FoS Framework of Standards

World Customs Organization

Supply Chain Security

Global Trade Lanes

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1.       Foreword

1.1.    Introduction

International trade is an essential driver for economic prosperity. The global trading system is vulnerable to terrorist exploitation that would severely damage the entire global economy. As government organizations that control and administer the international movement of goods, Customs administrations are in a unique position to provide increased security to the global supply chain and to contribute to socio-economic development through revenue collection and trade facilitation.

There is a need for a World Customs Organization (WCO) endorsed strategy to secure the movement of global trade in a way that does not impede but, on the contrary, facilitates the movement of that trade. Securing the international trade supply chain is only one step in the overall process of strengthening and preparing Customs administrations for the 21st Century. Accordingly, to strengthen and go beyond existing programmes and practices, WCO Members have developed a regime that will enhance the security and facilitation of international trade. This is the WCO SAFE Framework of Standards to Secure and Facilitate Global Trade (hereafter referred to as the "SAFE WCO Framework" or “Framework”). This WCO Framework to secure and facilitate global trade sets forth the principles and the standards and presents them for adoption as a minimal threshold of what must be done by WCO Members.

The reason that the WCO is the appropriate platform for this initiative is readily apparent. The WCO has the membership and thus the participation of 166 Customs administrations representing 99 percent of global trade. Customs administrations have important powers that exist nowhere else in government - the authority to inspect cargo and goods shipped into, through and out of a country. Customs also have the authority to refuse entry or exit and the authority to expedite entry. Customs administrations require information about goods being imported, and often require information about goods exported. They can, with appropriate legislation, require that information to be provided in advance and electronically. Given the unique authorities and expertise, Customs can and should play a central role in the security and facilitation of global trade. However, a holistic approach is required to optimize the securing of the international trade supply chain while ensuring continued improvements in trade facilitation. Customs should therefore be encouraged to develop co-operative arrangements with other government agencies.

It is an unacceptable and an unnecessary burden to inspect every shipment. In fact, doing so would bring global trade to a halt. Consequently, modernized Customs administrations use automated systems to risk manage for a variety of issues. In this environment, Customs administrations should not burden the international trade community with different sets of requirements to secure and facilitate commerce, and there should be recognition of other international standards. There should be one set of international Customs standards developed by the WCO that do not duplicate or contradict other intergovernmental requirements.

The Framework also considers the critical elements of capacity building and requisite legislative authority. While certain aspects of the Framework can be implemented without capacity building, it is recognized that many administrations will need assistance to implement the standards. The Framework contemplates appropriate assistance with capacity building for those Customs administrations that adopt the Framework.

1.2.       Objectives and principles of the SAFE Framework

The Framework aims to :

¾         Establish standards that provide supply chain security and facilitation at a global level to promote certainty and predictability.

¾         Enable integrated supply chain management for all modes of transport.

¾         Enhance the role, functions and capabilities of Customs to meet the challenges and opportunities of the 21st Century.

¾         Strengthen co-operation between Customs administrations to improve their capability to detect high-risk consignments.

¾         Strengthen Customs/Business co-operation.

¾         Promote the seamless movement of goods through secure international trade supply chains.

1.3.       Four Core Elements of the SAFE Framework

The Framework consists of four core elements. First, the Framework harmonizes the advance electronic cargo information requirements on inbound, outbound and transit shipments. Second, each country that joins the Framework commits to employing a consistent risk management approach to address security threats. Third, the Framework requires that at the reasonable request of the receiving nation, based upon a comparable risk targeting methodology, the sending nation's Customs administration will perform an outbound inspection of high-risk containers and cargo, preferably using non-intrusive detection equipment such as large-scale X-ray machines and radiation detectors. Fourth, the Framework defines benefits that Customs will provide to businesses that meet minimal supply chain security standards and best practices.

1.4.       Two Pillars of the SAFE Framework

The Framework, based on the previously described four core elements, rests on the twin pillars of Customs-to-Customs network arrangements and Customs-to-Business partnerships. The two-pillar strategy has many advantages. The pillars involve a set of standards that are consolidated to guarantee ease of understanding and rapid international implementation. Moreover, the Framework draws directly from existing WCO security and facilitation measures and programmes developed by Member administrations.

1.5.       Benefits

This Framework provides a new and consolidated platform which will enhance world trade, ensure better security against terrorism, and increase the contribution of Customs and trade partners to the economic and social well-being of nations. It will improve the ability of Customs to detect and deal with high-risk consignments and increase efficiencies in the administration of goods, thereby expediting the clearance and release of goods.

1.6.       Capacity Building

It is recognized that effective capacity building is an important element to ensure widespread adoption and implementation of the Framework. However, it is also recognized that parts of the Framework can be implemented immediately. To this end, strategies are required to enhance the capacity building provided to Members to enable implementation of the Framework. For capacity building to be successful, a foundation of political will and integrity must already exist. Thus, countries that demonstrate a commitment to implement the Framework and the necessary political will should be assisted by the WCO and a consortium of countries and other co-operating partners.

1.7.       Implementation

In order for the Framework to be implemented, not only will capacity building be necessary, but also an understanding that a phased approach will be required. It is unreasonable to expect that every administration will be able to implement the Framework immediately. While the Framework is considered a minimum set of standards, it will be implemented at various stages in accordance with each administration’s capacity and the necessary legislative authority. The WCO Secretariat, in conjunction with the High Level Strategic Group, will develop an Implementation Plan for the Framework Standards.

This Framework is structured as follows:

•           A description of the benefits of adoption and implementation;

•           The pillars dealing with Customs-to-Customs network arrangements and Customs-to-Business partnerships;

•           The annexes containing the detailed implementation specifications.

This Framework will be further developed on a continuing basis in due course.

2.       Benefits

Adoption of the SAFE Framework will brings benefits for nations/governments, Customs administrations and the business community.

2.1.     Nations/Governments

One of the main objectives of the Framework is to secure and facilitate global trade. This will enable international trade to contribute to economic growth and development. This will help to secure trade against the threat of global terrorism and, at the same time, the Framework will enable Customs administrations to facilitate the movement of legitimate trade and improve and modernize Customs operations. This will, in turn, improve revenue collection and also the proper application of national laws and regulations. The Framework therefore supports economic and social protection, and will enable foreign direct investment.

The Framework also encourages the establishment of co-operative arrangements between Customs and other government agencies. There should be recognition of other already existing international standards (see 1.1.). This will assist governments to ensure integrated border management and control. By putting the necessary measures in place, the Framework also empowers governments to expand the mandate and responsibilities of Customs administrations in this area.

2.2.     Customs

One of the main thrusts of the Framework is to establish Customs-to-Customs network arrangements to promote the seamless movement of goods through secure international trade supply chains. These network arrangements will result, inter alia, in the exchange of timely and accurate information that will place Customs administrations in the position of managing risk on a more effective basis. Not only will this improve the ability of Customs to detect high-risk consignments, it will also enable Customs administrations to improve their controls along the international trade supply chain and make for better and more efficient allocation of Customs resources. The Customs-to-Customs network arrangements will strengthen co-operation between Customs administrations and enable administrations to carry out controls earlier in the supply chain, e.g. where the administration of an importing country requests the administration of the exporting country to undertake an examination on its behalf. The Framework also provides for the mutual recognition of controls under certain circumstances. The application of the Framework will enable Customs administrations to adopt a broader and more comprehensive view of the global supply chain and create the opportunity to eliminate duplication and multiple reporting requirements.

As stated above, the Framework will enable Customs administrations to cope with the challenges of the new international trading environment by putting the building blocks in place to undertake Customs reform and modernization. The Framework has also been structured in a flexible manner to enable Customs administrations to move at different speeds. This will enable Customs administrations to implement the Framework in line with their own unique levels of development, conditions and requirements.

2.3.     Business

The Framework creates, amongst other things, the conditions for securing international trade, but also facilitates and promotes international trade. This encourages and makes it easier for buyers and sellers to move goods between countries. The Framework takes account of, and is based on, modern international production and distribution models.

Authorized Economic Operators (AEOs)1 will reap benefits, such as faster processing of goods by Customs, e.g. through reduced examination rates. This, in turn, translates into savings in time and costs. One of the main tenets of the Framework is to create one set of international standards and this establishes uniformity and predictability. It also reduces multiple and complex reporting requirements.

These processes will ensure that AEOs see a benefit to their investment in good security systems and practices, including reduced risk-targeting assessments and inspections, and expedited processing of their goods.

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