Dossier

TIACA and WCO: logical partners for taking Customs and Industry modernization forward

By Vladimir D. Zubkov, Secretary General, The International Air Cargo Association

Engaging with stakeholders and implementing open communication, effective collaboration and meaningful consultation is essential in building “a secure business environment for economic development.” In this article, the Secretary General of TIACA explains how similar the concerns of the air cargo industry and Customs administrations are, and shares his vision of a future where collaboration and the concept of “co-creation” achieve the recognition they deserve.

Reading the title of this article one may ask “What does TIACA have to do with the WCO?” or even “What is TIACA?” TIACA is the acronym of The International Air Cargo Association, which represents all the major segments of the air cargo and air logistics industry, such as combination and all-cargo airlines, forwarders, airports, ground handlers, road carriers, Customs brokers, logistics companies, shippers, information technology (IT) companies, aircraft and equipment manufacturers, the trade press, and educational institutions. TIACA supports, informs, and connects all these stakeholders who together constitute the global air freight supply chain.

Customs is one of the authorities our members naturally engage with, and the partnership between TIACA and the WCO is very logical as we work on similar issues and share common objectives. Let’s take the example of e-commerce, a way of conducting business that has become the norm today, as well as one of the central topics of discussion for Customs, governments, the global air freight supply chain, and many other stakeholders.

Those 550 people from more than 80 countries who attended the WCO IT Conference & Exhibition that was held in Tbilisi, Georgia in early June 2017 didn’t find it strange that the views presented by Kunio Mikuriya, the Secretary General of the WCO, and myself, Vladimir Zubkov, the Secretary General of TIACA, during the session devoted to e-commerce, proved to be heading towards similar conclusions.

Both of us acknowledged that the challenges surrounding e-commerce were common to the industry and Customs authorities alike. In addition, we identified other issues relating to e-commerce for further elaboration and action in the future, such as:

  • the impact of the growth in e-commerce on industry, Customs and governments, and how it should be addressed;
  • e-commerce platforms as a means of support to governments in performing their responsibilities, both in terms of ensuring proper controls as well as in service delivery;
  • the opportunities arising from e-commerce for developing countries.

Guiding principles for cross-border e-commerce

Why did I start with the Tbilisi conference? Because e-commerce was also on the agendas of two major recent events: the December 2017 WCO Policy Commission Meeting held in Luxor, Egypt, where WCO Members adopted a resolution outlining a set of guiding principles for cross-border e-commerce (the Luxor Resolution); and shortly after, the Eleventh World Trade Organization (WTO) Ministerial Conference held in Buenos Aires, Argentina – a purely landmark event.

It is worth highlighting that, in the WCO Luxor Resolution, Customs administrations are invited “to work in partnership with relevant stakeholders to apply the principles in a harmonized manner.” One of the relevant stakeholders is the air freight supply chain community. This is where the growing contacts between our communities can be of major benefit, enabling us to develop strategies and action plans in a coordinated manner.

I examined the key principles set out in the Luxor Resolution from the point of view of their relevance to TIACA’s objectives, and here are some of my thoughts.

Principle I – Advance Electronic Data and Risk Management

The timely and accurate exchange of advance electronic data between Customs and e-commerce operators has been on the agenda of every air cargo-related conference in recent years. Many of the options discussed come together in the concept of “Smart Borders,” a still vague concept, but one that clearly conveys the need to use information based technologies in order to create a new border environment. Many WCO Members have already made considerable progress towards the realization of this concept, but there is still a lot to do.

At TIACA, we believe Smart Borders, and their corollaries (Single Window environments, harmonized data requirements across countries, harmonized compliance processes, etc.) can only be achieved through intense exchanges between the trade sector and governments, and in this respect, we believe there is an opportunity to go beyond collaboration to a spirit of “co-creation” of the Customs and border environment. This could mean ongoing collaboration rather than ad-hoc consultation, working jointly from the concept stage all the way to implementation. It could also mean collaborating on capacity building programmes across countries, thereby enhancing the capabilities of both the industry and Customs. In this fast paced modern economy, the winners will be air cargo industry actors who have adopted smart technology, and Customs authorities with efficient border security systems.

Principle II – Facilitation and Simplification

The WCO is definitely on track in suggesting that “simplified clearance procedures […] are to be adopted for dealing with the increasing volumes of low-value and small shipments/parcels.” There are clearly common goals and interests between the trade sector and Customs, including other government agencies: the former needs borders where procedures are clear and understood, costs of compliance are minimized, and transit is as easy and fast as possible, while the latter need to be able to enforce Customs and other national laws, ensure compliance, and facilitate trade in an efficient manner. These needs should be seen against an environment where trade volumes are increasing and supply chains becoming more globalized.

Facilitation and simplification were named as one of the key issues by TIACA members when we asked them to comment on the relationship between TIACA and governments. Customs was singled out as one of the crucial partners in establishing favourable working conditions for the whole air freight supply chain. TIACA has been taking consecutive steps in strengthening its links with the WCO and the International Civil Aviation Organization (ICAO), especially on the work related to improving the Standards and Recommended Practices (regulatory material) laid out in ICAO’s Annex 9 dealing with traveller identification and border controls, and ICAO’s Annex 17 dealing with safeguarding international civil aviation against acts of unlawful interference.

Having mentioned the regulatory material, I couldn’t resist recalling the debate during the recent ICAO Remotely Piloted Aircraft Systems (RPAS) Symposium in September 2017, which was devoted to the regulatory frameworks that support the safe, secure, environmentally-friendly and economically sustainable development of these systems, more popularly known as drones in common parlance. The systems have the potential to considerably and cost-effectively enhance air cargo connectivity, in particular for remote destinations, like on the African continent. The “final sector,” which we often call “the last mile,” may well be efficiently covered by drones. Air navigation service providers, industry partners, international and humanitarian organizations, and other stakeholders should support the development of RPAS operations and States’ rulemaking efforts by sharing knowledge and experiences.

I often have to explain to audiences that connectivity is not the same as a convenient connection at the airport. It’s a complex of procedures, consisting of well-developed air cargo connections combined with good quality Customs services and smart borders.

In a study, Value of Air Cargo: Air Transport and Global Value Chains, which was commissioned by the International Air Transport Association (IATA) and published at the end of 2016, a quantitative link has been identified between a country’s air cargo connectivity, and its participation in global trade: a 1% increase in connectivity was associated with a 6.3% increase in a country’s total trade, thus increasing its competitiveness. The findings serve as evidence in support of policy deliberations on improving the trade facilitation environment and helping countries integrate into global value chains (GVCs), highlighting that countries with well-developed air cargo connections combined with good quality Customs services and smart borders, are better at integrating into GVCs.

Principle III – Safety and Security

There is a direct appeal to governments and industry to work collaboratively in using technology, intelligence, non-intrusive inspection (NII) equipment, and risk profiling based on advance electronic data (pre-loading/pre-arrival), to identify and intercept high-risk shipments. And all actors, whether trade or government, have safety and security as their number one priority. There are already a number of initiatives on which the WCO, TIACA and other stakeholders work jointly, such as the development of “Pre-loading Advance Cargo Information (PLACI)” and its implementation guidelines, an initiative which I won’t introduce here as it was well explained in a previous edition of WCO News (see October 2017 edition). However, the pace of development and testing of the standards, principles and mechanisms related to the use of PLACI is very slow. Momentum is lost, and it seems that soon the confidence in it will be lost as well.

There is also a need for better exchange of information about innovative technologies, which are often already used in other trade sectors, and have the potential to be applied for border protection. Those who attended the WCO Working Group on E-Commerce held at the headquarters of the WCO in October 2017 will certainly remember the presentation by Amazon, which showed how a bad strawberry hiding in a box can be quickly spotted by digital technology. There was a direct analogy with the objectives of border protection. Several other technological innovations, in particular those demonstrated at the earlier mentioned ICAO Symposium, would deserve being shared with the WCO and other partners having similar safety and security objectives. A mechanism for this must exist.

Specific issues of the developing world

Having said all this about innovations and new methods of work, we have to admit that there are less fortunate countries and whole regions where assistance is an absolute necessity. I have read with great interest about the WCO Customs for Regional East African Trade (CREATe) Project, aimed at contributing to poverty eradication in East Africa by fostering a regional economic development agenda. It’s interesting that just last June there was a joint ICAO/TIACA air cargo conference in Addis Ababa, Ethiopia also aimed at promoting sustainable development in the region. We developed an action plan, with some sections of relevance to the WCO.

The action plan encourages States to support the MoveAfrica Initiative launched by the New Partnership for Africa’s Development (NEPAD), which aims to free the movement of peoples, goods and services in Africa, including through the reform of “soft infrastructure,” such as cross-border transport laws, and the adoption of regulations related to electronic data submission for goods passing borders (e-freight), including documents such as the electronic air waybill (e-AWB). National Customs authorities have been invited to modernize their IT systems to accommodate e-freight/e-AWB initiatives.

It goes without saying that States should aim to enhance the effectiveness of their aviation security policies by implementing the actions, tasks and targets identified by the ICAO in its Global Aviation Security Plan (GASeP). They should also consider the introduction of authorized economic operator (AEO) programmes, and consistently encourage the signing of AEO mutual recognition agreements (MRAs) with other countries in order to add benefits to their compliance programmes.

There are several other concepts and programmes which are equally important to members of the ICAO, the WCO and TIACA, but the few examples I have given are sufficient enough to demonstrate that we do have common objectives. Very often, we work shoulder to shoulder in trying to attain certain achievements, but equally often we operate in isolation and don’t obtain the results we could achieve if we managed to coordinate our efforts. This is, therefore, my clarion call for more cooperation!

Airports as the main platform for cooperation

While success depends on the level of harmony achieved in the overall air freight supply chain, most of the interaction between Customs and the industry take place at airports. Airport authorities can play the role of facilitators, bringing the industry and their stakeholders together to define well-structured solutions and better industry standards for the future. Such an approach requires the adoption of a new common mind-set, aimed at bringing improvements to the entire industry and individual stakeholders. Several airports, in Brussels, London (Heathrow) and Vienna, just to name a few, have been working within the framework of what is called “The Airport Community,” bringing together all airport stakeholders to rethink processes such as handling and Customs clearance.

I would also put this in the category of innovations. Even though they are not technological, but rather organizational innovations, the common goal is the same: increased efficiency, better coordination, and eventually higher customer satisfaction as well as contributing to the development of trade.

What distinguishes these airport communities is that stakeholders as different as freight forwarders, airlines, ground handlers and ground transportation companies, shippers, industry partners, and governmental authorities such as Customs or food & plant safety agencies share a common strategic plan aimed at improving standards and practices for the benefit of their customers and citizens.

Conclusion

I imagine a future where the concept of airport communities is gradually transformed into a global air cargo community. In this future, the terms and requirements of the programmes for ICAO’s Regulated Agents and the WCO’s AEOs are aligned, enabling all parties involved in air cargo operations to be able to submit information through a Single Window, and that these developments be promoted through joint training activities.

Industry players and Customs and aviation authorities are well informed about one another’s work as well as each other’s instruments and regulations, and help one another in their efforts to address deficiencies and provide timely facilitation. And, of course, we have found a common view on how to handle the phenomenon of e-commerce. We are on the right track, but just have to ensure that we stay on course.

 

More information
vzubkov@tiaca.org
www.tiaca.org