The need for importers and exporters to establish and maintain a meaningful supply chain security program is becoming an increasingly important element in a company's overall business strategy. In developing an internal supply chain security program we suggest that companies not focus exclusively on their U.S. operations but view their security program in a comprehensive global fashion. Such a global perspective of security is highlighted by the recently published WCO supply chain security standards outlined below.
The World Customs Organization includes members from 165 Customs administrations, representing 99% of global trade. They have recently released the final draft version (No. 2.0) of their Framework of Standards to Secure and Facilitate Global Trade. Following is a brief summary of the report.
The four core elements of the WCO Framework include:
- Harmonizing the advance electronic cargo information requirements on inbound, outbound, and transit shipments.
- Creating a consistent risk management approach to address security threats.
- Performing an outbound inspection of high risk cargo, done by the sending nation’s Customs administration at the request of the receiving nation, preferably using non-intrusive detection equipment.
- Defining benefits that Customs will provide to businesses that meet minimal supply chain standards and best practices.
These four elements rest on the twin pillars of Customs-to-Customs network arrangements and Customs-to-Business partnerships. It is hoped that the new consolidated platform of this Framework will enhance world trade and ensure better security against terrorism, thereby increasing economic and social well-being throughout the world. The Framework aims to create one set of international standards, encouraging uniformity and reducing multiple reporting requirements.
Customs-to-Customs networking must provide the opportunity for co-operative effort to ensure the security of the international supply chain. Communication between Customs administrations should follow these recommended standards:
- Customs administrations should make use of advance electronic information to identify high-risk cargo early in the supply chain, at or before the port of departure.
- Systems should be automated to ensure harmonized exchange of information.
- Integrated Supply Chain Management should be followed by Customs, as outlined in the WCO Customs Guidelines.
- Performance measures, port security assessments, and employee integrity should be standardized and scrutinized.
- Modern Technology should be used in inspection equipment, such as non-intrusive inspection and radiation detection equipment.
Customs-to-Business partnerships must be established with benefits provided to those private businesses that offer a high degree of security guarantees within the international supply chain. To gain authorized status as a security partner with Customs, private businesses can:
- Perform a threat assessment.
- Provide a plan to deal with assessed threats.
- Establish a communication plan.
- Enact procedural measures to prevent undocumented goods from entering the international supply chain.
- Provide physical security of buildings and premises.
- Ensure security of containers and cargo, means of transport, personnel vetting, and protection of information systems.
Benefits to businesses partnered with Customs should include:
- Quicker movement of low-risk cargo through Customs.
- Improved security levels.
- Optimized supply chain cost through security efficiencies.
- Enhanced reputation.
- Increased business opportunities.
- Improved understanding of Customs requirements.
- Better communication between these businesses and Customs.
The WCO Framework includes a detailed list of agreed-upon standards governing these twin pillars of international trade, Customs-to-Customs partnerships and Customs-to-Business partnerships.
These standards can be viewed in pdf form at the World Customs Organization site.