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Supply Chain Security: The Challenges Ahead
 

Supply Chain Security: The Challenges Ahead

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Supply Chain Security: The Challenges Ahead

Supply Chain Security: The Challenges Ahead

Speakers: Ian Craig, Ernst & Young; Antonio Bianchi, Colgate-Palmolive Europe

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    Supply Chain Security: The Challenges Ahead Supply Chain Security: The Challenges Ahead Presentation Transcript

    • Confidential ECR Debating Panel Supply Chain Security: The Challenges Ahead Ian Craig: Ernst & Young Antonio Bianchi: Colgate-Palmolive Europe
    • Introduction • International trade supply chain security initiatives, driven by the revenue authorities began in the USA • These initiatives were a response to 9/11 and the subsequent demand for increased border security Confidential – All Rights Reserved – Ernst & Young 2008 Ref. XX0000
    • Securing Trade Globally World Customs Organisation Framework of Standards to secure and facilitate global trade – put forward proposals to improve global trade security and encourage customs jurisdictions to develop security programmes 149 countries signed the framework document which introduced the concept of Authorised Economic Operator (AEO) certification which has subsequently been developed by the European Commission Creating a ‘green lane’ of secure trade partners Confidential – All Rights Reserved – Ernst & Young 2008 Ref. XX0000
    • Securing Trade Globally Green Lanes Canada “FAST” EU CSP USA C-TPAT CHINA Jordan EU – China Pilot “Golden List” “FRONTLINE” Confidential – All Rights Reserved – Ernst & Young 2008 Ref. XX0000
    • Objectives and Principles of the SAFE Framework • Establish standards that provide supply chain security and facilitate certainty and predictability at global level • Enhance the role, functions and capabilities of Customs to become more supply chain security focused in addition to traditional revenue protection role. • Strengthen co-operation between Customs administrations to improve their capability to detect high- risk consignments. • Promote the seamless movement of goods through secure international trade supply chains (“Green Lanes”). Confidential – All Rights Reserved – Ernst & Young 2008 Ref. XX0000
    • International Action on the Framework of Standards • A number of supply chain security programmes both customs and commercially driven are being implemented based on the framework of standards. Confidential – All Rights Reserved – Ernst & Young 2008 Ref. XX0000
    • International Security Initiatives Governance Container scan 24h rule ‘Trusted’ information Transaction information Logistics Smart Box ISPS Confidential – All Rights Reserved – Ernst & Young 2008 Ref. XX0000
    • Significant Changes in the European Union Impacting International Trade Lisbon Strategy WCO European Framework Commission Excise New Customs Movement of Modernised SAD New Export Computerised Security Control Code Harmonisation System Transit Programme System System Common Pre-Arrival and Authorised Risk pre-departure Economic Assessment EDI messages Operator Confidential – All Rights Reserved – Ernst & Young 2008 Ref. XX0000
    • European Union: Customs Security Programme Aims: • “Increase international trade supply chain security to combat threat of terrorism and to further facilitate businesses who are trusted supply chain partners”. Authorised Economic Operator (AEO) Certification What is AEO? • Internationally recognised quality mark that identifies safe and secure supply chain partners • Part of the wider EU Customs Security Programme (CSP) to fight global terrorism • Voluntary government to business initiative. Confidential – All Rights Reserved – Ernst & Young 2008 Ref. XX0000
    • AEO Certification What is an ‘Economic Operator’? “….A person who, in the course of its business, is involved in activities covered by customs legislation.” Warehouse Customs Manufacturer Exporter Forwarder Carrier Importer Keeper Agent Confidential – All Rights Reserved – Ernst & Young 2008 Ref. XX0000
    • AEO Certification Criteria "The criteria for granting the status of authorised economic operator shall include: • an appropriate record of compliance with customs requirements • a satisfactory system of managing commercial and, where appropriate, transport records, which allows appropriate customs controls • where appropriate, proven financial solvency and • where applicable, appropriate security and safety standards." Authorised economic operators Guidelines on standards and criteria Confidential – All Rights Reserved – Ernst & Young 2008 Ref. XX0000
    • AEO Certification Criteria Multi-Function Responsibilities Production / Quality Manufacturing 4% 3% Criteria for Finance Supply 11% Chain assessment by 38% the customs I.T. authorities 12% covers a wide Tax (all range of other) 4% business activities Facilities 6% Human Customs Resources 13% 9% Confidential – All Rights Reserved – Ernst & Young 2008 Ref. XX0000
    • AEO Certification - Benefits • • Fewer physical and document-based controls • • Lower customs risk score leading to priority treatments of consignments if selected for control • • Improved internal control procedures • • Evaluation of Security and Safety standards on a regular basis • • Recognised as a safe and secure trade partner by both the authorities and business community • • Easier admittance to customs simplifications • • Development of an overall EU trade strategy • • Improved relationship with EU Customs authorities Confidential – All Rights Reserved – Ernst & Young 2008 Ref. XX0000
    • Commercial Considerations AEO certification will provide a competitive advantage to participating companies for the following reasons: • AEO certified traders will benefit from simplifications in customs procedures and/or from facilitation with regard to customs controls relating to safety and security; • The AEO concept should ensure a safer and more secure end-to-end supply chain [Trusted Supply Chain Partners]; • Being recognised as an AEO will constitute added value for the operator, as it demonstrates compliance with solid security criteria and controls. Confidential – All Rights Reserved – Ernst & Young 2008 Ref. XX0000
    • Key Debate Topics • Benefits of AEO, implications of being a non-AEO • Features of an AEO project: • Challenges and Experiences • Timescales • Resources • Costs • Functional involvement • Global significance, mutual recognition, Green Lane concept • Consistent application of AEO regulation throughout EU Member State customs authorities • Significance of AEO for various members of supply chain eg, shippers. • The commercial pressures (given & received) to become AEO certified Confidential – All Rights Reserved – Ernst & Young 2008 Ref. XX0000
    • Further Information & Assistance For further information or assistance in relation to AEO certification for your business or in relation to this debate please contact: Antonio Bianchi Colgate-Palmolive Europe SARL Tel: +41 (0)22 722 0747 E-mail: antonio_bianchi@colpal.com Ian Craig Ernst & Young LLP Tel: +44 (0)20 7951 8133 E-mail: icraig@uk.ey.com Confidential – All Rights Reserved – Ernst & Young 2008 Ref. XX0000