1. The SAFE Framework of Standards
Good morning, ladies and gentlemen.
I am honored to be here at the 2008 World Customs Forum.
There is perhaps no more appropriate place to discuss a topic important to us all – managing secure trade lanes and the future of facilitation.
Bob Struthers
World Customs Organization
Training on the New EU Implementations on Road Transport and Foreign Trade: Istanbul Turkey June 2009
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2. The World Customs Organization (WCO) is the only intergovernmental organization with competence in Customs matters.
 Please just go through the content of this slide
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3. Facts and Figures
Established in 1952 as the Customs Co-operation Council
Renamed WCO as working title in 1994
Headquarters in Brussels
6 regional representatives
Currently representing 174 members from all geographic regions and at different stages of development
Members process > 98% of all international trade
The Convention establishing a Customs Co-operation Council, now known as the “World Customs Organization”, entered into force in 1952 with 17 participating countries.
After years of membership growth, in 1994 the Council adopted the working name World Customs Organization, to more clearly reflect its transition to a truly global intergovernmental institution.
The WCO has 6 Vice-Chairs representing 6 regions.
Today the WCO consists of 174 Members, spread throughout the world, which are responsible for processing over 95% of all international trade.
The WCO employs plus minus 130 Staff members and has an annual operating budget of around 15 million Euros.
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4. WCO SAFE Framework
Recognition of risks to the security and facilitation of the international trade supply chain led the WCO to take bold action.
WCO Council Resolution, June 2002, forming a Joint Customs-Industry Task Force on Security and Facilitation.
In the 15 to 20 years prior to 9/11, Customs administrations, particularly in the developed world, began focusing more on trade facilitation rather than continuing to support unnecessary Customs controls. Indeed, some questioned the continued need for Customs control procedures.
At the WCO, this trade facilitation focus lead to the negotiation of the Revised Kyoto Convention on the Simplification and Harmonization of Customs Procedures between 1995 and 1999.
I will discuss further on Revised Kyoto Convention later in this presentation.
However, 9/11 caused the world to refocus on Customs control and recognize a simple truth that every nation has an absolute right to determine who and what crosses its national borders. The instrument of this exercise of sovereign control is, and always has been Customs. After 9/11, the stark recognition of the venerability of international trade lead WCO Members to seek to secure the global supply chain that serves the world economy.
Acting on this realization, WCO Council passed a Resolution in its June 2002 session to create a Task Force on Security and Facilitation, Jointly populated with Customs and Industry representation.
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5. SAFE Framework of Standards
Adoption at the Council in June 2005
Framework
Letter of Intent to implement the Framework
156 WCO Members make commitment to implement
Revised version published in 2007
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6. electronic information
Core Elements of SAFE
FOUR CORE PRINCIPLES
Advance
electronic information
Risk
management
Outbound
inspection
Business
partnerships
Harmonise the advance electronic information requirement on inbound, outbound and transit shipments.
Commit to employing a consistent risk management approach to address security threats.
Outbound inspection of high-risk consignments being exported, preferably using non-intrusive inspection methods.
Customs will provide benefits to businesses that meet minimal supply chain security standards and best practices.
The WCO Framework is comprised of four core elements.
First, the Framework harmonizes advance electronic manifest information requirements on inbound, outbound, and transit shipments.
Second, each Member that joins the Framework must commit to employing a standardized risk management approach to address terrorism and other security threats.
Third, the Framework requires the inspection of outbound high-risk containers by non-intrusive inspection equipment, such as large-scale x-ray machines and radiation detectors, at the request of the destination Member.
Lastly, the Framework defines the concrete benefits to be received by businesses that commit to implementing the Framework’s standards.
The Framework will therefore create standardized criteria for identifying businesses that offer a high degree of security in return for which they will receive such tangible benefits such as speedier clearance of low-risk cargo through customs and fewer customs inspections.
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7. Two pillars The WCO Framework rests on two twin pillars:
Customs-to-Customs network arrangements.
Customs-to-Business partnerships.
(Authorised Economic Operator (AEO) concept)
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8. Objectives of the Framework
Certainty and predictability at a global level
Integrated supply chain management for all transport modes
Allow Customs to meet the challenges of the 21st Century
Closer cooperation among Customs administrations
Stronger Customs-to-Business cooperation
Tangible benefits for businesses
Seamless movement of goods 8
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9. Pillar 1 Customs-to-Customs9

10. Integrated Supply Chain Management Cargo Inspection Authority
Pillar 1 covers the following:
Integrated Supply Chain Management
Cargo Inspection Authority
Modern Technology in Inspection Equipment 10

11. 5) High-risk Cargo or Container 6) Advance Electronic Information
Pillar 1 continued:
4) Risk Management
5) High-risk Cargo or Container
6) Advance Electronic Information
7) Targeting and Communication 11

12. 8) Performance Measures 9) Security Assessments 10) Employee Integrity
Pillar 1 continued:
8) Performance Measures
9) Security Assessments
10) Employee Integrity
11)Outbound Security Inspections 12

13. All the containers bound to US Starting from 1 July 2012
US SAFE Port Act
H.R. 4954
All the containers bound to US
Starting from 1 July 2012
Possibility to extend the date of application for 4 additional years
Pilot projects in 3 ports:
Port Qasim, Pakistan
Port Cortes, Honduras
Southampton, UK 13
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14. Pillar 2 Customs-to-Business14

15. Authorized Economic Operator in the SAFE Program
“A party involved in the international movement of goods in whatever function that has been approved by or on behalf of a national Customs administration as complying with WCO or equivalent supply chain security standards. Authorized Economic Operators include inter alia manufacturers, importers, exporters, brokers, carriers, consolidators, intermediaries, ports, airports, terminal operators, integrated operators, warehouses, and distributors.”
 Please just read the content of this slide
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16. Pillar 2 covers the following:
Partnership - ensure that their internal policies and procedures provide adequate safeguards against the compromise of their shipments and containers
Security
- incorporate pre-determined security best practices into their existing business practices. 16

17. Pillar 2 continued:
3) Authorization -The Customs administration, together with representatives from the trade community, will design validation processes or quality accreditation procedures that offer incentives to businesses through their status as Authorized Economic Operators.
4) Technology - maintain cargo and container integrity by facilitating the use of modern technology. 17

18. Pillar 2 continued:
5) Communication -The Customs administration will regularly update Customs-Business partnership programs to promote minimum security standards and supply chain security best practices.
6) Facilitation - The Customs administration will work co-operatively with Authorized Economic Operators maximize security and facilitation 18

19. Authorized Economic Operator Requirements and benefits
2007 supplement introduced:
13 detailed AEO requirements sections (e.g. cargo, conveyance, premises security)
Section listing possible benefits (eg reduced data sets, minimum number of cargo inspections etc)
Validation and Authorization procedures
 Please just read the content of this slide
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20. AEO and Mutual Recognition
A WCO Member Customs administration recognizes the AEO authorization system in another WCO Member Customs administration as equivalent to its own
Standardized approach to AEO authorization in SAFE provides a solid platform for the development of international systems of mutual recognition of AEO status - bilaterally, sub–regionally, regionally and, in the long term, globally
Authorized Economic Operator status and the possibility of mutual recognition of your AEO status by other Customs administrations are the real tangible benefits that the SAFE Framework offers to the private sector operators in the global supply chain.
The EU has enshrined AEO status and its benefits in the new EU Customs Code.
The US Customs Trade Partnership Against Terrorism (C-TPAT);
Canada’s Partners in Protection,
Sweden’s Stair-Sec,
Jordan’s Golden List,
Singapore’s Secure Trade Partnership,
Malaysia’s Customs Golden Client,
Japan’s AEO Programme,
New Zealand’s Secure Exports Scheme (SES)
and China’s AEO Programme, are examples of some of the AEO programmes that offer trade facilitation benefits to economic operators who secure their supply chain.
At the SAFE WG Meeting in October 2008, the WCO introduced a draft Compendium of Best Practices in AEO Implementation and requested comments from WCO Members and the private sector through the PSCG.
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21. AEO and Mutual Recognition
Will afford the foreign AEO the same benefits as a national AEO
Improve predictability and efficiency of operations
Tangible benefits to trade a challenge: Mutual Recognition widely regarded as the ‘holy grail' of benefits.
Authorized Economic Operator status and the possibility of mutual recognition of your AEO status by other Customs administrations are the real tangible benefits that the SAFE Framework offers to the private sector operators in the global supply chain.
The EU has enshrined AEO status and its benefits in the new EU Customs Code.
The US Customs Trade Partnership Against Terrorism (C-TPAT);
Canada’s Partners in Protection,
Sweden’s Stair-Sec,
Jordan’s Golden List,
Singapore’s Secure Trade Partnership,
Malaysia’s Customs Golden Client,
Japan’s AEO Programme,
New Zealand’s Secure Exports Scheme (SES)
and China’s AEO Programme, are examples of some of the AEO programmes that offer trade facilitation benefits to economic operators who secure their supply chain.
At the SAFE WG Meeting in October 2008, the WCO introduced a draft Compendium of Best Practices in AEO Implementation and requested comments from WCO Members and the private sector through the PSCG.
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22. Members’ AEO Programmes
EU AEO
US Customs Trade Partnership Against Terrorism (C-TPAT)
Canada’s Partners in Protection
Jordan’s Golden List
Singapore’s Secure Trade Partnership
Malaysia’s Customs Golden Client
Japan’s AEO Programme
New Zealand’s Secure Exports Scheme (SES) and
China’s AEO Programme
Korea’s AEO Programme
Authorized Economic Operator status and the possibility of mutual recognition of your AEO status by other Customs administrations are the real tangible benefits that the SAFE Framework offers to the private sector operators in the global supply chain.
The EU has enshrined AEO status and its benefits in the new EU Customs Code.
The US Customs Trade Partnership Against Terrorism (C-TPAT);
Canada’s Partners in Protection,
Sweden’s Stair-Sec,
Jordan’s Golden List,
Singapore’s Secure Trade Partnership,
Malaysia’s Customs Golden Client,
Japan’s AEO Programme,
New Zealand’s Secure Exports Scheme (SES)
and China’s AEO Programme, are examples of some of the AEO programmes that offer trade facilitation benefits to economic operators who secure their supply chain.
At the SAFE WG Meeting in October 2008, the WCO introduced a draft Compendium of Best Practices in AEO Implementation and requested comments from WCO Members and the private sector through the PSCG.
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23. Members’ AEO Programmes
….but bear in mind that 156 WCO members have committed to Implement SAFE!
Major , ongoing Capacity Building support required (Columbus Programme)
Authorized Economic Operator status and the possibility of mutual recognition of your AEO status by other Customs administrations are the real tangible benefits that the SAFE Framework offers to the private sector operators in the global supply chain.
The EU has enshrined AEO status and its benefits in the new EU Customs Code.
The US Customs Trade Partnership Against Terrorism (C-TPAT);
Canada’s Partners in Protection,
Sweden’s Stair-Sec,
Jordan’s Golden List,
Singapore’s Secure Trade Partnership,
Malaysia’s Customs Golden Client,
Japan’s AEO Programme,
New Zealand’s Secure Exports Scheme (SES)
and China’s AEO Programme, are examples of some of the AEO programmes that offer trade facilitation benefits to economic operators who secure their supply chain.
At the SAFE WG Meeting in October 2008, the WCO introduced a draft Compendium of Best Practices in AEO Implementation and requested comments from WCO Members and the private sector through the PSCG.
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24. Current Developments
Compendium of AEO programmes, including Mutual Recognition Arrangements (MRA), to raise awareness of other programmes
Guidance “How to set up an AEO Programme”
SMEs and AEO
Authorized Economic Operator status and the possibility of mutual recognition of your AEO status by other Customs administrations are the real tangible benefits that the SAFE Framework offers to the private sector operators in the global supply chain.
The EU has enshrined AEO status and its benefits in the new EU Customs Code.
The US Customs Trade Partnership Against Terrorism (C-TPAT);
Canada’s Partners in Protection,
Sweden’s Stair-Sec,
Jordan’s Golden List,
Singapore’s Secure Trade Partnership,
Malaysia’s Customs Golden Client,
Japan’s AEO Programme,
New Zealand’s Secure Exports Scheme (SES)
and China’s AEO Programme, are examples of some of the AEO programmes that offer trade facilitation benefits to economic operators who secure their supply chain.
At the SAFE WG Meeting in October 2008, the WCO introduced a draft Compendium of Best Practices in AEO Implementation and requested comments from WCO Members and the private sector through the PSCG.
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25. Scope and Objectives of the Research (AEO Compendium)
Since June Members have signed SAFE Framework to Secure and Facilitate Trade;
Research Objective: to evaluate the progress in Pillar II on AEO implementation;
Data used: in-house information (reports; previous questionnaires, open search) and targeted requests to Members;
Scope of study:
40 programmes in 67 countries (due to EU-27 that has a single programme) on all continents
25 programmes identified for targeted approach
Information is being verified through the national administrations (personalised requests)
Database of AEO contact persons is being formed
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26. AEO Typology I (25 programmes)
Programme type:
Security/customs compliance – 14
Security – 5
Customs compliance – 6
Type of operator:
importers, exporters, logistic operators (carriers, forwarders, shipping companies, airlines), customs brokers, warehouse operators. Some countries (i.e. USA) included special categories for ports and foreign manufacturers.
Legislation:
all programmes envisaged voluntary participation in the programme.
most countries introduced amendments to their current legislation (mainly Customs Codes) or passed new legislation specifically for AEO;
some countries, like Canada, Singapore or Australia have not introduced any specific legislation to provide for an AEO.
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27. AEO Typology II (25 programmes)
Further plans:
Development of new electronic applications;
Improvement of procedures;
Enlarging the scope of programme (import/export) or elaborating it to include more types of operators;
Adding a security component (for customs compliance programmes)

28. Mutual Recognition Arrangements
Japan NZ AU CN CA MY
USA JO SN JP EU NO CH US
Singapore
Korea
Argentina BR
Concluded MRA
To be concluded
Studies/consultations in place
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29. And the future….? Sustained Capacity Building Support SAFE Survey
Case studies on AEO mutual recognition – best practice
Mutual Recognition Standards?
Authorized Economic Operator status and the possibility of mutual recognition of your AEO status by other Customs administrations are the real tangible benefits that the SAFE Framework offers to the private sector operators in the global supply chain.
The EU has enshrined AEO status and its benefits in the new EU Customs Code.
The US Customs Trade Partnership Against Terrorism (C-TPAT);
Canada’s Partners in Protection,
Sweden’s Stair-Sec,
Jordan’s Golden List,
Singapore’s Secure Trade Partnership,
Malaysia’s Customs Golden Client,
Japan’s AEO Programme,
New Zealand’s Secure Exports Scheme (SES)
and China’s AEO Programme, are examples of some of the AEO programmes that offer trade facilitation benefits to economic operators who secure their supply chain.
At the SAFE WG Meeting in October 2008, the WCO introduced a draft Compendium of Best Practices in AEO Implementation and requested comments from WCO Members and the private sector through the PSCG.
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30. WCO SAFE Framework Thank you very much30
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