A Blueprint to Trust Holistic Risk Management and Effective Trusted - - PowerPoint PPT Presentation

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Dec 02, 2022 283 likes •517 views

A Blueprint to Trust Holistic Risk Management and Effective Trusted Trader Program Marianne Rowden American Association of Exporters and Importers AAEI Works with European Partners FTAs Should Facilitate Trade Not Complexity Market access

SLIDE 1

A Blueprint to Trust

Holistic Risk Management and Effective Trusted Trader Program Marianne Rowden American Association of Exporters and Importers

SLIDE 2

AAEI Works with European Partners

SLIDE 3

FTAs Should Facilitate Trade Not Complexity

Market access for all industry sectors in all FTA countries.
Trade facilitation for “trusted traders.”
Clarity for rules of origin.
Simplicity in applying the rules.
Harmonization among FTAs.

SLIDE 4

Holistic Risk Management

Horizontal Risk Management System
Regulatory regime applicable to all industries to manage imports and exports

based on company internal controls

Example: WCO SAFE Framework
Authorized Economic Operator program for “low risk” traders
E.U. and U.S. have a Mutual Recognition Agreement
Sectorial Risk Management System
Risk mitigation ranges from industry standards to strict liability regulation
Negotiators to determine which risk management regime is appropriate for

the risk posed by the industry and the company

Regulators should develop pilot projects with the private sector to reduce redundant

regulation

SLIDE 5

“Trusted Trader” Concept

Concept predates 9/11, but has gained currency with governments after 9/11 to describe a

company which is:

Highly compliant
Good internal controls
Mitigates risk
“Authorized Economic Operator”
“a party involved in the international movement of goods in whatever function that has been

approved by or on behalf of a national Customs administration as complying with WCO or equivalent supply chain security standards. Authorized Economic Operators include inter alia manufacturers, exporters, brokers, carriers, consolidators, intermediaries, ports, airports, terminal operators, integrated operators, warehouses, distributors.”

WCO “SAFE Framework of Standards to Secure and Facilitate Global Trade” adopted in June 2005 in Section 2.3 at p. 8.
AEO programs are:
Voluntary regimes
Commitment to adopt good importer practices for security and compliance
Trade facilitation benefits

SLIDE 6

Our Challenge

AAEI seeks to develop a strategy to establish a holistic risk management/trusted trade program for CBP and
ther government agencies (OGAs) that is built, in part, upon existing models, such as C-TPAT, and provides

genuine benefits to the trade community. Specifically, for AAEI and its member companies, the desired

utcome of this program is to:

1. Facilitate trade and compliance 2. Reduce compliance costs 3. Establish more efficient, risk-based enforcement

Six Steps:

1. Define the elements, objectives, and arguments for the trusted trader initiative 2. Strategic Plan 3. White Paper (Current Stage) 4. User Fee Chart 5. Develop Industry Compliance Standards 6. Additional Work

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Shortcomings of Existing Programs

Lack of coordination with CBP trusted-trader programs
Lack of specificity
Overly punitive
Insufficient benefits for companies and industries
Failure to understand or meet underlying objectives
Lack of flexibility to accommodate individual company or industry risk

profiles

Insufficient scope (i.e., too limited in number and type of entries covered)
Overly onerous or expensive application process

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Certified Compliant Commercial Entity (3CE)

Companies that:
Invest corporate resources (e.g., money, people, systems, etc.) into their

corporate compliance programs

Demonstrate a strong commitment to ensuring commercial, security,

environmental/conservation, human rights, and product health and safety compliance

Represent a low compliance risk to the public

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Elements of 3CE

Assessing risk:
How the agency perceives risk based on its statutory mission
Focus on unacceptable or catastrophic risk
What makes an importer higher or lower-risk to set up a 3CE importer risk

profile

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Risk Factors

Type of importer
New or experienced importer
Size and complexity of the company
Type of imported product
Highly regulated, lightly or non-regulated product
Source country and/or country of export
Importer’s compliance record on commercial issues, security, and

health and safety

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Benefits

For the agencies:
Program must be consistent with and support the agency’s enforcement

mission and mandate

Allocate resources efficiently and effectively to counter the greatest risks
Provides framework to facilitate and enhance the exchange of information

between and among agencies

For importers:
Lower administrative and compliance costs
Efficient and expeditious trade facilitation
Lower business risk
Greater business predictability

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0% 10% 20% 30% 40% 50% 60% 2009 2010 2011 2012 Fewer Inspections It is the right thing to do Business partner pressure Expedited clearance Haven't joined

If your company participates in a supply chain security program, why did your company decide to join the program?

Source: AAEI Benchmarking Survey – Security Question for Importers/ Exporters (June 2009, May 2010, May 2011, and August 2012, respectively)

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0% 10% 20% 30% 40% 50% 60% 70% 2009 2010 2011 2012

Yes No Don't know

Based on your experience with supply chain security programs, would you join today?

Source: AAEI Benchmarking Survey – Security Question for Importers/ Exporters (June 2009, May 2010, May 2011, and August 2012, respectively)

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Are you C-TPAT certified and, if so, at what level?

17% 3% 39% 41%