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Risk-based Information Sharing Approaches to Supply Chain Security and Visibility

Department of Investigation,

Directorate General of Customs,

Ministry of Finance, Taiwan

Outlines

• Forward• Customs Risk Management Mechanism• Cross-border Container Information

Sharing Platform• Case Study• Conclusions

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Forward

• Variety types of codes for cargo transportation information according to individual management systems.

• The information become invisible when the cargoes depart from control area.

• Invisibility raises potential risk to border security and additional cost to stakeholders

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The invisibility and its influence

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The developing trend• In 2005, WCO released SAFE framework defined two

pillars of relationship, Customs to Customs and Customs to Business.

• In 2009, APEC regional economic integration (REI) defined three areas (at the border, behind the border and across the border) of key work priorities for supporting and accelerating the regional economic integration.

• In 2010, APEC initiated Supply Chain Connectivity Initiative (SCI) to the development of Eight Action Plans for eight logistics chokepoints. SCI also encourage cooperation between public and private sectors to develop efficient supply chain model.

Forward

Customs Risk Management Mechanism

• To achieve the balance between the trade security and trade facilitation, it is crucial to build the cross-border platforms and share the high-risk and low-risk container movement information instantly.

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Customs Risk Management Mechanism

• High-risk containers– In general, the export container has shorter

inspection time. The inspection ratio for export containers is much lower than import containers.

– In consideration of logistic flow efficiency, the export containers are considered as potential-risked, but has no evidence to violate the relevant laws of export economics, or has no enough time for detail inspection, could be affixed with RFID e-Seal and notice next Customs through the information sharing platform. The local Customs can analyze the pre-interchange information for the purpose of further inspection.

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Customs Risk Management Mechanism

• Low-risk containers– The AEO containers are affixed with RFID e-Seal at

the factories. When they arrive at the border, the Customs scan the e-Seals, verify the relevant information, and release the containers.

– When they arrive the destination country, the local Customs could release the container after scanning the e-Seal and verify the relevant information over the cross-border platform.

– Develop a safe and green path for cross-border movement of cargo to enhance the customs clearance efficiency.

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Cross-border Container Information Sharing Platform

• Unity code to identify cargo– In consideration of conformity, a unanimous,

standardized number as a key to retrieve relevant data is necessary to seamless connect every links in the end-to-end supply chain.

• Information and communication technologies (ICTs) for container identification, transportation tracking and information sharing.

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Two things we needs to build the platform

B

E

A

D

F

C

Active e-Seal

Passive e-Seal

Semi-active e-Seal

Discovery &Authentication

Data Repository

Information Capture

Information Query

ISO 18000

ISO 18185

ISO 18186

ISO 17712

EPC C1G2Middleware Middleware Middleware

Information Carrier

EPCIS

Not Specified (draft)

Cross-border Container Information Sharing Platform

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Item Item

Pallet, crate, vessel

Consignment

Pallet, crate, vessel

Item

Item Item

Item GTIN

SSCC

GSIN

UCR

Last digit of calendar

Country or territory of export

Company (Supplier) ID

Internally applied

++ +

Consignment Level

Cross-border Container Information Sharing Platform

Cross-border Container Information Sharing Platform

Mapping table for different coding over internet

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Code A

Transform/Mapping over

Secured Networks

Code C

CodeB

Code D

XML Self-definition

Autonomy

Encrytion/Authentication

Standardization

– Starts From 2009 to 2012.– Implementation scope including import, export,

transit and transshipment containers.– Uses information and communication

technologies.– Provides a feasible solution to balance

facilitation and security. – Proposes cross-border cooperation plan for

supply chain connectivity.

Case Study

The cargo movement security subproject

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Case Study

• RFID e-Seal • Information processing• Information sharing platform

Technologies we used

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Two Operational Scenarios of RFID e-SealOpen Loop Applicatio

ns

Close Loop Applicatio

ns

PASSIVE E-SEALSYSTEM

ACTIVE E-SEALSYSTEM

Case Study

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RFID Handset

Real Time Warning

CCD Camera

Barcode Scanner

Active e-Seal

Passive e-Seal

3G/WiFi Wireless Communication

Case Study

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RFID Lane in Container Yard

DVR

OCR: Car plate No.Recognition

OCR:Container No.Recognition

ICR: Image CharacteristicRecognition

PassiveRFID e-Seal Reader & Antenna

LED Signal

Barcode Scanner

Infrared Triggers

Case Study

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Nonstop Fast Lane in Harbor Gateway

Fixed RFID Reader

(for driver identification)

OCR Cameras(for car plate number

identification)

OCR Cameras(for container

number identification)

Infrared Triggers

Fixed RFID Reader(for passive e-Seal)

LED Display Board

DVR & ICR Camera: (Image

CharacteristicRecognition)

Case Study

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Surveillance TV Real Time Warning and Alarm Devices Monitoring

Synchronized Display of Comparison Results of RFID

Lanes

Container Status from Customs Clearance

Systems

Instant Log of Container Notes

Monitoring Center in Taichung Customs Office

Case Study

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Active e-Seal

• In-transit real-time tracking and warning– GPS function– 3.5G communication

modules• AES 128 bits encryption• Quick and easy to install

and unlock

Case Study

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Green Channel 1

Keelung Harbor

Taipei Harbor

Distance : 51.6 km

Case Study

Airport Security Area

Ever Terminal

Distance : 4.7 km

Green Channel 2

Case Study

Kaohsiung harbor (2012)

Taichung harbor(2010)

Taoyuan internal airport (2011)

Taipei Harbor (2011)

Keelung harbor(2011)

286 RFID handsets deployed in 118 monitor

areas

110 RFID lanes (for passive e-Seal)

2 green channels (for active e-Seal)

1 control center in headquarters and 4

control offices in local Customs

Passive e-Seal System

Cargo Risk Control System(2012)

Active e-Seal System

Case Study

Cross-border Control

• A cross-border information exchange platform is essential to the Customs.

• The platform can provide critical or important information for Customs to

• ascertain the lowest risk containers such as AEOs’ and provide speedy clearance environment, and

• target the highest risk containers.

Case Study

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The Cross-border Pilot Project

• Chinese Taipei Customs initiated the cross-border pilot project in January 2010.

• The 7th Kuala Lumpur-Taipei Trade and Investment meeting held in April recognized Chinese Taipei’s proposal for bilateral cooperation in the use of RFID e-Seal between Malaysia and Chinese Taipei.

• The meeting of the Cooperation and Cross-Border Pilot Project on RFID E-Seal between Malaysia and Chinese Taipei for further discussion on the cooperation issues, was held in May 2010.

Case Study

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Two-Stage Test Plan

Stage 1: CY to CY test•The end-to-end test is limited to the

container yards that Customs can commence.

•The containers affixed with e-Seals are verified at the check points.

•The information exchanged between two sides is limited.

Stage 2: Trader-to-trader test•The container movement along the entire

supply chain is logged and traceable.•Enterprises with good reputation are

encouraged to join the trader-to-trader test.

•The containers movement along the end-to-end supply chain are traced and tracked by the above-mentioned platform.

Case Study

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Case Study

Chinese Taipei side:

Kaohsiung harbor

Malaysia side: Penang harbor

Case 1: 5 containers

Vessel name: WANHAI 313 VOY 060N

Departure date: 2010/9/18

Arrival date: 2010/9/25

Case 2: 4 containers

Vessel name: WANHAI 316 3F

Departure date: 2010/9/26

Arrival date: 2010/10/1

Chinese Taipei side: Taichung harbor

Malaysia side: Penang harbor

Case 3: 3 containers

Vessel name: EVER PEARL

Departure date: 2010/12/26

Arrival date: 2011/1/3

The container movement were logged and tracked in the cross-border platform

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Achievements

1Validation and justification of the RFID e-Seal in container movement security of end-to-end supply chain.

2The speedy clearance and transnational green lane concepts raised in this project are workable and feasible.

3By way of promotion of transnational cooperation, AEOs could enjoy the privilege of facilitated clearance at the import countries.

Case Study

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• Cross-border platform is essential for risk-management.

• Cross-border cooperation should be conducted by the agencies that in charge of border security, such as Customs.

• The cross-border platform should be conducted and implemented under APEC multilateral cooperation model.

Conclusions

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THANK YOU

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