Implementation of the WCO SAFE Framework through the TIR Convention Moscow, 23 October 2008 Jean Acri Head – TIR System © International Road Transport Union (IRU) 2008

Implementation of the WCO SAFE Framework & AEO Requirements How will this be implemented? © International Road Transport Union (IRU) 2008

Historical development of the new security requirements 9/11: SECURITY becomes TOP priority G7 mandated WCO to develop an appropriate package of measures to protect global trade and secure global supply chain June 2005: WCO SAFE Framework of standards to secure and facilitate global trade – including the requirements to obtain the AEO status October 2007: WCO SAFE Framework re-published to include technical guidance for AEO programmes TIR appears to be the best global multilateral legal instrument to ensure the implementation of the WCO Framework requirements BUT Due to the absence of mutual recognition, the implementation of the SAFE Framework, including AEO status, requires bilateral agreements between 119 trade partners! © International Road Transport Union (IRU) 2008

TIR can be used to implement the WCO SAFE including AEO status TIR can fully satisfy the WCO SAFE and AEO requirements TIR provides security and facilitation of international trade (controlled access, traceability) TIR Provides for mutual recognition of all Customs controls, and should be used for the effective implementation of the requirements of the WCO SAFE and AEO status Requirement fulfilled by  UAE, Jordan Tunisia Bahrain Saudi Arabia Lebanon Kuwait Egypt Yemen All will implement SAFE So far Syria Palestine Iraq and Libya are not. © International Road Transport Union (IRU) 2008

Options for Implementing the WCO SAFE Framework Unilateral – can be implemented quickly, but no mutual recognition of Customs Controls or AEO programmes thus no security of the supply chain. Bilateral - can be achieved if the political will exists, but 119 agreements would need to be put in place in order to achieve mutual recognition of Customs controls and AEO programmes. Multilateral - International Conventions like TIR are legally binding in nature, ensure uniform application, maximise mutual recognition of Customs controls and AEO programmes and new amendments can be put in place quickly. © International Road Transport Union (IRU) 2008

TIR Best Multilateral Agreement The TIR Convention, due to the fact that it is the only Convention providing mutual recognition of all Customs controls between all its 56 TIR operational countries, is the best multilateral legal instrument to implement all the security requirements of the WCO SAFE Framework, including those concerning AEO status. According to a study commissioned by the US Chamber of Commerce that compared various international conventions – such as the SOLAS Convention, the revised Kyoto Convention and the TIR Convention – with the objective of facilitating the implementation of the new WCO security requirements through a multilateral legal instrument. This study also came to the clear conclusion that Page 6 © International Road Transport Union (IRU) 2008 © International Road Transport Union (IRU) 2008 6

US Chamber of Commerce Findings Result of a study commissioned by the US Chamber of Commerce that compared various International Conventions such as SOLAS and Revised Kyoto. Page 7 © International Road Transport Union (IRU) 2008 © International Road Transport Union (IRU) 2008

TIR - Benefits The only transit system with a world-wide coverage. TIR is an international transit system for goods. It can be applied for multimodal transports whenever one leg is carried out by road. TIR carnets can be used for intermodal transports – One leg of the journey has to take place by road in order to be able to use a TIR carnet. {However in current practice, the TIR guarantee is lifted when the load is moved to another transport mode (train, boat) - this is due to the fact that at current stage, their are no infrastructure that are put in place in order to manage TIR carnet on ships/trains} The TIR system is also the broadest in scope – we will come back to this aspect later on in the presentation. © International Road Transport Union (IRU) 2008

Geographical scope of the TIR Convention Contracting Parties 68 TIR Operational Countries 56 Contracting Parties in admission process 2 In negotiation process 3 Interested 6 © International Road Transport Union (IRU) 2008

Provision of Advanced Cargo Information WCO – SAFE and AEO requirements can be fully satisfied by the TIR Convention The four core elements of WCO SAFE are: Pre-departure examination Provision of Advanced Cargo Information Risk Management to security and safety Benefits For Trade 1 2 3 4 Mutual recognition & Controlled Access Electronic Pre-declaration Risk Management In TIR convention (e.g. Annex 10) Communication Platform between AEO & Authorities 1 2 3 4 © International Road Transport Union (IRU) 2008

WCO SAFE: Customs to Customs 1 Mechanism already available in the TIR System WCO SAFE FRAMEWORK STANDARDS HOW THE TIR CONVENTION ALREADY IMPLEMENTS THE SAFE REQUIREMENTS 1. Mutual recognition of AEOs Standards 1 and 9 Recognition of Customs controls / Controlled access 2. Advanced Cargo Information Standards 1, 4, 5, 6, 7 and 9 TIR Carnet (e.g. NCTS/TIR) / Annex 10 3. Effective Communication Standards 1, 6,7 and 9 4. Risk management tools Standards 1, 2, 4, 5, 6, 7, 9 and 11 Secure vehicles / TIR Carnet (e.g. NCTS/TIR) / Recognition of Customs controls / Authority to inspect cargo /Controlled access / Annex 10 - Standards 3, 8 and 10 To be implemented through a new Annex to the TIR Convention © International Road Transport Union (IRU) 2008

WCO SAFE: Customs to Business 2 Mechanisms already available in the TIR System WCO SAFE FRAMEWORK STANDARDS HOW THE TIR CONVENTION ALREADY IMPLEMENTS THE SAFE REQUIREMENTS 1. Mutual recognition of AEOs Standards 1,2, 3, 4, 5 and 6 Recognition of Customs controls / Controlled access / International guarantee 2. Advanced Cargo Information Standards 4 and 5 TIR Carnet (e.g. NCTS/TIR) / Annex 10 3. Effective Communication Standards 1, 3 and 5 Recognition of Customs controls / Controlled access 4. Risk Management Tools Standards 1 and 2 Secure vehicles / TIR Carnet (e.g. NCTS/TIR) / Recognition of Customs controls / Controlled access / Annex 10 © International Road Transport Union (IRU) 2008

WCO SAFE Requirements to obtain the AEO status WCO SAFE Framework, including the technical guidance for the implementation of AEO programmes. WCO SAFE Framework requirements – easily implemented through slight amendments to the TIR Convention via new Annex 1. Demonstrated compliance with Customs requirements √ 2. Satisfactory system for the management of commercial records 3. Financial viability 4. Consultation, cooperation and awareness 5. Education, training and awareness 6. Information exchange, access and confidentiality 7. Cargo security 8. Conveyance security 9. Premises security √ Not relevant under the TIR System unless TIR Carnet holders are also acting as importers/exporters and storing Customs-related cargo at their premises 10. Personnel Security 11. Trading partner security 12. Crisis management and incident recovery 13. Measurement analysis and improvement Note to “9”: Not relevant under the TIR System unless TIR Carnet holders are also acting as importers/exporters and storing Customs-related cargo at their premises © International Road Transport Union (IRU) 2008

AEO Accreditation & TIR Holder Requirements TIR Approved Holder Requirements Proven capability to engage in international transport Be of sound financial standing Proven knowledge in the application of the TIR Convention – applied and adhered to in all TIR Transports Written undertaking to comply with Customs rules, to pay taxes that are due & to assist with enquiries Absence of serious or repeated offences against Customs or tax legislation Acceptance by Customs Keep records of TIR Transports = = = = WCO SAFE Framework, including the technical guidance for the implementation of AEO programmes. 1. Demonstrated compliance with Customs requirements 2. Satisfactory system for the management of commercial records 3. Financial viability 4. Consultation, cooperation and awareness 5. Education, training and awareness 6. Information exchange, access and confidentiality 7. Cargo security 8. Conveyance security 9. Premises security – not necessary for holders 10. Personnel Security 11. Trading partner security 12. Crisis management and incident recovery 13. Measurement analysis and improvement = = = © International Road Transport Union (IRU) 2008

Next Steps Work with strategic partners, such as ESC, to galvanise political support for the principle that the TIR Convention can act as an implementing tool for the WCO SAFE Framework. Seek agreement from contracting parties to the TIR Convention to make minimal changes to the Convention so that it can act as an implementing tool for the WCO SAFE Framework. Seek agreement from contracting parties to the TIR Convention that economic operators approved to use the TIR system are mutually recognised under other accreditation programmes (e.g. C-TPAT, EU AEO etc.) © International Road Transport Union (IRU) 2008

Conclusion Enter two pie: Current situation and with modification to the TIR Convention – fade in and out Green and yellow a single collor – change the label in the chart legend Requirements fully implemented in TIR Requirements green and yellow are merged according to the simplification of the tables in slide 45, 44 and 24 (single column for all partial and complete changes) The TIR Convention is the best multilateral legal instrument to implement the WCO SAFE Requirements and the AEO status by providing the mutual recognition of all Customs controls © International Road Transport Union (IRU) 2008

© International Road Transport Union (IRU) 2008