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  • I’d like thank the Government of Colombia (MFA), the Stanley Foundation, and the Stimson Center for the opportunity to present today I’d also like to thank the other presenters for their informative briefings and all of you for your interest in these issues. I and my firm, SECURUS, have provided training to a wide-range of company personnel and national governments on strategic trade control and nonproliferation concepts. Our analysts have worked to assess strategic trade controls in over 80 countries and we provide a full-range of compliance-related products and services to address any industry compliance-related issue. We work with national governments, NGOs, and industry throughout the world
  • We specialize in strategic trade control elements of 1540. We have extensive knowledge of how countries institute STCs and have worked with numerous countries to assist them in establishing the STC laws, policies, procedures, and institutions necessary to comply with the mandate of 1540. Materials includes items on international treaties and multilateral arrangements, which includes dual-use items. “ Related materials = “materials, equipment and technology covered by relevant multilateral treaties and arrangements, or included on national control lists, which could be used for the design, development, production or use of nuclear, chemical and biological weapons and their means of delivery.”
  • We specialize in strategic trade control elements of 1540. We have extensive knowledge of how countries institute STCs and have worked with numerous countries to assist them in establishing the STC laws, policies, procedures, and institutions necessary to comply with the mandate of 1540. Materials includes items on international treaties and multilateral arrangements, which includes dual-use items. “ Related materials = “materials, equipment and technology covered by relevant multilateral treaties and arrangements, or included on national control lists, which could be used for the design, development, production or use of nuclear, chemical and biological weapons and their means of delivery.”
  • 1540 Committee is looking to intensify industry outreach efforts and deepen collaboration with NGOs and civil society
  • The Committee monitors progress on interactions with civil society, academia and industry and reflects such progress in the 1540 matrix. 83 States are reported to have made some effort to reach out to industry Other Statements indicating increased reliance on technical experts to supplement limited UN 1540 resources Bridging the “knowledge gap” Supplement capacity and provide assistance with “transparency and media outreach”
  • Government must train and educate relevant companies on their responsibilities and obligations under the law.
  • An effective STC system, and each of these elements is ultimately p redicated on solid legal foundations, well-developed procedures and institutions, and continual training.
  • Industry is the first line of defense in preventing proliferation of strategic goods but do not always fully understand their export control responsibilities - voluntary compliance is the ultimate goal And this is where civil society and the private sector can assist states in establishing comprehensive STCs and developing mechanisms to engage and educate industry.
  • Isolating gaps – With generous assistance from donor governments, companies such as mine have conducted comprehensive analyses of numerous STC systems around the world and have identified gaps and deficiencies in a country’s STC system in order to assist donor states in providing targeted and necessary assistance. Conducting gap analysis helps in prioritizing needs and seeking “assistance partnerships” that offer the greatest benefit to the recipient state. Moreover, identifying deficiencies can better enable UN Member States to report to the 1540 Committee “on steps they have taken or intend to take to implement UNSCR 1540.” (OP4) Experience with STC systems around the world provides for a unique understanding of international best practices. Expanding on the work of former 1540 Chairman, Dr Richard Cupitt and with the assistance of the US government, our firm has developed “Model STC Laws and Regulations” to be used by nat’l governments to help them better incorporate int’l best practices and 1540 objectives into national legal authorities. Again, with generous assistance from donor states, SECURUS has provided a broad range of trainings for government officials. These trainings can assist with the development of legal/regulatory authorities or identify areas that may require additional understanding in order to implement (ITT/deemed). We have helped identify national industries that trade in dual-use goods and technologies and assisted national governments develop “targeted engagement strategies” with their domestic industries. For example, some countries have strategic industries that may be limited to only a few sectors such as chemical and electronics. Careful identification enables national governments to more efficiently utilize resources and carefully target outreach activities. Promoting trade harmonization strategies = we have assisted donor governments by identifying regional control list structures and identifying ways in which ROs can assist in regional implementation UN 1540 in the Middle East. Enhanced coordination and cooperation amongst national authorities can enable better information-sharing and avoid duplicative efforts, particularly in the area of border security.
  • Industry understands new technologies and use of products, maintain technical experts/engineers, and information on potentially suspicious inquiries
  • There are certain Elements that comprise a Model ICP and NGOs can work with firms to develop tailored-institutions, policies, and procedures to govern business operations and trade related to strategic goods and technologies.
  • XCs constantly In Flux - lists are always changing as are XC laws and regulations around the world. RPD Systems are commercially available but there are also customized solutions that address all of these lists and are seamlessly integrated into business operations. Can be integrated into systemic transaction screening tool – when a customer inquires about a product, they fill-in a form that is then screened against these databases, if a hit occurs, the inquiry is escalated to the compliance office. Automated solutions enable traders to screen transaction against EU, UN, and other sanctions and designated entity lists, helps traders to classify items, and assists in determining if a license is required for a given transaction
  • These are examples of trade compliance assistance developed by a Japanese NGO (CISTEC) that address the issues of Classification and End-Use Verification/End-Use controls - “will be used or may be suspected to be used”
  • XCs constantly In Flux - lists are always changing as are XC laws and regulations around the world. RPD Systems are commercially available but there are also customized solutions that address all of these lists and are seamlessly integrated into business operations. Can be integrated into systemic transaction screening tool – when a customer inquires about a product, they fill-in a form that is then screened against these databases, if a hit occurs, the inquiry is escalated to the compliance office.
  • Systems like Taiwan, the ROK, and the UK provide traders with order screening tools to assist industry with the classification and license determination process. Many countries provide restricted end-user lists and insight into the commercial and military/WMD applications of a given commodity and technical specifications of control. UK’s ECOChecker allows you to search the technical specs of an item
  • Global EASE™ trade compliance software is a comprehensive and robust suite of web-based solutions that streamlines international trade procedures by integrating multiple countries’ trade requirements.
  • Thank u all for your time and attention. I’ll open the floor to questions.

Transcript

  • 1. Civil Society and the Private Sector:Supporting UNSCR 1540 Implementation in the Andean Region Ryan Lynch Cathie Seminar for the Andean Region States: United Nations Security Council Resolution 1540 13 March 2012 Bogota, Colombia
  • 2. Presentation Overview• UNSCR 1540 Requirements: Focus on Strategic Trade Controls and Industry Outreach• A Mandate for Civil Society and the Private Sector to Assist with UNSCR 1540 Implementation• Effective Strategic Trade Control and Obstacles to Compliance• Civil Society and the Private Sector: A Unique Perspective• Areas Where Civil Society and the Private Sector Can Provide Implementation Assistance• Examples of Assistance and Outcomes• Conclusion and Questions 2 For Educational & Informational Purposes Only
  • 3. UNSCR 1540 Requirements• Operative Paragraph (OP) 3: Domestic Controls — “…all States shall take and enforce effective measures to establish domestic controls to prevent the proliferation of CBN weapons and their means of delivery, including by establishing appropriate controls over related materials…” — Mandate Includes border, export, and financial controls, as well as physical protection of relevant infrastructure — OP 3(d)  Regulation of transits, transshipments, re-exports, brokering, and end-users and establishing appropriate criminal or civil penalties• OP 6: National Control Lists 3 For Educational & Informational Purposes Only
  • 4. 1540 and Public/Private Engagement• UNSCR 1540 - OP 8(d): Industry and Public Outreach – calls on States to develop appropriate ways to work with and inform industry and the public regarding their obligations under national strategic trade and border control laws• UNSCR 1977 (2011)– Encourages UN 1540 committee to draw on relevant expertise, including “civil society and the private sector” 4 For Educational & Informational Purposes Only
  • 5. UNSCR 1540 Mandate for Civil Societyand Private Sector (1)• Tenth Programme of Work of the UN 1540 Committee (June 2011 – May 2012) – Committee shall continue to intensify its efforts to promote the full implementation of UNSCR 1540 – Consider regional approaches to assistance needs and efforts…. – “Encourages” States to promote dialogue and cooperation, including civil society, academia, and industry, to address the threat posed by illicit trafficking in WMD-related goods – “Consider and seize opportunities…for direct interaction with relevant industries and industry groups, academia and civil society” For Educational & Informational Purposes Only 5
  • 6. UNSCR 1540 Mandate for Civil Societyand the Private Sector (2)• Report of the UN 1540 Committee (September 2011) – “Committee recommends that it, States and international, regional & sub-regional organizations in cooperation, where appropriate, with academia, industry and civil society should take a long-term approach that can contribute to national implementation of UNSCR 1540” – “Committee will continue to develop a dialogue….with relevant NGOs with specialized expertise in assistance issues that could aid with implementation of UNSCR 1540” – Interaction with civil society, including through outreach to academia and industry, could assist States in implementing UNSCR 1540 6 For Educational & Informational Purposes Only
  • 7. Strategic Trade Control (STC):Multiple Levels• Global: Treaties, UNSC Resolutions, the multilateral export control regimes• National: Domestic laws and regulations that govern trade in strategic goods (WMD and arms-related), border controls, anti-terrorism and finance controls• Industry: Industry compliance is critical to nonproliferation efforts and UNSCR 1540 implementation For Educational & Informational Purposes Only
  • 8. Elements of an Effective STC System• SCOPE OF CONTROL: import/export; transit/ transshipment; brokering; intangible transfers; comprehensive control lists; “catch-all” controls ust have well-• LICENSING SYSTEM: dedicated licensing developed: agencies; interagency license review; technical expertise; multiple license types; transparency egal Authorities• ENFORCEMENT: customs control and border security; search, investigation, prosecution nstitutions and powers; administrative and criminal violations Procedures and penalties• INDUSTRY OUTREACH AND COMPLIANCE: raining government outreach and training; ICP development and tools that facilitate mplementation compliance 8 For Educational & Informational Purposes Only
  • 9. Obstacles toEffective STC Implementation• Legal/regulatory deficits: lack of sufficient legal authority; lack of effective regulations to implement the laws on the books; insufficient interagency coordination and cooperation• Lack of STC awareness and limited national expertise• Capacity and resource shortages: personnel; institutionalized expertise; equipment and resources• Lack of communication and coordination with industry: relies heavily on transparency, communication, and targeted outreach strategies For Educational & Informational Purposes Only
  • 10. The Space Between: Civil Society 10 For Educational & Informational Purposes Only
  • 11. Unique Perspective ofCivil Society and the Private Sector• Can serve as a conduit between government and industry• Experts on international best practices in the area of trade compliance• Follow international developments and trends in strategic trade control• Familiarity with industry actors that likely trade in strategic goods and technologies (dual-use and arms-related)• Can speak to the benefits derived from effective trade controls (access to high-technology, FDI, “dual-benefit” gains, and national security) 11 For Educational & Informational Purposes Only
  • 12. Assistance Opportunities:National Governments• Isolate gaps in existing export and border control system• Assist with the creation of comprehensive legal authorities or amendments to existing legislation in order to meet international standards and 1540 requirements• Provide assorted training for government officials (licensing and enforcement)• Identify potential “assistance partnerships” and prioritize areas of need in UNSCR 1540 requests for assistance• Identify relevant industry actors and help develop targeted outreach strategy• Publicizing trade control efforts and developments 12 For Educational & Informational Purposes Only
  • 13. Example: CSCAP Best Practice Guidelines • Resource for national governments • Designed to assist with regional UNSCR 1540 implementation in APAC • Based on inputs from civil societySource:http://www.cscap.org/uploads/docs/Memorandums/CSCAP%20Memorandum%20No%2014%20--%20Guidelines%20for%20Managing%20Trade%20of%20Strategic%20Goods.pdf For Educational & Informational Purposes Only
  • 14. Outcome:Philippines House Approves STC Bill SOURCE: http://www.congress.gov.ph/committees/commnews/commnews_det.php?newsid=1236 14 For Educational & Informational Purposes Only
  • 15. Example: Publicizing Outcomes 15 For Educational & Informational Purposes Only
  • 16. Assistance Opportunities: Industry• Training for industry officials that address trade compliance best practices, national trade control requirements, and develop procedures to help improve trade compliance• Assist in the development of internal compliance programs (ICPs)• Provide resources to encourage ICP adoption/enhancement, such as “model ICP” and compliance guidelines• Assist companies in developing technology control plans (TCP) and policies to avoid unauthorized transfers of strategic technology and information• Help to conduct external audits of company ICPs and measure effectiveness over time 16 For Educational & Informational Purposes Only
  • 17. Assistance: Industry Screening Tools• Develop resources to assist with transaction screening and license determination• Automated trade compliance solutions and software• To comply, companies must “know their product” and their “customer” — Screening end-users - Restricted party databases integrated into sales process (ERP) — Commodity classification and end-use guides  a significant percentage of unintentional export control violations are due to misclassification 17 For Educational & Informational Purposes Only
  • 18. Example: ICP Assistance• Article 8: Classification: “In the case of conducting export and provision of the items that are designed and developed by the company, [the company] shall obtain necessary information on technologies and classify whether the items concerned come under the list of controlled items . . .”• Article 9: End-Use Verification: “When there is an inquiry to the Sales Department concerning exports, verification shall be made as to whether the end-use of export falls under the following: – 1. For control list items, whether the items will be used for the development of WMD or military use… – 2. For catch-all controlled items, whether the items may be suspected to be used in the development of WMD”Source: Center for Information on Security Trade Control (CISTEC), “Compliance Program on Security Export Control: Procedures” 18 For Educational & Informational Purposes Only
  • 19. Example:End-Use and Identification Tools• Item Description and Technical Specifications: Ceramic cores or shells• Multilateral List and Item Number: Wassenaar Dual-Use List, Category 9 - Item # 9.B.1.b• Military/WMD Applications: Directional solidification or single crystal casting equipment and ceramic cores and shells are used to manufacture gas turbine blades, vanes or tip shroud castings used in high performance aero gas turbine engines for both military and civilian aircraft. 19 For Educational & Informational Purposes Only
  • 20. Outcome:Government Classification ToolsTaiwan, Bureau of Foreign Trade (BOFT), ICP Support WebsiteSource: http://icp.trade.gov.tw/ For Educational & Informational Purposes Only
  • 21. Example: Automated Trade Compliance• Single Window Solutions and Automated Trade Compliance benefit government and industry 21 For Educational & Informational Purposes Only
  • 22. Conclusion: Role of Civil Societyand Private Sector• Bridging the UNSCR 1540 “knowledge gap” and minimizing capacity shortages• Provide training for national licensing and enforcement authorities• Assist with the development of effective national legal authorities• Supplement national industry outreach efforts• Facilitate ICP adoption and creation of industry tools/resources• Help publicize developments and steps taken by States 22 For Educational & Informational Purposes Only
  • 23. Conclusion and Q+A• Thank you for your time and attention!• I would be happy to answer any questions now, or you can contact me any time at: Ryan Lynch Cathie SECURUS Strategic Trade Solutions, LLC ryan.cathie@securustrade.com 23 For Educational & Informational Purposes Only