1 Welcome Container Security and Inspection CBMU MONTREAL 22 Nov. 2005 Welcome Container Security...

1

WelcomeWelcome

Container SecurityContainer Security

andand

InspectionInspection

CBMU MONTREAL 22 Nov. CBMU MONTREAL 22 Nov. 20052005

2

SummarySummaryThe container inspection processThe container inspection process• why we inspect and what we are looking forwhy we inspect and what we are looking for• how much is the cost, all costs?how much is the cost, all costs?• is it workingis it working• is the container selection process randomis the container selection process random• same for air imports as sea importssame for air imports as sea imports• the issue of the warehousemen that are nominated to perform the destuff the issue of the warehousemen that are nominated to perform the destuff

and restuff how are they pickedand restuff how are they picked• are background checks done on the employeesare background checks done on the employees• steps that may be taken to protect the importer from loss or damagesteps that may be taken to protect the importer from loss or damage• the law and acts that apply, does the innocent importer have rights of the law and acts that apply, does the innocent importer have rights of

recourse if his goods arrive short or damaged.recourse if his goods arrive short or damaged.• how does a warehouseman deal with the challenges of destuffing and how does a warehouseman deal with the challenges of destuffing and

restuffing "a jigsaw puzzle“restuffing "a jigsaw puzzle“

• Mr. Gordon to add his thoughts from the civilian C-TPATMr. Gordon to add his thoughts from the civilian C-TPAT

• Underwriters in Canada refusing to cover losses caused by inspectionUnderwriters in Canada refusing to cover losses caused by inspection

3

Common TermsCommon Terms

• ▲▲C-TPAT = Customs Trade Partners C-TPAT = Customs Trade Partners Against TerrorismAgainst Terrorism

• ▲▲CBP = Customs Border Protection CBP = Customs Border Protection (U.S. Customs)(U.S. Customs)

• ▲▲CBSA = Canada Border Services CBSA = Canada Border Services Agency (Canada Customs)Agency (Canada Customs)

• ▲▲CSA = Customs Self AssessmentCSA = Customs Self Assessment• ▲▲FAST = Free and Secure TradeFAST = Free and Secure Trade• ▲▲PIP = Partners In Protection (Canada)PIP = Partners In Protection (Canada)

4

Vehicle and Cargo Inspection Vehicle and Cargo Inspection

System System (VACIS)(VACIS) VACIS inspection (container pre-selected before unloading from vessel) $125.00 per container. The rate includes: VACIS inspection (container pre-selected before unloading from vessel) $125.00 per container. The rate includes: • • labor and equipment to segregate unit in a reserved safe zone area, labor and equipment to segregate unit in a reserved safe zone area,

• • mounting unit on platform for scanning;mounting unit on platform for scanning;

• • return to import pile or set on ground for manual examination,return to import pile or set on ground for manual examination,

• • delivery to inland carrier;delivery to inland carrier;

• • documentation and clerical work. 2. VACIS inspection (container selected after unloading from vessel) $175.00 documentation and clerical work. 2. VACIS inspection (container selected after unloading from vessel) $175.00 per container. The rate includes: per container. The rate includes:

• • all of the above (1), plusall of the above (1), plus

• • sorting and shifting in piles to retrieve targeted container. 3. CUSTOMS inspection (commerce division, primarily sorting and shifting in piles to retrieve targeted container. 3. CUSTOMS inspection (commerce division, primarily tariff enforcement) $275.00 per container. These inspections are generally carried-out to verify compliance and tariff enforcement) $275.00 per container. These inspections are generally carried-out to verify compliance and accuracy of import declarations. Notification of targeted units are only received after the containers have been accuracy of import declarations. Notification of targeted units are only received after the containers have been unloaded from the vessel and stowed in the import section of the yard. unloaded from the vessel and stowed in the import section of the yard.

The rate includes: The rate includes: • • sorting and shifting in import piles to retrieve targeted container;sorting and shifting in import piles to retrieve targeted container;

• • labor and equipment to segregate unit in a reserved safe zone area,labor and equipment to segregate unit in a reserved safe zone area,

• • opening/closing container doors and removing / replacing blocking,opening/closing container doors and removing / replacing blocking,

• • making cargo available and opening cartons or cases if required,making cargo available and opening cartons or cases if required,

• • return to import pile;return to import pile;

• • delivery to inland carrier;delivery to inland carrier;

• • documentation and clerical work. documentation and clerical work. Source : OOCL (Orient Overseas Container Line) and Canada Source : OOCL (Orient Overseas Container Line) and Canada MaritimeMaritime

5

The Warehouse The Warehouse problemproblem

• Not a big revenue generatorNot a big revenue generator

• Piecing the “jigsaw puzzle”Piecing the “jigsaw puzzle”

• Staff background checksStaff background checks

• Photos of container upon openingPhotos of container upon opening

• Photos when restuffedPhotos when restuffed

• Following orders of a government Following orders of a government officerofficer

6

Colin V. Gordon, Colin V. Gordon, CRPCRP

• Colin Gordon is the Director of Quality Assurance for Colin Gordon is the Director of Quality Assurance for TheMIGroup TheMIGroup

• He represents the company in the Customs-Trade He represents the company in the Customs-Trade Partnership Against TerrorismPartnership Against Terrorism

• Born in Hong Kong and educated in Australia and the United Born in Hong Kong and educated in Australia and the United Kingdom, Colin has been involved in the Relocation Industry Kingdom, Colin has been involved in the Relocation Industry since 1963 and has worked in North America for the last 30 since 1963 and has worked in North America for the last 30 yearsyears

• As the acknowledged expert on the subject of how the threat As the acknowledged expert on the subject of how the threat of terrorism affects the movement of household goods as of terrorism affects the movement of household goods as part of the relocation process part of the relocation process

• Invited speaker at conventions and corporate seminars in Invited speaker at conventions and corporate seminars in Europe, US, Canada and Mexico and presented at ERC, CERC Europe, US, Canada and Mexico and presented at ERC, CERC and ORC events. and ORC events.

• His articles have been published in Mobility, CERC News and His articles have been published in Mobility, CERC News and the OMNI Observer. the OMNI Observer.

7

Vladimir Omazic Vladimir Omazic Customs Customs SuperintendentSuperintendent

• Started career as a Customs Inspector in 1998. Started career as a Customs Inspector in 1998. • Currently, Customs Superintendent at Commercial Currently, Customs Superintendent at Commercial

Operations at Pearson International Airport. Operations at Pearson International Airport. • Responsibilities include the management of border Responsibilities include the management of border

protection through efficient screening of goods and protection through efficient screening of goods and conveyances entering Canada resulting in the protection of conveyances entering Canada resulting in the protection of Canadian society and economy. This includes providing Canadian society and economy. This includes providing information and explaining CBSA legislation, regulations information and explaining CBSA legislation, regulations and requirements to the public to ensure their full and requirements to the public to ensure their full understanding and compliance with the requirements understanding and compliance with the requirements pertaining to the entry of persons and goods into Canada. I pertaining to the entry of persons and goods into Canada. I am directly involved in the development and maintenance am directly involved in the development and maintenance of effective working relations with Customs brokers, of effective working relations with Customs brokers, importers, and commercial carriers. I also monitor the importers, and commercial carriers. I also monitor the effectiveness of Commercial Operations programs and effectiveness of Commercial Operations programs and services.services.

8

Assia HussainAssia Hussain Chief of Release Processing and Chief of Release Processing and Enforcement Enforcement

CBSA - GTA CommercialCBSA - GTA Commercial • Customs Inspector since 1984 and have worked in the Passenger, Postal Customs Inspector since 1984 and have worked in the Passenger, Postal

and Commercial Streams of Customs. and Commercial Streams of Customs. • Gained experience as a technical trainer at the Customs and Excise Gained experience as a technical trainer at the Customs and Excise

College College and subsequently became a Customs Superintendent. and subsequently became a Customs Superintendent. • Current position is Chief of Release Processing and Enforcement at Current position is Chief of Release Processing and Enforcement at

Commercial Commercial Operations at Pearson Airport. Operations at Pearson Airport. • Areas of responsibilities include managing our 7/24 operation which Areas of responsibilities include managing our 7/24 operation which

mainlymainly focuses on release and examination of goods entering Canada in the air, focuses on release and examination of goods entering Canada in the air,

rail and marine modes of transportation. I am responsible for managing rail and marine modes of transportation. I am responsible for managing our cash operation which accounts for $ 500 million on monthly basis for our cash operation which accounts for $ 500 million on monthly basis for revenue revenue

collected. collected. • My new responsibilities include managing a new CBSA port of My new responsibilities include managing a new CBSA port of entry to facilitate people on the Rochester-Toronto Ferry, the Canpass entry to facilitate people on the Rochester-Toronto Ferry, the Canpass Private Air and Marine Programs and the Cross-Border Currency Program. Private Air and Marine Programs and the Cross-Border Currency Program. • I work with a management team to facilitate the movement of goods and I work with a management team to facilitate the movement of goods and

people in the largest inland office in Canada. people in the largest inland office in Canada.

9

Jerry GirouxJerry Giroux• President SubroGateway Inc.President SubroGateway Inc.• Speaker and author. Speaker and author. • With more than 25 years in the marine and With more than 25 years in the marine and

insurance business he brings considerable insurance business he brings considerable experience and a vast network of contacts. experience and a vast network of contacts.

• Past President of Eastern Marine Underwriters and Past President of Eastern Marine Underwriters and most recently, former President of the Maritime most recently, former President of the Maritime Insurance Company and Senior Vice President of Insurance Company and Senior Vice President of CNA Canada. CNA Canada.

• Past president of the Canadian Board of Marine Past president of the Canadian Board of Marine Underwriters and has authored and edited various Underwriters and has authored and edited various industry textbooks and publications. industry textbooks and publications.

• He has represented Canada as a delegate at three He has represented Canada as a delegate at three recent IUMI conferences and is a former director of recent IUMI conferences and is a former director of the Canadian Freight Forwarding Association. the Canadian Freight Forwarding Association.

10

Jean-François BilodeauJean-François Bilodeau• Partner and member of the firm’s Maritime & Shipping, Insurance and Partner and member of the firm’s Maritime & Shipping, Insurance and

Transportation Law Groups. He appears often before the Federal Court of Transportation Law Groups. He appears often before the Federal Court of Canada and other Quebec and Canadian courts.Canada and other Quebec and Canadian courts.

• Practice areas include Transportation Law (marine, air, rail and road Practice areas include Transportation Law (marine, air, rail and road transportation), Insurance Law and Commercial litigation related to such transportation), Insurance Law and Commercial litigation related to such matters. He acts as counsel to ship owners, charterers and operators, freight matters. He acts as counsel to ship owners, charterers and operators, freight forwarders, truckers, cargo interests such as shippers, consignees, forwarders, truckers, cargo interests such as shippers, consignees, warehousemen and their respective agents and insurers.warehousemen and their respective agents and insurers.

• Member of the Quebec and Montreal Bar, the Canadian Maritime Law Member of the Quebec and Montreal Bar, the Canadian Maritime Law Association (CMLA), the Association of Maritime Arbitrators of Canada (AMAC) Association (CMLA), the Association of Maritime Arbitrators of Canada (AMAC) and the Canadian Board of Marine Underwriters (CBMU). and the Canadian Board of Marine Underwriters (CBMU).

• In addition to his legal background, Me Bilodeau was an officer in the In addition to his legal background, Me Bilodeau was an officer in the Canadian Naval Reserve between 1981 and 2002. He holds a bridge watch Canadian Naval Reserve between 1981 and 2002. He holds a bridge watch keeping certificate and has sailed on the Atlantic and Pacific Oceans and on keeping certificate and has sailed on the Atlantic and Pacific Oceans and on the Mediterranean Sea onboard Canadian, British and French warships. He the Mediterranean Sea onboard Canadian, British and French warships. He lectures frequently and was a guest lecturer for the Toronto Marine Loss lectures frequently and was a guest lecturer for the Toronto Marine Loss Group in 2003 and for the Quebec Bar on the topic of Marine Insurance in Group in 2003 and for the Quebec Bar on the topic of Marine Insurance in 2004.2004.

• Born in Quebec City, Province of Quebec. He graduated from Laval University Born in Quebec City, Province of Quebec. He graduated from Laval University with a B.C.L. in 1985. He has practiced with Robinson Sheppard Shapiro since with a B.C.L. in 1985. He has practiced with Robinson Sheppard Shapiro since 2003.2003.

12

Jerry GirouxJerry Giroux

"The definition of a consultant: "The definition of a consultant:

Someone who borrows your watch, Someone who borrows your watch, tells you the time and then charges tells you the time and then charges

you for the privilege."you for the privilege."

15

SubroGateway SubroGateway Inc.Inc.

Open the Open the GateGate to a Smart Claims and Recovery to a Smart Claims and Recovery SolutionSolution

SubroGateway Inc. the choice of your Marine SubroGateway Inc. the choice of your Marine Underwriters!Underwriters!

Our Services IncludeOur Services Include: : AssetAsset Recoveries and Subrogation (no cure-no pay) Recoveries and Subrogation (no cure-no pay)

Abandoned goods Collection of bad debt Deductible recovery Abandoned goods Collection of bad debt Deductible recovery

FF lien positions Claims management Marketing of salvageFF lien positions Claims management Marketing of salvageAssisting your customerAssisting your customer

Covering your NVOCC position with carriersCovering your NVOCC position with carriersEducation and Seminars on Marine Insurance Education and Seminars on Marine Insurance

Proud to be a member of CIFFAProud to be a member of CIFFA

16

Container Security and Container Security and Global Relocation for Global Relocation for Executives and their Executives and their

FamiliesFamilies

The Canadian Board of Marine The Canadian Board of Marine Underwriters AGMUnderwriters AGM

November 22, 2005November 22, 2005TorontoToronto

Colin GordonColin GordonTheMIGroupTheMIGroup

17

““September 11September 11thth marked the end marked the end of an era during which we could of an era during which we could go about out lives treating go about out lives treating security as something only other security as something only other people had to worry about.”people had to worry about.”

Stephen FlynnStephen FlynnRetired Coast Guard CommanderRetired Coast Guard Commander

One of the foremost experts on homeland security and border One of the foremost experts on homeland security and border control from his recent book, America the Vulnerablecontrol from his recent book, America the Vulnerable

18

TheMIGroupTheMIGroup

19

VandalismVandalism

20

Container Container StowawayStowaway

21

Inside Stowaway Inside Stowaway ContainerContainer

22

What’s in the What’s in the Box?Box?

23

Facts:Facts:

Terrorist in a BoxTerrorist in a BoxBusiness-class suspect caught in containerBusiness-class suspect caught in containerBy Richard Owen in Rome and Daniel McGrory, The Times (UK), By Richard Owen in Rome and Daniel McGrory, The Times (UK),

October 25, 2001October 25, 2001

• ITALIAN police were investigating last night why a ITALIAN police were investigating last night why a suspected al-Qaeda hijacker would smuggle himself suspected al-Qaeda hijacker would smuggle himself halfway around the world locked inside a shipping halfway around the world locked inside a shipping container with its own bed and toilet.container with its own bed and toilet.

• The bizarre discovery of an Egyptian carrying a The bizarre discovery of an Egyptian carrying a Canadian passport was made on the dockside in Gioia Canadian passport was made on the dockside in Gioia Tauro in southern Italy, where detectives believe they Tauro in southern Italy, where detectives believe they may have foiled another hijacking.may have foiled another hijacking.

24

FactsFactsAshdodAshdod

25

Household Goods?Household Goods?

26

Why are Household Why are Household Goods Goods

High Risk Cargo ?High Risk Cargo ?

27

Cargo ComparisonsCargo Comparisons

Conventional Conventional CargoCargo

Regular Trading PatternsRegular Trading Patterns– Trading RoutesTrading Routes

• Supervised Loading Supervised Loading PracticesPractices

• Video SurveillanceVideo Surveillance

• Conforming CargoConforming Cargo• X-Ray InspectionX-Ray Inspection

– Reveals anomalies Reveals anomalies within the cargowithin the cargo

Household Household GoodsGoods

Irregular Trading Irregular Trading PatternsPatterns

• Unsupervised Unsupervised Loading/Remote AreasLoading/Remote Areas

• No Video SurveillanceNo Video Surveillance• Non-Conforming CargoNon-Conforming Cargo• X-Ray InspectionX-Ray Inspection

– Reveals that Reveals that everything is an everything is an anomalyanomaly

29

Partners in ProtectionPartners in ProtectionGeneral MOUGeneral MOU

PPARTNERS IN ARTNERS IN PPROTECTIONROTECTION

MEMORANDUM OF UNDERSTANDINGMEMORANDUM OF UNDERSTANDINGTO ENHANCE BORDER SECURITYTO ENHANCE BORDER SECURITY

AND TO SUPPRESS CONTRABAND SMUGGLINGAND TO SUPPRESS CONTRABAND SMUGGLING

BETWEENBETWEEN

THE MINISTER OF NATIONAL REVENUETHE MINISTER OF NATIONAL REVENUE

as represented by the Commissioner of Canada Customs and Revenue Agencyas represented by the Commissioner of Canada Customs and Revenue Agency(hereinafter referred to at “Customs”)(hereinafter referred to at “Customs”)

ANDAND

The MI Group Ltd.The MI Group Ltd.

as represented by Colin V. Gordonas represented by Colin V. Gordonfor and on behalf of for and on behalf of The MI Group Ltd.The MI Group Ltd.

(hereinafter referred to as (hereinafter referred to as “TheMIGroup”“TheMIGroup”))

PPARTNERS IN ARTNERS IN PPROTECTIONROTECTION Page 1 Page 1

30

Organized Crime and DrugsOrganized Crime and Drugs

• Most valuable contraband item Most valuable contraband item » illegal drugs» illegal drugs– $400 billion worldwide$400 billion worldwide– $50-$100 billion in the United States $50-$100 billion in the United States

• Cocaine comprises more than 90% of drugs Cocaine comprises more than 90% of drugs seized at portsseized at ports– CeilingsCeilings– WallsWalls– FloorsFloors

31

Collaboration of Organized Crime Collaboration of Organized Crime and Terrorismand Terrorism

The Dark Side of Globalization

32

Customs and X-Ray Customs and X-Ray DetectionDetection• Vehicle and Cargo Inspection Systems (VACIS)Vehicle and Cargo Inspection Systems (VACIS)

• Equipment is used to find Equipment is used to find – VoidsVoids– False wallsFalse walls– False ceilingsFalse ceilings– Other secret compartmentsOther secret compartments

• All common with illegal drugs, explosives, and All common with illegal drugs, explosives, and weaponsweapons

• Verify the contents of the cargoVerify the contents of the cargo

34

Illegal ImmigrantsIllegal Immigrants

35

Container

False Wall

Tractor Cab

36

False Wall Revealed

38

Organized Crime and Organized Crime and TerrorismTerrorism

•Currency Smuggling Currency Smuggling – Money launderingMoney laundering– Financing of terrorismFinancing of terrorism

41

Client’s Home

Client’s New Home

Origin Agent

Destination Agent

START

Empty Container

Empty Container

Where does our supply chain begin? Where does our supply chain begin? Where does it end?Where does it end?

42

C-TPAT ParticipantsC-TPAT Participants

8500 Participants8500 Participants

5300 Certified Partners5300 Certified Partners

2800 Validated Participants2800 Validated Participants

October 2005October 2005

43

PIP ParticipantsPIP Participants

393 Participants !!393 Participants !!


393 Participants !!393 Participants !!


44

“ “The cargo container is The cargo container is the potential Trojan Horse the potential Trojan Horse of the 21of the 21stst Century. Just as Century. Just as the terrorists of 9/11 the terrorists of 9/11 turned commercial turned commercial passenger airplanes into passenger airplanes into missiles, they could do the missiles, they could do the same with cargo same with cargo containers.”containers.”

Robert C. BonnerRobert C. BonnerCommissioner, U.S. Customs and Border ProtectionCommissioner, U.S. Customs and Border Protection

45

It only takes one!It only takes one!

““If a container exploded at a port or anywhere If a container exploded at a port or anywhere else in the international transportation chain else in the international transportation chain ending in the United States, this nation and ending in the United States, this nation and it’s leaders would have no choice but to shut it’s leaders would have no choice but to shut down the entire system of trade in our down the entire system of trade in our country.”country.”

Rob Quartel, Former US Federal Maritime CommissionerRob Quartel, Former US Federal Maritime Commissioner

46

Membership is voluntary Membership is voluntary - for the moment!!- for the moment!!

47

TriplockTriplock

48

Triplock MapTriplock Map

50

To do nothingTo do nothingis not an option.is not an option.To do nothingTo do nothing

is not an option.is not an option.

51

I HAD A DREAM, ABOUT I HAD A DREAM, ABOUT CUSTOMS…CUSTOMS…

Speaker :Speaker : Jean-François BilodeauJean-François Bilodeau

Presented to the CBMU on November 22, 2005Presented to the CBMU on November 22, 2005

52

I had a dream, about I had a dream, about customscustoms

• IntroductionIntroduction

• The dreamThe dream

• The liabilityThe liability

• The nightmare!The nightmare!

53

IntroductionIntroduction

Once upon a time, a foreign shipper in a far far Once upon a time, a foreign shipper in a far far away land sent a cargo of frozen seafood away land sent a cargo of frozen seafood products to a good consignee in Canada.products to a good consignee in Canada.

Unbeknownst to the good consignee the cargo Unbeknownst to the good consignee the cargo was inspected by Canada Border Services was inspected by Canada Border Services Agency and is delivered in a thawed condition in Agency and is delivered in a thawed condition in Toronto!Toronto!

The good consignee contacted his friend the The good consignee contacted his friend the insurer and our journey begins…insurer and our journey begins…

54

THE DREAMTHE DREAM

• The goods consignee contacted his insurer The goods consignee contacted his insurer to file a claim concerning his damaged to file a claim concerning his damaged cargo of frozen seafood products;cargo of frozen seafood products;

• The insurer instructed a surveyor to The insurer instructed a surveyor to investigate the loss and make investigate the loss and make recommendations concerning the claim;recommendations concerning the claim;

• The surveyor contacted the importer to The surveyor contacted the importer to commence his investigation;commence his investigation;

55

THE DREAMTHE DREAM

•During the course of his During the course of his investigation, the surveyor learned investigation, the surveyor learned that the cargo was discharged in that the cargo was discharged in Halifax before being railed to Halifax before being railed to Toronto;Toronto;

•While in Toronto, the container into While in Toronto, the container into which the cargo had been stuffed which the cargo had been stuffed was flagged for inspection by Canada was flagged for inspection by Canada Border Service Agency;Border Service Agency;

56

THE DREAMTHE DREAM

• Meanwhile, the consignee is contacted by his Meanwhile, the consignee is contacted by his freight forwarder and in informed that he must freight forwarder and in informed that he must pay a supplementary fee for the container pay a supplementary fee for the container inspection costs incurred in Halifax;inspection costs incurred in Halifax;

• The surveyor contacts the shipping line and is The surveyor contacts the shipping line and is provided with computer generated temperature provided with computer generated temperature log report showing that the temperature inside log report showing that the temperature inside the container was constant at -4the container was constant at -4°F throughout °F throughout the entire movement;the entire movement;

57

THE DREAMTHE DREAM

• The surveyor reports to his principal and the The surveyor reports to his principal and the insurer informs the good consignee that the loss insurer informs the good consignee that the loss is not covered by virtue of the Institute Frozen is not covered by virtue of the Institute Frozen Food Clauses (A) since the loss did not result Food Clauses (A) since the loss did not result from a variation in temperature attributable to a from a variation in temperature attributable to a breakdown of refrigerated machinery for a breakdown of refrigerated machinery for a period of no less than 24 consecutive hours.period of no less than 24 consecutive hours.

• The good consignee has no other choice but to The good consignee has no other choice but to contact his solicitor.contact his solicitor.

58

THE DREAMTHE DREAM

• Fortunately for our good consignee, the Fortunately for our good consignee, the solicitor did some maritime cases in the past;solicitor did some maritime cases in the past;

• The solicitor decides to institute recovery The solicitor decides to institute recovery proceedings against the shipping line, the proceedings against the shipping line, the warehousemen, the trucker, the rail company warehousemen, the trucker, the rail company and Canada Border Service Agency;and Canada Border Service Agency;

• The line is insulted as it provided good The line is insulted as it provided good evidence of the temperature showing that evidence of the temperature showing that the it was constant inside the container!the it was constant inside the container!

59

THE DREAMTHE DREAM

• The Attorney General of Canada, The Attorney General of Canada, representing Canada Border Service representing Canada Border Service Agency is not happy either as the Agency is not happy either as the Queen can do not wrong!Queen can do not wrong!

• The trucker are not pleased as they The trucker are not pleased as they argue that they did nothing wrong!argue that they did nothing wrong!

• The good consignee and his solicitor The good consignee and his solicitor decide, despite the odds to advance decide, despite the odds to advance the matter.the matter.

60

THE DREAMTHE DREAM

• The Canada Border Service Agency The Canada Border Service Agency representatives inform the representatives inform the consignee of the following: consignee of the following:

1.1. The The Customs ActCustoms Act allows the Agency to allows the Agency to examine imported goods at any time examine imported goods at any time and to open or cause to be open any and to open or cause to be open any package or container (sect. 99);package or container (sect. 99);

2.2. It is the responsibility of the shipping It is the responsibility of the shipping lines to report to Customs the details lines to report to Customs the details of goods imported to Canada;of goods imported to Canada;

61

THE DREAMTHE DREAM

3.3. The report is made electronically to The report is made electronically to the Agency;the Agency;

4.4. The Agency conducts a risk The Agency conducts a risk assessment of the arrivals and selects assessment of the arrivals and selects a number of container for inspection;a number of container for inspection;

5.5. The Agency notifies the shipping lines The Agency notifies the shipping lines of a number of container that have of a number of container that have been selected for inspection;been selected for inspection;

62

THE DREAMTHE DREAM

6.6. In order to allow the Agency to perform its In order to allow the Agency to perform its inspection, the shipping lines have selected inspection, the shipping lines have selected a warehouse in Halifax to proceed with such a warehouse in Halifax to proceed with such inspections;inspections;

7.7. The warehouse is under contract with each The warehouse is under contract with each lines to provide labour to empty and reload lines to provide labour to empty and reload containers;containers;

8.8. The warehouse also provide space for the The warehouse also provide space for the Agency inspectors to perform the Agency inspectors to perform the inspections; inspections;

63

THE DREAMTHE DREAM

9.9. The shipping lines are responsible to truck The shipping lines are responsible to truck the container from and to the ocean terminal;the container from and to the ocean terminal;

10.10.The Agency officers will, during the The Agency officers will, during the inspection, take notes and photographs of inspection, take notes and photographs of cargo and draft a report on their findings;cargo and draft a report on their findings;

11.11.Once the inspection has been completed, the Once the inspection has been completed, the cargo is returned to the ocean terminal to cargo is returned to the ocean terminal to continue its journey to final destinationcontinue its journey to final destination

64

THE LIABILITYTHE LIABILITY

In order to succeed in its endeavour, the In order to succeed in its endeavour, the solicitor must determine the cause of the loss solicitor must determine the cause of the loss and where the it occurred.and where the it occurred.

• The The ocean carrierocean carrier will state that it is not will state that it is not responsible for the loss as the temperature responsible for the loss as the temperature inside the container was constant a -4inside the container was constant a -4°F;°F;

• The The trucker and rail carriertrucker and rail carrier will state that will state that they took a container from and delivered in they took a container from and delivered in the same order and condition to the next the same order and condition to the next person in the line;person in the line;

65


• The The AgencyAgency will state that its inspectors did not will state that its inspectors did not touch the cargo and that any loss resulted from touch the cargo and that any loss resulted from the condition of the cargo;the condition of the cargo;

• The The warehousemanwarehouseman will state that it received will state that it received the container, turned off the temperature the container, turned off the temperature setting, emptied the content of the reefer setting, emptied the content of the reefer container into another container to allow the container into another container to allow the Agency officers to conduct the inspection and Agency officers to conduct the inspection and then, re-stuffed the initial container. The reefer then, re-stuffed the initial container. The reefer unit was restarted and the container picked up unit was restarted and the container picked up the following say.the following say.

66


• It would appear from the above that the only It would appear from the above that the only explanation for the loss would be that the explanation for the loss would be that the shipper did not deep froze the shipment at shipper did not deep froze the shipment at origin as the reefer container is not designed origin as the reefer container is not designed to freeze but to maintain the cargo at a set to freeze but to maintain the cargo at a set temperature;temperature;

• However the foreign shipper is adamant in However the foreign shipper is adamant in stating that the cargo was deep frozen before stating that the cargo was deep frozen before departure as showed by the various departure as showed by the various certificates and that damage could only have certificates and that damage could only have occurred during transit;occurred during transit;

67


•At this stage, the At this stage, the solicitor wonders solicitor wonders whether family law whether family law would not have been a would not have been a better field of work!better field of work!

68


Scenario # 1Scenario # 1

• During the course of the discoveries, During the course of the discoveries, the consignee learns that the trucker the consignee learns that the trucker retained by the shipping line forgot to retained by the shipping line forgot to re-start the reefer unit after re-start the reefer unit after completion of the inspection at the completion of the inspection at the warehouse;warehouse;

69


Scenario # 1Scenario # 1

• In this case, the trucker could be In this case, the trucker could be held liable for its negligence;held liable for its negligence;

• The shipping line would also be The shipping line would also be vicariously held liable for the vicariously held liable for the negligence of its sub-contractor; negligence of its sub-contractor;

70

THE LIABILITY THE LIABILITY

• However, the shipping line is likely to However, the shipping line is likely to invoke the terms and conditions of invoke the terms and conditions of the ocean bill of lading and in the ocean bill of lading and in particular the Himalaya clause particular the Himalaya clause whereby its the sub-contractors can whereby its the sub-contractors can benefit from the same limitations of benefit from the same limitations of liability;liability;

71

THE LIABLILITYTHE LIABLILITY

Scenario #2Scenario #2

• The warehousemen forgot, after The warehousemen forgot, after completion of the inspection by the completion of the inspection by the Agency to re-stuff the initial Agency to re-stuff the initial container and let the cargo thaw in container and let the cargo thaw in the warehouse for the week end;the warehouse for the week end;

72

THE LIABLILITYTHE LIABLILITY


• The liability of the warehousemen The liability of the warehousemen will have to be assessed pursuant to will have to be assessed pursuant to the terms of its contract with the the terms of its contract with the shipping line. The warehousemen shipping line. The warehousemen could also benefit from the terms of could also benefit from the terms of the B/L as could the trucker; the B/L as could the trucker;

73

THE LIABILITYTHE LIABILITYScenario #3Scenario #3• The discoveries did not allow the solicitor The discoveries did not allow the solicitor

to find negligence on the part of any party;to find negligence on the part of any party;• However, the Agency officers took good However, the Agency officers took good

pictures of the container before the pictures of the container before the inspection and it appears that the cargo inspection and it appears that the cargo packaging was not wet nor did it display packaging was not wet nor did it display any sign of thawing. Furthermore, one any sign of thawing. Furthermore, one officer visually inspected at random officer visually inspected at random several boxes and found that the cargo several boxes and found that the cargo was in good order. He even use a pick axe was in good order. He even use a pick axe to cut one fish in half and it found it to be to cut one fish in half and it found it to be frozen hard solid! frozen hard solid!

74

THE LIABLILITY THE LIABLILITY

• The above would indicate that if the cargo was The above would indicate that if the cargo was found in a thawed condition in Toronto, the found in a thawed condition in Toronto, the reefer unit did not function properly from Halifax reefer unit did not function properly from Halifax onward. This would also indicate that the onward. This would also indicate that the temperature electronic report is not reliable.temperature electronic report is not reliable.

• Under the circumstances, the liability of the Under the circumstances, the liability of the shipping line should be retained as the evidence shipping line should be retained as the evidence of the Agency as to the condition of the cargo in of the Agency as to the condition of the cargo in Halifax is likely to be preferred to that to the Halifax is likely to be preferred to that to the electronic data! electronic data!

75



• The Agency after having completed The Agency after having completed its initial inspection finds that the its initial inspection finds that the container must be detained. container must be detained. However, the container is stolen However, the container is stolen while detained at the warehouse;while detained at the warehouse;

76



• In our view, the Agency would be In our view, the Agency would be responsible for the theft as it had the responsible for the theft as it had the care of the cargo and would have been care of the cargo and would have been acting as bailee. A recourse could also acting as bailee. A recourse could also be made against the warehousemen in be made against the warehousemen in tort as it had care custody and control tort as it had care custody and control of the cargo at the material time.of the cargo at the material time.

77

THE NIGHTMARETHE NIGHTMARE

• You decide after having reviewed the You decide after having reviewed the evidence that the theft occurred after evidence that the theft occurred after the cargo was detained by the Agency;the cargo was detained by the Agency;

• You contact the consignee and inform You contact the consignee and inform him that you are ready to take on the him that you are ready to take on the case on a contingency basis as the case on a contingency basis as the case against the Agency is clear and case against the Agency is clear and liability for the theft does not appear liability for the theft does not appear to raise any difficulty.to raise any difficulty.

78


• The solicitor contacts the Attorney general and The solicitor contacts the Attorney general and declared that his client is ready to accept a declared that his client is ready to accept a settlement for 75% of the claim in capital and settlement for 75% of the claim in capital and interest!interest!

• The Attorney General responds that he would The Attorney General responds that he would be willing to recommend to his client a be willing to recommend to his client a discontinuance of the claim against his client discontinuance of the claim against his client on the basis of each client paying his costs;on the basis of each client paying his costs;

• The solicitor responds, « Why should I do The solicitor responds, « Why should I do this? »this? »

79


• The answer received from the Attorney The answer received from the Attorney General is: “ Because of section 106 of the General is: “ Because of section 106 of the Customs Act”:Customs Act”:

106. (1) No action or judicial 106. (1) No action or judicial proceeding proceeding shall be commencedshall be commencedagainst an officer for against an officer for anything done in anything done in

the performance of his the performance of his duties under duties under this this act,…, more than three act,…, more than three months after months after the time when the cause of the time when the cause of action,…, action,…, arose. arose.

1 Welcome Container Security and Inspection CBMU MONTREAL 22 Nov. 2005 Welcome Container Security...

Documents

Transcript of 1 Welcome Container Security and Inspection CBMU MONTREAL 22 Nov. 2005 Welcome Container Security...