The WCO SAFEThe WCO SAFE FrameworkFramework ofof StandardsStandards

Larry Burton Larry Burton Senior Technical OfficerSenior Technical Officer

World Customs OrganizationWorld Customs Organization

Components of the New WCO SAFE Framework of Standards:

• Introduction and General Provisions;

• Benefits to Governments, Customs, Business

• SAFE Pillar 1, Customs-to-Customs Cooperation;

• SAFE Pillar 2, Customs-to-Business Cooperation;

• AEO Conditions, Requirements and Benefits;

• AEO Validation and Authorization Procedures, including Appeals;

SAFE; FOUR CORE ELEMENTSSAFE; FOUR CORE ELEMENTS

Common risk-management approach; Key data elements

Advance electronic manifest information

Inspection of high-risk cargo at port of origin; export controls

Enhanced trade facilitation for legitimate trade; Authorized Economic Operator (AEO) concept

FRAMEWORK STRUCTURE: FRAMEWORK STRUCTURE: TWO PILLARS / 17 StandardsTWO PILLARS / 17 Standards

• Pillar 1: Customs-to-Customs Cooperation; Using Commonly Accepted Standards to both Secure and Facilitate Trade (11 Standards).

• Pillar 2: Customs and Business Partnership; Identify Secure Business Partners / Offer Benefits (6 Standards).

HISTORY: SUPPLYING SAFE HISTORY: SUPPLYING SAFE WITHWITH SPECIFICSSPECIFICS

Authorized Economic Operator Document (Conditions, Validation, Mutual Recognition) was Presented to Policy Commission and Council at End of June 2006.

Once adopted, the process of encouraging Mutual Recognition began. This is a Goal to be realized in the Long Term.

THREE AEO COMPONENTSTHREE AEO COMPONENTS

I. Conditions, Requirements, Benefits;

II. Validation and Authorization;

III. Mutual Recognition

I. CONDITIONS & I. CONDITIONS & REQUIREMENTS for CUSTOMS REQUIREMENTS for CUSTOMS

AND THE AEOAND THE AEO

First of the Three SAFE Document Components Includes:

Thirteen Detailed Requirements Sections (Lettered A-M);

A Section Listing Benefits to the AEO.

DETAILED REQUIREMENT: AEO DETAILED REQUIREMENT: AEO SECTION “A”SECTION “A”

Demonstrated Compliance with Customs Requirements:

Requirements Specified for the AEO and Taken into Account When Customs Considers Applicant’s Qualifications

DETAILED REQUIREMENT: AEO DETAILED REQUIREMENT: AEO SECTION “B”SECTION “B”

Satisfactory System for Management of Commercial Records

Recognizes the Importance of Keeping Accurate Commercial Records that are

Readily Available to Customs.

DETAILED REQUIREMENT: AEO DETAILED REQUIREMENT: AEO SECTION “C”SECTION “C”

Financial Viability:

Recognizes the Critical Role of Good Financial Standing - Allows AEO’s to Fulfill Commitments under SAFE.

DETAILED REQUIREMENT: AEO DETAILED REQUIREMENT: AEO SECTION “D”SECTION “D”

Consultation, Cooperation and Communication:

Establishes Measures for Customs and the AEO to Foster Mutually Beneficial Working Relationships.

DETAILED REQUIREMENT: AEO DETAILED REQUIREMENT: AEO SECTION “E”SECTION “E”

Education, Training and Awareness:

This Section Recognizes the Importance of Reinforcing in Employees (both Customs and AEO), the Necessity of Learning Proper Procedures and Dealing with Anomalies.

DETAILED REQUIREMENT: AEO DETAILED REQUIREMENT: AEO SECTION “F”SECTION “F”

Confidentiality:

This Section has Provisions Which Apply to the AEO, to Customs, and to the Parties Jointly. The Thrust of the Section is to Secure Information and to Prevent its Misuse or Unauthorized Alteration.

DETAILED REQUIREMENT: AEO DETAILED REQUIREMENT: AEO SECTION “G”SECTION “G”

Cargo Security:

This Section Seeks the Maintenance of Cargo Integrity and Access Controls at the Highest Levels through Provisions for Customs and the AEO.

DETAILED REQUIREMENT: AEO DETAILED REQUIREMENT: AEO SECTION “H”SECTION “H”

Conveyance Security:

Elements Apply to Customs and to the AEO with the Aspiration that they Work Together to Secure and Maintain Transport Conveyances.

DETAILED REQUIREMENT: AEO DETAILED REQUIREMENT: AEO SECTION ”I”SECTION ”I”

Premises Security:

Enhanced Protocols to Secure Buildings, to Control and Monitor Perimeters - Elements Apply to Customs and to the AEO.

DETAILED REQUIREMENT: AEO DETAILED REQUIREMENT: AEO SECTION “J”SECTION “J”

Personnel Security:

Elements for both Customs and the AEO Regarding Recruitment, Security Checks and Personnel Procedures. The Section also Includes Removal of Premises Access.

DETAILED REQUIREMENT: AEO DETAILED REQUIREMENT: AEO SECTION “K”SECTION “K”

Trading Partner Security:

Encourages the AEO to Conclude Contractual Provisions with its Partners in the Supply Chain to Bolster their Level of Security Commitment.

DETAILED REQUIREMENT: AEO DETAILED REQUIREMENT: AEO SECTION “L”SECTION “L”

Crisis Management and Incident Recovery:

Section Applies Jointly to AEO and Customs, and Encourages Advance Contingency Planning for Recovery from Adverse Incidents.

DETAILED REQUIREMENT: AEO DETAILED REQUIREMENT: AEO SECTION “M”SECTION “M”

Measurement, Analysis and Improvement:

Fostering Consistency, Security Integrity, and Identification of Security System Improvements by Applying Specific Requirements to AEO Activities.

AEO BENEFITS: GROUP “A”AEO BENEFITS: GROUP “A”

Expedite Cargo Release, Reduce Transit Time, Lower Storage Costs:

• Reduced data set for cargo release;• Expedited processing and shipment release;• Minimum of cargo inspections• Priority access to non-intrusive methods when requiring exam;• Reduced fees or charges for AEO in good standing;• Possibility of Customs offices always open when justified.

AEO BENEFITS: GROUP “B”AEO BENEFITS: GROUP “B”

Providing Access to Information of Value to AEO Participants:

• With Consent, Access to Contact Information for other AEOs;• Lists of all Countries Adopting the SAFE Framework;• Lists of Recognized Security Standards and Best practices.

AEO BENEFITS: GROUP “C”AEO BENEFITS: GROUP “C”

Special Measures Relating to Periods of Trade Disruption or Elevated Threat:

• Priority Processing from Customs during elevated threats;• Priority Processing after Port/Border Incident Closure;• Priority in Exporting to Affected Countries after an Incident.

AEO BENEFITS: GROUP “D”AEO BENEFITS: GROUP “D”

First Consideration for Participation in Any New Cargo Processing Programs:

• Account-Based Processing and Account Clearance;• Simplified Post-Entry or Post Clearance Programs;• Eligibility for Self-Audit/Reduced Audit Programs;• Expedited Resolution of Post-Entry/Clearance Inquiries;• Except for Fraud/Criminal Activity, Special Mitigation Relief;• Increased Paperless for Import and Export Transactions;• Priority Responses to Requests for Administrative Rulings;• Eligibility for Remote Customs Clearance Programs;• Except for Fraud/Criminal, Chance for Prior Disclosure/Correction;• Interest Only for Late Duty Payment, with no Penalty/Liq. Damages.

II. VALIDATION AND II. VALIDATION AND AUTHORIZATIONAUTHORIZATION

The Second of the Three SAFE Document AEO Components:

Discusses Application and Authorization Process for Attaining AEO Status;

Contains General Information on the Process of Validating AEO Qualifications;

Discusses the Need for Communication and Review Concerning Levels of AEO Compliance;

Provides a Process Outline for AEO and Customs Use in Validation and Authorization Activities;

III. MUTUAL RECOGNITIONIII. MUTUAL RECOGNITION

The Third of the SAFE Document AEO Components:

Recognition that Mutual Recognition will Evolve Over Time (Phase-In Approach);

Mutual Recognition Relates to SAFE Under:1. Pillar 2, Std. 3, Authorization of AEO;

2. Pillar 1, Std. 6, Advance Electronic Information; 3. Pillar 1, Std. 7, Targeting & Communication

COUNCIL 2007COUNCIL 2007

Council Authorized a Revised and consolidated version of SAFE (SAFE Framework + AEO Guidelines to be merged and published)

Future management by the SAFE Working Group

THANK YOUTHANK YOU

Larry Burton

Senior Technical OfficerWorld Customs Organization, Brussels

Larry.Burton@wcoomd.org