*EPF406 09/30/2004
Excerpt: U.S. Calls for Global Supply Chain Security Framework
(Envisions central role for customs in protecting trade from terrorists) (1930)

The United States is calling for an international security and trade facilitation framework that would help secure global supply chains against terrorist manipulation without impeding trade flows.

In September 21 remarks to the Customs World Summit in London, Customs and Border Protection Commissioner Robert Bonner said that all nations would benefit from adhering to universal standards governing customs-to-customs and customs-to-business relationships.

All countries have a stake in protecting global trade because a terrorist attack in a country involved in such trade would send economic ripples throughout the entire international trade system, Bonner said.

He said that the U.S.-proposed approach would ensure a uniform and predictable regulatory environment for companies doing business globally.

Bonner said that features of the four key elements of the U.S. strategy -- the 24-hour rule, the Container Security Initiative (CSI), the Customs and Trade Partnership Against Terrorism (C-TPAT) and automated risk targeting -- could form the basis of an international framework.

The 24-hour rule requires advance submission of electronic information on all U.S.-destined cargo 24 hours before the cargo is loaded at a foreign seaport.

Under CSI, the Customs and Border Protection (CBP) agency in the Department of Homeland Security places its inspectors at foreign ports to identify high-risk, U.S.-bound cargo containers for physical inspection by their local counterparts.

C-TPAT is a program that asks U.S. importers to secure their global supply chains in return for faster processing of their shipments at U.S. borders and other forms of preferential treatment.

Bonner said that the core mission of customs authorities around the world can be expanded to include securing trade against terrorist threats and that the World Customs Organization (WCO) should lead the effort to develop and implement an international framework. But he acknowledged that the broadening of customs authority may require legislative changes in some countries.

Bonner said he hopes that a high level group WCO group established in June to draft global standards will present its recommendations in December.

Because not all developing countries will be able to participate in the proposed framework, developed countries must be prepared to help build capacity in those nations that are "truly" committed to the implementation of international standards, he said.

Following is an excerpt from Bonner's remarks as prepared for delivery:

(begin excerpt)

Department of Homeland Security

Customs and Border Protection

Remarks by Robert C. Bonner, Customs World London Summit 2004
London, England

09/21/2004

Call to Internationalize the Strategy

But, while the U.S. has pioneered a strategy for the security of global trade, collectively all of us must do more to secure what moves into -- and through -- ports of the world, not just into the ports of the United States.

I would like to see the EU [European Union] join with us on the strategy to prevent, not just the U.S. from being hit, but preventing the EU and its member states from being hit, as well.

That's why we are actively discussing with the EU the adoption of the 24-Hour Rule; expanding of CSI to goods being shipped to EU ports; the adoption of a Customs-Trade Partnership program; and the use of automated risk targeting to help identify what is a potential terrorist risk.

The 24-Hour Rule, CSI, C-TPAT, and automated risk targeting are the key elements for a global strategy to secure and facilitate global trade, not just trade from certain European or Asian nations and the United States, important as that security network is -- a network already largely in place.

The strategy we have implemented in partnership with other nations and the private sector secures only a portion of the global supply chain����principally the trade routes to the United States.

To better protect global trade against the threat of global terrorism, we need to promptly make the 24-Hour Rule, CSI, C-TPAT, and automated, risk-based targeting international standards that all nations adhere to.

Such a strategy would be benefit all nations for two reasons:

First, should a terrorist attack occur in the United States or any other country in the trade chain, the economic impact would be potentially devastating and the economic ripples would be felt around the world. All nations have a stake in protecting global trade and the global economy.

Second, securing supply chains assures predictability and uniformity of approach for each participant in the supply chain.

For companies to compete and for nations to have confidence in the security of goods flowing through their ports, a common approach is imperative.

Multinational companies that manufacture, import and export out of dozens of countries everyday cannot afford to put dozens of different systems in place to satisfy dozens of different national requirements and rules.

This approach will probably not secure trade. It most certainly will not facilitate it.

The U.S. strategy and the four interrelated initiatives recognize that security and facilitation are not mutually exclusive.

The U.S. initiatives do both.

The core elements of the U.S. initiatives can be used to form an international Framework of "standards," governing customs-to-customs relationships and customs-to-business relationships.

In my judgment, the Framework would consist of these five elements:

First, all nations joining the international Framework or regime would require advanced manifest information about shipments 24 hours before lading.

The data elements to be provided would be harmonized, so all nations joining in the Framework would require and receive the same data on shipments, preferably electronically.

Second, each country should employ a common risk management approach with regard to the terrorist threat, in the way "high risk" containers are identified, inbound and outbound.

Third, there should be information sharing relevant to terrorist risks between the customs authorities of nations participating in the Framework.

Fourth, at the reasonable request of the receiving nation, based upon a common risk targeting methodology, the sending nation's customs agency would perform an outbound inspection, preferably using detection equipment, such as large-scale x-ray machines and radiation detectors, of high risk containers.

Fifth, each nation participating in the Framework would agree to provide benefits, such as expedited processing, to private sector companies that meet minimal supply chain security standards and best practices.

Some of these measures could be implemented now. For example, most EU member states have CSI agreements with the United States.

The EU and its member states could extend the EU zone of security by three simple actions:

-- First, adopting a 24-Hour Rule,
-- Second, assessing all such shipments for risk, and
-- Third, entering into bilateral����even multilateral agreements����for security inspections of high risk shipments heading for European seaports from, say, Port Said, Karachi, or Singapore.

The EU and its member states, and the U.S. have a working group designed to do this, and it is making great progress.

But, beyond the EU and the U.S.: How can we implement a global strategy to secure and facilitate international trade?

How do we implement this global Framework?

I believe that the World Customs Organization can -- and should -- lead this effort and get it done.

The International Maritime Organization -- IMO -- implemented international standards for the security of seaports throughout the world, minimum standards that took effect in July of this year.

IMO standards may help secure against unauthorized access to ports -- and that's important -- but we must also focus on what moves into -- and through -- these ports.

That's where a WCO endorsed Framework for security and facilitation of global trade comes in.

The WCO has the participation of the customs administrations of 163 countries, representing 99 percent of global trade.

And customs administrations have important authorities that exist nowhere else in government -- the authority to inspect everything, all cargo, all goods, shipped into or exported from a country.

This is also the authority to refuse entry or exit. And the authority, for example, to expedite, or delay entry.

Customs administrations always require information about goods being imported, and often require information about goods exported. They can, with appropriate legislation, require that information be provided in advance and electronically.

These classic "customs" authorities can be used for more than interdicting illegal drugs, assuring trade compliance, and collecting revenues. They can -- and should -- be used to secure trade against terrorists and the terrorist threat.

It is an unacceptable and an unnecessary drag on trade to inspect every shipment. So all advanced customs administrations tend to risk manage for a variety of issues, some like the U.S., use automated systems.

That is why customs can -- and should -- play a central role in the security and facilitation of global trade. As I described in my remarks at the WCO Council last July, this should be the role of Customs in the 21st Century.

But we don't want -- and the international trade community should not be burdened with -- 163 different sets of requirements to secure trade against the threat of terrorism. There should be one set of rules.

And, the WCO has already begun work that could lead to a Framework.

Last June, the WCO has adopted a resolution that established a High Level Group of heads of customs, Directors General, to draft the global Framework I have talked about.

The private sector, who own and know the supply chain, will be consulted before the Framework is adopted.

But, I am hopeful that a draft of the Framework will be presented to the WCO Policy Commission this December.

Time is of the essence. And we do not know how much time we have.

No country would be required to join the WCO Framework or regime for the security of global trade, but if they do join, they will be agreeing to adhere to the Framework.

Goods from a Non-Framework country will undoubtedly be viewed as a higher risk by receiving nations.

That said, the WCO Framework needs to recognize that not all developing countries currently have the capacity to participate in the type of WCO Framework I have outlined.

For a country that signifies an intent to join the Framework, that truly has high-level political will and support to take all steps that are prerequisites, a consortium of developed countries should be prepared to assist with the requisite capacity building.

At a minimum, though, a developing country must first have taken real steps toward making four commitments:

-- One, commit to professionalism and integrity of its customs workforce. It makes no sense to invest in capacity building or training if corruption is endemic.

-- Two, commit to use risk management principles and other measures required for securing and facilitating the movement of trade.

-- Three, commit to provide tangible benefits in the form of expedited processing that is transparent����to companies that secure their supply chains.

-- And four, commit to do reasonable export inspections at the request of the receiving country.

If the commitment is there, a consortium of developed countries that have adopted the WCO Framework would work to assist in obtaining detection equipment needed through the World Bank loans or other sources; training in security and risk management; and assistance with automation of customs processes.

But I call for all nations to join together to ensure that the core elements of CSI, C-TPAT, advance information requirements, and risk targeting approach are internationalized.

It is imperative that these security principles are applied throughout the world as soon as possible so that all ports, in all nations are secure from the physical and economic threat of global terrorism.

(end excerpt)

(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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