This document summarizes a lecture on securing global supply chains after 9/11 through programs like C-TPAT and SAFE. It discusses how these programs were created in response to terrorism to designate "secure traders" entitled to fast customs clearance. However, implementation of mutual recognition between countries' programs has been slow, with only 14 agreements over a decade later. While aims to facilitate trade for compliant companies, challenges remain in developing a fully integrated global secure trade framework.

1. JUB International Trade Law
Scope of Lecture 13
Spring Term 2011
Dr. Carsten Weerth BSc (Glasgow)

2. Lecture by Dr. Carsten Weerth BSc (Glasgow)
JUB Int. Trade Law Lecture 13
Part D.
D. Selected Global Trade and Customs Problems
13.The Combat or Terrorism by help of a
secure supply chain: focus on compliance
This lecture focusses on the aftermath of 9/11 –
the terroist attacks on the World Trade Center
(Twin Towers) in New York and on the Pentagon in
Washington D.C. - this event changed the
landcape of international trade...

3. Lecture by Dr. Carsten Weerth BSc (Glasgow)
JUB Int. Trade Law Lecture 13
The Al Qaida attacks in the US were answered by
creating the US Ministry of Homeland Security
which also involves the US Dpt. of Customs and
Border Protection.
The worst fear of some politicians (and scientists)
is the so called dirty bomb:
Some cargo on a ship or airplane that explodes
and thereby distributes radioactive material (or
biological, chemical acitve material, such as
antrhax or gases) [see paper on dirty bombs]

4. Lecture by Dr. Carsten Weerth BSc (Glasgow)
JUB Int. Trade Law Lecture 13
A possible trade related answer is to create a
secure supply chain – that means that all acting
persons are secure and no bomb can be
introduced in the supply chain – sounds easy but
it is tricky...
The US created C-TPAT (Customs-Trade
Partnership in Fight against Terrorism) and
explained its ideas in the WCO – the WCO in turn
adopted the SAFE-Program which will be
explained in detail. Until now 164 WCO members
have agreed to introduce 'secure' trader systems.

5. Lecture by Dr. Carsten Weerth BSc (Glasgow)
JUB Int. Trade Law Lecture 13
Yet again: the overall idea seems easy and
straigthforward – when an operator is indicated as
"good" or "safe" he / she will not be a bad guy and
introduce bombs into the supply chain?
But how to be good?
Customs authorities are verifying the businesses
and grant a "secure trader status". When there are
many participants to the secure trader programs
there will mostly be secure supply chains. And all
the rest will be "unsecure".

6. Lecture by Dr. Carsten Weerth BSc (Glasgow)
JUB Int. Trade Law Lecture 13
The SAFE-Program is no additional agreement or
understanding but "only" a WCO-Resolution on
the "Framework of Standards to Secure and
Facilitate Global Trade".
Only very few programs are working in 2011
(about 15 – 20) and some are under construction
and planning to be working in the near future.
That means it will take another 10 or more years
in order to fully implement the WCO-
Recommendation in world trade...
What about the developing countries?
Will it work?

7. Lecture by Dr. Carsten Weerth BSc (Glasgow)
JUB Int. Trade Law Lecture 13
In order to become a secure trader an applicant
has to file an application to customs authorities
which will in turn audit the security level of the
applicant.
The economic operator has to hand in documents
and the customs authorities are also visiting the
venues, warehouses and offices of the applicant.
The employees have to be knowedgeable in
customs law.
In about 98 % the applicant gets the certificate.

8. Lecture by Dr. Carsten Weerth BSc (Glasgow)
JUB Int. Trade Law Lecture 13
Advantages:
➢ Fast customs clearance, better trade flow,
➢ Few customs controls,
➢ High accepted trade standard,
➢ "Quality" trade certificate helps to gain more
market share,
➢ Bilateral acknowledement in other trading
nations (either in force or under negociation),
➢ Advantages for pre-arrival declarations.

9. Lecture by Dr. Carsten Weerth BSc (Glasgow)
JUB Int. Trade Law Lecture 13
Authorized Economic Operator-Programs
➢ C-TPAT (US)
➢ PiP (CA)
➢ AEO (EU)
➢ AEO (NO)
➢ AEO (CH)
➢ AEO (JP)
➢ AEO (KR)
➢ Golden League (JO)
➢ Programs under construction, e.g. China...

10. Lecture by Dr. Carsten Weerth BSc (Glasgow)
JUB Int. Trade Law Lecture 13
Concept of pre-arrival declarations (US)
➢ The US introduced the so called "24 hrs-rule"
➢ That means that every cargo must be declared
either before it arrives in the US or
➢ In case of containerized cargo 24 hrs before
dislodgment in the port of departure
➢ Example: sea cargo in containers shall be
shiped from Bremerhaven on 24 february, 10.00
➢ The pre-departure declaration must be filed with
US Customs and Border protection 24 hrs
earlier until 23 february, 10.00 h...

11. Lecture by Dr. Carsten Weerth BSc (Glasgow)
JUB Int. Trade Law Lecture 13
Concept of pre-arrival declarations (EU)
➢ The EU has introduced pre-arrival and pre-
departure declarations from 1 January 2011
➢ That means that every cargo must be declared
either before it arrives in the EU or
➢ In case of containerized cargo 24 hrs before
dislodgment in the port of departure
➢ Example: sea cargo in containers shall be
shiped from Mumbay (IN) on 24 february, 10.00
➢ The pre-departure declaration must be filed with
EU Customs 24 hrs earlier until 23 february,
10.00 h...

12. Lecture by Dr. Carsten Weerth BSc (Glasgow)
JUB Int. Trade Law Lecture 13
Why pre-arrival declarations (US/EU)?
➢ Customs authorities are performing a so called
"risk analysis" and try to distinguish dangerous
and harmful goods from normal and peaceful
goods.
➢ Data will travel quickly around the globe
➢ Old time scales will have to change – data must
be readily available very fast – offences and
penalties will be the legal consequence if
compliance is not effective...
➢ Customs clearance might take longer...

13. Lecture by Dr. Carsten Weerth BSc (Glasgow)
JUB Int. Trade Law Lecture 13
Advantages for traders and economic operators
➢ AEO or C-TPAT holder is recognized as "good
guy
➢ Fewer controls, faster customs clearance
➢ Can be used for marketing – better contracts
and part of secure supply chain

14. Lecture by Dr. Carsten Weerth BSc (Glasgow)
JUB Int. Trade Law Lecture 13
Problems of the SAFE-Certificates World Trade
➢ 163 WCO members are intending to introdue
the AEO
➢ However there are only 14 agreements which
acknowledge each others security measures
➢ Though this is a WCO initiative there is no
global acceptance of security measures (yet)