© US National Nuclear Security Administration

Flash Info

Operation Cosmo – the first ever global WCO operation on strategic goods

10 June 2015

As part of its Strategic Trade Controls Enforcement (STCE) Project, the WCO organized an unprecedented law enforcement operation to detect and prevent illicit trafficking of strategic goods in international supply chains. The operation, which went under the code name of ‘Cosmo’, brought together 89 WCO Member Customs administrations and their national partners to coalesce around the goals of international security and non-proliferation.

Operation Cosmo benefited from the support of the WCO Regional Intelligence Liaison Office network and of the Organization’s international partners in this area – INTERPOL, the United Nations Office on Drugs and Crime (UNODC), the United Nations Office for Disarmament Affairs (UNODA), the International Atomic Energy Agency (IAEA), and the Organisation for the Prohibition of Chemical Weapons (OPCW).

Objectives and operational phases

In addition to detecting and preventing illicit trafficking of strategic goods, Operation Cosmo had several other objectives. One of these was to take stock of the international Customs community’s capacity to work together in enforcing strategic trade controls.

Another key goal related to assessing the Customs community’s capacity to enforce international strategic goods related resolutions, such as the United Nations Security Council Resolution 1540 in relation to Weapons of Mass Destruction.

To achieve this latter goal, all participants in Operation Cosmo were asked to complete a national self-assessment regarding their national standard operating procedures and work practices in this area.

With the above goals in mind, the execution of Operation Cosmo was divided into four main parts:

  • a planning phase, during which a global operational plan was adopted;
  • a pre-operational phase which saw participating countries crafting national implementation plans and risk profiles for those strategic goods that were of greatest concern to them;
  • an interdiction phase, which took place in October 2014, during which Customs used the predefined risk profiles to target high-risk shipments;
  • a follow-up and reporting phase, during which cases of administrative and criminal wrongdoing were investigated at the national and international levels.

Results

To coordinate and provide technical support to the operation, the WCO established an Operational Coordination Unit (OCU) at its Headquarters. The OCU was staffed with national export controls experts and analysts from several WCO Members; it provided support to participating countries, and facilitated and followed-up on international communication.

With the support of the OCU, the results of Operation Cosmo were encouraging. Over 140 messages on high-risk consignments were generated by participants during the interdiction phase. Another 380 messages exchanged information on cases, and an additional 180 enquiries were made in relation to technical advice on commodity identification and the operation itself.

All cases reported as part of Cosmo were analysed in real-time and those deemed to be low-risk were released, promoting trade facilitation. Those which included elements of administrative negligence or wrongdoing were submitted for correction or further advice through administrative measures at the national level.

To date, there have been approximately 10 cases which are suspected of including trafficking and criminal wrongdoing. These cases have been referred for criminal investigation by the States involved, and many are still under investigation.

In relation to capacity assessments, the WCO has received around 40 national self-assessments. Based on these assessments, it has become clear that the issue of strategic trade controls enforcement is a new and challenging area for many WCO Members.

Various areas requiring capacity enhancements have been identified through these reports. These relate to issues such as legal competence to enforce strategic trade controls, frontline skills to identify and detect dual-use goods, intelligence collection, industry outreach, evidence collection and investigation, lack of training, etc.

The WCO is currently following up with those Members who have not yet submitted their reports. Based on new submissions, a general trends analysis will be finalized. This analysis will help the WCO to build future capacity building and technical assistance activities to better support its Members in addressing those gaps that were identified during Cosmo.

Way forward

As the annual WCO Council Sessions approach, Operation Cosmo is in its post-operational phase during which the operation’s final report is being drafted. This report will be presented and discussed, together with the criminal cases uncovered during the operation, at the debriefing event scheduled to take place in the Northern autumn of 2015.

Based on the good practices and needs expressed by the participants, the WCO is exploring the possibility of setting up a medium to long-term technical assistance and capacity building programme in the field of strategic trade controls enforcement – the ‘WCO STCE Programme.’ It would focus on training, international cooperation, industry outreach, and the facilitation of information and intelligence collection and sharing.

Many Members have also asked the WCO to consider setting up the OCU as a permanent communication and interaction mechanism for export controls and strategic goods experts. The WCO is currently looking into ways of responding to this need. The WCO is also eager to set up a potential ‘WCO STCE Programme’ and is currently negotiating with several different countries in relation to potential support towards the initiative.

The ongoing STCE Project, of which Operation Cosmo was a part, has produced a very comprehensive policy and training guidance on strategic goods, and will form a solid foundation for all future activities. These useful tools are accessible to Members on the WCO website or the CLiKC! platform.

 

More information
cosmo.ocu@wcoomd.org

WCO News 77

15 June 2015

WCO News 78

29 October 2015

Flash Info

New book provides insight into the economic benefits of implementing a single window system

29 October 2015
By Dr Dennis Ndonga, Murdoch University, Australia

The adoption of the Trade Facilitation Agreement (TFA) in December 2013 at the World Trade Organization’s (WTO’s) Ministerial Conference held in Bali, Indonesia, was a landmark achievement for the global trade community. The so-called ‘Bali Package’ marked an end to trade negotiations that had dragged on for over a decade. In a broader context the agreement breathed new life into the WTO’s style of multilateralism, which many had started to doubt due to the persistent deadlocks in trade negotiations experienced in previous years.

One of the driving forces behind the TFA is its promise to deliver economic gains. The WTO has stressed that the simplification and harmonization of international trade procedures through the measures proposed under the TFA has the capacity to generate some 400 billion to 1 trillion US dollars to the world economy by reducing trade costs by around 10% to 15%, increasing trade flows and revenue collection, creating a stable business environment, and attracting foreign direct investment (FDI) [WTO, Day 3, 4 and 5: Round-the-clock Consultations produce ‘Bali Package,’ 5-7 December 2013]. The realization of these benefits would be fundamental to determining the TFA’s significance to the global trade community, and more broadly reaffirm the WTO’s capacity to deliver on global prosperity.

With this in mind, I wrote a book, entitled ‘Single Windows and Trade Facilitation – A Tool for Development’, to investigate the economic value of single window systems recommended under Article 10 (4) of the TFA. Single windows (SWs) have been one of the most controversial trade facilitation tools, owing to their high implementation costs. A number of developing countries have been lethargic about undertaking SW implementation, expressing scepticism about the ability of such systems to boost their global competitiveness. These sentiments were voiced in the negotiations leading up to the TFA. The common view is that the implementation costs of SWs far outweigh the presumed benefits, and many developing countries will be keen to discover whether the contentious provision will contribute to the agreement’s projected benefits.

This book explores the economic benefits of SWs and further analyses some of the key challenges facing SW implementation in developing countries, with a view to offering direction to countries that are preparing to implement Article 10 (4) of the TFA.

It also explores the concept of SWs and trade facilitation, providing Customs practitioners and scholars with comprehensive insight into the range of economic benefits that SWs can generate for their host economies. In presenting these issues, the book provides answers to several key questions:

What is trade facilitation?

The book offers a detailed analysis of the concept of trade facilitation, with an emphasis on how the WTO deliberations on trade facilitation have developed from the first Ministerial Conference in Singapore up to the adoption of the TFA at the 9th Ministerial Conference in Bali.

What are the various trade facilitation tools and programmes in operation?

The book explores some of the global trade facilitation measures aimed at streamlining Customs and other border operations that have been proposed by various multilateral organizations such as the WTO, the World Customs Organisation (WCO), the United Nations Conference on Trade and Development (UNCTAD), and the United Nations Economic Commission for Europe (UNECE).

How do single windows facilitate trade?

The book examines the concept of SWs highlighting the diversity of SW models adopted in various jurisdictions, and the broad operational and revenue benefits that Customs and other international trade operators stand to gain from such systems.

How would single windows interlink with national e-government initiatives?

The book analyses the interrelationship between SWs and national e-government initiatives and how emerging economies can streamline their SW projects to achieve total e-service delivery by government, thereby realising some of the main economic benefits associated with e-government diffusion.

How do single windows promote integrity in Customs administrations?

The book examines the challenges of combating corruption in Customs, which has an adverse effect on economic growth. It presents detailed arguments supported by case studies on how the implementation of SWs can promote integrity in Customs and boost economic growth.

How do single windows increase developing countries’ competitiveness in attracting FDI?

The book analyses how SWs have the capacity to determine certain investment outcomes that are primarily linked to Customs efficiency, and thereby stimulate a country’s capacity to attract export-oriented investors. It further explores the economic benefits attached to export-oriented FDI.

How can Customs overcome the major barriers to single window implementation?

The book discusses some of the major barriers to SW implementation in developing countries. It analyses the technological and fiscal challenges affecting the implementation and operation of a SW in developing countries, and proposes practical solutions. It also explores the legal issues surrounding electronic authentication of international trade documents processed through SWs and recommends an appropriate legal framework to deal with these technicalities.

In summary, the book serves to inform practitioners on the role of SWs in facilitating trade, and how the implementation of these systems can be appreciated as being more than a Customs modernization exercise, but also a development tool that can be integrated into a national development strategy.

Dr Dennis Ndonga is a lecturer at Murdoch University, in Australia. He has carried out extensive research on single windows and trade facilitation. His findings have been published in a number of premier journals and presented at several WCO PICARD Conferences.

 

More information
www.wklawbusiness.com

WCO News 79

10 February 2016

Flash Info

New book examines existing collaborative mechanisms aimed at protecting the environment in a more efficient way

14 February 2016
By Mariya Polner, Policy Advisor, WCO Enforcement Sub-Directorate

The WCO is among the impressive range of contributors from policy, enforcement and academic circles who contributed to the 2015 volume of the Palgrave Studies in Green Criminology, titled ‘Environmental Crime and Collaborative State Intervention.’ The book sheds light on how collaborative networks form in the context of the fight against environmental crime, and what opportunities they offer for all stakeholders.

Throughout the last decade, transnational environmental crimes, that comprise activities such as the illegal transportation and dumping of toxic waste, the illegal trade in endangered species of wild flora and fauna, illegal logging, and the illegal trade in ozone-depleting substances, to name a few, have attracted the attention of policy makers at the highest levels. These crimes have also resulted in the formation of different models of collaboration within and across governments with law enforcement agencies, non-governmental organizations (NGOs), academia, the private sector, consulting agencies, prosecutors and courts, and civil society.

The 2015 volume of the Palgrave Studies in Green Criminology, titled ‘Environmental Crime and Collaborative State Intervention’ and edited by Grant Pink from the University of New England (Australia) and Rob White from the University of Tasmania (Australia), offers a unique account of the different governance models adopted by these collaborative networks from the inception to the maturity stage. The book sheds light on the latest developments in the field of environmental collaboration, and presents the perspectives and experiences of major stakeholders, as well as lessons learnt.

From the very first pages, the role of collaboration in combating environmental crime is discussed, with an emphasis on both the theoretical underpinnings of collaboration through networks, and the definitions of transnational environmental crime. Stemming from the definition of environmental crime as a crossover crime, given its transnational and multifaceted nature, the authors underline that the response of all stakeholders as a whole is critical in tackling it. The distinguishing among three major types of collaboration – horizontal, vertical and diagonal – provides a useful analytical framework when examining the different types of existing collaboration which are discussed in the book’s different chapters.

Several chapters provide an up-to-day account of the networks built by national governments and international organizations, as well as their contribution to fighting environmental crime. Among them is the International Network for Environmental Compliance and Enforcement (INECE), one of the most prominent trans-governmental networks, considered a catalyst for practitioner and academic writing in this area. In its more than 25 years of existence, the INECE has grown from an informal bilateral mechanism to a global network that has influenced the establishment of more than 20 networks focused on building the capacity of civil servants in the area of environmental compliance and enforcement.

The strength of this volume lies in the variety of stakeholders that have contributed to it. The WCO, the Secretariat for the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) and INTERPOL provided detailed analyses of the way they addressed environmental crime, as well as on the networks they have built, such as the International Consortium on Combating Wildlife Crime (ICCWC) – established by the WCO, the CITES Secretariat, INTERPOL, the United Nations Office on Drugs and Crime (UNODC) and the World Bank, or the National Environmental Security Taskforce – established by INTERPOL to enhance collaboration among relevant stakeholders at the national level.

A special chapter is dedicated to the role of Customs authorities in combatting illegal wildlife crime. It provides an analysis of the limitations of Customs functions and of the different initiatives taken in order to tackle identified weaknesses, implying a high degree of collaboration, including the implementation of capacity building programmes, organizing regional and global operations, forming new alliances with NGOs and other institutional partners, and developing secure electronic systems for information exchange, such as the WCO’s ENVIRONET.

One interesting finding which was mentioned in several chapters is the increasing role of NGOs in the sphere of environmental protection, since they have proven to be catalysts for change due to their flexible structure, strong voice and ‘feet on the ground’. In many instances, NGOs played the role of incubators and stimulators of wider governmental action on environmental crime.

The prosecutor’s perspective on the collaborative relationship with the courts, based on the United Kingdom Environment Agency’s (EA) experience, is also interesting not only because it provides the latest casework in this area, but also because it contains lessons learnt on the role of the EA in the regulatory sphere.

A chapter on port-to-port collaboration would be of particular interest to enforcement professionals. Established in 2008 as an offspring of the INECE to tackle hazardous and electronic waste in the seaport environment, the Seaport Environmental Security Network (SESN) has proven successful in promoting cooperation to prevent, detect and disrupt the movement of illegal hazardous and electronic waste through ports. Customs authorities in particular have been actively engaged in the Network because of their central role at seaports. The unique characteristic of the Network is its flexibility in terms of approaches to collaboration that vary from very informal to formally established mechanisms, and include national, regional and international dimensions.

In the Netherlands, the partnerships between the Human Environment and Transport Inspectorate (ILENT) – responsible for inspecting waste transport – and enforcement agencies – such as the Customs and Police services – have been formalized in order to enable the latter to exercise their power on behalf of the ILENT. While in Germany, another model prevails, based on the principle of semi-structural interagency collaboration along the infrastructure (rail, road, and inland waterways), both at the local and national level.

The last three chapters of this volume are dedicated to the role of research from a collaboration angle. Difficulties related to the quantification and understanding of the phenomenon of transnational environmental crimes and their impact, may lead to ineffective policies and a waste of resources to fight against this scourge. The complex nature of environmental crimes created a need to collaborate in order to produce a more holistic picture and contribute to research.

The book also addresses collaboration between researchers and practitioners. While this type of collaboration is emerging in a number of countries and is supported by different actors, the gap between academics and professionals is wide and collaboration between the two is not self-evident. Overall, coordinating research efforts is not an easy task. Therefore, case studies on the successful coordination of research projects that involve different partners contribute substantially to this volume.

The novelty of this book is in its unique format, discussing the strengths and weaknesses of different collaborative efforts to fight against environmental crimes from a governance perspective. The volume itself is a product of collaborative efforts as it required experts from different institutions – at least two – to work together on each chapter. While the constraints and challenges in building and maintaining networks to fight against environmental crime differ, one of the major lessons learnt is that collaboration and mutual trust are the key prerequisites for success.

Overall, this book can serve as a good reference, not only for environmental professionals wishing to learn more about the latest achievements in this field, but also for enforcement officers, development experts, and researchers working on governance issues in the environmental domain.

 

More information
www.palgrave.com

WCO News 80

16 June 2016

Flash Info

Trans-Pacific Partnership Agreement added to WCO Comparative Study on Preferential Rules of Origin

28 June 2016

The Trans-Pacific Partnership (TPP) Agreement was signed on 4 February 2016. It aims to establish a more seamless trade and investment environment through commonly-agreed rules and the promotion of transparent laws and regulations, providing greater certainty for businesses, reducing costs and red tape, and facilitating participation in regional supply chains.

The TPP is the first of the so-called ‘mega-regional’ free trade agreements (FTAs), a term which refers to deep integration between countries, or regions with a major share of world trade and foreign direct investment (FDI). The 12 Parties to the Agreement are Australia, Brunei Darussalam, Canada, Chile, Japan, Mexico, Malaysia, New Zealand, Peru, Singapore, United States of America, and Viet Nam.

The WCO issued a first analysis of the main features of the origin provisions contained in the TPP Agreement back in December 2015 (see http://www.wcoomd.org/en/topics/origin/activities-and-programmes/preferential-origin.aspx). It is now about to publish a detailed analysis of the TPP rules of origin and a comparison between the new agreement and existing origin models as part of the WCO Comparative Study on Preferential Rules of Origin. This new section of the Study will be available in July 2016.

Rules of origin are important legal instruments for the application of preferential trade agreements. But, with the proliferation of these agreements comes a plethora of divergent and often overlapping preferential rules of origin, a situation which presents challenges, both to the business community and the authorities implementing origin legislation. Thus, enhancing overall understanding of preferential rules of origin is the main aim of the WCO Comparative Study.

The section of the WCO Comparative Study dealing with the TPP explains and analyses some special features contained in the Agreement, such as full cumulation, provisions on regional value content, including the new ‘focused value method,’ remanufactured goods, the provision on the updating of the rules of origin to reflect amendments to the Harmonized System (HS), as well as the specific chapter on textile and apparel goods.

Recurrent themes apply to virtually all existing models on rules of origin legislation. The comparison between the different agreements contained in the WCO Comparative Study is made at a topic level – certification of origin, advance rulings, concept of originating goods or cumulation, for example.

Any questions, comments or enquiries on the WCO Comparative Study should be addressed to the WCO Secretariat’s Origin Sub-Directorate.

 

More information
origin@wcoomd.org

WCO News 81

26 October 2016

Flash Info

A new module in ASYCUDA speeds up the processing of relief consignments

20 February 2017
By Virginie Bohl, Emergency Relief Project Manager, the United Nations Office for the Coordination of Humanitarian Affairs

In major humanitarian crises, whether natural disasters or complex emergencies, many relief goods are delayed by Customs. Sometimes these items are only released months after their arrival, and, in the worst-case scenario, may never reach the affected population.

The reason for such delays is that Customs authorities are often not adequately prepared to process the large amount of relief items that usually arrive in a disaster stricken country within a very short period of time. The case of the Philippines after Typhoon Haiyan struck in November 2013 gives an idea of the volumes involved: the country’s Bureau of Customs reported that the volume of cargo flights and ships was 10 times larger than under normal circumstances.

ASYCUDA’s new module

As a new initiative might help countries using the Automated System for Customs Data (ASYCUDA) to better handle the influx of relief items in an emergency, the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) and the United Nations Conference on Trade and Development (UNCTAD) jointly explored how to upgrade the computerized Customs management system, developed 35 years ago by UNCTAD and used today in more than 95 countries, in order to facilitate the processing of international relief consignments in humanitarian emergencies.

The collaboration resulted in the development of an additional module for the software, called the Automated System for Relief Emergency Consignments (ASYREC). As its name suggests, it will automate the prioritization and rapid processing of relief consignments in humanitarian emergencies.

Once activated, the module will enable the automated system to:

  • register the organizations potentially involved in UN relief operations in advance, in preparation for potential unforeseen emergencies;
  • record the duration of the state of emergency and the relief items listed by the government as priority needs, including their respective HS codes, and the requested volume;
  • associate a list of pre-authorized organizations (UN, inter-governmental organizations (IGOs), non-governmental organizations (NGOs), etc.) with the emergency;
  • authorize eligible aid agencies or donors with the possibility to lodge pre-simplified arrival declarations, and clearly indicate on their declaration that their shipment contains ‘humanitarian relief’;
  • recognize these consignments, and prioritize their treatment by Customs and other government agencies.

Different types of humanitarian relief items such as goods imported for the benefit of disaster victims or temporary admission of disaster relief material can be associated with the relevant Customs procedures prescribed by the national Customs law of the affected country (e.g. exemption from import duties and/or taxes), enabling completely automated processing and release of these goods by Customs authorities without delays.

The system will also enable Customs to get a more accurate overview of incoming relief consignments, and to share this valuable information with other national authorities and international actors such as the Global Logistics Cluster (the coordination mechanism responsible for coordination, information management, and, where necessary, the logistics service led by the United Nations World Food Programme (WFP) provision to ensure that an effective and efficient logistics response takes place in humanitarian emergency missions).

Rolling out the new system

The software prototype has been tested, and will be integrated into ASYCUDA systems around the world progressively. Procedures and guidelines will be developed and tested in simulation exercises to ensure that national authorities and shipping agencies are comfortable with the system, and are ready to use the module.

 

More information

bohl@un.org