, and to ensure ment Council (CDC) organized the efficiencies in the implementation of the Government-Private Sector Forum Government’s trade facilitation policy (GPSF) with fruitful outcomes un- and also the policy of the WCO, especially der the leadership of Samdech Akka the WCO SAFE Framework of Standards. Question-Answers session Moha Sena Padei Techo Hun Sen CPPM’s objectives include: (the Prime Minister of the Kingdom • Bu ilding trust, mutual understand- of Cambodia), as there was no for- ing, and cooperation between Cus- mal mechanism in the past some toms and the private sector. Customs-related issues identified in the Forum had not been consulted • Pr omoting fiscal morality and trade or solved efficiently at the techni- facilitation in order to enhance com- cal level before being brought to pliance with laws and regulations. the GPSF.

• En suring that all Customs-related The General Department of Customs issues are consulted or solved at Networking and Excise expects that this new the CPPM before they are brought mechanism will deal more efficiently with to other mechanisms, such as the The underlying idea is to enhance the Cus- many Customs-related issues and mis- inter-government body or the Gov- toms-private sector partnership, which understandings, especially with regards ernment-Private Sector Forum. will promote a policy of openness, and to cargo clearance procedures, informal encourage the exchange of ideas between costs and unnecessary delays. • Pr omoting private sector participa- Customs administrations and private section, to the greatest possible extent, tor stakeholders in order to efficiently in the process of solving all Cus- facilitate international trade, and ensure More information toms-related issues. global safety and security. [email protected]

38 WCO News – No 62 – June 2010 O U R M E MB E R S wo r l d

Malaysia’s “Megaport Initiative”

ince November 2009, the “Megaport the Radiation Portal Monitor (RPM) inte- More information SInitiative” to screen cargo containers grated with Optical Character Recognition Razif Abbu to deter, detect and interdict illicit traf- (OCR) systems (to identify the container [email protected] ficking in nuclear and other radioactive number). A Secondary Inspection Station materials has been operational at Klang is set up at each terminal to carry out a Port in Malaysia. The agreement to im- more thorough inspection using Advance plement this Initiative was signed on 27 Spectroscopic Portals (ASP) and handheld February 2008 and prior to the com- radioactive isotope identification devices missioning, 16 senior Customs officers and other handheld equipment. A Central received Megaport Initiative training in Alarm Station (CAS) serves as the control Washington DC in Jan 2009. and communication centre.

The initiative is a programme of the U.S. Implementation of the Megaports Initia- Department of Energy’s (DOE) National tive will enhance the Terminal Operator’s Nuclear Security Administration (NNSA). compliance with the International Ship It is a key component of the Second Line and Port Facility Security (ISPS) Code of Defense (SLD) programme undertaken and make Port Klang a safer port, which © Malaysia Customs to prevent the proliferation of nuclear ma- is crucial in turning it into a regional hub. terials following the collapse of the Soviet Union in 1991 and the subsequent end of In the first three months since the com- © Malaysia Customs the Cold War. missioning and handing over of the equipment in Malaysia, a total of 849,599 Through the Megaport Initiative, DOE containers were screened by a radiation works collaboratively with foreign gov- portal monitor located in strategic areas ernments to equip selected sea ports in the port and 13,118 containers triggered with radiation detection equipment. The primary inspection alarms. However, sub- installation of equipment and training of sequent evaluations revealed the absence the host country personnel is provided of nuclear materials other than naturally by DOE. After commissioning, the equip- occuring radioactive materials. ment is handed over to the host government and the programme is fully operated The Megaport Initiative was established by personnel of the host country. in 2003 by the US; at present 19 ports are already operational, 25 ports are in the All containers – whether for import, ex- implementation phase, and over 25 ports port or transshipment – are scanned using are pending for negotiation.

WCO News – No 62 – June 2010 39 l a v i e d e s m e mb r e s

Knowledge Beyond Borders

Centre for Customs and Excise Studies

University of Canberra Australia

• Research • Consultancy • Vocational Programs • Postgraduate Programs

WCO Accredited Courses

• Master of International Customs Law and Administration • Master of Customs Administration • Graduate Diploma in International Customs Law and Administration • Graduate Certificate in International Customs Law and Administration • Graduate Diploma in Excise Studies • Graduate Certificate in Excise Studies

Full time and part time enrolments now being accepted Study online or on campus

40 WCO News – No 62 – June 2010 Australian Government Registered [email protected] Higher Education provider # 00212K www.customscentre.canberra.edu.au ZOOM Colombia’s Directorate of National Tax and Customs

he Directorate of National Tax and Ingresos, Servicio y Control Automatizado TCustoms (DIAN) in Colombia is re- – MUISCA) – on the basis of concerted, sponsible for providing a compliance and coordinated and orderly management of facilitation service vis-à-vis economic processes, people and technology. These operators in order for tax, Customs and pillars are fundamental to its manage- exchange-rate system rules to be met. ment, as well as critical and decisive fac- DIAN aims to collect all taxes, expedite tors in its efficiency and effectiveness foreign trade operations, and encourage and, consequently, in its proper perform- fair competition. ance of its role within the State.

Transforming the organization MUISCA is based on three strategic principles which underpin it and lend it • DIAN officials who were experts on the The DIAN management team, which was strength: integration, unity, viability and processes involved and familiar with appointed at the start of the first term in magnitude. Its purpose being to promote the needs of the organization were in office of Álvaro Uribe, the President of the the adoption of best practice at all levels charge of identifying and developing Republic, observed acute structural prob- in the organization, for example: the procedures provided through IT- lems in the organization. These problems • Coordinate the organization’s planning based electronic services, assisted by a were creating insurmountable difficulties and operation in its strategy. group of consultants. with respect to the achievement of the • Review, tailor, simplify, measure and • Implementation took place in tandem institution’s mission. monitor processes and procedures with with a support and assistance pro- the aim of attaining the highest levels gramme for the public. An audit of the organization was carried of excellence and quality. • In terms of Customs matters, follow- out, making it possible to start on a co- • Promote the technological change sup- ing the international guidelines of the herent solution to tackle the problems. porting DIAN processes, with a view to World Customs Organization was vi- Roadmaps were drawn up to achieve ex- sustainability and mass coverage. tal as it enabled DIAN to be inside cellence in terms of operation, to make • Cultivate and manage knowledge, hu- Customs with greater visibility at the the organization more service-oriented, man talent and change in the organi- international level. to consolidate autonomy and legitimacy, zation. • Th e joint work with the Ministry of and to contribute to the country’s com- External Trade and the bodies which petitiveness. In addition, the following DIAN moves forward grant approvals in import/export strategic actions were identified: develop processes was also important – the and implement a new management mod- The following key factors are highlighted Single Window for External Trade el; restructure the organization; promote as they underpin the success of the MUIS- and the Single System for Simulta- the legal reforms required, and effectively CA management model: neous Inspection have been consoli- manage conditions. • The backing of senior management dated with these bodies, using the within the organization as well as within concept of the “procedural chain”. A new management model national government, and the support of the World Bank which backed the MUISCA has enabled the Directorate of Na- DIAN founded its management model project and indeed approved a new loan tional Tax and Customs to move forward. – the Single Model for Revenue, Service to continue with the development of and Automated Control (Modelo Único de outstanding topics until 2012. Contacts Director General of National Tax and Customs Dr. Néstor Díaz Saavedra Tel: +57 1 607 93 25/94 75 Fax: +57 1 607 93 83 Email: [email protected]

Director of Organizational Management Ms. María Elena Botero Mejía Tel: +57 1 607 99 99 Email: [email protected]

Website: www.dian.gov.co

WCO News – No 62 – June 2010 41 f O C U s

Small statuette from Bactria, chlorite and calcite, 3rd millennium BC. Anthropomorphic pendant, Diquís, Costa Rica, 1000-1500 AD. Customs and cultural property: keeping heritage criminals at bay

Overview cern to the global Customs community and the role of Customs in fighting this form of cross-border crime is recognized as being Cultural heritage is the legacy of tangible artworks that express of paramount importance. Indeed, preserving cultural heritage the value of a culture and the characteristics of a society. For and stemming illicit phenomena like trafficking and smuggling every nation, cultural heritage represents a fundamental source transcends borders, and as a primary border agency, Customs is of life, civilization as well as a unique asset for its future. Through well-placed to fight criminal organizations trafficking art as well the preservation and promotion of their national cultural prop- as looters, smugglers and unscrupulous art dealers. erty and heritage, societies transfer their own identity onto future generations. International efforts

It is vital therefore to protect cultural items from any Over recent years, the WCO has strengthened inter- attempt to compromise their integrity by putting in national cooperation with other important players place all needed measures to prevent crimes such as involved in this battle in order to improve and aug- theft, looting or illicit trafficking. In fact, once a piece ment the protection of cultural property against illicit of history or national identity is lost, in most cases it imports and exports, and illegal transfers of ownership. is lost forever and the detriment to humanity is often It has done this on the basis of Memoranda of Under- incalculable. The true value of cultural property can be standing signed with INTERPOL, UNESCO, and ICOM (In- appreciated only if conditions such as origin, tradition and ternational Council of Museums). The WCO is also actively history are fully respected and safeguarded. Each time a involved in worldwide projects and capacity building activi- cultural object is taken from its original context, not only ties aimed at raising enhanced awareness and developing does it create a void in a country’s national heritage but effective enforcement tools specifically relating to the the artifact itself is seriously impoverished. In this sense, protection of cultural heritage. the theft and trafficking of cultural items represents one of the oldest forms of crime and is a scourge as old as In 2005, the WCO provided technical assistance to history itself. UNESCO by jointly developing the WCO-UNESCO Model Export Certificate for Cultural Objects. This joint work re- The ongoing increase in the illicit trafficking in cultural flected the increase in illicit exports of cultural objects, ef- goods and the damage caused by this trade is of great con- forts to address the legal aspects, and put new emphasis on

Bronze foundation figurine, end of the 3rd millennium BC. Iraq Museum.

42 WCO News – No 62 – June 2010 f O C U s

the practical importance of export certificates Indo-Greek silver coin, 2nd century BC. designed specifically for cultural goods. This © Kabul National Museum and French National Library certificate implements the provisions of Ar- ticle 6 of the UNESCO Convention on the to the repatriation and return of cultural objects il- Means of Prohibiting and Preventing the Il- legally exported. Just by way of example, effective licit Import, Export and transfer of Owner- cooperation between Customs led, two years ago, ship of Cultural Property of 1970. The Article to the repatriation to Italy of 50 vases dating from requires UNESCO members “to introduce an the 3rd to the 4th centuries BC. These vases were appropriate certificate in which the exporting seized in Perpignan in 2007 by French Customs. An- state would specify that the export of the cultural other example is the return of stolen artifacts to Italy property in question is authorized”. by the U.S. Immigration and Customs Enforcement (ICE) in 2009. Among the cultural objects returned to the Italian au- The adoption at national level of the WCO-UNESCO Model Ex- thorities by ICE were a Corinthian column krater dating between port will help to secure the return of illicitly exported cultural 580 and 670 BC and a Pompei wall panel fresco. objects as the Certificate enables Customs to identify and trace these items. Keeping up the fight

Cooperation with ICOM is extremely important also. Their Red Cultural Heritage will continue to represent a priority for the Lists of endangered cultural objects (see article page 44) rep- WCO. As criminals involved in cultural heritage crimes change resent a useful tool to help museums, art traders, collectors, their tactics, new forms of cooperation as well as new enforce- and Customs and police officers to identify objects that may ment tools will have to be developed in order to combat this have been illegally exported or may be subject to illicit trade. phenomenon and preserve the character of our cultural legacy The WCO’s partnership with INTERPOL entails WCO participa- and therefore our national identities. Capacity building too has tion in INTERPOL’s important Experts’ Group on Stolen Cultural an important role to play. By building the capacity of Customs Property that meets on an annual basis and which sets out recommendations on how to better tackle this illicit phenomenon. Painting, archangel with harquebus, 18th century AD.

The WCO will continue to intensify its presence on the global stage by participating in many different fora and events dedicated to the protection of cultural heritage.

Cooperation bares fruit

Cooperative efforts are just as important in the fight against the illicit cross-border trade in cultural property.

At the regional level, for example, the WCO Regional Intelligence Liaison Office for East and Eastern Europe (RILO ECE) is currently running a valuable initiative named “Project Obelisk” aimed at saving the region’s cultural heritage. It was initiated by RILO ECE in 2002 to actively encourage countries in the region to detect illegal trafficking of works of art and report seizures to the Customs Enforcement Network (CEN) database. The Project will strengthen the activities of Customs services and improve cooperation between them and other relevant law enforcement agencies in the region.

As a case study, let’s consider Italy for instance. With more than 3400 museums, 2100 archeological areas and 43 UNESCO world heritage sites, Italy has the world’s vastest cultural heritage. Its Customs and border agencies (Agenzia delle Dogane and the Guardia di Finanza) are engaged on a daily basis in protecting the country’s cultural heritage from any kind of illicit exportation.

On the other hand, Italy is also benefiting from the coordinated actions of other Customs administrations especially with regards © MNAAHP

WCO News – No 62 – June 2010 43 f O C U s

administrations to effectively combat this form of crime will business community as this will allow for more exchange of result in better border enforcement; essential in the fight against information and intelligence which is the key to successful all forms of illicit trade. border enforcement.

Equally important is the improvement of relations between More information Customs authorities and between Customs and its various [email protected] stakeholders including other law enforcement agencies and the http://portal.unesco.org/culture/en

About the Red Lists

he International Council of Muse- · Emergency Red List of Iraqi Antiquities at Risk (2003) Tums (ICOM) has published its Red · Red List of Afghanistan Antiquities at Risk (2006) List of Endangered Cultural Objects of · Red List of Peruvian Antiquities at Risk (2007) Central America and Mexico (2009), · Red List of Cambodian Antiquities at Risk (2009) the seventh Red List in ICOM’s pro- · Red List of Endangered Cultural Objects of Central America gramme to combat illicit trafficking and Mexico (2009) in cultural property. Police and Customs authorities are encouraged to carry out The Red Lists have been designed as in-depth investigations when dealing with cultural artefacts an aid to identify categories of cul- identified in Red Lists. However, these Lists do not pretend to tural items which are particularly be exhaustive and any cultural item which may come from the vulnerable to illicit traffic. They are region and, in general, from a country or region for which a Red disseminated to Customs authori- List has been published, should be subjected to detailed scrutiny ties worldwide and are also available on- and precautionary measures. line in several languages at ICOM’s website. Three new projects are under way for publishing in 2010, cover- ICOM has already published Red Lists for the following countries ing Haiti, Colombia and China respectively. and regions:

· Red List of African Archaeological Objects (2000) More information · Red List of Latin-American Cultural Objects at Risk (2002) http://icom.museum/redlist

44 WCO News – No 62 – June 2010 f O C U s

INTERPOL steps up its fight against trafficking in cultural

property

espite the global financial crisis and its Drepercussions on the art market, illegal trade in culturalproperty continues to flour-

1 2 3 OBJET : Paire de vases OBJET : Tableau OBJET : Antéfi xe ITEM : Pair of vases ITEM : Painting ITEM : Ante-fi xae ish worldwide. AUTEUR : Inconnu AUTEUR : AUTEUR : Inconnu ARTIST : Unknown ARTIST : Ignacio de Ries ARTIST : Unknown

DATE DU VOL : Entre le 12 août et le 1er septembre 2009 DATE DU VOL : Entre le 12 février et le 24 mars 2008 DATE DU VOL : Entre le 21 et le 22 juillet 2009 DATE OF THEFT : Between 12 August and 1st September 2009 DATE OF THEFT : Between 12 February and 24 March 2008 DATE OF THEFT : Between 21 and 22 July 2009

B.C.N. : PARIS B.C.N. : B.C.N. : VIENNE NCB : NCB : MADRID NCB : VIENNA

N° de dossier : N° de dossier : N° de dossier : File No. : 2009/31393 File No. : 2009/25976 File No. : 2009/30068

LIEU DU VOL : Palais LIEU DU VOL : Transport public LIEU DU VOL : Site archéologique PLACE OF THEFT : Palace PLACE OF THEFT : Public transport PLACE OF THEFT : Archaeological site A very specific crime DIMENSIONS : Hauteur / Height : 60 cm DIMENSIONS : 112.1 x 136.8 cm DIMENSIONS : 21 x 19 x 2 cm Information on thefts of works of art record- ed daily by INTERPOL, and the INTERPOL Unit specialized in this field, illustrate the © INTERPOL

4 5 6 OBJET : OBJET : Tableau ITEM : Statue ITEM : Painting OBJET permanence of a phenomenon which spares Sculpture ITEM AUTEUR : Inconnu AUTEUR : René Magritte Painting by Picasso, 1938, stolen in March 1999 ARTIST : Unknown ARTIST : AUTEUR : Inconnu ARTIST : Unknown DATE DU VOL : 1er janvier 2008 DATE DU VOL : 24 septembre 2009 DATE OF THEFT : 1st January 2008 DATE OF THEFT : 24 September 2009 DATE DU VOL : Entre le 18 et le 19 septembre 2009 DATE OF THEFT : Between 18 and 19 September 2009 B.C.N. : B.C.N. : BRUXELLES NCB : SAN SALVADOR NCB : BRUSSELS B.C.N. : no region of the globe, from Latin America, NCB : NEW DELHI in France N° de dossier : N° de dossier : File No. : 2009/36884 File No. : 2009/31315 N° de dossier : File No. : 2009/32911 LIEU DU VOL : Eglise LIEU DU VOL : Musée PLACE OF THEFT : Church PLACE OF THEFT : Museum LIEU DU VOL : Temple PLACE OF THEFT : DIMENSIONS : 115 x 45 x 32 cm DIMENSIONS : 60 x 80 cm victim of the archaeological pillage of sites DIMENSIONS : 90 x 56 cm N°39 (b) December - En cas de découverte ou de renseignements concernant ces affaires, prière d’aviser les services de police qui informeront leur B.C.N. INTERPOL. - Should any of these items be discovered or any information concerning these cases become available, please inform the police who will contact their INTERPOL NCB. Décembre 2009 which existed long before Columbus, to Cen- Publié par INTERPOL - Published by INTERPOL - B.P. 6041 - 69411 LYON CEDEX 06 (FRANCE) tral and Eastern Europe, with the disappear- stolen, at the same time making it more dif- ance of icons from Orthodox churches, and Asia with attacks on ficult to sell fake cultural property. the heritage of the Khmer civilization. What is more, it is now difficult for any seller or buyer to argue Thefts given wider media coverage, such as the armed robbery that it is impossible to verify whether or not an object has been of a Magritte painting from a museum on the outskirts of Brus- registered as stolen. The success experienced by the different sels (Belgium) in September 2009, or more recently of a Degas stakeholders involved in fighting trafficking in stolen goods dem- pastel in Marseille (France) at the beginning of 2010, remind the onstrates in hindsight just how vital this step was. So far access world of the existence of this very specific crime. has already been granted to more than 1,300 users in 60 or more countries, and this figure is growing all the time. Twice a year, moreover, INTERPOL issues a poster on “The Most Wanted Works of Art” to raise public awareness of six key stolen All sectors of activity with an interest in this issue are repre- works (see photo above). sented: law enforcement agencies; heads of cultural institutions; art market professionals; and even private collectors. This wide Need for an international data base of stolen range naturally includes Customs, with 40 or so representatives works of art from around 20 countries on different continents. To counter this scourge, INTERPOL has developed a database integrating photographs and descriptions of works of art sto- This involvement by Customs authorities reflects the key role len from the four corners of the globe. This now catalogues played by Customs administrations in the fight against unau- over 35,000 items and is constantly updated by INTERPOL 188 thorized exports of cultural property, with numerous objects Member countries. In continuous evolution since it was s e t seized on a regular basis. up in 1995, this data base has now made a major step forward, having been opened to the public since Au- For its part, the WCO works closely with INTERPOL, gust 2009. and has done so for many years in fighting this type of cross-border crime – a more general Cooperation This initiative, crucial to any attempt to fight Agreement has linked the two Organizations since the illegal trade in stolen art effectively, per- November 1998. mits not just law enforcement services but any other interested party to consult the information in Quite apart from the new step taken in making the the database directly and instantaneously. database accessible online to a wider public, other projects are currently underway to improve the efficiency and per- To obtain online access to the data base – www.In- formance of the INTERPOL database even more. terpol.int/Public/WorkOfArt/dbaccess.asp – users must first register and be given a password. On- On the technical level, for instance, there are plans to use line access constitutes an extremely important step a system of recognition based on image similarities to forward as it offers everyone an opportunity to facilitate searches in the database. verify that a work of art has not been reported © R. Velasco Alonso, INAH Saint Michael Archangel, Mexico, 18th century.

OMD News – No 62 – June 2010 45 f O C U s

One of the most important objectives is based on This is why INTERPOL, alongside UNESCO, ICOM a Council of Europe recommendation to promote and the WCO, is helping to mobilize the interna- improved data input into the INTERPOL database. tional community to ensure the preservation of The use of an IT mechanism allowing automatic Haitian cultural property. integration of data from Member countries is currently being examined. The implementation of this The alerts promptly sent out to all Member coun- kind of system is key to inputting even more data tries after the catastrophe, to make them aware into the database, as it seems that many coun- of the vulnerability of Haitian heritage and the tries communicate far too little information to risks of illegal imports of cultural property from INTERPOL. this country, were one of the first responses to © Iraq Museum counter the urgency of the problem. Ivory plaque from Nimrud, However, it is unrealistic to claim to be stamping 9th-8th centuries BC (stolen). out trafficking unless all nations are on board and The imminent publication, under the aegis of actively participating. ICOM, of a Red List of at-risk Haitian cultural property, like the lists drawn up for Cambodia and Afghanistan, also demonstrates In this area of crime, as in many others, the need for strong the gravity of the situation. international cooperation is proving essential. Finally, the mobilization of the international community is soon Mobilizing the international community to safeguard to be formalized by the setting up, at UNESCO’s initiative, of an world heritage international coordinating committee for Haitian culture to which Particularly dramatic events such as the Iraq war or the recent INTERPOL, in close collaboration with its partners, will be offer- earthquake in Haiti underline the demand for international co- ing its experience and know-how in crisis management matters. operation since the heritage of the countries concerned is seriously threatened. More information www.Interpol.int In Haiti, for instance, artistic treasures are at real risk as the [email protected] reigning chaos is propitious to theft and trafficking. [email protected]

46 WCO News – No 62 – June 2010 f O C U s

Swift delivery of emergency humanitarian aid …a priority for the international Customs community

In the event of natural disasters and other catastrophes, humanitarian aid from the international community needs to be delivered on site as quickly as possible in order to help survivors. But at the same time, the absence of adequate control mechanisms at the national level can lead to a flood of inappropriate international “aid” which is not suited to the needs of those who require it.

elief consignments need to be cleared quickly and carefully, Rwhich calls for specially adapted procedures. Given its position at borders, Customs plays a key role in facilitating the expeditious movement of goods sent as emergency humanitarian aid.

According to a study by the International Federation of Red Cross and Red Crescent Societies (IFRC) in 2007, there are a multitude of international instruments recommending facilitation measures to simplify and rationalize the clearance of humanitarian relief consignments. Of these, three of the most important ones have been drawn up by the WCO, namely the WCO Recommen- dation to expedite the forwarding of relief consignments in the event of disasters (8 June 1970), the revised Kyoto Convention (RKC), in particular Specific Annex J5, and the Istanbul Conven- tion on temporary admission , in particular Annex B9. These Haiti : a Makeshift camp instruments served as a model for the development in 2007 of new “Guidelines for the Domestic Facilitation and Regulation since few countries have signed it so far. At the national level, of International Disaster Relief and Initial Recovery Assistance” discussions preparatory to the signature of this kind of agree- that were adopted by the States Parties to the Geneva Conven- ment are generally inter-ministerial, although the final decision tions in 2007. is often taken at the political level.

It is generally impossible to foresee when and where natural Additionally, in order to manage the intervention of a large disasters will strike, or their scale, although on occasion some number of NGOs in the event of natural disasters, which ob- can be predicted. Unfortunately, natural disasters have been in structs the clearance process, the Model Agreement provides the news all too often recently. As a result thereof, the WCO’s for the use of a Model Certificate allowing the UN to guarantee Permanent Technical Committee (PTC) devoted a large part of that an NGO or an individual is a bona fide participant in the UN its 187th/188th Sessions from 1-3 March 2010 to reviewing the relief operation being undertaken at the request of the govern- current situation; what has been done and what more could ment and as such is entitled to the application of the Customs be done. facilitation measures provided for under the Agreement.

The UN Office for Coordination of Humanitarian Affairs (OCHA) The centralisation of the formalities, and of the processing of and the IFRC had an opportunity to present their work at this relief consignments, is essential if we are to manage humani- meeting. OCHA in particular, encouraged WCO Members to tarian aid effectively, and Customs is ideally placed to occupy a sign the Model Agreement on Customs Facilitation between the key role in the coordination and management of humanitarian United Nations (UN) and governments concerning relief con- crises. To this end OCHA maintains a “Directory of National signments and the possessions of relief personnel in the event Focal Points and Legislation for Customs Facilitation in Inter- of disasters and emergencies (as taken into account in the RKC) national Emergency Humanitarian Assistance” on its website:

WCO News – No 62 – June 2010 47 f O C U s

www.reliefweb.int. WCO this subject as one of its main priorities over the next 12 months. Members are invited to A working session will therefore be devoted to this issue at the provide the UN with the PTC’s next meeting in October 2010. contact details of national Customs focal points and/ The WCO Secretariat is currently drafting a Memorandum of or to ensure that these de- Understanding on cooperation between the WCO and OCHA tails are up-to-date. on the one hand, and between the WCO and the IFRC on the other, which it intends to sign very shortly. It is also involved in

© CPB For its part, the IFRC en- an Advisory Consultative Committee recently set up by the IFRC couraged WCO Members to draw up model national legislation covering international aid to ensure that their domestic regulatory frameworks are prop- in the event of a disaster, which held its first meeting in Geneva erly prepared for the most common Customs problems encoun- on 19 April 2010. Finally, it is interesting to note that the Policy tered in the event of a disaster (as described in its 2007 study and Commission has also included this issue on the agenda for its in several dozen case studies available on its website: www.ifrc. next session in June 2010. org/idrl. The disaster relief and recovery guidelines (mentioned earlier in this article) could prove useful in such an appraisal. WCO measures on emergency humanitarian aid are available The IFRC also noted that national Red Cross and Red Crescent on its website. Societies often have extensive experience and expertise in this field that they can share. More information www.wcoomd.org At the close of the discussions, and taking account of the urgent www.reliefweb.int need to establish efficient clearance systems, the PTC identified www.ifrc.org/idrl

Haiti: “Rather than give up, Customs must forge ahead!”

t 4.53 p.m. local time on 12 January 2010, a devastating Aearthquake registering 7 on the Richter scale struck Haiti approximately 15 km west of the capital, Port-au-Prince.

This tremor of unprecedented violence caused the collapse of many dwellings and hotels as well as government buildings of sturdier construction such as the Presidential Palace, the Parlia- ment, the Ministry of Finance, the Ministry of Public Works, the main prison and the Taxation Office. The death toll stands at over 300 000, with hundreds of thousands injured and millions of Haitians left homeless.

Since the quake, over 450 settlements – most commonly consisting of makeshift camps – have sprung up in an unplanned manner in Port-au-Prince. The onset of the rainy season is now Customs headquarters in ruins the greatest cause for concern, given that access to proper wa- terproof shelter will not be available to all the disaster’s victims. did not spare Haitian Customs. Nine Customs officers perished What is more, the rain will worsen sanitary conditions and sub- in the disaster, some 15 were seriously injured and all without stantially increase the risk of epidemics and disease. exception lost family members.

In May 2010, the WCO Secretariat visited Haitian Customs in Customs infrastructure was also badly damaged. Their head- Port-au-Prince to express the sympathy and support of the in- quarters building is on the verge of collapse and the full staff ternational Customs community as a whole. The quake obviously complement has been transferred to the Customs School

48 WCO News – No 62 – June 2010 f O C U s

(1)

(2)

Port-au-Prince commercial port out of service premises. These premises are too cramped and the Directorate (1) A district of Port- General’s divisions have to work in shifts as there is not enough au-Prince levelled room for everyone. The buildings at Port-au-Prince International by the quake (3) Airport are also out of commission and Customs has taken up (2) The remains of the residence in a hanger fitted out at very short notice so that of- Finance Ministry ficers can perform their duties.

Port facilities too were completely levelled by the quake (3) Malpasse border office linking Haiti (wharves, warehouses, administrative buildings, etc.). Pending and the Dominican reconstruction, the United States has loaned the port authorities Republic two floating docks that enable some commercial vessels to berth. Deep draught vessels have no option but to unload their cargo in the Dominican Republic. The containers are then transported overland via Malpasse Customs office (the border post linking the two countries), which does not have sufficient capacity given the circumstances. Once at the office, the goods are placed under a transit procedure until they reach Port-au-Prince. this time of crisis and his staff’s accessibility and receptive- In spite of all these problems, Haitian Customs succeeded in get- ness despite the difficulties encountered. “Rather than give ting the “ASYCUDA” Customs clearance system up and running up, Customs must forge ahead!” said Mr. Valentin. Such is the again within a fortnight of the disaster; an important feat as Cus- watchword adopted by the Director General and his Directors toms currently generates 65% of the country’s total tax revenue. to maintain their motivation in the face of a catastrophe of this scale. The Director General of Haitian Customs, Mr. Jean-Jacques Val- entin, has the use of a small office in the Customs School where he welcomed the WCO representative. During the discussions More information he underscored his administration’s outstanding efforts during [email protected]

WCO News – No 62 – June 2010 49 f O C U s

Using Statistics to Fight Corruption by Bryane Michael and Nigel Moore

any Customs managers think they Mneed expensive computer systems and computer experts to detect corruption using statistical methods. This is not true! There are many ways for a diligent manager to quickly and relatively easily identify suspicious activities across a wide range of Customs operations. We will try to show how a regional Customs manager can detect corruption just by looking at graphs of data.

Can you find the two or three suspicious inspectors in the data graph shown in Fig- ure 1? Look for data points which look unusual – just use your common sense. The Figure compares the clearance times for a number of inspectors and the value of inspections they carry out. Of course, the inspectors who take too long are suspicious. However, the one inspector who clears too quickly also represents a risk. We have coloured these points for easy reference.

The simple graph shows the basic con- respectively). The second group of officers is a concern because they are outside the cept of risk. You may be used to thinking normal range. The statistics have therefore highlighted them for further attention. about the lone inspector at a far away As a manager we need to establish what the reasons for these anomalies are. border crossing at night as a corruption “risk.” The modern manager though How can we look at the variance (or risk in our jargon) of performance indicators also thinks of risk as statistical variance. we are interested in (like clearance times) without printing thousands of graphs and Namely, how much differences are there data plots? Maybe you remember from your maths classes the notion of a standard in groups of data? Looking at Figure 1, we deviation. The standard deviation (represented by the Greek letter s) measures the actually see two groups of data – one dispersion or spread of data. Average import values, times required for clearance or group (clearing goods between 3 and 6 other variables we are interested in will have a standard deviation which helps us hours) and a second group outside this measure the “risk” of corruption, inefficiency (or just random unpredictability). The norm (i.e. around 2 hours and 7 hours standard deviation in Figure 1 for clearance times is between 3 and 6 hours.

Figure 1: An Anti-Corruption Rorschach Test 300

250 goods 200 of

housands)

(T 150 Value value (thousands) 100 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 time for clearance (hours)

Source: We have made up these data for this example.

50 WCO News – No 62 – June 2010 f O C U s

You can easily calculate the standard de- Figure 2: Using Excel to Calculate Standard Deviations viation of such things as import values or Infraction Blue North Blue South clearance times using Microsoft Excel. 1 2.4 24.2 Figure 2 shows how this can be done us- 2 1.3 22.1 ing another example – the times two bor- 3 4.3 23.3 der points (Blue North and Blue South) 4 5.3 25.2 take to detect a Customs offence. Even 5 3.5 23.1 though group 1 working in Blue North at 6 6.3 24.4 first glance appear more “efficient” (they 7 7.4 24.6 detected more offences), they are in fact 8 5.3 24.5 also more risky than the Blue South group 9 6.4 22.1 when looking at the standard deviation 10 7.5 22.3 of the two groups. This is because the 11 2.5 23 standard deviation of times in detected 12 1.3 24.2 offences equaled about 2.4 days in Blue 13 11.6 24.7 =stdev(C4:C18) North whereas Blue South’s rate varied by 14 7.1 23.9 less than one day. As shown, to find the 15 9.9 24.1 standard deviations of these groups, just Average 5.5 23.7 select the data, and – in a new cell – type Standard dev. 2.38 0.85 “stdev.” In the brackets, choose the data you want. You see two standard deviations in Figure 2. Many readers may seriously doubt the value of using a statistics-based approach to From a statistical point of view, risky help fight corruption. We know the jokes about statistics – and how unusual these Customs officers (and groups) are there- concepts may seem when read for the first time. Statistics is only one tool among fore those who are “different.” They many to detect and prevent corruption. We are not suggesting that you turn your have higher standard deviations – they Customs service into a statistics faculty. Nor do we suggest you fire your intelligence are more abnormal. They include indi- officers and investigators. Instead, we suggest that your managers are trained to use viduals who are different from the rest basic statistical analysis skills to help identify possible corrupt activities i.e. ones that of the group. From a statistical analysis a simple graph may show all too clearly. perspective, being different is “bad”. Managers need to establish the cause While we have tried to make the subject simple, please don’t accuse anyone of cor- for such differences. ruption without having a professional look at the data first!

Statistics serves as a tool that can help us Further information on the subject can also be found in our companion article in the identify and quantify risks – in this case World Customs Journal (www.worldcustomsjournal.org). We can also be contacted the risk of corruption. And statistics can directly via email should you wish to clarify any points or have a specific question you also allow us to quantify the cost (on av- would like us to answer. erage) of corruption in Customs. Namely, the expected value of corruption in a part About the authors: of Customs operations equals the value of Nigel Moore is an Bryane Michael works at goods cleared multiplied by the probabil- independent Customs the Stockholm School ity that officers are taking bribes. For ex- Expert. of Economics. ample, if 50 Customs officers have a 15% probability of taking €50,000 in bribes each, then the expected level of corruption in that group is equal to €375,000. We just multiply the probability of bribe- taking by the amount these inspectors More information may be taking. [email protected]

WCO News – No 62 – June 2010 51 E V e n T S

Customs community rallies to improve Customs-Business partnerships

Following the WCO’s decision to dedicate 2010 to Korea Customs Service (KCS) signed nu- promoting the importance and necessity for Customs- merous MOUs with businesses, reinforc- ing the KCS surveillance network over Business partnerships especially in light of the fact that drugs, guns and smuggling activities. The partnerships form one of the 10 core building blocks in the KCS business partnership is particularly strong on IPR issues, illustrated notably by WCO Customs in the 21st Century strategic policy, Customs the Cyber Monitoring Team which enables administrations around the world have rallied to concretise Customs and customer-group representatives to keep watch on transactions of the Secretary General of the WCO’s call by undertaking counterfeit goods in cyberspace. a number of positive initiatives in this area. The Royal Malaysian Customs Depart- ment conducted a Customs-Private Sec- he Secretariat too has taken up the On International Customs Day, Baha- tor Consultative Meeting to discuss vari- Tchallenge by setting in motion a mas organized a public forum with local ous aspects of Customs matters in order project to revisit all its Memoranda of brokerage companies and the general to enhance trade facilitation. Understanding with the private sector public that included a question and with a view to exploring whether they are answer session and the exchange of ideas Norway chose to dedicate International still fit for purpose, whether they need to and concerns. Customs Day to the Customs-Business be updated and strengthened or whether Partnership in the fight against coun- they need to be completely renegotiated Cambodia established its Customs-Pri- terfeiting, a strategically important is- to take on board new opportunities and vate Sector Partnership Mechanism aimed sue that illustrated its good cooperation challenges of today’s international trading at raising awareness among all stakehold- with business. Norwegian Customs and environment. A central part of the project ers, accelerating better cooperation, and Excise cooperates on a daily basis with is to ensure that exchange of information ensuring efficiencies in the implementa- the Confederation of Norwegian Enter- provisions are reinforced to the greatest tion of the government’s trade facilita- prises. They invited the press to witness extent possible as sharing of information tion policy and also policies of the WCO, how many counterfeit products are dis- is recognized as playing a key role in en- especially the WCO SAFE Framework of covered at the main mail terminal during hancing Customs-Trade operations and Standards. a single week. performance.

A small sampling of concrete national Customs initiatives reported to WCO News appear below:

Malaysia: Customs and the private sector consult

Cambodia Customs Management Board and private sector Malaysia's Director General of representatives Customs with the Minister of Finance who presented Certificates of Merit to the private sector Cambodia: Q&A during the official launch of the new mechanism

52 WCO News – No 62 – June 2010

Cambodia: Q&A during the official launch of the new mechanism E V e n T S

Ukrainian Customs highlighted the lat- Brunei Customs announced that it plans requirements a company needs to fulfill to est developments in its cooperation with to develop several activities with the busi- obtain this new status. business: the implementation of the AEO ness community during 2010, including a concept for trusted traders (the so-called number of dialogue sessions to exchange In Cameroon, a debate took place dur- “white” and “green” lists); the launch of ideas and experience. Brunei highlighted ing which the main issues and obstacles the “e-Customs” project and the intro- the need to change its mindset and up- hindering trade were discussed. Delegates duction of its first phase, namely, the grade working processes and perform- recognized that many things have been “e-Declaration”. The trading community ance, encourage a pro-business attitude, put into place to develop the Customs- were invited to comment on these break- and better understand the needs of entre- Business Partnership including a Business throughs and on the dynamics of the Cus- preneurs who do not want to be hindered Customs Forum and a committee to pro- toms business. with regulations and procedures that are mote integrity. All delegates also under- no longer relevant. lined the need for regulations to be well Côte d’Ivoire launched a Time Release applied and for every player in the “trade Observatory to enhance its relationship In Mali, a Seminar on Customs-Business chain” to comply with their responsibility. with business. It had set up several con- Partnerships was an occasion to highlight sultation committees with the private the efforts made by Customs such as the The 2010 International Customs Day cel- sector and announced the establishment review of the Customs code, the agree- ebrations corresponded with the opening of a national committee on IPRs. Business ments with neighbouring countries on of the Meeting of Customs Officers from representatives took the opportunity to transit procedures, the ongoing IT inte- the West African Economic and Monetary comment on the changes made and, while gration of Customs procedures, the use Union in Niger. Customs representatives recognizing progress made, highlighted of scanner equipment to reduce clearance from the eight member countries ex- the necessity to accelerate clearances times, etc. Other projects to facilitate and changed experiences in order to find so- and to move to a paperless environment. simplify procedures to support business lutions that would facilitate an increase in development are under way. trade and economic integration. With the assistance of the WCO, Morocco launched an Integrity Observatory as part Tunisia used International Customs Day Hong Kong Customs announced the roll of their efforts to enhance the business to launch the Tunisian AEO programme out of its electronic Road Cargo System environment. and to explain in detail the conditions and (ROCARS) to facilitate road cargo clear-

China awards Certificates of Merit to Customs officers and business representatives Customs officers and their business partners cycle together in Indonesia

Representatives from the private sector honoured by Indonesian Customs

Korea Customs Commissioner poses with Ambassadors accredited to Korea

WCO News – No 62 – June 2010 53 E V e n T S

Canada Border Services Agency hosts a public Italy honours deserving Customs officers information event Japan awards certificates to private sector representatives

New Zealand Customs holds an open day that included a number of displays, detector dog demonstrations and tours of the Hawk IV vessel.

ances. ROCARS was developed in close Jordan Customs continued to enhance its Given the focus on Customs-Business collaboration with industry and allows partnership with the private sector with Partnerships in 2010, the WCO decided shippers to submit road cargo data elec- particular emphasis on supply chain se- that it would be appropriate to also award tronically in advance of the Customs curity and the protection of intellectual Certificates of Merit to private sector in- clearance. property rights. Their Customs-Business dividuals and organizations that were Partnership Council provides a platform playing a positive part in this area. Many Israeli celebrations covered both Inter- for the frank exchange of views on issues Customs administrations followed suit by national Customs Day and its 60th anni- that deter economic growth and hinder awarding certificates to their national pri- versary during which they noted the past the flow of goods. vate sector representatives whose work through to the present while looking into had contributed to transparency and im- the future. Their event emphasized the in- Portugal’s Customs administration and proved trade. volvement of and close cooperation be- the Lisbon Trade Association met to im- tween Israel Customs and the country’s prove their performance through partner- foreign trade community. ship and Sudan Customs signed an MOU with a major company to combat com- The work done by Her Majesty’s Revenue mercial fraud. and Customs in the United Kingdom to help international trade was placed under More generally, ceremonies took place the spotlight. This work covers everything across the globe celebrating the work from helping major car manufacturers to of Customs in keeping the movement of sharing and exchanging information on goods flowing and therefore encourag- sea containers, through to reducing the ing trade. Many Customs administration amount of paperwork for Fast Parcel Op- awarded Customs officers with WCO erators who complete Customs entries on Certificates of Merit for displaying pro- More information behalf of importers. fessionalism and skill. www.wcoomd.org

54 WCO News – No 62 – June 2010 E V e n T S

German Customs investigators receive Certificates Canada Border Services Agency hosts a public information event of Merit Canada Border Services Agency hosts a public information event

A Portuguese Customs officer receives a WCO Dutch Customs officers pose with their Certificates of Merit Certificate of Merit

New Zealand Customs holds an open day that included a number of displays, detector dog demonstrations and tours of the Hawk IV vessel.

Private sector and Customs representatives meet in Ukraine Israel's Director General of Customs and the Director General of the Tax Au- thority hand out a Certificate of Appreciation to the previous Director General of the Department of Customs & VAT in the presence of senior officials

Awarding Certificates of Merit to Customs officers in the Dominican Republic

An ICD poster in Norway showing fake medicines and the words "Do not let this into the country".

WCO News – No 62 – June 2010 55 E V e n T S The page turns at the German Zollkriminalamt

WCO. They hosted the Balkan Info, Mar crucial role Customs has to play in fighting Info and Cargo Info systems and actively all forms of Customs and Excise related assisted in organizing a number of drug crime. The WCO also benefited through related enforcement operations such as Karl-Heinz’s support in providing many Carmen I to IV, and later Operation Road- highly qualified experts to run operations runner and follow up operations which and to evaluate WCO driven programmes. Karl-Heinz Matthias at his farewell reception targeted drugs, counterfeits, precursors and other enforcement issues. Progress- His legendary “New Year’s Reception” at fter a long and very successful career ing from these operations, the WCO later or around the date of International Cus- Awith the German Customs adminis- developed its various CEN applications toms Day on 26 January, was often used tration, Karl-Heinz Matthias, the Head which are the cornerstone of modern Cus- by Karl-Heinz to personally award WCO of the German Zollkriminalamt (ZKA) toms and law enforcement cooperation. Certificates of Merit to dedicated Cus- retired on 30 April 2010 after having di- toms officials. As a friend of the WCO, rected the ZKA for 20 years. The ZKA is Karl-Heinz very early realized the impor- Karl-Heinz will always be remembered for responsible for Customs criminal inves- tance of communication and intelligence his long lasting commitment to the ZKA tigations. Guests from various countries in Customs law enforcement and offered and the WCO, and for his personal contri- joined Karl-Heinz at the ZKA offices in the ZKA as a “home” for the WCO’s Re- bution to improving global Customs law Cologne to say farewell and to wish him gional Intelligence Liaison Office for enforcement. well in his retirement. Western Europe (RILO WE). RILO WE will always be associated with his name We wish Karl-Heinz and his family all the The WCO has counted on dedicated sup- and his support to the WCO. His vision, very best for the future. port by the ZKA in many different Cus- his determination and his internationally toms compliance matters over the years. recognized competence in enforcement During the early nineties, Karl-Heinz and matters made him many friends in the his officers supported many operational international law enforcement commu- More information programmes and projects initiated by the nity and underlined in many instances the www.zoll.de

Mansion House in downtown Dublin all Fusing data to deliver were treated to the crystal clear purity of the voices of a troupe of Celtic sing- integrated business ers that provided an evocative, almost

FUSING DATA TO TRANSFORM haunting experience that all present shall BUSINESS PROCESSES solutions 2010 WCO IT Conference & Exhibition never forget. No mention of Ireland can 28-30 April 2010 • Dublin • Ireland be complete without the word “Guinness”

Hosted By S his was only the There were many other individual efforts and the next evening was hosted at one of Irish Tax & Customs second time that involved in making the 2010 event such the truly symbolic icons of Ireland – the Corporate Event Sponsor T the WCO has held an outstanding success; the entire team Guinness Storehouse – and there cannot its annual IT Confer- at the Office of the Revenue Commis- be a more appropriate setting for a tra- ence and Exhibition in Europe since the sioners worked tirelessly, with flair and ditional Irish evening with great views of very first event in Brussels back in 2002. great friendliness in supporting the WCO the city of Dublin, the lovely dancing and The unexpected role of the Icelandic vol- contingent and the official conference or- of course, the Guinness! cano added a new dimension to the proc- ganizers. It is important to note the con- ess and while registrations were affected tribution from our main event sponsor, From the opening address by Conor Leni- in the last week or so, participants had Accenture, and all the other sponsors and han, the Irish Minister for Science, Technol- a truly wonderful experience in the Irish exhibitors without whom nothing would ogy and Innovation to the closing speeches capital from 28-30 April. This outcome have been possible – this is the WCO Year by Josephine Feehily and Sergio Mujica, the was down to the efforts of many individu- of the Customs-Business Partnership and WCO Deputy Secretary General, there was als, but the WCO owes a huge thank you the IT Conference and Exhibition is a tan- an excellent line-up of speakers from Cus- to its co-host, the Irish Revenue Com- gible demonstration of that partnership. toms and the private sector. The WCO has missioner, Josephine Feehily, who took built an enviable record of success with the an enormous amount of time from her There were many memorable moments IT Conference and Exhibition at locations busy schedule to be a very visible part of for all participants. On the first evening at all over the world and 2010 has kept that all proceedings. the historically important and very lovely record intact. There were highly pertinent

56 WCO News – No 62 – June 2010 E V e n T S “Looking back, looking forward”

he Technical Committee on Customs today was still in its of the six WCO regions. WCO TValuation held a landmark event dur- infancy - world trade Members are being encour- ing its recent session at WCO Headquar- volume has since in- aged to utilize existing rele- ters to celebrate the 30th anniversary of creased by 525%. This vant tools and instruments the GATT/WTO Valuation Agreement. poses difficulties for and are being given the op- today’s Customs valu- portunity to identify and The event was an opportunity to take ation specialists; sup- discuss areas where they stock of how the Valuation Agreement ply chains and multi- would appreciate more was working in today’s international trad- national structures have guidance. To date, valu- ing environment, taking into account the become ever more so- ation, particularly in the vast changes which have taken place over phisticated and complex, context of commercial the past 30 years. It was recognised that and large payments are fraud, has emerged as the Agreement was first drafted at a time being made for intellec- the main theme where when international trade as we know it tual property rights and further help is sought. other services connected with imported goods. For As well as looking back over the these reasons, the Technical Committee past 30 years at the lessons learnt, speak- has been working hard on tricky technical ers and panellists also looked forward to questions such as whether certain royalty future challenges for Customs valuation payments should be part of the Customs and considered ways to address them. value, the relevance of transfer pricing to There is a need for increased commercial Customs value, and determining which awareness, so that Customs can enhance parties in a chain should be regarded as its understanding of modern business the buyer and seller for Customs valua- practices and meet business expectations. tion purposes. The importance of strong partnerships between Customs administrations was presentations on the complex subject In most developing countries, effective also emphasized. The close ties between of business transformation through the implementation and application of the the WCO and the WTO were further re- fusion of data and the exhibition stands WTO Valuation Agreement is often quot- inforced during the event which stretches allowed vendors to showcase their exper- ed as one of the main problems faced by back to the creation of the WTO in 1995. tise and world-class solutions to an eager Customs administrations. Informal trade audience. across national borders has increased and Finally, the celebration was also a time become more diverse, often accompanied for nostalgia; a Valuation Museum of in- Finally there is the subject of Dublin it- by suspected false invoices and under- teresting artefacts and photos was set up self and Ireland more broadly. Everybody valuation. These issues were addressed and some familiar faces from the valua- there shall have lasting impressions of during the anniversary event and are tion world, past and present, were able to the kind, welcoming and humorous peo- also being considered in the context of catch up with old friends and colleagues. ple who are the basis of the rich cultural the WCO’s Revenue Package which was experience that Ireland offers. designed to strengthen fair and efficient revenue collection in light of the global financial crisis and consequential declining More information duty rates. A series of Workshops, funded More information www.wcoomd.org by Japan, is currently being held in each www.wcoomd.org

WCO News – No 62 – June 2010 57 E V e n T S WCO’s continued commitment to enhancing tariff classification

Seminar in East and Diagnostic in Liberia Southern Africa In 2009 a WCO diagnostic mission was Modernisation of tariff classification work conducted in Liberia during which the was the topic of a seminar that took place need to assist the country in the HS area in Mombasa (Kenya) from 8-11 February was identified. As a result, a workshop on which gathered almost the entire region of the implementation of the HS Convention East and Southern Africa together. Twenty- and the WCO classification work model seven Customs officers from 20 countries was organised during March 2010 to discussed how best to organise their tariff identify the organizational strengths and classification infrastructure by projecting weaknesses of tariff classification work in In Timor-Leste the standards recommended by the WCO order to determine specific needs for as- onto current practices, by identifying com- sistance. With the help of WCO experts, mon strengths and weaknesses, and by participants analyzed the current situa- contemplating measures needed to keep tion, identified objectives and developed tariff classification work in line with mod- an action plan for the modernisation of ern standards and requirements. The Semi- tariff classification work in Liberia. nar also focused on addressing problems in the area of establishing advance tariff Seminar for the Customs Union ruling programmes – an issue that remains of Belarus, Kazakhstan and high on the WCO agenda. the Russian Federation A seminar on managing the challenges In Kenya Seminar in West and posed by a common tariff and Customs Central Africa policy including tariff classification issues From 15-19 February, a regional seminar in the newly established Customs Union for the West and Central Africa region between Belarus, Kazakhstan and the focusing on HS 2007 took place in Oua- Russian Federation took place from 17-18 gadougou (Burkina Faso). Twenty-two February in Minsk (Belarus). The seminar participants from seven countries were provided clarification on certain proce- introduced to the work of the WCO HS dures and mechanisms for managing the committees and sub-committees, to Customs Union’s HS related activities, as WCO Council Recommendations, and well as more practical information on the to the HS 2007 amendments. They were use of the HS in daily work. In Liberia also acquainted with the WCO commodity database which offers the possibility Conclusion mproving tariff classification work is of searching by keyword or by using an These training opportunities are a step to- Irecognised as a priority in the WCO HS code number, HS publications, and the wards the concrete improvement of the Strategic Plan, which calls for the imple- WCO HS e-learning tools. situation in the field. Customs adminis- mentation of best practices in this area. trations too must take practical measures These best practices are enshrined in Workshop in Timor-Leste to implement WCO instruments on tariff two very important WCO Council Rec- Enhancing the ability of Timor-Leste Cus- classification work and the latest version ommendations on the introduction of toms officers to classify goods and to jus- of the HS which caters for goods currently programmes for binding pre-entry clas- tify their classification decisions was the being traded internationally. sification information (1996) and on the main reason behind a national WCO HS improvement of tariff classification work Capacity Building Workshop held in Dili The next version of the HS nomenclature and related infrastructure (1998). (Timor-Leste) from 8-12 February. will enter into force on 1 January 2012. Customs administrations are encouraged Since 1988, when the first version of the The 25 participants learnt the mechanics to begin the process of implementing HS came into force, the WCO Secretariat of classification – the step-by-step proc- HS 2012 in their national Customs tariff has been assisting WCO Members in their ess of first identifying goods, and second or statistical nomenclatures. efforts to implement the HS and enhance identifying the possible chapters using the tariff classification work. In the early Table of Contents, then locating the appro- months of 2010, five HS seminars took priate headings, next, considering the rela- place at the regional and national level tive Section and Chapter Notes and, finally, More information with the support of the Organization. classifying in the six digit subheading. [email protected]

58 WCO News – No 62 – June 2010 AlexanAlexan UHFUHF PassivePassive ElectronicElectronic SealSeal Solve smuggling issue & Accelerate Custom’s clearance

Product Profile Product Profile RF Specifications • Low cost ; High reliability   • Design for superior performance     sealed on container        • No change to current container Physical Specifications sealing process and no need of         battery     • For security consideration,         disposable one-time device, and   can’t be reused   • RFID acts when sealed ; RFID no    function when bolt be cut off • Container travel speed: 0 to 80 km/h *Eseal’s bolt through closed hasp on container **Reader dependent (14m is based on 4W EIRP)

    pub_webbfontaine.pdf 1 15/12/2009 11:45:46

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