Abstract
The expansion of international trade may influence security in all stages of supply chains of goods. In this regard, the aim of this study is to present some thoughts on recent applications concerning customs and IoT for monitoring risk-management systems: the Authorized Economic Operator status and the so-called “Feri certificate”. The Authors will present a literature review and will focus their attention on the two above-mentioned case studies. Even if these tools have diverse legal and technical aspects that make them significantly different, they both simplify customs procedures and facilitate customs controls related to safety and security in all stages of supply chains of goods by adopting a risk-management strategy.
This paper is a joint effort of the Authors. For the attribution of paragraphs, S. M. Ronco wrote Sects. 3.3 and 3.5.2, while E. Varese wrote the other sections.
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1 Introduction
With the rapid growth in trade volume, illegal activities still exist in import and export channels; the essence of a modern customs system is based on a mutually beneficial cooperative customs-to-business partnership (Meng 2017).
After the terrorist attacks of 11 September 2001, the USA and many other countries and regions, such as the EU, desired to implement cooperation in order to increase the safety and security of international logistics while leaving the flow of goods unobstructed.Footnote 1
Security in supply chains and better trade facilitation (hereafter, TF) have therefore become a top priority. This topic has received increasing attention not only from researchers but obviously also from all supply chain actors.
The matter has immediately attracted the attention of relevant international bodies as well: in June 2002, the World Customs Organization (hereafter, WCO) formed a Joint Customs-Industry Task Force on Security and Facilitation. Subsequently, in June 2005, the WCO Council adopted the SAFE Framework of Standards to Secure and Facilitate Global Trade (hereafter, SAFE Framework). The main objective of the SAFE Framework is to secure and facilitate global trade through the establishment of cooperative arrangements among customs, trade and other government agencies in order to promote a uniform movement of goods through secure international trade supply chains (Wolffgang and Natzel 2007; World Customs Organization 2018).
According to Tweddle (2008), key elements of the SAFE Framework are “the mutual recognition of controls and information which will allow a broader and more comprehensive view of the global supply chain and create the opportunity to eliminate duplication and multiple reporting requirements”.
Similar steps have been undertaken in the European Union framework, as highlighted in the Strategic Plan 2016–2020 proposed by the European Commission’s Directorate-General for Taxation and Customs Union (TAXUD).
In particular, this EU document underlines the need of balancing protection of revenue sources with support to the competitiveness of EU businesses on the world markets. It also highlights the importance of a comprehensive trade facilitation reform that could “cut trade costs by up to 10% for OECD countries”.
Against this background, the European Commission stresses that “increasing theefficiencyofcustomsis pivotal” and that “Modernising customs and strengthening international customs cooperation are the main drivers”. The European Commission also underlines that such a goal should be achieved by improving risk analysis at customs level, specifically selecting for controls those consignments which present a higher risk of non-compliance.
Further, significant relevance should be given to quality management systems adopted by the international standard setting ISO 9001:2015, the implementation of which by import–export companies is considered (Afanasieva et al. 2017) helpful in facilitating customs activities.Footnote 2
Given the above, the aim of this paper is to present some thoughts on two different risk-management tools—the Authorized Economic Operator (hereafter, AEO) at EU level and the “Fiche Electronique de Renseignement à l’Importation - Feri certificate” (hereafter, FC) used in some African countries—developed in the context of the customs system, which both adopt some features typical of an IoT-based technology.
This research fills a gap in literature: to the Authors’ knowledge, this is the first paper comparing the two mentioned programmes, and one of the very first studies on the FC.
This paper is divided into 7 sections: Sect. 3.2 presents a brief theoretical framework on risk-management systems in customs administration; Sect. 3.3 explores the relationship between risk-managementcapabilities and IoT considering the opportunities presented by IoT-based technologies for customs authorities and trade facilitation institutions; Sect. 3.4 introduces the cases of the AEO status and the FC; Sect. 3.5 offers a literature review on AEO status and FC mechanism and on the role of pre-shipment loading notes in the practice of some African countries; Sect. 3.6 discloses methodology and data collection, and in Sects. 3.7 and 3.8 the findings/discussion and the final conclusions, implications and limitations of the work are summarized.
2 Risk-Management Systems in Customs Administration: General Considerations
As briefly pointed out above, developing a closer customs-to-business partnership and improving trade facilitation mechanisms while effectively guaranteeing safety and security in the flow of goods at international level is a key issue for fostering economic growth by significantly reducing trade costs.
In this regard, it is well-known that one of the components for achieving such a result derives from the limitation of intrusive customs examination, which is an action advocated under the Kyoto Convention and discussed within the WTO framework.Footnote 3
According to Laporte (2011), modern customs activities should “now intervene at all stages of thecustomschain, using electronic data exchange and risk analysis, and focusing their resources on a posteriori inspection”.
However, as is widely known, this is a challenging task, especially for customs authorities located in developing countries, which are in a more difficult position as to implementing risk analysis and management techniques.
Although risk analysis should be considered a key element for modernizing customs administration in these countries, it should be noted that any effort on this side would be impaired unless it were matched by significant reforms in human resource management and governance at administrative level (Laporte 2011).
In addition, it happens rather frequently that developing countries prefer to outsource risk-management systems to private parties, with the aim of complementing ineffective customs checks with pre-shipment inspection programmes or other auditing services.
The effectiveness of the overall system appears questionable, doubts having been expressed as to the real integration and level of exchange of information between private companies entrusted with risk-management checks on behalf of the developing country and their customs authorities (Johnson 2001).
However, it should be pointed out—as will be further discussed below—that there is a conceptual difference between customs authorities and trade facilitation mechanisms entrusted to private parties: only customs authorities are public entities, carrying out functions of public nature, such as the collection of taxes and duties at borders. Tasks entrusted to private entities, on the other hand, even if carried out with the aim of fostering import–export of goods, remain dependent upon their contractually defined scope of intervention which is limited to trade facilitation mechanisms and does not fall within the realm of entitlements of public entities.
Given the considerations above, it is unquestionable that risk-management techniques are acquiring growing importance in the customs scenario. However, as doctrinal studies have pointed out, careful attention should be paid to the existing “divide” between capabilities and institutional tools put into place in developed countries vis-à-vis structural deficiencies in developing countries’ customs management.
As put forward by some Authors, these limitations on the part of developing countries are usually overcome by resorting to services provided by private entities, which are able to facilitate import–export formalities, even if lack of proper exchange of information and gaps in structuring a strong relationship seem to impair the overall efficiency of the system in developing countries.
3 Risk-Management Capabilities and IoT: Which Opportunities for Customs Authorities and Trade Facilitation Institutions?
It is against this background, briefly described above, that IoT developments in improving risk-management capabilities should be understood, taking into consideration existing diverging practices among customs authorities located in developed countries vis-à-vis those pertaining to developed countries.Footnote 4
This being said, the relevance of IoT and, more generally, data-driven technology is well-known and its growing acceptance by industries and business sectors is undisputable.
In this scenario, the logistics industry has quickly adopted such technological innovation, seeing in advance its benefits for strengthening networks and improving information sharing at logistics level. As put forward by Lacey et al. (2015), “companies in this sector have embraced the suite of data-driven technologies dubbedthe Internet of Things(IoT) in diverse settings, from maritime and aviation freight to warehousing to package delivery”.
Given the above, the importance of IoT deserves to be discussed in the light of the implications it could have in terms of risk management as a tool for ensuring that customs authorities are able to receive better information and make smarter decisions.
In any case, the most interesting feature of IoT application to customs management has to do with the fact that this technology enables to turn any object into a source of information about that object; such a feature is extremely important in an industry which is fundamentally about moving things from one place to another.
In this regard, as noted in scholarly researches (Lacey et al. 2015), most IoT technologies already implemented by transport and logistics companies concern track-and-trace applications, such as GPS asset tagging, which are aimed at optimizing routes by detecting real-time locations of shipments and cargoes and identifying the shortest and most fuel-efficient route to destination. Again, the immediate goal of this application is to “allow for faster movement through the network with fewer transitions”.
However, adoption of IoT technologies provides further benefits, which are not merely limited to improvements in fuel-efficiency or in time-saving applications for the transport and logistics industry.
In this regard, widespread introduction of IoT technologies and better use of the information acquired in the process might create significant value and new resources for companies in the transport and logistics industry. However, as has been pointed out, the latter development is still under way as it poses challenges and hurdles on companies, demanding significant changes to existing business practices.Footnote 5 It appears, on the other side, that such a change in business practices is unavoidable and companies in the transport and logistics sector are more and more realizing that “the value generation based on collected information is becoming a T&L industry standard for their customers: the market is beginning to demand a strategic positioning related to the IoT”.Footnote 6
As has been described, the relevance of IoT technologies in the transport and logistics field is well-known and is acquiring growing importance. On the other side, IoT application by customs authorities or in a customs-related setting appears to be less common.
In this regard, the most important IoT applications developed by customs authorities relate to big-data technologies, aimed at improving analytics and risk-management applications.
In other words, as pointed out in scholarly researches (Okazaki 2017), when IoT initiatives are undertaken by customs authorities, this translates into the acquisition of a better analytical power and improved quality of the data received regarding shipments, cargoes and so on.
It should also be noted that the adoption of IoT applications by customs authorities is already underway, particularly in some developed countries (as discussed above, structural deficiencies in developing countries’ customs management play a role in this dynamic as well).
Empirical researches on this matter have highlighted that big-data technologies are already implemented in the customs systems of the U.S. Customs and Border Protection; the New Zealand Customs; the Hong Kong China Customs; the United Kingdom Revenue and Customs.Footnote 7
The practices and regulatory techniques adopted in the above-mentioned cases are however remarkably diverse and it seems difficult to see, at this stage of development, common patterns in the way IoT and big-data technologies are introduced at customs level in each of these countries.
In addition, as noted in literature, customs seem to have “not yet been fully prepared to use such data to extract the information which could result in improved decision-making”.Footnote 8
This outcome is the result of a two-folded issue. On the one hand, existing data exchanged at customs level are disordered and untidy; therefore, they are difficult to structure and then properly be used by customs authorities during customs and clearing procedures.Footnote 9
On the other hand, big data usage requires developing a skilled workforce, capable of mastering data analysis techniques and professionally trained to use datasets for customs purposes.Footnote 10
It follows from the above considerations that IoT-based technologies are surely gaining a growing importance in the transport and logistics field. However, these techniques seem to be less developed in the context of customs activities. It appears that their relevance in improving risk-management capabilities is still limited and at an early stage.
4 Risk-Management Framework and Applications: A Brief Introduction to the Cases of the Authorized Economic Operator Status and of the FC
Both the SAFE Framework and the “security amendment” to the European Community Customs Code feel the need to introduce a “wide risk managementframework to support a common approach so that priorities are set effectively and resources are allocated efficiently with the aim of maintaining a proper balance betweencustomscontrols and the facilitation of legitimate trade” (Regulation EC, No. 648/2005). This status is called AEO and came into effect in the EU from 1 January 2008. The programme implies that the relationship between customs and AEO should always be based on the principles of mutual transparency, correctness, fairness and responsibility.
There are other AEO initiatives in the world such as, the Custom-Trade Partnership Against Terrorism (C-TPAT) in the USA, Partners in Protection (PIP) in Canada, Golden List Program in Jordan and Secure Exports Scheme (SES) in New Zealand (Weerth 2015). The main objective of these supply chain security programmes is to identify security risks before goods move (den Butter et al. 2012).
In the EU, criminal activities such as counterfeiting, piracy and theft have been committed against almost each product sector. Thanks to customs controls, in 2016 more than 41 million (41,387,132) counterfeit articles have been discovered, with an estimate retail value of original goods of 672,899,102 euros. The top categories of detained articles were cigarettes, which accounted for 24% of the overall amount of detained goods, followed by toys (17%), foodstuffs (13%), packaging material (12%) and other goods (8%) (European Commission—Taxation and Customs Union 2017).
The AEO is an EU supply chain security authorization that has the scope of enhancing international supply chain security and facilitating legitimate trade. Security and safety are a priority in the EU territory, as any “security/safety gaps are likely to be exploited by wrongdoers, thereby putting in question the integrity of the single market as well as security in the EU” (Aigner 2017).
Many companies consider AEO authorization as a passport for doing business globally (Miled and Fiore 2014).
Outside the EU, goods shipped to some African countries such as the Democratic Republic of Congo require the FC. It provides an example of application of an IoT-based system adopted in customs-related activities with the aim of tracking the flow of imported goods in the country and simplifying relevant customs formalities. It may be included in the framework of the TF.
5 Literature Review
5.1 Literature Review: AEO Mechanism
TF can be explained as the application of “methods for the reduction of barriers that can hinder trade in global operations” (Campos et al. 2018) without compromising the security of trade or the ability of governmental agencies (mostly customs) to charge taxes and collect revenue (Moïsé 2013).
TF are a set of measures aiming to simplify, harmonize, standardize international trade procedures. They relate to customs procedures, logistics, licensing procedures and documentation, insurance and other financial requirements imposed on the entry or exit of goods from countries (Behar et al. 2011; C.de Sá Porto and Morini 2017).
TF encompasses a link between a public and a private party and is therefore considered as a type of Public–Private Partnership (hereafter, PPP).
In international trade, PPPs are partnerships between customs and businesses that have taken the form of structured programmes (Campos et al. 2018). The AEO is the one that has become the most important and widespread in international trade worldwide.
In the EU, the so called “Union Customs Code legal package” has modified the pre-existing framework that regulates the procedure for issuing the AEOstatus and the related benefits (European Commission—Taxation and Customs Union 2018b).
The “Union Customs Code legal package” that directly relates to the AEO status is composed of the following legal acts (Agenzia Dogane e Monopoli 2018):
-
i.
The Union Customs Code (hereafter, UCC): Regulation (EU) No 952/2013 entered into force on 30 October 2013, although most of its substantive provisions apply since 1 May 2016;
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ii.
The UCC Delegated Act adopted on 28 July 2015 as Commission Delegated Regulation No. 2015/2446. It supplements certain non-essential elements of the UCC;
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iii.
The UCC Implementing Act adopted on 24 November 2015 as Commission Implementing Regulation No. 2015/2447. It aims to ensure the existence of uniform conditions for the implementation of the UCC and a harmonized application of procedures by all Member States;
-
iv.
The UCC Transitional Delegated Act adopted on 17 December 2015 as Commission Delegated Regulation No. 2016/341. It establishes transitional rules for operators and customs authorities pending the upgrading or development of the relevant IT systems to create a fully electronic customs environment.
As mentioned above, the EU established its AEO concept based on the internationally recognized standards, creating a legal basis for it in 2008 through the “security amendments” to the Community Customs Code (CCC) and its implementing provisions. The programme is open to all supply chain actors, including small- and medium-sized enterprises.
There is no legal obligation for economic operators to become an AEO, nor is there any legal obligation for AEOs to require their business partners to obtain the AEO status.
According to article 38 (1) UCC, an economic operator may apply for the status of AEO only if he is established in the customs territory of the EU and meets the criteria specified in article 39 UCC.
An economic operator is “a person who, in the course of his or her business, is involved in activities covered by the customs legislation”—article 5 (5) UCC—and therefore is entitled to benefits within the entire customs territory of the EU.
The status of the AEO consists of different types of authorizations: AEO for Customs Simplification (hereafter, AEOC), AEO for Security and Safety (hereafter, AEOS) or a combination of the two, Customs Simplification + Security and Safety, AEO Full (hereafter, AEOF).
The AEO status can be granted to any economic operator meeting the common criteria (article 39 UCC) listed in Table 3.1 and, if obtained, this authorization is recognized by the customs authorities in all Member States—article 38 (4) UCC.
The economic operator may hold at the same time a combined AEOC and AEOS authorization if he/she fulfils all the above-mentioned criteria.
Each type of authorization offers different kinds of benefits (article 38, UCC) (direct and indirect) which are recognized in all Member States (Table 3.2).
Indirect benefits may be summarized as follows (European Commission—Taxation and Customs Union 2016a, b): “analysis in detail of all the related international supply chain processes; visibility and tracking; personnel security; standards development; supplier selection and investment, transportation and conveyance security, building organisational infrastructure awareness and capabilities, collaboration among supply chain parties, proactive technology investments and voluntary security compliance. Some examples of the indirect benefits that may result from these positive effects could be the following:
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reduced thefts and losses;
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fewer delayed shipments;
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improved planning;
-
improved customer service;
-
improved customer loyalty;
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improved inventory management;
-
improved employee commitment;
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reduced security and safety incidents;
-
lower inspection costs of suppliers and increased co-operation;
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reduced crime and vandalism;
-
improved security and communication between supply chain partners”.
Mutual Recognition of AEOs is a key element of the WCO SAFE Framework. By mutual recognition of AEOs two customs administrations agree to: (i) recognize the AEO authorization issued under the other programme and (ii) provide reciprocal benefits to AEOs of the other programme.
Until now the EU has concluded and implemented Mutual Recognition of AEO programmes with Norway, Switzerland, Japan, Andorra, the USA and China.
Economic operators may apply for AEO status through an application process that determines their eligibility.
AEOs are entitled to utilize the AEO logo (Fig. 3.1) that can be used under the following conditions: (i) the right to use the logo is on condition of having a valid AEO authorization; (ii) only the holder of a valid AEO authorization can use the logo; (iii) AEOs must stop using it as soon as their AEO status is suspended or revoked.
Table 3.3 illustrates the number of AEO holders in the 28 EU Member States on 27 August 2015 and 2018.
Concerning the type of AEO authorization, at the end of August 2018 there were 7118 companies with AEOC status, 647 with AEOS status and 15,917 with AEOF status.
A comparison of these data with the ones presented by Laszuk and Ryciuk (2016) shows, over a period of exactly 3 years (27 August 2015–27 August 2018) an increase in the total number of AEO holders by 19.3% (AEOC: +22.3%; AEOS: +25.1%; AEOF: +16.3%).
As shown in Table 3.4, the ranking of the first five Member States with the highest number of AEO holders is quite the same in 2011 and 2018.
5.2 The FC Mechanism and the Role of Pre-shipment Loading Notes in the Practice of Some African Countries
As briefly introduced above, goods shipped to some African countries, such as the Democratic Republic of Congo, require the FC or a similarly denominated electronic document.
This is an example of application of an IoT-based system adopted in customs-related activities with the aim of tracking the flow of imported goods in the country and simplifying relevant customs formalities.
As a first introduction, it should be highlighted that the loading note or waiver is a document obtained to load cargo which is necessary in several African countries to effectively control, supervise and manage import and export traffic. In this regard, the FC is one kind of loading note, adopted for the shipment of goods into the Democratic Republic of Congo.
The use of loading notes to load cargoes shipped to African countries is a well-known practice adopted not only in the Democratic Republic of Congo but also, inter alia, in Angola, Gabon, Niger, Ivory Coast and Mali. The management of these certificates is left in the hands of private companies, which have the task of running it on the basis of contractually defined agreements with other private entities entrusted with the task of managing pre-clearance activities at border. None of these entities is entrusted with customs activities on the part of the country’s customs administrative authorities and the overall system is private in nature, without any direct intervention of the country of importation of the goods.
Besides its legal design, the most interesting feature of the FC, as well as the other loading note systems adopted in these African countries, is that it embodies a technology platform allowing the regularization of goods from all ports of embarkation and tracking of the same.
In addition, considering the particular maritime geography of some African countries adopting pre-shipment loading certificates, some certificates embody additional technology tools allowing to track cargo from port of discharge to entrance point, facilitating customs controls at various border crossings in the country of destination.Footnote 11
It is however difficult to discuss in further detail the characteristics of these pre-shipment loading certificates, considering that, as explained above, there is a literature gap on their application in the practice of African countries.
This being said, it appears that, similarly to the AEO status, also the FC—as well as similar certificates adopted in other above-mentioned countries—should be considered a trade facilitating tool.
As briefly underlined, it both enhances international supply chain security, by allowing the tracking of cargoes at the borders of the country of destination, and provides a facilitation for legitimate trade, incorporating in an electronic certificate multiple information on the imported goods, which is useful for importers and eventually helpful in customs clearance activities.
As a matter of fact, there are also two important features deserving to be taken into consideration in a deeper fashion.
On the one hand, it is unquestionable that the mechanism at stake falls within the category of those risk-management systems adopted in many developing countries, the operation of which is entrusted to private companies with the aim of providing better and more reliable information than is potentially receivable from public customs administrations.
On the other hand, it is interesting to note how the design of these certificates incorporates many of the typical features of IoT-based applications.
While these certificates are not used by public entities and no exchange of information exists between the private companies running the system and the customs authorities, it clearly appears that these tools are an example of IoT applications implemented in the transport and logistics industry, mainly for track-and-trace purposes of cargoes and shipment in remote areas lacking accessibility.
6 Methodology and Data Collection
Even if the two above-mentioned programmes have dissimilar origins and legal technical aspects making them significantly different, we aim at demonstrating that both are intended to simplify customs procedures and facilitate customs controls related to safety and security in all stages of supply chains of goods by adopting a risk-management strategy.
Our study can be divided into two steps, one following the other.
To analyse the object, the scope, the characteristics and the pros and cons of the AEO authorization, first of all, various research papers provided by library services (https://www.scopus.com) and publishers (https://www.sciencedirect.com; https://www.emeraldinsight.com; https://login.webofknowledge.com) were reviewed. To better outline the key aspects of AEO and to support or challenge the findings, this search has been integrated also by other data collected through websites, guidelines, etc.
As noted above, to the Authors’ knowledge, this is the first research paper that analyses the FC and similarly denominated certificates: this certificate has never been subject to significant scholarly debate. It is for this reason that data are being collected through websites, guidelines and guidance notes suggested by various institutes.
This part of the essay used a wide range of sources of information in order to develop and analyse the FC and similarly denominated certificates.
In particular, attention was paid to websites of private companies operating in the business of issuing pre-shipment loading certificates and running the technological infrastructure behind it, as well as to public information available on websites of entities and other bodies located in African countries that help and provide assistance in the management of said certificates, particularly shippers’ councils of some African countries.Footnote 12
We are conscious of the weaknesses of such observation, which could appear to be selective (might miss facts) and less documented than an on-site observation (Tellis 1997; Yin 2013).
We have autonomously analysed all data obtained by literature review, websites, guidelines, and we finally compared our individual interpretation of the results.
7 Findings Discussion
The AEO authorization demonstrates how PPP may become a practical application: on the one hand, it enhances security and control with less physical checking for customs and, on the other hand, it reduces administrative charges and facilitates trade for business operators.
Security measures have been introduced to prevent theft, deter illegal access to facilities and protect intellectual capital right.
Even if some companies state that AEO authorization has provided both collateral (indirect) and direct benefits, according to Fletcher (2007) it is crucial that customs organizations regularly document any quantified benefits to AEO participants, as a report made by an external source can be an invaluable confirmation of investment pay-back.
Some Authors (den Butter et al. 2012) have noticed that as this authorization is voluntary, with entry costs and associated benefits, on the one hand it may happen that compliant and trustworthy companies are not willing to get the authorization if they see no fair value for them to participate. On the other hand, opportunistic and fraudulent enterprises may perceive “opportunistic benefits (with less checking, and simplified procedures may create chance for easier ways of committing fraud), relatively less compliance costs than good firms (they can make a false compliance report to show the fulfilment of the requirements), and thus are more willing to get the certificate”. They state that information technologies (hereafter, IT) are a key aspect to eliminate information asymmetry in PPP. The so-called “IT-enabled risk management” has two meanings: (i) information technology and information systems are the main focus for the assessment, and (ii) it refers to automated IT support, in the form of decision support systems, for the general risk-management approach.
Similar considerations can be made with reference to the above-mentioned FC system adopted in some African countries. This tool should also be considered a trade facilitation instrument, even if, differently from the case of the AEO status, there is no link between public and private parties.
In this regard, as mentioned before, customs administrations and clearance activities remain subject to an autonomous regime, with no connection to the pre-shipment loading notes fulfilment carried out by importing companies in agreement with African shippers’ councils.
This element marks the most significant difference between the two tools as in this latter case—differently from the AEO program—no PPP partnership exists in any form.
8 Conclusions and Limitations/Further Steps
In accordance with the mapping of Portugal-Perez and Wilson (2012), trade facilitation (TF) measures include a “soft” dimension related to intangible issues (customs management, business environment and transparency) and a “hard” dimension associated to tangible infrastructures (roads and ports). With reference to the soft dimension, some Authors (Liu and Yue 2013) suggest that it may be possible to increase the trade structure of a country by accelerating customs clearance procedures.
Both AEO and pre-shipment loading notes like the FC have in common the goal of simplifying flows of goods at international level and stimulating international transactions while minimizing risks. However, only the AEO is a tool able to accelerate customs clearance procedures in their respective country of application.
This being said, a critical aspect of AEO is that the authorization is not cost free and, as the companies have increasingly limited resources, many AEOs want their benefits to be commensurate with their level of investment.
On the other hand, a critical aspect of pre-shipment loading notes like the FC tools is that they do not provide any link with public customs activities, therefore their scope of application seems limited; if no change is made to this system, hurdles at customs level would not be mitigated in any way. In this case, the main application of pre-shipment loading notes would remain at the level of simplifying tracking of imported goods in the country of importation.
In any case, further research is needed as regards the scope of application of African pre-shipment loading notes like the FC used in the Democratic Republic of Congo, in order to better understand their legal and technical aspects with a view to providing additional insights and stimulating a widespread debate on pros and cons at academic level.
Notes
- 1.
In international trade, according to Grotteli (2015) safety is most often defined “as a condition in which the vast majority of risks associated with the conducted activity, have been identified, the probability of specificadverse eventshas been defined, accepted and special measures have been taken to limit the risks” while security and trade facilitation “should be defined as the conditions enabling business activity in a free and adjustable way, with the autonomy of the will of the operators engaged in that activity and the necessity to maintain existing volumes of risk by maintaining limited confidence in the economic and legal relations between the contracting parties, and also between internal and international environment. In the context of transnational threats such as terrorism and smuggling, security is also defined as the physical protection of technical infrastructure of the company, as well as cargo security and security of any information associated with it”. The objects of security are therefore (Manuj and Mentzer 2008; Sarathy 2006) for example harbours, warehouses, terminals, transport means and also staff operating in all this infrastructure.
- 2.
These Authors highlight that “Currently one of the most widespread and effective systems of management is the quality management system, the basic requirements of which are set out in the international standard ISO 9001:2015. Introduction in activity ofcustomsrequirements and quality management principles in accordance with this standard, is a strategic decision that will enable to increase theefficiency, effectiveness, reliability and quality of customs services”.
- 3.
In this regard, see Harmonisation of thecustomsrisk managementsystem with the EU standards and best practices by the Republic of Croatia Ministry of Finance—Customs Administration, which underlines that “customs controls should ensure that the movement of vessels, vehicles, aircraft, goods and persons across international borders occurs within the framework of laws, regulations and procedures that comprise thecustomsclearance process. Given the high number of export, import and transit transactions many customs administrations use risk analysis to determine which persons, goods and means of transport should be examined and to what extent (WCO Revised Kyoto Convention, Standard 6.4.)”.
- 4.
It is difficult to find a generally agreed definition of IoT. In very broad terms, this notion means “a networked connection of physical objects that are not computers in the classic sense” (Okazaki 2017). This Author further describes IoT as “a variety of items, including household products and community facilities which have been equipped with information terminals and thus become a provider of raw or initial data, focused on their regular use, helping to facilitate certain business tasks, public or private”.
- 5.
The reasons are clearly described in Lacey et al. (2015). The Authors note that: “currently, the highest concentration of use cases can be found within the sensing and shaping category, such as applications offering track-and-trace. Such applications are simplified by the fact that they must exist on the supply side of logistics, which can be owned entirely by the T&L company. Therefore, such applications can be accomplished with relatively few hurdles or changes to existing business practices. By contrast, few companies—in any industry, not only T&L—havethus far adopted IoTapplications that achieve ecosystem scope. In T&L, the difficulty encountered in moving to these higher-value, larger-scope applications can be captured by the fact that they must incorporate both demand- and supply-side logistics capabilities”.
- 6.
Cfr. Lacey et al. (2015).
- 7.
Okazaki (2017). This Author remarks that this is not an easy task as “in order forCustomsadministrations to implement a big data strategy, knowledgeable experts, whether in-house or outsourced, are necessary. Furthermore, a strategy on how to engage specialists in the relevant fields, including cyber security and incident readiness, should be elaborated”.
- 8.
Okazaki (2017).
- 9.
As noted in Okazaki (2017), “big data contains clusters of raw data that are disordered and untidy. More technically, it relies on a broad mix of both structured and unstructured data formats. This represents a stark change forCustomsadministrations usually accustomed to structured data; that is, data from electronic declarations for example are well defined by the WCO Data Model, and the EDIFACT family of standards. The ‘standards’ defining big data would be much more varied, and largely outside of government’s control. It is clear that any intentions to exploit the potential of big data will require Customs, on the one hand, to have a strong mastery of its own structured data management and, on the other hand, to advance into other areas to exploit new data as well. The standards are still being written for the areas of commerce and industry; therefore, Customs administrations seeking data from the business community will be encouraged to focus their attention on new emerging standards, with a view to benefiting from the ‘sense-making’ potential of big data”.
- 10.
As noted in Okazaki (2017), “unlocking potential for big data usage will require strategically developing their workforce by identifying high potential data analysts that can be hired early in their career and grow professionally inside the organization”.
- 11.
Further features of these pre-shipment loading certificates allow to develop and manage a network of satellites which guarantee the connection of various systems, overcoming lack of accessibility in many remote areas in Africa.
- 12.
In particular, reference in the research has been made to the websites of the Shippers Council of Eastern Africa (http://www.shipperscouncilea.org); Ogefrem website (http://www.ogefrem.net); Conselhos de carregadores africanos of Angola (http://www.cnc-angola.com); Fabema website (http://www.frabema.it/en/certificati/certificati.html).
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Varese, E., Ronco, S.M. (2019). Customs and IoT for Monitoring Risk-Management Systems: Some Recent Applications. In: De Vincentiis, P., Culasso, F., Cerrato, S.A. (eds) The Future of Risk Management, Volume I. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-14548-4_3
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