Facilitating Trade in a Secure Environment Geneva, Nov 13-14

1. Facilitating Trade in a Secure Environment Geneva, Nov 13-14 Security Management Standard for the Global Supply Chain Peter.Mackenbach@dnv.com DNV Rotterdam

2. What is DNV? • Since 1864 a classification Society (One of the big 4) • A non-profit, self owned foundation • To safeguard life, property and the environment • Through standard setting, verification and certification • One of the largest international management-system c certification bodies • World-wide present • ~ 6000 employees

3. DNV and Security • Worked with IMO since the “Cole-incident” • Instrumental in developing ISPS code • Adopted December 2002 • In force 30th June 2004 • >150 of DNV’s best maritime auditors trained in security • Appointed RSO by flag-states for > 80% of our fleet • Certification of ships to the ISPS –Code • Advisory and training to ports ……….. But what about the rest of the supply chain??

4. Security Taskforce Current Initiatives • US  (unilateral) • CT-PAT • BASC • Container Security Initiative • 24hrs Advanced Manifest Regulation etc. • G7  WCO • Secure supply chain • Facilitate world trade • IMO  WCO • Efficiency and security of multi-modal cargo • UN-Counter Terrorism Committee • UNODC • IAEA • UNICRI • OPCW • OAS • APEC • EU • Multinationals

5. Compliance Agreements High Level Guidelines WCO Data Model UCR Nr Electronic Communic. High Level Guidelines Extended Intelligence Risk Management ACI Guidel Accounting Standards Reliable Business Syst. Self Assessment WCO Security Taskforce Aim at Customs – Business Partnership Including Physical Security

6. What was our Concern? • Trusted Trader = Bilateral Agreem. = Inefficient • ISPS will be enforced as per end of June 2004 • This shifts Customs Security Focus to Exports • Customs Revenue Focus remains on Imports • Sufficient Capacity? • Liability of Ship Owners!! • Disappearing Borders ▬►other Policing Organisations • Sub-suppliers subject to Proliferated Standards • And Subjected to Multiple Assessments by Multi Nationals > 250 Mln. Boxes <2% inspected

7. What should be the Answer? • A Trusted Trader is a Secure Trader + + + + + + • Customs and Multi Nationals need to have Confidence in their Supply Chain Partners • Importing Customs need to have Confidence in Exporting Customs. • Confidence through Certification has proven to provide a Level Playing Field • Certification is a proven Legislative Instrument • Certification is a proven Commercial Instrument • No Certification when there is no Standard!!

8. Compliance Agreements High Level Guidelines WCO Data Model UCR Nr Electronic Communic. Industries Supply Chain Security standard Extended Intelligence Risk Management ACI Guidel Accounting Standards Reliable Business Syst. Self Assessment How such Standard would fit in WCO’s work

9. Why Customs Support? A security Management Code needs support from Customs • It shall cover all existing guidelines and security requirements • US C-TPAT • US BASC • Swedish Stair-Sec • Canadian CSA • WCO Framework Requirements • A certified secure supply chain shall get a “green lane” through customs • Customs shall perform spot-checks and focus on non-trusted traders

10. Why Industry Support? • Increasing number of large industrial players develop(ed) their own “standard” • To reduce direct losses • To protect their reputation • To select their suppliers • Increasingly security threats need not to pass customs • Increasing of trade unions (EU, APEC, GOST??) • After implementation of ISPS terrorist will “purchase” in the region they target

11. A Draft Standard • Developed by DNV in consultation with SE and NL Customs and after discussions with UN-ECE • A generic security management standard • For closed cargo transportation units. • Only four basic processes in the supply chain • Loading (stuffing, consolidating, sealing) • Storage of cargo / closed CTU’s • Transport by • Road • Rail • Inland Waterways • Processing of information • Based on ISO 9000 series (multiple management systems) • Includes also theft and damage of cargo as security risks Functional Requirements ISO Management System Quality Security • Therefore “easy” to implement by industry

12. “Connected” to the ISPS Code • One supply chain! • 3 security levels: • L1 Normal mode of operation (lowest hurdle for trade) • L2 Increased security due to general terrorist threat • L3 High Security due to specific and targeted terrorist threat • Basic requirements (industry to find own solutions) for: • Procedural security • Human Resources Security • Physical Security • Access Controls • Non-prescriptive i.e. operators shall analyse own risk.

13. What’s next? • Draft Standard has gone through 1st preliminary hearing • Draft was discussed at last ITWPG-TBG 15 meeting • A Team of Specialists needs to be established with relevant Regulators and Industry Representatives • Assure that the Standard covers Industries and Customs Needs • Assure that the Standard enhances Trade Facilitation • Assure that the standard is open to all and owned by no one • Test through Pilots • As fast as possible an ISO-standard

14. What remains to be done? • An Accreditation Standard to create a level playing field for certification bodies (Customs and Independent Third Parties) • An Accreditation Body that continuously monitors the quality of Certification Bodies • Not National but Multinational • A new task for WCO? • Or a new to establish body?

15. Certification to ISO Standards (a selection in random order) • Creates transparency in communications • Underpins trust and confidence between partners in the supply chain • Facilitates mutual acceptance of “secure traders” • Creates one world wide, level playing field for all actors in the supply chain • Avoids multiple assessments • Provides a clear and concise reference in contractual agreements • Can be used as a risk-assessment tool by authorities and industry • Is a tool to select suppliers/sub-contractors