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Gerard RodriguesDirector, Cargo OperationsAustralian Customs and Border Protection Service
RISK MANAGEMENT & SELECTIVITY
1. Make the case for an intelligence led, risk-based approach to border management rather than traditional transaction-per-transaction documentation and physical checks
2. Examine and assess the nature of Customs risk
3. Describe the risk management process, analysis, profiling and selectivity
4. Understand how to design and implement a risk management strategy using specific examples and case studies
SESSION OBJECTIVES
OVERVIEW
1. Introduction to Customs Risk Management2. Risk Management Principles3. Risk Management Process
• Context• Risk Identification• Analysis• Evaluation• Treatment • Monitoring and Review
4. Developing and implementing a risk management strategy
1. Traditional approaches to border management have been transaction-based. What are the implications of this?
• Increasing volumes means increasing workloads and delays
• Unsustainable in light of the globalisation of trade
INTRODUCTION
The management of borders carry elements of risk:• Fraud • Drug trafficking• Counterfeit goods• Illegal movement of people etc
Exposure to risk can be managed through the practice of Risk Management
DEFINITION OF RISK: A combination of probability and consequence
• “The chance of something happening that will have an impact on objectives”.
• Risk management, therefore, can be defined as “the culture, processes and structures that are directed towards realising potential opportunities whilst managing adverse effects”.
INTRODUCTION
WCO definition of risk management:The systematic application of management procedures and practices that provide Customs authorities with the necessary information for addressing risk.
Customs administrations are increasingly using formal risk management to achieve border management objectives, improve decision making, allocate resources in accordance with priority and risk, develop policy and manage projects.
GATT, Revised Kyoto Convention, WCO SAFE Framework, WTO, APEC all see risk management as the cornerstone of modern business practice and fundamental to trade facilitation in the modern world.
Customs Risk
Risk management is:
• An integral part of all organisational processes
• Part of decision making
• Explicitly addresses uncertainty
• Systematic, structured and timely
• Based on the best available information
• Takes human and cultural factors into account
• Transparent and inclusive
• Dynamic, iterative and responsive to change
Risk Principles
Australian Customs and Border Protection Model
Customs Risk
Australian Customs and Border Protection
Cargo Intervention Strategy
Risk Based “layered approach” that incorporates:
• Pre-arrival lodgement and reporting of all cargo entering and leaving Australia
• Risk assessment of all reported cargo against intelligence and other information holdings for known and suspected indicators of border risks
• Tailored interventions and responses to treat identified risks or validate the level of risk in the environment
• Licensing of some key operators who report, handle and process cargo
• Industry outreach, engagement and education programs
• Controls to maintain physical security of import, export and transhipment cargo
• Assurance activities, in the pre-clearance and post-transaction environments.
Customs Risk
RISK MANAGEMENT PROCESS
RISK ANALYSIS
MONITOR AND
EVALUATE
ESTABLISHCONTEXT
TREAT THE RISK
CONTEXT
• Different Geographical environments
• Difference cargo “streams” eg sea cargo, air cargo, International Mail, Air Passengers, Cruise Ships
• Time of the year (eg New Year, Holiday season etc)
RISK MANAGEMENT PROCESS
ANALYSIS:
• Identify the risk
• Assess the risk
• Rate the risk
RISK MANAGEMENT PROCESS
RISK MANAGEMENT PROCESS
RISK MANAGEMENT PROCESS
TREAT THE RISK:
• Reduce risk to acceptable level by applying measures to reduce exposure. This may include developing a risk management plan with actions, roles, responsibilities, performance measures and deadlines. It may require inclusion of an action plan into the National Business Plan, regional plan or work area plan. This response will seek to reduce the consequences or likelihood of the risk event, thereby lowering the overall risk level.
• Avoid risk by deciding not to proceed with risk-generating activity.A decision to terminate the activity will usually require the approval of senior management. Note that it is not always possible to avoid risk.
• Transfer risk, by involving another party to bear the risk or share part of the risk. This will include transferring risk through insurance or partnership with another agency.
• Accept / Tolerate the current risk level, and manage it routinely.
• Residual Risk: risk remaining after the treatment has been applied.
RISK MANAGEMENT PROCESS
RISK PROFILING:
• Paper or electronic tool or documentation used to detect a transaction, entity, vessel, piece of cargo, particular import etc and used by Customs for further analysis or “targeting”purposes.
• The Global Facilitation Partnership for Transportation and Trade (GFFPTT) 2005, identified 4 key elements for a risk profile:
� Description� Period of Validity� Date range� Additional comments (free text field)
• Should include the following:� Risk area� Risk level assessment� Countermeasures to be taken� Activation and review dates� A means for measuring effectiveness
•
RISK TREATMENTS
SELECTIVITY:
• APPLICATION OF PROFILES TO DECLARATIONS, OPEARATIONS, INDIVIDUALS, TRANSACTIONS• CASE STUDY – CUSTOMS INFORMATION SYSTEM (CIS) - CROATIA
CASE STUDY – Former Yugoslav Republic of MacedoniaASYCUDA (Automated System for Customs Data)
RISK TREATMENTS
Impending Arrival Report
Cargo Report-MAWB-OBL-HBL
Vessel/Aircraft arrivalReport
Underbond Movement
Cargo Discharged
Declaration lodged
Cargo dischargeCustoms/AQIS
Clearance
Goods arrive
Goods
CASE STUDYAUSTRALIAN CUSTOMS
AND BORDER PROTECTIONINTEGRATED CARGO SYSTEM (ICS)
Import Process
Sea Impending Arrival Report
At least 96 hours before arrival
Sea Cargo Report or Cargo List Report
At least 48 hours before arrival
Sea Actual Arrival Report
Within 24 hours of arrivalSea Cargo Outturn
or ProgressiveDischarge Report
SCO within 5 days of starting discharge.
PDR 3 hours after starting discharge and then 3 hourly
UnderbondMovementRequest
Must have submitted Sea Cargo Report before being approved.
Outturn Report Within 24 hours of unpacking
or receipt
ICS Sea Cargo Reports & Timeframes
Import
Carriers
Cargo Handlers
Customs Owners
Service Providers
Who is involved?
GROUP EXERCISE
YOU ARE THE RISK MANAGEMENT TEAM FOR THE COUNTRY HOSTING THE FOOTBALL WORLD CUP IN 2018
USING THE RISK LIKELIHOOD AND CONSEQUENCE TABLES:
• IDENTIFY SOME OF THE RISKS• DETERMINE THE LIKELIHOOD• AGREE ON CONSEQUENCE• RATE THE RISK• DISCUSS APPROPRIATE RISK TREATMENTS
GROUP EXERCISE
VIDEO
RISK MANAGEMENT
DEVELOPING AND IMPLEMENTING A RISK MANAGEMENT FRAMEWORK AND STRATEGY
• NEED A WELL DOCUMENTED PLAN THAT PROVIDES POLICY GUIDANCE AND DOCUMENTATION OF ALL ACTIVITIES AND PROCESSES IN THE ORGANISATION
• ADDRESS CULTURAL ISSUES AND MINDSET
• LEGISLATION AND REGULATORY CHANGES
• ORGANISATIONAL STRUCTURES� Strategic (Risks aligned with Goals and Objectives of the organisation� Tactical (Finances, equipment, resources, monitoring and review)� Operational (Day to day immediate situations)
� ONGOING TRAINING AND DEVELOPMENT
RISK MANAGEMENT
• RISK MANAGEMENT WORKS, IT IS THE ONLY VIABLE OPTION IN THE CURRENT GLOBAL ENVIRONMENT AND INTO THE FUTURE
• THERE ARE NUMEROUS AND TANGIBLE BENEFITS
• WIN-WIN FOR INDUSTRY, TRAVELLING PUBLIC AND CUSTOMS
• NEEDS TOP MANAGEMENT SUPPORTS AND STRATEGIC THINKING WITH A CLEAR RISK MANAGEMENT POLICY UNDERPINNING ALL ASPECTS OF OPERATIONS
• ORGANISATION STRUCTURES MUST BE IN PLACE TO SUPPORT RISK MANAGEMENT STRATEGY
• MUST BE SUPPORTED BY STRONG IT INFRASTRUCTURE WITH PROFILING AND SELECTIVITY CAPABILITY BASED ON ADVANCE ELECTRONIC INFORMATION
• MUST BE SUPPORTED BY LEGISLATION
• ONGOING TRAINING, EDUCATION AND AWARENESS IS CRUCIAL
SUMMARY
Remember not everything goes according to plan!
Thank You
