Category / Customs Inspection

by Mike Poverello

Dumb, dumber’er, or just plain downright stubborn?

A US statutory requirement to scan all incoming containers at foreign ports will take effect at the beginning of July, a date thrown into sharp relief as the House of Representatives homeland security committee approved a revamped bill that retains the clause.

The draft bill gave the industry minor cause for cheer for unrelated reasons, as it will postpone the requirement for workers to renew their transportation worker identification cards in the absence of Department of Homeland Security regulations on biometric card readers. But the 100% scanning requirement has proved its resilience yet again.

Since 2006 shippers, spearheaded by associations that include the National Retail Federation, have been campaigning to get the requirement eliminated on grounds that it is impractical and costly and could trigger foreign government retaliation against cargoes originating from the US. US homeland security secretary Janet Napolitano has pointed out the impracticality of the law and proposed a two-year postponement.

These calls went unheeded in the house, as the homeland security committee on Wednesday approved the Securing Maritime Activities through Risk-based Targeting for Port Security Act, known as the Smart Port Security Act. The Smart Port Security Act reauthorises the Security and Accountability for Every Port Act, known as the Safe Port Act, which became law in 2007.

The Safe Port Act implements the 9/11 Commission’s recommendations, including the contentious provision that all US-bound containers will be scanned at origin from July 2012. A fig leaf in the Safe Port Act allows the homeland security secretary to grant waivers to individual ports, under conditions that are somewhat vague. Last year, a Safe port reauthorisation draft in the Senate proposed a broad waiver of the 100% scanning requirement.

With the clock now ticking to July 1, shippers were particularly anxious to get the house bill to remove the 100% scanning clause permanently.

The homeland security committee passed a version that allows DHS to recognise other countries’ trusted shipper programmes and allows the US Coast Guard to recognise other governments’ port security threat assessments, but stops short of jettisoning the 100% scanning clause.

Republican congresswoman Candice Miller, chair of the subcommittee on border and maritime security, hailed the new bill, saying: “Securing our waterways is an essential component of a layered approach to security.

“This bill enhances risk-based security measures overseas before the threat reaches our shores, emphasising a stronger collaborative environment between customs and border protection and the US Coast Guard in sharing port security duties and leveraging the maritime security work of our trusted allies.”

Comment: Huh!, to whom does this refer? Such a statement flies in the face of its own C-TPAT program and bilateral overtures with foreign ports (supposedly based on risk). Perhaps its time for the ‘trusted allies’ to deport CSI teams who have not necessarily endeared themselves to their respective host nations.

Source: Lloydslist.com

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by Mike Poverello

X-Ray Security Screening – Technologies & Global Market Outlook

Over the next five years, Homeland Security Research Corporation analysts forecast a growth at a CAGR of 10% of the global X-ray screening market, led by a dramatic expansion of the Chinese civil aviation (two out of three new airport projects are in mainland China) and internal security funding. Other key markets are terror-troubled India and the replacement market of the US and Europe.

Despite years of cutting edge weapon and explosives screening technologies RDT&E, there is no competitive modality on the horizon which challenges the cost-performance of 2D X-ray screening technologies. The global X-ray security screening market (including systems sales, service, and upgrades) is forecast to grow from $1.2 billion in 2011 to $1.9 billion by 2016.

The new report is the most comprehensive review of the multibillion dollar global X-ray security screening market available today. It analyses and forecasts the market by application, by geography and by business transaction. The report, segmented into 50 submarkets, offers for each submarket 2010-2011 data and 2012-2016 forecasts and analysis. In more than 300 pages, 90 tables and 150 figures, the report analyses and projects the 2012-2016 market and technologies from several perspectives, including:

  • Market forecast by application: Air cargo, Airport-cabin baggage, Secured facilities, Postal items, Supply chain cargo and People screening AIT
  • National and regional markets
  • X-Ray Technologies: conventional, backscatter, multi-view, coherent and dual energy x-ray
  • Systems sales, post warranty service and upgrade markets
  • Competitive environment: 16 leading vendors and their products
  • Market analysis: e.g., market drivers & inhibitors, SWOT analysis
  • Business environment: e.g., competitive analysis
  • Current and pipeline technologies

Source: Homeland Security Research Corporation

by Mike Poverello

Making X-ray scanning safer

Given recent public outcry regarding airport passenger scanning, I found this scientific report which provides very sensible recommendations in regard to X-ray scanning of vehicle borne commercial cargoes. A recent study commissioned by Economic Commission for Europe provides some key recommendations to ensure improved safety of scanner operators and vehicle drivers. The protection of drivers against sickness and injury arising from their work activities is an important matter, and how to manage the hazards and risks associated with transport activities which are unavoidably connected to the possible exposure of employees to ionising radiation whilst undergoing the cargo/vehicle scanning process was a key question of the study.

Ensuring maximum safety precautions, all stakeholders have a role in enhancing the radiation protection culture within the road transport sector. As it is clear that drivers included in this study are not regarded as occupationally exposed to ionising radiation, the study recommends the following to Customs and Border agencies:

  • Install appropriate information panels, which include pictograms, highlighting that x-ray scanning is being performed and giving clear indications on what the driver should do to avoid unnecessary exposure;
  • At concerned border crossings, make available multi-lingual information leaflets, including pictograms, which describe the x-ray process, risks and safety information;
  • Develop and introduce a mutually recognised x-ray scanning certificate to prevent repeated scanning and thus facilitating and accelerating the control process;
  • Ensure, with the support of the International Atomic Energy Agency (IAEA), the European Commission (EC), the International Labour Organization (ILO) and the World Customs Organization (WCO), the correct implementation of internationally accepted x-ray scanning procedures;
  • Ensure that customs officers and x-ray equipment operators are properly trained on the functioning and risks of x-ray scanning machines enabling them to operate the equipment safely and give adequate safety instructions to drivers; and
  • In cooperation with x-ray machine manufactures, to ensure that x-ray equipment is properly maintained.

Source: UNECE – Scientific Study on External Ionising Radiation Exposure during Cargo / Vehicle Radiographic Inspections

by Mike Poverello

Hong Kong Customs Moves Forward With E-Lock Plans

The Hong Kong Customs and Excise Department (C&ED) reports that RFID-based container locks can effectively improve the security, convenience and visibility of the customs process for cargo entering the airport. In November 2011, C&ED began testing three types of electronic locks (e-locks) in order to speed up the process of performing customs checks on containers filled with cargo. The solution, known as the Intermodal Transhipment Facilitation Scheme (ITFS), was implemented as a way to streamline the clearance of cargo passing through customs at Hong Kong International Airport for cargo destined for areas both domestic and outside of Hong Kong. The installation and consulting services were provided by the Hong Kong R&D Center for Logistics and Supply Chain Management Enabling Technologies (LSCM), according to Frank Tong, LSCM’s director of research and technology development.

An electronic lock with an active RFID tag is being used to secure freight passing through
customs and Hong Kong International Airport, ensuring that the cargo remains tamper-free,
while also expediting the clearance process.

The Hong Kong C&ED estimates that the system reduces the amount of time required for clearing each container through customs, from two to three hours down to five minutes, since customs officials can now be assured that the containers have not been opened between their inspection at the border control point and their arrival at the airport. What’s more, the agency can now collect a digital record of where each container has been, along with when it was inspected.

Cargo is loaded into freight containers or directly onto trucks—such as those operated by United Parcel Service (UPS)—in Mainland China, and is then transported to a customs control point located at the border with Hong Kong, where C&ED officials inspect the cargo and clear it for entry into Hong Kong. Following that clearance, the shipment continues on to Hong Kong International Airport’s cargo terminal, where the goods are unloaded from the container or vehicle, and are placed into an air cargo container. Once this has occurred, the cargo is moved through another customs control point at the airport, where C&ED again inspects and approves or rejects its passage.

To speed up this process, the R&D Center implemented the use of an e-lock for the customs agency, consisting of a physical lock activated by a built-in active RFID tag, designed to receive a transmission from an RFID reader that allows the lock to be opened or closed. Three types of e-locks are currently being used, provided by three different vendors: Long Sun Logistics Development Ltd, CIMC Intelligent Technology Co. and CelluWare Research Laboratory. Each of the three products employs a different frequency—433 MHz, 315 MHz and 2.4 GHz—but all comply with the ISO 17712 standard for mechanical seals designed for freight containers.

LSCM has installed fixed RFID readers (provided by the three e-lock vendors) at two border control points—Lok Ma Chau and Shenzhen Bay—as well as at Hong Kong International Airport. When a shipment first arrives at either border control point, C&ED’s staff attaches an e-lock, reads the ID number encoded on its built-in RFID tag via a handheld reader, and links that ID with the vehicle registration number of the truck transporting the container. The transporting company must pre-register each vehicle with the Hong Kong C&ED prior to its arrival; the truck’s ID number is listed in the agency’s database, and the customs official can confirm that the vehicle is, in fact, the one expected.

That data, along with the specific cargo being transported, is then stored on the Hong Kong C&ED’s integrated tracking software platform, developed by LSCM, which collects and processes the data and then displays it for customs officials when necessary. The system stores the e-lock ID number linked to the vehicle ID, and transmits instructions to the e-lock, along with a password, thereby causing it to lock. The device also requires a physical key, which remains in the driver’s possession. In this way, two actions must be completed before the container or vehicle can be unlocked: The e-lock must be electronically unlocked via a password from a customs official, and the driver must use a key to physically open the padlock.

The shipment is then transported approximately 42 kilometers (26 miles) to the airport. The e-lock comes with a built-in GPS device that tracks the vehicle’s location as it moves. In that way, the e-lock stores a record of where the vehicle has been. When the lock is later read at the airport, the back-end software compares the actual GPS data against the container’s expected route. The system can issue alerts in circumstances in which an e-lock is found to have lost a GPS signal, or, based on GPS data, the truck appears to have deviated from the intended route.

At Hong Kong International Airport, a C&ED official either selects the container for inspection, or simply instructs the system to issue an unlocking command with the matching password; the container is then brought to a site where the cargo is removed and then loaded onto an aircraft, says Steve Wai-chiu Chan, a C&ED special duties officer. If the container is selected for inspection, the e-lock remains locked. In this scenario, a truck driver would be instructed to await a C&ED officer, and would be unable to unlock the container without providing the proper password. The C&ED officer, upon arrival, would then use a handheld device to read the e-lock, instructing it to unlock by providing the necessary password.

LSCM installed a total of 38 readers at the two land border control points, five logistic hubs at the airport and a marine control point known as the Kwai Chung Customhouse, for items arriving by sea (at the Marine Cargo Terminal located at the airport). Altogether, by February of this year, 109 containers had been equipped with the e-lock device. An average of 100,000 consignments pass through the border daily, and the ITFS e-lock system is utilized for about 17 percent of that cargo.

The solution has enabled a faster customs clearance process, as well as providing a digital record of what was unlocked, and thus inspected, and when this occurred. The system also improves security, since only officers who know the proper password can access the container. Ultimately, Chan says, “it enhances the Hong Kong logistic industry’s competency and reinforces Hong Kong’s position as a world-class logistics hub.” Source: RFID Journal and a word of thanks to Andy Brown (Tenacent) for bringing the article to my attention.

by Mike Poverello

America – shees verry beeeeg!

Publication of the latest USCBP Border Patrol Strategic Plan reflects and builds on the transformation of the United States’ relationships with Mexico and Canada, particularly in the areas of border management and security. The joint Declaration of Principles for the 21st-century border represents an enhanced and strengthened commitment to fundamentally restructure the way we manage our shared border. The depth and breadth of cooperation that occurs now between the United States and Mexico was unthinkable even a few years ago. Similarly, the Beyond the Border declaration between Canada and the United States has an equally significant potential in what is already our historically extraordinary relationship with Canada. These developments have created unprecedented opportunities with both Mexico and Canada, in which DHS and CBP will play a defining role, to improve our security and economic competitiveness – and CBP will play a defining role in taking advantage of those opportunities. The Border Patrol in turn is key to advancing CBP’s security agendas with Mexico and Canada, working with its law enforcement counterparts in each country to identify and mitigate threats.

The U.S. Border Patrol is a premier law enforcement organization, recognized around the world for expertise, capabilities, and professionalism. CBP’s officers and agents are the frontline, the guardians of the Nation’s borders. We honor and are proud of them, and we thank them for everything that they do to protect America and the American people. Source: CBP.gov

So there you have it – for a real dose of commercialized Customs and what it can do for the good folks in America, and anywhere else in the world for that matter, check out the strategic plan by clicking here! You’ll be forgiven if you thought you were reading an edition of Jane’s Defense & Security Intelligence & Analysis. Most customs and border management agencies around the world can only dream about such impressive kit! 

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by Mike Poverello

Royal Malaysian Customs implements Smartag Solution

Smartag Solutions, a homegrown total radio frequency identification (RFID) solutions provider, will handle 1.3 million containers at all Royal Malaysian Customs (JDKM) checkpoints in Malaysia starting June.The company has entered into a two-year agreement with the government to implement and operate the Container Security and Trade Facilitation System using its RFID solutions at the JDKM checkpoints.

This is the first electronic and electrical Entry Point Project, under the 12 National Key Economic Areas to monitor containers and facilitate clearance within domestic ports and selected high volume routes. The enhancement of container security using the RFID track and trace system reduces the risk of terrorism, dangerous chemicals and contraband from reaching borders while increasing the efficiency of container movement through Customs checkpoints.

The system allows users to use the RFID seal to secure their containers when entering, leaving and moving within the country. Smartag Solutions is expected to handle 50 per cent of the total transactions at the Customs approved by JDKM, or 500,000 containers. Source: BTimes.com

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by Mike Poverello

Advancing the argument for sealing cargo and tracking conveyances

South African Customs law provides for a seal integrity regime. This consists in provisions for the sealing of containerised sea cargo as well as sealable vehicles and trailers. These requirements have, however, not been formally introduced into operation due to the non-availability (until recently) of internal systems and cross-functional procedures that would link seal integrity to known entities. To explain this in more layman’s terms, it is little use implementing an onerous cargo sealing program without systems to perform risk assessment, validation of trader profiles and information exchange. It’s  like implementing non-intrusive inspection (X-ray scanning) equipment without backward integration into the Customs Risk Management  and Inspection environment and systems. It has often been stated that a customs or border security programme is a layered approach based on risk mitigation. None of the individual elements will necessarily address risk, and automation alone will likewise not accomplish the objective for safe and secure supply chains. Moreover, neither will measures adopted by Customs or the Border Agency succeed without due and necessary compliance on the part of entities operating the supply chain. It therefore requires a holistic strategy of people, policy, process and technology.

In the African context, it is surmised that the business rationale will be best accomplished with a dual approach on IT connectivity and information exchange. Under the political speak there are active attempts within SACU, SADC, COMESA and the EAC to establish electronic networks to facilitate and safeguard transit goods. Several African states are landlocked and are not readily accessible, some requiring multiple transit trips through countries from international discharge in the continent to place of final destination. National laws of each individual country in most instances provide obstacles to carriers achieving cost effective means in delivering cargoes. Over and above the laws, there exists (regrettably) the need to ‘grease palms’ without which safe passage in some instances  will not be granted. Notwithstanding the existence of customs unions and free trade areas, internal borders remain the biggest obstacle to facilitation.

Several African logistics operators already implement track and trace technology in the vehicle and long-haul fleets. This has the dual purpose of safeguarding their assets as well as the cargoes of their clients which they convey. Since 9/11, a few customs administrations have formally adopted ISO PAS 17712 within their legislation to regulate the use of high security seals amongst cargo handlers and carriers. In most cases this mandates the use of high security ‘mechanical’ bolt seals. However, evidence suggests there is a growing trend to adopt electronic seals. Taiwan Customs for one has gone a significant way in this regard. Through technological advances and increased commercial adoption of Radio Frequency Identification (RFID) technology the costs are reducing significantly to warrant serious consideration as both a viable and cost-effective customs ‘control’ measure.

Supply chain custody using RFID as an identifier and physical security audit component – as provided for in ISO 17712 – is characterized by the following:

  • it uniquely identifies seals and associates them with the trader.
  • the seal’s unique identity and memory space can be used to write a digital signature, unique to a trader on the seal, and associating that seal with a customs declaration.
  • using customs trader registration/licensing information, together with infrastructure to read seal information at specified intervals along a route to create a ‘bread-crumb’ audit trail of the integrity of the cargo and conveyance.
  • using existing fleet management units installed in trucks to monitor seal integrity along the high risk legs of a cargo’s transit.
  • record the seal’s destruction at point of destination.

Looking forward to the future, it is not implausible for customs and border authorities to consider the use of RFID:

  • as a common token between autonomous customs systems.
  • to verify and audit that non-intrusion inspections have taken place en-route, and write that occurrence to the seal’s memory with the use of an updated digital signature issued to the customs inspection facility.
  • to create a date and time stamp of the cargo’s transit for compliance and profile classification – to confirm that transit goods have actually left the country as well as confirm arrival at destination (to prevent round tripping).
  • Lastly to archive a history of carrier’s activities for forensic and/or trend analysis.
This is a topic which certainly deserves more exposure in line with current regional developments on IT-connectivity and information exchange. A special word of thanks to Andy Brown for his contribution and insight to this post.
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by Mike Poverello

WCO/SACU – IT Connectivity and Data Exchange

WCO-SACU IT Interconnectivity and Data Exchange Conference

On the occasion of International Customs Day, in January earlier this year, the World Customs Organisation dedicated 2012 as the year “Connectivity”, which encapsulates people connectivity, institutional connectivity and information connectivity among the members of the global Customs community.

Over the last week and a half delegates from the WCO, SACU, UNCTAD, SADC and COMESA have been hosted at SARS, Pretoria to discuss and deliberate over an approach to implement ‘IT connectivity’ within the Southern African region. During the first week representatives from UNCTAD, SACU and SARS were briefed on important developments at the WCO on IT-Interconnectivity and Information Exchange. We were privileged to have Mr. Satya Prasad Sahu, Technical officer from the WCO – a leading expert in all matters of ICT in international customs matters – present the developments towards finalisation of a future international customs standard called “Globally Networked Customs” (GNC). It entails a structured approach that will enable customs authorities to formulate and document bilateral or regional ‘standards’ on a variety of Customs-to-Customs topics, for instance Authorised Economic Operators, Cross Border Information Exchange, Risk Management, etc. A representative from UNCTAD presented a synopsis of the proposed ‘cloud computing solution’ which the Trans Kalahari Corridor (TKC) plans to pilot between Namibia and Botswana along the TKC route in the next few months. During the course of this week, delegates , under the guidance of Satya, prepared a proposed approach for information exchange between members of the Southern African Customs Region. This document is based on the GNC Utility Block structure (defined by the ad Hoc Committee on Globally Networked Customs at the WCO) and served as the basis for discussion for Week 2.

Mr. SP Sahu (WCO) and delegates from SACU SecretariatWeek 2 saw the arrival of customs and IT representatives from COMESA, SADC, UNCTAD, SACU as well as a delegation from Mozambique Customs. Mr. Sahu was invited to chair the session, given his vast experience on the subject matter as well as international experience in national and regional customs ICT programmes. Delegates were treated to various lectures on the GNC, a comprehensive overview of developments on ASYCUDA (Customs solution developed by UNCTAD), various updates from within the customs region – Botswana, Namibia, Lesotho, Swaziland, Mozambique and SARS. Beyers Theron informed delegates of ongoing developments of the SARS Customs Modernisation Programme as well as key implications for neighbouring countries. SARS presented a live demonstration of SARS’ Service Manager solution, navigating through all the functionality now available to SARS Customs officials. Of significant interest to all was the new iPod inspection tool. This technology is given prominent feature in the latest edition of WCO News.

A large portion of the week was, however, spent on deliberating the proposed scope and content of the draft Utility Block on Information Exchange in the Southern African Region. Significant progress was been made to attain first, a common understanding of the scope as well as the implications this has for participating countries. Delegates will return home with a product with which to create awareness and solicit support in their respective countries. Over the next few months SARS will engage both SACU and SADCOM (combined SADC and COMESA trading blocs) to establish firm commitments for information exchange with customs administrations in these regions. This conference is significant for SARS and South Africa as a whole as it provides a uniform, standardised and practical approach for engagement with other international trading partners. To view photographs of the conference please click here!

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by Mike Poverello

WCO News – February 2012 Edition

WCONews Edition February 2012Herewith a link to the latest edition of WCO News, providing a wealth of customs news and developments from across the globe. This edition focuses almost entirely on regional initiatives involving C-2-C information exchange. On pages 20 to 22 you’ll read about new developments emerging on customs inter-connectivity and information exchange in the Southern African Region. At this time, a conference lead by the WCO, involving representatives from UNCTAD, SACU, SADC and COMESA and SARS is taking place in Pretoria to establish a firm framework for introduction of customs information exchange. I will devote a dedicated article on these developments shortly, as this has implications for the business community as well. Also, don’t miss the feature on South Africa’s modernisation developments, pages 29 and 30. Besides the usual editorials this edition includes –

  • WCO Secretary General launches Year of Connectivity.
  • Evolving technology landscape and its impact on Customs.
  • Latest developments in Latin America, Southern Africa and Europe.
  • West Africa implements airport task forces to fight drug trafficking.
  • South Africa to roll out mobile Customs controls.
  • Operation “Short Circuit” successes and challenges.
  • WCO Tariff and Trade Affairs Directorate
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by Mike Poverello

Customs Modernisation Release 3 – SACU

Saturday 11 February 2012 sees the implementation of new modernised customs procedures and formalities at South Africa’s first SACU land frontier office – Kopfontein – border between South Africa and Botswana.  While enhancements are slanted more in terms of internal SARS customs procedure, SACU traders will no doubt experience some anxiety with the transition. For the first time SARS Customs Modernisation impacts directly on traders and neighbouring Botswana Customs operational procedures in a significant way, which will fashion operations at all remaining inland border posts of the Customs Union. Over the last few months SARS has worked with trade, the Botswana customs authority as well as the business chamber in Botswana concerning the intended changes and their impact on stakeholders. The implementation ushers in cross-cutting changes for customs staff operationally, new technology as well as legal and policy changes. In the case of the latter, a further element of the draft Customs Control Bill is introduced whereby foreign business operators (importers, exporters and road carriers) must be registered with SARS to perform customs transactions in South Africa. This is perhaps the single issue which has had ramifications for parties who regularly cross the border between Botswana and South Africa. Hopefully recent iterations of notices and explanations have helped clarify the SARS requirements. (See the SARS Customs Modernisation webpage).

Other modifications and changes include –

Elimination of paper clearance documents – this is a significant departure from traditional SACU processing where all member countries have relied on the Single Administrative Document (SAD) to facilitate intra-SACU clearance. With the bulk of clearances expected to be electronic, SARS will now only print a customs notification (CN1) which will specify the status and outcome for each clearance. This the trader will use in support of customs clearance in Botswana. SARS will therefore no longer stamp and authorise hardcopy SAD500 clearance documents. Of course, there is nothing which stops a trader printing the SAD500 for cross border purposes, only SARS will no longer attest these. As concerns SARS VAT requirements, arrangements will be made for traders to submit the CN1 for purposes of VAT returns. Details on this to follow.

Electronic supporting documents – already tried and tested at sea and airports across South Africa, traders no longer need to carry on their person hard copy clearance supporting documentation , i.e. invoices, worksheets and packing lists. These are only required should SARS indicate via electronic message that a consignment requires further scrutiny. Customs brokers and traders using EDI will in most cases have the SARS e@syScan facility available on their computer systems which makes it relatively simple and easy to scan, package and submit to SARS. In the event a trader cannot perform this electronically, he may approach any of the 4 Customs Hubs (Alberton, Cape Town, Durban, and Doringkloof) across the country, to have these scanned and uploaded by SARS. Alternatively, these can of course be delivered to the border post for manual processing and finalisation of a customs intervention. Supporting documents are linked to a unique case number which SARS notifies to the trader in the event of a risk.

Clearance processing – SARS has centralised its backend processing of clearances where goods declarations are now processed off-site at one of the 4 Hubs. No longer are clearances processed at customs branch office. All goods declarations – whether electronically submitted or manually captured – are routed to a central pool for validation, verification and assessment if flagged by the risk engine. In the case of land borders all clearances once successfully processed will receive a ‘Proceed-to-border’ message implying that the road carrier may commence delivery to the border. A key feature of the new clearance process is the availability of Customs Status Codes. These codes are initiated by the customs system at specified points in the process to alert the declarant of the status of his/her transaction. These status’s also indicate the follow-up required of the declarant to bring the transaction to a state of finality.

Automated Cargo Management (ACM) – All road carriers are now required to submit their road manifests electronically, via EDI, to the Customs ACM system. For now, SARS will not electronically match the manifest against the declaration, but will monitor compliance and data quality of electronic manifest  for a period of time before initiating real-time matching and acquittal. This will invoke a significant responsibility on both trader and road remover to ensure that they both provide credible data to customs otherwise delays will occur. Upon arrival of the cargo at the border, the driver presents a printout of his electronic manifest. The manifest number is ‘checked in’ by a customs official which in seconds brings up all associated goods declarations linked to the manifest number on the system. The customs officer is able to determine the overall risk status of the vehicle. Where no risks are present a status notification (CN1) is printed for each goods declaration, and a gate pass (CN2) is handed to the driver permitting him to exit the customs controlled area. The future real-time matching will comprise a combined risk assessment of both manifest and declaration information that will result in a single risk outcome. Such risk assessment will include both fiscal and security compliance features thereby bringing SARS in line with international supply chain security standards. Going forward, risk assessment will accommodate ‘all-of-government’ requirements ensuring that all regulatory measures and associated risks are administered in a single instance obviating the need for successive, time-consuming inspections and costly delays.

Automated Customs Inspection – Following its recent introduction at the Beit Bridge border post, the new hand-held inspection tool, conveniently developed on an iPod, allows the customs border control official to electronically access, capture and upload an inspection outcome to the central customs system. This significantly improves the efficiency for this time-intensive activity where the officer can initiate a status up date electronically at the inspection site, where previously the declarant would have to wait for the outcome of the manual inspection report and release note. What’s more, the customs officer has access to the underlying clearance data and can even activate the camera function and capture visuals of suspect cargo which can be appended to an inspection case for verification by higher authority or historical reference value.

There are additional features and functionality to be introduced at Kopfontein and all remaining border posts over the next few months. These relate to improved revenue accounting, new trader registration and licensing system offering online application and approval, and a new traveller and temporary import/export processing. More about this in a future post.  For traders, the benefits of the new solution at SACU land borders aim to remove random and unwarranted intervention by customs. All activities are risk driven via a secure ‘get next’ selection function ensuring that internal integrity is maintained and only ‘risk-related’ consignments/transactions are dealt with. Please visit the SARS Modernisation webpage for all the latest updates and notices on modernisation releases.

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by Mike Poverello

Shortage of Helium – challenges for Cargo Security and potential contractual dilemma for Security Agencies

While the topic of non-intrusive detection equipment there has been much-a-do about the shortage of helium over the last 18 months, the impact this may have for existing investments in scanner and radiation detection equipment poses an even more ominous question, particularly those countries and agencies having already invested in US-based technology.

The demand for nuclear detectors exploded (if you’ll pardon the expression) from 8,000l/year to ten times that in 2008 due to increased efforts to stop nuclear proliferation and terrorism. But production of helium-3, a critical element in nuclear detection technology, has not kept pace and existing stockpiles are quickly dwindling. Alternatives are currently in the early stages of development and researchers have found several promising leads; when an alternative is found, current radiation detection equipment will have to be replaced with the new technology.

Helium-3 is a decay product of tritium, a heavy isotope of hydrogen used to enhance the yield of nuclear weapons, but whose production stopped in 1988. The half-life decay of tritium is about 12 years, and the U.S. supply for helium-3 is fed by harvesting the gas from dismantled or refurbished nuclear weapons. However, production of helium-3 hasn’t kept pace with the exponential demand sparked by the Sept. 11 attacks.

Projected demand for the non-radioactive gas in 2010 is said to be more than 76,000 litres per year, while U.S. production is a mere 8,000 litres annually, and U.S. total supply rests at less than 48,000 litres. This shortage wasn’t identified until a workshop put on by the Department of Energy’s Office of Nuclear Physics in August 2008. Between 2004 and 2008, about 25,000 litres of helium-3 annually was entering the U.S. from Russia. Right around the time of the August workshop, Russia decided it was “reserving its supplies for domestic use.

Helium-3 is primarily used in security applications as it is highly sensitive to the neutrons that are emitted by plutonium. Roughly 80 percent of helium-3 supplies are used for national security. Since 9/11 demand for radiation detectors increased sharply, however production failed to increase. The shortage is reported to severely effect even the handheld and backpack detectors used by the U.S. Coast Guard, Customs and Border Protection, and Transportation Security Administration. A representative of General Electric Energy, which manufactures radiation detectors, said, “Up to six different neutron-detection technologies may be required to replace helium-3 detectors” for its four main uses and “[a] drop-in replacement technology for helium-3 does not exist today.” When an acceptable alternative is found, current radiation detection equipment will have to be replaced with the new technology. In the meantime, industrial manufacturers of detection equipment have been diversifying their helium-3 sources and turning to recycling old helium-3 canisters.

In June 2011, however, General Electric (GE) did announce that it had introduced a new radiation detection solution using boron-10 (10B) to detect radiation in border security applications. These detectors are key components of radiation portal monitors used in a wide range of applications including screening at borders and in seaports. GE is the only company to date to manufacture an alternate neutron detection technology for deployment in radiation portal monitors.

It still needs to be seen how manufacturers will deal with their existing customers. Concerned Customs Administrations and Security Agencies should be reviewing the terms and conditions of their supply agreements in the meantime. Future acquisitions will no doubt look at Helium-3 based technology with sceptism unless they are uninformed.

Sources: WIRED, General Electric

by Mike Poverello

X-Ray Security Screening -Technologies & Global Market 2011-2016

X-Ray Security Screening Market 2011-2016Despite years of cutting edge weapon and explosives screening technology Research, Development, Test & Evaluation (RDT&E), there is no competitive modality on the market, which challenges the cost-performance of X-ray screening technologies. This is a significant drawback for security agencies and funding bodies when considering the multi-year investments which need to be costed to operate a successful and effective scanner inspection solution. The capital cost of the equipment is but one facet, one also needs to consider the HR and facilities which need to be procured to make all this work. The Homeland Security Research Corporation (HSRC) have therefore made significant improvements over the years to the scope and content of their market analysis to make visible the scope, application and longevity of such equipment.

Over the next six years, HSRC analysts forecast that, led by the USA, China and India, the global X-ray security screening market (including systems sales, service, and upgrades) will grow from $1.0 billion in 2010 to $1.9 billion by 2016.

HSRC’s latest report, is the most comprehensive review of the multibillion global X-ray security screening market available today. It analyses and forecasts the market by application, by country and by business transaction.

The report, segmented into 50 sub-markets, offers for each sub-market 2010 data and 2011-2016 forecasts and analysis. In 210 pages, 87 tables and 118 figures, the report analyses and projects the 2011-2016 market and technologies from several perspectives, including:

  • Market forecast by application: Air cargo, Airport-cabin baggage, Secured facilities, Postal items, Supply chain cargo and People.
  • National and regional markets: e.g., US, UK, Germany, France, Saudi Arabia, China, India, Japan, Korea, Malaysia, Singapore, Brazil
  • X-Ray Technologies: conventional, back-scatter, multi-view, coherent, dual energy
  • Systems Sales, post warranty service and upgrade markets
  • Competitive environment:6 leading vendors and their products
  • Market analysis: e.g., market drivers & inhibitors, SWOT analysis
  • Business environment: e.g., competitive analysis
  • Current and pipeline technologies
  • Business opportunities and challenges

At a purchase cost just shy of US$ 4,500 for this market analysis, procurement officers would do well to familiarise themselves with the WCO’s Guidelines for the Purchase and Deployment of Scanning/Imaging Equipment. While it won’t provide all the answers, it certainly outlines the key areas for evaluation. Better still, secure the services of a non-intrusive inspection expert, typically with procurement and implementation experience who can guide and recommend the most cost-effective and practical solution. These experts can also offer significant help in the development of associated organisation planning and performance structures.

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by Mike Poverello

Pre-shipment Inspection (PSI) – an antiquated approach

Recently, an organisation called Global Inspection Group (GIG) has advocated PSI – an import verification system – as a solution to counteract South Africa’s trade deficit. The article ‘Import verification would outlaw customs fraud’ alludes to the apparent success of these mechanisms in other African states to support quality and import standards in those countries, respectively. Because South Africa has no verification of imports system ‘it is easy to systematically under-declare goods’, the article states. Furthermore, it mentions that a Finance ministry would benefit from such a system ensuring the collection of the correct duties. [Really? how naive].

South Africa is a free country, and it follows that organisations will go to extremes to secure a business foothold in the country. The question is – to what length and to what end? If any ministry of finance were to rely on a PSI company, it would first disband its customs department, because there is evidently no trust in its frontline and post clearance capability.  Most governments (if not all) are pretty much aware of the broader international customs developments championed by the WCO. In recent years, the WCO has developed several diagnostic studies and programmes – with the option of donor funding if required. There would therefore be no sense or credibility in a government that would persist in pursuance of PSI services for fiscal assurance.

Any trade practitioner and supply chain operator in South Africa will readily confirm the hectic ‘change’ programme which is being pursued under Customs Modernisation. These changes and their associated systematic innovations and efficiencies are by no means the result of government capitulating in the face of illegitimate trade. No, it’s a conscious decision to take responsibility for the problem, and together with the allied trade to improve the situation.

It is therefore high time that such organisations which front themselves with the ‘be-all and end-all’ systems in Customs’ tariff and valuation appraisal rather seek a more practical and benefit-delivering model than one which not only scams governments for service and inspection fees, but also offers no benefit to trade. Included are those BOT vehicles offering governments ‘free’ cargo scanning equipment in exchange for a lucrative inspection fee. None of this is based on risk management and is purely profit focussed. The concept forgoes most if not all, the modern customs principles and standards promoted by the WCO. The buzz word is ‘Capacity Building!’

The reality in all of this should be clear. No private sector entity can replace Customs. Outsourcing in any event would require government to set up a vehicle of its own to ‘ensure’ that the outsourcer is doing his job. If there is a dearth in knowledge and skills, then it is up to government to rectify the situation.  Source: FTW Print version.

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by Mike Poverello

Mobile Customs Control – Great minds think alike

Beitbridge inspection area6 December 2010 saw the rollout of a new electronic tool for customs inspectors at Beitbridge border post. The need for a hand-held device was identified following the rollout of a new workflow system, called Service Manager, to various Customs offices over the past few months. Although the changes introduced recently were aimed at moving Customs to a totally paperless environment, customs inspectors still had to print out their instructions on paper, manually write down the inspection results and then recapture these onto the system back in the office.

The use of an iPod by a Customs officer to conduct a physical inspection at Beitbridge this week introduces significant enhancements over the previous manual process. SARS has been liaising with iPod experts in various countries around the world over the past few months to develop this function and procure the devices.

The solution comprises an Apple iPod Touch which has been configured to operate SARS’ automated inspection workflow application – Service Manager. The introduction of a hand-held device therefore means that all the functions of Service Manager are now at the inspector’s finger-tips. Inspectors receive their instructions on the iPod, capture the results and make recommendations which then go to the finalisation/adjustment inspector. They can even take photographs with the iPod if they need further clarification on the goods they are inspecting. Inspectors no longer have to go back and forth to the office and their next job can be assigned to them on the spot. This is expected to substantially reduce the time spent on physical inspections and minimise human error.

Initially 34 iPods were procured for Beitbridge, WiFi technology was made available at the port and training of affected staff undertaken. All physical inspections at Beitbridge were being conducted with iPods and will be rolled out to the other Customs border posts throughout 2012.

While SARS’ solution is the first known Apple solution of its kind, similar solutions have been introduced recently within the US Bureau for Customs and Border Control and the Australian Border Control Agency offering varying types of functionality, including the integration of RFID technology by the Australians to monitor and track cargo movements. Life for Customs officers is a whole different and will continue to evolve if it expects to remain in touch with modern era fraud and scams.

by Mike Poverello

Customs Connect 2 – SA Customs Modernisation

Customs Connect 2The year 2011 has proven both challenging and beneficial for many in the South African Customs community. New business opportunities offered via the Customs Modernisation Programme materialised and provided the service providers ample scope to improve their service offerings to clients in the freight forwarding and clearance space. Leveraging off tried and tested technology tools already employed by SARS in the Tax business, the implementation of E@syScan provided significant efficiencies in the customs clearance processing response times, although the jury is still out on whether such efficiencies have in fact translated into cost-savings for the customs trade. In this regard it is up to trade itself to assess if the traditional cost of printing reams of paper and employing a runner to deliver manual documents to Customs is significantly reduced by the new electronic supporting document process. Could be an interesting exercise.

On the SARS front, the implementation of a new automated case management, and inspection workflow is nothing short of a revelation in so far as traceability and improved efficiency. Similarly, such efficiency needs to translate into cost savings. Certainly there are less manual interventions in the process, the emphasis now moves to working more smartly as regards the booking and conducting of physical inspections. True this has been a huge learning curve for all. Refinements and fine-tuning of the process moving forward will undoubtedly release the expected results to the point where most will wonder how they ever managed in ‘manual mode’ in the past.

To close off the year, SARS has just published its second edition of its electronic Customs bulletin – Customs Connect. Please take the time to read and digest.