Supply Chain Security Compliance Programs
and Third Party Support
presented to the
The 1st National Conference on SAFE TRADE & AEO
“International Security Initiatives and their Impact on Philippine Trade”Manila
Daine Eisold
Vice President, Supply Chain Security Cotecna, Inc.
Partners in Protection
Pillar Two – Customs to Business Partnership
“Each Customs administration will establish a partnership with the private sector in order to involve it in ensuring the safety and security of the international trade supply chain. The main focus of this pillar is the creation of an international system for
identifying private businesses that offer a high degree of security guarantees in respect of their role in the supply chain. These business partners should receive tangible benefits in such partnerships in the form of expedited processing and other measures.”*
“Partnership” means there will be involvement of both parties to meet the shared goals
Develops new requirements for the business sector to understand and participate in security Establishes new roles for Customs agencies to cooperate with, educate and work together
with private sector for Security purposes
Trends in Supply Chain Security Compliance
National Compliance Programs
Regional Compliance Programs
Industry Lead Compliance Programs
Individual Company Compliance Programs
Trade Association Lead Compliance Programs
Program Driven Compliance Programs
“Certified Cargo Screening Program (CCSP)” Third Party Assessments / Audits / Validation
Mutual Recognition 100% Air Cargo Scanning Requirement Requirement Exceeds Govt Capacity Requirement Pushed to Public Sector Govt Requirement for oversight New Compliance Program
EU USA Australia Canada Latin America New Zealand Sweden EU AEO C-TPAT ACP PIP BASC StairSec WCO SAFE Industry - ISO 28000 Tech Mfg TAPA SEP
Landscape of Growing ‘Voluntary’
Compliance Programs
Trade Assns Self Gen
World Community Regional
National
Where Compliance Programs Fit In
Layered System
–
United States CBP Example
Advance Information Under 24 Hour Rule, Trade Act of 2002
National Targeting Center – Advanced Targeting System
Customs Trade Partnership Against Terrorism (C-TPAT) Container Security Initiative (CSI)
Use of Non-Intrusive Inspection Technology and Mandatory Exams for All High Risk Shipments
Automated Commercial Environment
“…establish a partnership with the private sector in order to involve it in ensuring the safety and security of the international trade supply chain.”
Selling ‘Voluntary’
Compliance Programs
http://www.customs.ustreas.gov/linkhandler/cgov/import/commercial_enforcement/ctpat/ctpat_ cost_survey.ctt/ctpat_cost_survey.pdf
Most important question – Why invest?
Quantifiable return on investment (ROI) Many studies conducted
Hard to quantify benefit of ‘deterrence’ Indirect benefits more palpable
Positive Response –
Value Added
Difficult to measure deterrence, but…
…other valuable benefits and aspects can be quantified.
Private Sector Perspective –
Benefits & Value
What should the private sector expect from participation in Compliance Programs?
- Overcoming ‘newness’
- Accepting the requirements
Negative perceptions
Additional cost No value added Bureaucratic
‘Partnership’ concept
Direct and indirect benefits
Security Safety Reputation Competitive advantage Facilitation Transparency Efficiency Reliability / predictability Economy
Reduced insurance rates
How Will Compliance Programs Be Managed?
Issues
Global nature of trade – global requirement – millions of participants
‘National Security’ purpose – government responsibility
Value proposition
Government bandwidth and budget
Voluntary vs. regulatory
Moving Forward
Several different models – same basic goal
High degree of overlap between models
Mutual recognition initiatives
Private sector buy-in
Third Party Validators
“Third party validator : any manner of outside (non-Customs) entity that is
employed to assist a Customs administration in the accomplishment of security risk assessment reviews and related validation procedures...”
- Concept of Third Party use is well established within governments worldwide - How can Third Parties can add value?
Bandwidth – capacity to meet demand (force multiplier) Responsiveness
Economy – outsourcing this mission can be cost effective Technical expertise – “Security” is a new mission for many Oversight – easier to manage than to operate
Process Integrity – may preclude conflicts, improve impartiality Economy – may cost more up front, but more effective in long term Strengthens ‘Partnership’ with private sector
Private Sector Perspective
Why would the private sector support the use of a third party? -Overcoming ‘newness’
- Accepting the requirement
Not within core competency Responsiveness
Expertise and experience
Multiple standards capability (C-TPAT, ISO 28000, AEO concurrently e.g.) Impartiality
Flexibility
Educational capacity
Preparatory services – pre-assessments, coaching Follow on services – deficiency management
Additional supply chain security services Offset / subsidy
Third Party Qualifications
Integrity
Experience and qualifications
Industry involvement
Government vetting
Network
Bandwidth
Flexibility
Recognized as an important tool by the WCO, Third Party support programs are a new concept being applied to evolving supply chain security programs. Growing pains, learning curves abound in both the public and private sectors.
Cotecna is proud to be one of the trusted Partners in Protection to Customs agencies worldwide!
Thank You!
Supporting Global Trade with nearly 100 Offices in 80 Countries with over 4000 Employees and Agents
For further information please email COSEC at
COSEC US / Cotecna, Inc.: Tel: +1-202-333-2540
The Flour Mill Building 1000 Potomac Street NW Washington, DC 20007
Mr. Daine Eisold, VP Supply Chain Security
− Mobile: +1-703-869-3336
