1. Protecting our Border Securing our Future Presentation to Industry LAE Monday 12 th November 2012 Mr Ray Paul Commissioner PNG Customs Service Container Examination Facility (CEF) Project

2. Protecting our Border Securing our Future Project Background  PNG Customs has a requirement to facilitate legitimate trade and travel, collect revenue and perform vital border protection roles to protect the community from illegal and dangerous goods.  The World Customs Organization (WCO), of which PNG Customs is a member, advocates the use of x-ray equipment as a non intrusive method of examination.  To meet the challenges of globalised trade and to deliver a high service standard to business and legitimate trade while maintaining supply chain security, the acquisition of CEF’s was identified as a core element of the Customs Modernization Strategic Action Plan.

3. Protecting our Border Securing our Future Current Project Status  CEF construction has commenced at the Old Lae Airport site with expected completion in 2014.  Two Container X-ray Units (CXU) are currently being assembled in China.  The CEF in Port Moresby will be located Motukea wharf.  The Port Moresby facility will be constructed by the landlord at their cost and leased to PNG Customs.  PNG Customs is committed to delivering this project to the Government and the people of Papua New Guinea by the end of 2014.

4. Protecting our Border Securing our Future Current project status - CXU Diagram of the Container X-ray Units currently being assembled in China

5. Protecting our Border Securing our Future Design Leverage from Australian Customs & Border Protection:  Experienced Australian CEF Customs officers are providing advice to the PNG Customs CEF Project and Steering Committees.  CEFs in PNG and Australia have similar design features allowing symmetry between safety standards and operational procedures.

6. Protecting our Border Securing our Future Design - Facility The CEFs will look and operate similar to Australian CEFs

7. Protecting our Border Securing our Future Design – X-ray Scan Hall A container being scanned

8. Protecting our Border Securing our Future Design – Examination Hall Unpacked cargo inside an Examination Hall

9. Protecting our Border Securing our Future CEF Process  Sea Cargo imports and exports through the Ports of Lae and Port Moresby will be risk assessed through profiling and intelligence.  Selected containers will be transported to the CEF scanning hall for x-ray inspection.  An x-ray scan of containers is a quick process taking only minutes.  The x-ray image will be assessed by trained Customs officers who will analyse the x-ray image.  Based on intelligence, profiling and analysis of the image, the container will be returned directly to the wharf (or container depot) or unloaded for physical examination.

10. Protecting our Border Securing our Future CEF Process – X-ray  The image will be analyzed by trained Customs officers.  The Container X-ray Unit has material discrimination software that can distinguish between organic and inorganic material.

11. Protecting our Border Securing our Future CEF Process - Unloading Certain containers will be unloaded by Customs for examination

12. Protecting our Border Securing our Future CEF Process - Examination  All containers will be tested for fumigants.  Containers will be partially or fully unpacked by contract labourers.  Cargo will be examined by Customs officers using a range of equipment, tools, x-ray and narcotic trace detection technology.  The cargo will be repacked into the container and be returned to the wharf or a Customs approved container depot.

13. Protecting our Border Securing our Future Service Agreements Commercial contract arrangements (Service Level Agreements) will be necessary with:  S TEVEDORES To load and unload targeted containers required for transport to/from CEF.  T RANSPORT To transport targeted containers to/from CEF.  U NPACK /R EPACK Provide labour to professionally unpack and repack cargo from selected containers to allow Customs examination.

14. Protecting our Border Securing our Future Container Imports TEU Year Source: PNG Ports

15. Protecting our Border Securing our Future CEF Throughput  Approximately 2% of import containers will be selected for CEF inspection (container x-ray). A small percentage of export containers will be selected.  This equates to 4 - 5 containers being transported to each CEF daily, with 1000 containers to each CEF yearly.  It is expected around 10 - 50% of these containers will be unloaded for physical examination.  It is planned to x-ray more containers once the system is bedded in.

16. Protecting our Border Securing our Future Costs  The PNG Government are funding initial start up costs including ongoing lease arrangements.  PNG Customs and the Importing industry will fund ongoing operational and maintenance costs.  PNG Customs will further consult with industry regarding the details of these ongoing costs. It is likely the CUSTA (import entry fee) will increase.

17. Protecting our Border Securing our Future Customs Key Service Standards  We aim to assess most of your Customs entries within 2 days of lodgement.  We will inform stakeholders or their representatives that their cargo is available as soon as possible after the examination is completed.  We will advise you if there are any delays in releasing your cargoes after the inspection and explain the reasons for delay.

18. Protecting our Border Securing our Future Hours of Operation  Week days  0745 - 1606 hrs

19. Protecting our Border Securing our Future Benefits  Minimal disruption to import and exports supply chain.  Increased levels of sea cargo examination than currently possible.  Increase detection rates of prohibited goods.  Increased detection rates of undeclared or misdescribed goods leading to increased revenue collection.  Enhanced community and industry confidence in Customs capability.  Deterrent factor for criminal entities and deliberate revenue evasion practices.  Improved compliance, timeliness and accuracy of sea cargo reporting by industry.

20. Protecting our Border Securing our Future Questions