February 2017 | n° 82 | www.wcoomd.org WCO news

Data Analysis for effective border management

World Customs Organization SOLUTION READY

OFFERINGS

TRADE FACILITATION SOLUTIONS ICT CONSULTING PA A R BUSINESS AUTOMATION Pre -Arrival Assessment Report

PORTAL DEVELOPMENT KNOWLEDGE TRANSFER VIEW CAPACITY BUILDING & TRAINING Single Window Application Platform MANAGED SERVICES

SOLUTIONS NARP National Automotive Repository Portal [email protected] www.westblueconsulting.com SOLUTION WCO news N° 82 February 2017 READY Content

04 Flash info 07 Dossier 16 32 Point of view 22 Mirror analysis, a 34 Focus risk analysis support API-PNR: an overview of tool for Customs the French system and 46 Panorama administrations the challenges faced

67 Events

46 51 Facilitating trade How the United States against a backdrop of is transforming its trade security threats: the processes to compete Tunisian experience in the global economy

DOSSIER: DATA ANALYSIS POINT OF VIEW FOCUS: ENVIRONMENT

07 The Secretary General of 32 Emerging technologies can 34 Customs and the the WCO shares his thoughts on transform border management, environment: bringing about a the importance of data analysis, but agencies must prepare better future for all the WCO’s theme for 2017 40 Project INAMA: OFFERINGS 10 National experiences: implementation progress and first Canada, Côte d’Ivoire, France, results achieved New Zealand and Singapore 44 Customs’ role in protecting TRADE FACILITATION SOLUTIONS 26 Developing data analyst the ozone layer and mitigating skills: how the WCO contributes climate change to expanding this specialized area ICT CONSULTING of work 28 Cognitive computing: how PA A R it can help in improving trade BUSINESS AUTOMATION Pre -Arrival Assessment Report compliance and facilitation PORTAL DEVELOPMENT Editor-in-Chief Advertising Editorial note Copyright © World Customs Organization Grant Busby WCO News is distributed free of charge in English All rights reserved. Requests and enquiries concerning and in French to Customs administrations, international translation, reproduction and adaptation rights should be KNOWLEDGE TRANSFER Writer / Editor organizations, non-governmental organizations, the addressed to [email protected]. Laure Tempier Bernard Bessis business community and other interested readers. Opinions [email protected] expressed in WCO News are those of the contributors and Acknowledgements: The Editorial Team wishes to express its Editorial Assistant Publisher do not necessarily reflect the official views of the World sincere thanks to all who contributed to this publication. CAPACITY BUILDING & TRAINING VIEW Sylvie Degryse World Customs Organization Customs Organization. Contributions in English or French Single Window Application Platform Rue du Marché, 30 are welcome but should be submitted no later than 15 April Illustrations: Our thanks also extend to all who provided Online subscriptions B-1210 Brussels 2017 for consideration. The WCO reserves the right to photos, logos and drawings to illustrate this issue. http://www.wcoomd.org/en/media/wco- Belgium publish, not to publish, or to edit articles to ensure their MANAGED SERVICES news-magazine/subscriptions.aspx conformity with the magazine’s editorial policy and style. Photo cover: © Mischa Keijser / Cultura Creative Tel.: +32 (0)2 209 94 41 The WCO Communications Service is available to answer Fax: +32 (0)2 209 92 62 all requests for subscriptions, submission of contributions, Design: www.inextremis.be - mp5521 [email protected] and any other enquiries relating to WCO News. Please email www.wcoomd.org [email protected]. SOLUTIONS NARP National Automotive Repository Portal 3 [email protected] www.westblueconsulting.com FLASH INFO

A new module in ASYCUDA speeds up the processing of relief consignments

By Virginie BOHL, EMERGENCY RELIEF PROJECT MANAGER, THE UNITED NATIONS OFFICE FOR THE COORDINATION OF HUMANITARIAN AFFAIRS

IN MAJOR HUMANITARIAN crises, whether natural disasters or complex emergencies, many relief goods are delayed by Customs. Sometimes these items are only released months after their arrival, and, in the worst-case scenario, may never reach the affected population. © USCBP The reason for such delays is that relief consignments in humanitarian be associated with the relevant Customs Customs authorities are often not emergencies. procedures prescribed by the national adequately prepared to process the large Customs law of the affected country (e.g. amount of relief items that usually arrive Once activated, the module will enable exemption from import duties and/or in a disaster stricken country within a the automated system to: taxes), enabling completely automated very short period of time. The case of the processing and release of these goods by Philippines after Typhoon Haiyan struck • register the organizations potentially Customs authorities without delays. in November 2013 gives an idea of the involved in UN relief operations in volumes involved: the country’s Bureau advance, in preparation for potential The system will also enable Customs of Customs reported that the volume unforeseen emergencies; to get a more accurate overview of of cargo flights and ships was 10 times incoming relief consignments, and larger than under normal circumstances. • record the duration of the state of to share this valuable information emergency and the relief items listed with other national authorities and ASYCUDA’s new module by the government as priority needs, international actors such as the Global As a new initiative might help countries including their respective HS codes, Logistics Cluster (the coordination using the Automated System for and the requested volume; mechanism responsible for coordination, Customs Data (ASYCUDA) to better information management, and, where handle the influx of relief items in an • associate a list of pre-authorized necessary, the logistics service led by the emergency, the United Nations Office organizations (UN, inter- United Nations World Food Programme for the Coordination of Humanitarian governmental organizations (IGOs), (WFP) provision to ensure that an Affairs (OCHA) and the United Nations non-governmental organizations effective and efficient logistics response Conference on Trade and Development (NGOs), etc.) with the emergency; takes place in humanitarian emergency (UNCTAD) jointly explored how to missions). upgrade the computerized Customs • authorize eligible aid agencies or management system, developed 35 donors with the possibility to lodge Rolling out the new system years ago by UNCTAD and used today pre-simplified arrival declarations, The software prototype has been tested, in more than 95 countries, in order to and clearly indicate on their and will be integrated into ASYCUDA facilitate the processing of international declaration that their shipment systems around the world progressively. relief consignments in humanitarian contains ‘humanitarian relief’; Procedures and guidelines will be emergencies. developed and tested in simulation • recognize these consignments, and exercises to ensure that national The collaboration resulted in the prioritize their treatment by Customs authorities and shipping agencies are development of an additional module and other government agencies. comfortable with the system, and are for the software, called the Automated ready to use the module. System for Relief Emergency Different types of humanitarian relief Consignments (ASYREC). As its items such as goods imported for the More information name suggests, it will automate the benefit of disaster victims or temporary [email protected] prioritization and rapid processing of admission of disaster relief material can

4 WCO news N° 82 February 2017

New global HS standard enters Latest accessions to into force WCO instruments Revised Kyoto Convention

THE NEW EDITION of the WCO Harmonized • The Explanatory Notes which Samoa System (HS) Nomenclature entered constitute the official interpretation Date of accession: 27 October 2016 into force on 1 January 2017. The of the HS at the international level; 105th Contracting Party changes in HS 2017 encompass 242 sets of amendments relating to a wide • The Compendium of Classification Benin range of products and product groups, Opinions which includes a list Date of accession: 5 January 2017 including: of the most significant/difficult 106th Contracting Party classification decisions taken by the • fish and fishery products; WCO HS Committee; Nepal • forestry products; Date of accession: 3 February 2017 • antimalarial products; • The Alphabetical Index which 107th Contracting Party • substances controlled under the facilitates the location of references Chemical Weapons Convention; in the HS Nomenclature or in the Harmonized System Convention • hazardous chemicals controlled Explanatory Notes to any of the under the Rotterdam Convention; products or articles mentioned therein; Burundi • persistent organic pollutants Date of accession: 18 January 2017 controlled under the Stockholm • The online HS Database which 155th Contracting Party Convention; includes all HS publications. • ceramic tiles; More information • light-emitting diode lamps; Information about progress on the [email protected] • monopods, bipods, and tripods; implementation of HS 2017 and the • hybrid, plug-in hybrid, and all- acceptance of various HS-related electric vehicles. recommendations relating to each of the Contracting Parties is published The several tools available to WCO on the WCO website in the form of a Members and to the public to assist matrix. with the classification of commodities in the HS Nomenclature have been More information updated, and are available for purchase [email protected] via the WCO Bookshop: http://wcoomdpublications.org

HS 2017: 242 sets of amendments

Agriculture Chemicals Machinery Other 85 45 35 32

Wood Transport Textiles 22 8 15

5 DOSSIER

Data Analysis

6 WCO news N° 82 February 2017

Data analysis: seizing opportunities for effective border management

By Dr Kunio Mikuriya, A snapshot of the activities undertaken SECRETARY GENERAL, WORLD CUSTOMS by Customs officers who were awarded ORGANIZATION on the occasion of ICD for their DATA IS GENERATED by every economic commitment to the data analysis theme activity, including by the movement reveals the diversity and complexity of of goods and people. In fact, the the data analysis work being undertaken convergence of several technologies by Customs administrations. These is accelerating the generation of data. officers have: According to experts, the volume of data continues to double every three • used analysis to better detect cigarette years as information pours in from smuggling attempts; digital platforms, wireless sensors, virtual-reality applications, and billions • undertaken a study on how to enhance of mobile phones. In addition, data the security deposits on mineral oils storage capacity has increased, while which are temporarily imported; its cost has plummeted. Data scientists now have unprecedented computing • enhanced post-clearance audits by power at their disposal, and they are determining criteria and setting up devising algorithms that are ever more profiles to control the movement of sophisticated. cargo;

Data analysis is not new, companies • exploited historical enforcement- and governments have been leveraging related data to predict the behaviour data analysis in their businesses of traders and passengers; for years to drive priority‐setting, decision-making, performance • developed tools that directly support measurement, budget planning and data analysis activities, such as forecasting, and operations. Customs databases or systems which enable already has a substantial amount of Customs-to-Customs exchange of data at its disposal, beginning with information; data submitted for the Customs clearance process. Moreover, thanks to • engaged with other related government the development of digital technology, agencies to support data exchange; Customs can tap into data from other government agencies, commercially • implemented the WCO Time Release available databases, and open source Study (WCO TRS) for measuring the information platforms, such as time necessary for the clearance and digitized global public records and release of goods; multilingual news sources. • assessed passenger risk, and assisted Taking this context into account, I am in the targeting and identification of convinced that, building on last year’s high risk cargo. theme “Digital Customs – Progressive Engagement,” it is imperative that we It is important to recognize the critical continue to enhance our data analysis value of the work of these officers, and practices. For this reason, I chose the benefits that can be brought to our “Data Analysis for Effective Border community through the sharing of Management” as the WCO’s annual knowledge on the use of data analysis theme for 2017, which was launched on methods and technologies. On this the occasion of International Customs last point, I should like to highlight Day (ICD) on 26 January. the importance that modern analysis

7 © Mischa Keijser / Cultura Creative DOSSIER

More and more Customs administrations have turned to data mining and predictive analytics, i.e. the pursuit of extracting meaning from raw data using specialized computer systems, or even cognitive technologies which use advanced algorithms to analyse unstructured data. Data, used in conjunction with analytics and other emerging technologies, will, I am quite sure, provide us with new opportunities to realize our objectives.

tools are playing today. In recent years, databases. The WCO Information and and Trade and the research-focused we have witnessed the emergence of a Intelligence Centre (I2C) is another PICARD Conference will spend some whole gamut of new tools, providing new endeavour to show the use of open data, time looking at this issue. opportunities to get the most value from while supporting intelligence-gathering. available information. But, it is not only the WCO which will Customs administrations should be focusing its attention on data analysis More and more Customs administrations make data analysis a strategic priority, during 2017. I have been informed that have, for example, turned to data mining making use of cutting-edge technology, some regional Customs organizations and predictive analytics, i.e. the pursuit establishing appropriate automation will also be organizing events around of extracting meaning from raw data policies, recruiting experts to collect and the data analysis theme, such as the using specialized computer systems, analyse data, and acting upon the data- Oceania Customs Organisation which or even cognitive technologies which driven insights. Customs staff also need intends to hold its event in May. I use advanced algorithms to analyse to progressively develop the appropriate can only encourage initiative, while unstructured data. Data, used in skills to exploit the potential of data exhorting others to do the same. In conjunction with analytics and other analysis and information technology addition, throughout the year, the WCO emerging technologies, will, I am quite (IT) tools. will use every opportunity to enhance sure, provide us with new opportunities the promotion of its tools that can to realize our objectives. Needless to say, to optimize the use of contribute to taking the data analysis data analytics it is important to obtain theme forward, such as: Key requirements quality data in a timely manner. This A critical foundation of a successful is one of the key areas for partnerships • the WCO Customs Enforcement cognitive organization concerned with with business to ensure the timely flow of Network (CEN), which is a global data analytics is the digitization of precise information. Moreover, there is Customs seizure database; data. If data cannot be consumed by a a need for border agencies to harmonize cognitive system, it cannot be analysed the data being shared (using the WCO • the WCO TRS, which is a methodology effectively. So, digitizing information Data Model) and to develop skills for measuring border agency clearance and processes and moving data to the pursuant to any IT challenges. Further, times; cloud or any other easily accessible Customs administrations need to ensure platform are some of the prerequisites that privacy and confidentiality laws are • the use of mirror analysis, which for attaining success in the use of data respected, so as to uphold the confidence involves using the Harmonized analytics. of society while accessing and using such System (HS) Code to compare the data. imports (or exports) of a country with Data analytics should be able to the exports (or imports) reported to access various databases (for example, Methods and tools it by its trading partners, as a means seizure databases, databases of traders, Data analysis, its key requirements and of detecting gaps in terms of quantity, valuation databases, etc.) to discover related challenges will be thoroughly weight or value that may reveal hidden information and patterns. discussed within the WCO during 2017, fraudulent flows or practices; In other words, automation of the and will appear on the programmes extraction and analysis of Customs of all major WCO events, such as the • the application of performance data, including external data, is also of Information Technology Conference measurement to improve Customs critical importance. One of the benefits and Exhibition, the Global Conference procedures and integrity, including of Customs-tax and Customs-police on Transit, and the Technology and the use of the techniques presented in cooperation that the WCO promotes is Innovation Forum. Even the WCO the WCO Performance Measurement to enlarge Customs’ access to different Knowledge Academy for Customs Contracts Guide;

8 WCO news N° 82 February 2017 © David Plas

• the WCO Data Model, which supports as well as the analysis tools it is using, provider which introduces cognitive data analysis by improving data including future developments in this computing and explains how it can help collection and by enabling the sharing field; in improving trade compliance and of data between government agencies. facilitation. • Côte d’Ivoire Customs sheds light Monitoring trends and practices on how it is using mirror analysis to Conclusion Part of our work in the months ahead support risk analysis; Given its growing importance, the data will also be to showcase data analysis analysis theme will be further explored related projects to inspire others, and • Singapore Customs gives us an during meetings of our committees and to monitor and communicate best overview of its data analysis policy in working groups during the year, and practices in this domain. I therefore terms of technologies used and staff the WCO will make every effort to use invite all WCO Members to share how competencies required; all its different communication tools to they are leveraging the potential of data disseminate the knowledge gained and to advance and achieve their objectives, • French Customs tells us about the practices shared on these occasions. and respond to the expectations of data analysis that it applies to the their traders, transport and logistics movement of airline passengers and In wrapping up, I would like to sincerely operators, as well as their governments. crew, and to the implementation of thank all the contributors to this dossier Some have already shared information its Advance Passenger Information/ on data analysis, including all the other with us in the pages of this magazine: Passenger Name Record (API/ magazine contributors who share their PNR) programme, including related experiences on various Customs-related • Canada Border Services Agency challenges. issues with us. Your contributions help explains how it is reorganizing itself us to ensure that the WCO continues to around the data it collects, making Last but not least, the magazine also be the centre of Customs expertise, and data a strategic pillar to build around; includes an article from a Professional a central point for sharing knowledge, Associate working temporarily at the information and research. • New Zealand Customs Service briefs WCO Secretariat, who describes how us on the development of its Single the WCO capacity building programme Window, which will enable it to enabled her to develop her data analyst obtain richer and better quality data, skills, and an article from a technology

9 DOSSIER

Data analysis for effective border management: the Canadian experience

By Charles Slowey, data model with data sets consistent DIRECTOR GENERAL, GLOBAL BORDER MANAGEMENT AND DATA ANALYTICS, CANADA BORDER SERVICES AGENCY with the WCO Data Model standards. To date, the CBSA has improved data EFFECTIVE BORDER MANAGEMENT requires of the data in its care, and that the data policy coherence and strategic direction the identification of people and goods, enables effective border management. through improved communication and the collection and analysis of among all branches of the CBSA. We relevant information at the earliest What is data analytics? have focused our dialogue to ensure that possible point in the travel and trade The term “data analytics” refers to the we are discussing data integrity, data continuum. The “business” of modern use of information technology to harness management, and how best to automate border management organizations has statistics, algorithms, and other tools of manual data entry tools. In short, we evolved, and is now driven by the active mathematics to improve decision-making. have brought the right people together to use of advanced data. It includes traditional analytics that is ensure that we are having conversations often referred to as business intelligence on how to use data the “right way.” Customs organizations collect and hold (e.g. “what happened?”) and predictive vast amounts of data on travellers and analytics (e.g. “what will or could The second pillar, Business Intelligence, goods. As a result, we must embrace happen?”). The CBSA recognized that it involves building an integrated data an organizational culture that is could not fulfil its core mandate without warehouse that draws on key data from equally driven by sound principles of data to drive our priority‐setting, decision- multiple sources, including operational information management so that we making, performance measurement, systems, as well as financial and may truly take advantage of the large budget planning, and operations. Key to human resources data. Early on, the amounts of data in our care. By adopting this was a shift in culture. Agency was able to complete high-level progressive approaches, such as data business requirements for an integrated analytics, to collect and successfully Our traditional methods saw us overview of the CBSA’s operational, exploit data to drive decision-making, accepting information through “stove financial and human resources data. we can strengthen our capacity to pipes” that were in turn analysed in We also developed a visualization pilot protect our citizenry, improve border siloes aligned to our various business to improve situational awareness of what services, and generate revenue for our lines. However, as today’s world is data was available. Going forward, we governments. increasingly interconnected, it became hope to use data to effectively inform clear that we needed to link our diverse decision-making on where to deploy Turning our “raw data” into information data sets and take an enterprise approach enables evidence-based decision- to information management. By making, and allows border management connecting our data holdings, we could organizations to invest resources in a way position ourselves to better contribute that supports high priority services. In to global security, and facilitate the free the case of Customs organizations, this flow of persons and goods. An internal can include advanced risk assessment culture shift is underway at the CBSA techniques, better resource utilization, to see data as a corporate resource that and more complete reporting on overall can be used across all of the Agency’s performance to the public. business lines.

In order to take advantage of the Toward a data-driven decision-making information under its stewardship, process the Canada Border Services Agency By recognizing that we are a “data- (CBSA) has developed a strategy for rich” organization, with significant data data analytics, including establishing systems, the CBSA’s Data Analytics a centralized governance structure, to Strategy became the guiding framework drive investments in three key areas: to increase the value of these data holdings. data governance; business intelligence; Our strategy focuses on three pillars. and advanced analytics. The framework is designed to allow the Agency to derive The first pillar, Data Governance, increased value from its data. At the core includes establishing a Data Governance of this strategy is the recognition that the Centre, launching data stewardship, and CBSA respects the privacy and security implementing an enterprise business

10 WCO news N° 82 February 2017

officers and technology in response to development and implementation of a Expected outcomes real-time shifts in operational needs. data analytics strategy. By integrating data analytics into our regular operations, we expect to see The third pillar, Advanced Analytics, Using these building blocks, any marked effectiveness and efficiency includes expanding operational analytics Customs administration can develop a gains in a number of areas. We expect capacity, exploring the potential of tailored plan for data analytics, which to be more capable of predicting traffic predictive analytics, visualization, and will allow it to derive value from the volumes in real time to help inform the other advanced tools. Under this pillar, vast amounts of data that we as border deployment of human and technology the CBSA launched an eManifest project, management organizations collect. From resources. In addition, we are improving in cooperation with the WCO, to set in the CBSA’s experience, these include: the identification of non-compliance, place a standard data model for use across and, therefore, hope to generate increased jurisdictions. This enabled us to apply • appointing an executive champion revenue from trade verification. We are advanced risk assessment to pre-arrival who understands the value of data also refining risk scenarios to improve commercial information. We have also in decision-making, and who has the targeting operations. used predictive analytics and models to authority to make it accessible; determine patterns and anomalies in • establishing formal data governance to Finally, by providing more comprehensive existing datasets. This included applying ensure relevant, accurate, and timely and accurate performance reporting data analysis technologies to examine data is available, thereby increasing of the Agency’s programmes, we are patterns of trade fraud, targeting models, confidence in data; positioning ourselves to deliver better and to improve resource allocation. • developing teams that understand results for Canadians. We cannot expect data and technology; to modernize our business overnight, Building blocks of data analytics • always respecting privacy and but we can certainly take the right steps Canada’s experience in placing data- sensitive information. today, so that we can be effective partners driven analysis at the forefront of decision- in the global economy of tomorrow. The making required a comprehensive shift in The concept of “privacy by design” is CBSA views this culture shift, towards thinking towards using data as a valuable essential to the development of policies increased use of analytics grounded corporate asset to further effective border that hope to benefit from the use of in a sound information management management. data analytics. In Canada, as we build policy, as foundational to our overall capabilities from the ground up, we modernization efforts, including a more While there may not be a standard always consider privacy implications open government. “one-size-fits-all” blueprint for all and legislative requirements. countries to adopt when looking to take advantage of the information under More information their management, we believe there are CBSA Data Analytics inbox key building blocks to the successful [email protected] © Geralt

11 DOSSIER

Border management modernization in New Zealand forges ahead

By Murray Young, client codes to importers, exporters and CHIEF INFORMATION OFFICER, NEW ZEALAND CUSTOMS SERVICE overseas suppliers, and to organizations or individuals who wanted to submit The New Zealand Customs Service is getting closer to messages to the system. These were applied for on forms that were generally completing a major modernization project, called the faxed or emailed to NZCS for data entry.

Joint Border Management System. The system has two key Allowing supplier codes to be issued online has been hugely beneficial for components: the development and implementation of the traders using the TSW. It has reduced what previously took up to one business New Zealand Trade Single Window; and advanced risk day to issue, down to a matter of minutes. We no longer hear ‘stories’ of and intelligence capability, including new tools to provide someone trying to get a supplier code late on a Friday, but having to wait until sophisticated data mining, risk rating, and pattern analysis. Monday for it to be sorted out. Letting industry get on with their business, IN FEBRUARY 2015, the New Zealand food safety, biosecurity and Customs and allowing it the freedom to manage Customs Service (NZCS) updated purposes. certain information in the TSW has been WCO News readers on the progress of hugely popular and efficient. the (NZD) $104.1 million Joint Border I can tell you good progress has been Management System (JBMS) project, made since 2015, with three areas of the The ‘flip side’ for Customs is what was which it is undertaking in partnership JBMS project completed or substantially previously a manual process is now with New Zealand’s Ministry for completed. largely dealt with through the TSW, Primary Industries (MPI) – responsible allowing officers to focus on more high for managing the biosecurity risks posed Allowing industry the freedom to value work, and for future costs associated by cargo, craft, passengers and mail manage certain information with manual processing to be avoided. items, including risks associated with In July 2015, further functionality to imported food. the TSW was added, to allow brokers to R&I analytics toolset and data register and manage some of their own repository upgraded At the time of the update, a significant and their clients’ information, and for A further milestone was reached in proportion of the Trade Single Window supplier codes to be issued through the November 2015, when a significant (TSW) initiative had been delivered for TSW. Before this addition, NZCS issued upgrade to our offline risk and

Prior to the Trade Single Window, meeting border requirements for goods and craft involved dealing with multiple agencies and a third party to process transactions

Third party Customs Pre-TSW: gateway  Different information sets Industry parties Email, fax &  Insufficient data for a range of MPI full risk assessment e-message Biosecurity system standards  Supported by MPI manual screening MPI data entry Overseas Govt MPI agencies Food Safety system

12 WCO news N° 82 February 2017

intelligence (R&I) analytics toolset and this, we have built a predictive model, Hong Kong, China, and the United data repository to support its use was in consultation with Australia’s States. Collaboration with such agencies deployed. This technology has enabled Department of Immigration and to stop illicit drugs and other contraband a joint border analytics team to be Border Protection, centred on air cargo pre-border has been paying dividends, established (November 2016), which data. While early results are promising, with many notable methamphetamine consists of Customs and two fellow time and more data is needed to prove seizures in particular. A big part of the border agencies, Immigration New it. As our capability and capacity success has come from information Zealand and the MPI respectively. grows, further predictive models will sharing, and NZCS staff being on the be developed, including models for ground in other countries to assist with Establishing a joint team allows revenue risk and other drugs. operations and intelligence gathering. the agencies to share the cost of specialist resources and leverage More investment in the area of data This better CBM approach is also at the the R&I capability and tools of the analytics is certainly required to forefront of how remaining real time three agencies, to gain new insights build from our current state, but it R&I tools, to be delivered as part of into border risk through the use of is the tools, and understanding from the JBMS project, will be implemented. analytics and data sharing. the JBMS project, that have given us a While progress on implementation good head start. of these tools was slowed to focus on Literally millions of border transactions completing the TSW, it has allowed us are now being interrogated to identify Coordinated border management and to re-think some design aspects, and patterns in data that represent border R&I tools implementation in general. For example, risk. A good proportion of that data is Another example of the push in New the tools will now be available to all New being generated through the TSW, which Zealand for better coordinated border Zealand’s border agencies to use, and uses electronic craft and cargo reporting, management (CBM) is that it should they have also been designed for the and clearance messages based on Version be driven by intelligence-led risk mobility platform used by frontline staff. 3.2 of the WCO Data Model (WDM3). management. This intelligence-led approach underpins what NZCS and It is now our expectation that these The available data will grow with the its fellow border agencies do in an tools will be deployed over two years, completion of the last major release ever-changing border environment. as a series of smaller projects once the of the TSW in early 2017, which will But, the collaboration is not just completed TSW has gone live. What will include new ‘lodgement’ types, the limited to gathering intelligence, as in be delivered includes: term used to describe the different sets many locations, New Zealand’s border of information required (see diagram). agencies have co-located staff, and are • a new alert engine for risk assessment; The quality of data will increase even sharing resources more than ever. • a mitigation/workflow engine; further once the use of WDM3 message • an entity management tool; sets by traders to submit information The new way of working is not just • an addressing system; becomes mandatory. confined to the New Zealand border. • a federated search tool to search Closer ties have been established with unstructured data; Initially, NZCS has decided to target many Customs administrations around • a geospatial information system. methamphetamine smugglers. For the world, including Australia, Canada,

The Trade Single Window has streamlined border clearance

Border Agency systems TSW Customs Industry parties One Receive electronic  MPI Import Biosecurity Registration message Validate MPI Import Food & standard  Lodgements Transfer Maritime NZ Connection  options Port Health Officers Respond Other Agencies over time

13 DOSSIER

The completed Trade Single Window

Industry TSW Border Agencies

Registrations Registrations Customs MPI Lodgements Lodgements Import Declaration Maritime NZ Port Health Export Declaration Receive Officers (MoH) Web User InterfaceWeb Excise Validate Inward Cargo Report NEW Advanced Notice of Transfer Arrival Advanced Notice of Departure TECH Outward Cargo Report Update

Cargo Report Export Direct Connection Notify Other Govt Agencies (information sharing) TO

I am confident that these real time a port or airline store, if they have not In keeping with the approach taken prior tools will add huge value, and lead to been cleared already; to the release of any functionality in the DETECT positive outcomes and interventions at JBMS project, NZCS has worked very the border. • Electronic messages for industry to closely with industry during the various report ship arrivals and departures. phases. We have done rigorous testing Single Window component prioritized As a result, New Zealand Ministry of with a select group of traders to ensure it Our TSW has been prioritized. A key Health officers will be able to access works well for them, and to flush out any reason behind this decision is that, if we the TSW to provide instructions to unexpected issues ahead of our ‘go-live.’ want to maximize our R&I tools that ships about approvals to berth, and After the completed system is in place, are still to be implemented, we need Maritime New Zealand will also get we will then consult with industry on two years of rich TSW data, based on the fuller electronic data to manage its mandatory dates for all traders to adopt WDM3. We felt that it was important to safety and billing functions; the WDM3 message sets. get the information flowing first, so that the tools could do their job once they had • Industry will be able to submit excise So, it is a busy time for us here at been implemented. NZCS believes the lodgements directly into the TSW for NZCS, as we prepare to mark another richer WDM3 data will provide us with the first time, with minimal Customs milestone with the completion of our much better insight into border risk, and interaction. This will improve the TSW. It has not been easy at times, but lead to more targeted interventions. efficiency of the excise declaration it is definitely worth it. And, given that process; border modernization never really ends, NEW-GEN In terms of the TSW, right now we are I am excited to see where the next major making final preparations to launch the • Extending the ‘trader self-service’ developments in border management NII SCANNERS completed system (for goods and craft) in capability introduced in March 2015, will take us. just a matter of weeks. As denoted in the which allows brokers and traders to illustrative diagram, the completed TSW manage how their staff use the system; For more information on New Zealand’s TO BE UNVEILED features four new lodgements. It also has TSW, please have a look at a presentation increased functionality across the system. • Providing officers with full access to we prepared for New Zealand Parliament AT WCO IT FORUM transactions in the TSW, so that they representatives in December 2016: The remaining TSW functionality will can help traders with any issues that https://vimeo.com/195691917. deliver the following: they might have with their messages. NUCTECH COMPANY LIMITED 7-9 JUNE • The Inward Cargo Report (the most BEIJING · CHINA complex message set) that includes More information TBILISI, GEORGIA the ability to electronically request www.customs.govt.nz/features/jointbordermanagement/Pages/default.aspx Tel: +8610 50980999 Fax: +8610 62788896 approval to move consignments out of Robert Lake, Counsellor, New Zealand Embassy in Belgium: [email protected] E-mail: [email protected] Follow us on: www.nuctech.com twitter.com/NuctechCoLtd 14 NEW TECH TO DETECT

NEW-GEN NII SCANNERS TO BE UNVEILED AT WCO IT FORUM

NUCTECH COMPANY LIMITED 7-9 JUNE BEIJING · CHINA TBILISI, GEORGIA Tel: +8610 50980999 Fax: +8610 62788896 E-mail: [email protected] Follow us on: www.nuctech.com twitter.com/NuctechCoLtd DOSSIER © Richard Kaby

Mirror analysis, a risk analysis support tool for Customs administrations

By Roger-Claver Victorien Gnogoue, World Bank (WB) and the International Risk analysis FINANCIAL SERVICES DIRECTOR, CÔTE D’IVOIRE Monetary Fund (IMF) – is founded on Customs action has had to be CUSTOMS six projects. rationalized in response to increased volumes of trade in recent years. TWENTY-FIRST CENTURY CHALLENGES place Its enforcement and anti-smuggling Pre-clearance audits, which verify demands upon Customs administrations initiative forms part of the reform the nature and value of goods before throughout the world, particularly in process under Project 4. To reduce importers or their representatives developing countries. Customs services supply chain risks in matters of security take possession of them, have had to must, therefore, be effective and efficient and non-compliance with prevailing be appropriately combined with post if they are to meet their revenue and trade laws and regulations, Côte d’Ivoire clearance audits (PCAs), which are facilitation targets, the achievement of Customs has put a series of modern carried out after goods are released or which requires substantial investment in working methods and techniques cleared at the border, the aim being to reforms, modernization, and continued in place to improve and develop its control less but better. improvement. risk management, and inspection, investigation and enforcement Pre-clearance audit, carried out by Côte d’Ivoire Customs is aware of capabilities. It has, in particular, frontline services, involves a selection these challenges, and has introduced a established a control and selectivity of operations with a potentially high range of reforms to ensure its thorough system based on risk analysis, and has risk of fraud. Côte d’Ivoire Customs, modernization. It is now an exemplary, introduced a simplified report procedure with technical assistance from the up-to-date and high-performing service. which computerizes declaration control IMF Regional Technical Assistance The modernization programme driven reports, thus creating a database of Centre in West Africa (AFRITAC), by its development partners – the Customs offences. has introduced a risk analysis-based

16 WCO news N° 82 February 2017 The pursuit of data quality is essential for a mirror analysis. control and selectivity system to Customs administrations Using the results of a mirror analysis ensure this process. The system’s must ensure this quality by The findings of any mirror analysis performance over the previous 12 lead to assumptions of fraud which months was assessed in late 2015: 20% collecting data from various must then be verified by investigations of transactions covering around 70% sources, particularly foreign in the field or, failing that, in-depth of recognized fraud findings were document reviews. They point Customs audited. Historically, less than 10% of Customs administrations, administrations towards possible fraud, declarations audited led to a finding port authorities, exporting and make it possible to avoid sometimes of fraud. cumbersome and costly investigations countries, and businesses. that may prove inconclusive and PCAs, carried out by second-line fruitless. services, are designed to ensure that completed Customs operations have Côte d’Ivoire Customs issued 2,420 been properly conducted. This involves fraud reports in 2015. The offences an in-depth analysis, both of declarations most commonly recorded by frontline and of the attached import documents, services are false values, false goods and and may cover the three financial years false weight declarations, which alone preceding the audit. While sectors of account for 83.68% of total offences. The activity and operators to be audited The first case concerns a product that will principal offences identified by second- may be selected on the basis of a risk be identified as tariff subheading “X1,” line services are false value declarations analysis, new methods are increasingly which is mainly imported from an Asian (29.83%), undeclared imports (17.23%), recommended by the WCO, including country. The 2014 import value declared and false goods declarations (7.32%). mirror analysis. for this subheading in the SYDAM is 127.24 billion CFA francs, compared to a The results of controls are recorded in the By definition, mirror analysis is a mirror value of 211.3 billion CFA francs, simplified report, allowing operations decision support tool designed to study i.e. a negative difference of 84.10 billion to be audited and control officers to differences in a country’s foreign trade. CFA francs. In addition, the prices be assessed. To ensure that Customs To that end, it analyses both import declared at the Customs barrier are well controls are increasingly effective, the and export statistics. This technique is below international prices (209 CFA statistical services that conduct mirror used to develop the capacity of Customs francs/kg). Two particular operators analyses must also cultivate close administrations to identify possible declare prices, which are significantly relations with Customs control services, irregularities, such as under-valuations, atypical compared to average imports and targeted products and origins must incorrect classifications (tariff slippage), of the same product. be regularly monitored during Customs false declarations of origin, etc. In other clearance operations or PCAs. words, the magnitude of the differences The second concerns product “X2”. may point Customs administrations to While one country may have declared In addition, the results of mirror analyses fraudulent flows most commonly used exports of this product to Côte d’Ivoire, allow Customs statistics to be corrected. over a period of time. the 2014 national Customs statistics Statistical asymmetries are a very serious show a weak flow of such goods that issue since they affect the reliability Some results of mirror analyses and year. This product attracted a tariff of of the trade balance, the balance of their interpretation 20%. By contrast, a product in another payments, and national accounts. Mirror analysis has been used in Côte subheading taxed at a lower rate, i.e. Data reconciliation is necessary to d’Ivoire to study 2014 data, the most 10%, which will be referred to as “Y2,” improve the quality of the foreign trade recent complete data available in the accounted for a considerably greater statistics that Customs administrations United Nations Commodity Trade number of declarations over the same are responsible for compiling in many Statistics Database (UN COMTRADE). period. In this particular case, this countries. This exercise highlighted significant could represent a tariff slippage, leading disparities between data taken from to the avoidance of a proportion of the Data quality and mirror analysis in our SYDAM WORLD computerized Customs duties. perspective Customs clearance system and data The pursuit of data quality is essential stored in the UN database. These The challenge is all the more significant for a mirror analysis. Customs differences involve several products, because the introduction in 2015 of administrations must ensure this and are more substantial for Asian the common external tariff of the quality by collecting data from various countries. Our attention was drawn to Economic Community of West African sources, particularly foreign Customs two particular cases. Because of their States (ECOWAS) brought about a administrations, port authorities, sensitive nature, information regarding 35% increase in the Customs duties on exporting countries, and businesses. Harmonized System (HS) headings or product X2, which could lead to greater the source countries of the products revenue losses if corrective measures are Many data accuracy problems have been involved will not be disclosed. not put in place. highlighted repeatedly during mirror

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analyses. These may be goods classification errors TRACABILITY SECURITY by the country of origin, time lags between export and import declarations, the “misallocation” of imports to a third country, or exchange rate volatility. These problems can be resolved largely CUSTOMS through Customs cooperation. The WCO has drafted a model agreement on bilateral administrative assistance in traditional areas such as valuation, classification, and origin EDI HUB TRAINING of goods, thus facilitating Customs cooperation which is essential to any mirror analysis. In response to the differences identified by these analyses, a Customs administration must organize meetings with the administrations of the countries concerned in order to reconcile its data. This will allow goods to be monitored and traced from their place of production to the country of final destination.

AT THE HEART It should be noted here that, under the Trade Support and Regional Integration Programme OF DEMATERIALISATION (PACIR), the European Union (EU) undertook to foster regional integration in the West African Economic and Monetary Union (WAEMU) by interconnecting Customs computer systems. This project includes a data exchange protocol enabling goods transit operations to be managed more effectively.

It is also essential to ensure close cooperation COACHING between Customs administrations and businesses, in particular to initiate a dialogue on data reliability. The implementation of an authorized SOFTWARE economic operator (AEO) programme may be beneficial in this respect. In Côte d’Ivoire, a public-private partnership between Côte d’Ivoire Customs and the private sector was developed through the Observatoire pour la Célérité des Opérations de Dédouanement (OCOD)*, a body PERFORMANCE set up to streamline Customs clearance processes. This cooperation, which has already produced INTERNATIONAL useful results (particularly two studies of Customs release times, trade facilitation measures and appeals against Customs decisions), could represent a starting point for greater dialogue on data quality with certain trusted traders. In Agence Linéal - 03 20 41 40 76 Agence addition, the WCO’s decision to dedicate 2017 to data analysis under the slogan “Data Analysis for Effective Border Management” is another A GALAXY OF SKILLS opportunity to promote dialogue on the quality FOR A UNIVERSE OF SERVICES and use of Customs data. *Observatory for the Speed of Customs Clearance Operations

More information [email protected]

18 WCO news N° 82 February 2017 © Singapore Customs

Data analysis in risk management: Singapore Customs’ perspective

By Singapore Customs Data collection data against the relevant supporting AS A PARTNER of business and a guardian Data collection is the first step in trade documents received. of trade, Singapore Customs strives to the data analysis process. Singapore strike a fine balance between making Customs obtains data from multiple data Along with analysing historical sure sufficient controls are in place sources. Such sources of data include data, Singapore Customs ‘scans the to interdict illicit trade, and ensuring information from Customs declarations, environment’ to identify evolving trends that legitimate trade continues to flow other domestic agencies, commercially and patterns, assesses their impact, and unhindered. This requires Singapore available databases, and open source responds to threats and opportunities Customs to be adept at data analysis, information platforms. Information is posed by them. which strengthens enforcement and also obtained from intelligence sources, boosts compliance by the trading of local origin and via international Tools and methodologies community. collaborative efforts such as feeds from With the advancements in data the WCO Regional Intelligence Liaison analytics, i.e. the pursuit of extracting Accurate profiling and targeting Office (RILO). meaning from raw data using specialized enhance the effectiveness of Singapore computer systems, Singapore Customs Customs’ compliance checks. This The collected data, which may be in a has endeavoured to strengthen its data also sends a clear message to would-be structured or unstructured form, may analytics capabilities by progressing smugglers that despite the huge volume not be fed into the same risk engine. from descriptive analytics to the use of of goods crossing the country’s borders, Some of the data that has been collected predictive analytics. Singapore Customs remains highly is used to substantiate an analysis. capable in detecting illegitimate or It is also important to ascertain the Descriptive analytics uses data fraudulent transactions. reliability and validity of collected data, aggregation and data mining to provide which Singapore Customs does through insight into the past and answers various means, including verifying the the question: “What has happened?”

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Data analysis

Predictive analytics, on the other lower than the historical norm. Data collection hand, uses statistical models In addition, shipment details and forecast techniques to were found to be inconsistent understand the future and with an importer’s past answers the question: “What Tools & methodologies business activities. These could happen?” irregularities were assessed to Risk-based targeting fit the risk profile of historical To make sense of the data that cases involving similar modus

it collects, Singapore Customs Building staff competency operandi, providing officers leverages its data warehouse where with enough just cause to target voluminous collected data is stored, the shipment for inspection, which such as shipment clearance times and led to the detection of duty-unpaid declaration-related information. Using cigarettes. data extraction tools, officers piece together information from different The two critical factors Building staff competency data sources, and establish relationships Singapore Customs has a dedicated team and links. Through this approach, the contributing to the success doing threat assessment on shipments officers are able to observe deviations, of data analytics are the soft and producing reports on evolving trends and identify specific trends and patterns and patterns. The team comprises officers in the trading environment. knowledge of Singapore who are trained in diverse disciplines Customs officers, as well as such as engineering, economics and Singapore Customs has also social sciences. At the organizational implemented an anomaly-detection the hard elements of data level, all Singapore Customs officers are business intelligence (BI) tool to flag analytics tools. taught to apply risk assessment in various shipments whose details fall out of the aspects of Customs' work. The officers are norm. On a real-time basis, the tool also subject to job rotations every 3 to 5 risk-scores Customs declarations based years, enabling them to broaden their on pre-defined criteria and historical knowledge and experience, and build datasets in order to identify anomalies. up their risk assessment capabilities as a whole. Apart from identifying shipments that are out of the norm, Singapore Customs computers to find hidden insights The ‘soft knowledge’ acquired by also analyses the similarities in Customs without being explicitly programmed Singapore Customs officers from data declarations. Customs declarations to look for them, in order to further analysis is critical in decision-making. which exhibit extreme similarities could develop Customs’ predictive capabilities Such knowledge is strongly associated be an indicator of rampant incorrect in targeting. with officers’ domain knowledge and declarations. experience. As such, the two critical Risk-based targeting factors contributing to the success of As there are continual developments By analyzing data, such as data data analytics are the soft knowledge in the area of data analytics, Customs on historical shipment trends and of Singapore Customs officers, as well officers are required to keep abreast modus operandi (MO), Singapore as the hard elements of data analytics of new technologies, and constantly Customs officers are able to triangulate tools. upgrade their knowledge. Singapore irregularities that could, for example, Customs also actively engages other suggest non-compliance, and use the Singapore Customs officers performing government agencies and Customs results to target suspicious shipments data analysis are provided with administrations to learn about their for inspection. The outcome of these comprehensive training so that they experiences and best practices in the inspections also enriches the risk understand the rules and underlying application of data analytics for fraud profiling capabilities of Singapore theories of data. They are also given detection, as well as developments in Customs. hands-on experience in the enforcement data analytics capabilities. and compliance aspects of Customs’ To illustrate: in a case involving the work. Regular joint training sessions Moving forward, Singapore Customs detection of duty-unpaid cigarettes, with other Customs administrations is exploring ‘machine learning,’ i.e. a Singapore Customs officers, through and other domestic agencies are also method of data analysis that automates data analysis, observed that the weight conducted to enhance the officers’ analytical model building and allows of goods declared in a declaration was competencies in data analytics.

20 WCO news N° 82 February 2017

For instance, Singapore Customs For instance, to understand the practices is collected and securely stored in its hosted a joint training session with of air courier companies, Singapore data warehouse. the United States’ Customs and Border Customs officers conducted site visits Protection (US CBP) agency on 16 Nov to air courier companies operating in In addition, Singapore Customs actively 2016 to share insights and experiences Singapore to learn more about their monitors the latest developments in the in data analytics and targeting. Such operations and processes. These visits field of data analytics and available collaboration positively impacted both enabled a clearer understanding to be technologies, through study visits to administrations, and is in line with gained of how the industry operates, domestic agencies which have adopted international WCO norms promoting and aided in strengthening data analysis data analytics in their operations, and Customs-to-Customs cooperation. capabilities as Singapore Customs is able engagements with commercial vendors. to input operational behaviour norms By doing so, Singapore Customs is better Through courses, formal meetings and into our models to flag any anomalies. able to understand the advancements in site visits to relevant industry sectors, related technology, including products/ Singapore Customs officers have acquired Recognizing the strategic importance tools, available on the market. insights into the evolving business of data analysis, Singapore Customs environment, including industry continues to refine its data sources More information trends and consumer behaviour, all of and explore other methodologies for [email protected] which have added further value to their data collection, in order to ensure that knowledge base. relevant and value-adding information

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API-PNR: an overview of the French system and the challenges faced

By Christophe Hypolite, The Directive stipulates that a Passenger and adopted in order to ensure that the PNR MISSION, FRANCE Information Unit (PIU) responsible International Civil Aviation Organization The European context for collecting, storing and processing (ICAO) Guidelines are followed when it European Union (EU) Directive 2016/681 data should be set up in each Member comes to the format of the data and the on the use of Passenger Name Record State. According to the text, any hits protocols applicable to the transfer of data (PNR) data was adopted on 27 April 2016. or positive results must be sent by the from the aviation sector. It requires EU Member States to collect PIU to the operational units referred to and use both PNR data and Advanced as “competent authorities.” In addition, API-PNR France project Passenger Information (API) “for the the Directive also covers data exchange Without waiting for the Directive to prevention, detection, investigation and between PIUs and with EUROPOL, as be adopted, France established a set of prosecution of terrorist offences and well as with third countries on a case by national legal measures, authorizing serious crime.” The Member States have case basis. the collection, storage and processing two years to transpose the Directive into of API-PNR data on air passengers their national law, by which time it must Moreover, the Directive also stipulates and crew. The system was established be ready for implementation. that implementing acts should be drafted by the law of 18 December 2013, which

22 WCO news N° 82 February 2017

API-PNR: an overview of the French system and the challenges faced

created Article L232-7 of the ‘Code de tour operators) that charter all or part The 26 September 2014 decree provides la Sécurité Intérieur’ (internal security of an aircraft, and by the law of 20 June for the collection of data on air code). 2016, to include shipping lines. passengers and crew on all flights into and out of France, except domestic Two implementing decrees were France will transpose the Directive flights, as of 1 January 2015. The data adopted in order to get the API-PNR into national legislation in 2017 in collection process has been introduced France system up and running: the order to ensure that its national gradually, starting with the four airlines decree of 26 September 2014, which provisions on PNR are fully in line (Air France, Delta Airlines, Ethiad provides for data processing; and the with EU legislation: for example, a Airways and ASL Airlines France) that decree of 22 December 2014, which data protection officer (DPO) must be helped develop the API-PNR France establishes a PIU. Article L232-7 was appointed at the PIU; and the amount programme, and later expanding to then amended, by the law of 28 July of time that data can be stored before include other airlines from 1 January 2015, to broaden the scope of data personal information is masked out 2016. collection to include 'non-carrier will be reduced from two years to six economic operators' (travel agencies, months. To begin with, only flights to and from countries outside of the EU will be covered (around 55 million passengers per year out of a total of 110 million). Just over 40 airlines are connected to the system as France enters 2017, covering around 70% of all non-EU passengers. In the future, all 250 airlines operating international flights into or out of France (including intra-EU and French overseas territories) will send data on the passengers they are carrying.

Data analysis The API-PNR system will have a number of search, targeting and sorting functionalities designed to:

• obtain information from the passenger database;

• identify persons representing a risk from pre-tested standard profiles;

• compare passenger data collected with data from national, EU or international databases concerning people who are known or wanted, and stolen or lost documents; © Dustin Ground

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Thanks to the new data collection and analysis system, Customs has brought to light a number of matters linked to attacks on EU • put one or more people or targets financial interests and money amounts of personal data, any PNR under surveillance for a given period. laundering, and has also system must be used on the basis of a principle of proportionality, meaning With respect to French Customs, the made a number of seizures of that any use of personal data must analysis of the data enables it to identify, cigarettes and tobacco. For be commensurate with the specific on a large-scale basis and very rapidly, security objectives set out by law in sensitive or illogical routes, return the police, positive screening accordance with personal freedom flights at unduly close intervals in light results have led to cases being requirements and personal data of the weight of a passenger’s luggage, protection guarantees. unusual forms of payment, suspect travel handed over to the criminal agencies, etc., or a combination of these prosecution authorities as The French Administration presented different criteria. its guarantees before the national data well as to the detention of a protection authority, and was met with Staff training number of ‘flagged’ individuals. approval. The French Administration The API-PNR France project entered has undertaken to: a test phase in June 2016: the list of operational units now designated as Criminal Procedure – participation in • secure data collection; ‘competent authorities’ was established; a criminal organization, trafficking in and a plan was devised for phasing in the human beings, illicit trafficking in arms • limit its collection of PNR data to the new information technology (IT) system or drugs, etc. – and acts which violate 19 authorized categories; within these units. This is currently the fundamental interests of the Nation. being rolled-out across all Customs units • limit the storage of data to five years, based at main international airports in Thanks to the new data collection and and to mask out data revealing an France. The system is also becoming analysis system, Customs has brought individual’s identity after two years increasingly powerful as more and more to light a number of matters linked to (to be reduced to six months after the airlines connect to it. attacks on EU financial interests and Directive has been transposed); money laundering, and has also made The French PIU is based near Roissy a number of seizures of cigarettes • set up an automatic data filter to Charles de Gaulle airport, and is and tobacco. For the police, positive remove and destroy any sensitive data; made up of staff from four partner screening results have led to cases being administrations (Interior, Defence, handed over to the criminal prosecution • give the ‘competent authorities’ access Transport and Customs). It is now up authorities as well as to the detention to the data once it has been checked, and running, and is open from 07.00 of a number of ‘flagged’ individuals. and set up a system to track any until 19.30, from Monday to Friday. It Intelligence services too reported having communication; should be open on weekends and public identified several individuals whose holidays by May 2017. By the end of 2017, movements were being monitored. • stick to the list of authorized units the PIU will be staffed by more than 70 (and related functions) set down in people, ensuring a 24/7 service. Over and above the results already the December 2014 decree; mentioned, the system has proven A training plan for staff from the PIU its worth to intelligence services in • guarantee passengers’ rights to and ‘competent authorities’ has been detecting ‘weak signals’ (the term used information; put in place, and over 100 people have in the prevention of terrorism to refer to already received training. The training the faint/limited signals given out by an • undergo audits and receive visits from strategy focuses on training trainers individual that presents a risk), has been the national data protection authority, so as to increase each unit’s training of use in investigations and handling and to draft a report on the test phase capacities. The PIU has equally been evidence, and simplifies investigative by the end of 2017. supporting users throughout the current procedures (PNR data can be attached test phase. to reports and it is no longer necessary Furthermore, once the EU Directive to issue a warrant in order to gain access is transposed into national law, a DPO Results to airline data). will be appointed at the French PIU. The main purposes of processing data The DPO will have access to all the data are for the prevention and detection of Protecting personal data processed by the PIU, and if the officer acts of terrorism, the offences referred Given that, by its very nature, such a feels that this is not being done in line to in Article 695-23 of the Code of system involves giving access to huge with the law, then he/she is responsible

24 WCO news N° 82 February 2017

API-PNR

API data is produced during check-in, and includes all passport for reporting non-compliance to the primarily by the industry for the or identity card data necessary national data protection authority. industry. Consequently, only data to identify the passenger or Passengers can also contact the DPO, collected for commercial purposes will crew member, as well as general who acts as a single contact point within be transmitted as stipulated in ICAO information on the flight. the PIU for any data protection issues. document 9944. This explains why the The DPO will also be informed of any quantity, type and quality of PNR data PNR data refers to the records held PNR data shared with a third country. varies considerably from one airline to by airlines for each flight booked the next, and from one passenger to the by a passenger, and is used by the The issue of data quality next. airline for its own operational From the very beginning of the purposes. This data makes it project, the choice was made to use the Yet, ensuring the quality of the data is, of possible for all parties in the aviation complementarity of API and PNR data course, essential: the IT data processing sector (including travel agencies, (i.e. to marry the API data, which is system must include all data received air carriers and airport handling limited in quality, with the PNR data, in order to (a) filter out any sensitive agents) to identify each passenger, which is declarative and not verified, but data, and (b) ensure that risk analysis and to access all information potentially richer in information), and results are as reliable as possible, thereby about his/her trip, return flights, to respect international standards and enabling unnecessary inspections to be any connections, and any special examples of best practice. avoided. assistance requested on board.

For data produced by departure This issue was raised by France control systems (API data), a standard before the spring 2016 meeting of the computer message (called the PAXLST) PNRGOV Working Group, which was developed to transmit information brought together government and related to the identity of passengers, private sector representatives. The usually during the scanning of the governments represented at the meeting machine readable zone (MRZ) of travel identified the priority issues as being documents. The message, which has the lack of compliance with industry been used in the airline industry for documentation, and the poor quality many years, is quite short and can be of third-party data (from traders, other sent easily via the carriers’ traditional airlines operating the same flight, etc.). A communication networks. working group facilitated by the United Kingdom was set up in order to address As for the collection and processing of these issues and come up with medium- booking information (PNR data), an term solutions. internationally standardized message format (called the PNRGOV) allows this Support and capacity building data to be sent to governments. Since 2013, France advises States that are looking to France has been participating in the work set up their own API-PNR programme to develop the PNRGOV standard, led by to take part in the discussions of the the WCO, ICAO and the International Air PNRGOV Working Group, which Transport Association (IATA). are held twice a year in spring and autumn, as well as in those held at the While the PNRGOV message structure WCO during the API-PNR Contact is now well-established, the standard Committee, which meets in autumn. leaves some room for manoeuvre for those in the aviation sector: the private Two WCO-supported initiatives that sector and governments are still in the came out of the meeting are worth learning stages. The French API-PNR noting: the creation of Guidelines on system, therefore, had to be made more how to use API-PNR data; and, more flexible in order to make it possible to recently, the draft Guidance on how to accept certain messages. build API-PNR systems.

It should also be noted that PNR data More information is commercial data which is collected [email protected]

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Developing data analyst skills: how the WCO contributes to expanding this specialized area of work

By Tsendsuren Davaa, PH.D., PROFESSIONAL ASSOCIATE, COMPLIANCE scholarship programme which provides the Organization for Security and AND FACILITATION DIRECTORATE, WCO grants to promising young Customs Co-operation in Europe (OSCE) at managers from developing countries, its Border Management Staff College AS THE WCO is dedicating 2017 to enabling them to undertake master’s in Dushanbe, Tajikistan: the “Border encouraging the use of data analysis level studies in Japan. I chose to study Management Senior Officer Training for more effective border management, for a master’s degree in public finance Workshop;” which is held twice a year; I would like to share my own personal at the National Graduate Institute for and the “Women in Border Security and experience in this field, and explain how Policy Studies in Tokyo. Management - Leaders of Today and I was able to develop my data analysis Tomorrow Workshop.” The other two skills thanks to the WCO’s support. The curriculum enabled me to enhance took place in 2016: the “Risk Assessment my analytical skills, especially my and Selectivity with Advance Cargo Data analysis is not merely one of the ability to use social-economy and Information Workshop” in Japan; and core activities of any modern Customs statistics methods. Besides academic the “Risk-Based Passenger Selectivity administration; today it is a basic tool lectures, the degree programme also Workshop” in Mongolia. for any organization, requiring the included the study of best practices, adoption of a systematic approach to the and visits to Japan Customs to I also try to share my knowledge collection and processing of data, as well experience real-time field operations. by writing articles and reports as specialized and qualified personnel. After completing my master’s degree, for international and Mongolian I felt that I had strengthened my skills publications, such as the World Customs I started my career at Mongolian as a data analyst. Journal and the Scientific Journal of Customs some 20 years ago as a Customs Mongolia. To date, 27 of my articles examination officer before being On my return to Mongolia Customs, have been published on topics such as transferred to headquarters where I have I was promoted to the post of Deputy Customs risk management, comparative been involved in policy making for the Director of the Customs Control studies, Customs valuation, trade last decade. and Risk Management Department. facilitation, and border management. As such, I participated in a WCO My capacity to grow and continually accreditation workshop on the topic of One of the major changes in my life evolve in my career is largely due to risk management, which was organized came in November 2015, after I had the fact that I took advantage of the in Hong Kong, China in 2012. The completed a doctoral degree in business training opportunities offered by the accreditation process involved a two- administration from the Mongolian WCO. I could, therefore, be considered step approach: National University. My dissertation a “product” of the capacity building was titled “Ways to mitigating Customs programme which the WCO developed • Participants have to attend a five-day control risk.” After graduating, I had for its Member Customs administrations. workshop, mixing theory and practice, the opportunity to lecture to students during which they are assessed; studying for their master’s and doctoral Over the years I have attended various degrees at the very same university. WCO workshops and seminars, • Participants deemed to have potential, Analysing data, and teaching students including a risk assessment workshop then take part in a capacity building and colleagues how to do it, is my which was held in Qingdao, China in mission with an expert, during which favourite activity. 2009. It was actually the risk assessment their training skills are evaluated. workshop which led to me taking my Last year, I was selected to participate in first steps in risk analysis. The expert I passed the first step successfully, and the Career Development Programme, an from the WCO Secretariat, who led hope to complete the accreditation initiative launched in 2009 by the WCO, the workshop, became my first risk process soon and become part of in cooperation with Japan Customs, management teacher and has continued the WCO’s pool of experts on risk which provided me with an opportunity guiding and encouraging me to develop management for the Asia/Pacific region. to work at the WCO Secretariat for my knowledge and skills. 10 months. It was one of the greatest I actually had a chance to practice my moments of my life. Never would I have After the workshop, I decided to apply training skills by participating as a imagined, when I first joined Mongolian for a place on the Japan-WCO Human facilitator in five workshops. Three Customs, that one day I would be Resource Development Programme – a of them were organized in 2013 by working at the WCO Secretariat.

26 WCO news N° 82 February 2017

The WCO Secretariat is a sort of economic data), clustering (grouping My capacity to grow knowledge bank, and, since my arrival, a set of objects in such a way that the I have been learning a lot from my objects in the same group are more and continually evolve tutors and colleagues. Each programme similar to each other than those in other in my career is largely participant has to produce a study paper groups), and quantitative analysis (using on a topic of his/her choice. My study mathematical and statistical methods to due to the fact that I report will look into the possibilities study behaviour and predict outcomes). took advantage of the of how to apply a comprehensive and My calculations are made using systematic risk differentiation model to Microsoft Excel and E-views software. training opportunities Customs control. offered by the WCO. Over the years, many Customs officers For this purpose, I am analysing like me have obtained academic and I could, therefore, be approximately three million records, professional knowledge on Customs considered a “product” which relate to import clearances over matters, thanks to the WCO’s support the last three years, as well as the export and assistance. I hope my story of the capacity building records of six of Mongolia’s major will inspire others and motivate programme which the commercial partners. The objective is to them to take advantage of the many undertake a mirror analysis of the data, opportunities offered by the WCO to WCO developed for which involves using the Harmonized advance their careers to the benefit of its Member Customs System (HS) Code to compare the their administrations, including sharing imports (or exports) of a country with their work and practices with the entire administrations. the exports (or imports) reported to the Customs community. country by its trading partners, in order to detect gaps in terms of quantities, More information weight or value that may reveal [email protected] fraudulent trade flows or practices.

In undertaking my study, I am also using methodologies such as gap analysis (comparing actual performance with potential or desired performance), econometric analysis (applying statistical techniques to analyse

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Cognitive computing for Customs agencies: improving compliance and facilitation by enabling Customs officers to make better decisions

By Stewart Jeacocke, GLOBAL CUSTOMS EXPERT, IBM, Cognitive systems have three patient´s symptoms and history, Watson and Norbert Kouwenhoven, characteristics that distinguish them will suggest various therapy options, EU CUSTOMS LEADER, IBM EUROPEAN UNION TEAM from programmable era systems. They: and a confidence score for each option. It allows the physician to drill down into DATA ANALYTICS – for example, automated • understand unstructured data, the documents used to generate each selectivity rules – has become an through sensing and interaction; hypothetical therapy option so that they increasingly important tool for Customs • reason by generating hypotheses, can understand the evidence on which agencies. However, conventional data considering arguments, and making Watson is basing its recommendation. analytics has some critical limitations. recommendations; The more relevant information Watson It can only look for pre-defined • learn from training by experts, finds to support a particular therapy, patterns and rules, and cannot make from every interaction, and from the higher the confidence score. Where use of unstructured data, which comes continually ingesting data. additional test results would assist in in the form of emails, social media, improving Watson's recommendations blogs, documents, images and videos. It is estimated that 80% of all data for the patient, it will suggest these to Cognitive computing allows Customs generated today is unstructured. The the physician. agencies to extract insights from both dawn of the cognitive era means that structured and unstructured data, machines can, for the first time, create The Watson solution allows local discover new patterns and rules, capture insights from this enormous volume of physicians and their patients to benefit the experience of top performers, and data. Unstructured data is data which is from the hundreds of thousands of improve the quality and consistency of not organized in a pre-defined manner; it pages of medical research and results – decision-making. is typically text heavy and often consists a knowledge base that is too large and of documents, reports and articles, but evolving too fast for any individual to The dawn of the ‘cognitive’ era can also include images, social media be able to read everything in order to On 11 May 1997, the Deep Blue computer and videos. This previously unintelligible stay current. Watson provides local system beat Grandmaster and world pile of documents is now a rich source physicians with advice on treatment chess champion, Garri Kasparov, after a of data for cognitive systems which can options, but the treating doctor is still six-game chess match. This represented process it faster and more accurately in control of making the final treatment a major milestone in the evolution of than humans ever could. Processing the decision along with the patient. computer systems. The Deep Blue project entire content of Wikipedia is a piece of inspired a more recent grand challenge: cake for a computer! Cognitive systems for Customs building a computer that could beat the Informed compliance, risk management champions at a more complicated game Early successes in oncology and audits continue to be some of – the American game show Jeopardy! The first successful commercial use of the most powerful techniques used these cognitive software capabilities by Customs agencies to deliver their Over three nights in February 2011, this can be found in the medical world, in mission. These techniques allow computer system – named Watson – took the field of oncology. Watson is being Customs agencies to assist the vast on two of the all-time most successful used to process unstructured medical majority of economic operators who human players of the game, and beat and research notes, as well as test wish to be compliant, and enables them in front of millions of television results. These notes include descriptions them to concentrate their resources viewers. The technology in Watson was of symptoms, patient characteristics, on controlling the smaller number a substantial step forward from Deep chosen therapy, and the corresponding who represent the greatest risk to a Blue. By understanding and processing therapy results. Watson is able to country. Data analytics – for example, a massive supply of unstructured data, process this vast stream of information, automated selectivity rules – has Watson demonstrated that a whole generating correlations, patterns and become increasingly important in new generation of human-machine hypotheses; this along with training enabling these techniques. However, interaction is possible. Watson had by expert clinicians is used to create a conventional data analytics has some ushered in a new era of computing: the corpus of knowledge. critical limitations. It can only look ‘cognitive’ era. Since then many large for pre-defined patterns and rules, and technology firms, such as IBM, Google, Using this corpus of knowledge, Watson cannot make use of unstructured data, Facebook and Apple, have all developed helps physicians identify personalized causing it to ignore 80% of all available cognitive computing technologies. therapy options for patients. Given a data.

28 WCO news N° 82 February 2017 © Philippe Put

The amount of data available to improve an agency's ability to engage, information relating to a consignment, Customs agencies is exploding, and decide and discover: allowing them to determine quickly much of it is unstructured. Initiatives whether the consignment should be held aimed at creating a global platform • Engage – Informed compliance can be for inspection; of information, such as the WCO’s improved with a virtual assistant, which Customs Enforcement Network engages in a conversation with travellers • Discover – Cognitive systems can be (CEN), are increasing the amount of or infrequent importers; guiding used to ‘mine’ Customs data, enabling information shared between agencies. them through the import process, previously unknown patterns, The ease of publishing information on or highlighting relevant preferential relationships and indicators of fraud the Internet has dramatically increased schemes. Recently, Dubai launched or other risks to be discovered. This the number of relevant open source Saad, a virtual assistant which guides data is no longer restricted to just that intelligence sources. Supply chains individuals through the process of which has been captured electronically are becoming more instrumented opening a business. During inspections, in information technology (IT) and interconnected, and economic Customs officers could use an iPad to systems as part of the Customs operators are sharing more of this take a photo of a foreign language declaration process. Commercial information with Customs. document, and see it instantaneously documents along with open-source translated into their native language on intelligence sources, such as news sites, Cognitive systems allow Customs screen. Or, they could take a photo of an organizations' websites, social media, agencies to extract insights from this unknown item and automatically search company filings, container tracking mass of big data, discover new patterns for similar images in their agency's and vessels' automatic identification and rules, capture the experience of top knowledge base, assisting them to system (AIS) broadcasts, can all be performers, and improve the quality and determine the correct course of action. processed, merged with classified consistency of decision-making across Targeting officers could query a single government records, and used to their organizations. In doing so, they system to access all intelligence and derive insight;

29 DOSSIER

• Decide – Conventional selection/ advisor which allows investigators to brought back by the system are most targeting systems can be enhanced analyse structured and unstructured relevant to the question being asked. with cognitive technology so that they data sources by posing queries in This process trains the system by also process the free-text information natural language. The investigator logs creating a corpus of knowledge. The TURN YOUR in economic operators' filings, and use into the system, and types in a query in training teaches the system which parts it to improve targeting accuracy. Goods natural language: for example, “What of the data that is has access to are most descriptions can be automatically connections are there between football relevant to answering particular types BIG DATA INTO compared to the declared tariff gangs and drug trafficking?” or “Which of questions. classification, in order to identify members of the Ultras football gang are SMART DATA cases of misclassification; a technique connected to companies undertaking After sufficient training the system will that has already been adopted by the activities at the Port of Sevenberg?” The start to answer queries in the way that Government of the Bahamas and cognitive intelligence advisor responds an intelligence officer would, and will other Customs agencies. In a world with a series of hypotheses. highlight connections that could take that is not too far away, the images an officer years to discover manually. from scans of trucks and containers For the first question the responses of Furthermore, the system scales the could be automatically compared to the intelligence advisor might include knowledge of a small group of expert economic operators' filings as a means “Ultras”, “Baltic Nations” and other intelligence officers to all Customs of highlighting those shipments where hypotheses. The investigator can drill officers who have access to the system, the scan does not appear to match the into each hypothesis to understand the lifting the performance of all staff up to goods description. evidence behind it. This evidence might that of leading experts. MAKE INFORMED DECISIONS be document excerpts from classified CARGO Cognitive targeting intelligence databases, or open sources Customs agencies need a cognitive THANKS TO ADVANCED DATA SCANNING Some countries have already such as press articles or grey literature. roadmap implemented cognitive solutions to With a small team and three weeks, Cognitive computing has arrived COLLECTION AND VERIFICATION improve their targeting/selectivity one Customs agency was able to create and is already being exploited by TECHNOLOGIES AND SERVICES processes. Canada Border Services a pilot system that processed over forward thinking Customs agencies. Agency (CBSA) enhanced its targeting 20,000 documents from six different Organizations which successfully apply FRAUD rules so that it could apply cognitive open source intelligence sources, such cognitive computing follow a structured, TARGETING processing to free-text goods description as Reuters, national news agencies, and but agile roadmap which nurtures TRANSIT fields. By doing this, they were able to company websites and press releases, optimism whilst breaking down any We provide centralization systems MONITORING improve the accuracy of the targeting allowing users to interact with it in the complacency. that collect and analyse data to feed rules compared to their previous manner described above. your risk management processes for keyword search approach. Cognitive computing helps Customs an effective tackling of illicit trade. The simplicity of the interaction officers make better decisions in a NATIONAL A simple example of the improvements is hides a significant amount of system wide range of different scenarios by VALUATION that the cognitive solution understands intelligence. Cognitive systems work understanding the vast amount of Our integrated solutions are that a goods description including the in a similar manner to the way humans unstructured data that is inaccessible to compliant with the WCO Data Model DATABASE words "no wood crates" should not match undertake a task; they learn by being conventional IT systems and reasoning, and secure a safe implementation against a profile for controlling wood taught by another person. Older generating hypotheses and learning of the WTO Trade Facilitation packaging. Previous keyword matching programmable systems, by comparison, from expert officers. It allows all officers Agreements. techniques would have matched against must be programmed with specific rules. to benefit from the experience of an the wood packaging profile because The system must gather data in a huge agency’s best experts, whether they are the text included the word "wood." The range of formats from a wide range of investigating complex cases of fraud, cognitive solution understands that the sources. It understands the language or determining whether to inspect a PORT COMMUNITY "no" indicates a negation. This reduction contained in the documents and users’ shipping container. SYSTEM in false positive matches translates into queries; for example, that “Ultras” is reduced inspection efforts, benefitting the name of an organization, and that The cognitive era has arrived; every For more information, please contact both the CBSA and economic operators. the user is looking for relationships Customs agency should have a roadmap [email protected] between that organization and the Port for adopting cognitive computing, and Cognitive advisor for intelligence and of Sevenberg. use it to usher in a new era of Customs CUSTOMS investigations facilitation and compliance. Several countries are experimenting A small group of intelligence officers Cotecna, a trusted partner at your side SUPERVISION with using cognitive solutions to assist train the system by querying it in the More information CENTRE with intelligence and investigations. manner described above, and then [email protected] A common solution is an intelligence indicating which of the responses [email protected] A LEADING PROVIDER OF TECHNOLOGY-BASED SERVICES TO GOVERNMENTS 40 years of experience 100 offices around the world 4000 employees and agents www.cotecna.com

30

Ad_WCO_Feb_ENG-FRA_FINAL.indd 1 03/02/2017 10:30:25 TURN YOUR BIG DATA INTO SMART DATA

MAKE INFORMED DECISIONS CARGO THANKS TO ADVANCED DATA SCANNING COLLECTION AND VERIFICATION TECHNOLOGIES AND SERVICES FRAUD TARGETING TRANSIT We provide centralization systems MONITORING that collect and analyse data to feed your risk management processes for an effective tackling of illicit trade. NATIONAL Our integrated solutions are VALUATION compliant with the WCO Data Model DATABASE and secure a safe implementation of the WTO Trade Facilitation Agreements.

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Ad_WCO_Feb_ENG-FRA_FINAL.indd 1 03/02/2017 10:30:25 POINT OF VIEW

Emerging technologies can transform border management, but agencies must prepare

By Jim Canham, SENIOR MANAGING DIRECTOR AT ACCENTURE The new IT The most commonly cited reason for In the coming years, emerging implementing advanced analytics was GLOBALIZATION AND THE rising threat of technologies will fundamentally to improve and augment the work of terrorism are just two of the many issues change border management, creating employees (48%). Surprisingly, cost challenging border agencies’ ability to huge opportunities for industry reduction was not a key motivation for secure the swift movement of people transformation. While some agencies, survey respondents, only 15% of whom and goods across borders. At the same such as Singapore Customs [https:// said they had budgetary concerns. time, emerging technologies such as www.customs.gov.sg/~/media/cus/files/ the Internet of Things (IoT,, blockchain, insync/issue40/article3.pdf], have taken Despite the relatively high adoption of biometrics, data analytics and machine steps to deploy these technologies, most data analytics solutions, respondents learning have introduced new risks are struggling to keep up with the pace reported limited use of video analytics, and opportunities, requiring a rapid of innovation. with less than a third saying they were and innovative response from industry piloting the technology – in spite of leaders. Respondents cited increasing service the clear benefits that video analytics demands (58%), a fast-changing capabilities bring to the management of A recent Accenture survey of 91 leaders operating environment (47%), ports and border crossings. within border agencies across nine challenging legacy system integration countries – Australia, Finland, France, (43%), and an aging workforce (41%) Adoption of biometric-based solutions Germany, Japan, Norway, Singapore, as the four biggest challenges facing was also surprisingly low. Only 36% the United Kingdom, and the United border agency leaders today, all acting of survey respondents are using this States – found that despite challenges, as barriers to digital transformation. technology, despite the availability of the majority (92%) are willing to adopt mobileEmerging devices to captureTechnologies the biometric can Transform Border next-generation technologies. However, some agencies are embracing detailsManagement (fingerprints, facial - image,Agencies etc.) of Must Prepare more familiar technologies, especially travellers at border points or when they In fact, most believe that these those that will help them achieve their apply for visas. And, while two-thirds A recent Accenture survey of technologies can help reduce risk and data management and operational of respondents were familiar with the ninety-one leaders within border improve border security (68%), while objectives. For example, the research IoT, less than one third were piloting or agencies across nine countries (U.S., enhancing customer service delivery found that three-quarters are utilizing implementing IoT-related projects. Australia, Finland, France, Germany, (54%). Despite this near consensus, advanced analytics and predictive Japan, Norway, Singapore and the many agencies have not yet deployed modelling techniques to re-engineer Despite these low adoption rates, there UK) found that these technologies due to significant travel and Customs processes, thereby are pockets of innovation – the use of implementation obstacles. improving overall business performance. smart containers, embedded sensors, and tracking technology by some border Emerging Technologies can Transform Border agencies. This is most notable in the Management - Agencies Must Prepare freight 92%industry with its use of smart87% 68% containers embedded with sensors and A recent Accenture survey of tracking technology such as GPS and ninety-one leaders within border RFIDare willing chips, to allowing adopt manufacturers,believe new technologies believe new technologies next-generation will improve job satisfaction can reduce risk and agencies across nine countries (U.S., carriers, and shippers to monitor the technologies among employees improve border security Australia, Finland, France, Germany, Japan, Norway, Singapore and the UK) found that However barriers to implementation exist:

92% 87% 68% 58% 47% 43%

are willing to adopt believe new technologies believe new technologies cited increasing cited a fast-changing cited challenging legacy next-generation will improve job satisfaction can reduce risk and service demands operating environment system integration technologies among employees improve border security

Despite challenges, some forward-looking agencies are making progress: 32 However barriers to implementation exist:

58% 47% 43% 75% using 33% use 36% deploying 30% implementing data analytics video analytics biometrics IoT related projects cited increasing cited a fast-changing cited challenging legacy service demands operating environment system integration

Despite challenges, some forward-looking agencies are making progress:

75% using 33% use 36% deploying 30% implementing data analytics video analytics biometrics IoT related projects WCO news N° 82 February 2017

temperature, vibration, losses and role models. Most survey respondents location of their cargo more accurately. (89%) said that they study successful The Internet of Things (IoT) implementations from the private sector, The network of physical objects People and processes while only one-fifth (20%) look to their or ‘things’ embedded within The deployment of next-generation public sector peers for best practices. electronics, software, sensors and technologies demands significant Collaborating with universities, research network connectivity, which enables operational changes for border agencies, institutes, and forward-thinking these objects to collect and exchange but forward-looking agencies are taking companies can help border agencies data steps in the right direction. A majority of to identify and actualize innovative survey respondents said that they have solutions to operational challenges. Blockchain adapted their work processes (88%) A database of all transactions across and organizational models (68%) to Interestingly, more than two-thirds of a peer-to-peer network accommodate technology adoption. respondents said that they are willing to embrace public-private partnerships Biometrics The Finnish Immigration Service and new commercial models (69%), the measurement and statistical (MIGRI) is one agency taking stepsEmerging to and to considerTechnologies “as-a-service” can models Transform analysis ofBorder people's physical and drive the adoption of new technologies for technology deployments (70%). A behavioural characteristics through its Smart Digital AgencyManagement similar proportion - Agencies say that they Must have Prepare programme, designed to enable the digital already teamed with the private sector Data analytics A recent Accenture survey of transformation of MIGRI’s operations. to help meet increasing service demands The pursuit of extracting meaning ninety-one leaders within border Through a series of pilots, the initiative will (73%). from raw data using specialized examine the potential impact of emerging agencies acrosscomputer nine countries systems (U.S., technologies, such as analytics, artificial Innovation mindset Australia, Finland, France, Germany, intelligence, machine learning, robotics, Education and collaboration areJapan, crucial Norway, Video Singapore analytics and the and intelligent processing services. for helping border agencies to harnessUK) found the thatApplying computer vision transformational potential of intelligent algorithms to video surveillance Emerging Technologies can TransformThe survey Border also revealed that most technologies. The private sector and feeds Management - Agencies Must PrepareCustoms and border agencies (87%) academia should keep their public believe that new technologies will 92%sector peers informed about87% emerging Machine68% learning A recent Accentureimprove survey jobof satisfaction among technologies, sharing best practices and The construction of computer ninety-one leadersemployees within byborder allowing them to focus on lessons learnt from their deployments. programs that automatically agencies acrossmore nine specialized,countries (U.S., higher level tasks.are willing to adopt believe new technologies believeimprove new with technologies experience Australia, Finland, France, Germany, next-generationFortunately, thewill vast improve majority job of satisfaction border can reduce risk and Over half of respondents said their agency leaders (92%) support the Japan, Norway, Singapore and the technologies among employees improve border security organization currently possessed deployment of intelligent technologies. UK) found that the necessary skills to drive change, This innovation mindset is key to the including data scientists (52%) and safe, secure and efficient passage of Research and Development (R&D) Howeverstaff people barriers and to goods implementation across borders, exist: as (54%). A similar percentage reported well as an economic imperative and key 92% 87% that they68% are currently looking to hire driver of national and global prosperity new digital developers and designers. 58%for all countries. 47% 43% are willing to adopt believe new technologies believeCollaboration new technologies More information next-generation will improve job satisfaction Anothercan reduce factor risk impacting and the deploymentcited [email protected] cited a fast-changing cited challenging legacy technologies among employees improveof new technologiesborder security is a lack of industryservice www.accenture.com/us-en/service-accenture-border-servicedemands operating environment system integration

However barriers to implementation exist: Despite challenges, some forward-looking agencies are making progress:

58% 47% 43% cited increasing cited a fast-changing cited challenging legacy 75% using 33% use 36% deploying 30% implementing service demands operating environment system integration data analytics video analytics biometrics IoT related projects

Despite challenges, some forward-looking agencies are making progress: 33

75% using 33% use 36% deploying 30% implementing data analytics video analytics biometrics IoT related projects FOCUS

Customs and the environment: bringing about a better future for all

By Roux Raath, “the air, water, minerals, organisms, and The human factor, an incessant thirst ENVIRONMENTAL PROGRAMME MANAGER, WCO all other external factors surrounding for natural resources NUMEROUS MEDIA OUTLETS often publish and affecting a given organism at any The various byproducts of human alarming articles about the dire state of time.” activity, such as pollution, as well as the environment, but is this really the human beings’ incessant thirst for case? The answer to this is, unfortunately, For the purpose of this article, natural resources that far outweighs an unambiguous YES! environment refers, in a broad sense, supply, are the largest contributors to the surroundings, such as air, to the current precarious state of the Even rudimentary research substantiates water, etc., inclusive of living things. environment. By 2012 it was already that the environment, in all its facets, is ‘Environmental crime,’ on the other estimated that the equivalent of 1.6 deplorably under severe threat and if the hand, refers to the illegal activities Earths were needed to provide the status quo is not halted and reversed, the that cause damage to or harm the resources humanity consumes annually. end result will be disastrous for all who environment – this would typically inhabit the planet. include the illegal exploitation of the An ‘overshoot day’ refers to the day world’s wild flora and fauna, and each year when demands on the The term ‘environment’ attracts various pollution-related crime, which includes planet’s resources outstrips its ability to definitions, such as “the aggregate of the trade and disposal of waste and regenerate. More worryingly, the date surrounding things, conditions, or hazardous substances in contravention on which the Earth goes into ‘ecological influences; surroundings; milieu,” or of international legislation. debt’ has been occurring earlier and

34 WCO news N° 82 February 2017 It is imperative for Customs administrations to consider

the gravity of environmental • Rhino horn is now worth more than crimes, and ensure that such gold, and reaches prices between 30,000 and 60,000 US dollars per crimes receive the strategic kilogram on the illicit market; recognition and operational • Rhino poaching in South Africa, for attention that they deserve. example, has increased from 13 rhinos Turning a blind eye to the killed in 2007, to 1,175 in 2015 – i.e. an 8,938% increase; myriad environmental threats that we face should not be • The elephant population has decreased by 62% over the last decade, and of the an option, and it is requisite remaining 400,000, on average 100 are to reconsider what Customs poached daily for their ivory;

can do in order to bring • Other species are, likewise, about a better environmental systematically killed-off and over- exploited, such as tigers, marine future for all. turtles, pangolins and timber trees, to mention a few.

The international wildlife trade is Climate change, a major threat regulated by the Convention on Various aspects contribute to the International Trade in Endangered environmental status quo. Climate Species of Wild Fauna and Flora change, for example, is considered a (CITES). While a large proportion of major threat, perpetuated by increasing the trade is legal, the rapidly increasing anthropogenic pollution (i.e. pollution proportion of illegal trade in wildlife chiefly created through human activity), makes the disappearance of species which could result in a two-degree nearly certain. The CITES Secretariat, th © Banksy © Celsius temperature rise for humankind after conclusion of the 17 meeting of the – some scientists say it is unavoidable. A Conference of the Parties to CITES (CoP notable example is that of the Bramble 17), held in South Africa in late 2016 and Cay melomy, a small, mouse-like rodent, attended by 2,600 delegates from more earlier each year. This phenomenon first which was the first mammal to become than 160 countries, announced that as a occurred in the 1970s, and to place this extinct due to anthropogenic global result of the decisions taken by CITES into perspective, some past overshoot warming. Parties (member states), multiple new days occurred on 24 December 1971, animals and plants were added to CITES 5 November 1980, 13 October 1990, 25 Customs contributes towards mitigating Appendices for the first time, and will September 2000, 14 August 2010, and 8 climate change, and the WCO News come under international trade controls, August 2016. (edition No. 81 of October 2016), which increasing the demand on frontline carried an article under the title “Global customs officers to intervene where A report by the World Wildlife Fund Warming, International Trade, and the necessary. and the Zoological Society of London Quantification of Carbon Emissions: (October 2016) found that by 2020, the Production-based and Consumption- Appendices I, II and III to the CITES world’s populations of vertebrates will based Accounting,” provides context to Convention are lists containing have dropped by 67% since 1970, and the carbon problem. over 35,000 species that are afforded that extinction rates are currently 100 different levels of protection from times higher than the natural extinction Wildlife crime, the fourth largest over-exploitation and international rate stemming from climate change, criminal activity trade, where Appendix I lists species overfishing, hunting, and deforestation. Wildlife crime also raises a major that are the most endangered and that This means that at the present rate concern. It is not only big business, but cannot be traded internationally for of extinction, the world is facing its is also run by international criminal commercial purposes, where Appendix biggest mass extinction since that of the networks, where experts estimate the II and III species can be traded under dinosaurs – two thirds of animals will be value of the ‘trade’ to be between five and strict international controls. Following wiped out in 50 years from now! Leading 20 billion US dollars per year, making CoP 17, among the species that achieved scientists have warned that we are in the wildlife trafficking the world's fourth a listing on Appendix I are all eight midst of the planet’s sixth period of mass largest criminal activity. The following species of pangolin, the African grey extinction. statistics speak volumes: parrot, the helmeted hornbill, and

35 FOCUS

barbary macaques. In addition, the for example, estimated that between they are also highly potent greenhouse international trade for a substantial 20 and 50 million tonnes of electrical gases – more potent that carbon dioxide. number of new mammals, marine and and electronic equipment waste, also timber species, as well as many reptiles known as e-waste or WEEE, is generated Countries usually monitor the and amphibians, and also more than annually – 70% of which is dumped in consumption of such products through 350 species of rosewood, devil rays, developing countries in Africa and Asia. a quota allocation system, product silky sharks and thresher sharks, is now stewardship, compliance inspections, controlled. The WCO shared with its readers in the and a licensing system. Customs February 2016 edition of this magazine administrations are key actors in these Harmful and waste products, the recommendations developed by a control schemes as they are the ones poisoning the Earth group of experienced professionals who largely responsible for collecting all the The attack on the environment is participated in the Countering WEEE trade data needed to monitor and control further perpetuated by the continuous Illegal Trade (CWIT) Project, launched the trade, and to detect and prevent any production of harmful and waste by the EU in 2013. illegal trade. Detailed information on products, such as plastics, medical the subject is available on an article in waste, dangerous and toxic pesticides, There are also new developments the following page of this magazine. radioactive waste, and even old cooling regarding ozone depleting substances. appliances that leak Ozone Depleting The governments of 150 countries Growing outrage, a strengthened call Substances (ODS). reached a compromised agreement for action in October 2016 to phase out Ever increasing pollution, the unlawful Toxic waste causes long-term poisoning Hydrofluorocarbons (HFCs), which will disposal of waste, wildlife crime, of water and soil, which adversely affects require the vigilance and dedication of illegal logging, and unreported and peoples’ food sources and eventually their Customs officers to ensure that legal unregulated fishing, have all contributed health. Every year more that 400 million trade is facilitated, and that illegal trade towards a situation where a lukewarm tonnes of hazardous waste is generated, is combatted. HFCs were designed to approach is considered objectionable – where a great proportion thereof is replace chlorofluorocarbons and are the growing outrage and clamour for illegally shipped to and dumped in widely used in refrigerants, but have immediate action from all quarters other jurisdictions. The United Nations recently been the subject of criticism as of the globe is proof of this. But what Environment Programme (UNEP), can the WCO and its 180 Member administrations do to ensure a better tomorrow?

WCO actions, responding to the threat Since 2003, the WCO has been an active partner, together with UNEP, to the Green Customs Initiative (GCI). The GCI aims to enhance the capacity of Customs and other relevant enforcement personnel to monitor and facilitate the legal trade and to detect and prevent the illegal trade in environmentally- sensitive commodities governed by the relevant conventions and multilateral environmental agreements (MEAs), covering ODS, toxic chemical products, hazardous wastes, endangered species, and living-modified organisms.

In 2008, the WCO Council adopted a Recommendation concerning Actions Against Cross-Border Environmental Offences, in which steps to be taken by © baselactionnetwork© Customs administrations to enhance Women sorting plastic waste, some of which will be melted down. their capabilities in this area have been outlined. This was followed in 2010 by a decision by five international

36 WCO news N° 82 February 2017

A snapshot of the ICCWC’s mission and work organizations, namely the WCO, the CITES Secretariat, INTERPOL, the United Nations Office on Drugs and ICCWC’s mission is to strengthen criminal justice systems and provide Crime (UNODC) and the World Bank, coordinated support at national, regional and international level to combat to join forces to form the International wildlife and forest crime. The Consortium supports national law enforcement Consortium on Combating Wildlife agencies, assists in establishing wildlife law enforcement agreements, undertakes Crime (ICCWC). research into the causes, nature, scale and value of wildlife crime and related violations, and proposes innovative ways to prevent and discourage such crimes. ICCWC’s mission is to strengthen In addition, the ICCWC supplies expertise and resources, jointly develops new criminal justice systems and provide capacity building material and tools, raises awareness on wildlife crimes and coordinated support at national, regional other related violations in the wider law enforcement community, and, where and international level to combat wildlife appropriate, seeks donor support to enable the provision of such services in and forest crime. The Consortium the form of joint projects and programmes. The ICCWC Strategic Programme provides support to national wildlife 2016-2020 outlines ICCWC’s comprehensive strategy and types of activities to law enforcement agencies, as well as to be pursued by the Consortium up to 2020 based on funding availability and regional and sub-regional networks. In donor support. 2012, the ICCWC launched the Wildlife and Forest Crime Analytic Toolkit, More information which was developed to provide a www.cites.org/eng/prog/iccwc.php comprehensive overview of matters related to wildlife and forest crimes, and aimed at government officials in their disposal in the fight against the The WCO also supports an initiative wildlife and forestry authorities, as well illegal wildlife trade. These tools include: aiming at forging partnership with as Customs and other relevant agencies. freight forwarders, logistics companies, • the Customs Enforcement Network land, air and sea carriers, including Although long involved in issues (CEN); passenger airlines, who are being abused pertaining to the environment, the by traffickers in wildlife who depend WCO, in response to its Members’ needs, • ENVIRONET, a real-time communication on them to smuggle illicit goods from decided to consolidate its activities tool for information exchange among source areas to market destinations. with the launch of its Environmental all competent national authorities, The transport fraternity plays a critical Programme in 2012. The Programme international organizations, and regional role in being the eyes and the ears of aims to contribute to the combating of networks; enforcement agencies, helping to identify environmental crime, in particular, the and strengthen key risks in the supply illegal wildlife trade, the illegal trade in • the CLiKC! platform, a WCO chain. In 2016, the WCO signed the hazardous and other waste, ODS, and e-learning facility containing courses United for Wildlife Transport Taskforce the illegal trade in timber. on environmental crime. Buckingham Palace Declaration, the result of 12 month’s work carried out by As Part of the Programme, the WCO The WCO also organised and coordinated leaders from the global transportation also started implementing the activities a number of law enforcement initiatives industry, conservation organizations of the Inama Project in 2014, which and operations, which have also proven and several international organizations, aims to strengthen Customs’ CITES to be effective to test the enforcement including the WCO. enforcement capacity in selected capacities of some countries, identify countries in Sub-Saharan Africa. The modus operandi as well as to share The WCO also pledged its support to the continuous focus on illegal wildlife information among countries. resolutions of the CITES CoP 17 which trade through training provided to are mentioned earlier in this article, Port Control Units (PCUs) created and Having worked for many years to turn as well as to the Hanoi Statement on trained under the Container Control the attention of the policymakers to Illegal Wildlife Trade and hopes that Programme (CCP), developed jointly environmental crimes, the WCO gained countries’ commitment, especially by the UNODC and the WCO, has, in additional momentum in June 2014, those to provide financial support and addition, increased capacity within when the WCO Council unanimously technical support to initiatives aimed Member Customs administrations. adopted the WCO Declaration on at developing capacity to tackle wildlife These Units are currently fully the Illegal Wildlife Trade, which crime, will be implemented. In addition, operational in 34 countries. demonstrates the commitment of the it further bears mention that in 2015, the global Customs community to address WCO worked closely with the CITES Operationally, Customs administrations these crimes in a timely, coherent, and Secretariat to integrated the CITES have already various practical tools at coordinated manner. Enforcement Authorities Forum with

37 FOCUS

ENVIRONET. The Forum was a closed user forum that the CITES Secretariat used to reach out to the law enforcement community through the posting of various alerts, manuals, handbooks and enforcement- related messages. This is now part of ENVIRONET and the ENVIRONET library, where selected folders managed by the CITES Secretariat include copies of CITES Notifications on enforcement matters, alerts issued by the CITES Secretariat, CITES sample permits and certificates and other relevant materials and information.

Customs, uniquely mandated and positioned Customs administrations are uniquely mandated and positioned at the borders Big decisions made at the 2016 of a country, or at critical ‘chokepoints’ in the supply chain. Not only do they control CITES global wildlife summit the flow of goods across borders, they also make rulings on the procedure, or treatment a consignment is subject to. In this regard, Pangolins: Conservationists warned of the devastating decline in Customs is strategically located at the pangolin populations. CITES followed up by putting all eight pangolin frontline as a ‘first defence,’ or as a ‘last species, 4 found in Africa and 4 found in Asia, into Appendix I. control.’ Grey parrots: The African grey parrot, heavily sought after for the pet In addition, Customs has holistic knowledge trade, was moved to Appendix I. The birds are hugely popular around the and expertise in dealing with the legal world as pets, but their numbers in the wild have dwindled, with Ghana transboundary movement of goods, as estimated to have lost 90-99% of its wild population. well as with illegal, or illicit trade and the actors involved. Global information and Rosewood: The explosion in demand – the market has grown by 65% intelligence exchange networks are in place since 2005, and is now worth 2.2 billion US dollars per year – is having a through which information, risk data, and devastating impact on the forests in South-East Asia where the rosewood intelligence are disseminated, and where tree grows, and traffickers are now looking for sources in Africa and infringements occur, Customs has the Central America. By a consensus decision, the CITES conference placed power to undertake physical controls, such all 300 types of rosewood under Appendix II. as detentions, investigations, and seizures. Rhinos: A proposal from Swaziland that would have allowed it to sell its In light of the above, it is imperative for 330 kg stockpile of horn in order, it said, to use the money to help support Customs administrations to consider the rhino conservation work, was rejected. gravity of environmental crimes, and ensure that such crimes receive the strategic Lions: A motion to ban all trade in lion parts was defeated. The trade in recognition and operational attention that wild lion parts will continue to be prohibited, but the hoped for ban on they deserve. Turning a blind eye to the trade in captive lion parts did not materialize. myriad environmental threats that we face should not be an option, and it is requisite Sharks and rays: A decision was taken to place all nine species of devil to reconsider what Customs can do in order ray, three thresher shark species, and the silky shark in Appendix II, to bring about a better environmental future resulting in international trade restrictions to ensure their exports are for all. sustainable and legal.

Interested readers may obtain source Elephants and ivory markets: There was no change with respect to references relating to this article from the African elephants. Most populations remain in Appendix I, while the author, or the WCO Communications populations of Botswana, Namibia, South Africa, and Zimbabwe remain Service. in Appendix II. However, a unanimous resolution was passed calling for the closure of all domestic ivory markets “that contribute to illegal More information trade and poaching.” China later announced plans to close down its own [email protected] domestic market.

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Project INAMA: situation analysis and first results

Launched in October 2014, the INAMA project aims is followed by scoping missions. The objective being to provide to strengthen the enforcement capacity of Customs participating countries with tailor- made support on the basis of the administrations in Sub-Saharan Africa, while findings of these missions;

focusing on the illegal trade in wildlife, particularly • Intelligence – participants follow basic and advanced training on intelligence on species listed in the appendices of the Convention to improve their capacities in all the relevant phases of the intelligence on International Trade in Endangered Species of Wild cycle, namely the collection, evaluation, collation, analysis, Fauna and Flora (CITES). dissemination and re-evaluation of data, as well as on advanced THE CONVENTION REGULATES international over the issuance, inspection and intelligence analysis principals, tools, trade in CITES-listed animals and acceptance of CITES documentation, as and techniques. A selected group of plants, and this involves addressing well as detecting wildlife that is being Customs administrations are provided both legal and illegal trade. For traded illegally. with additional support to strengthen domestic or international trade in their intelligence function; wildlife to be described as illegal or The INAMA project’s capacity building as ‘illicit wildlife trafficking,’ which activities are organized into three • Enforcement – participants learn is often used to refer to illegal trade, components: through practical courses to plan it must contravene either domestic or and conduct enforcement operations, international law, or both. • Institutional and organizational as well as to manage investigations development – participants assess through the use of a wide range of Effective application of the CITES their own capacity building needs at techniques, such as the conducting of Convention depends largely on control the national level, and this assessment controlled deliveries.

40 WCO news N° 82 February 2017

Based on the results assessment made by each participating country, the situation appears to be rather gloomy. However, the positive feedback received from the more than 120 officials who have been trained under the scope of the project gives hope that crucial progress may be made in the near future.

generally do not use those enforcement and a lack of a suitable vetting process modalities. during staff recruitment.

Risk assessment practices and Although fighting corruption is not a technologies focus of the project, discussions are held Fifty per cent of the administrations do with participating officers on efforts that not have an intelligence unit in place, and should be made to mitigate the risks of none of them have Intelligence officers corruption in the trade chain, and to dedicated specifically to CITES issues. ensure that adequate integrity policies There is also a general lack of CITES risk and procedures are in place in national indicators, and a recognized weakness in government structures to prevent the development and dissemination of organized crime groups from corrupting risk profiles covering CITES shipments. officials. In fact, CITES related items do not

© Diana Robinson appear in the risk register of at least one Controls focusing on imports half of the administrations. Revenue collection is the priority of most of the participating administrations. Inter-agency cooperation Thus, more emphasis is placed on the Project INAMA: situation analysis and first results Fighting wildlife crime requires control of imports, leading to a much concerted efforts involving the pooling lesser allocation of resources to the of financial, human and information control of exports. This reality poses Infrastructure, legal capacity and resources. Sharing intelligence, a serious issue as these countries are know-how especially, is a critical prerequisite wildlife range countries, with the illegal All countries participating in the project to effectively fight the phenomenon. trade in wildlife occurring at both export are Contracting Parties to the CITES However, the level of inter-agency and transit levels. Convention, but awareness of the cooperation is still weak, and most of the Convention’s provisions and of wildlife countries do not have a specific multi- Capacity building activities issues in general is rather low among agency enforcement team in place. implemented officers who, in most countries, do not Based on the results assessment made by clearly understand their role in wildlife Moreover, only a few administrations each participating country, the situation preservation. have been involved in joint exercises appears to be rather gloomy. However, with other Customs administrations, the positive feedback received from the Unfortunately, the enforcement of the such as global enforcement operations more than 120 officials who have been CITES Convention is not a priority in targeting illicit wildlife trafficking, trained under the scope of the project several participating countries and does although such exercises could help them gives hope that crucial progress may be not feature in the strategic planning to develop information networks and made in the near future. process of most of them, and Customs improve their risk indicators. administrations face the challenge of At the regional and sub-regional levels, weak government support for their role Corrupt practices 11 training sessions and workshops have in fighting the illegal wildlife trade. A number of CITES-listed species are been held so far: high-value items targeted by organized As a consequence, although most crime groups, and this makes the • one on the controlled delivery of administrations have the legal power officers responsible for regulating illegally traded wildlife products; to conduct investigations into the trade in these specimens vulnerable to • two on basic intelligence; illegal trade in species regulated by the attempts to corrupt them. It has been • two on advanced intelligence; CITES Convention, with only a few of generally recognized that there is a lack • two to develop and validate the them having the legal power to conduct of incentive to officers based at border Institutional Assessment Tool on the controlled deliveries in this domain, they posts to avoid exposure to corruption, enforcement of the CITES Convention;

41 FOCUS

• one on cross-border cooperation and First results achieved have drafted an intelligence framework coordination; The project makes reference to several and a work plan to strengthen their • two focusing on investigations; performance indicators as follows: intelligence functions. • one on enforcement operations planning. • increase in the number of seizures of Some officers have also started sharing illegally traded wildlife products; information about seizures occurring in Support was also provided at the their countries, such as in Burkina Faso national level. Uganda received technical • increase in the number of wildlife where 26 pairs of elephant tusk, en route assistance on evidence handling and crime cases brought to justice through to Côte d’Ivoire in a bus, were found and seizures. This assistance was delivered by the efforts of Customs officers; seized in January 2017 by the mobile WCO experts working under the COPES Customs unit. project, which focuses on the working • at least 15 participating methods used to combat fraud, from the administrations to have completed Some of the performance indicators will identification of an offence to the storage the self-assessment; only be able to be measured at the end of seized assets, including reporting, of the project. More time will also be collecting and preserving evidence. • increase in the amount of information required to achieve some of the expected related to illegally traded wildlife results, which might only be realized Moreover, Malawi and Zambia products shared with other after the project completion. received support in strengthening their administrations through the WCO intelligence functions, and an exchange CENcomm communication platform; As with many capacity building projects, of personnel between the Customs the main challenge to overcome is always administrations of China and Kenya • at least 3 out of the 25 participating ensuring the sustainability of the results as well as between China and South administrations to have developed a already obtained and those to come. Africa was organized with the aim of work plan by 2017 on how to establish strengthening cooperation between an intelligence unit. More information officers, which could facilitate the [email protected] conducting of controlled deliveries in So far, 13 Customs administrations have the future. completed their self-assessment, and two

INAMA at a glance

Objective 25 Participating countries* To address the illegal trade in endangered species by Angola, Benin, Botswana, Burkina Faso, Central African improving Customs officers’ capacity to enforce CITES Republic, Cameroon, Congo (Republic of the), Côte d'Ivoire, regulations. Democratic Republic of the Congo, Gabon, Gambia, Ghana, Kenya, Malawi, Madagascar, Mozambique, Namibia, Duration Nigeria, Rwanda, South Africa, Tanzania, Togo, Uganda, 5 years (2014-2019) Zambia, and Zimbabwe.

Expected results *Countries in Asia will participate in specific activities of the • Customs administrations: project, and additional countries in Africa are expected to -- increased capacity to conduct an analysis of their join the project. enforcement needs, and to measure their performance in terms of enforcing CITES regulations; Funding partners -- Implement new tools and enhance new structures, Sweden, the United States Department of State, the German enabling their officers to better enforce CITES Federal Enterprise for International Cooperation (GIZ), and regulations. the Secretariat of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). • Customs officials: -- enhanced awareness and knowledge of CITES regulations, and how to enforce them, in particular when it comes to conducting operations and controls; -- increased capacity to collect, process and disseminate intelligence.

42 New edition of the Harmonized System

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Customs, playing a key role in protecting the ozone layer and mitigating climate change

By Dr Ezra Clark, OZONACTION, ECONOMY DIVISION, UNITED NATIONS include chlorofluorocarbons (CFCs), Ensuring success ENVIRONMENT hydrochlorofluorocarbons (HCFCs), When those familiar with the Montreal halons, methyl bromide, carbon Protocol consider the work of Customs THE MONTREAL PROTOCOL on Substances tetrachloride and methyl chloroform. officers in relation to this environmental that Deplete the Ozone Layer has convention, what may first come to been in the news a great deal recently. Under this treaty, developing and mind is the central role they play in This is something quite unusual for a developed countries have equal but the detection and prevention of the ‘lesser known’ convention. But how has differentiated responsibilities with illegal trade in ODS. Smuggling of this landmark environmental treaty, both groups of countries having CFCs, HCFCs and other ODS has which some see as the most successful binding, time-targeted, and measurable been a significant problem which international agreement of any kind, commitments. The Montreal Protocol threatened to undermine the success managed to effectively halt the destruction has been ratified by 197 Parties, making of the Protocol, but significant seizures of the ozone layer as well as making a it the first universally ratified treaty of these chemicals by Customs officers huge contribution to combatting climate in the history of the United Nations around the globe regularly hit the change? Dedicated and vigilant Customs (UN). The treaty has been successful in headlines. It has been estimated that in officers – that’s how. phasing out more than 98% of ODS, and the early 2000s, the illegal trade in ODS it is expected that as a result the ozone represented around 10-20% of legitimate The stratospheric ozone layer is the thin layer will recover to its pre-depletion trade, with an approximate value of layer of the atmosphere that protects levels by around 2060. In addition, due between 25 and 60 million US dollars life on earth from harmful ultraviolet to the phase-out of ODS, many of which a year [http://ozone.unep.org/Meeting_ radiation from the sun. The objective are powerful global warming gases, the Documents/mop/18mop/ODS-Tracking- of the Montreal Protocol is to protect Montreal Protocol lowered greenhouse September-2006-1.pdf]. human health and the environment gas emissions by the equivalent of about by phasing-out the production 11 gigatonnes (11 billion tonnes) of Important though this work on illegal and consumption of nearly 100 carbon dioxide per year – a truly huge trade is, to focus only on this part of industrial chemicals known as ozone contribution to protecting the earth’s the function of Customs would be to depleting substances (ODS), which climate. neglect the arguably more important, but perhaps less visible work of Customs, which is fundamental to the success of the Montreal Protocol – the day-to- day work of monitoring and reporting trade data on which a country’s compliance with their commitments under the Protocol is based. While the Protocol deals with the production and consumption of ODS, in reality, this ‘consumption’ is not measured in situ, but is calculated from countries’ ODS import, export, production, and destruction figures.

It is clear that to ensure accurate and timely reporting it is essential to have detailed and accurate import and export data, which is the domain of Customs. They must also ensure, by working closely with the designated national authority, that imports and exports of ODS are only allowed to proceed according to the national ODS licencing © IISD/Kiara Worth system and associated import and export The Parties to the Montreal Protocol applaud the historic decision to phase-down the production and consumption of hydrofluorocarbons (HFCs), which are powerful climate change quotas for each specific controlled gases. substance. One of the requirements

44 WCO news N° 82 February 2017

of remaining in compliance with the developing, to phase down HFCs Montreal Protocol is timely annual following various specific schedules. data reporting, and another is ensuring These chemicals are commonly used that a country’s imports and exports alternatives to ODS, and while not remain within the agreed ODS phase- ozone depleting substances themselves, out schedules. Both these requirements they are greenhouse gases which can would not be able to be fulfilled without have high or very high global warming dedicated Customs officers. potentials (GWPs) – about 121 to 14,800 times more powerful than carbon Providing support dioxide in causing climate change. It OzonAction, a branch of United Nations has been estimated that this agreement

Environment, assists developing will help nations avoid up to 0.5° Celsius © Ezra Clark countries and countries with economies of global warming by 2100, which very The import and export of ozone depleting in transition to achieve and sustain much continues the historic legacy of the substances is already controlled under the compliance with the Montreal Protocol. Montreal Protocol. Montreal Protocol, however, hydrofluorocarbons One of its priority areas of work is to (HFCs) such as R-410a (pink cylinder) will soon be subject to trade controls as a result of the provide capacity building support to However, the work to achieve this 'Kigali Amendment' to the Protocol. Customs and other enforcement officers target is all still to be done. Once again, to assist them in their work. For this Customs officers will be called upon to reason, OzonAction has developed a play their indispensable role. It will soon dynamic configuration of 10 regional be necessary to monitor and control networks comprising 147 developing the trade in HFCs as the import and countries, supported by staff located in export of these substances comes under regional offices who interact closely with regulation, and quotas are issued. It will these countries on a daily basis. be necessary to identify and distinguish HFCs from their alternatives and other The regional networks provide a regular, chemicals. The latest edition of the interactive forum for officers in National Harmonized System (HS) released in Ozone Units – country representatives 2017 does not include specific codes responsible for the implementation of for HFCs, but they are expected to the Protocol – to exchange experiences, be included in the 2022 edition. This develop skills, and share knowledge may present a particular challenge and ideas with colleagues from both as countries are required to establish developing and developed countries. working licensing systems for HFCs by These networks also provide a platform 2019, although controls for developing for interaction with, and the training countries do not follow this for some and capacity building of, Customs and years. © Ezra Clark enforcement officers. The networks are UN Environment’s OzonAction branch has considered a cornerstone in the success Continuing cooperation provided training and capacity building to of the Montreal Protocol. For many years, OzonAction and the Customs officers for many years on the WCO have collaborated on developing implementation of the Montreal Protocol, including training on the use of ozone Phasing down HFCs and deploying innovative information depleting substance identifiers. After more than seven years of intense material and training tools, such as and sometimes difficult negotiations, the e-learning modules which are available historic decision taken by the Parties to on the WCO CLiKC! Platform, and the Montreal Protocol in October last cooperated in the carrying out of material. By ensuring that Customs and year in Kigali, Rwanda which hit the enforcement operations and intelligence- enforcement officers on the frontline headlines was that they had agreed sharing exercises that have specifically are well informed about these new to phase down the production and targeted the illegal trade in ODS. These chemicals and remain vigilant, United consumption of hydrofluorocarbons actions have cemented the strong ties Nations Environment is confident that (HFCs) also. To appreciate the between OzonAction and the WCO at the success of the Montreal Protocol significance of this agreement, one the international level, while having a will continue to be underpinned by needs to reflect on the fact that this is positive impact at the national level. the tireless work of Customs officers. a treaty dealing with ozone depletion, Continued cooperation between addressing a group of chemicals which OzonAction currently has projects in OzonAction and the WCO will support are not ozone-depleting. some 100 developing countries. These this even further. projects include support for Customs The ‘Kigali Amendment’ will require officers, by way of capacity building, More information all countries, both developed and training and the provision of information www.unep.org/ozonaction

45 PANORAMA

Facilitating trade against a backdrop of security threats: the Tunisian experience

By Mourad Arfaoui, CAPACITY BUILDING DIRECTORATE, • 19 November 2015 – a Customs officials. Technical and procedural and Thomas Cantens, patrol at the border outpost of Sidi measures have been put it place in RESEARCH UNIT, WCO Toui (50 km south of Ben Gardane) order to facilitate the treatment of trade apprehended three terrorists who were transactions: AT THE END of June 2016, a group of trying to enter Tunisia from Libya WCO experts went to Tunisia as part illegally; • less time-consuming procedures of a research programme on barriers for perishable and flammable goods to trade facilitation with a particular • March 2016 – an armed group (release in under six hours); focus on potential obstacles linked claiming to be part of the Islamic to the implementation of the World State group (designated a terrorist • an electronic Single Window for Trade Organization’s (WTO’s) Trade organization by the United Nations) submitting documents accompanying Facilitation Agreement (TFA). The entered the city of Ben Gardane, a Customs declaration (used in 90% of WCO-led programme is being carried killing several people, including a operations); out in a number of countries, with Customs official and a police officer, support from the Korea Customs and tried to create a people’s uprising • an automatic selectivity programme Administration. against the central government, and in with centralized risk management in particular against Customs officials, place at Customs‘ headquarters; The experts were particularly interested whom they accused of threatening in the way in which Tunisian Customs informal trade, the biggest source of • the possibility of making a Customs officials perceive trade facilitation, revenue for the region. declaration without using an the measures already in place to authorized Customs broker (option facilitate trade, and any barriers to The WCO experts carried out a number used in less than 10% of Customs trade facilitation – one of the most of individual and group interviews with declarations); significant being security-related issues Customs officials and operators in the of increasing concern on the ground. informal trade sector. They also carried • the possibility for certain operators out onsite visits at the port of Radès, to submit an advance Customs For several years now, Tunisia has Tunis-Carthage airport, the Ras Jedir declaration (request for authorization witnessed a series of violent attacks border post on the border with Libya, in to remove goods – under 10% of cases) perpetrated by armed groups or goods warehouses in Ben Gardane, and individuals. The attacks carried out at the at the outposts of El M’guissem and Sidi • an authorized economic operator Bardo Museum in Tunis (March 2015), Toui on the border with Libya. (AEO) programme (very stringent in a hotel in Sousse (June 2015), and in selection criteria, with 24 authorized Ben Gardane (March 2016) received a This article briefly lays out the initial operators at the airport) considerable amount of media coverage analysis carried out by the experts and given the scale of the attacks. According the potential areas of work, which, in • the use of non-intrusive inspection to the Armed Conflict Location & Event their opinion, would enable Tunisian equipment; Data (ACLED) academic project, over 50 Customs to develop policies to ensure violent armed attacks were recorded in a balance between facilitation and • deferred inspections for Customs Tunisia in 2016, killing 105 people, two security, taking into account their declarations. of which were Customs officials. specific environment, priorities and means, and not necessarily based only The officials that were interviewed The security situation remains difficult, on outside recommendations. recognized the need to take measures particularly in the city of Ben Gardane to strengthen trade facilitation policy, (a trade hub where both formal and Facilitation: a concept firmly rooted in including: informal trade flows cross the border working culture between Tunisia and Libya), evidenced The majority of senior Customs officials • simplifying Customs procedures; by the following incidents: that the WCO experts met with stated that they were highly aware of the • improving the current Customs IT • August 2015 – an armed group facilitation aspect of their job. Trade system; claimed responsibility for an attack facilitation as a concept is visibly against a Customs patrol, killing one anchored both in the representations • overhauling the risk management Customs official; and working culture described by senior policy by updating the risk indicators;

46 WCO news N° 82 February 2017 © A. Doron The Zokra souk at Ben Gardane: warehouse stores displaying goods line the road leading to the border.

• improving coordination between Tunisia’s foreign trade transits: the At a national level, any action by an the different stakeholders at the surveillance unit has been bolstered; a armed group would have disastrous border (Customs, police, agricultural canine unit is now up and running; a economic consequences. While at a authorities, health authorities, video surveillance system has been put personal level, any Customs official certification bodies, etc.); in place (74 cameras); there is a plan to having dealt with an import in which install new scanners (4 to 6 scanners); the means to carry out an attack were • improving information sharing and staff are being trained to use the concealed would be subject to scrutiny, between headquarters and local scanners to detect weapons. and serious doubts would be raised units on the ground in order to about their integrity in an environment ensure that facilitation policy is Rolling out such additional measures, where corruption is taken as a given. It is turned into concrete measures and however, has not involved any overhaul clear then that certain Customs officers actions – adopting the WTO TFA of procedures. The security controls have do not want to take any risks, both in should involve running an awareness simply been added to the administrative order to protect society as a whole, but campaign for staff on the ground who, procedures already in place: the majority also in order to protect themselves in the while they know of the Agreement, do of cargo is released “immediately” after case of poor targeting. not have a good understanding of all being scanned on leaving the port; and its provisions. the canine team is used systematically to Tunis-Carthage airport inspect personal effects. At the airport, the main objective of Procedures and security measures at Customs staff is to facilitate trade and different border posts Here, facilitation is understood to mean no exceptional security measures appear While all senior officials interviewed minimizing delays. As such, security- to have been taken, apart from the (at the port, the airport, and the border related obligations, particularly the systematic non-intrusive inspection of with Libya) did express their willingness use of scanners, can lead to differing parcels sent by post or express courier. to facilitate trade, it is clear that trade viewpoints between experts from Physical inspections at shop exits is a facilitation cannot take the same form international organizations, whose main measure that has been in place for years. at all border posts. concern is to ensure that a standardized This can be explained by two factors approach to Customs procedures which are quite common in airport Port of Radès is followed (risk analysis, reduce environments: first, a major objective According to senior Customs officials, inspections to a minimum, etc.), and of air freight is the speed with which since 2003 security measures have Tunisian Customs officials, for whom operations are completed; and second, been stepped up at the port of Radès there is a lot riding on security, both at airports have traditionally been sensitive through which a large majority of a national and personal level. to security concerns.

47 PANORAMA

Ras Jedir border post At the south eastern border, the collapse of the Libyan state means that the issue of border security and the fight against smuggling is even more pressing here. In response to such threats, buffer zones under high military surveillance have been set up in the south of the country, a largely desert area, situated between Libya and Algeria. Access to the area is possible through a few crossing points, but only with authorization from the military. The northern border of the buffer zone is in a place called Matrouha to the west, on the Algerian side, and to the east, on the Libyan side, and is situated at the Ras Jedir border post where the WCO experts travelled to.

At the Ras Jedir border post, armoured (anti-tank) gates have been installed to allow the border to be closed in an emergency. Special lighting facilities make the border point operational 24 hours a day: watchtowers outside the crossing point allow movements on the Libyan border to be monitored, to forewarn of any unforeseen activity by armed groups or large movements of refugees. The number of staff has been increased to 260 Customs officers, each equipped with their own personal weapon. In addition, an armed response unit made up of Customs officials and the National Guard is ready to move on orders from the head of office.

Two joint meetings are held every month to ensure coordination between Customs and the security forces, and emergency action plans have been put in place to ensure coordinated efforts in the event of a problem (terrorist act, influx of refugees, etc.). This is done Overview of armed attacks recorded in Tunisia since 2015. The 40 km border strip condenses with the aim of guaranteeing border more than 50% of the violence although it only represents 30% of the territory. security. Passengers arriving in Tunisia are scanned systematically, the main relatively low, the intelligence aspect insecurity, the ability of an organization objective being to detect any weapons. is an important one, particularly as (be it the State or a militia) to enable officials have contact with the nomadic trade across the zone is an indicator to At the border outpost of El M’guissem, communities. the population of its ability to govern. as at other border outposts where government forces that control the At Ras Jedir, as at other posts on the As such, the Tunisian State, and in areas between border crossings are border with Libya, the notion of trade particular Customs, plays an important based, Customs officers play a purely facilitation takes on a very specific role in negotiating with Libyan surveillance role, but do so in very dimension. It is cross-border trade that authorities. Any Libyan measure challenging conditions (climate, sustains the region, and facilitating trade (blocking the release of goods, seizures, housing, water and power sources, singles out the State as a player in the taxation, etc.) that has a negative effect communication by radio only, etc.). governance of such fragile regions. In on Tunisian traders (mostly informal), Although the number of seizures is addition, as in other areas affected by couriers or transporters elicits a strong

48 WCO news N° 82 February 2017

It should be noted that Customs officers, and response from the latter on the Tunisian probably the security forces • Carrying out a quantitative study on side (roadblocks, strikes, damage to as well, are well aware of the delays caused by security checks, means of transport, etc.). particularly the scanner. It is highly their “social” role, and that likely that the delays linked to security Thus, it falls to Tunisian Customs to they have not adopted a checks, caused by the time taken for resolve the disputes in part. This role, goods to be scanned, for example, are specific to Customs, is necessary in purely repressive approach actually quite minor in comparison order for the Tunisian State to keep to the trafficking of “legal” to the time it takes to get through the peace in society, and to retain the the port. This type of quantitative support of the population. The role of goods, other than weapons study can demonstrate that security Tunisian Customs officials is further and drugs. measures are compatible with complicated by the fact that sometimes facilitation. they have no established, professional Libyan counterpart. • Adapting the anti-corruption policy to the security role. Corruption becomes Guaranteeing the smooth flow of trade a different issue as Customs plays at the border by making Customs part an increasingly security-orientated of the security apparatus their “social” role, and that they have not role. On the one hand, by definition, Generally, despite the insecurity, adopted a purely repressive approach to terrorism-related fraud is a rarity in Tunisian Customs is present at the border the trafficking of “legal” goods, other comparison to commercial Customs with Libya and plays an active role in than weapons and drugs. fraud. On the other hand, the the security apparatus. The situation in perception that Customs is corrupt Tunisia is an interesting one as Customs Appointing Customs officials that come weighs heavily on non-corrupt has been able to reinstate its authority from the region, applying more or less Customs officials who cannot afford at the border after the border fell under flat-rate taxation to small shipments, to take any risks when it comes to military rule. This can be held up as an having border outposts that foster security checks: if a shipment to example that could be followed by other good relationships with the nomadic an armed or terrorist group is not Customs administrations working in a communities, and looking to take down checked, then the Customs official fragile or insecure area. the “big” smugglers (thereby breaking up in charge would immediately be monopolistic situations and allowing suspected of corruption, but if a On the basis of the Tunisian experience a greater number of “smaller fish” to risk-based security check procedure it can be said that making Customs, do business) are all measures which, is in place, then a legal mechanism is the only authority able to guarantee although technically simple, help to needed to protect Customs officials. the smooth flow of cross-border trade, contribute to social peace, and encourage By the same token, an assessment part of the security apparatus involves a a favourable relationship between the system should make it possible to number of elements: population and the repressive apparatus monitor the daily practice of Customs of the State. officials. i) willingness by the central authorities to take into account the economic Food for thought • Organizing a global seminar for importance of the border; This WCO mission’s objective was senior officials in order to promote not to run any diagnostics or to draft the development of in-house policies ii) local Customs officers’ ability to recommendations, but rather to make and techniques as well as better send quantitative data, including proposals with the aim of strengthening negotiations with external partners. data on seizures, back to the central the position of senior Customs officials, Senior Customs officials do benefit authorities; and helping them to come up with a from external expertise and Customs policy that will ensure a balance training, particularly on facilitation iii) the same means of force (weaponry, between facilitation and security, taking instruments. The experience of means of surveillance, etc.) as other into account the environment, priorities Customs at the border post with security services; and means of the Tunisian Customs Libya, however, shows that it is in the Administration, and one which would interests of each administration to iv) an understanding of local issues not necessarily be developed only in develop its own solutions locally and linked to cross-border trade by response to external recommendations. show flexibility, both administratively Customs officers who support The proposals included: and intellectually, in order to better commercial activity in the region in understand and tackle problems. which they work. • Organizing a debate on the possibility of Moreover, the Customs officials that establishing quicker and more reliable were met all showed a real desire to On this last point, it should be noted import, export or transit procedures at engage with the Customs strategy. It that Customs officers, and probably the the border which would take account of may also be interesting to note that security forces as well, are well aware of current security challenges. Tunisian Customs organizes a seminar

49 PANORAMA

for its senior officials on topics of border outposts on the actual border, to negotiate with operators from the global interest relevant to Customs and managing the border as a series of informal sector, making it easier to (facilitation, competitiveness, cross-border “flows” to be controlled justify a change in fiscal policy. security, terrorism, corruption, tax, through surveillance concentrated at etc.) in order to encourage them to trade hubs where such flows meet. • Carrying out a study on the links between develop their own ways of thinking, smuggling and terrorism. It would be and strengthen their negotiating • Carrying out a study of the “business useful to study the transition process skills for dialogue with foreign and model” of the various players involved from one network to the other: how international partners. This type of in smuggling, across a number of flows might couriers or smugglers become seminar, which is organized regularly, of goods. Smuggling and the informal part of a terrorist network? What are is both a platform for exchange and sector are supposed to provide goods the motives? How does it happen? a source of motivation for senior at a low price to the poorest of the officials. population. In order to assure the • Carrying out a study into the role of social function of smuggling, Customs Customs at local level. The Tunisian • Organizing a workshop on Customs agrees to apply advantageous fixed- experience, and this has been seen enforcement techniques in a desert rate tariffs to certain flows of goods, in other countries too, shows how environment. Different Customs though there is a lack of data on this important it is for Customs to administrations can share their type of trade. It would be useful to participate in local government, as experiences which would provide know which actors along the value well as how important their role is in opportunities for perfecting border chain make the most profit. If it getting the population to contribute to control strategies for such settings. turns out that certain individuals are ensuring their own security. It could be interesting to address the making significant profit, and that opposing concepts of managing the the quantities imported are grossly More information border like a “line” to defend and under-valued, a quantitative study [email protected] control through the use of a network of would put Customs in a better position [email protected]

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Racing ahead: the United States transforms its trade processes to compete in the global economy

By Marcy Mason, A WRITER WHO COVERS TRADE FOR US CUSTOMS AND BORDER PROTECTION OVER THE LAST five years, the global economy has been changing. Consumers are buying more goods online, e-commerce is flourishing, and supply chains are moving at a breakneck speed. At the same time, the number of trade agreements is growing, and countries are increasingly more focused on regulations, supply chain security, and the movement of cargo across their borders.

For US Customs and Border Protection (CBP), the effects have been staggering. “Everyone wants everything now. You order something online today; you want it at your home tomorrow,” said Todd Owen, the Executive Assistant Commissioner of CBP’s Office of Field Operations.

But with speed and immediacy come logistical challenges. The number of shipments entering the United States (US) by air, rail, truck, and sea is rapidly increasing, especially by air. In 2015, EXPERT SOFTWARE CBP inspected more than 275 million parcels at express courier hubs and at the heart of International Trade international mail facilities.

Cargo coming into the US through other modes of transportation was also high. “In the last five years, the economy has LOGISTICS AND INTERNATIONAL CUSTOMS grown much stronger, so we are seeing © APM Terminals FREIGHT FORWARDING the benefits of that,” said Owen. “Trade A crane unloads one of the millions of cargo containers that arrive in the US from around the is up, e-commerce is going through the world each year. roof, and we have far more shipments coming into the US. The numbers concerns, but to do so in a way that When CBP was formed in 2003 as part CUSTOMS are huge. But that also increases our allows the economy to continue to of the newly created Department of workload and our staffing has struggled prosper.” Homeland Security, it was an outgrowth to keep up.” of the events of 11 September 2001, and As a consequence, over the last few years, its primary focus was protecting the A growth booster at the heart of CBP realized that the changes had a the agency has been transforming its US from terrorism. This was a major the supply-chain for over 25 years direct impact on the US economy and processes to increase efficiency, and to shift from the agency’s roots as the the ability for American businesses to make CBP more nimble as a Customs US Customs Service. “Our traditional compete globally. “We don’t want to organization so the country would not mission of facilitating and enforcing be a roadblock,” said Owen. “We want be left behind. trade was not as strong as it had +33 (0)9 72 72 23 62 www.akanea.com to make sure that we meet our security previously been,” said Brenda Smith, (non-surcharged call) 51

RCS Lyon 330 573 775 - SAS au capital de 623 434€ Crédits photos : Fotolia - Shutterstock PANORAMA © Ya-Huei Laura© Ya-Huei Lee © Marcy Mason A CBP officer inspects a bag of international mail as it arrives at Los Angeles International Shipments of parcels being inspected at Airport. the DHL facility by CBP officers at John F. Kennedy International Airport.

the Executive Assistant Commissioner viewed as accounts. “We were still at the early 1980s, when the legacy US Customs of CBP’s Office of Trade. transaction level,” said Smith. “Every Service built the Automated Commercial time we dealt with a company, even if the System. But by 2010, things started changing. company had an excellent track record The worldwide recession; several new and we had dealt with them many times Significant progress was made, and in trade agreements; and a significant before, we looked at the company as if 1993, the Customs Modernization Act growth in e-commerce, where goods are we had no idea who they were. It was was passed, which gave legal authority bought and sold easily over the Internet, slowing us down, and when we made our to develop the next generation of prompted CBP to elevate trade. “We took decisions about the risk of a particular automation. Starting in the mid-1990s, a look at the strategic gaps in how we transaction, we didn’t consider all of the plans were made for a new cargo were conducting our trade mission,” other information that we knew about processing system, the Automated said Smith, a chief architect of the the company. So importers couldn’t Commercial Environment (ACE). ACE transformational plans. bring their goods into the US quickly. was intended to help the US government We were holding their goods, trying to collect duties, analyse and assign risk, One of the obvious findings was that decide if they were safe to let into the and process international shipments the government was not conducting country,” she said. coming into and going out of the business in the same way as industry. country. “We weren’t operating at the same It soon became apparent that CBP speed or technology level,” said Smith. needed to collaborate with the trade Development of the new system was slow “We were still stuck in the 20th century. community to get a fresh perspective. because of multiple challenges. “It was There were a lot of things that we had It was not something that had typically a constantly changing environment,” oversight over that hadn’t kept up with been done. “We recognized that if we said Smith. “It was no longer just about the times. Business was moving very brought the trade community to the collecting revenue. We had to be able to quickly to modernize supply chains, to table to work with us, we could both identify and manage terrorism threats, use technology and to use information, benefit,” said Smith. “Not only could import safety threats, and ensure and we weren’t there.” they help us define what the problems compliance with free trade agreements, were, they could help solve what was which have exploded over the last 10 A major sticking point was paper. “Our slowing things down, and making us years. At the same time, we were building trade processes were very cumbersome less efficient. It would save time, drive the automated systems under some very because everything was done with the economy, and better protect the challenging budget constraints.” paper,” said Smith. But it was much more American consumer.” than that. “It’s not just getting rid of the But over the last four years, there has been paper. It’s actually using the information Automating processes a dramatic turnaround. Buoyed by the in those documents to make decisions. Automation was at the heart of CBP’s strength of political support, additional We didn’t have the visibility or the tools transformation efforts. “So much of what funding, and a herculean effort by those to do that,” said Smith. we do is driven by data, it’s essential that involved, ACE has catapulted to near- our trade processes are automated,” said completion. Working in concert with CBP identified significant gaps in other Smith. The agency began automating a host of other initiatives, CBP’s system areas. For example, importers were not its cargo processing system during the has begun to shine. “ACE has given CBP

52 WCO news N° 82 February 2017 If we’re going to compete, if we’re going to get goods

the ability to look at information on into the country at a complexity in global trade,” said shipments nationwide,” said Heidi Bray, reasonable cost and expect Alexandra Latham, the Director the Manager of US Customs Compliance of Customs Compliance at Costco at Fiat Chrysler Automobiles, one of to export to foreign markets, Wholesale Corporation, an American America’s top three auto manufacturers. the government has to membership-based retailer with “That helps us because we use ports all warehouse stores in nine countries over the country.” develop a more consistent, around the world. “When we purchase customerfriendly approach. goods, they need to meet the regulatory “When I started doing Customs work requirements for all nine countries that almost 30 years ago, it was all paper- CBP has done a great Costco is doing business with.” But as driven and you had to plan ahead. It job with that. Now, it’s just Latham pointed out, it is costly. “The was hard to get something shipped in or increased complexity in requirements out of the country without there being a extending it out to the rest of makes it prohibitive for a business to slowdown at the border,” said Bray. “We the government. continue to import goods. It drives up have plants in Canada, so we have a lot the cost for consumers,” she said. of suppliers that cross through Detroit. It’s a major port for us, and when a to wait in long traffic lines at the border, CBP addressed the issue and found a driver has to hand a paper document that’s huge for us. The automation has way to simplify the process for goods to a CBP officer at the booth, it takes helped us do that, and it really has had a entering the US. “We were asking for a lot of time,” she said. “In a just-in- positive impact.” quite a bit of data to make decisions time environment, we don’t hold a lot about whether goods could come into of our parts in the plant anymore. We Another area that CBP tackled was the country,” said Smith. “Over the don’t want to carry inventory costs. If simplifying processes, which has been preceding 10 years or so we had layered we can bring those parts in, use them in a welcome relief for many importers many new information requirements on production immediately, and not have and exporters. “There’s an increasing top of each other, and we hadn’t figured

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AZ_Mutation_WCO_210x144.5_engl.indd 1 17.01.13 12:22 PANORAMA

out where there was duplication. So we any of the ports, they help us. The Center sat down with representatives from the has visibility of all of our shipments trade community and asked them how throughout the country, which has been we could do this more efficiently,” she extremely beneficial to us.” said. “They put some ideas on the table, and we listened.” One of the Centers’ goals was consistency. “The lack of uniformity at In the end, CBP found a way for the ports has been a huge complaint of importers to submit a simplified version the trade community,” said Bray. “We’ve of the required entry information earlier had shipments that come in through a in the importing process. “It allowed us port and a Customs officer there will to let importers know early on if there ask us a question. Then a week later, a was a problem with their cargo, so that different Customs officer at a different they had an opportunity to fix it,” said port will ask the same question. No one Smith. “It also gave them a greater degree has time to answer the same question of predictability with their supply chains. over and over again at different ports. Were we going to stop and inspect their It’s burdensome, and it’s costly for any New Jeep Wrangler vehicles for export out of the US are loaded onto railway cars at the Fiat shipments? If so, companies could make business to duplicate its efforts,” she said. Chrysler Automobiles’ assembly complex in decisions about their inventories and Toledo, Ohio. their logistical movements.” “But the beauty is – now the Centers are addressing this. For Fiat Chrysler, the Industry centers lack of uniformity has virtually been way it’s been done historically will not In 2011, CBP introduced the Centers of eliminated. They know us now. We’re work going forward. You can’t efficiently Excellence and Expertise, a sweeping, treated as an account instead of having move freight across borders when you’re transformational change in how CBP each of our transactions processed running the gauntlet of 47 agencies worked with the trade community. separately,” said Bray. “So, when we acting independently,” said Sherman. Operating on a national scale, the have shipments that come through “If we’re going to compete, if we’re Centers became the primary point Baltimore or Los Angeles or any other going to get goods into the country at of processing for importers within a port and we need help with something, a reasonable cost and expect to export specific industry. Today, there are 10 the Centers can go into ACE and look at to foreign markets, the government has Centers, focusing on a range of industries the shipment, and help us troubleshoot. to develop a more consistent, customer- including electronics, pharmaceuticals, They give us guidance on what needs to friendly approach. CBP has done a great automotive, petroleum, consumer occur in order to expedite the release of job with that. Now, it’s just extending it products, apparel, and others. Staffed by our goods.” out to the rest of the government.” experts who are linked virtually across the country, the Centers are based at Single Window solution One of the ways CBP proposed to solve locations strategic to the industries they Satisfying requirements for the the problem was to build an information serve. multitude of regulating agencies is a system that enabled all of the agencies major hurdle. “Even if CBP would say, to view the information simultaneously. The idea for the Centers was one of several ‘Your shipment looks good,’ one of 47 “We recognized that there really needed suggestions proposed to CBP in a 2009 agencies with regulatory responsibilities to be a guiding vision for the whole of paper written by the congressionally could stop the shipment and tell us, ‘You government,” said Smith. “But, that mandated trade advisory committee, can’t bring this into the country,’” said was something that could not be driven known as COAC. Most of the paper’s Bray. solely by CBP. It needed to come from suggestions centred on a ‘management the government because it required the by account’ concept, which viewed The underlying problem is a lack of agreement and support of 47 different companies as accounts rather than on a unity. “We see the inconsistencies across government agencies that had a stake in transaction-by-transaction basis, where government agencies because we work the project.” each shipment was reviewed separately. with different cargo processing systems. The trade community believed that Some still use paper and faxes,” said The support came through in February the account managed process would Ted Sherman, Senior Director of Global 2014, when President Obama signed help products enter the country more Trade Services at Target, one of the an Executive Order to streamline the quickly, and that there would be more largest mass merchandizing retailers in US import/export process, creating predictability on when merchandise the US, and importers of containerized a single window (SW) for businesses would be on store shelves. freight. to electronically transmit the data required by the US government to “We interact with the Automotive & “The fact that a company has to navigate import or export cargo. The new system Aerospace Center in Detroit almost 47 agencies to get goods into the US is would speed up exports of American- daily,” said Bray. “If we have delays at very problematic and challenging. The made goods, so that the US could

54 WCO news N° 82 February 2017 © Fiat Chrysler Automobiles

We recognized that there really needed to be a guiding vision for the whole of compete more effectively in the world Increasing exports marketplace. Completion of the SW government. But, that was Exports were another key area of focus. system was set for December 2016 when something that could not In 2010, shortly after President Obama the Obama administration ended. launched a National Export Initiative be driven solely by CBP. to revitalize and promote American In March 2014, CBP Commissioner R. It needed to come from exports abroad, CBP asked COAC to Gil Kerlikowske took over the reins of help the agency improve the country’s the agency. He understood President the government because export process. From an industry Obama’s vision, and within weeks it required the agreement perspective, members of the trade reached out to industry to listen to their advisory committee mapped out the concerns. At the top of the list were and support of 47 different obstacles to a smooth, flowing process. worries about how other government government agencies that Eighty were identified. agencies were going to implement the SW. The trade community was concerned that had a stake in the project. “We discovered that paper documents the agencies might start asking for more are a major reason that shipments are information. They also had concerns held up,” said Julie Ann Parks, the about how the timing of the new system Director of Global Trade Organization would impact their supply chains and the for the Raytheon Company, a defence, economy. Furthermore, they questioned In 2015, when the FDA met with COAC, civil government, and cybersecurity whether the system would be useful, and the discussion was fruitful. “We opened firm headquartered in Waltham, fit in with their operations. up more to industry about how we do Massachusetts. “As a defense company, things than I think we have ever done most of the exporting challenges that “Because of his former position as the before,” said Douglas Stearn, Director we face relate to manual processes with Director of the Office of National Drug of the FDA’s Office of Enforcement and licences.” Control Policy at the White House, Import Operations. “We talked about Commissioner Kerlikowske was able to our struggles, and they gave us a lot For security purposes, the US leverage his relationships to open doors of advice, a lot of recommendations Department of State regulates and for industry to have a better dialogue to consider. Mainly what they wanted issues licences for military-related with the agencies implementing the was more guidance and information shipments sent overseas. “Depending project,” said Maria Luisa Boyce, CBP’s about our requirements,” he said. “We upon the licence type, we have to get Senior Advisor for Trade and Public have endeavoured to do a lot more in paper documents signed by CBP before Engagement. “He asked the head of the that area, and within the SW effort, we we can import and export shipments,” Food and Drug Administration (FDA) have been extremely explicit about our said Parks. and other agency chiefs if their agencies requirements – probably to a greater could meet with COAC to talk directly degree than we have ever been before.” “This can become very problematic and with industry about the changes that time-consuming in terms of logistics. were needed to modernize the process For example, we’ve shipped cargo out so the new system would be successful.” of the port of Los Angeles, and then

55 PANORAMA

brought the shipments back through Internationally, the programme has had will look at US trusted exporters less, the port of Phoenix because it made a significant impact, providing the world in terms of inspections. Our goal is logistical sense. The paper licence needed with supply chain security protocols. It to create conditions that will help US to travel between the two locations also is the prototype for an “authorized exporters establish a foothold in other before the shipments were signed-off. economic operator (AEO),” or trusted markets.” This is probably the biggest pain point trader programme that voluntarily in our industry,” said Parks. works with corporate citizens to help Some aspects of the programme have ensure the highest degree of supply not changed. C-TPAT’s standards However, all of that is changing. “The chain security. remain high. “It’s not all about joining government is now using the SW to the programme. We also suspend share licensing information between Today, nearly 12,000 companies companies, and remove them from agencies,” said Parks. “It started in participate in C-TPAT voluntarily. Those the programme. So there is a constant December 2015, and it was a beautiful who participate in the programme are churn of evaluation that goes on,” thing.” considered low-risk and enjoy fast-track said Schmelzinger. “Americans want privileges at the US’s border crossings to know that the companies they buy Efficient movement of exports is critical and ports. In return, companies which merchandise from are not supporting from an economic standpoint too. “It’s are certified by CBP must agree to terrorist activities. They want to know important that we keep commerce enforce security throughout their that companies are looking at their moving,” said Bray. “We have customers supplier networks, provide a profile on supply chains, vetting their suppliers, overseas and we need to meet their the security measures their companies and not buying trinkets from somewhere needs. We can’t do that if our parts have in place, and undergo a risk in the world blindly.” and our vehicles are stopped at a port assessment by CBP. because Customs doesn’t know what C-TPAT also continues to help CBP we’re shipping out of the country, and “We’re retooling the programme so that with enforcement. “If we’ve invested they don’t have any information on us.” it stays current. There are a lot of factors our time, our energy, and our resources that have changed throughout the years,” to prove to CBP that we are trustworthy, “If we don’t meet a certain sailing said Elizabeth Schmelzinger, CBP’s then they don’t have to worry about us. schedule, then we have to wait another C-TPAT Director. “We wanted to make They can focus their limited resources week or two until we can get space on sure that the minimum standards are on who they don’t know,” said Bray. another boat,” said Bray. “The bottom still relevant. We’re also restructuring “We know our supply chain. We’ve got line is we need to compete economically. the programme so that it’s more in line it secured. We know what’s coming in. And, if we don’t have efficiencies in our with the structure of other countries’ Don’t worry about us. Worry about the supply chain, then it’s just not going to programmes that have security and unknown.” happen. If we can’t get goods out of the compliance components.” country to meet the demands of our According to CBP’s Smith, enforcement is global customers, then we’re not going C-TPAT will also include exporters. another way the initiatives are helping US to be able to compete, and they will buy “Our supply chain programme initially businesses compete. “It’s not just about cars from someone else.” only focused on imports. Now, we’ve moving trade. It’s important to have a added other entities such as exports,” level playing field to ensure everyone is Keeping current said Schmelzinger, noting the benefits adhering to the same rules,” said Smith. CBP is also updating some initiatives. this will bring. “We have agreements “So those with the best product at the The Customs-Trade Partnership Against with countries that have similar supply lowest prices eventually win.” Terrorism (C-TPAT) programme is chain security programmes. As part one of them. Launched in the wake of of those agreements, those countries More information 11 September, C-TPAT was created in will honour a commitment to our www.cbp.gov partnership with seven major companies exporters who are low-risk,” she said. to ensure that America’s supply chains “What that means is that we will look are secure. at their trusted exporters less and they

56 WCO news N° 82 February 2017 © Retlaw Snellac Photography

Livestock is an important mainstay in Somaliland’s economy, with millions of goats and sheep being exported via the Berbera Port on an annual basis. Customs reform and trade facilitation in the Horn of Africa: Somaliland under the microscope

By Creck Buyonge Mirito, Interestingly, Article 10 of the scientific socialism as the political CEO AND PRINCIPAL CONSULTANT, CUSTOMS & INTERNATIONAL TRADE ASSOCIATES (CITA) LTD. Somaliland Constitution, which was ideology of the new state, with the adopted in 2000, recognizes, as part of justification that such an approach was Introduction the country’s foreign relations, that there not in contradiction with the tenets of THE HORN OF Africa refers to the has been “long-standing hostility in the Islam, and aligned himself with the easternmost extension of Africa, and Horn of Africa,” and that this needs to Soviet Union. for the purposes of this article, includes be replaced with “better understanding the region covered by Djibouti, Eritrea, and closer relations.” This context In 1977, Siad Barre’s army invaded Ethiopia, Somalia, and Somaliland. informs issues relating to Customs the Ogaden region of south-eastern This area has been a theatre of struggle and trade facilitation in the Horn of Ethiopia, setting off a war that ended between and amongst world powers Africa generally, and in Somaliland in with the defeat of Somalia in 1978. He for more than one century: the desire particular. immediately changed his alignment to to control the Red Sea by colonial the United States for military support strategic interests; struggles for control Somaliland has been cited as an example in exchange for American access to over the waters of the River Nile among of locally-driven reconstruction in the use Berbera Port. Siad Barre was also the riparian states, with some Nile period following the fall of Maj. Gen. smarting from the failure of his long- River Basin countries questioning Mohammed Siad Barre’s regime that standing war with Kenya – which began the relevance of the Anglo-Egyptian ruled Somalia from 1969 to 1991. Siad in the 1960s – over control of Kenya’s Agreement of 1929); ‘Cold War’ Barre’s rise to power came in a bloodless so-called Northern Frontier District politics that saw countries in the region coup after a police officer assassinated that is inhabited by Somali-speaking switching sides at different junctures; the then President, Dr Abdirashid Ali and other related ethnic groups, such as and, more recently, issues related to the Shermarke, on 21 October 1969. On the Borana, Burji, Garre, Ajurran, and ‘Global War on Terror.’ assuming power, Siad Barre adopted Degodia.

57 PANORAMA

War broke out in 1988 between a stable government, and a Constitution. happening elsewhere in the Horn of the government and secessionist Its success in state-building is partly Africa, such as the establishment of guerrillas from the north, known as attributed to the fact that it has integrated the Djibouti Duty Free Zone, or the the Somali National Movement (SNM), traditional ways of governance, which coming into existence in 2008 of the who contended that they had been are based on consultation and consent, Ethiopian Revenues and Customs systematically discriminated against with the apparatus of a modern state. Authority (ERCA) – a merger between by Siad Barre’s government. After the Establishment of an effective and the Ethiopian Customs Authority and government was overthrown in January efficient Customs administration is the Federal Inland Revenue Authority. 1991, the SNM took control of north- a contribution towards building a western Somalia and unilaterally declared sustainable Somaliland state. In addition to political instability and independence from the rest of Somalia to geopolitics, the Horn of Africa region become the new ‘Republic of Somaliland,’ Delayed recognition of Somaliland’s has also been shaped by complex ethnic defined by the borders of the former sovereignty means that the country and clan dynamics, especially in the British Protectorate. This was reaffirmed does not belong to any regional or Somali-speaking countries of Djibouti at a conference in Burco (April/May 1991) international organizations. However, (colonial era French Somaliland), and in Borama (May 1993). this has not prevented it from exercising Somalia (colonial era Italian Somaliland) some functions associated with and Somaliland (colonial era British The complex relationship between sovereign states, such as the negotiation Somaliland). Somaliland and Somalia partly arises of agreements with other states. In from the fact that the former British this regard, Somaliland has a transit The major clans in Somaliland Somaliland gained independence and and trade facilitation agreement with include the Isaaq, Gadabuursi, Ciisa, became a sovereign state on 26 June Ethiopia, and in mid-2016, agreements Dhulbahante and Warsangeeli, and clan 1960, but chose to enter into a union were signed between the Berbera Port membership is taken into account in the with Somalia on 1 July 1960. But, as Authority (owned and operated by the distribution of government positions, we have seen, the union ended in 1991 Republic of Somaliland) and DP World rather than pure meritocracy. In spite of after a civil war that started in 1988 (the Dubai-based global maritime port Somaliland having been a former British due to long-standing grievances over terminal operator), providing for a Protectorate, it did not inherit the sort discrimination by the Somalian regime. 30-year concession for Berbera Port, of bureaucracy usually associated with and the establishment of duty free zones. Commonwealth member countries, The new Republic of Somaliland has not as there was an overlay of practices received international recognition in These developments, as well as the associated with the Italian system of spite of it having all the key elements of a decision to create a revenue authority governing, introduced during the union modern state, such as a defined territory, in the near future, mirror what is period which ran from 1960 to 1991.

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Somaliland faces a number of challenges related to

Context for reform Customs and trade facilitation. classification of goods in Customs Article 2 of the Constitution of First and foremost, though tariffs (1959), Customs valuation using Somaliland clearly defines the territory the Brussels Definition of Value (1953), of Somaliland in terms of location the Somaliland Constitution the coordinating role of Customs at the (“between latitude 8° to 11° 30’ north of requires a legal basis for border, and anti-smuggling measures. the equator and longitude 42° 45’ east; This is in contrast to the new law and consists of the land, islands, and the collection of duties and which provides for the use of the WCO territorial waters, above and below the taxes, the intermingling Harmonized Commodity Description surface, the air space and continental and Coding System (HS Code), the shelf”) and borders (“the Republic of of international norms Valuation Agreement of the World Trade Somaliland is bordered by the Gulf of which are not always well Organization (WTO), and modern Aden to the east; the Federal Republic Customs procedures that include risk of Ethiopia to the south and the west; understood, and the cultural management and post-clearance audit. and the Republic of Djibouti to the tendency to negotiate and north-west”). Moreover, and just as equally important, consult on everything, Revenue Act No. 72 of 2016 made In terms of Article 6, “the official leads to unpredictability provision for the establishment of the language of the Republic is Somali, Somaliland Revenue Authority (SLRA), while the second is Arabic, and other in the international trading and makes fundamental changes to the languages shall be used when necessary.” environment. administration of tax law in Somaliland. Furthermore, Article 14 (paragraph 1) provides that “no taxes or duties which Customs and trade facilitation have not been determined by law shall be challenges and reform initiatives collected,” and that “the levying, waiver Somaliland faces a number of and changes in taxes and other duties challenges related to Customs and shall be determined by law.” trade facilitation. First and foremost, though the Somaliland Constitution Customs reform in Somaliland is being to the Customs and Inland Revenue requires a legal basis for the collection undertaken as part of the government’s Act, introducing and enforcing value- of duties and taxes, the intermingling Public Financial Management (PFM) added tax (VAT) and establishing of international norms which are not Strategy, which was launched in 2011. a training centre for the Ministry. always well understood, and the cultural During the launch, the then Minister A government-wide Civil Service tendency to negotiate and consult on for Finance, Eng. Mohamed Hashi Strengthening Project, supported by everything, leads to unpredictability in Elmi, identified the four key challenges World Bank “with the overarching the international trading environment. in raising revenues for the country: goal of strengthening institutions to deliver services to citizens” according to Even when the current law provides for • a lack of capacity in the tax Country Representative Hugh Riddell, the use of international standards (such administration system, and low was launched in November 2016. as valuation methods based on the compliance levels among taxpayers; WTO Valuation Agreement, or goods Five years after the launch of the PFM classification based on the HS Code), • a need for tax law and tax Strategy, Customs Law No. 73 was the understanding of these standards administration reform, and a adopted on 16 July 2016, repealing the tends to be localized and country- development-oriented system of Customs Rules and Procedures Law specific. For example, the General Rules taxation; No. 91/96. This was a critical step in for Interpretation of the Harmonized Somaliland’s reform process. As WCO System may be used and interpreted • the difficulty in taxing the dominant Secretary General Dr Kunio Mikuriya selectively, with an eye to increasing pastoral and informal economy; said in 2005, “without an effective legal revenue rather than the strict application framework that guarantees transparent, of the HS rules and the provisions • the need to fight corruption, as the tax predictable and prompt Customs contained in national law. administration is widely perceived to procedures, the international private be corrupt. sector will find it highly cumbersome To remedy this situation, workshops to conduct business with, or invest in, on Customs law, rules of origin and Customs and revenue reform is also a country in a competitive business Customs valuation were held in 2015 and in line with the Somaliland National environment” (Customs Modernization 2016 for technical officers and managers Development Plan (2012-2016) which Handbook, p. 51). from the Ministry of Finance, as well focuses on reform of the Ministry as relevant stakeholders. The objective of Finance through strengthening The repealed law provided for the being to create a sound foundation for revenue policies and systems, reviewing classification of goods based on the Customs operations, based on simple, and updating all procedures related Convention on Nomenclature for the clear and predictable rules. These

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the Quality Control Commission, the Central Bank of Somaliland, and the Accountant General among others. This partnership approach is reflected in the concept of ‘iskaashi-shaqo/talo-wadaag’ (mutual respect and cooperation).

Conclusion Customs reform and trade facilitation in a post-conflict environment like Somaliland has its special challenges, but as we have seen, efforts are being made to address these challenges comprehensively through strategic and policy interventions, as well as through From left to right at the Berbera Port Customs Office: Creck Buyonge Mirito (Adam Smith implementation at the operational level. International), Idiris Dirie (Deputy Chair of the Customs Reform and Modernization Committee), Mohammed Gurhan (Berbera Customs Manager), Yusuf Abdi (Adam Smith International), Nevertheless, it will take time to Abdilahi Omaar (Deputy Director of Customs and Chair of the Customs Reform and enhance the capacity of the country to Modernization Committee), and Dr Jennifer Clarke (Adam Smith International). operate a modern Customs and revenue administration with adequate structures, workshops were held at three locations, structures, and several have been including the necessary human and namely Berbera, Burco and Borama. established: financial resources. On the positive side though, the support of development There is also a need to enhance • a PFM Coordination Unit; partners has certainly provided the strategic and operational planning needed impetus for Customs and capacity in the Ministry of Finance, • a Revenue Reform Steering Committee revenue reform and modernization, but in the envisaged SLRA, and, (RSC) chaired by the Minister for more needs to be done. Somaliland is the more specifically, in the Customs Finance, which meets monthly, and definitely on the right track! Department. In this regard, a Tax which includes representatives of Policy Unit (TPU) has been established DFID and the implementing partner, More information and staffed, under the Strengthening the Director General in the Ministry [email protected] Revenue Policy and Administration in of Finance, the PFM Coordinator, and Somaliland Project (2015/16), funded Directors from the Inland Revenue, by the Department for International Customs and Planning Departments; Development (DFID) in the United Kingdom (UK). • a Revenue Technical Working About the author Group (RTWG), which meets weekly Technical assistance delivered under to monitor project progress and Creck Buyonge Mirito is the the DFID-funded project includes address any bottlenecks that may be CEO and Principal Consultant of development and training in the encountered; Customs & International Trade use of a revenue forecasting model. Associates (CITA) Ltd., which is A comprehensive national strategy • a Customs Reform and Modernization based in Nairobi, Kenya. CITA for a modern Customs and revenue Committee (CRMC), at departmental engages in training, research administration has also been developed, level, has been established as the focal and consultancy on Customs, validated and adopted. At a workshop point for the identification of the international trade, trade in October 2015, Customs managers needs and reforms in the Department. facilitation and border management adopted the following principles issues. From September 2015 to for a modern Somaliland Customs Without adequate cooperation, December 2016, Mr Mirito worked administration: integrity (sharaf/ communication and partnerships with as a Customs Policy and Training hufnaan); fairness (daacadnimo); external stakeholders in the public and Expert in the “Strengthening transparency (daah-furnaan); mutual private sector, Customs reforms can Revenue Policy & Administration respect and cooperation (iskaashi-shaqo/ easily encounter conflict and lose steam. in Somaliland Project,” which was talo-wadaag); and professionalism Training and sensitization provided funded by the UK’s Department (aqoon-xirfadeed). under the DFID-funded project has, for International Development therefore, included representatives of the and implemented by Adam Smith In addition, successful reform requires Ministry of Commerce and Industry, the International. The views expressed appropriate project management Berbera Port Authority, the Somaliland in this article are his own. Chamber of Commerce & Industry,

61 PANORAMA

The eTIR pilot project, an ongoing success

By Daniel Kern, system, with Customs administrations the possibility to undertake multiple INTERNATIONAL ROAD TRANSPORT UNION (IRU) and the private sector pushing to loadings and unloadings, and to amend and André Sceia, UNITED NATIONS ECONOMIC COMMISSION FOR computerize large parts of the TIR declarations when additional loading or EUROPE (UNECE) procedure. Since 2003, TIR Contracting unloading are not specified at the start Parties have been working on the of the transport procedure. OVER SEVERAL DECADES, the 1975 Customs “eTIR” project, aimed at achieving a Convention on the International paperless system. In July 2015, TIR Throughout the eTIR pilot project, Transport of Goods under Cover of TIR Contracting Parties reconfirmed stakeholders use dedicated, secure web- Carnets (TIR Convention) has proven their commitment to this end by based applications and web services to be one of the most successful and adopting the Joint Statement on the to exchange information. National efficient instruments for the facilitation computerization of the TIR procedure. associations use the “TIR Association of international transport and goods In March 2015, the IRU and UNECE Portal” to issue electronic guarantees in transit, helping to increase trade, also started to actively collaborate on to transport operators, while transport boost economic growth, and make computerizing the TIR, and in October, operators use the “TIR Holder communities stronger. The world’s Customs administrations and national Portal” to order e-guarantees and to only tried and tested global Customs associations of the Islamic Republic of submit pre-declarations to Customs transit system – it is the easiest, safest Iran and Turkey volunteered to work authorities. TIR data is sent from and most reliable way to move goods with the IRU and UNECE on the launch Customs administrations’ information across international borders, saving time of the eTIR pilot project. technology (IT) systems to the IRU and and money for transport operators and is instantly and automatically replicated Customs authorities. A resounding success to the eTIR international system, hosted The initiative has been a resounding by the UNECE. The TIR system is administered by its success, introducing the incontrovertible Contracting Parties under the auspices benefits of going digital (see WCO Both the IRU and UNECE’s systems of the United Nations Economic Magazine, February 2016 issue, page offer secure web services to Customs Commission for Europe (UNECE), 21). The advantages include less data administrations to verify the validity of and is governed by the provisions of entry work, ease of implementation, a given e-guarantee, as well as to obtain the TIR Convention. It constitutes a and advance risk assessment. The all data related to a transport procedure public-private partnership between eTIR replaces the paper TIR Carnet, covered by an e-guarantee. In order the Contracting Parties and the which traditionally serves as a Customs to implement the eTIR pilot project, international guarantee chain, which declaration, and accompanies the the Iranian and Turkish Customs is managed by the International Road driver and cargo along the itinerary. administrations made only minimal Transport Union (IRU) – the world’s Ensuring that Customs officers receive adjustments to their IT systems, as road transport organization – and cargo information electronically eTIR is designed to link into the existing national associations. It is currently before the cargo arrives, the eTIR architecture. in operation in 58 countries, covering makes international freight transport the whole of Europe and extending faster, more efficient, and more secure, It is also important to note that the eTIR to North Africa, the Middle East and contributing to increasing trade and relies on the principles contained in the Central Asia. In July 2016, China became boosting economic growth. WCO SAFE Framework of Standards to the 70th Contracting Party to the TIR Secure and Facilitate Global Trade, and Convention, marking an important In August 2016, all parties, therefore, makes use of the WCO Data Model. The new milestone for its ongoing global decided to launch phase two of this eTIR provides all stakeholders with real- expansion. very important project. The next step time access to relevant information, thus involves not only additional Customs providing additional security and risk For some time, momentum has been offices and transport companies, but management benefits to all stakeholders, building towards computerizing the also adds new functionalities, such as while at the same time accelerating

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In the wider regional context, the success of the eTIR pilot project has also sparked enthusiasm and curiosity among governments, which are now interested in launching additional eTIR pilot projects. Turkey and Ukraine have recently recognized the benefits of going digital, and are planning a new eTIR project along an inter-modal trade corridor that crosses the Black Sea.

Customs procedures and significantly Republic of Iran, Kazakhstan, the public companies carrying passengers reducing costs. Kyrgyz Republic, Pakistan, Tajikistan, and goods to nearly 50 countries in Turkey, Turkmenistan, and Uzbekistan. Europe, the Middle East, and Asia. In To date, all parties involved in the The eTIR was hailed as an efficient tool, the Asia and Pacific region, various pilot project have shown a high level and a significant way forward for the countries have also indicated their of commitment, enthusiasm, and economic integration of the region. interest in actively participating in the satisfaction. There is much anticipation Consequently, the ECO members have implementation of the eTIR system for the presentation of the final results expressed strong support for the full in order to further improve transit to the TIR Administrative Committee, computerization of the TIR, and called procedures. comprising all TIR Contracting Parties, on TIR Contracting Parties, UNECE which will be the next milestone to move and the IRU to continue expanding the Direct economic benefits and next the eTIR agenda forward. geographical coverage of the eTIR to all steps ECO countries. The implementation of a paperless transit In parallel with ongoing efforts to system, such as the eTIR, provides direct develop the legal provisions for the In the wider regional context, the economic benefits to the countries eTIR, which will either be included in success of the eTIR pilot project has involved, with increased efficiency and an optional annex to the existing TIR also sparked enthusiasm and curiosity improved security of transit operations Convention or in a separate protocol to among governments, which are now being the main advantages. By the Convention, the eTIR pilot project interested in launching additional eTIR streamlining transit procedures, waiting between Iran and Turkey is a crucial pilot projects. Turkey and Ukraine times and transport costs are significantly stepping stone in the development have recently recognized the benefits reduced, ensuring substantial savings for of a fully computerized global TIR of going digital, and are planning a international trade. procedure. new eTIR project along an inter-modal trade corridor that crosses the Black Sea, The second step of the eTIR pilot project Strong endorsement and interest with the objective of providing a secure between Iran and Turkey continues to With proven far-reaching benefits, and fast solution for the transport of successfully demonstrate the feasibility the eTIR pilot project has received containers under cover of a TIR Carnet. of a paperless TIR procedure. Political strong endorsement and interest As part of a wider agreement on Customs engagement, mutual trust, and a high from a growing group of countries, and trade between the two countries, the level of cooperation among all TIR notably through the Economic project proposes to reinforce bilateral Contracting Parties are crucial for Cooperation Organization (ECO), cooperation, and will bring new benefits achieving the full computerization an intergovernmental organization, to Customs, transport operators, and of the system. With this in mind and whose Secretariat is based in Tehran. national associations. considering the interest from further In October 2016, the ECO approved the countries and regional organizations, report of its sub-committee, praising the One of the keys to facilitate intermodal such as the ECO, UNECE and the successful implementation of the eTIR transport IRU are continuing their efforts, in pilot project between Iran and Turkey, in The eTIR is certainly one of the keys to collaboration with interested parties, cooperation with UNECE and the IRU. further facilitate intermodal transport, to fully computerize the TIR, and making it more efficient and secure, to roll-out the technology to all TIR The ECO also acknowledged that the and facilitating trade growth in the Contracting Parties. eTIR will further facilitate trade and region. This is an important marker for transport among all TIR Contracting the Association of International Road More information Parties, particularly in the ECO Carriers of Ukraine (AsMAP UA), an [email protected] region, comprising the Islamic State of IRU member representing a strong [email protected] Afghanistan, Azerbaijan, the Islamic community of over 3000 private and

63 PANORAMA

Gambia Revenue Authority modernizes its human resource management approach

By Si Mohamed El Hail, WEST AFRICAN CUSTOMS ADMINISTRATIONS MODERNIZATION PROJECT LEAD HRM EXPERT

In cooperation with the WCO, the Gambia Revenue Authority has embarked on a journey to modernize its human resource management capacity, which will enable it to become one of the country’s best employers, as well as a better service delivery institution.

CREATED IN 2004 through a merger of the Central Revenue and Customs & Excise Departments, the Gambia Revenue Authority (GRA) employs approximately 590 staff members, led by a Commissioner General. Recognizing the importance of developing the skills and competencies of its staff, in an effort to further their effectiveness, the GRA top management team decided to collaborate with the WCO back in 2013 in order to develop the Authority’s human resource management (HRM) capacity.

The WCO provides this support as part of its West African Customs Administrations Modernization (WACAM) Project, funded by the Swedish Government and designed to support modernization in West African Customs administrations in the fields of strategic management, HRM, and stakeholder engagement. Support for the WACAM Project is provided by way of a three-pronged approach: © [email protected]©

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Gambia Revenue Authority modernizes The HRM competency-based approach applied to the Customs context is a new paradigm that its human resource management approach places staff at the centre of an administration’s concerns, and makes an HRM Unit a strategic By Si Mohamed El Hail, WEST AFRICAN CUSTOMS ADMINISTRATIONS MODERNIZATION PROJECT LEAD HRM EXPERT partner, indispensable to the achievement of organizational goals.

1. Delivery of regional workshops to Based on the needs assessment, priorities Both management and staff raise awareness on best practices were set and a results framework benefit from this approach. This and tools in the three above- developed. The framework represents implies the establishment of a mentioned areas; the underlying logic that explains how transparent blueprint for staff the development objectives of the project planning, recruitment processes, 2. Provision of tailored national are to be achieved. job expectations, training and support; development, performance From 2013 to 2015, the following HR management and rotation, as well 3. Fostering regional cooperation tools were developed and implemented: as career management. through the development of a pool of regional experts who, • a HRM strategy which includes a Personal judgment and subjectivity having benefited from tailored strategic HR dashboard that provides in the management of staff are national support can assist other visual representation of the metrics minimized, creating a healthy and administrations in building that HR project managers need to keep positive work environment, as well capacities. track of, or judge, the performance of as facilitating a stronger relationship the strategy; between employees and managers. It is during a regional workshop which took place in February 2013 in Banjul • a HRM database allowing access to all (Gambia) that GRA officials and the staff information; WACAM project team first met and discussed best practices, processes, • a competency framework defining tools and methodologies in areas such the knowledge, skills, and attributes Since 2016, the project has focused as staff planning, recruitment, and needed for people in the organization; on supporting the GRA with the training and staff motivation. Later on, “institutionalization” of the new HR the GRA officially made a request to • a revised recruitment policy, and processes to ensure that modernization the WCO Secretariat for support. The associated manual of procedures; efforts undertaken in this field have a national support officially begun in the sustainable and positive impact. The last quarter of 2013. • a training package on competency- institutionalization project was allocated based recruitment, which is a process to the HRM Unit and to relevant staff Needs assessment and first results of recruitment based on the ability of members. In order to respond appropriately to the candidates to provide anecdotes, or GRA’s request, WCO experts conducted short accounts, demonstrating their Establishing the HRM Unit as a an HR diagnostic using the WCO People technical skills, work experience, strategic partner Diagnostic Tool – the first time that this past performance, qualifications, It is widely agreed that people are an WCO tool had been used in the field. training and reactions (behavioural organization’s most important asset, and competencies) to incidents and events a source of competitive advantage – by Based on the diagnostic results, WCO in their professional life, which can be no means a radically new concept. experts and GRA officials discussed in used as evidence that a candidate has great detail the Authority’s needs in the a given competency; By developing a new set of HR tools and field of HRM, and agreed that the GRA’s procedures based on this approach, and HRM Unit needed to build capacity, in • updated job descriptions which were by following the WCO’s Framework of order to: drafted by a working group that Principles and Practices on Customs included representatives from all Professionalism, the HRM Unit was • act as a strategic partner of the GRA; technical, operational and support able to become a ‘recommendation • improve the quality of the GRA services; force’ for top management, to enhance recruitment process, and implement its credibility and to ensure that it competency-based techniques; • a job catalogue, and a dictionary of evolves into a strategic partner of the • enhance the training and competency competencies. administration, notably in the design of development provided to GRA staff. its 2015-2018 strategic plan.

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To ensure that training and competency development activities are cost-effective, Moreover, the HRM Unit also started a preparing staff for the changes to the goal-orientated and dialogue with top managers to convince HR policy, a GRA HRM Working them of the benefits of developing Group was established, representative productive, as well as business strategies that make the best of all technical, operational and support enabling staff to achieve a use of the core competencies of the services. The individual members of this organization’s staff. group act as “change agents” in their high level of competence respective departments. in an efficient manner, the Improving the recruitment process A competency-based recruitment In order to gain the support of all staff, GRA’s HRM and Training relies on the use of assessment tools the GRA, with the support of WCO Units had to abandon the that measure the competencies of experts, conducted information and the proficiency level of a candidate communication sessions around the traditional approach to comparatively with the job requirement new approach at the national level. training, which consisted as mentioned in the job description. During these sessions, the benefits and challenges of this new approach for of training staff without To improve its processes, the HRM Unit both the Authority and the staff were worrying about the return on undertook a competency assessment of discussed. all the GRA staff. Based on the results investment. and on the identified needs, they Feedback from all participants was developed a staffing plan. positive. An officer working in the port said, “With the adoption of this new Training and competency development approach and the new tools that have To ensure that training and competency been developed, I have a clearer vision development activities are cost-effective, of what I need to do at my workstation, goal-orientated and productive, as well how to do it, and what I need to have as enabling staff to achieve a high level of to do it.’’ Another employee working in competence in an efficient manner, the the tax department explained that, “Now GRA’s HRM and Training Units had that I have a job description based on to abandon the traditional approach to competence, I have a clear vision of my training, which consisted of training career plan.’’ staff without worrying about the return on investment. Besides garnering support from the staff, the HRM Unit also reached With the WACAM experts’ support, the out to the finance and civil service responsibilities of all the actors involved ministries. During meetings with in the training process were clarified. their representatives, the impact of In addition, based on the results of the new approach on an organization’s the competency assessment exercise, performance was highlighted. The the HRM Unit was able to not only Ministry of the Civil Service even scientifically identify competency gaps, decided to promote this approach as a but also the most efficient way to fill in national best practice to be adopted by these gaps. all State departments.

Institutionalizing the changes The GRA also showcased its HRM In order to institutionalize the changes progress to the Ministry of Finance and made to HRM, it was deemed necessary the National Personnel Management to create a sense of urgency at the top Office of the Gambia. Both institutions and senior management levels, as well as have requested that the GRA impart its raise awareness amongst the GRA staff new HRM competencies and lessons on the added value of the new approach learned with them in the near future. which gives prominence to the concept of competency. More information [email protected] Therefore, in order to test the quality of HRM competency tools and start

66 EVENTS WCO news N° 82 February 2017

Calendar of Events

March 1 - 3 SAFE Working Group, 17th Meeting 2 - 3 Regional Offices for Capacity Building/Regional Training Centres, th12 Meeting 6 - 7 Agreement on Trade Facilitation Working Group, 7th Meeting 7 - 9 Capacity Building Committee, 8th Session 9 - 10 Integrity Sub-Committee, 16th Session 13 - 14 Harmonized System Committee Working Party 15 - 24 Harmonized System Committee, 59th Session 27 - 31 Enforcement Committee, 36th Session

April 3 - 6 Permanent Technical Committee, 215th/216th Sessions 6 - 7 Revised Kyoto Convention Management Committee, 17th meeting 6 - 7 ATA/Istanbul Administrative Committee 10 - 13 Finance Committee, 100th Session 24 - 25 Global Information and Intelligence Strategy (GIIS) Project Group, 13th Meeting

May 3 -4 Global Origin Conference, Addis Ababa (Ethiopia) 3 - 5 Technical Experts Group on Non-Intrusive Inspection (TEG NII), 2nd Meeting 8 - 12 Technical Committee on Customs Valuation, 44th Session 15 - 17 Data Model Project Team 18 -19 Information Management Sub-Committee (IMSC), 72nd Meeting 22 - 23 Global RILO Meeting , 22nd Meeting 29 - 2 June Harmonized System Review Sub-Committee, 52nd Session

June 7 - 9 2017 IT Conference & Exhibition, Tbilisi (Georgia) 19 - 28 Knowledge Academy for Customs and Trade

July 3 - 5 Policy Commission, 77th Session 6 - 8 Council, 129th/130th Sessions 10 - 11 Global Transit Conference

It should be noted that WCO meetings are mentioned for information purposes and are not all open to the public. Unless otherwise indicated, all meetings are held in Brussels. Please note that these dates are indicative only and may be subject to change. The WCO meetings schedule is regularly updated on the WCO website.

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