Supply Chain Security: The New Normalaz9194.vo.msecnd.net/pdfs/110902/3207.pdf · Supply Chain Security: The New Confidential 1 ... Guatemala AEO Import/export ... Freight Forwarders,

Supply Chain Security: The New

1Confidential 1Confidential

ASIS Supply Chain &

Transportation Security

Council - SCSC

Laura HainsJJ CoughlinJohn SharpDennis Blass

Supply Chain Security: The New Normal

Overview On Secure Supply Chain Programs


Laura Hains

BasisPrograms based in some form on World Customs Organization (WCO) Framework of

Standards to Security and Facilitate global trade (SAFE) and SAFE has origins in the revised Kyoto Convention.

161of 171 WCO members have signed on to SAFE

SAFE based on six standards:

1. Partnership-self assessment-measuring their internal policies and procedures


1. Partnership-self assessment-measuring their internal policies and procedures against security standards/best practices

2. Security-define best practices for security into business practices

3. Authorization-design validation process or quality accreditation procedures that offer incentives to business

4. Technology-parties maintain cargo and container integrity by using modern technology

5. Communication-Regularly updates security standards and supply chain security best practices

6. Facilitation- Customs works with AEO’s to maximize security and facilitation of the international trade supply chain.

Authorized Economic OperatorAEO

SAFE Framework defines an AEO as:

“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


national Customs Administration as complying with WCO or

equivalent supply chain security standards. AEOs include inter

alia manufacturers, importers, exporters, brokers, carriers,

consolidators, intermediaries, ports, airports, terminal operators,

integrated operators, warehouses, distributors”.

(WCO SAFE Framework of Standards, June 2007)

Operational AEO ProgramsArgentina Customs System of Reliable Operators (SAOC) Export

Canada Partners in Protection (PIP), Customs Self-Assessment (CSA), Free and Secure Trade (FAST), Partners in Compliance (PIC) PIP - Import/export CSA, FAST, PIC - Import

China Classified Management of Enterprises Import/export

EU (27 countries) AEO Import/export

Japan AEO Import/export


Japan AEO Import/export

Jordan Golden List Import/export

Korea AEO Import/export

Malaysia AEO Import/export

New Zealand Secure Exports Scheme (SES) Export

Norway AEO Import/export

Singapore Secure Trade Partnership (STP) Import/export

Switzerland AEO Import/export

USA Customs-Trade Partnership against Terrorism (C-TPAT) Import

AEO Programs to be Launched

Andorra AEO Import/export

Botswana Trans Kalahari Accreditation Scheme Import/export

Chile AEO pilot Export Colombia* AEO Export


Costa Rica AEO Export

Guatemala AEO Import/export

Former Yugoslav Republic of Macedonia AEO Import/export

Israel AEO Import/export

Morocco AEO Import/export

Countries with Mutual Agreement with C-TPAT as of June 2011

New Zealand - June 2007 – New Zealand Customs Service’s Secure Export Scheme Program – SES- Export

Canada - June 2008 – Canada Border Services Agency’s Partners in Protection Program - PIP - Import


Protection Program - PIP - Import

Jordan – June 2008 – Jordan Customs Department’s Golden List Program –GLP-Import/Export

Japan - June 2009 – Japan Customs and Tariff Bureau’s Authorized Economic Operator Program – AEO-Import/Export

Korea - June 2010 – Korea Customs Service’s Authorized Economic Operator Program – AEO-Import/Export

(EU and US currently in talks for Mutual Recognition)

Customs Trade Partnership Against Terrorism (C-TPAT)

Customs-Trade Partnership Against Terrorism (C-TPAT) is a program developed by the United States Customs Service as a result of growing concerns by government and business of the growing threat of terrorist activity involving the movement of freight into the U.S.

Started November 2001

Designed to build cooperative relationships that strengthen supply chain and border security.


Designed to build cooperative relationships that strengthen supply chain and border security.

Asks business to ensure the integrity of their supply chain processes and business partners

To become a certified member, companies must demonstrated they have developed acceptable security procedures throughout the supply chain.

Eligible Business Types: US Importers, Foreign Manufacturers, Licensed US Customs Brokers, US Air Freight Consolidators, Ocean Transportation Intermediaries, Non-Vessel Operating Common Carriers, US/Canada Highway Carriers, US/Mexico Highway Carriers, Rail Carriers, Sea Carriers, Air Carriers, US Marine Port Authority/Terminal Operator

As of 2011, 10,000 companies in program

Imports.

Makes allowances for foreign based carriers and manufacturers

EU Authorized Economic Operator (AEO)

The Authorized Economic Operator (AEO) program was officially launched in Europe on January 1, 2008 to upgrade the security of the supply chain, while contributing to trade facilitation.

Currently EU AEO has 27 members to include Norway, Switzerland


Currently EU AEO has 27 members to include Norway, Switzerland

An AEO Certificate - Customs Simplifications is issued to any economic operator established in the Community who fulfils the criteria of customs compliance, appropriate record-keeping

Eligible business types: Manufacturers, Exporters, Freight Forwarders, Warehouse-keepers, Clearance agents, Carriers and Importers

Imports and Exports

EU AEO available only to companies with status as legal entity of the EU

Partners in Protection Program (PIP) Canada

Partners in Protection (PIP) is a Canadian government compliance and security certification.

It is voluntary, with no fees actively dealing with supply chain security.

Started in 1995


Started in 1995

PIP members must own or operate facilities in CA. (US based highway carriers who are members of FAST do not need facilities)

Includes: Importers, Exporters, Marine Carriers, Air Carriers, Customs Brokers, Warehouse Operators, Freight Forwarders, Shipping Agents

Imports

Service’s Secure Export Scheme (SES) Program

SES began in 2004 and designed to give exporters greater certainty at international borders by minimizing Customs delays and giving exporters priority in trade recovery.

The purpose is to protect exports from being tampered with, sabotaged,


The purpose is to protect exports from being tampered with, sabotaged, smuggled or subjected to other trans-national crimes.

Eligible Business Types: All exporters, exporting by all modes of transportation, to all destinations, applies to all products (bulk & containerized & general cargo).

New Zealand, Hong Kong agreement March 2010

Exports

Golden List Program (GLP)

Jordan Customs Department launched the GLP in August 2005

Founded on concept of true partnership between the private and public sector.


The purpose of evaluating the due diligence of the Jordanian Supply chain companies dealing with the international trade.

Depends on the principles of risk management and due diligence with customs requirements and international security standards.

Imports/Exports

Supply Chain-Information Sharing and Analysis Center


JJ Coughlin

Presentation Agenda

1. SC-ISAC 2010


2. Cargo Theft Analysis-US

3. SC-ISAC 2011 1st & 2nd Quarter Cargo

4. Theft Analysis-US

SC-ISAC Cargo Theft AnalysisFrom 2010/2011 SC-ISAC Incident Database

� Types of Incidents

� Theft by State


� Theft by State

� Locations of Thefts

� Days of Incidents

� Main Products/Industries Targeted

� Main Commodities of Thefts

2011 1st & 2nd Quarter


2010 Theft by State




2009/2010 Cargo Theft Locations




2010 - Days of Thefts




2010 - Targeted Commodities




2011 1st Quarter


2011 2nd Quarter


2010 – Items Stolen




2011 1st Quarter


2011 2nd Quarter


C-TPAT:

Customs-Trade Partnership

Against Terrorism

Is it worth it and what’s the future?


Is it worth it and what’s the future?

John Sharp, CPP

C-TPAT 2011

Voluntary Supply Chain Security Initiative

Currently 10,500 members in Program

• Controlling 60% of all imported goods

• Total importers in US – 810,000


CBP Commissioner Alan Bersin wants a new direction of “Secure and Expedited Trade”

• Calling to increase membership to 40,000 companies within 5 years

• Expansion of Trusted Trader Programs

• Synchronization with other US Government Programs

C-TPAT: Cost-Benefit Studies

University of Virginia & CBP - 2010 Survey

42% benefited from participation, outweighs the cost

Tangible Benefits cited include:

• Improvement of workforce security

• Decrease in time to release cargo by CBP


• Reduced time in CBP inspection lines

• Increased predictability in the movement of goods

• Overall impact to decrease disruption of supply chains

US Customs C-TPAT Benefit Claims:

• Members are 4.1 times less likely to have cargo examined for compliance measurement reasons

• 6 times less likely to have exams for security reasons

• Ports provide expedited completion of exams for members “C-TPAT priority”

C-TPAT: Organizational Gains Beyond Regulatory ComplianceImproves communication and collaboration across organizational units

• purchasing, facility management, administration

• logistics, customs compliance and security

Improves written procedures and internal controls for:

• Hiring procedures; Training; Shipment Documentation; Information security

• Physical security; Access Control

• Business partner vetting; Internal and External Audit Function

Enhances security awareness to organizational threats:


Enhances security awareness to organizational threats:

• Internal conspiracy

• Workplace violence

• Intellectual property protection

• Country risk factors – crime, contraband and human smuggling

Operational Improvements

• Improved supply chain transparency by mapping end to end supply chains

• Knowledge of who is handing your cargo (subcontracted carriers and agents)

Financial Improvements

• Ability to join other programs such as FAST and ISA – Importer Self Assessment

• Duty payment –monthly instead of transactional

• Reduced Penalties

Case Studies – C-TPAT ROI

STRATIFIED EXAM BENEFIT:

SITUATION: Big Box Retailer imports 9 containers on one bill of lading. CBP wants to examine one of the 9 containers. Importer had ALL 9 containers removed and stored for inspection. Charged $28,000 for drayage, storage and container fees for all 9 containers.

OUTCOME: CBP will hold only the one container they want to examine and release the others. All must remain sealed at the importer’s location.


TIER 3 BENEFIT:

SITUATION: Power Tool Manufacturer has assembly and distribution in Tennessee. After Japan earthquake and tsunami, parts manufacturing were delayed, parts were sourced from China. The US assembly waited patiently for the shipment. Once parts departed, the assembly plant readied for their arrival. Upon entry to the west coast port, 3 containers were called for a non related security examination.

OUTCOME: The Tier 3 importer notified their Supply Chain Security Specialist and advised that the plant was to be shut down if the goods were held. The container examination was expedited and the 3 containers were released the same day.

Outlook from WashingtonSAFE Port Reauthorization Act of 2011(S. 832)

• Introduced in Senate on 4-14-11

• C-TPAT Unannounced Visits

• Inform Congress before entering any Mutual Recognition Agreements or Trusted Shipper Programs

• Tier 3 – Promote sharing of information

• Security Training


National Strategy on Global Supply Chain Security

• Will supersede a 2007 supply chain security strategy

• Comprehensive guide for the federal government’s response and recovery from a terrorist attack

• The previous strategy was limited to CBP’s role

• The new strategy encompasses all agencies in DHS as well as the U.S. departments of Agriculture, Justice, Commerce and Defense

Synchronizations of Trusted Shipper Programs:

• ISA-Product Safety Pilot (Voluntary Qualified Importer program)-FDA (FSMA), CBP-TSA-CCSP, CBP-CPSC, Programs/Legislations

Security Management Systems

for the Supply Chain


Dennis Blass, CPP, PSP, CFE, CISSP

ISO 28000 Required Elements

1.Know the Organization

Key Operations & Assets

4. Implement

Define responsibilities


Key Operations & Assets

2. Security Mgmt Policy

3. Plan

Security risk assessment

Legal Requirements

Objectives and targets

Define responsibilities

Training and competency

Documentation

5. Check

Monitor, measure & report

6. Continually Improve

Comparable Transportation Security

Programs

Voluntary Supply Chain Programs

Regulatory ProgramsInternational Conventions


� C-TPAT

� PIP

� AEO

� ISO 20858

�Aviation

�Marine

�Air cargo

�Surface and intermodal

�IATA�IMO

Features of Secure Supply Chain Programs

• Management systems

approach

• Risk-based

• Data collection & root cause analysis

• Supports the needs of


• Risk-based

• Defined roles &

responsibilities

• Security training &

awareness

business

• Exposes vulnerabilities, threat agents and vectors

• Enables continuous improvement

Comprehensive Physical Security

Program Theory

• Existing physical security program as a starting point.

• Conduct a GAP analysis against required program or standard.


standard.

• Incorporate a risk, threat, vulnerability assessment program.

• Build upon an existing or incorporate the principles of a management systems approach.

Challenges & Benefits

• Defining the key elements or components of a Comprehensive Physical Security Program

• Acceptance of this concept by government & oversight agencies

• Documentation and reporting requirements


• Documentation and reporting requirements

• Avoids duplication

• Cost effective

• The ability to tailor security to address specific facilities, security needs and operations

• Inter-operability

Next Step:

Incorporate Organizational Resilience

Management

•Management Commitment • Planning


•Management Commitment

•Implementation & Operation

•Management Review

• Planning

• Checking (Evaluation)

Q&A


Session

Laura Hains, CPPMaritime Security SpecialistHammerhead Security Solutions, [email protected]

JJ Coughlin


John Sharp, CPP Sharp Global Partners, Ltd70 West 40th Street, 8th FloorNew York, NY USA646-240-4100 [email protected]

Dennis Blass, CPP PSP, CFE, CISSPDirector, Safety & SecurityChildren’s of Alabama1600 7th Avenue SouthBirmingham, AL 35233E-mail: [email protected]

Documents

Supply Chain Security: The New Normalaz9194.vo.msecnd.net/pdfs/110902/3207.pdf · Supply Chain Security: The New Confidential 1 ... Guatemala AEO Import/export ... Freight Forwarders,