Stopping Illicit Trade

June 2016 | n° 80 | www.wcoomd.org WCO news

World Customs Organization picard 2016 EN copy.pdf 1 18/05/2016 12:30:31

PICARD MANILA 2016

CMY

K Want to contribute to research on Customs, borders, and trade?

Interested in the latest analysis from leading academics and policymakers?

Join us at the

WCO’S 11th ANNUAL PICARD CONFERENCE in collaboration with the Philippine Bureau of Customs

and make your voice heard

27-29 September 2016 Manila, Philippines See you there!

Photo courtesy of Serbian Customs / Design by Myriam Boyer picard 2016 EN copy.pdf 1 18/05/2016 12:30:31

WCO news N° 80 June 2016

PICARD MANILA 2016 Content

04 Flash info

06 Dossier

36 Focus 16 26 42 Point of view Switzerland addresses the traffic in cultural Illegal fishing, another 48 Panorama goods form of wildlife crime

63 Events

C 32 44

M Tracking the illicit traffic Y Quantifying the illicit in weapons trade in tobacco CM

CY DOSSIER: ILLICIT TRADE PANORAMA FOCUS CMY

K Want to contribute to research on Customs, borders, and trade? 06 The Secretary General gives an 48 Dubai Customs’ Journey 36 The power of pollen: overview of WCO enforcement-related towards a ‘Customs of the how CBP is at the forefront Interested in the latest analysis from leading academics and policymakers? initiatives future’ of using pollen as a new forensic tool 10 Review of the COPES Project and 54 Publishing TRS results in nCEN application the public domain: Poland’s positive experience 12 Malaysia destroys huge ivory trove 59 Customs-Police Join us at the 20 Hong Kong Customs: equipped to tackle cooperation – the Canadian cybercrime experience 22 Highlights on the trade in non- WCO’S 11th ANNUAL PICARD CONFERENCE 61 Overview of Australian Border authorized and counterfeit pesticides in collaboration with the Philippine Bureau of Customs Force’s counter terrorism 34 Automatic detection tools: from capabilities and make your voice heard concept to reality

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 Writer / Editor organizations, non-governmental organizations, the addressed to [email protected]. 27-29 September 2016 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 Manila, Philippines Editorial Assistant do not necessarily reflect the official views of the World sincere thanks to all who contributed to this publication. Sylvie Degryse Publisher Customs Organization. Contributions in English or French World Customs Organization are welcome but should be submitted no later than 15 August Illustrations: Our thanks also extend to all who provided Head, Research and Communications Rue du Marché, 30 2016 for consideration. The WCO reserves the right to photos, logos and drawings to illustrate this issue. See you there! Robert Ireland B-1210 Brussels publish, not to publish, or to edit articles to ensure their Belgium conformity with the magazine’s editorial policy and style. Photo cover: Jean-Luc Fabre / Biosphotos Online subscriptions The WCO Communications Service is available to answer http://www.wcoomd.org/en/media/wco- Tel.: +32 (0)2 209 94 41 all requests for subscriptions, submission of contributions, Design: www.inextremis.be - mp5369 Register at: http://tinyurl.com/picard2016 news-magazine/subscriptions.aspx Fax: +32 (0)2 209 92 62 and any other enquiries relating to WCO News. Please email [email protected] [email protected]. www.wcoomd.org

Photo courtesy of Serbian Customs / Design by Myriam Boyer 3 FLASH INFO

Trans-Pacific Partnership Agreement added to WCO Comparative Study on Preferential Rules of Origin

overall understanding of preferential rules of origin is the main aim of the WCO Canada Comparative Study.

USA Japan The section of the WCO Comparative Study dealing with the TPP explains and analyses some special features contained Viet Nam Mexico in the Agreement, such as full cumula- tion, provisions on regional value content, Malaysia including the new ‘focused value method,’ Brunei remanufactured goods, the provision on Singapore the updating of the rules of origin to reflect Peru amendments to the Harmonized System (HS), as well as the specific chapter on tex- Australia tile and apparel goods.

Chile Recurrent themes apply to virtually all New Zealand existing models on rules of origin legislation. The comparison between the different agreements contained in the WCO Comparative Study is made at a topic level – certification of origin, advance rulings, TPP Market Snapshot concept of originating goods or cumula- tion, for example.

Gross Domestic Population TPP % of TPP % of world TPP % of Any questions, comments or enquiries on Product (GDP) 806 million world GDP population world trade the WCO Comparative Study should be 28 trillion $ 36.2% 11.2% 25.6% addressed to the WCO Secretariat’s Origin Source: Australian Department of Foreign Affairs and Trade Sub-Directorate.

THE TRANS-PACIFIC PARTNERSHIP (TPP) The WCO issued a first analysis of the More information Agreement was signed on 4 February 2016. main features of the origin provisions [email protected] It aims to establish a more seamless trade contained in the TPP Agreement back in and investment environment through December 2015 (see http://www.wcoomd. commonly-agreed rules and the promo- org/en/topics/origin/activities-and-pro- Latest accessions tion of transparent laws and regulations, grammes/preferential-origin.aspx). It is providing greater certainty for businesses, now about to publish a detailed analysis to WCO instruments reducing costs and red tape, and facili- of the TPP rules of origin and a compari- tating participation in regional supply son between the new agreement and exis- Revised Kyoto Convention chains. ting origin models as part of the WCO Comparative Study on Preferential Rules Iceland The TPP is the first of the so-called ‘mega- of Origin. This new section of the Study Date of accession: 8 October 2015 regional’ free trade agreements (FTAs), will be available in July 2016. 103rd Contracting Party a term which refers to deep integration between countries, or regions with a Rules of origin are important legal instru- Harmonized System Convention major share of world trade and foreign ments for the application of preferential direct investment (FDI). The 12 Parties trade agreements. But, with the prolifera- Oman to the Agreement are Australia, Brunei tion of these agreements comes a plethora Date of accession: 12 May 2016 Darussalam, Canada, Chile, Japan, of divergent and often overlapping prefe- 154th Contracting Party Mexico, Malaysia, New Zealand, Peru, rential rules of origin, a situation which Singapore, United States of America, and presents challenges, both to the business More information Viet Nam. community and the authorities implemen- [email protected] ting origin legislation. Thus, enhancing

4 WCO news N° 80 June 2016

WCO releases new instrument on transfer pricing and Customs valuation

AN IMPORTANT NEW instrument was fina- ICO imports the relays and does not pur- In view of the strong interest in the busi- lized at the April 2016 session of the chase any products from sellers unrelated ness community, the WCO has made WCO Technical Committee on Customs to its parent company. Likewise, XCO does Case Study 14.1 available via its website. It Valuation (TCCV). The instrument is Case not sell relays or similar goods to unrelated will be published in the WCO Valuation Study 14.1, illustrating a specific scenario buyers. This then led to the question: how Compendium, subject to approval by the where Customs took into account trans- can one estimate whether ICO and XCO WCO Council, in July 2016. Further infor- fer pricing information in the course were buying and selling at a ‘real’ price mation on this topic can be found in the of verifying the Customs value, which which was not influenced by the fact that WCO Guide to Customs Valuation and should benefit Customs authorities and XCO and ICO are related? Transfer Pricing, which is also available business alike. Transfer pricing refers on the WCO website. to the price for goods and services sold The answer is found in the case study. between controlled or related legal enti- By using the company’s transfer pricing The Guide, designed to be accessible to ties. Multinational companies determine information based on the transactional both experts and non-experts in both a transfer price in order to allocate profits net margin method – that is, by compa- fields, sets out the relevant methodology among their different parts, which in turn ring ICO’s operating margin with those for both regimes, and explores the linkages determines how much tax it pays and in of similar, but unrelated companies doing and the possibilities for Customs to use which country. similar business in the country. On the transfer pricing information in examining basis of this information, Customs accep- related party transactions. Most tax administrations require com- ted that the sale price in question had not panies to calculate the price following been influenced by the relationship. The Both the WCO and the OECD advocate ‘the arm’s-length principle.’ Broadly, this conclusion notes that the use of a transfer closer cooperation between Customs and means that operations should be priced by pricing study for examining the circums- tax administrations in order to streng- comparing them with similar operations tances surrounding a sale must be consi- then the ability of governments to iden- carried out on a commercial basis at market dered on a case-by-case basis. tify the correct taxes and duties legally prices, as if the parties were independent due, and to enhance trade facilitation for entities – at arm’s length from one another. WCO Secretary General Kunio Mikuriya, the compliant business sector. A key mes- This can be a lot more complicated than in congratulating the TCCV on the work sage is that Customs and tax authorities it sounds, leading to the Organisation for that it had recently done in the transfer are encouraged to work together, and to Economic Co-operation and Development pricing area, said: “This new instrument exchange information and knowledge in (OECD) producing ‘Transfer Pricing is an important step for the WCO and this area. Guidelines for Multinational Enterprises demonstrates its relevance by providing and Tax Administrations’ on the applica- guidance on the management of Customs Similarly, businesses are encouraged to tion of the arm’s length principle. valuation in an increasingly complex trade take into account Customs’ needs when landscape, whilst maintaining consistency preparing documentation, such as trans- Transfer prices are also of interest to and strengthening cooperation with tax fer pricing studies and advance pricing Customs when verifying the Customs authorities.” agreements (an ahead-of-time agreement value and, more specifically, that the between a taxpayer and a tax authority on price for transactions of imported goods Writing in an OECD blogpost, Pascal an appropriate transfer pricing methodo- has not been influenced by the relationship Saint-Amans, the Director of the OECD logy for a set of transactions at issue over between the buyer and seller, as stipulated Centre for Tax Policy and Administration a fixed period of time). in the Valuation Agreement of the World stated: “This will be increasingly impor- Trade Organization (WTO). A previous tant in a global environment. As a result The WCO would like to thank the TCCV instrument – Commentary 23.1 of the OECD’s Base Erosion and Profit OECD and the International Chamber of – supported the idea that business docu- Shifting (BEPS) project, more and more Commerce (ICC) for their ongoing assis- mentation developed for transfer pricing countries are applying transfer pricing tance in this important work programme. purposes may contain useful information rules, and those rules are becoming stron- for Customs. ger and more sophisticated, in particular More information with regards to the treatment of risks www.wcoomd.org In the case study, XCO, a manufacturer in and intangibles, rather than just tangible country X, sells relays to its wholly-owned goods.” subsidiary, ICO, a distributor in country Y.

5 DOSSIER

Some thoughts on illicit trade

By Kunio Mikuriya, SECRETARY GENERAL, WORLD CUSTOMS ORGANIZATION

6 WCO news N° 80 June 2016

The Punta Cana Resolution, which the WCO released in December 2015, encourages Customs authorities to include security as part of their mandate and functions, where appro priate, by incorporating it into their strategic plans and disseminating the goal to the front lines.

MUCH HAS BEEN said about illicit trade and To support WCO Members in building or over the years many articles touching on enhancing their border security capacity, this subject have been published in this we recently launched the Border Security magazine covering, amongst others, drugs, Initiative (BSI). WCO Members, following tobacco, ivory, counterfeiting, cash and a specific WCO or United Nations (UN) dual-use goods. In this edition we put the border security-related assessment mission, spotlight on some lesser known illicit trade can request technical assistance from the issues such as cultural goods, small arms, BSI in developing tangible plans to support fisheries crime, and illicit pesticides, in an the implementation of relevant security endeavour to share pragmatic ideas and ways measures. that can help us to devise strategies in which to confront these existing menaces. Under the ‘Strategic Trade Controls Enforcement (STCE) project,’ we continued In this article I will be taking stock of what our work on strategic goods, which are defi- we have achieved together in the past few ned as weapons of mass destruction (WMD), months, guided by the WCO Council, conventional weapons and related items Policy Commission and Enforcement involved in the development, production Committee. Circumstances that were out of or use of such weapons and their delivery our control also impacted on our work, such systems. In this regard we produced a curri- as the recent terrorist attacks in Belgium, culum and modules for training purposes, France, Lebanon, Mali, Tunisia, Turkey and and also oversaw a global law enforcement other countries. This has led to intensively operation in 2014. increased discussions on global security and how the Customs community can enhance Besides detecting and preventing illicit traf- its response to these threats to international ficking of strategic goods in international trade and peace. supply chains, the operation helped us to evaluate standard operating procedures and Building operational capacity work practices in this area, and allowed us One of the main results of these discussions to tailor our capacity building and technical was the Punta Cana Resolution which the assistance activities to address any outlined WCO released in December 2015, empha- gaps. In particular, we started training front- sizing the key role that Customs adminis- line officers, providing them with the requi- trations play in tackling illicit cross-border red information and know-how on how to movements of goods that could ultimately detect dual-use goods. Future trainers were support terrorism and terrorist financing. also targeted in order to strengthen the trai- In this resolution, we encourage Customs ning capacities of our human resources. authorities to include security as part of their mandate and functions, where appropriate, Under Programme Global Shield (PGS) – an by incorporating it into their strategic plans initiative launched in 2010 to monitor the and disseminating the goal to the front lines. trade in 14 chemicals that could be diverted for use in the illegal manufacture of impro- vised explosive devices (IEDs) –officers are

7 © TONY KARUMBA / AFP DOSSIER

trained in the detection and handling of joint programme on air cargo control has risk analysis capacities. One of them is the these chemicals, and certain countries were been established, and specialized units to nCEN which gives Customs administra- provided with presumptive field test kits for target suspicious shipments in this transport tions the ability to collect, store, analyse and frontline officers, as well as electronic che- segment are already operational in Amman, disseminate law enforcement data effecti- mical detection devices. Jordan, and in Karachi, Pakistan, with more vely at the national level, with the additional to come. possibility to exchange this information at PGS also increases cooperation among regional and/or international levels. I will countries as well as reaching out to private Launched in 2010 to build drug enforcement not go too much into details as a specific stakeholders in the chemical industry in capacities at international airports, Project article on the application’s new features is order to increase awareness on the dual-use AIRCOP has been responsible for the set- available for readers in this edition of the capability of the precursor chemicals they ting up of Joint Airport Interdiction Task magazine, but I would encourage all WCO manufactured, distributed or retailed. PGS Forces (JAITFs) in 16 countries, namely Members to look into implementing nCEN is a superb programme, impacting positi- Barbados, Benin, Cameroon, Cape Verde, in their administrations. vely on saving lives. Côte d’Ivoire, the Dominican Republic, Gambia, Ghana, Guinea Bissau, Jamaica, The WCO Cargo Targeting System (WCO In the security area, other streams of Mali, Niger, Nigeria, Panama, Senegal, and CTS) is another risk management tool. It work relate to small arms and light wea- Togo. In addition, four other countries, two enables user countries to capture advance pons, passenger controls (the utilization of in Africa (Ethiopia and Mozambique) and electronic cargo manifest information, advance passenger information (API) and two in South America (El Salvador and and to perform risk assessment, profiling passenger name record (PNR) data), and the Peru), have recently been evaluated with a and targeting. To date, the WCO CTS has prevention of terrorist financing. Regarding view to the setting up of JAITFs. In total, 19 been deployed in six countries, namely the passenger controls more specifically, gui- JAITFs are currently operational. Bahamas, Georgia, Jamaica, the Maldives, delines on the use of API/PNR have been Panama, and Sri Lanka. Further deploy- released, and workshops are planned across Inter-agency cooperation is at the heart of ments are planned in the coming months in the globe to test these guidelines as well as these initiatives. Among the agencies that Chile, Kenya, the Philippines, and Ukraine. collect best practices from participating Customs must cooperate with is the Police. In addition, development of the WCO CTS’ countries. Key components of such cooperation have air cargo capability is nearing completion been discussed widely at different meetings and pilots are planned for later this year. We continue to offer training on risk over the last few months. This has led to management in general, with specific agreement that broad-ranging Customs- Information sharing programmes focusing on drugs, wildlife, Police cooperation is a precondition for Back in December 2015 we opened our intellectual property rights, etc. The WCO better coordinated border management ‘Information and Intelligence Centre (I2C)’ INAMA Project, for example, aims at (CBM) and that as the two agencies often which acts as an operational contact point strengthening the enforcement capacity of share overlapping mandates, there is no for matters related to the WCO’s different targeted Customs administrations in Sub- alternative but to cooperate in these areas. enforcement programmes. The I2C also Saharan Africa, while focusing on the ille- produces intelligence bulletins and facili- gal trade in wildlife, particularly endange- But cooperation between agencies at the tates the sharing of information in general. red species identified in the Convention on national and international level is not In addition, the I2C team manages the IRIS International Trade in Endangered Species always straightforward. In some fragile platform, an information tool that collects of Wild Fauna and Flora (CITES). and conflict-affected regions especially, the all Customs-related news together. To date, situation at the border is complex with no the IRIS platform now has over 8,000 users. Multi-agency units easy answers. On this subject, I invite you Two projects whose core aims include the to read the paper written by two resear- Communicating information is one thing, development of enforcement capacities chers working on Customs-related issues, but we also need to obtain more sophisti- at specific ports and airports through the Thomas Cantens, from the WCO, and Gaël cated knowledge on current smuggling and establishment of multi-agency teams are Raballand, from the World Bank, entitled ‘A cross-border criminal activities to better still underway and gaining momentum: the very long border, difficult to cope with: the target evolving and emerging risks. The UN Office on Drugs and Crime (UNODC)- North of Mali and its borders’ (Une frontière quantification and mapping of illicit mar- WCO Container Control Programme très très longue, un peu difficile à vivre’ : le kets is critical, as this will enable a fuller (CCP); and Project AIRCOP. nord du Mali et ses frontières) – see www. understanding of the connections between frstrategie.org/publications/recherches- different forms of trafficking. Here I would Port Control Units (PCUs) established documents/web/documents/2016/201603. like to highlight the importance of the WCO under the CCP are, at present, fully opera- pdf. Customs Enforcement Network (CEN), the tional in 55 ports in 30 countries, and fun- tool we developed to record Customs sei- ding for the integration of another 24 WCO Information management zures worldwide, allowing the latest trends Members into the CCP is now available. Several WCO applications have been deve- and patterns linked to illicit trade to be trac- Given the success of the CCP, a separate loped to enhance Customs’ data mining and ked and analysed.

8 WCO news N° 80 June 2016

The ‘consequence phase’ revise existing certificates, in line with the Not all Customs administrations have UN Educational, Scientific and Cultural investigative powers, but all of them should Organization (UNESCO)-WCO Model implement best practices and procedures Export Certificate. when dealing with a seizure, in order to facilitate the work of those in charge of the In this edition, Switzerland shares its expe- investigation, including the judge who will rience in the fight against the illicit trade in hear the case. cultural goods and more especially on the legislative changes it adopted recently, and the To provide guidance in this area, back in challenges posed by free ports and Customs 2012 the WCO produced a Compendium warehouses. Other topics that I mentioned of Customs Operational Practices for earlier are also addressed in the pages of Enforcement and Seizures (COPES) and this issue: Canada shares its experience in later secured funding for training with res- Customs-Police cooperation; and Australia pect to the Compendium’s critical content. provides information on its counter-terrorist A Project Manager was subsequently strategy. Fisheries crime, cybercrime, the traf- recruited in March 2015 for the implemen- ficking of weapons, illicit pesticides and the tation of these training activities. An article use of technology are also interesting reads in dedicated to the project is contained in this this edition of WCO News. edition. The quantification and Should you wish to know more or explore mapping of illicit markets is Today, the WCO Secretariat has difficul- ways in which you can collaborate in com- ties in keeping up with training requests, batting illicit trade, I invite you to consult critical, as this will enable which shows how relevant and successful the ‘more information’ section at the end of a fuller understanding of the project is. The COPES has even been articles. The contributing experts would, I recognized by other organizations that am quite sure, be more than happy to engage the connections between deal with Customs authorities, requesting with you. After all, the WCO is a unique different forms of trafficking. the deployment of training in areas of acti- forum for the global Customs community vity in which they are active. Of course, we to share experiences, and a valuable plat- Here I would like to highlight will need more donor funding to meet these form for WCO Members to access experts the importance of the WCO requests, thereby enabling us to continue that can support their needs, including the broadening out a complete education pro- provision of various forms of operational Customs Enforcement cess in terms of chain of custody. assistance around the scourge of illicit trade. Network (CEN), the tool Cultural objects We must continue to actively strengthen our we developed to record Cultural goods are the subject of a specific cooperation, coordination and communica- Customs seizures worldwide, draft recommendation, to be submitted to tion activities if we are to successfully com- this year’s WCO Council Sessions in July. bat illicit trade and our increasingly inter- allowing the latest trends and This initiative came about as a result of a connected global challenges. It is imperative patterns linked to illicit trade series of high-level meetings with the Heads that we collectively assist one another and of other international organizations having stand together, if we want to succeed in our to be tracked and analysed. a role in the protection of cultural heritage, efforts to help communities that we serve as well as expert level activities and coordi- to fully seize the benefits of open trade and nation efforts. I have no doubt that WCO achieve greater sustainable development and Members will approve, and more impor- enhanced security. tantly, apply it. I would urge WCO Members to actively The WCO remains fully committed to participate in the CEN. All Customs ser- Among other things, and besides calling working with its Members and its part vices should do their utmost to ensure that for more cooperation with relevant stake- ners around the world in accomplishing every seizure related to illicit trade, be it holders such as experts in the field and its goal of stopping illicit trade and other drug trafficking, tobacco smuggling or cultural institutions, the draft recommen- cross-border crimes that impact negatively the illegal trade in counterfeit goods, fake dation asks countries to conduct an ana- on society, including countries’ interna- medicines, precursor chemicals, stolen lysis aimed at identifying and closing the tional trade, economic growth and social artifacts, environmentally-sensitive goods gaps in current legislation and techniques development. and endangered wildlife, among others, is as a means of addressing this scourge. It inputted into the CEN and that the data also encourages Customs authorities to More information reported is of a high quality. introduce new ‘export certificates,’ or to www.wcoomd.org

9 DOSSIER © Australian Department of Immigration and Border Protection

Testing Customs enforcement practices: the ambitious agenda of the COPES Project

By the WCO Communications Service IN ADDITION TO the fact that not all Customs May 2012 in the WCO’s two working lan- administrations enjoy the same preroga- guages (English and French), and was sub- The ambitious goal tives and the same ability with respect to sequently updated in 2013 and translated enforcement, every country deals with into Arabic, Russian, Serbian and Spanish. envisaged by the creators infringements of the law using its own specific procedures. In other words, the proce- “Seizures and other enforcement measures of the WCO COPES dures and practices for investigating, iden- are everyday occurrences for all Customs tifying and prosecuting Customs offences administrations that require appropriate Project was to initiate a – whether criminal or civil – are laid down risk management and we regularly discuss exclusively in national legislation. these issues at various WCO meetings. dialogue reflecting on the So, it seemed appropriate that it would The aim of the WCO is not to advocate a be helpful to work, under the auspices of working methods used to particular means of enforcing legislation the WCO, on a document which would or managing seizures, but to present a combine relevant practical know-how combat fraud, from the range of methods and practices currently and examples, and thus help to improve used by various WCO Members (appli- our methods and strengthen our border identification of an offence cable to various legal systems), and to agency role,” said David Dolan, one of the encourage administrations to review the early driving forces behind the develop- to the storage of seized efficacy of their procedures and practices ment of the COPES Project. in terms of operational ease and the autho- assets, including reporting, rity vested in them by law. Dolan currently heads the Division for International Organizations and collecting and preserving The initial step was to compile a Agreements at the US Customs and Border ‘Compendium of Customs Operational Protection’s (CBP’s) Office of International evidence. Practices for Enforcement and Seizures,’ Affairs in Washington D.C., and was or COPES. This was first published in formerly CBP’s Customs Attaché at the

10 WCO news N° 80 June 2016 “The training module is for all administrations, regardless of their individual competencies. The goal is to open the vision of officers by recreating their environment within the context of a repressive supply chain, and that acquiring such a vision would also enable them to better value their work.”

U.S. Mission to the European Union in improvements could be relatively simple of training and its benefits to high-level Brussels, Belgium, responsible for, among to implement, like new accountability management dealing with training and others, engaging with the WCO and its practices (access log books, chain of cus- enforcement, in order to convince them Members on global Customs issues. tody forms, etc.) and developing new of the benefits of deploying the training procedures to safeguard seized assets, all programme by emphasizing the advan- An ambitious project the way to the other end of the spectrum, tages associated with it in the mid- to Whatever enforcement powers an admi- where Members might actively enhance long-term”, said Gilles Thomas, the WCO nistration may have, field officers are in their legal authorities and/or potentially COPES Project Coordinator. the front line when it comes to seizures receive new equipment from committed of goods, and their role is thus crucial donors to better employ their seizures and This interactive training course has a in determining whether investigations enforcement practices,” said Dolan. number of advantages. “It not only pro- and prosecutions are successful. In fact, vides participants with practical tools for it is vital to make them aware of the lin- Training seminars immediate use, but also an appropriate kage between a seizure, the collection In 2014, the WCO was able to secure fun- platform for discussion, in order to iden- of evidence, the investigation, and the ding for the continuation of the project tify methods commensurate with specific prosecution. and, in March 2015, it appointed a project local conditions,” continued Thomas. manager to develop new educational sup- When it comes to, for example, reve- port material, and oversee its promotion His view is that “the training module is nue fraud or a seizure of cash linked to and distribution to WCO Members. for all administrations, regardless of their drug trafficking, the official in charge of individual competencies,” adding that documenting the findings must collect Training modules were developed around “the goal is to open the vision of officers pertinent evidence, in accordance with the following topics: risk; storage and dis- by recreating their environment within the the prescribed format, and know how to posal of seized goods; sourcing of informa- context of a repressive supply chain, and document the evidence to assist future tion and sharing of intelligence; coordina- that acquiring such a vision would also investigations and prosecutions, and ulti- ted activities with other agencies; recording enable them to better value their work.” mately, convictions. Similarly, information and documentation of information; defini- included in the findings must be exploited tions and types of evidence; integrity and Two national workshops have been held in such a way as to feed future cases. traceability of evidence; practical interroga- to date: one in Peru, the other in Senegal. tion techniques; the role of the prosecutor; In both cases, the personnel receiving the The Compendium considers, in turn, and management of cases. training were field officers working as part issues related to the role of legislation, of multidisciplinary teams: procedural aspects, petitions and recourse, Seminars have already been held for evidentiary considerations, coordinated Customs officials in almost all of the WCO’s • In Peru, the opening ceremony of the border management (CBM), integrity, six regions. They consisted of a general pre- seminar that took place in July 2015 was security and safety of Customs personnel, sentation on the COPES project, and the attended by over 100 participants. Day as well as accountability and performance relevance of the topics covered given the one enabled WCO experts to familia- management. It also provides examples of challenges for administrations in regard rize themselves with the methods used forms, checklists and other worksheets, to cross-border criminality. The seminars by the enforcement agencies working along with seizure regime flow charts combine theory and practice – for example, at the port of Callao, and to tailor the designed to help administrations evaluate during the seminar organized in Hong training they would be giving the next their seizure procedures and identify areas Kong, China, a tour of storage facilities and day accordingly; where there may be room for revision and/ presentations on working methods provi- or improvement. ded, among other things, a practical illus- • In Senegal, training was given in tration of those parts of the course which February 2016 in Dakar to officials of the “There was also a desire to apply a syste- covered best practice with respect to the Joint Airport Interdiction Task Force matic approach to this work by develo- sealing of seized goods and the methods (JAITF), formed as part of the WCO’s ping global standards that Members and used to ensure their traceability. Project AIRCOP which aims to streng- other stakeholders could align with, so then anti-drug-trafficking capacity in 20 that a stronger case for capacity building “The aim, at regional level, was not only or so airports around the world. Here improvements could be made, because to train frontline Customs officials, even too, trainers first observed the working the WCO is very well positioned to pro- if they are the principle target audience, methods used, before moving on to a mote such practices. Along these lines, but rather to publicize the availability more theoretical stage.

11 DOSSIER

“They tell us about their procedures of the administration, both to detect and The WCO is also advocating the prepa- which we compare with the standards and identify Customs offences, and to pro- ration of a ‘code of conduct’ for seizures knowledge adopted by COPES experts, secute and punish them. Now, Customs and asset forfeitures, a model of which and we engage in a dialogue with them, legislation has to evolve in line with the is appended to the WCO Model Code of examining in detail ways in which prac- general trend towards mandatory obser- Ethics and Conduct. tices can be improved. The training is vance of human rights and fundamental very interactive. The aim is to help them freedoms. Customs legislation can no lon- The road ahead to develop their own methods,” Thomas ger be separated from other rights. COPES training activities are set to inten- explained. sify in the months ahead. Enforcement As well as promoting the use of modern teams taking part in the United Nations He added that, “Most trained Customs and innovative methods likely to help Office on Drugs and Crime (UNODC)- officers are very motivated. They are good reduce the operating costs of enforcement WCO Container Control Programme and at detecting fraud, but not necessarily at services and the cost of detentions and sei- Project AIRCOP are likely to benefit as a documenting their findings, as they don’t zures, the WCO is seeking, through the result. The COPES Compendium itself will know what constitutes evidence or how to COPES Project, to emphasize the need for be updated, and the educational support collect it.” systems to be in place that ensure a degree material used in training will be expanded of ‘due process’ for those parties that are and improved. Due process involved, including a high degree of trans- For a long time, it was as if, in Customs parency and integrity, so that the parties More information matters, the end justified the means. This can choose the right option for resolving [email protected] meant a sizeable increase in the powers the issue.

Malaysia destroys huge ivory trove

By Agence France-Presse (AFP) Malaysia, a signatory to the Convention on International Trade ON 14 APRIL 2016, Malaysia destroyed 9.5 tons of elephant ivory in Endangered Species of Wild Fauna and Flora (CITES), has it had seized over the years, which authorities hope will help seized a number of shipments over the years, mostly by sea. In deter smugglers who have long used the country as a trans- March this year, officials said that they had also confiscated 159 shipment point. kg of ivory smuggled by passengers aboard commercial flights.

The huge pile of African elephant tusks, estimated to be worth The Minister said that the tusks destroyed on 14 April origina- 20 million US dollars, was first fed into an industrial crusher ted from 11 African countries ranging from Ghana to Tanzania. to be pulverized, and then incinerated in a giant furnace at the “They were publicly destroyed to deter smugglers,” he said, Kualiti Alam Waste Management Centre in Port Dickson in while adding that it was also partly in response to questions southern Malaysia. raised by conservationists over the fate of seized ivory. “I do not want any of the seized ivory lost. If the ivory is no longer needed Malaysia has previously announced in its Parliament that 4,624 to be kept for evidence, we will destroy it,” added the Minister. ivory tusks were confiscated between 2011 and 2014. “This is our first-ever ivory destruction. We want to send a strong message The event was witnessed by foreign diplomats and conservation to the world that Malaysia does not compromise in protecting groups. “We look forward to these good intentions being bols- endangered species,” Natural Resources and Environment tered by concrete actions to tackle the factors that have made Minister Wan Junaidi Tuanku Jaafar told AFP. Malaysia a key transit point in the global ivory trade,” said Kanitha Krishnasamy, the Programme Manager for TRAFFIC in Southeast The international ivory trade, with rare exceptions, has been Asia – an international wildlife trade monitoring network. outlawed since 1989 after the population of African elephants declined from millions in the mid-20th century to just 600,000 Published with the kind permission of AFP, the world’s third largest by the end of the 1980s. But poachers and smugglers have conti- international news agency headquartered in Paris, France. nued to exploit demand, mainly from Asia and particularly China, where ivory is highly prized for medicinal and deco- More information rative uses. www.afp.com

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772_anz_be_wco-news_rz.indd 1 14.03.16 11:38 DOSSIER

Risk management: an upgraded version of the nCEN now available

By the WCO nCEN team databases contain information on suspect or the post seizure follow-up actions that THE WCO DIGI- persons, methods of conveyance and busi- need to be taken. TAL toolbox ness entities of interest to Customs, the- contains an reby facilitating a structured investigation The system allows, for example, cases and extensive process. tasks to be assigned to officers in order v a r i e t y o f that they may follow up actions taken and instruments What’s new? keep a record of them. Using the nCEN to and tools to In response to requests from countries support daily Customs enforcement work help Customs already using the application as one of allows the history of undertaken actions incorporate their main enforcement tools, the new ver- to be tracked, thus providing a global pic- information sion of the nCEN was developed. In addi- ture of the efficiency of existing workflow and communications technology (ICT) tion to improving existing functionality processes. into their daily work, one of which is the in line with daily operational needs, the National Customs Enforcement Network application developers focused on: Developed with the aim of supporting risk (nCEN) application. management, the nCEN offers the possibi- • aligning the pre-populated drop-down lity to analyse data quickly online through It has been almost three years since the fields for information related to detec- the use of its advanced search feature, or first version of the nCEN was launched by tion methods and risk indicators used to download bulk data for in-depth offline the WCO, and the application is now used to detect a crime or an infringement, analysis. All data input into the nCEN is in 20 countries around the world. Drawing with the wording/designation used in searchable and analysable, with the possi- on these years of experience, the WCO has the WCO Customs Risk Management bility of creating ‘watch lists’ of arriving developed, in cooperation with all nCEN Compendium; passengers, companies appearing in the user countries, a new version of the nCEN country, and/or vessels or containers arri- application which better addresses the • integrating an electronic data input ving at borders. needs of the Customs community. component, allowing data to be transferred from other national databases; The advanced search functions make With the year 2016 dedicated to the pro- interlinking between the persons or com- motion of ‘Digital Customs,’ the launch of • upgrading the in-built information panies and the committed fraud or out- this upgraded version of the nCEN could communication interface, enabling comes of investigations possible, an added not be timelier. information-sharing on investiga- value from an analytical perspective for tions and/or suspect persons (not just profiling and risk management. Countries What is the nCEN? seizures); using the nCEN can share information on The application gives Customs administra- their seizures and suspect persons, compa- tions the ability to collect, store, analyse, • adding significant enhancements to the nies, methods of conveyance, etc. among and disseminate law enforcement infor- search capability of the system, allowing each other, with the possibility of tracking mation efficiently at the national level, in administrations to extract greater value the results of their information exchanges. order to establish robust intelligence capa- from the content of their data, resulting bilities, enhance profiling at the strategic, in increased user productivity and better Various digital tools are available for tactical and operational level, and boost decision-making. information exchange, however the addi- information-sharing both regionally and tional advantage of the nCEN’s in-built internationally. How can nCEN benefit administrations? information communication (Icomm) One of the primary uses of the application interface is that reporting only has to be The nCEN consists of three independent is to improve the process of data collection done once. Icomm allows administra- databases. The principal database of natio- and data management. In addition, the tions to exchange data in a standardized nal seizures and offences comprises data nCEN also assists Customs administra- format with other nCEN countries (pro- required for analysis, as well as means tions with the digitalization of their daily vided a legal basis exists), or to transfer of conveyance, routes, and the possibi- operations by providing workflow mana- non-nominal components of their data lity to view photos depicting exceptional gement features, and structured communi- directly to the global WCO CEN database concealment methods. Two supplementary cation relating to the investigation process, with a click of a button.

14 WCO news N° 80 June 2016

Work is currently underway to further establish a link between the nCEN and the Customs Enforcement Communication platform (CENcomm), allowing nCEN users to additionally transfer their data collected, under the auspices of an enforcement operation, directly to their nCEN seizure database. UV-light

This information sharing component is key to boosting cooperation at the regional level. The WCO adopted a regional approach in the deployment of the application, which is also reflected in the activities organized around nCEN matters. Each country that implements the nCEN is asked to nominate a local nCEN Project Leader for all communication related to the nCEN. The first regional project lea- ders’ workshop was organized in the WCO East and Southern Africa region in 2015 to discuss technical matters, and the conclu- sions from that meeting were instrumental jetStamp graphic 970 in shaping the new version of the nCEN application. REINER – handheld ink jet printer Want to find out more? The nCEN application is provided to WCO • Automatic number, date, time, barcode and logo Members free of charge, and a range of cus- • Security inks like UV visible or invisible, to print tomized solutions is available, catering to each administration’s circumstances and on porous or nonporous materials needs. For example, fast track implementation in those administrations that already REINER – imprimante mobile possess the hardware needed to support the application. To ensure optimal use at jet d‘ encre the national level, the application may be translated by the implementing adminis- • Numéros, dates et heures automatiques, tration into its national language, beco- codes barre et logo ming an integrated part of the country’s • Encres de sécurité type UV visible ou invisible, ICT base. pour impression sur supports poreux ou non

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Ernst Reiner GmbH & Co. KG | Baumannstr. 16 78120 Furtwangen / Germany | Tel. +49 7723 657-0 | [email protected] 15 DOSSIER

Switzerland addresses the traffic in cultural goods

By Professor Jean-Robert Gisler, FEDERAL OFFICE OF POLICE, SWITZERLAND

of cultural property into Switzerland and bilateral agreements); The Swiss art market, being one of the largest in the • promoting international exchanges world, inevitably attracts objects of dubious provenance. between museums (restitution gua- rantee for museums); Some of these stolen or plundered objects not sold • ensuring due diligence is carried out on directly on the Swiss market are held in Switzerland the art trade and the auction business. pending their insertion in the legal distribution system, The introduction of the CPTA brought about a significant change in the practices whether in Switzerland or elsewhere. of suppliers, sellers and buyers, whose relationships and positions have evolved. Although they were extremely reticent ONE OF THE reasons why Switzerland is a Ownership of Cultural Property, adopted during the CPTA consultation phase, the destination and transit country for cultu- by the United Nations Educational, Social actors in the art world have adjusted well. ral goods is that for many years it has offe- and Cultural Organization (UNESCO) in Having feared for the very existence of red storage and trading facilities which 1970. Switzerland’s art market during the dis- helped to sustain not only the substantial cussions which preceded the adoption of local market, but also, above all, the inter- The CPTA regulates the importation of the Act, they now recognize that business national market. cultural property into Switzerland, its has not declined, and that the image of transit and exportation, as well as the their business has been enhanced. During the 1980s and the 1990s, return of cultural property located in Switzerland was viewed by the world as a Switzerland. It also establishes measures The obligation to take control of tran- hub for international trafficking in cultu- to combat the illicit transfer of cultural sactions, and the introduction of safe- ral goods. However, when the spotlight property. guards designed to curtail illicit opera- was shone on several major cases invol- tions enabled the art world, as a whole, to ving international traffickers, this helped Through the CPTA, the Swiss attain greater respectability. Nevertheless, to raise the awareness of the Swiss authori- Confederation hopes to make a contribu- for this new legislation to be even more ties, bringing about the adoption of a new tion to the maintenance and protection of effective, it needed to be supplemented by legal framework aimed at regulating, in mankind’s cultural heritage, and prevent developments in the Customs field. particular, the ‘exceptional’ Customs areas the theft, looting, and illicit import and known as free ports and open Customs export of cultural property from museums Customs warehouses warehouses. and similar institutions. There are two types of Customs warehouses in Switzerland: duty-free ware- 1970 UNESCO Convention The Act also provides for a series of mea- houses; and open Customs warehouses For a long time, it was the extreme laxity sures aimed at: (OCWs). Whereas the former are, in prin- of its legislation that made Switzerland ciple, available to anyone for the storage attractive. After a long gestation period • promoting intercultural dialogue and of goods under the surveillance of the the situation changed, both legally and sustainable exchange; Customs authorities, the latter are for pri- concretely, on 1 June 2005, with the vate use, and do not incorporate a Customs entry into force of the ‘Cultural Property • protecting Swiss cultural heritage office. Transfer Act’ (CPTA). (inventory and provisions regulating the export of cultural property belonging to These two types of warehouses can be used, The CPTA constitutes the implementation, the Confederation or the Cantons); in particular, to store goods under suspen- at Swiss national level, of the Convention on sion of Customs duties and value-added the Means of Prohibiting and Preventing • contributing to the protection of the tax (VAT) pending their final importation the Illicit Import, Export and Transfer of cultural heritage of other States (import into the country of destination. Over the

16 WCO news N° 80 June 2016

One of the exceptional pieces of ancient Etruscan art, discovered at Geneva Free Ports, handed back to Italy in January 2016 © République et Canton de Genève

years, this historical function of Customs The OCWs, whose primary function is the The provisions concerning OCWs (CA, warehouses has evolved to encompass the temporary storage of large consignments Articles 50 to 57) and free ports (CA, storage of valuables, including cultural of goods in transit – for example, garments Articles 62 to 67) fall into two different goods in particular. Thus, works of art while being labelled – are sometimes used Chapters, but some of them are similar. are stored in these warehouses under the for high-value goods. However, although The major changes introduced by this new best possible conditions, while they wait their number has increased rapidly in legislation, insofar as free ports and OCWs to change hands. recent years, they have yet to outrank the are concerned, include the following: now ultra-secure free ports in this res- The interest in contemporary art and the pect; especially the one in Geneva which • The introduction of Customs warehou- need for secure storage facilities go some recently opened a new building on its sing as a new Customs regime, encom- way towards explaining this development, ‘territory,’ with a floor area of 10,400 m2, passing OCWs which are distinct from but there are other factors: the diversifi- devoted entirely to the warehousing of free ports. The Customs warehouse cation of private investors’ portfolios, works of art. is defined as a place in the Customs especially in the aftermath of the finan- territory which is authorized by the cial crisis; tax optimization strategies in As one can imagine, these warehouses Customs administration and placed the area of asset and wealth management; have also been used to store illicit goods under Customs supervision, and in the development of ‘art banking’ (an art and to circumvent, notably, the require- which goods can be stored under condi- advisory service developed by the banks); ments of the CPTA. Given such activities, tions laid down by Customs. For OCWs, and the development of investment funds the Swiss legislature had to draw up a new this procedure involves, among other and hedge funds that invest in art. legal framework to regulate, in particular, things, the removal of import duties these ‘exceptional’ Customs areas, namely and the non-application of commercial Thus, in recent years, works of art have free ports and OCWs. policy measures, the identification of become financial assets like any other, the goods, and random checks on com- and transactions can be concluded inde- New Customs Act pliance with the conditions and charges pendently of the physical location of the The new Customs legislation, i.e., the stipulated in the authorization; work of art. This situation has considerably Customs Act which was adopted by the increased the demand for secure storage, Swiss Parliament in 2005 and entered into • A new definition of free ports, now preferably outside the tax laws of a given force in 2007, updated Swiss law to reflect known as ‘duty-free warehouses.’ Free country, enabling works of art to change modern Customs requirements, especially ports are no longer defined as being hands as financial transactions may dic- in the area of combatting illicit trafficking. foreign Customs territories, and as tate, without physically changing location. It replaced legislation which dated back a result they no longer have ‘extra- to 1925, and which had not been revised territorial’ status which precludes any frequently. inspections on their premises. The

17 DOSSIER

legislature has taken care to define them with requirements, and that Customs to fulfil this obligation). The warehouse precisely: duty-free warehouses are parts supervision and control will not entail operator is also responsible for ensuring of the Customs territory, or premises disproportionately high administrative that during their stay, goods are not remo- located on that territory, which are costs. There may be charges associated ved without Customs supervision. under Customs supervision, are separate with the authorization, and it may exclude from the rest of the Customs territory, the storage of certain high-risk goods, or The warehouse operator is also required and in which goods which are not in free specify that high-risk goods must be stored to ensure that the obligations arising out circulation can be stored. Goods placed in special premises. of the warehousing of the goods are ful- under an export procedure can be stored filled. The status of the goods changes (i) there if, after leaving the warehouse, Warehouse operators and depositors have at the moment when they leave the ware- they are actually exported. The stored fewer obligations to Customs in a free port house, because at that time they are placed goods are not subject to import duties than in an OCW: no financial security is under an authorized Customs procedure or commercial policy measures; payable; and the inventory is confined to for entry into the Customs territory or sensitive goods only. The operator of a free for import, or (ii) when they are declared • An obligation to keep an inventory of port has no responsibility in respect of the under the transit procedure and exported. so-called sensitive goods (including, goods stored as the responsibility lies with in particular, art objects and cultural each depositor. Implementation goods) in free ports, and all goods in The Federal Customs Administration OCWs. Inventory requirement for cultural goods (FCA) is responsible not only for granting There is no doubt that the maintenance of authorizations to warehouse operators and Warehouse operator and depositor an inventory is key to the proper functio- ensuring that the operating conditions are Both the warehouse operator (who runs ning of the duty-free warehouse and OCW complied with, but also for ensuring com- the warehouse) and the depositor (the per- regime. Warehouse operators must draw pliance with the requirements laid down son who stores goods in the warehouse and up lists indicating the value of the object by other, non-Customs legislation, inclu- who is bound by the declaration used to and where it has come from, as well as the ding the CPTA which assigns the task of place them under the warehousing proce- identity of the person entitled to dispose controlling the transfer of cultural pro- dure, or one to whom that person’s rights of it; also, a certificate of origin must be perty at the border to Customs. and obligations have been transferred) are appended. Customs may request access recognized under the free port and OCW and conduct controls at any time. Thus, Customs is required to control the provisions, with an identical definition transfer of cultural property at the border, and similar obligations. In duty-free warehouses, the inventory including, in particular, import, export or requirement is confined to sensitive goods transit declarations (CPTA Article 19). It Anyone who operates a Customs ware- only. The warehouse operator must main- may request support or expert advice from house requires authorization from Swiss tain an inventory of all sensitive goods the Federal Office of Culture (FOC), which Customs. Authorization is granted on held in the warehouse, in the form pres- is the body responsible for the implemen- condition that the requesting party is cribed by Customs, and cultural goods tation of the CPTA, or indeed from the domiciled in Switzerland and undertakes are rightly regarded as sensitive goods (in Federal Office of Police in respect of these to operate the warehouse in compliance some cases the depositor may be required declarations, for example in order to determine the provenance of a suspect cultural object (theft, looting, false declaration, incorrect or fraudulent export permit, etc.).

Customs is not, however, in a position to check all declarations relating to cultural property. By way of illustration, it was reported in a publication from 2012 that the ‘Genève-Routes’ Customs office, which is responsible for the free port at La Praille, deals with 250 declarations a month, on average, for the warehousing of cultural goods. Customs’ interventions are therefore based on risk analysis.

The FOC informs Customs of the risks identified at the international level. It does so based on announcements made by organizations engaged in combatting the illicit trafficking of cultural property at the Geneva Free Ports at la Praille international level, i.e., the International

18 WCO news N° 80 June 2016

ARCHEO – Connect to preserve

ARCHEO is a communication tool developed to facilitate the exchange of information amongst enforcement authorities, national agencies and international organizations engaged in the protection of cultural heritage. The platform is accessible only to a closed user group, and information transmitted via the tool is encrypted and secured.

ARCHEO aims to:

• Enable the exchange of best practices • Provide training materials, identification guides, manuals and other relevant background information • Exchange information on seizures • Establish discussion forums • Link enforcement officials with experts in order to facilitate the deter- mination of the nature of the artefacts when confronted with a suspicious transaction

More information [email protected]

Council of Museums (ICOM), UNESCO, the subject of ‘requests for return’ by the circles, and then picked up by cultural and INTERPOL. countries of origin concerned. associations and groups. So, it has taken time for Switzerland to rid itself of its bad Inversely, Customs offices notify the The Federal Audit Office has looked reputation. FOC of cases they discover in the field; into the question of how to increase the it is then the FOC’s job to determine effectiveness of the controls conducted Legislative progress was possible only whether the cases notified by Customs by Customs. In a report published on 28 following a change in attitude, to which are suspicious and warrant criminal January 2014 (www.efk.admin.ch), it made several actors contributed. The art market, proceedings, which are a matter for the eight recommendations: which is an important part of the Swiss Public Prosecutor’s Office of the Canton economy, needed to act under new rules concerned. Where there are suspicions • The first recommendation is directed at and abandon the ‘blind alley’ of protec- about the nature of an item of cultural the Swiss Federal Council, as it involves ting and concealing the theft and pillage property, it is analysed by an expert to devising a strategy for the development of archaeological cultural property, in determine where it has come from, the- of Customs warehouses; particular. reby enabling it to be returned. • The other recommendations are for the However, there are other projects awaiting It is also worth noting that the penalties FCA, and are aimed at enhancing the attention, including the ratification of the for CPTA infringements are severe: if the effectiveness of Customs activities in 1995 UNIDROIT Convention on Stolen offence is committed through negligence, relation to Customs warehouses, with or Illegally Exported Cultural Objects. the penalty is a fine of up to 20,000 Swiss regard to the operating permits and the This instrument supplements the 1970 Francs (around 22,000 US dollars). If the controls to be conducted. UNESCO Convention, which has a limited offender has acted in a professional capa- sphere of action because it deals only with city, the penalty is a prison sentence of Another challenge the restitution of cultural property stolen up to two years, or a fine of up to 200,000 Switzerland has adapted its Customs pro- from museums and similar institutions. Swiss Francs. visions and addressed the implementation issues. It also responded promptly in The UNIDROIT Convention, a private-law The Customs authorities have been applying the UN embargos on the impor- legislative document in whose develop- conducting sporadic and targeted controls tation of cultural property from conflict ment Swiss specialists played a major part, since 2011, warehouse operators having zones (Iraq in 2003, Syria in 2014). Can it has not yet found favour with the Swiss been granted time to draw up their inven- now put its dubious past behind it? Parliament. This is doubtless the next chal- tories. These initial controls have revea- lenge to be addressed by Switzerland, at led the presence of objects which have This is an important point to reflect on. the national level, in the fight against the been stored for many years, and which in The new provisions of the Ordinance trafficking in cultural goods. some cases are even found to be unclai- implementing the Customs Act were intro- med assets. Certain objects, particularly duced on 18 November 2015, i.e., 25 years More information from Egypt, Libya, Syria and Turkey, are after this issue was first raised in academic www.efk.admin.ch

19 DOSSIER

Officer conducting research at the ECIC © Hong Kong Customs

Hong Kong Customs: equipped to tackle cybercrime

By Guy Fong, GROUP HEAD OF INTELLECTUAL PROPERTY specifically infringements of intellectual the technology, by transferring skills and INVESTIGATION (OPERATIONS), HONG KONG property rights (IPR) on the internet. knowledge, and by developing automatic CUSTOMS monitoring systems. THE RAPID DEVELOPMENT of the Internet Professional teams in the past decade has drastically and In 2000, Hong Kong Customs faced Officers working at the ECIC were positively changed every aspect of our an upsurge in cybercrime cases. Huge recruited among thousands of Customs lives. People, in almost all cities across amounts of digital data were found stored staff according to strict selection criteria. the world, are today virtually connected in computers seized at crime scenes, and Most of them possess a university degree with each 24/7. But thanks to its speed, this data needed to be recovered and in information technology (IT) or compu- expediency and anonymity, internet- analysed. ter science, and all showed a keen interest based technology has also become one in undertaking digital forensic or cyber of the key facilitators for a vast range Hong Kong Customs responded to this investigation work. of criminal activities, many falling wit- situation by establishing three specia- hin the remit of Customs enforcement lized establishments: the Anti-Piracy When there is a need to recruit new actions, including the trade in counter- Investigation Teams (AIPTs); the members for the ECIC teams, Hong Kong feit products, goods subject to prohibi- Computer Analysis and Response Team Customs’ human resource department will tions and restrictions, and the smuggling (CART); and the Computer Forensic examine the profile of serving officers and of excisable goods, such as cigarettes and Laboratory (CFL). These establishments shortlist suitable ones for consideration by alcohol. prominently enhanced Customs’ enforce- the section heads concerned. Recruited ment capability, as well as the credibility members are given professional training Many countries have set up specialized of digital evidence presented to the courts. by academic institutions, vendors of foren- units to combat internet-linked crime sic technologies and, on occasion, other known as e-crime or cybercrime. These In 2013, the set-up of an Electronic enforcement counterparts be they local teams trawl the Web for information Crime Investigation Centre (ECIC) fur- or from overseas. which might be of use in preventing, ther strengthened Hong Kong Customs’ detecting, investigating, and prosecuting a capacity to detect infringements on the AIPTs are tasked to detect and crack Customs-related offence. This article looks internet, especially when it comes to IPR, down on infringing activities in cyber at the way Hong Kong Customs has equip- by pooling its knowledge on the trends space. They are equipped with the latest ped itself to tackle cybercrime, and more that had come to the fore in the use of investigative tools to proactively search the

20 WCO news N° 80 June 2016

internet, as well as to hide their identity In late 2014, Customs observed that online Manual monitoring when carrying out covert communications counterfeiting activities had migrated of the internet is not online. from auction sites to social networking platforms. So, in early 2015, the ECIC effective and efficient. Upon the request of frontline officers, developed another monitoring system, Hong Kong Customs members of CART will be summoned to known as SocNet, which automatically the scene of a crime to render technical monitors online counterfeiting activities adopted the approach assistance in preserving and collecting on major social networking platforms. of using technology to digital evidence. All CART members have to undergo professional training on com- SocNet generates alerts to Customs offi- fight technology. The puter forensics in local and overseas acade- cers for follow-up actions when certain ECIC cooperated with mic institutes before taking up their posts. criteria are matched on the one hand, and automatically preserves the posting as evi- the University of Hong CFL provides professional analysis and dence on the other. The implementation Kong to develop a series forensic examinations on digital evidence of SocNet enables about 4,000 social plat- acquired by CART and frontline investiga- form accounts to be screened every day – a of automatic monitoring tors. It is equipped with the latest IT foren- 20-time increase in comparison with the systems dedicated to sic examination software and hardware past. The system also enabled Customs to facilities, and all the forensic examiners extend its scope of enforcement without tackling cyber IPR crimes at CFL are qualified to testify as expert increasing its manpower. on different platforms. witnesses in courts of law. Capacity building The ECIC focuses on conducting research As explained earlier, the ECIC provides on how criminals are making use of the training on a wide range of aspects ran- latest technology to commit cybercrimes, ging from cyber investigation techniques, and shares the research results with front- to handling and preservation of digital line officers. In response to internet piracy evidence, and to hands-on exercise of crimes in particular, the ECIC formulates tackling different technology crime sce- new methodologies for cyber investiga- narios. It also offers tailor-made courses tions and digital evidence management. In for other government departments, legal addition, the ECIC also provides training professionals, and Customs’ overseas to the frontline officers on new guidelines counterparts. and procedures developed to tackle latest crime modus operandi, in order to upkeep In August 2013, Hong Kong Customs their knowledge and skills in cybercrime organized a three-day WCO Workshop investigations. on Computer Forensics for countries in the Asia/Pacific region. Thirty-four parti- Making use of technology cipants from 25 Customs administrations Manual monitoring of the internet is not attended the event which aimed to enhance effective and efficient. Hong Kong Customs their capabilities in combatting technology adopted the approach of using technology crimes. The ECIC also organized about 60 to fight technology. The ECIC coopera- various training sessions for different parties ted with the University of Hong Kong to or groups in 2014 and 2015. develop a series of automatic monitoring systems dedicated to tackling cyber IPR Hong Kong Customs has also engaged crimes on different platforms. with leading overseas law enforcement agencies to share expertise and knowledge Until 2015, three monitoring systems run- on fighting cybercrime. In March 2016, the ning round the clock had been developed: ECIC and the Cyber Crimes Center (C3) (1) to track file sharing activities through of Homeland Security Investigations (HSI) the Bit Torrent protocol; (2) to monitor of the United States organized a five-day activities at internet auction sites selling workshop on cybercrime investigation IPR infringing goods; and (3) to monitor in Hong Kong, to keep our investigators infringing activities through cyberlockers abreast of the latest tools and techniques (online data hosting services). Upon detec- in cyber investigation. ting suspicious activities, these monitoring systems trigger alerts and notify officers More information that follow-up actions are necessary. www.customs.gov.hk [email protected]

21 DOSSIER © Asian Development Bank Highlights on the trade in non- authorized and counterfeit pesticides

By Ing. M.H. van Diesen, Pesticides are one of the most regulated terms of their label, such as the wearing of SENIOR INSPECTOR, FOOD AND CONSUMER PRODUCT SAFETY AUTHORITY, THE NETHERLANDS. products on the market. In most countries, appropriate protective clothing. pesticides must be registered by a national THE GLOBAL TRADE in illegal pesticides is government agency in charge of determi- New generations of pesticides are highly growing, evidenced by the increase in the ning whether the pesticide meets the safety specific, targeting just one pest in a crop, number of seizures and incidents around standards in force before it can be sold. while others, mostly older generation pes- the world related to such products. The The approval procedure is long and costly, ticides, have a broad spectrum. The older increase is not only due to better awareness typically taking 10 years from the moment generation pesticides are banned from use by controlling authorities of the phenome- of discovery to the first sale, and could cost in many countries. They can’t meet the non, but also to the fact that nowadays the as much as 280 million euro. requirements for approval. illicit actors involved in the production and distribution of these goods operate There is a reason why laws regulating pes- Illegal pesticides refer to both counterfeit on a global scale. ticides are strict. Pesticides are designed to products and pesticides that are not regis- harm or kill pests, such as insects, fungi tered in the country of destination. These Following a 12-day operation organized by and weeds. In addition, as these pesticides ‘non-authorized’ pesticides pose a grea- the European Police Office (EUROPOL) are released over land, water and food ter risk as they may have a much higher in November 2015, 100 cases of infringe- crops, people and wildlife may be exposed level of toxicity than legal products. For ments were detected during 350 inspec- to them. example, they may not have been evalua- tions at major ports and airports in seven ted by a government agency to ensure that European Union (EU) countries. At the Furthermore residues enter the food chain their use will not harm people or the envi- Port of Rotterdam alone, Dutch Food and can accumulate, and sometimes the ronment, and they are often sold without and Consumer Product Safety Authority chemical substances may pose a threat to proper usage directions or warnings on (NVWA) officials and Customs officers beneficial insects, such as bees. They can the labels. inspected eight shipments, six of which also do harm to the direct user and even were found to be suspicious. to crops themselves if not used strictly in

22 WCO news N° 80 June 2016

There is a risk that instead of importing formulated products (pesticides in the form of a ready-to- use formulated product) illicit traders would turn to ‘technical substances,’ and produce the ready-to-use As for counterfeit pesticides, they are product in the country of updated, following a positive inspection usually packaged to look like legal pro- destination. At present, by the NVWA and Customs for example. ducts, but their contents may not match their labels. For example, they may have in some countries the Customs has a central role in coordina- less of the active ingredient than the legal importation of technical ting combined inspections of pesticide product, or they may contain cheaper, pos- shipments. Shipments that are selected by sibly more toxic, active ingredients. Thus, substances is not as strongly the risk management system are inspected counterfeit pesticides may either be useless regulated as ready-to-use by both agencies, with Customs control- (not achieving their expected intention) or ling whether the consignment is properly highly dangerous (containing excessive pesticides. stowed, as well as ensuring that there is poison), while still being toxic. no infringement of intellectual property rights (IPR). In many countries, agriculture is the cor- Customs, most especially, has a pivotal nerstone of the economy. Therefore, the role to play in detecting illicit and coun- By coordinating inspections and ensuring stakes are high – contaminated products terfeit shipments of pesticides. In coopera- that only one physical check is carried out, may be banned from markets, including tion with regulatory bodies and/or police Customs enables time loss in the logistics export markets, crops may be damaged, forces and public prosecutors, cases can chain to be minimized. The NVWA com- and farmers brought to ruin. In Northern be successfully brought to court, creating municates the outcome of its inspection India in 2015, farmers launched a strike a deterrent effect on criminals, and pre- to Customs, in order to ensure that a ship- to demand a judicial probe into the sale of venting illicit pesticides from entering the ment is not released. The bonus of the one counterfeit pesticides that damaged their market and the food chain. check principle is that all involved partners crops or rendered them worthless. benefit from each other’s knowledge and In countries that are successfully dea- expertise. If required, the NVWA can pro- State of play ling with this phenomenon, cooperation vide training to Customs officials. There are several reasons that explain why between government agencies within the trade in illicit and counterfeit pesti- and across countries has been the key What to expect cides has increased over recent years. The to their success. In the Netherlands, the Cases of deliberate illegality include mis- demand for cheap pesticides is high; broad NVWA enforces regulations related to labelling (wrong name, spelling mistake, spectrum pesticides are increasingly being pesticides. unapproved label format, etc.), misbran- banned in many markets across the world, ding (leading to patent or trademark profits are high, and the probability of The NVWA works together with Customs, infringements), undesirable composi- detection is low. the Police and the Public Prosecution tion, use of wrong active ingredients or Service (OM) to prevent non-authorized co-formulants, the presence of impuri- Enforcement in this area is indeed com- pesticides from reaching the market. All ties that are cause for concern, unsui- plex. Besides criminal networks whose the parties involved use Customs com- table bottles or containers, and obsolete operations entail the use of complicated munication channels to exchange infor- pesticides. and deliberately long supply chains (pro- mation. Control activities focus on the ducts crossing many borders of different Port of Rotterdam and Schiphol Airport, Importations of pesticides must be countries) and fake documents, there are the country’s key hubs. Once these illegal controlled by inspecting the supporting also smaller operators – sometimes just a goods make it onto the market they are documentation, by visually checking the few individuals – seeking a quick win. In much harder to control. packaging and labelling, and, in cases of addition, direct sales of pesticides to far- suspected contraband, by sampling and mers are a common occurrence. The NVWA is responsible for defining risk performing a laboratory analysis. profiles and feeding indicators into the As awareness of the trade in illicit and Customs automated risk management sys- The use of false declarations and falsified counterfeit pesticides is growing around tem. Indicators refer to the presence of an documents is common practice among the world, the key to success in combatting active substance, to the use of a description smugglers of illicit pesticides. Most illegal this crime is to combine knowledge from for the goods known to be used for illegal products would not be declared as ‘dan- competent authorities and industry, as well pesticides, and to the names of importing gerous goods,’ the shipping documents as from countries throughout the world. companies. These indicators are regularly would be unclear, and fake/fraudulent

23 DOSSIER

names and misleading/deceptive labels that are fully equipped and able to ana- would be used. lyse pesticides in line with internationally accepted methodologies must be in place, In addition, the shipping documents may together with mobile laboratories to carry refer to a different pesticide than the one out express pesticide testing. actually being transported, and contain a different active substance, especially when International cooperation the real active substance is still under The necessity for countries to cooperate is patent. evident. If a shipment has been detained at one port of entry, smugglers will divert Analysing the packaging is of utmost Picture 1 Picture 3 their products from it, and try to enter importance. The transport of dangerous them through another port. goods is regulated to ensure the safety of workers and operators, of the vehicle used This logic is commonly referred to as the to transport them, and of other goods ‘waterbed’ effect. For the same reason, any being transported. Therefore, the packa- decision to return illegal pesticides to an ging has to meet certain standards defined exporter should be avoided if possible, by the United Nations (UN). because the high profit margins realized when selling such goods results in these International agreements for the carriage shipments usually being re-sent to other of dangerous goods require packaging to countries. be of a design-type certified by a national competent authority. This involves testing Picture 2 To enhance cooperation, internatio- the packaging against the appropriate UN nal enforcement operations are help- specification to ensure its suitability. Such ful, such as the one organized by packaging is often referred to as ‘type- should be stored and stowed in specific EUROPOL. Another interesting ini- approved,’ ‘UN approved’ or ‘UN certified’ designated positions on a vessel, but due tiative is the Network of Officials for and marked in a particular way, prefixed to deliberate false declarations, these Pesticide Compliance and Enforcement by the UN logo and followed by codes. conditions are often not met. Dangerous (NOPCE), created and managed by the cargo with sometimes very low flashpoints Organisation for Economic Co-operation The UN marking system indicates several of <20° Celsius could be on board a vessel and Development (OECD). Members of characteristics of the packaging, as well as without the necessary warning signs. the NOPCE – pesticide regulators from information on the test levels the packa- OECD and non-OECD countries – use ging has successfully passed. Because these Design and trademarks on the packaging a system to inform other officials on the test levels are related to the hazard level of big brands are often copied in an inten- arrival of non-authorized and possible and physical/chemical characteristics of tionally unobtrusive manner. Picture 2 illegal pesticides. the substance, the markings also indicate shows the bottom of a five litre canister – some of the properties of the materials that there is no UN code, and there is a visible Besides enhancing the exchange of infor- may be packed in each container. It also infringement of the Syngenta’s Spac® mation, another challenges for government indicates the country where the container trademark. agencies and the industry in the future is was manufactured, as well as the manu- the capacity to react to illicit traders’ new facturing plant. In some cases, the trademarks are indica- importing methods. There is a risk, more ted on separate parts of the packaging, as specifically, that instead of importing for- As most pesticides are classified as dange- shown in picture 3. In this case, the intel- mulated products (pesticides in the form rous goods, closely examining the packa- lectual property (IP) right only applies to of a ready-to-use formulated product) they ging will be crucial during an inspection. the bottle’s cap, which is for measuring would turn to ‘technical substances,’ and It has been found that UN markings on purposes. Only the caps could, therefore, produce the ready-to-use product in the the canisters are sometimes incomplete be detained – it is worth noting here that country of destination. At present, in some or even absent. On picture 1 for example, trademarks should be used on all pac- countries the importation of technical the country code is missing, as well as the kaging in order to better protect goods. substances is not as strongly regulated as producer’s initials, always represented by Nevertheless, as the bottle contained a ready-to-use pesticides. the last digit at the end of the code. This non-approved pesticide, there was a vio- gives a lead as to whether the shipment is lation of the law regulating pesticides. More information legitimate or not. [email protected] As mentioned earlier, checking cargo https://english.nvwa.nl It is common to find packaging mate- and detecting infringements requires the www.europol.europa.eu rial that is not adequate for the retention intervention of laboratories that are able to www.oecd.org/chemicalsafety/pesticide- of pesticides, and could be an accident undertake rapid chemical analyses. Thus, compliance/nopce-authorities.htm hazard. Shipments containing pesticides an efficient system of Customs laboratories

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Illegal fishing, another form of wild life crime

By Markus Burgener, FISH AND FISH products are among the most SENIOR PROGRAMME OFFICER, TRAFFIC traded food commodities worldwide, and the trade has expanded considerably Identifying the trade in fisheries products that have in recent decades as the fisheries sector operates in an increasingly globalized been illegally caught is challenging. This article environment. The way fishery products are prepared, marketed and delivered provides an overview of the solutions being developed to consumers has changed significantly, and commodities may well cross natio- by governments, inter-governmental organizations, nal boundaries several times before final consumption. non-governmental organizations (NGOs), the private In 2012, about 200 countries reported sector and civil society to address illegal fishing and exports of fish and fishery products, representing about 10% of total agricultural associated trade. exports, with fishery exports being valued at 129.2 billion US dollars. Developing countries account for the bulk of world

26 WCO news N° 80 June 2016

This photo was taken in Senegal by Kukka Ranta, an investigative journalist, photographer and author who worked extensively on the consequences of overfishing in West Africa. For more information, visit https://kukkaranta.com/portfolio/robbed-sea

For convenience, the term ‘illegal’ when fishing is frequently associated with a lack used in this article encompasses all fishing of consideration for working conditions, that breaks fisheries laws, or occurs outside safety at sea, and labour laws in general. It the reach of fisheries laws and regulations. is also, in some cases, linked to drug smug- In addition, the term used by professio- gling, human trafficking, money launde- nals, namely ‘illegal, unreported and unre- ring, and tax evasion. IUU fishing thrives gulated (IUU)’ fishing is also used in this on weak governance, poor traceability, and article. a lack of deterrents.

Illegal fishing specifically refers to fishing Traditionally, fisheries offences have not which is conducted by national or foreign been regarded as very serious in many vessels in waters under the jurisdiction of a countries, resulting in the legislative, State, without the permission of that State, institutional, administrative, policy and or in contravention of the laws and regu- budgetary arrangements of most States not lations of that State. Examples of illegal keeping pace with the growing seriousness fishing include fishing without a licence, with which the international community fishing in a closed area or marine protec- now views illegal fishing and the trade ted area (MPA), fishing with prohibited in associated fish and fish products. As a gear, fishing that exceeds a quota, or the result, well organized and financed large- fishing of prohibited species. scale transnational networks are operating with relative impunity across the Unreported fishing refers to fishers only entire value chain of the fisheries sector, reporting a portion of a catch in order to engaging in an array of criminal activities fall within quotas, failing to report the ranging from document fraud to illegal harvest of non-targeted species, or simply harvesting to tax evasion.

© Kukka Ranta avoiding reporting all together. Taking advantage of the limited capacity Unregulated fishing is a broader term of many States to effectively control fishe- which includes fishing conducted by ves- ries activities and associated product and Illegal fishing, another form of wild life crime sels without a nationality, or in the area of financial flows, the porous nature of the a regional fisheries management organi- prevailing international legal framework, zation in a manner inconsistent with, or the associated low risk of prosecution in contravention of, the conservation and and low penalties, these transnational fishery exports, and for many of them management measures of that organisa- networks systematically divert revenue these exports are essential to their eco- tion, and is flagged to a State not party to from primarily developing coastal States, nomies, with international and domestic that organization, or not cooperating with and are frequently linked to organized fisheries trade playing a major role in job that organization as established by that crime networks. They are engaged in what creation, food supply and income gene- organization. can be called ‘fisheries crime,’ i.e. adminis- ration, while contributing to economic trative and criminal offences of a serious growth and development. Products derived from illegal fishing ope- nature carried out within, or in close asso- rations often find their way into local or ciation with, the fisheries sector. The Food and Agriculture Organization international trade, thus undermining the of the United Nations (FAO) notes, in economies of local fisheries and the supply Identifying the trade in fisheries products their report on the State of the World of fish to local markets. Rough estimates that have been illegally caught is challen- Fisheries and Aquaculture 2014, that indicate that IUU fishing is responsible for ging. Supply chains are often highly com- one of the key issues affecting interna- 11 to 26 million tonnes of fish being taken plex, and regulatory processes generally tional trade in fish products is the need each year, with an estimated value of 10 to involve paperwork rather than electronic to ensure that internationally traded 23 billion US dollars. permitting and validation systems, leaving fishery products from capture fisheries the system open to abuse. Furthermore, (i.e. not aquaculture operations) have Aside from the financial losses from ille- the international seafood trade involves been produced legally. gal fishing and associated trade, illegal high volumes of cargo and, as with all

27 DOSSIER

In the context of illegal fishing, analysis of trade plants and animals, aims to facilitate the support materials such as fact sheets, pos- information is a potentially exchange of information and intelligence ters, and identification guides. powerful tool to assess between European Union (EU) wildlife law enforcement officials across Europe. iSharkFin, an innovative tool making use illegal fishing activities, and of technological advances in image reco- so assist efforts to combat The system currently engages over 850 gnition software, was recently developed law enforcement officers, representing by the FAO in collaboration with the them. TRAFFIC, a number Customs, the police, the judiciary and University of Vigo in Spain. Aimed at port of government agencies, national authorities responsible for enfor- inspectors, Customs officials, fish traders cing the Convention on International and other users without formal taxonomic and various other institutions Trade in Endangered Species of Wild training, iSharkFin allows the identifica- have analysed Customs trade Fauna and Flora (CITES), amongst others, tion of shark species from a picture of the from the 28 Member States of the EU and fin (see www.fao.org/ipoa-sharks/tools/ data as a means of gathering its neighbouring countries, as well as orga- software/isharkfin/en). information that can be nizations such as the CITES Secretariat, the European Commission, EUROPOL, Improved understanding of trade flows valuable in tackling illegal INTERPOL, the United Nations Office through Customs data analysis fishing. on Drugs and Crime (UNODC) and the Analysis of the trade in wildlife products WCO. has for some time been recognized as a valuable source of information, contribu- perishable goods, there is often limited Several species of sharks and the European ting to the effective monitoring and regu- time to conduct inspections at ports of eel (Anguilla anguilla) are currently listed, lation of natural resource use and trade. entry and exit. This is exacerbated by capa- amongst a total of 103 species of marine city limitations for most countries, and a and freshwater fish. Via the EU-TWIX Given the extent to which fisheries lack of technologies and tools – such as mailing list and database, officials share products are traded internationally, scanners, X-ray machines and sniffer dogs. information on illegal wildlife trade trends knowledge of the trade dynamics for these on a daily basis (species being traded, products is almost a prerequisite to good There are challenges in information- routes used, modus operandi, etc.), the- management, as it has the ability to shed sharing, communication and reporting reby alerting their counterparts throu- light on issues such as the source, destina- between Customs authorities and other ghout Europe. tion, value, and volume of fisheries pro- stakeholders within a country, and inter- ducts in international trade. nationally. There is also a lack of awareness No nominal information is shared when about illegal wildlife smuggling methods using the EU-TWIX system. Exchanges via among the transportation sector including the mailing list have, for example, helped handling and screening companies, whose draw attention to the illegal trade in eels current focus is mostly on weapons and (routes used, mislabelling of shipments Fish catch and trade chain – compliance controls explosives. Moreover, those involved in where Anguilla anguilla is recorded as Observers illegal trade are adaptive, and will shift another species of eel such as the Japanese Vessel Monitoring Systems* trade routes to take advantage of ports of eel, etc.) and assisted officials in identifying Automatic Identification System** entry and exit having weaker controls. shark products, which have led to seizures. Patrols

Faced with these challenges, governments, Identification of fish products in inter-governmental organizations, NGOs, International trade the private sector and civil society are Processed seafood products in internatio- developing solutions to address illegal nal trade are often very difficult to identify fishing and associated trade. at a species level, making implementation of species-specific legal requirements, such Information-sharing and collaboration as those under the CITES, very difficult The Improvement of coordination and to implement. There is a need for training Sea Landing standardization of intelligence sharing components on illegal wildlife trade to be among government agencies and other incorporated into existing systems and stakeholders in the supply chain at national, programmes – to make it cost effective, regional and global levels is key in tackling and to ensure that officers are trained at Monitors illegal wildlife trade. The European Union the beginning of, and throughout, their Shore-based Trade in Wildlife Information eXchange careers. compliance officials (EU-TWIX) system, which has been in

operation since 2005 with the ongoing Many agencies, institutions and organiza- * The vessel monitoring system is a satellite-based monitoring support of TRAFFIC – an internatio- tions, including TRAFFIC, conduct spe- system which at regular intervals provides data to the fisheries nal NGO focusing on the trade in wild cies identification training, and provide authorities on the location, course and speed of vessels.

28 WCO news N° 80 June 2016

In the context of illegal fishing, analysis of trade information is a potentially powerful tool to assess illegal fishing activities, and so assist efforts to combat them. TRAFFIC, a number of government agencies, and various other institutions have analysed Customs trade data as a means of gathering information that can be valuable in tackling illegal fishing. Trade data analysis can assist efforts to combat IUU fishing by:

• increasing the understanding of the nature, scope and extent of IUU fishing activity, and the dynamics of the trade in products sourced from IUU fisheries;

• providing independent verification of the extent of a known IUU fishing problem;

• assessing the effectiveness of an existing trade and/or market-related measure;

• demonstrating that a problem exists that may not have been previously documented;

• determining the value of IUU products in international trade.

The sourcing, extraction and analysis

of trade data can be carried out by any © TRAFFIC

Fish catch and trade chain – compliance controls

DATA DATA DATA DATA DATA DATA DATA DATA DATA DATA DATA DATA DATA DA TA DATA DATA DATA DATA DATA DATA

Invoices Permit Invoices Permit Routine inspections Routine inspections

Import & Retail & Buyer Processor Trader Consumer Plate Export Restaurant

Permit Customs export/import permits/controls Voluntary compliance Invoices EU regulation catch certificates through purchase of Routine inspections Regional Fisheries Management certified product Organizations trade document

** The Automatic Identification System (AIS) is an automatic tracking system used on ships and by vessel traffic services for identifying and locating vessels by electronically exchanging data with Source: Stop Illegal Fishing and PescaDOLUS (2016) Record of other nearby ships, AIS base stations, and satellites. The First International Symposium on FishCRIME. Stop Illegal Fishing: Gaborone, Botswana.

29 DOSSIER

individual, NGO, business, government transportation sector in particular, inclu- To read agency or other institution anywhere in ding handling and screening companies. the world. Trade data analysis is an inex- Is illegal fishing a form of organized pensive process, requiring only a standard The Reducing Opportunities for Unlawful crime? In which circumstances computer, Internet access, and knowledge Transport of Endangered Species should it be treated as such? What of spread-sheet applications. There are (ROUTES) Partnership was established in approaches are necessary to tackle it? many user-friendly websites managed by October 2015 with a five-year mandate to These are some of the main questions national governments or international collaborate and implement activities that driving new research carried out by organizations such as the United Nations will assist the transport sector, in an effort the NGO The Black Fish in partner- which provide, mostly free, online access to reduce wildlife trafficking via land, ship with the Global Initiative Against to trade data. TRAFFIC’s fisheries trade sea and air. Funded by the United States Transnational Organized Crime. data analysis user’s guide – www.fisheries- Agency for International Development trade-data.org – provides information on (USAID) and coordinated by TRAFFIC, sourcing, extraction and analysis of trade ROUTES has established collaboration data, and includes links to websites where across government agencies, transporta- trade data can be obtained. tion and logistics industry representatives, international conservation organizations The 2012 amendments to the WCO and donors to counter the use of transport Harmonized System saw some significant supply chains for the illegal movement of changes under Chapter 3 supporting the wildlife by organized criminals. separate identification of certain species of fish and crustaceans, molluscs and other ROUTES complements other conserva- aquatic invertebrates. This has enhanced tion and law enforcement approaches by the possibilities for fisheries trade data focusing on private sector solutions along analysis, and the next set of amendments, their supply chains, bringing the trans- Cape Town, South Africa, saw nearly in 2017, will hopefully improve separate port sector to the forefront of innovation 200 delegates from 31 countries parti- identification even further. in disrupting the illegal flow of wildlife. In cipating in the inaugural International its initial phase, ROUTES is focusing on Symposium on FishCRIME from Private sector action the aviation transport supply chain, with 12-13 October 2015. The record of the Illegal seafood trade knows no borders the intention of expanding to the maritime meeting is available online. and the freight forwarders, logistics com- sector in coming years (see www.traffic. panies, land, air and sea carriers, inclu- org/routes). ding passenger airlines, are increasingly being abused by traffickers in wildlife who Pilot training courses at two airports – one depend on them to smuggle illicit goods in Africa and another in Asia – will take from source areas to market destinations. place this year. TRAFFIC has previously The private sector can, therefore, play a been involved in a number of training pro- critical role in being the eyes and the ears grammes involving Customs officials, but of enforcement agencies, helping identify this will be the first one that is specifically and strengthen key risk points in the sup- focused on the transport sector. ply chain. However, as mentioned earlier, there is a lack of awareness about illegal More information wildlife smuggling methods among the www.traffic.org

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Tracking the illicit traffic in weapons By Mike Lewis, CONFLICT ARMAMENT RESEARCH © U.S. Army Alaska (USARAK)

AN ASSAULT RIFLE is shipped to a foreign factors based on past weapons seizures, compare physical data from bombs and government in the mid-1970s. Forty years and to identify those responsible for traf- improvized explosive devices (IEDs). later, with the original records of its sale ficking seized weapons, when the history long since disposed of or lost, it is stolen of those weapons has been effectively The technology developed from Scotland from a poorly guarded stockpile, and ‘laundered’ by age and geographical Yard’s UK Police National Bomb Data driven in the back of a truck across a movement, just as surely as the proceeds Centre, aimed at improving investiga- thousand-mile-long border. It is passed of crime are laundered by passing through tions of terrorist attacks by organising on to a foreign insurgent group, discove- multiple entities and bank accounts. and sharing data on incidents. It allows red at a Customs post while being smug- investigators, for example, to connect the gled across another border, and is finally It is precisely this problem of weapons’ construction and components of a bomb seized and placed in a Customs storeroom hidden histories that Conflict Armament found in one place with those in another, for investigation or disposal. Research (CAR) has set out to tackle. An identifying potential links between bomb- independent organization established in makers and bombers internationally. Such a scenario will be familiar to Customs 2011, CAR began two years ago to docu- and enforcement officials all over the ment and track weapons from source to iTrace is applying this technology to world. Recent atrocities in Paris, France use – a project set up and financed by a conventional weapons for the first time, – perpetrated with military firearms ori- European Union (EU) Council Decision allowing users to match a seized or illicit ginating partly in Eastern European state in 2013, with funding also from the weapon with ‘matching’ weapons docu- stocks – highlight the huge challenges of German, Swiss and United Kingdom (UK) mented across the world. This is done preventing illicit weapons from crossing governments. by finding weapons with similar techni- borders even within Europe, let alone in cal characteristics, corresponding batch regions with far more limited enforcement CAR uses two basic tools. First, CAR and serial numbers, or similar transfer resources, and with much vaster and more field investigators, working primarily in histories. The technology can thus help remote territories. Given the impossibility Africa and the Middle East, physically investigators to identify the possible ori- of physically interdicting every potentially document weapons used by illicit actors gins, users and diversion points of a seized illicit item, Customs officers and investi- in enough detail both to trace the weapons weapon, even when the records of its pro- gators have long recognized the need for through formal channels, and to compare duction, original export or theft are una- intelligence-led and risk-led approaches to them with other weapons documented vailable, or have been destroyed. tackling the illicit weapons trade. around the world. Second, CAR has created a unique database called iTrace, using iTrace thereby aims to complement formal Officials will be equally familiar, though, DFuze technology that many law enfor- weapons tracing through the International with how difficult it is to establish risk cement agencies have used to track and Tracing Instrument, INTERPOL’s iArms

32 WCO news N° 80 June 2016

Since 2014, CAR has documented over 130,000 illicit weapons, munitions and related items in 15 countries, including Iraq, Syria, Lebanon, Niger, South Sudan, Nepal, Somalia, Mali, Libya, Chad, and the Central African Republic. This dataset is continually updated, and in June 2016 it will go live at www.conflictarm.com. It will be available online to investigators, policymakers and researchers.

dataset and other tracing programmes. held and lost, and possible local criminal To ensure the project’s sustainability, Meanwhile, CAR hopes that policymakers intermediaries. CAR has also helped train over 200 police, and risk managers will also use the data in Customs, military and intelligence officials aggregate to red-flag locations, interme- Meanwhile, through a combination of to document and trace seized illicit wea- diaries and specific end-users which pre- ‘traditional’ weapons tracing and weapons pons more effectively, and to use the iTrace sent particular diversion risks for future matching, iTrace has also identified close system. CAR aims to contribute long-term exports – and to target interdiction efforts matches between newly-produced small capacity to every agency with which CAR on such ‘choke points.’ arms found in the hands of an Islamist works, an approach which helps CAR group in the Middle East, and those used investigators to learn too. Two examples from the greater Sahel in a spate of marauding terrorist attacks region show the potential of this approach. across West Africa during 2015 and 2016. On top of its core documentation work, Working across eight countries in North These and future matches are providing CAR also undertakes some bespoke in- Africa, West Africa and the Middle East, the initial leads for investigations rela- depth investigations of particular transac- CAR initially set out to track the cross- ting to trafficking networks and personal tions and intermediaries. The organization border diffusion of Libya’s weapons connections which may stretch thousands has shared leads with several enforcement stocks since the 2011 overthrow of the of kilometres between widely separated agencies since 2014, resulting so far in at Gadhafi regime, a project funded by the Islamist groups. least one completed criminal investigation. UK government. Of particular concern are portable surface-to-air missiles Since 2014, CAR has documented over For further details, including enquiries (MANPADS), widely available in poorly- 130,000 illicit weapons, munitions and about collaboration or data availability, secured Gaddafi-era arsenals, which could related items in 15 countries, including kindly contact Marcus Wilson, CAR’s pose a potential threat to civilian airliners. Iraq, Syria, Lebanon, Niger, South Sudan, Managing Director, at wilson@conflictarm. Nepal, Somalia, Mali, Libya, Chad, and the com. iTrace has matched a significant number Central African Republic. This dataset is of MANPADS seized from weapons caches continually updated, and in June 2016 it More information and smugglers as far apart as Lebanon and will go live at www.conflictarm.com. It www.conflictarm.com Mali to batches of missiles which CAR will be available online to investigators, field investigators in Libya documented policymakers and researchers. at a particular depot in the Fezzan, fin- gering this facility as a particularly significant diversion point in need of physical security, and revealing the transnational reach of the smuggling networks around it.

But iTrace has also identified significant clusters of matching small arms which correspond to batches within the state stocks of two other countries in the region, and which have found their way to groups as far apart as Islamist fighters in Mali, and rebel groups in the Central African Republic. Work is now ongoing in these two countries to determine exactly where these batches of weapons were Screenshot of the iTrace user interface

33 DOSSIER

Automatic detection tools: from concept to reality

By Dr. Chen Zhiqiang, PRESIDENT AND CEO, NUCTECH COMPANY LIMITED ATR suggestion: Further Inspection (40.18) ON INTERNATIONAL CUSTOMS Day 2016, 1. Detection of alcohol the Secretary General of WCO, Kunio Mikuriya, reminded us all that informa- 2. Mismatch with the declaration, further inspection required tion and communications technology (ICT) is everywhere in today’s Customs workplace, and that ICT has transformed the way Customs and governments operate.

To meet the challenge of facilitating trade through more effective and streamlined control of merchandise, Customs authorities must take advantage of technologies, and more particularly of non-intrusive inspection (NII) solutions.

Over the last decades, Customs have stayed at the forefront of this key technology. Thousands of advanced NII systems – commonly X-ray transmission systems – have been installed at Customs security The good news is that technologies that and build up a massive reference database checkpoints around the world, enabling will improve image interpretation are here, which can be used for training purposes, them to expedite the movement, release and now. Scanning technology providers as well as for building ATR algorithms. and clearance of internationally traded are working on algorithms that will enable goods, while improving their fraud detec- machines to recognize objects. Automatic ATR technologies are based on machine tion capacities. detection tools are commonly known by learning, which is the development of the acronym ‘ATR,’ which means automa- algorithms that learn from experience. Today, with the development of automatic threat recognition, or assisted target Algorithms are developed to find spe- tic detection tools, Customs’ capacity to recognition. Big Data, cloud computing, cific patterns in X-ray scans of all sorts. detect fraud could take a giant leap. machine learning, and advanced data The algorithm analyses pictures based on analytics have been seamlessly integrated their shape, density, texture, and even ato- The Achilles’ heel of security inspection together to develop such solutions. mic numbers to formulate certain pattern Amazing tools as they are, NII systems recognition rules, which can be applied need to be operated by highly skilled offi- Unleashing potential later to other image sets, irrespective of cers. Although great strides have been NII equipment is usually used in a stan- the NII system used to produce the images. made in image processing over the years, dalone manner. An X-ray image collected there is still a scarcity of image analysts in from a scan is, in most cases, only used The nature of the goods can be automa- many countries. once at the checkpoint level. Field officers tically identified and designated with are required to analyse the X-ray image distinctive colours according to the Human resources constraints is a long- and assess whether it reveals the pres- Harmonized System (HS) code of the standing problem which affects many ence of suspicious items. Once a decision commodity. Based on its unique pattern, Customs authorities. NII literacy is truly is made, X-ray images are often archived ‘milk’ can be easily distinguished from hard to earn in the short term. To train onsite, or stored in a remote server. They ‘beverages’ for example. By comparing an image analyst, even a naturally talented are usually not used again. In today’s the image with the data contained in the one, requires a great deal of time to be information age, such a practice is seen cargo manifest, a machine would be able to given. One also has to take into conside- by professionals as a huge loss. assist field officers in verifying whether the ration the need for constant training to data and image received from the scanner keep pace with the booming development Supported by a secure information tech- match. of new NII systems. nology (IT) system, Customs officials can now collect, manage and process tremen- Specific knowledge can be used to improve dous volumes of historic scanning images, the application. For example, algorithms

34 WCO news N° 80 June 2016

can be specifically fine-tuned to automatically distinguish consignments which are frequently traded. Filtering mechanisms can be put in place to free the operators from repetitive interpretation of similar scanned images of frequent goods.

The machine can learn also to detect certain items of interest such as cigarettes, bottled liquor, radioactive material, solid waste, or even artillery or weapons. The list of target items can be expanded and customized to accommodate specific needs.

By comparing the features of different parts of the image, an algorithm can also be built to pinpoint and highlight anomalies, for example a hidden compartment. Such technology also enables ‘ISO non-empty containers’ to be revealed, in order to detect contraband and illegal goods, forgotten or intentionally left in an ISO container, including differences in a load.

The machine learns from human interactions, and constantly expands its analytical capacities to better categorize, clas- sify and detect goods. In other words, it sharpens its skills to become an expert in image interpretation through constant self-development.

ATR may also serve as a deterrent for the corruption of, or collusion between, officers and smugglers. Whatever the final decision regarding the release of a shipment, the system will record any hit in a database for future auditing, or even report it to the central command centre in real time.

years OF EVOLUTION Way forward ATR application is capable of memorizing details from tons of screening pictures, cross-referencing them for a quick match, extracting features from every image, locating anomalies with established rules, and providing recommendations to assist human operators in their decision-making. Multi-tasked with all these functions, an automatic recognition algorithm can serve as the super brain that assists human operators for image interpretation in a more timely and accurate manner.

As for now, ATR has transformed from concept to reality. Committed to combatting the illegal trade in cigarettes and alcohol, Customs authorities from Asia-Pacific and Europe are now applying the full-fledged ATR algorithms. As an add-on tool for an Asia-Pacific Customs service, ATR predetermines automatically if the scanning image contains any suspicious objects, while removing the necessity to analyse repetitive images of similar frequent goods.

In another three-month blind test by an Asia-Pacific Customs administration, ATR application has proved its capacity to detect cigarettes with a detection probability of almost 88%, and alcohol with an amazingly high accuracy rate of 93%. It should be noted that ATR application can achieve an even higher detection rate through further ‘machine learning’ in synchronization with the completed image database.

More information [email protected] www.nuctech.com

35 FOCUS

The power of pollen: how CBP is at the forefront of using pollen as a new forensic tool

By Marcy Mason, A WRITER WHO COVERS TRADE FOR US CUSTOMS AND BORDER PROTECTION In June 2015, when the partially decomposed body of an unidentified little girl, known as Baby Doe, was found in a trash bag on a beach on Deer Island in Boston Harbour, the National Center for Missing & Exploited Children in the United States (US) contacted US Customs and Border Protection’s (CBP’s) forensic pollen expert, Andrew Laurence, for help.

LAURENCE, ONE OF the world’s foremost forensic palynologists and one of only two such experts in the US, has helped the Center identify the geographical origins of other children in the past. He found more than 30 different types of pollen grains on the Baby Doe evidence sent to him. Most were common to the Northeast. “There was a lot of pine, oak, birch, and a little bit of spruce,” he said.

But then, there were the unexpected types of pollen that he found. Baby Doe’s clothing and blankets contained two types of Cedrus or cedar pollen grains. One of the species in the sample was cedar of A bumblebee gathers nectar while pollinating a Bleeding Heart floral blossom Lebanon. “It didn’t grow in New England

36 WCO news N° 80 June 2016

Arboretum of Harvard University in bring the pollen in on their clothes and it Boston imported a specific variety of the transfers into the air inside the building. trees that now grow throughout the area,” There can be up to 10,000 pollen grains said Laurence. But it was the second spe- per cubic metre of air, roughly the space cies of cedar that clinched it. “The only inside a home refrigerator,” said Laurence. place I could find the second type of cedar was the Arnold Arboretum, so I knew that Moreover, pollen is extremely resilient. It

Baby Doe was from the Boston area,” he © Yolanda Choates stays intact and doesn’t lose its physical said. Vaughn Bryant, the first forensic palynologist structure. “Under the right preservation in the US, going about his work at Texas A&M conditions, pollen is virtually indestruc- University in College Station, Texas In less than two weeks, Laurence delive- tible,” said Laurence. “Pollen grains could red the results. “It was a very helpful tool,” be 20 million years old, more than 200 said Trooper Daniel Herman, the detective million years old – before the age of dino- from the Massachusetts State Police homi- University in College Station, Texas, who saurs, or even go back as far as when the cide division investigating the case. “We is regarded as ‘the father of forensic paly- first plant life appeared on earth 450 mil- had hundreds of leads and calls coming nology’ in the US. Similarly, every plant lion years ago.” in from all over the country. The pollen has its own unique pollen grain. “There analysis indicated that the child had spent are about 300,000 species of plants in the However, forensic pollen analysis isn’t a significant part of her life in the Boston world. Each one produces a unique type of ideal for every type of situation. “If you area. So it was encouraging news for us. pollen,” said Bryant. have a sample that has been exposed to It helped us narrow down our search and the local environment for a couple of days, focus the effort we put into leads.” One of the reasons that pollen is so well- chances are it’s so heavily contaminated suited to forensic investigations is because with local pollen that it would be difficult Although pollen analysis has been used for pollen is everywhere. “Any object that is to determine where it actually came from,” forensic purposes for several decades, it is a exposed to the environment is collecting said Laurence. new technique for US law enforcement. As pollen,” said Laurence, one of Bryant’s the only US federal agency with a forensic former students and his protégé. “We can Historical roots palynologist on staff, CBP is leading the analyse pollen to reconstruct the envi- The earliest reported case of forensic pol- US law enforcement community in using ronment of where that object came from len analysis successfully being used as this new forensic tool for investigations or the different places that it’s been. For criminal evidence occurred in Austria and intelligence. example, we can trace the route of a truck in 1959. Pollen found on the soles of a as it travels through different ecological suspect’s muddy boots was linked to the Unknown field and vegetation zones, because as the truck site where a man had disappeared while Forensic palynology, not a widely known travels, it’s collecting different types of pol- vacationing along the Danube River near field, is defined as using pollen and spores len grains,” he said. Vienna. During the 1960s and 1970s, there to solve criminal or civil legal issues. were other European criminal cases that Essentially, there are two types of foren- “We also can analyse clothing and tell used pollen as a forensic tool to link sus- sic palynology. The first is when pollen is where someone has been. Pollen can hang pects to events or crime scenes. used to investigate crimes. The second is onto clothing for quite some time even when pollen is used to determine the geo- after repeated washings,” said Laurence. In America, forensic palynology took root graphical location or ‘geolocation’ of items “So even if you wash your clothes several in 1975, when Bryant, a botanist who had or people. times, the pollen will still be there from studied pollen at archaeological sites, star- the day you bought the clothes. It becomes ted to analyse pollen for forensic purposes. “Every location in the world has a embedded in the fabric.” The US Department of Agriculture unique pollen print – just like a finger- (USDA) tapped his expertise for a loan print,” said Vaughn Bryant, a Professor Pollen is also indoors. “When people are subsidy programme to help US honey far- of Anthropology and the Director of the going in and out of a building, they’re mers. Bryant tested honey samples, iden- Palynology Laboratory at Texas A&M collecting pollen,” said Laurence. “They tifying the pollen content, to determine if

37 FOCUS

the honey was produced domestically – one of the requirements of participating in the programme.

Unbeknownst to Bryant, it was a huge undertaking. “I had abso- lutely no idea what I was getting into,” said Bryant. “I had never looked at honey before and thought it would be relatively easy. What I did not realize is that just in North America alone, not counting the rest of the world, there are probably somewhere close to 90,000 to 100,000 different plant species that could potentially be used for pollen or nectar.”

After five years of identifying pollen, Bryant became an expert. But then the price of honey on the world market soared and the USDA ended its honey subsidy programme. In 1980, Bryant was not able to find anyone in the US who wanted to hire him for his forensic palynology skill. “No one at that time was doing forensic palynology anywhere in the world except New Zealand,” said Bryant.

In the 1990s, interest in using forensic palynology reemerged in countries such as the United Kingdom, but the US lagged behind. It was not until after the 11 September 2001 terrorist

attacks that pollen was used as a forensic tool. One of the US © Yolanda Choates intelligence agencies contacted Bryant about using his foren- CBP scientist Andrew Laurence puts his palynology skills to good use at CBP’s laboratory in Houston, Texas sic palynology skill for security purposes. “I was looking at samples that had been collected by the intelligence community from places where terrorists were active. There were samples of everything from rugs to cars to people to dwellings to weapons – even bombs,” said Bryant.

Then, just as his work with the intelligence agency was winding down, CBP reached out to Bryant. “We had intelligence gaps related to the movement of narcotics. We wanted to know more specifically where the drugs were coming from, how they were grown, and how the cartels were operating so that we could strengthen our interdiction efforts,” said Patricia Coleman, Acting Director of CBP’s Office of Intelligence.

Surprising connection One of the first samples that Bryant tested was from an 8,000- pound (3,629 kg) marijuana seizure taken from a warehouse in San Diego, California in November 2011.The warehouse was connected to a drug tunnel that ran beneath the US-Mexico border. Two weeks later an 8,646-pound (3,922 kg) marijuana seizure was made at a ranch in Starr County, Texas.

“The two seizures were in two different states, more than a 1,000 miles (1,609 km) apart, but the forensic pollen analysis revealed that there was a shared nexus where the marijuana was cultivated or packaged,” said Steven Goldfarb, a Watch Commander in the Counter Network Division at CBP’s National Targeting Center, who is currently assigned to the Drug Enforcement Administration’s (DEA’s) Special Operations Division. “From

an intelligence perspective, we concluded that the same drug © Adam Hoffner trafficking organization was responsible for the growth site and J.R. Shook, a Border Patrol agent, examines a drug bundle washed-up at Sombrero Beach in the Florida Keys the distribution of both marijuana shipments.”

38 WCO news N° 80 June 2016

CBP also made another eye-opening disco- of marijuana shipments. “Then it became vessels, drug cartels use the boats to move very. “The presumption was that the mari- bigger. We weren’t looking at just mari- narcotics up the West Coast. “Initially juana moving through Texas was coming juana anymore,” said Coleman. “We were the panga boats would leave Mexico from from the cartels that controlled the states looking at other narcotics such as cocaine, the Baja California peninsula and sail south of Texas. But that’s not what we were heroin, and crystal methamphetamine. up to the San Diego coastal area,” said seeing,” said Coleman. “The pollen testing Basically, we were using science to tell a Coleman. “But in 2012, we started to see showed that the drug shipments seized in story, to piece it altogether, to find out who a lot of panga movement further north up Texas were coming from Sonora, which is was involved, how the drugs were made, the Pacific Coast, and it was becoming a south of Arizona.” where they came from, and what routes problem.” they travelled.” A few months later, Bryant did pollen tes- CBP’s Office of Intelligence wanted to ting on another batch of shipments. This By this point, it had also become apparent get a better idea of how the cartels were time with Laurence’s help. Between March that CBP needed to hire a full-time foren- operating, so pollen was tested on aban- and May of 2012, CBP officers and Border sic palynologist. “Once we started getting doned boats. “We analysed the interior of Patrol agents made numerous marijuana results, things took off,” said Coleman. the boats, wiping them down the sides as seizures on the southern border near El “We couldn’t keep up with the demand. well as inside the engines and the engine Paso, Texas. Further inland, state and We literally had a backlog.” Bryant recom- covers,” said Laurence. “The boats contai- local law enforcement agencies also made mended Laurence who shared his passion ned lots of pine, lots of oak, and a few several marijuana seizures that involved for forensic palynology and had proven to spruce or fir pollen grains. In Mexico, fir heavy farm equipment used to smuggle be gifted in the field. Laurence now works trees only grow in the highest elevations the drugs. full-time at CBP’s Houston laboratory. of the mountains.”

“We thought there was some connection One of the cocaine cases that Laurence “What we derived from this in an intelli- among these shipments because the drug worked on was a drug bust in Detroit, gence sense is that they were loading the seizures were coming through the same Michigan in November 2013. The cocaine, boats discreetly at the higher elevations channels,” said Goldfarb. “Through foren- which was not destined for the US market, and then driving them to the water to sic pollen analysis, we discovered that all was seized from a truck before it exited the launch them,” said Coleman. “Once again, of the marijuana had a specific pollen type, country to Canada. The truck’s manifest this finding enabled us to give informa- a ‘key marker’ that stands out. It’s a pollen indicated that the truck had travelled from tion to the Mexican government to do that generally points to a very precise loca- Salinas, California. “We wanted to verify enforcement.” tion. In this case, the plant was sagebrush,” that,” said Laurence. The pollen revealed he said. that the truck did originate in Salinas, Washed ashore drove up the coast to San Francisco, Pollen analysis also has helped CBP trace Although there are more than a 100 species and then turned east, travelling through the routes of marijuana and cocaine of sagebrush in the US, in Mexico, there is Nevada, Utah, Wyoming, Nebraska, Iowa, bundles that wash up onshore along the only one known species, which only grows and Illinois until it eventually arrived in coasts of Florida and Texas. As early in a few isolated locations. “We were able Detroit, where the cocaine was seized. as 2011, the Border Patrol in the Miami to narrow down very precisely a particular Sector started to see a steady increase in area of Mexico where the marijuana was “It was a curious route,” said Goldfarb. drug bundles washing-up in the Florida cultivated,” said Goldfarb. “This tied into “The question is – why would you take Keys. a bigger case involving a specific drug traf- your shipment all the way to Detroit when ficking organization in Mexico that was you can go straight up to Canada through “We had over 40 wash-ups in fiscal year under investigation. The pollen analysis the state of Washington? It was evident 2015,” said J.R. Shook, a Border Patrol linked this organization to the marijuana that there was a drug deal going on, and agent in the Miami Sector’s Intelligence seizures in Texas,” he said. this gave us an investigative lead. Just like Unit. “From the trends we’re seeing during on the Mexican side of the border, there the first quarter of 2016, we expect that CBP shared information with the Mexican are different cartels in Canada that control number to rise.” Compared to the same government, and in June 2012, Mexican specific regions,” said Goldfarb. “If we give period last year, Border Patrol statistics for authorities raided a farm outside of the city that information to the highway patrol, the state of Florida show nine times the of Chihuahua, where they seized 400 kg of they could occasionally do some enforce- number of marijuana bundle wash-ups. marijuana and 13 sacks of marijuana seed ment and stop the movement of cocaine weighing almost 300 kg. through the US.” When bundles are found, the Border Patrol sends samples to Laurence for testing. “The More than marijuana Another unexpected finding from the pol- majority of the wash-ups are bundles of For more than a year, CBP’s Office of len analysis involved panga fishing boats. marijuana from the Caribbean, especially Intelligence used pollen to track the flow While panga boats are legitimate fishing Jamaica,” said Coleman. “What clued us in

39 FOCUS

“Prior to the pollen testing, we had no idea where the narcotics were originating from, so when a bundle would land on the beach, Homeland Security Investigations would just seize it and there wasn’t an investigation. No smuggler was caught,

no information was captured; the drugs © CBP Office of Intelligence Pollen analysis revealed that a truck carrying a cocaine shipment were just destroyed.” travelled across the US from California to Canada instead of taking the most direct route up the West Coast, giving CBP an investigative lead and filling an intelligence gap.

was the samples we examined are loaded Processing pollen of political reasons or some places are just with fern spores, more than would be typi- The pollen analysis process is arduous very difficult to get to like the Amazon,” cal of an area where ferns grow. There are and labour intensive. “Pollen processing he said. Laurence and Bryant also rely on only a few areas that have that many ferns itself is a very long process. There are a reference collections, databases, books, and one of them is Fern Gully, a winding, lot of chemical steps as well as physically and other forensic palynologists, however, scenic stretch of road in Jamaica,” said washing the samples,” said Laurence. there are few. Coleman. “Normally, it takes four to six hours to process a sample if everything goes well. “There are only a handful of forensic paly- “Prior to the pollen testing, we had no idea That includes vacuuming the sample to nologists in the world, maybe five,” said where the narcotics were originating from, extract the pollen.” Jen O’Keefe, the past President of AASP – so when a bundle would land on the beach, The Palynological Society, an international Homeland Security Investigations would But there are often complications. For association based in Houston, Texas. “It’s just seize it and there wasn’t an investi- example, if a cocaine sample is not com- very hard to identify people with the right gation,” said Shook. “No smuggler was pletely pure, the impurities need to be dis- skill set to do this. You have to be extre- caught, no information was captured; the solved. “It takes time to figure out what mely exacting and careful in the labora- drugs were just destroyed,” he said. “With those impurities are and what can dissolve tory. You also need an incredible memory pollen analysis, we’re now able to pin- them,” said Laurence. Other times there for shapes and sizes, and for where you last point where the narcotics originated and could be a lot of sediment in the sample saw something. Plus you need to have the the probable routes and methods used to that traps the pollen. “This adds a lot of patience and stamina for long hours at the smuggle them into the country. That, in extra steps and a lot more time,” he said. microscope.” turn, helps us counter the threat.” After a sample is processed, then Laurence Forensic value Before long, the pollen testing was identifies the pollen with a microscope. “It’s amazing that pollen, a small microsco- expanded to gather intelligence on other “I sit down and count the pollen grains. pic particle, could have such a great impact aspects of CBP’s mission including seized How long that takes depends on how many on criminal investigations,” said Coleman. weapons, currency, and even identifying grains are in the sample, what the sample “Sometimes the findings that come out of travel routes and places of origin of cri- is, where it came from, and what types of pollen analysis are things we would never minals, potential terrorists, and other per- pollen grains are there,” he said. “While even venture to think about. It’s like a new sons of interest. I’m counting, I’m identifying and if there discovery, a new piece of information that are lots of different pollen grains, it could supports existing intelligence or counters “We’re looking to apply forensic pollen take a long time to determine what eve- what we know,” she said. “It gives us irre- analysis to matters of national security,” rything is as well as matching it against futable, scientific evidence that allows us said Coleman. “We’re looking at travel known pollen types. If I’m looking at pol- to rethink how we look at the processes, routes of people who are travelling to the len from regions where there isn’t a lot of the procedures, and the tactics of the cri- US. These are people who have already information, it could take even longer.” minal enterprise, but perhaps what’s most been identified by CBP systems that are exciting are the endless possibilities of pol- used to determine risk associated with One of Laurence’s biggest challenges is len as a forensic tool.” travel,” she said. “Pollen can trace a per- knowing what grows in various places son back to a certain location. In light of around the world. In some countries, like More information foreign fighters and concerns about indi- the US, extensive pollen mapping studies www.cbp.gov viduals coming to the US, this is an avenue have been done. In other places, such as the for us to explore, to find out if people have Middle East, South America, and Mexico, been in conflict zones.” information is scant. “It’s either because

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AD WCO CLEARVIEW FINAL.indd 1 1/31/16 4:25 PM POINT OF VIEW

Thoughts on ‘Big Data’ and our real world

By Christine Macqueen, from ‘boot-legging’ into one of the most distribution chain. Collecting data is not DIRECTOR OF CORPORATE AFFAIRS, SICPA powerful activities on the planet, with the enough – putting in place the framework There has been much hype, and for good economic impact of counterfeit products to ensure high quality data is essential: a reason, around the Big Data revolution. alone growing from 178 billion US dol- cliché but true – ‘rubbish-in, rubbish out.’ Dramatic advances in technology have lars in 2007 to an estimated 1.77 trillion Assuring data quality requires real rigour made it possible to develop services with in 2015 according to the International and expertise, and the constant application large volumes of data that could never Chamber of Commerce (ICC). of critical thinking. Oh too easy for those have been done with smaller data sets – who do not want to be properly regulated allowing authorities to spot new patterns, Our tools have not kept up to bamboozle hard-pressed officials by and identify threats in near real-time. Most governments and institutions have offering up data sets that will not do the The ability to process data at speed has not evolved in line with the technological job – that are incomplete, or will not fit in allowed extraordinary advances such as advances of the past decades, and many with an international framework so essen- those which enable planes to fly safely still operate with legacy systems and tial in a cross-border world. by autopilot, and cars to navigate their legislation that were put in place before own path more efficiently and safer than the expansion of globalization. Big Data Private sector data sets are also very when driven by human beings. Why then dividends are all too often not harvested patchy has this power not yet been harnessed to because of the inadequacy of the data sets This might seem surprising given the tackle more effectively the ever increasing available, and the insufficiency of analy- potential scope of traceability data and incidence of illicit trade and the prolifera- tical tools and resources to exploit them. the fact that producing it has become tion of counterfeit goods? Some food for Budgets are tight but we need to do more economically viable over the past years, thought. and better with them. In the new virtual making it possible, for example, for fast world, linear approaches do not suffice moving consumer goods (FMCG) compa- The world has got more complicated and traditional ways of collecting and nies to offer secure traceability even on the Globalization has had many positive exploiting data are not enough – it is often cheapest of products. But not even 1% of consequences and driven economic the unexpected patterns that our lateral products available on the market today are growth, but it has also complicated the thinkers and data science experts identify protected with any traceability, let alone task of enforcement agencies. Production or predict that make the difference, not a secure traceability solution. This makes locations and trading routes have chan- only the answers to the questions we for- it difficult for law enforcement officers to ged as manufacturers outsource more mulate in the field, no matter how much be able to differentiate legitimate from and more to low labour cost countries. this experience matters. illegitimate products, and for consumers Supply chains have evolved to reflect this to protect themselves from consuming and become more convoluted. Advanced Ensuring high quality data is essential potentially fatal products. Indeed many production technologies are increasingly Data sets can come from multiple sources. brands still handle counterfeiting as an available to criminal organizations, and The private sector can do a great deal intellectual property (IP) problem, dele- their products may even rival the quality and governments create their own: be gating the issue to their legal departments of genuine goods. Over recent years illi- it in the sphere of tax and duties, or for and taking, at best, sporadic action. cit trade and counterfeiting have evolved other controls on product origin, or the

42 WCO news N° 80 June 2016

It is the collective Worse even, the mentality remains within reinforce data integrity, data collection, responsibility of producers, some brand owners that promoting secu- and data verification and exploitation. rity on their products could be perceived Only a combined effort by all stakehol- distributors, consumers and by the customer as an admission that their ders – institutions, consumers, govern- law enforcers to reinforce products are not safe, which could poten- ments, and the private sector alike – has tially negatively affect their market share a chance to disrupt illicit networks and data integrity, data collection, and reputation. And consumers likewise reverse the growing trend of the past and data verification and often fail to understand or ignore the decades. The work of the WCO is crucial, risks they are exposed to on a day-to-day providing its Members, and through its exploitation. Only a combined basis, and do not exercise their purcha- partners, the advice, expertise, standards effort by all stakeholders sing power to put pressure on producers and programmes which make it possible to put in place more adequate systems. It to work together. Equally, an integral – institutions, consumers, is worth recalling that over one million part of the solution resides in the WCO’s governments, and the private people are thought to die each year from pro-active and practical collaboration the consumption of fake medicines, and with other international institutions who sector alike – has a chance many more from contaminated food. This work against illicit trade – it deserves our to disrupt illicit networks and lacuna continues to fuel criminal and ter- wholehearted support. Criminal enter- rorist organizations, providing them with prises grow their business and make reverse the growing trend of immense financial resources. alliances in dynamic and flexible ways – the past decades. why would we accept to be any less good? Collective responsibility We know what the answer is: it is the col- More information lective responsibility of producers, distri- www.sicpa.com butors, consumers and law enforcers to

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AZ_Mutation_WCO_News_210x144,5_AK2_engl.indd 1 15.04.13 14:08 POINT OF VIEW

Quantifying the illicit trade in tobacco: a mat ter of public interest and self-interest

By Robert Ireland, WCO HEAD OF RESEARCH AND COMMUNICATIONS

SCIENTISTS DETERMINED LONG ago that there is higher tobacco taxes and other tobacco tobacco control experts Luk Joossens and a direct causal link between smoking and control regulations. Martin Raw defined tax avoidance as the ill-health for both smokers and passive “purchasing in lower tax jurisdictions of smokers. Despite overwhelming evidence, Moreover, even if there are increases in illi- tobacco products by individual tobacco some stakeholders continued to peddle cit trade, the societal impacts would seem users residing in high tax jurisdictions for doubt regarding the health implications to be inconsequential when compared to their own consumption, within Customs until this false contention was no longer the significant benefits of improved public constraints.” Thus, tax avoidance is not per tenable. health and greater tax revenue collections. se an illegal activity. As economist and tax expert Alex Cobham Research has also shown that tobacco wrote, “there is no doubt that illicit trade Tax evasion, however, is an illegal acti- control regulations, such as higher taxes, in tobacco exists; and nobody argues it’s a vity. As defined by Joossens and Raw, it bans on smoking in public places, adverti- good thing. But it’s clearly not the big issue “includes the purchase of smuggled and sing bans, purchaser age restrictions, and about tobacco consumption – that would illicitly manufactured tobacco products.” plain packaging reduce tobacco consump- be, er, tobacco consumption.” The sale of ‘cheap whites’ (also known as tion rates, and thus positively impact ‘illicit whites’) is a type of tax evasion – the human health. Although the evidence for Illicit trade nomenclature European Commission has described illi- this is conclusive, some stakeholders conti- In their 2011 peer-reviewed paper ‘From cit whites as “brands manufactured legiti- nue to sow doubt, especially related to the cigarette smuggling to illicit tobacco trade,’ mately in one market, either taxed for local impact of newer regulations, such as plain packaging, on reducing smoking levels.

Opponents of tobacco control also emphasize the non-public health implications, particularly the supposed impact on illicit trade. There is an incentive for certain stakeholders to exaggerate the volume of illicit trade in tobacco, in order to garner resources or to lobby against public policies that result in decreased profits. Also, misleading or false pronouncements are aided by data limitations: illicit trade is difficult to measure because smugglers are not ‘eager’ to supply data.

Peer-reviewed research, however, generally concludes that although, all things being equal, tobacco control policies such as higher taxes can in some circumstances partially contribute to modest short-term increases in illicit trade, it is not a major factor, and that illicit trade can be better curtailed by policies that strengthen law enforcement and reduce government corruption.

Many examples show that a robust Customs game plan which targets the illicit trade in tobacco, coupled with anti- corruption strategies where necessary, can result in lower illicit trade commensurate

with the impact of the implementation of © Antony Mayfield

44 WCO news N° 80 June 2016

Quantifying the illicit trade in tobacco: a mat ter of public interest and self-interest

consumption or untaxed for export, and The broadest term is illicit trade, which the 1996 book ‘Smoke and Mirrors – The sold knowingly to traders who transport World Health Organization’s Framework Canadian Tobacco War,’ the Tobacco them to another country where the pro- Convention on Tobacco Control defines in Association of Canada published a guide ducts are sold illegally without domestic Article 1 as “any practice or conduct pro- entitled ‘Serious Loss of Revenue to the duty paid.” hibited by law and which relates to pro- Country,’ which “complained that higher duction, shipment, receipt, possession, dis- taxes had led to a large illicit tobacco Smuggling entails cross-border move- tribution, sale or purchase, including any trade.” ment of goods that violate Customs laws. practice or conduct intended to facilitate Counterfeiting, as defined by Joossens such activity.” A more recent example is a tweet by and Raw, is the “production of manufac- British American Tobacco (BAT) on 24 tured products which bear a trademark Tobacco control and illicit trade November 2015, which stated “Excise without the consent of the owner of the Blaming taxation and other government increases equal #illegaltobacco growth.” trademark.” regulations for illicit trade in tobacco has The tweet linked to a BAT media release a long history. For instance, 140 years ago criticizing the Australian Government’s in 1876, as reported in Rob Cunningham’s increase in tobacco excise taxes. In reality,

Chart

Research Method Sampling of Dr. Ross’s Comments Survey of tobacco users • “Direct method of estimating the scope of tax avoidance/evasion and availability of low-tax products.” • “Underestimates tax evasion; problems of validity; potential bias due to social stigma and underreporting.” Exam of cigarette packs • “Direct and objective method of estimating the scope of tax avoidance/evasion.” obtained from smokers • “Tax evasion cannot be detected without self-reported info from smokers and/or lab inspection; possible selection bias.” Exam of discarded • “Direct and objective method of estimating the scope of tax evasion; can be less expensive than surveys.” cigarette packs • “Cannot distinguish tax avoidance from tax evasion; estimates relevant only for narrow geographical areas; difficult to account for tourists/commuters.” Exam of cigarette packs • “Direct and objective method of estimating the availability of illicit products via legal channels.” obtained from retail • “Cannot estimate the scope of tax evasion; cannot detect tax avoidance; lab inspection needed to detect counterfeits.” Compare sales with • “Transparent, replicable, and relatively low cost method that uses secondary data; estimates can be generated consumption (gap relatively quickly.” analysis) • “Lack of reliable survey data; consumer underreporting, tourist purchases and RYO [roll-your-own] cigarettes can bias the results; better at estimating the change rather than the scope.” Econometric modelling • “Can detect various types of tax avoidance/evasion; can model impact of policies.” • “Sensitive to data quality; technically demanding.” Comparison of tax paid • “Simple and intuitive method.” sales with estimated • “Cannot distinguish tax avoidance from tax evasion; better at estimating the change rather than the scope.” consumption Comparison of actual and • “Simple and intuitive method; can detect changes in tax avoidance/evasion.” projected tobacco tax • “Cannot estimate the scope of tax avoidance/evasion; cannot distinguish tax avoidance from tax evasion; cannot revenue detect one time deviation from a trend.” Key informant interviews • “Little technical skills required; low costs; relatively quick assessment of the situation.” • “Subjectivity of the estimates; may generate bias results.” Monitoring tobacco trade • “Can detect smuggling hubs.” • “Cannot estimate the scope of tax avoidance/evasion for individual countries; captures only large-scale tax evasion.” Analysing seizures of • “Globally, the World Customs Organization (WCO) provides annual data on tobacco seizures from its Customs illegally transported Enforcement Network.” tobacco • “Can generate the minimum scope of tax evasion. Can inform on the composition of the illicit market.” • ”Information may not be complete or easily available, and it could be difficult to establish its accuracy.” • [The focus on] “large seizures may not be representative of the illicit market as a whole.” • “Underestimate the scope of tax evasion; sensitive to enforcement effort.”

Source: Ross (2015)

45 POINT OF VIEW

A perfect method or methodology by which to measure the illicit trade in tobacco does not exist. Any

peer-reviewed research and Australian Quantifying the illicit trade in tobacco study that contends that government data indicate that the illicit There are a number of reputable papers one particular methodology trade in tobacco has not increased in tan- that discuss the challenges and methods dem with higher tobacco taxes and ‘plain of quantifying the illicit trade in tobacco. can make a definitive packaging’ in Australia, while smoking These include the Joossens and Raw paper; conclusion concerning the rates have declined and revenue collection the International Agency For Research has increased. on Cancer (IARC) handbooks ‘Methods measurement of illicit trade for Evaluating Tobacco Control Policies should be disregarded. Unwarranted fears of illicit trade have (2008)’ and ‘Effectiveness of Price and Tax occasionally influenced governments Policies for Control of Tobacco (2011)’; and By using several methods to reduce tobacco taxes, which in turn economist and tobacco control expert Dr. that comply with objective increases tobacco consumption and Hana Ross’s 2015 guide, ‘Understanding tobacco-related diseases, while reducing and Measuring Cigarette Tax Avoidance research rules, reasonable revenue collection. Actions by the govern- and Evasion – A Methodological Guide.’ estimates can in some ments of Canada and Sweden in 1994 and 1998 respectively are prime examples of Of particular importance for considera- settings be made. this. tion are (1) the research methods for measuring the illicit trade in tobacco, and (2) In both countries, tobacco tax increases the criteria for evaluating the reliability of led to lower smoking rates and higher papers that present findings on the quan- revenue collection. However, fears about tification of the illicit trade in tobacco. Dr. increased illicit trade and political pres- Ross discusses at length criteria for evalua- sure led the governments to reduce the ting the quality of papers on illicit trade. her comments. Elaboration on the research tobacco tax rates, resulting in an increase methods she describes can be accessed in smoking rates and a decline in revenue Papers submitted for peer-review which at http://tobaccoecon.org/wp-content/ collection. survive the process maintain their cre- uploads/2014/10/Understanding-and- dibility, while those that are not formally measuring-cigarette-tax-avoidance-and- Interestingly, evidence is presented in Rob scrutinized by independent experts do evasion_a-methodological-guide.pdf. Cunningham’s book that in Canada in the not. In addition, the funding source (if 1990s, the rise in illicit trade occurred as any) should be disclosed – in striving for No silver bullet for quantifying the illicit a result of Canadian tobacco companies objectivity and accuracy, it is essential that tobacco trade massively increasing exports of Canadian funding does not come from vested inte- A perfect method or methodology by which cigarette brands to the United States for rests expecting a pre-ordained conclusion. to measure the illicit trade in tobacco does which there was virtually no demand, not exist. Any study that contends that one and which were then smuggled back into In her guide, while noting the difficulties particular methodology can make a defi- Canada where demand was high. in obtaining reliable data, Dr. Ross sum- nitive conclusion concerning the measure- marizes many of the methods that have ment of illicit trade should be disregarded. It seems almost intuitive that imple- been used for measuring the illicit trade in By using several methods that comply mented public policies that reduce tobacco tobacco. She recommends that in striving with objective research rules, reasonable consumption would also contribute to for the most reliable analysis, it is advanta- estimates can in some settings be made. lower illicit trade in tobacco, especially geous for researchers to triangulate (com- Moreover, illicit trade cannot be viewed in over the long-term. If lower initiation, bine different research methods and cross isolation; smoking rates and revenue col- higher cessation, and lower intensity verify from other sources) and to focus on lections from tobacco taxes are not only consumption levels ensue for tobacco papers that comply with the basic tenets of easier to measure, but are vital matters for products compliant with tax regulations, objective research. public policy. those who quit or never start will also have less demand for tobacco products that are The chart in this article summarizes the More information non-compliant with tax regulations. 11 tobacco illicit trade research methods [email protected] discussed by Dr. Ross and a sampling of

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Dubai Customs: Journey towards a ‘Customs of the future’

By Juma Al Ghaith, understanding of the future needs of To do so, the current state of the organi- EXECUTIVE DIRECTOR, CUSTOMS DEVELOPMENT Dubai. In 2006, Dubai Customs launched zation was assessed – the performance of DIVISION, DUBAI CUSTOMS a larger Reform and Modernization its operations was determined, notably by JUST A FEW years ago, the Dubai government Programme (RMP) to transform the orga- calculating the time that it took to clear set a very aggressive vision to compete nization from a paper-based administra- goods from airports and seaports, and the with the major cities of the world, and to tion into an electronic enabled, paperless, amount of documentation that had to be stand out as the leading trade hub in the world leading administration in the field supplied. A study on what Dubai would Middle East. This left Dubai Customs with of digital services. look like in 2010 and in 2015 was also no choice but to evolve and transform. undertaken. Looking at the future The characteristics of the environment The first task undertaken under the RMP The study predicted that by 2010 declara- when this transformation started was by was to establish a full understanding of tions would grow by 400%, and passenger no means favourable. Dubai Customs was what was needed for the future of Dubai, traffic by 300%. To support this growth a traditional paper-based organization. and to identify the gaps between Dubai without reforming the then existing ope- There were about 1,500 employees, pro- Customs’ current environment, and the rating model meant that Dubai Customs cessing about two million Customs decla- ‘Customs of the future’ envisioned by the would have to increase its staff numbers rations per year. The information techno- organization. from 1,500 to 6,000 by 2010. Moreover, logy (IT) functions were limited to basic there was a need for increased efficiency software development, using traditional Reform and modernization key drivers of ports and airport operations if existing technologies. Strategic Drivers Operational Drivers clearance times were maintained. WCO Diagnostic Dubai Growth According to a diagnostic study undertaken Study Challenge In the initial planning phase, it was by the WCO in 2002, while Dubai Customs thought that all Dubai Customs would GCC Integration Limited Human offered a number of services, the operating Initiative Capabilities have to do to meet the challenges of this environment did not meet the expectations future environment would be to intro- UAE Strategic Plan Long Process of the international trade supply chain, nor / Direction duce new technology systems. But it was did it enable the administration to fulfil its Dubai Custom Inadequate very quickly realized that, in order to obligations towards the protection of the Vision and Scope Technologies implement a sustainable solution, Dubai local economy and society. Document Customs needed to change the basic pre- Economical Analysis Outdated mise of its operations with the consequen- Between 2002 and 2005, some activi- Study Organization tial impact on the organization’s operating Structure ties aimed at responding to the WCO model and the way its staff worked. diagnostic study were undertaken, but Technical Analysis Slow Service Study Delivery these actions were not based on a full

48 WCO news N° 80 June 2016

Reform components -- the United Nations (several fra- represent Dubai Customs in lawsuits), a The components of the RMP included: meworks that streamline and control compliance unit, a post-clearance audit international trade); unit, and a policies and notices unit (to 1. Building business capacity, and more issue Customs policies and notices that specifically: -- the Dubai government (the transfor- are aligned to laws and legislation). • Establishing a reform and moderniza- mation of all services to electronic/ tion function which would take into mobile services, and the creation • Defining working methodologies in account existing international standards of an executive service ‘dashboard’ areas such as project management, busi- and directives developed by: which enables directors to monitor ness process management, and service the performance of their teams and management. -- the WCO (introducing intelligence- the quality of the service delivery). based risk management – incorpora- 2. Building technological capacity ting a ‘risk assessment engine’ – in • Establishing a new operating model that Revamping IT functions into a state-of- transaction processing, introducing would incorporate the above-mentioned the-art business unit that would be capable a post-clearance audit function to WCO recommendations on risk mana- of supporting the transformation of the assure compliance, introducing a gement as well as Dubai government entire organization towards full automa- reconciliation function to validate directives, in order to ensure full tion. This required rigorous structural re- transaction data obtained from understanding of the transformation engineering and automation of Customs documents such as declarations, initiatives by all concerned operational processes, by implementing global best discharge lists and import manifests, units. This operating model has been the practices in IT integration, governance and introducing trade facilitation building block for the entire organiza- and management in order to optimize measures, the most notable being the tion’s transformation, and is driven by efficiencies. use of the ATA Carnet for the tempo- four core enablers: people; processes; rary admission of goods which Dubai technology; and information. 3. Building human capacity implemented in 2013); Modifying the organizational structure, • Establishing a legislative infrastructure ensuring the availability of qualified staff -- the World Trade Organization (speci- by the creation of business units dedi- for each practice area, and ensuring the fically in the area of goods valuation); cated to setting and enforcing legis- effectiveness of the structure through a defi- lation, notably a legal department (to ned framework for monitoring, assessing, handle the interpretation of laws and and refining organizational structures.

Figure 1: Impact on trade facilitation

Trade through Dubai (AED Billions) 1st Customs Administration in the GCC and 3rd Globally 1,738 Wold Economic Report 2015 1,580 1,433 1,505 1,329 1,331 1,300 1,365 3 3 1,250 1,025 5 5 75%>>78% of UAE Trade 7

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 2012 2013 2014 2015

Dubai is a preferred Trade Hub due to its efficient Customs procedures with less than a 5% intervention rate, making Dubai the “leading Customs administration in the region”

Total Transactions Processed by Dubai Customs (Millions) Customer Satisfaction 17.6 14.7 96% 94% 95% 91% 11.1 12.2 10.1 88% 94% 8.9 86% 85% 7.9 8.6 6.8 7.7 93%>>96% 75% Service Level

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 May Jun Jul Aug Sep Oct Nov Dec Jan

Dubai Customs is a trusted administration providing multiple “Smart Service” channels, leading to satisfied customers

49 PANORAMA

Figure 2: Optimized trade facilitation Figure 3: Increase Protection and Figure 4: Improve Operational Compliance Performance Reduce Intervention rate to 4% Increase Risk Profile Effectiveness by 50% Reduce IT operational costs by 50% % of Seizure interventions probability milliers 14% 13% 0.6 1400

12% 0.5 1200 10% 1000 0.4 7% 274% 8% 800 56% 0.3 65% 5% 65% 6% 4% 600 0.2 4% 400 2% 0.1 200 0% 0 0 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

Intervention rate has been reduced Risk profile effectiveness target exceeded The cost of IT operations reduced by 65% to 4%, resulting in an increase of by 274%, resulting in an increase of in 2012 and 56% in 2015, which reflects auto-cleared transactions positive hits a lesser dependency on IT

Reduce time to process a transaction to Increase Number of Risk Engine Seizures Increase number of transactions less than 2 seconds processed in less than 10 minutes Processing # of declarations Time (sec.) (Millions) 6.0 8.00 Number of 504% seizures 5.0 3000 239% 6.00 4.0 328% 2500 355% 3.0 4.00 2000 2.0 1500 1.0 2.00 1000 500 - 2009 2010 2011 2012 2013 2014 2015 0.00 0 2010 2011 2012 2013 2014 2015 Jun Jun Apr Apr Oct Oct Feb Feb Aug Aug Dec Dec A 328% increase up until 2012 and a 504% Each declaration gets risk assessed Number of seizures increased by 355% increase up until 2015 in the number of in less than 1 second during the period 2010-2012 transactions processed within 10 minutes

Challenges and achievements Mirsal 2 allowing for faster processing of goods and The main challenges that Dubai Customs Dubai Customs launched a paperless cargo. has met along the way towards the transfor- Customs clearance system, known as mation of its organization included having Mirsal 2, in March 2010. This advanced Mirsal 2 provides a large number of bene- to set the legislative reference. For example, Customs system allows the electronic clea- fits to Customs, its clients, and other rela- Customs policies had to be identified and rance of simple declarations through the ted parties: modified to allow paperless transactions. internet in less than two minutes, without the need to submit any papers before the Client benefits Yet, the biggest challenge was changing arrival of goods. • Paperless online declarations available peoples’ mindset, and gaining traction 24/7; amongst employees. Dubai Customs Mirsal 2 is a combination of IT services. • Pre-clearance of goods; worked very closely with its Human The system manages all operations, inclu- • Time, effort and cost savings of up to Resources Department to mitigate resis- ding the collection of Customs duties. It 75%; tance to change by defining and applying also manages the risk management cycle. • Consistency in treatment, and better a framework for managing change, as well The main uniqueness about the product is predictability; as resistance to change. that clients are able to electronically sign • Availability to submit different requests their declarations by using a digital certifi- through a full-fledged file or by connec- In terms of achievements, figures 1 to 4 illus- cate. Added to this, it is connected to other ting the client’s systems to the Customs trate the delivered results of the transforma- entities that form part of the trade supply system, which can be very beneficial in tion enablers that are tied directly to Customs’ chain within Dubai, meaning that infor- cases where there are many invoices core mission and objectives, namely facilita- mation about the declaration is seamlessly and goods that need to be cleared in ting trade and protecting society. exchanged amongst these entities, thereby one request.

50 WCO news N° 80 June 2016

Dubai Customs is also working on ‘smart inspection glasses’ that will allow Dubai Customs benefits integrated smart system, which stands out • Real-time risk assessment; as a reference model worldwide, assesses inspectors to upload cargo • Efficiency of controls by focusing atten- Customs transactions according to pre- declarations, and visualize tion on risky consignments; defined risk profiles. These risk profiles are • Possibility to share intelligence informa- loaded into the system following the linking scanned images of the tion with strategic partners; and analysis of intelligence gathered from cargo and other relevant • Improved border management coor- various channels. As per the risk engine, all dination with other government transactions flagged as risky are routed for documents, just like they departments; further risk mitigation and inspection. do on their smartphones • Enhanced possibility to receive clients’ opinions, and to view and share infor- Consignments cleared in less than 10 and tablets. They will also mation with them; minutes have increased by 328%; and be able to enter inspection • Systematic and documented processes; now represent 82% of all Customs transac- • Improved collection of trade statistics tions. The risk assessment engine has also reports through their smart and data used, to develop strategic plan- helped to reduce the time required for risk inspection glasses, using ning in the region. assessment to less than two seconds, which means that 97% of non-suspect transac- voice commands or a virtual Risk Assessment Engine tions are cleared automatically in less than keyboard. Developed in-house by Dubai Customs, one minute from the time the consignment the ‘risk assessment engine’ is considered data is logged. to be the ‘beating heart’ of Mirsal 2. This

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Advanced Container Scanning System All of Dubai Customs’ services have been • ‘My favourite’ – allowing clients to mark The Advanced Container Scanning (ACS) eEnabled since 2009 and mEnabled since an existing transaction as a ‘favourite,’ if System combines X-ray and radiation 2013. Despite the remarkable drastic trans- they know they will reuse the data sub- scanning inspection technologies. The formation undertaken by Customs over the mitted for another transaction; device is capable of screening the contents last few years, there is still much work to of 150 trucks per hour moving at 8 to 15 be done to cope with today’s ever-changing • ‘My Frequent’ – an analytical tool that km per hour – that is one truck every 24 and increasingly globalized world. enables the most common transactions seconds. to be ascertained, providing clients In early 2015, Customs launched the ‘smart with an option to create templates or What is unique about the ACS System is its version’ of its Transformation Strategy, add these transactions to their list of integration with the Customs inspection fully aligned with the Dubai Plan 2021 (a favourites; and clearance systems. An inspector using visionary plan for the Emirate up to 2021) the ACS System can access data from the and the DSG Strategy. Customs defines • Predictive service – specific decisions risk engine directly from his workstation, ‘smart transformation’ as an intelligent usually initiate specific procedures. For in order to check why a scanned shipment approach to delivering services to traders example, if an inspection is required, the has been selected for inspection. He can and customers in a faster, more accessible, client is notified by way of an inspection also access the declaration, in order to and more cost-efficient way. booking request. In this context, thanks compare the scanned image with the ship- to the predictive service functionality, ment details. The Smart Transformation Strategy of the system will automatically create a Dubai Customs lays the foundation for draft message. The implementation of this technology future innovation, and focuses on service contributed to an increase in the com- modernization, improving user expe- Dubai Customs is also working on ‘smart pliance rate at Jebel Ali Port from 42% in rience, technological innovation, increa- inspection glasses’ that will allow inspec- 2010 to 91.7% in 2013, a reduction in the sing efficiency, and reducing costs. tors to upload cargo declarations, and time taken for the total inspection from visualize scanned images of the cargo two hours to 20 minutes per container, Dubai Customs’ handling of the flow of and other relevant documents, just like and a drop in the costs involved by 54%. goods, people and conveyances across they do on their smartphones and tablets. Last but not least, the number of Customs’ borders can be done in a better way if it They will also be able to enter inspection clients at Jebel Ali increased by 33% during uses the right technology and has the right reports through their smart inspection the 2010 to 2013 period. human capabilities. Work is underway, in glasses, using voice commands or a vir- collaboration with its stakeholders in the tual keyboard. Building-up towards a ‘Smart Customs’ trade and security supply chains, to adopt In line with the vision for Dubai espoused enabling information and communication The approach to transformation by Dubai by His Highness Sheikh Mohamed Bin technologies (ICT), like ‘big data,’ open Customs is unique and innovative, parti- Rashid Al Maktoum, Vice President data, mobile technologies and cloud com- cularly in how it smartly combines several and Prime Minister of the United Arab puting, to help drive connectivity among transformation enablers. This approach Emirates (UAE) and Ruler of Dubai, the border agencies and with trade operators. could act as a reference point or blueprint Dubai government launched the Dubai for other Customs administrations and Smart Government (DSG) Strategy in Dubai Customs is, for example, working border agencies, and potentially for other June 2014. It consists of four major areas on building a ‘Smart Workspace’ for its industries as well. It is worth mentioning and sets out 21 strategic objectives aimed clients. Its main features are: that the UAE federal government plans to at making customers happy, and at enhan- leverage Dubai Customs’ approach to risk cing their confidence in the adoption of • ‘My Template’ – allowing clients to management and risk mitigation in other ‘smart government’ services. create declaration templates with pre- government organizations. populated basic data; More information www.dubaiCustoms.gov.ae

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Publishing TRS results in the public domain: Poland’s positive experience

By Tomasz Michalak, DIRECTOR, CUSTOMS DEPARTMENT, MINISTRY OF FINANCE, POLAND according to Article 7 (paragraph 6.2) of the WTO TFA. Numbers are a universal language. They reflect an Given the WCO’s role as a platform for intelligible and neutral understanding about what is information sharing and cooperation, and the focus the Organization has been put- happening on the ground. Measuring should threfore ting on performance measurement over the last few years, I would like to share be a random activity in the daily life of any Customs the Polish experience on the use of Time Release Studies (TRS), as well as my views service searching to improve its procedures as part of on the publication of TRS results. its efforts to enhance its economic competitiveness. Figures are useful One key step towards the implementation This article explains how the Customs Service of Poland of a performance measurement approach in Poland was the adoption of the ‘Business has been using Time Release Studies (TRS) to improve Strategy of the Polish Customs Service’ for the period 2014 to 2020. The strategy border clearance processes, and keenly advocates the established goals which triggered projects, leading to the need for measurement. publication of performance results. Another key driver was meeting the expectations of trade operators and travellers in terms of time – time taken to release goods The Trade Facilitation Agreement of the law is readily available to any interested and for crossing borders. World Trade Organization (WTO TFA) person.” This idea is reiterated in the clearly states in Article 7 (paragraph 6) WCO Transparency and Predictability A set of indicators were developed, and are that “Members are encouraged to mea- Guidelines, which list the ‘results of constantly being monitored. These indica- sure and publish their average release time performance measurements’ among the tors are made public, as well as the results of goods periodically and in a consistent information that Customs is encouraged obtained against the objectives outlined manner, using tools such as, inter alia, the to publish. in the strategy. Two of these indicators Time Release Study of the World Customs directly refer to the time taken to release Organization”. Not only should results be made public, goods and to process people crossing the but “experiences in measuring average border, a process which may not only To conduct a TRS, countries can refer to release times, including methodologies involve the Customs service, but also other the WCO TRS Guide – a document contai- used, bottlenecks identified, and any resul- border agencies. ning comprehensive and practical tools for ting effects on efficiency” should be shared the purpose of TRS implementation and analysis. It rightly underlines the three stages of the study: preparation; collection of data; and analysis of the results. However, another useful stage could be added: the optimization of procedures where results are not satisfactory, followed by the undertaking of a new assessment. This would close the circle.

The result of a TRS and any other performance measurement activity should be published, in line with Standard 9.1 of the WCO Revised Kyoto Convention which provides that “the Customs shall ensure that all relevant information of general application pertaining to Customs Screenshots of the mobile application for smart phones and electronic watches

54 WCO news N° 80 June 2016

At the land border • Via a dedicated website – www.granica. lanes for low-risk commodities and vehi- Among other agencies that the Polish gov.pl – which displays the times taken cles; fast lanes for authorized economic Customs Service cooperates with in col- for processing goods and travellers at operators (AEOs) and empty trucks; and lecting data on average crossing times every border crossing point, on entry pre-booking of clearances, etc. is the Border Guard. Truck drivers and and exit, with times shown separately cross-border travellers are also questioned, for travellers and commercial truck A four-party agreement was signed in order to verify official measurements. drivers. A mobile application is also between the Polish Customs Service Moreover, occasionally the results are veri- available; and the Border Guard on the one side, fied by non-governmental organizations and their counterparts in neighbouring (NGOs). The aggregated data is available • By way of radio broadcasts dedicated to countries on the other side. In terms of the online. drivers, with relevant announcements agreement, each side stipulates the mini- being broadcasted frequently throu- mum and maximum numbers of cars and A project is currently being tested to ghout the day; trucks to be cleared per day, as well as the improve the measurement process. It amount of time required and the methods involves the use of a more sophisticated • On large-scale monitors installed at used to respond to identified irregularities technology: drivers can confirm their posi- the crossroads of highways close to the or fraud. tion at the border via a dedicated applica- border. tion installed in their GPS and/or mobile This border management agreement phones. People visiting the granica.gov.pl website enables bottlenecks to be avoided. If wait may access a wide variety of information times are excessive, all the parties would The methodology used for the TRS was in a number of languages, such as Customs know how to react appropriately. The per- carefully designed by a joint team of and immigration provisions, relevant formance of the agreement, as well as the Customs and Border Guard officers, and addresses, and required documentation. set limits, is verified regularly, and appro- approved at the highest level. The results Even a virtual tour of the border crossing ved at Director-General level. are analysed every day by local duty offi- point is available that includes the bor- cers. If waiting times exceed the levels dee- der control verification process. The tour Last but not least and as mentioned above, med as acceptable (and publicly declared is popular with tourists visiting Eastern NGOs also play a role in monitoring bor- as such), Customs managers are obligated Europe for the first time. der processing performance. Reports by to take appropriate measures, as defined NGOs are discussed together by Customs in a reaction plan. The results are regu- Anyone having doubts about the veracity Service and Border Guard officers. larly discussed at management board of the information provided via the media meetings, where benchmarking exercises channels may verify the actual situation at At the seaports between border crossing points are notably the border point of their choice by connec- Seaports are gateways that are essential to examined. ting to the web cams installed on the roads the welfare of many countries. Ensuring leading to them. that the flow of goods is processed Publishing TRS results to the public is of smoothly through such entry points is, the utmost importance. Waiting times are Publicly declaring waiting times has had therefore, critical, especially as competi- publicized through the use of different an impact on the Customs workflow. tion between and within countries is stiff. media: Different facilitation schemes were set up at land border crossing points: green

Screenshots of the mobile application for smart phones and electronic watches

55 PANORAMA

Publicly relayed results can be a very effective motivation factor for Customs officers, and also for other governmental and non-governmental bodies. It enables inter-agency cooperation to be improved, clear communication mechanisms to be set up, and trade community expectations as well as transparency

Waiting times displayed on large-scale monitors obligations to be met.

The ‘24h rule’ was later enacted by the national parliament and became law. To coordinate controls, all agencies, following individual risk assessments, are obliged to notify their requests for physical examination in advance.

Customs coordinates the time and place of the controls, which are carried out following a one-stop-shop model. The results of every control or activity undertaken by Customs, the Veterinary Inspection Service, the Sanitary Services, or any other agency are submitted to a common IT platform which is available to all.

The Customs Service – as the coordinator of the Seaport 24h project – provides, on its website http://pkc.gdynia.uc.gov.pl/ statystyki/gdynia, the consolidated performance results of all the agencies. These results are broken up for each seaport, lis- ting the average waiting time, as well as the shortest and the longest release times. Screenshots of the www. granica.gov.pl website Daily TRS reports are available online. Since the project became operational, less Yet, a few years ago, the situation was than 15 different agencies authorized to than 0.5% of all agencies’ control proce- completely different, and rather worri- check imported and exported goods. dures exceed the declared 24h. The average some. The trade community complained time to process a shipment is 10-12 hours. about long waiting times – it took up Project ‘Porty 24h’ (Seaports 24h) was The binding character of the 24h rule is a to three days to release a shipment. All launched with the idea that all proce- crucial component of the project’s success. port stakeholders worked separately, and dures related to the clearance of goods, the some procedures and data were duplica- transfer of containers, etc., would have to It is worth noting that there are no sanc- ted. As a result, Polish ports were losing be finalized within 24 hours, unless speci- tions for extra hours. Therefore, the key competitiveness. fic situations occurred, such as a missing element of compliance can be attributed entry declaration, the temporary storage to the fact that the results are made publi- This led to the Polish government deci- of goods, or a quarantine issue. Detailed cly available! This was, and still is, a very ding to correct the situation. The Customs procedures were adopted, and the neces- strong motivating factor for all stakehol- Service was given the task of coordinating sary information technology (IT) solutions ders taking part in the Seaport 24h project, the necessary reforms, together with more developed. playing a bigger role in motivating officers

56 WCO news N° 80 June 2016

than the performance evaluation conduc- The above examples clearly show that difficult to refute would be relied upon, ted by senior management internally at publicly relayed results can be a very which may distort the perception of the each agency. effective motivation factor for Customs public in a negative way. Not only would officers, and also for other governmental the work and efforts undertaken go unno- The project has received positive comments and non-governmental bodies. It enables ticed, but people could think that we have from the World Bank. Poland achieved inter-agency cooperation to be improved, something to hide, or that we are not doing the first rank in the Doing Business 2016 clear communication mechanisms to be anything. reports in the ‘Trading Across Borders’ set up, and trade community expectations index, which measures the time and cost as well as transparency obligations to be Naturally, not every indicator in a perfor- (excluding tariffs) associated with three met. mance measurement scheme should or can sets of procedures – documentary com- be made public, as some are particularly pliance, border compliance, and domes- Any benchmarking exercise is indeed a sensitive. Yet, none of the results emerging tic transport – within the overall process good starting point to review practices from a TRS is confidential. Therefore, there of exporting or importing a shipment of and further improve administrations. is no reason why we should not declare goods. Moreover, it enables recommendations to loud and clear that our figures are fine, be drawn up and promoted at the inter- when they are actually fine. Lessons learnt national level. TRS projects usually contain a disclaimer More information stating that “the data is not to be published, There is another strong argument for the www.clo.gov.pl and that no ranking is to be made among publication of TRS results and other per- www.granica.gov.pl participants.” I would argue that such an formance statistics: if no official data is http://pkc.gdynia.uc.gov.pl/statystyki/gdynia approach is wrong. available, unreliable information that is

A Master’s Programme for Strategic Managers in Customs

The MCA in Customs, Taxation and International Trade Law is a well-established course for customs practitioners in the public and private sectors of all countries. It is held in English and takes place in Germany.

The MCA was founded in 2005 to prepare students for roles as strategic managers in the field of customs. It is offered by the University of Münster and the AWA Foreign Trade Academy.

The course is part-time and lasts 18 months. The MCA is ECTS-accredited and recognised by the WCO. Graduates are awarded the degree “Master of Customs Administration” (MCA) by the University of Münster.

Start: September 2016 Location: Münster, Germany Duration: 18 months Contents: Lectures, project work and master’s thesis Contact: University of Münster Phone +49 (0)251 83 27591 E-Mail [email protected]

Applications: Further information is available on our website: www.uni-muenster-mca.de/admission www.uni-muenster-mca.de 57

Anzeige-MCA-WCO-Mai-16.indd 1 18.05.2016 10:24:58 OMD_0516_E:OMD_0516_E 24/05/16 11:21 Page1

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MARINE & OFFSHORE - INDUSTRY - INSPECTION & VERIFICATION IN SERVICE - HEALTH, SAFETY & ENVIRONMENT CONSTRUCTION - CERTIFICATION - GOVERNMENT SERVICES & INTERNATIONAL TRADE PANORAMA WCO news N° 80 June 2016

Customs-Police cooperation – the Canadian experience

By Nada Semaan, of Canada has developed a legislative and the RCMP, and allows for effective coo- EXECUTIVE VICE PRESIDENT, CANADA BORDER regulatory framework that results in a peration on matters that fall under the SERVICES AGENCY (CBSA) strong working relationship between the responsibility of each organization. As a The Canada Border Services Agency CBSA and the Royal Canadian Mounted result, CBSA-RCMP cooperation is stron- (CBSA) provides integrated border ser- Police (RCMP), Canada’s federal police ger and more efficient. vices that support national security and service. public safety priorities while facilitating In essence, the Canadian experience has the legitimate flow of people and goods. This framework clearly delineates the demonstrated that an interconnected and To fulfill this mandate, the Government roles and responsibilities of the CBSA and interdependent world, with an increasing demand for greater security, requires Customs authorities to work effectively with their police counterparts. I was proud to deliver a presentation on this topic at the recent Customs meeting of the WCO Americas and Caribbean region in Bolivia in April 2016.

CBSA’s history The CBSA’s own history is founded on the principles of coordination and partnership with key stakeholders. In 2003, the CBSA was established as an integrated border management organization. Responsibilities related to the border were brought together, including those for Customs and revenue collection, immigration, and food plant and animal safety.

The result is a single organization responsible for managing the flow of goods and people across Canada’s borders, administering over 90 different Acts and Regulations. One of the founding principles of the CBSA is that coordination across government, with a focus on the border, is essential, for both security and trade.

CBSA-RCMP cooperation The CBSA and the RCMP are partners under its portfolio head, Public Safety Canada, meaning that we report to the same Cabinet Minister of the Crown. Cooperation between our two organizations begins at the highest level, with the President of the CBSA in regular dialogue with her counterpart, the Commissioner of the RCMP.

We recognize the important part that each organization plays; we have clear roles and responsibilities that delineate

59 PANORAMA

This joint operation took place simulta- CBSA-RCMP Joint Border Strategy neously in six countries located in North The CBSA and the RCMP signed a and South America, as well as in Europe, Statement of Cooperation in July 2013, and resulted in the arrest of approximately which describes a desire for both organi- 60 individuals linked to organized crime. zations to work towards greater coopera- Over the course of the operation, this cri- tion at the strategic, operational and tac- minal organization allegedly smuggled at tical levels. To solidify this commitment, least 158 loads of tobacco, which repre- the first Joint Border Strategy was adopted sents a fraud of over half a billion dollars in April 2015 and distributed publicly on (530 million) to the Canadian federal and various websites. provincial governments through the evasion of duties and taxes. The strategy is meant to facilitate collective discussions on jointly identified issues,

© CBSA The dialogue extends to day-to-day inte- including formalizing working relation- ractions at the local level. For example, ships for collective priority setting and this past January, Customs officers at planning, enhancing information and our busiest airport, Toronto Pearson intelligence sharing, leveraging existing International Airport, found 110 kg of infrastructure, and formalizing training greatest cooperation at the strategic, ope- cocaine. In these instances, the narcotics and secondment processes. rational and tactical levels. In essence, the are turned over to the RCMP for further CBSA has primary responsibility at ports investigation that may include a controlled Lessons learned and looking to the future of entry, while the RCMP is responsible for delivery. Building a strong and fluid relationship everything that takes place between them. with a country’s police service is not Internationally, we also work together with always easy. An efficient cooperative rela- In addition, we hold joint executive mee- our federal police counterparts to leve- tionship needs to overcome obstacles, tings and regular operational discussions, rage respective strengths and resources. such as differing organizational cultures/ and have day-to-day interactions at the For example, our International Liaison interests, legislative barriers, technological regional and local levels. One of the most Officer network, consisting of 44 officers complexities and funding, to name a few. important examples of cooperation is our in 32 countries, collaborates regularly with Joint Working Group, led by CBSA’s Vice- our federal police counterparts to review Throughout our experience in building President of Operations and her counter- issues impacting operational effectiveness, the relationship, it became clear that part at the RCMP. Through this working in order to protect Canada’s borders from open and fluid communication between group we are able to share information and abroad. the two organizations is critical. Success review joint forces operations. factors include political will, and a clear The CBSA-RCMP Memorandum of definition of our respective roles and res- In environments requiring long term Understanding ponsibilities for jointly ensuring the safety Customs-Police cooperation at the local Since the creation of the CBSA in 2003, of Canadians. In this way, the return on level, a formal agreement covering this we have signed over 120 agreements with investment can be quite significant, resul- collaboration is required to clearly set the RCMP on an ad-hoc basis. In 2012, the ting in better positioning for both Customs out guidelines through what is known as senior management at both the CBSA and and police to achieve their joint mandate. Joint Forces Operations (JFO) agreements the RCMP agreed that a new, overarching in Canada. Memorandum of Understanding (MoU) While there will not be a ‘one-size-fits-all’ with seven subject-specific annexes should blueprint for countries to adopt, a concer- Recently, a JFO consisting of some 700 be developed to consolidate and replace ted effort to consolidate border functions Customs and police officers were mobi- the 120 existing agreements between the and develop an efficient framework for lized during a major operation against two organizations. Customs-Police cooperation is critical to a criminal network involved in tobacco strengthening border management, which smuggling, drug trafficking, and money Signed in early 2014, this new umbrella requires a balance between facilitation and laundering. Seizures from this operation MoU, enhances national consistency in security measures. of tobacco and narcotics were valued CBSA-RCMP interactions, clarifies roles at approximately 5.3 million Canadian and responsibilities, and allows for a More information dollars. consolidated point of reference for staff. www.cbsa-asfc.gc.ca

Overview of Australian Border Force’s counter terrorism capabilities

By the Australian Department Australia’s Department of Immigration Special Counter Terrorism Unit of Immigration and Border and Border Protection (DIBP) considers To enhance the capability of the ABF to Protection the border as a strategic asset, and plays deal with inbound and outbound natio- THE NATIONAL SECURITY environment is a critical role in national security. The nal security threats, special Counter one of uncertainty and complexity, with Australian Border Force (ABF), the opera- Terrorism Unit (CTU) teams are deployed security threats emerging from different tional arm of the Department, performs a at Australia’s eight major airports. “CTU conflicts and threatening different inte- vital role in protecting Australia’s borders teams provide a visible and active demons- rests. Despite its relatively remote geogra- and keeping Australians safe. tration of the Australian Government’s phic location, the threat to Australia and commitment to maintaining the integrity Australians from terrorists and violent Established on 1 July 2015, the ABF brings of Australia’s borders and Australian law”, extremists is both real and growing. together all of the operational functions said ABF Acting Deputy Commissioner of the former Customs and immigration Clive Murray. Australia has one of the largest and most departments. It delivers on regional, natio- challenging border environments in the nal and international border protection, CTU officers proactively intercept suspi- world with approximately 37,000 kilo- law enforcement and national security cious persons of national security interest metres of coastline – much of which is in priorities, and is strongly committed to in Customs controlled areas. The officers remote regions, eight major international staying ahead of the very real and evolving also screen all inbound and outbound airports, more than 60 international sea- threat of terrorism. passengers, using a range of indicators to ports, and an offshore exclusive economic determine which passengers they wish to zone covering 10 million square kilo- speak to. Since their deployment the CTU metres of ocean. has had a real impact at the Australian

61 border. “The CTU has prevented the travel of minors to conflict areas, found evidence of significant movements or attempted significant movements of large sums of cash, and detected images and material of an extremist nature. Some cases have resulted in the suspension or cancellation of passports, and others in the imposition of infringement notices,” said Murray.

Since the implementation of the CTU, the teams have undertaken almost 278,000 real time assessments. Such assessments © Australian Department of Immigration and Border Protection involve the CTU officer asking a short series of questions to determine risk, and then making a decision on whether fur- The total number of international tra- help prevent incidents of people travel- ther action is required including baggage vellers arriving and departing Australia ling illegally on someone else’s passport — examinations. continues to grow on average at about 5 to improving both the departures experience 7% each year. In December 2015, the ABF for legitimate travellers, and boosting our Additionally, over 19,000 patrols have saw record numbers of passenger depar- border security efforts and outcomes,” said been conducted, adding to the ABF’s tures, and January 2016 similarly saw the Milford. detection and deterrence capability in the highest number of passenger arrivals. airport environment, and supporting the SmartGates are scheduled to be operating Australian Government’s national security The advancement and investment in in all eight Australian international air- priorities. technology have provided opportunities ports by 1 July 2016, and since the com- to improve how the ABF enables and faci- mencement of the project the Department Advance Passenger Processing system litates its operations. It has increased the has already seen more than 5.6 million The ABF’s capability to target security Department’s ability to process passengers passengers processed using this techno- concerns is further enhanced through while upholding Australia’s strict security logy. “It’s about rewarding the good, and an Advance Passenger Processing (APP) arrangements. ensuring that those who attempt to ille- system. APP has been in place since 2003, gally breach our borders are detected and and is one of the most advanced border SmartGate consequently face the full weight of our control systems operating today. It ope- An automatic passenger processing tech- laws,” Milford added. rates at check-in to verify if a traveller nology called ‘SmartGate’ is now provi- holds a valid visa or other authority to ding a faster and simpler process for tra- The ABF will continue to use and develop travel to Australia. vellers while maintaining the security of sophisticated digitized systems to collect the border. It performs the checks usually and safeguard duties, and control goods In 2015, APP capability was expanded conducted by an ABF officer, and uses and the movement of people. This coupled to include outbound information to bet- facial biometric technology to confirm the with the ongoing investment in training ter understand who is departing from identity of travellers. a highly skilled and adaptable task force Australia. With this expansion, the ABF ensure that the future is positive. now has more time to conduct checks, According to Michael Milford, First against alert lists, before the individual Assistant Secretary of the DIBP’s Major In this rapidly changing border envi- crosses the immigration primary line to Capability Division, implementing ronment, Australia’s DIBP and the ABF depart Australia. SmartGate allows legitimate, law-abiding remain committed to delivering the capa- travellers to be facilitated more efficiently bilities required to address threats, and While protecting Australia’s borders from and with less manual intervention, leaving to harnessing opportunities to promote a threats is critical, facilitating the smooth ABF officers to focus more effort on -tra streamlined and simplified border expe- flow of people and goods across the border veller interactions, intelligence collection, rience for legitimate travellers. is also essential to Australia remaining a enforcement, and targeting activity. prosperous and cohesive society. Each More information year the ABF processes more than 35 mil- “SmartGate technology is also critical www.border.gov.au lion travellers through Australian air and in improving our ability to accurately seaports. confirm the identity of travellers. It can

62 EVENTS

Calendar of Events

June 27 June - 6 July Knowledge Academy for Customs and Trade

July 11 - 13 Policy Commission, 75th Session 14 - 16 Council, 127th/128th Sessions

September 12 - 16 Data Model Project Team 19 - 20 Information Management Sub-Committee (IMSC), 71st Meeting 21 - 23 E-commerce Working Group (to be confirmed) 27 - 29 PICARD Conference, Manila (Philippines) 26 - 27 Harmonized System Committee, Working Party 28 Sept - 7 Oct Harmonized System Committee, 58th Session

October 10 - 11 Agreement on Trade Facilitation Working Group, 6th Meeting 12 - 14 Permanent Technical Committee, 213th/214th Sessions 17 - 21 Technical Committee on Customs Valuation, 43rd Session 24 - 25 Private Sector Consultative Group 25 SAFE Members Only Meeting 26 - 28 SAFE Working Group, 16th Meeting

November 9 - 11 Working Group on Revenue Compliance and Fraud, 3rd Meeting 14 - 15 ATA/Istanbul Administrative Committee 16 - 17 Revised Kyoto Convention Management Committee, 15th Meeting 21 - 22 WCO/IATA/ICAO API/PNR Contact Committee, 10th Meeting 23 - 24 WCO/UPU Contact Committee 28 - 30 WCO Counterfeiting and Piracy (CAP) Group, 13th Meeting

December 5 - 7 Policy Commission, 76th Session 12 - 16 Harmonized System Review Sub-Committee, 51st Session

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.