The Scary New Technology of Iris Scanners

Picture: Ben Mortimer

Picture: Ben Mortimer

The technology of ‘Minority Report‘ is closer than you think, according to Russell Brandom writing in www.theverge.com.  A company called AOptix recently unveiled its latest creation, pitched as a game-changer in the world of iris recognition. In less grandiose terms, it’s basically an iPhone case for cops, providing military-grade biometric scanning on the move. The AOptix shell is built to provide everything an officer needs to process a suspect on the spot. There’s a fingerprint scanner on the back, the capacity for facial recognition, and the new guest at the party: an iris scanner. The camera’s a little tricky — you have to hold it a little less than a foot away, and keep it steady for a few seconds — but otherwise, using the Stratus is like taking pictures with a heavier, clunkier iPhone. Crucially, it’s small enough to hold with just one hand, so the officer using it can still reach for his gun.

The Stratus has only been on the market a few weeks, but AOptix is already pitching it for use at border crossings and in airport security. The US Department of Defense is interested too, and provided a $3 million grant for AOptix to develop the tech further. Once it’s normalized, scanning your iris could become as routine as swiping a credit card. “We really feel it’s going to be an inflection point in the biometrics industry,” AOptix marketing director Joey Pritikin told The Verge. “We can do business, we can conduct health care, we can go to disaster areas. This will really open up new markets.” After years of lurking in the margins, AOptix thinks iris scanning is ready for the big time.

Outside of the West, it’s already there. Hundreds of millions of Indians have already been iris-printed, along with thousands of Iraqi civilians and anyone who goes through customs regularly in Dubai. It’s the gold standard of a modern ID program, easier than fingerprinting and more stable than facial recognition. All you have to do is look at the camera and open your eyes. And unlike in retinal scans, the scanner doesn’t need to be up close. It’s just a photograph, taken in infrared, which in theory could work if taken from across the room.

If this sounds familiar, it’s probably because you saw something like it in Minority Report, where omnipresent eye-flashers identify everyone who walks through a public plaza, targeting ads at them and feeding the police information about their every move. Even Pritikin acknowledges the precedent, saying, “Tom Cruise did not do us any favors.” But within the industry, the product is less exotic, just the latest and best solution to the persistent problem of quick, reliable identification. What does the world look like when proving ID is as easy as taking a photograph? Like it or not, we’re about to find out.

Iris Scanner (Picture: Ben Mortimer)

Iris Scanner (Picture: Ben Mortimer)

If you find yourself flying into Dubai, you can see it in action. The city’s airport recently made the switch to an automated two-gate customs system, also made by AOptix. Scanning your passport opens the first gate; an iris print opens the second. Once the system is fully deployed, the company says it will bring wait times down from 49 minutes to 22 seconds. A private company called Clear is already trying this on an opt-in basis in the US. In exchange for a quick iris scan, their service will let you skip security in half a dozen American airports.

The bargain is simple enough: In exchange for one more biometric, you get to skip an hour in customs, or the indignity of a TSA checkpoint search. And as an ID technology, it simply works better. It’s less invasive, harder to fake (although still possible), and more effective at everything we want ID tech to be good at. Of course, that same effectiveness makes a Minority Report future all the more plausible.

For countries with national ID programs, this Orwellian scenario is already starting to play out. In collaboration with MorphoTrust, India has already iris-printed 350 million of its citizens as part of its national ID program, and they’re on track to scan all 1.2 billion. This year, Mexico will roll out the first iris-matched ID cards in the world as part of a $25 million program. In both cases, the ID will help stop fraud and provide poverty assistance, helping solve half a dozen urgent humanitarian issues at once. Despite these good intentions, this kind of mass identification has civil libertarians very worried.

“The concern is that biometrics will be used for the mass tracking of individuals,” according to Jay Stanley of the American Civil Liberties Union. “If that kind of ID system becomes routine and widespread, it turns us into a kind of checkpoint society.” Even in India, the system is still only used at police stations and government offices, but once the print is connected to a universal ID, it’s easy to imagine iris scans becoming as commonplace as pulling out a driver’s license.

For now, we’re left with less invasive devices like the Stratus, an iris camera aimed squarely at US law enforcement. The FBI is already building an iris system to track persons of interest, and it’s not hard to see them using a Stratus-like device to collect prints. Iris cameras haven’t landed in the hands of beat cops yet, but AOptix is trying its best to get them there. The path of the technology, from the military to local law enforcement, is almost complete. The only question is what it will look like when it gets here. Source: http://www.theverge.com

 

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Who Really Runs this Place?

SpinWatchUK public interest and transparency lobby group Public Interest Investigations (PII) recently published a somewhat perturbing paper on the activities and dubious role of the ‘Big 4’ accounting firms. The report aptly titled – Who Really Runs this Place?  takes a look at some of the relationships between the Big 4 accountancy firms and the UK government. It examines some of their lobbying activity: on their own behalf to block much-needed reforms of the industry that they dominate; at some of the lobbying they have undertaken to protect the tax avoidance industry; and at their role as lobbyists-for-hire.

Who Really Runs this Place? reveals how:

  • At least 50 employees of the Big 4 have been on loan to the government in the past three years;
  • One of the Big 4, lobbies for tax breaks for its clients – a service that it describes as a ‘low risk alternative’ to tax avoidance – while at the same time advising the Treasury on reform of the tax system;
  • They successfully lobbied the British government to oppose new EU rules designed to improve audit standards and challenge the monopoly of the Big 4;
  • They are profiting from changes to government policy, changes that are made by government departments that they are contracted to;
  • Lobbying by the Big 4 accountancy giants – either on their own behalf or for clients – is unlikely to be included in the forthcoming register of lobbyists.

You can also watch Spinwatch’s new Big 4 film here!

Source: http://www.spinwatch.org

 

Dumping Ships From East-West to North-South Trade Lanes Nearing ‘Saturation’

Trade Lanes (The Jouranal of Commerce)

Trade Lanes (The Jouranal of Commerce)

Ocean carriers’ tactic of shifting surplus capacity from east-west trades to north-south routes is nearing “saturation point,” according to Drewry Maritime Research.

The “endless” cascading of tonnage from the main haul trades to regional routes is now “seriously haemorrhaging” freight rates in north-south services, and the rate of decline in the second quarter suggests carriers are running out of options to soak up surplus capacity, the London-based consulting firm said.

All-in prices from Asia to Australia, West Africa, South Africa, India and both the east and west coasts of South America based on forwarder buy rates for spot cargo declined significantly during the second quarter. Rates from Asia to India and the west coast of South America rose in July, but Drewry said it “remains to be seen if the increases are sustainable, as there have been many false dawns in other trade lanes.”

The average all-in spot rate from Shanghai to Santos, Brazil, in July was down 51 percent from January, and was 19 percent and 32 percent lower on services to Durban, South Africa, and Melbourne, Australia, respectively.

“This adversarial situation helps to explain why ocean carriers appear to have returned to war with each other over market shares between Asia and Europe since August,” Drewry noted.

The “apparent” benefit of cascading is that average vessel utilization from Asia to the west coast of North America and Europe has usually remained above 85 percent since the second quarter, thus helping to support freight rates.

“It’s been a yo-yo ride nevertheless, but freight rates are still a lot higher than they were at the beginning of the year,” Drewry explained.

Fourteen new vessels averaging 12,713 20-foot-equivalent units were delivered into existing Asia-to-North Europe schedules in the second quarter, but the overall average capacity of all ships on the route increased by just 1.7 percent from the beginning of the year to 10,456 TEUs, as carriers cascaded surplus vessels to other routes.

Drewry said further restructuring on north-south routes via alliances and consortia appears inevitable, particularly as world fleet growth of just over 7 percent in 2014 is again expected to significantly exceed cargo growth. Source: The Journal of Commerce

Walvis Bay Container Terminal – AfDB and Namibia sign loan agreement

NamPort ExpansionThe African Development Bank Group (AfDB) and Namibia on Friday, November 8, 2013 signed a ZAR 2.9 billion (US $338 million) sovereign guaranteed loan to the Nambian Ports Authority (Namport) to finance the construction of the new container terminal at Port of Walvis Bay and a UA 1.0 million grant (US $1.5 million) to the Government of Namibia for logistics and capacity building complementing the port project loan. The project was approved by the AfDB Group in July 2013.

The project is expected to enable Namport to triple the container-handling capacity at the Port of Walvis Bay from 350,000 TEUs to 1,050,000 TEUs per annum. It will also finance the purchase of up-to-date port equipment and the training of pilots and operators for the new terminal. The grant component will fund the preparation of the National Logistics Master Plan study, technical support and capacity-building for the Walvis Bay Corridor Group and training of freight forwarders.

According to the AfDB Director of Transport and ICT, Amadou Oumarou: “Through this project which potentially serves up to seven major economies in the SADC region, the Bank is assisting in the diversification and distribution of port facilities on the southwest coast of Africa, and provides the much-needed alternative for the region’s landlocked countries.”

The project will stimulate the development and upgrade of multimodal transport corridors linking the port to the hinterland while improving the country’s transport and logistics chains. It will also boost competition among the ports and transport corridors in the region with the ripple effect on reductions in transportation costs and increased economic growth.

The projected project outcomes include improvement in port efficiency and increase in cargo volumes by 70% in 2020 as a result of increased trade in the region. The benefits of the project will include among others, the stimulation of inter-regional trade and regional integration, private sector development, skills transfer and most importantly employment creation, leading to significant economic development and poverty reduction in Namibia, and the SADC region. Source: African Development Bank

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Preparing for legislation on verification of container weights

High quality 3D render shipping container during transportPort Technology International – The work by the Maritime Safety Committee (MSC), within the auspices of the International Maritime Organization (IMO), on the verification of container weights prior to loading on to a ship is progressing. Currently, expectations are that legislation will come into force in 2017 at the latest, and possibly in 2016.

Many terminal operators are concerned about how to comply with the upcoming legislation, and how it will impact on logistic flows in terminals.

One of the challenges facing terminals is how to weigh containers with little or no impact on operations. Transferring containers to separate weighing stations will affect productivity. Terminals are likely to need additional space and transportation capacity to cope effectively.

Solutions that weigh containers as part of existing logistic flows and operations will therefore deliver significant advantages for terminal operators.

Weighing alternatives

This article outlines technologies that are available for managing weighing or verifying weight. It should be noted that requirements for weight accuracy is not included in the current draft text from the IMO and will likely put further constraints on available options. The discussion here indicates what level of accuracy can be expected from the various options available.

Three different types of weighing or load measurement devices will be discussed: commonly available weigh bridges; load sensing devices in cranes and other lifting equipment and load sensing devices fitted to, or integrated into spreader twistlocks.

Weigh bridges

The first system that comes to mind when looking at weighing a container is the weigh bridge. Weigh bridges are a longestablished and recognised technology to measure the weight of a vehicle. When the weight of the container being carried by a vehicle is of interest, the tare weight of the vehicle must be deducted. The measuring accuracy of the weigh bridge is very high but the tare weight deduction process either introduces additional inaccuracies or becomes complicated and time consuming.

If a standard vehicle tare weight is used, the inaccuracy comes from such things as variations in fuel level, driver weight and the weight of miscellaneous materials also loaded in the vehicle. These may seem like minor aspects when considering a truck carrying a 40ft container, but it easily adds up to a few hundred kilos, thereby significantly affecting the accuracy of the container weighing process. The alternative to using a standard tare weight is to include weighing of the unloaded vehicle in the process. This will give an accurate vehicle tare weight and ultimately, an accurate container weight, but it adds steps to the process which takes time and uses terminal resources.

Using weigh bridges to weigh containers is likely to result in changes to the internal logistics of most existing terminals. All containers entering terminals by road would have to pass through the weighing station. The most critical factor in this scenario would be to have sufficient weigh bridges to avoid the bottlenecks and resulting congestion.

Containers arriving by train or sea (for transhipment) would have to be sent to a weighing station, a step which is uncommon in terminal logistics today. This additional step would tie transporting vehicles to specific containers for longer periods of time ultimately resulting in additional resources being needed to handle the same container volumes. Sufficient resources in terms of weigh bridges and transportation space therefore need to be allocated to avoid congestion
and delays.

Another situation which would require a specific process to be in place is where vehicles arrive at the terminal gate with two twenty-foot containers loaded. Weigh bridges can only determine combined weight. Because containers have to be weighed separately, this would imply a relatively complicated process involving not only the truck carrying the equipment but also terminal resources to facilitate the loading and unloading of the containers.

Load sensing devices in cranes or other lifting equipment

The second type of load measuring device is, in effect, several devices with common features. This group includes load sensors and devices on ship-to-shore (STS) cranes; rubber-tyred gantry (RTG) cranes; railmounted gantry (RMG) cranes; mobile harbour cranes; reach stackers; straddle carriers and so on. Most of the load sensing devices in this group are used for safety and/or stability systems, but the information is available to provide weight information with some limitations as outlined below.

The biggest question mark related to these systems is accuracy. Will the accuracy of these systems meet the requirements to come? The answer is most probably no, but until the requirements are defined, this option should be mentioned. Sensors in these devices are typically fitted to rope and chain anchors, in trollies or on booms. Distance from the container, and the dynamic effect this introduces adds to inaccuracy. These systems will typically have a measuring accuracy of plus or minus five percent. Source: Port Technology International

Australia to boost intelligence sharing with US customs

australian-and-us-flag-mapsAustralia is to boost its intelligence sharing with the US customs and border protection service.

The immigration minister, Scott Morrison, said the Australian and US customs and border protection agencies had agreed to a formal strategic partnership from 2014, which would see two Australian officers posted to the US to strengthen intelligence co-operation.

Morrison said a trial of the closer engagement over the past year led to a crackdown on organised crime and resulted in several major drug seizures.

“These results demonstrate that governments must work together to effectively combat transnational crime and terrorism,” he said in a statement on Thursday.

The move to strengthen intelligence sharing with the US comes after a former US National Security Agency (NSA) contractor Edward Snowden leaked thousands of secret documents, including details of how Australian spies targeted the phone of the Indonesian president, Susilo Bambang Yudhoyono. Source: theguardian.com

Protecting U.S.-Bound Container Cargoes

Securing US Cargo - Infographic by Journal of Commerce (Click to enlarge)

Securing US Cargo – Infographic by Journal of Commerce (Click to enlarge)

The Journal of Commerce provides a very useful infographic on the U.S. Customs and Border Protection’s efforts and initiatives in securing US – cargoes from foreign ports. While the Container Security Initiative (CSI) was one of the very first post 9/11 security initiatives it has since been supported by a number of other partnership programs involving other customs agencies and the US trade community. These have spawned many of the policies and guidelines being adopted by Customs agencies around the world where the WCO has ‘formulated’ and ‘standardised’ such requirements for broader international use, in conjunction with capacity building programs.

The U.S. Government Accountability Office has published a report, “DHS Could Improve Cargo Security by Periodically Assessing Risks From Foreign Ports,” recommending that U.S. Customs and Border Protection should continually update and expand its Container Security Initiative.

Since Sept. 11, 2001, CBP has taken steps to reduce vulnerabilities associated with U.S.-bound cargo container shipments by placing customs officials at foreign seaports to determine whether U.S.-bound shipments from those ports pose a risk of containing weapons of mass destruction or other terrorist contraband. While cargo from foreign ports and ships is critical to the U.S. economy, it can also be exploited by terrorists.

When CSI was launched in 2002, CBP initially selected 23 CSI ports largely on the basis of the volume of U.S.-bound container cargo, but it increased the number of risk factors in selected additional ports as it expanded the CSI program beginning in 2003. Through 2007, CBP added 35 ports to the CSI program based on additional criteria, such as strategic threat factors and diplomatic or political considerations. As of July 2013, CBP was coordinating targeting of U.S.-bound cargo container shipments with 61 foreign ports in 34 countries.

Cargo shipment data from PIERS, JOC’s sister publication, supports the GAO’s view that the U.S. needs to update and expand CSI in order to continue effectively monitoring incoming cargo. In particular, it appears the U.S. should form new CSI partnerships with Vietnam and India, which are the Top 2 exporters to the U.S. with no established CSI partnerships.

Although Vietnam is “relatively stable” in terms of its government, it is geographically close to Laos and Cambodia, and is therefore risky because of transshipment issues, according to Susan Kohn Ross, an attorney with Mitchell Silberberg & Knupp in Los Angeles. She also noted there has been a trend of manufacturers moving from China to Vietnam recently, as labor has become more expensive in China, resulting in more Vietnamese exports to the U.S.

Meanwhile, local uprisings in India recently have increased the country’s vulnerabilities to terrorist plans, despite the nation’s stable government, Ross said. India’s proximity to Pakistan also exposes it to terrorist groups, such as al-Qaida and the Taliban, and because Pakistan already has an established CSI partnership, terrorists might find it easier to smuggle cargo via India, she explained.

Conversely, if budgetary constraints ever force the CSI program to condense its monitoring, then CSI partnerships could perhaps be downgraded or eliminated entirely with the governments of Jamaica, Oman and Greece, which are the smallest exporters to the U.S. with established CSI connections, according to PIERS.

However, expanding and even contracting the CSI program present challenges. For example, CBP officials said in the GAO report that it is difficult to close CSI ports because removing the program from a country might negatively affect U.S. relations with the host government.

Furthermore, implementing a CSI partnership in a country exposes jurisdictional issues and regulatory differences, Ross said. For instance, the U.S. considers drugs to be a national security issue, but that’s not always the case in other countries, so prioritization of monitoring has to be worked out. Issues like which nation should pay for customs officers to be trained, or who should fix scanning equipment when it breaks, also must be resolved.

Ross further explained that it is “highly unlikely” that the federal government will ever expand CSI to cover 100 percent of all U.S. imports, an idea that CBP considered in 2009, but never implemented because of budget constraints. She said that scanning equipment is not advanced enough to expeditiously monitor all U.S.-bound cargo, and not all countries would even be willing to put CSI in place anyway.

Ultimately, nothing is foolproof, and if terrorists really wanted to wreak havoc on the U.S., they could probably more easily attack the U.S. through its borders, via Canada and Mexico, Ross said. However, CSI acts as an important deterrent, limiting the number of chances a terrorist has to harm to the U.S. Source: www.joc.com

What Optimisation means for Terminals and Ports

Container terminal (CT1) with Nordschleuse in ...

Container terminal (CT1) with Nordschleuse in the foreground, Bremerhaven (Photo credit: Wikipedia)

Port Technology International’s article is perhaps poignant to current logistics developments in South Africa. Optimisation at the terminal does not only mean improving productivity and reducing operational costs. Optimisation represents a new approach to managing container terminals; it is the most significant driving factor in changing the traditional operational approach and methodology applied at container terminals. It also allows terminals to have a focus on efficiency which needs to address the trade-off between vessel service time, terminal capacity, and cost per move.

In terms of the marine shipping industry, one of the most accurate definitions of optimisation is: “The act of making a system, design or decision as effective or functional as possible.” Optimisation as a discipline is an ancient science best illustrated over time.

The history of optimisation

Greek mathematicians used to solve optimisation problems related to geometrical studies. After the invention of calculus, mathematicians were then able to address more complex optimisation problems. Following the start of the World War II and the advent of the operations research field, the concept and practice of optimisation began to develop and received significant academic and industrial focus. Mr J. Von Neumann, a leading individual behind the development of operations research, contributed substantially to the field of algorithmic research. And in the 60s and 70s, complexity analysis began to further support the use of optimisation. Then, in the 80s and 90s as computers became more efficient, algorithms for global optimisation with the purpose of solving large-scale problems began to gain momentum and credibility.

Considering the present

The continual advancements in technology with respect to computing power along with significant research in applied mathematics and computer science have solidified the value of optimisation to the industry and the end user. This has enabled advanced theory to be applied in a way that has sometimes invisibly improved our lives during last 20 years. The progress is amazing. Today, companies such as UPS and Federal Express utilise complex routing algorithms for resource allocation and supply chain distribution to deliver an item to our door with seamless efficiency. Their results have in turn changed the way millions of us find information, shop, and even do our jobs.

Today, many industries use optimisation as a more general term that covers areas from manufacturing process efficiency to improved distribution techniques. The core objective of optimisation is improving and controlling the process – whatever it may be – and allowing people with responsibilities in those areas to make better decisions. Operations research, for example, is a discipline that deals with the application of advanced analytical methods to help make better decisions at the right time and within the time constraints of a live operation.

As with other industries, the shipping and container space is currently going through its own step change to achieve new levels of operational productivity in response to mega-trends, such as globalisation and sustainable operations. To compete, ports and terminals have decided they need to adapt to their changing demands by optimising their activities in areas such as berthing allocation, vessel planning, fleet size optimisation, shift resource planning and equipment scheduling. All of these areas are critical for minimising the cost per move factors and maximising overall terminal performance and throughput.

Optimisation also provides the intelligence and the tools to support this changing industry, but it is not meant to be a black box. A container terminal is a very complex system with many unpredictable variables. Those focused on achieving optimisation will need to be able to control, monitor and configure the behaviour of this intelligence behind the machine and systems, filling any critical gaps between the planning and execution.

Containerised cargo makes up about 60 percent of all dry cargo trade in the world; since the advent of the cargo container more than 50 years ago, this number continues to grow. The appeal of containerised cargo is well known – cargo can be seamlessly transported from origin to destination via a variety of modes without the need to unload and reload its contents. The marine container terminal is at the junction of water, rail and truck transport modes. And as a consequence, marine container terminals are some of the most essential, yet challenging, links in the global supply chain. Source: Port Technology International

Experts Caution Against Rush into Trade Facilitation Agreement

Bali 2013A rather lengthy article published by Third World Network, but entirely relevant to trade practitioners and international supply chain operators who may desire a layman’s understanding of the issues and challenges presented by the WTO’s proposed agreement on ‘Trade Facilitation’. I have omitted a fair amount of the legal and technical references, so if you wish to read the full unabridged version please click here! If you are even more interested in the subject, take a look through the publications available via Google Scholar.

A group of eminent trade experts from developing countries has advised developing countries to be very cautious and not be rushed into an agreement on trade facilitation (TF) by the Bali WTO Ministerial Conference, given the current internal imbalance in the proposed agreement as well as the serious implementation challenges it poses.

“While it may be beneficial for a country to improve its trade facilitation, this should be done in a manner that suits each country, rather than through international rules which require binding obligations subject to the dispute settlement mechanism and possible sanctions when the financial and technical assistance as well as capacity-building requirements for implementing new obligations are not adequately addressed.”

This recommendation is in a report by the Geneva-based South Centre. The report, “WTO Negotiations on Trade Facilitation: Development Perspectives”, has been drawn up from discussions at two expert group meetings organised by the Centre.

Noting that an agreement on trade facilitation has been proposed as an outcome from the Bali WTO Ministerial Conference, the South Centre report said that the trade facilitation negotiations have been focused on measures and policies intended for the simplification, harmonization and standardization of border procedures.

“They do not address the priorities for increasing and facilitating trade, particularly exports by developing countries, which would include enhancing infrastructure, building productive and trade capacity, marketing networks, and enhancing inter-regional trade. Nor do they include commitments to strengthen or effectively implement the special and differential treatment (SDT) provisions in the WTO system”.

The negotiations process and content thus far indicate that such a trade facilitation agreement would lead mainly to facilitation of imports by the countries that upgrade their facilities under the proposed agreement. Expansion of exports from countries require a different type of facilitation, one involving improved supply capacity and access to developed countries’ markets.

Some developing countries, especially those with weaker export capability, have thus expressed concerns that the new obligations, especially if they are legally binding, would result in higher imports without corresponding higher exports, which could have an adverse effect on their trade balance, and which would therefore require other measures or decisions (to be taken in the Bali Ministerial) outside of the trade facilitation issue to improve export opportunities in order to be a counter-balance to this effect.

According to the report, another major concern voiced by the developing countries is that the proposed agreement is to be legally binding and subject to the WTO’s dispute settlement system. This makes it even more important that the special and differential treatment provisions for developing countries should be clear, strong and adequate enough. The negotiations have been on two components of the TF: Section I on the obligations and Section II on special and differentiated treatment (SDT), technical and financial assistance and capacity building for developing countries.

Most developing countries, and more so the poorer ones, have priorities in public spending, especially health care, education and poverty eradication. Improving trade facilitation has to compete with these other priorities and may not rank as high on the national agenda. If funds have to be diverted to meet the new trade facilitation obligations, it should not be at the expense of the other development priorities.

“Therefore, it is important that, if an agreement on trade facilitation were adopted, sufficient financing is provided to developing countries to meet their obligations, so as not to be at the expense of social development,” the report stressed.

The report goes on to highlight the main issues of concern for a large number of developing countries on the trade facilitation issue. It said that many developing countries have legitimate concerns that they would have increased net imports, adversely affecting their trade balance. While the trade facilitation agreement is presented as an initiative that reduces trade costs and boosts trade, benefits have been mainly calculated at the aggregate level.

Improvements in clearance of goods at the border will increase the inflow of goods. This increase in imports may benefit users of the imported goods, and increase the export opportunities of those countries that have the export capacity.

However, the report noted, poorer countries that do not have adequate production and export capability may not be able to take advantage of the opportunities afforded by trade facilitation (in their export markets).

“There is concern that countries that are net importers may experience an increase in their imports, without a corresponding increase in their exports, thus resulting in a worsening of their trade balance.”

Many of the articles under negotiations (such as the articles on ‘authorized operators’ and ‘expedited shipments’) are biased towards bigger traders that can present a financial guarantee or proof of control over the security of their supply chains. There is also the possibility that lower import costs could adversely affect those producing for the local markets.

“The draft rules being negotiated, mainly drawn up by major developed countries, do not allow for a balanced outcome of a potential trade facilitation agreement,” the report asserted.

New rules under Section I are mandatory with very limited flexibilities that could allow for Members’ discretion in implementation. The special and differential treatment under section II has been progressively diluted during the course of the negotiations. Furthermore, while the obligations in Section I are legally binding, including for developing countries, developed countries are not accepting binding rules on their obligation to provide technical and financial assistance and capacity building to developing countries.

The trade facilitation agreement would be a binding agreement and subject to WTO dispute settlement. The negotiating text is based on mandatory language in most provisions, which includes limited and uncertain flexibilities in some parts.

Therefore, if a Member fails to fully implement the agreement it might be subject to a dispute case under the WTO DSU (Dispute Settlement Understanding) and to trade sanctions for non-compliance.

“Many of the proposed rules under negotiations are over-prescriptive and could intrude on national policy and undermine the regulatory capacities and space of WTO Member States. The negotiating text in several areas contains undefined and vague legal terminology as well as ‘necessity tests’, beyond what the present GATT articles require.”

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Reconstruction and deepening project at Durban’s Maydon Wharf

Transnet moves ahead with Maydon Wharf upgrade plan. (Picture credit:  Duane Daws, Creamer Media)

Transnet moves ahead with Maydon Wharf upgrade plan. (Picture credit: Duane Daws, Creamer Media)

Port Technology reports that the IMO’s stricter sulphur emission standards are likely to have a profound impact on the maritime industry. With this in mind, PTI’s sixtieth edition pays a particular focus to the challenges ahead if LNG is to become the shipping fuel of the future and if this is the most viable option for shipping lines vying to meet these new regulations. Elsewhere, we have contributions form Drewry, Liftech consultants and a host of key industry experts, engineers and analysts.

The Port of Durban is situated on the east coast of South Africa, in the KwaZulu- Natal Province. The port is the busiest on the African continent, and the biggest in terms of container capacity with 44 percent of South Africa’s break-bulk cargo and 61 percent of all containerised cargo flowing through it. In 2010 alone, the port handled 2.5 million TEU.

The port has 57 berths and is protected by the north and south breakwaters, which are 335 metres and 700 metres long respectively. It was developed primarily for import cargo but over the years, cargo flows have changed significantly and exports have become more important. Over 4,000 commercial vessels now call at the port each year.

The Maydon Wharf terminal

The Maydon Wharf multi-purpose terminal (MPT) handles a variety of containerised, break-bulk and bulk cargo, and specialises in the handling of specific commodities. The terminal also handles both import and export containers, taking it to an average of 15,000 TEU. It has an annual throughput of more than one million tonnes of break-bulk and neobulk commodities. The Maydon Wharf area consists of 15 berths and the MPT operates principally between berths eight and 13.

Transnet National Ports Authority (TNPA) has initiated an extensive upgrade of the infrastructure at the port. One of the major projects is to rebuild and deepen seven of the 15 berths in the Maydon Wharf area. The new quays will be able to accommodate larger vessels and provide suitable load-carrying capacity for the handling of cargos over the berths. Source: Port Technology

Transnet receives 2 Chinese electric locomotives

THE FIRST two of 95 Class 20E dual-voltage electric locomotives being supplied to Transnet Freight Rail (TFR) by the CSR E-loco supply consortium was transferred from the port of Durban to the nearby depot at Umbilo on November 14 for commissioning.

The first 10 locomotives are being built by CSR Zhuzhou Electric Locomotive in China, while the remaining 85 units will be assembled in South Africa by Transnet Engineering. CSR is a 70% partner in CSR E-loco Supply, with local partner Matsetse Basadi holding the remaining 30%. The contract specifies a target of 60.5% for localised content.

The 3MW Class 20E is equipped for operation on 25kV ac and 3kV dc electrification systems and will be used by TFR’s general freight business.

Transnet says the two locomotives have been delivered a month earlier than expected, and it expects a second consignment of four units to arrive in South Africa next month. Source: www.railjournal.com (Pictures credits: FTW Online, and various)

The Protection of Personal Information Bill

Grant ThorntonThe folks at Grant Thornton have prepared a paper on this important subject, which is no less relevant to the Customs environment. The Protection of Personal Information Bill (POPI) is expected to be passed into law soon. It makes sweeping changes to the way all organizations are going to be allowed to deal with personal information, laying down very strict guidelines about what we can do with such data once it is received and processed.

As with all acts of law, it is imperative that the public sector leads by example and ensures that staff are trained and systems in place so that personal data of South African citizens remains secure.

In its latest issue of In the Public Eye (available on their website), Grant Thornton provides a comprehensive legal and technical framework to assist you in getting ready for POPI. Remember that failure to comply with the POPI Bill may result in significant penalties including fines and imprisonment. Source : Grant Thornton

Information gathering by revenue authorities – What about the cost?

The powers of the South African Revenue Service (SARS) to gather information were extended significantly in Chapters 4 and 5 of the Tax Administration Act, No 28 of 2011 (TAA) that took effect on 1 October 2012.

Greater powers were deemed necessary because “… too many requests for information by SARS result in protracted debates as to SARS’s entitlement to certain information.” (SARS Short Guide to the TAA, at p23)

Clearly information is central to the SARS business model: “By increasing and integrating data from multiple sources, SARS will increasingly be able to gain a complete economic understanding of the taxpayer and trader across all tax types and all areas of economic activity.” (SARS Strategic Plan 2013/14 – 2017/18, at p25) Information-gathering under the applicable TAA provisions is a costly exercise for SARS, taxpayers (both corporate and individuals) as well as for advisers. The cost-aspect is usually not addressed in legislation empowering information-gathering by revenue authorities.

Despite this there is a strong need for ‘cost-consciousness’ relating to information requests – simply because of the compliance cost impact.

The SARS Strategic Plan specifically states, in order to achieve the objectives of the National Development Plan, SARS will promote effective government by “Reducing the cost of compliance and the cost of doing business in South Africa” (at p13). Hence, one of SARS’s future initiatives would be to “Continue to implement the principles of a cooperative compliance approach to reduce compliance costs…” (at p34). SARS also acknowledges under “Small business and Cost of Compliance” that the “relatively high cost of compliance” might be a reason for non-compliance by small business (see at p43).

So how does a revenue authority inculcate a culture of “cost-consciousness” when it comes to information-requests by its officials? The Australian Tax Office (ATO) has gone down this road in its Access and Information Gathering Manual: Said Manual explains the law relating to the ATO’s statutory information-gathering powers and indicates how ATO officials should exercise such powers. [The Manual is available on the ATO website].

 The following reflects the ATO’s philosophy on information gathering (as communicated by the then Commissioner): “These guidelines are to assist my staff and ensure we apply a professional and, as far as possible, open approach to the exercise of our access and notice powers. These powers must be used with the utmost care and we aim only to fulfil my obligations under the legislation. A consultative approach to obtaining the information should be the norm. Consultation generally involves advance notice and flexibility in meeting reasonable requests.”

It is, furthermore, important to the ATO that costs associated with information-gathering should be curtailed: “In deciding whether to seek access, and in determining how much detail to seek, officers should always try to minimise the cost to the recipient of meeting access requests. Particularly in cases of seeking bulk data, request should be made only if there is a reasonable chance that there will be a substantial compliance impact relative to cost. On occasions sampling may be required to determine the benefits of obtaining bulk data. Also where bulk data is requested, officers should try to fit in with the custodian’s circumstances (for example seeking information from the custodian’s IT systems at times when it will not disrupt operations) and recognise the time and cost of obtaining such information.” (emphasis added)

The ATO then provides practical guidance to its officials considering an information request, alternatively where they intend accessing premises to obtain information/documentation. The ATO official is instructed to ask certain questions before requesting the information/accessing any premises. [The following is a summary of the guidance from the ATO Manual]:

For what purpose and under which law do you require information?

The access provisions can only be used for the purposes of the Act. You must be clear on your reasons for seeking particular documents. You should be able to show a clear connection between the use of the access power and one of the purposes of the Acts. Like all statutory powers, you must exercise the right of access in good faith for the purposes for which it was conferred.

What information do you already have?

You should ensure that the taxpayer or the third party has not already provided the documents to the ATO, eg in support of a request for a private ruling.

What information do you need?

You should establish, as far as possible, what particular books, documents and papers are needed and whether the information they might contain is necessary for the purposes for which you are seeking access. Is it likely that the information will be located at the premises you propose to access or from the person you propose to give a notice to?

Can you obtain relevant information from another source?

Before using access powers, be reasonably sure that you are approaching the right person. If the information is available from more than one source, you should consider the cost to each party and who might be the appropriate party to bear the cost. In the majority of cases, tax officers should try and obtain the information and documents from the taxpayer prior to contacting third parties, such as advisers and banks. The cost to the ATO, and whether the exercise if cost-effective, should also be considered.

Are you authorised to seek access?

You must be properly authorised to exercise access powers.

Can you obtain access to the relevant information on an informal/cooperative basis?

If you think you can obtain the information by making telephone contact, sending an informal letter or searching other sources, the access powers should not be used. However, it is not necessary for all other avenues of enquiry to have been exhausted or to have used the notice powers before resorting to the access powers. You should be able to conclude that the occasion is one that reasonably requires you to enter premises and inspect documents.

Is it necessary to exercise formal access powers?

In circumstances in which privacy or confidentiality require that the formal access powers are used, consultation beforehand should encourage cooperation. Consultative procedures may include: giving the custodian reasonable notice of your intention to obtain access; liaising with the custodian about a convenient time to seek access, taking into account the workflow demands on the custodian; giving adequate information to ensure that custodians are fully aware of their rights and obligations in relation to access requests and so on.

Minister Gordhan, in his foreword to the SARS Strategic Plan (at p6), anticipates that over the next four years “… the demands on revenue collection growth will be between 10% and 11% per annum”. For example, SARS would need to collect R1.09 trillion in revenue by 2015/16. To achieve those kinds of revenue targets probably means increasing levels of information-gathering. Seeking to reduce the cost of compliance requires that locally ‘cost-consciousness’ must become part of the information-gathering equation – and that a way is found to limit, and hopefully reduce, the costs associated with information-gathering under the TAA. Source: Written by Johan van der Walt, Director, Tax, Cliffe Dekker Hofmeyr – sourced from www.polity.org.

Beira – Zimbabwe road to be rebuilt by China

A truck leaves the border post at Machipanda to drive down the Beira Corridor, which links the port of Beira to Zimbabwe. This has always been a strategically crucial route for trade in Southern Africa. (The Guardian)

The Mozambican government intends to invest $400 million in the full rehabilitation of the road from the port of Beira to Machipanda, on the border with Zimbabwe.

Minister of Public Works, Cadmiel Muthemba, announced the rehabilitation of the road, which is about 300 kilometres long, will begin in February 2014. The finance is a loan from the Chinese export-import bank (Exim Bank).

Muthemba said that the road will be substantially widened. Along its entire length the road will be at least a four-lane highway, and in places, such as the approaches to Beira, it will have six lanes.

“The road will have roundabouts at particularly busy areas, such as the Inchope crossroads (where the road meets Mozambique’s main north-south highway), Chimoio city, and the towns of Gondola and Manica”, said the Minister.

Along some stretches the road will be elevated, notably along the Pungue flats. This is where the current road runs alongside the Pungue River. When the Pungue bursts its banks, which happens frequently during Mozambican rainy seasons, the road is swamped, and sometimes the flooding is serious enough to interrupt traffic to and from Zimbabwe.

Raising the road above the level of the river will be expensive, but will ensure that traffic flows in all weathers.

The Beira-Zimbabwe road will be farmed out for maintenance to a private company, which will charge motorists through toll gates.

So far, the only major road in the country with toll gates is the Maputo-South Africa motorway, operated by the South African company Trans-Africa Concessions (TRAC).

At the moment, the Beira-Zimbabwe road is in a poor and dangerous condition. In order to avoid gaping potholes, motorists frequently cross into the opposite lane, risking collisions with vehicles gong in the other direction. Emergency repairs between Beira and Inchope, which should have been finished in mid-April, are months behind schedule, and the Sofala provincial government is considering cancelling the contracts with the companies concerned.

The road is of key importance to the trade, not only of Zimbabwe, but of other landlocked southern African countries, including Zambia, Malawi and even parts of the Democratic Republic of Congo.

The road that branches off the Beira-Zimbabwe highway at Tica and leads to the district of Buzi, will be tarred, Muthemba announced. This is budgeted at $150 million, and the money will come from the Indian Eximbank. Work on the Tica-Buzi road will begin this year.

But Muthemba lamented that there was no money available to rehabilitate the road from Inchope to Caia, on the south bank of the Zambezi. This is a key part of the north-south highway, and it needs thorough rehabilitation.

“We aren’t sitting back with arms crossed”, said Muthemba. “With the few financial resources we have, we are working on the most critical sections, until we find the money for a complete rehabilitation”.

However, a complete rehabilitation of this road was carried out less than a decade ago. Indeed, in May 2007, the then Minister of Industry and Trade, Antonio Fernando, boasted in the Mozambican parliament, the Assembly of the Republic, that the Inchope-Caia road, “used to be a nightmare”, but had been rebuilt to such a high standard that it resembled a racing track. Source: Mozambique News Agency

 

SARS – SA trade statistics will in future include trade data with BLNS countries

Import exportThe Minister of Finance has approved that South Africa’s trade statistics will in future include data in respect of trade with Botswana, Lesotho, Namibia and Swaziland (BLNS countries).

BLNS country-trade statistics have previously not been included in the trade statistics. This arose historically because of the free flow of trade from a customs duty point of view within the Southern African Customs Union (SACU).

BLNS merchandise trade however, has a material impact on South Africa’s trade balance. South Africa exported R103.8bn to and imported R21.5bn from BLNS countries. In the last full year (2012) this resulted in a positive trade balance of R82.3bn for trade with BLNS countries.

South Africa’s total trade deficit for 2012 was R116.9bn. Had the BLNS trade data been included, the deficit would have been R34.6bn.

The view is therefore that direct trade within the BLNS countries should be included in the calculation of the monthly trade statistics to provide a more accurate reflection of South Africa’s trade.

Furthermore, SARS’s customs modernisation programme has resulted in its systems moving to new technologically enhanced platforms that enabled better electronic capturing of trade data that was previously done manually. The modernised system greatly improves the accuracy of trade data and allows the reporting and analysis of trade data to be done in real-time.

SARS worked very closely with the National Treasury (NT) and the South Africa Reserve Bank (SARB) in preparing the trade statistics that includes trade with the BLNS countries.

The SARB has welcomed the revision of the trade statistics “as valuable additions to building block data used to compile South Africa’s balance of payments.”

“While the Bank has always included estimates of the trade between South Africa and this group of countries in its compilation of South Africa’s overall imports and exports, the new building block data will be incorporated in the balance of payments, leading to improved measurement. Previously published statistics will also be revised. The revised balance of payments data for South Africa will be finalised in the next few weeks and published in the Bank’s Quarterly Bulletin, due to be released on 3 December 2013,” the SARB said in a statement.

Although SARS is confident as to the accuracy of the BLNS trade numbers, it is SARS’s intention to approach the United Nations to review the treatment of South Africa’s trade data that will now include BLNS trade numbers.

In addition to the inclusion of the BLNS trade figures, SARS is also contemplating certain other revisions to improve the reporting of trade statistics in the future. Some of these include the following:

  • publishing of imports on both a Free On Board (FOB) and a Cost Insurance Freight (CIF) basis to align it with UN principles,
  • compiling statistics on the date when the goods are actually released into or from South Africa’s economy, rather than using the date on which the goods entered the customs’ system for ultimate release from or into the SA economy, and
  • publishing gold exports as recorded on the SARS system reflecting the physical export movement of gold as opposed to the current practice of reporting the SARB gold export data on the IMF change of ownership basis.
  • These changes will however, only be finalised and implemented after consultation with international experts and other relevant stakeholders.

For more details visit sars.gov.za