STRENGTHENING THE SUPPLY CHAIN - A pragmatic and incremental step towards safeguarding importer identity

There has been extensive media coverage of violence relating to gang wars with much debate on solutions in an environment where our law enforcement agencies acknowledge the difficulties in preventing related drugs imports hitting our streets.
 
In a presentation to the Trans-Tasman Business Circle on 12 July 2023, the Australian Border Force (ABF) Commissioner Michael Outram stated that despite doubling its impressive strike rate in recent years in terms of the drug interdictions, wastewater testing reveals about 75 to 80 per cent of illicit drugs succeed in getting across the border.
 
"In other words, despite the thousands of tonnes per year of drugs we are stopping – even on a good day we're stopping only about 20 to 25 per cent of them. So, we have to do better. We can do better." Commissioner Outram said.
 
Following on from this, the Sydney Morning Herald reported on 1 August 2023 that the ABF watch list compiled through Operation Jardena has "ballooned" to about 1000 individuals and more than 90 businesses working at the border suspected of being supply chain trusted insiders.
 
As members will recall, Jardena was established in November 2021 with 90 ABF officers dedicated to supply chain operations, working closely with federal and state police and other regulatory agencies, both in Australia and abroad, to identify and disrupt border vulnerabilities that are being exploited.
 
According to Commissioner Outram at his July 2023 address, Jardena has issued 165 infringement notices totalling more than $1.7 million in financial penalties for supply-chain-related offences. Several licences have also been cancelled with the ABF building the case for further legislative, regulatory and policy changes.
 
From an industry perspective it is hoped that the intelligence received through Jardena allows for better targeting by the ABF of high-risk consignments rather than a potential knee-jerk reaction to the media reports by simply stopping more cargo. To ensure an outcome of continued trade facilitation outcomes, industry is turning its attention to solutions.
 
In its Autumn 2023 Good Compliance Update, the ABF highlighted multiple instances of fraudulent identity claims have been associated with the import of noncompliant and illicit goods.
 
The update labelled the misuse of an identity as a "piggyback", referring to a shipment where a legitimate importer's name is used by an entity not associated with them to import illicit goods. The legitimate importer is unaware a consignment has been shipped in their name until the point there is a detection at the border, and they are contacted by the ABF.
 
The ABF is encouraging customs brokers to take reasonable steps to verify the identity of their clients, noting this is not necessarily an onerous task "for example, in the context of piggyback consignments, a simple search of your client on the internet or phone call to your client through the claimed company's main switchboard could reveal discrepancies between the details you have been provided and the legitimate entity's details ".
 
Freight & Trade Alliance (FTA), in partnership with the ABF, have communicated the need for verification of identity as being an essential obligation to customs brokers at this year's Continuing Professional Development (CPD) Border Compliance Program events.
 
Member feedback was subsequently incorporated into a comprehensive submission provided by FTA and the Australian Peak Shippers Association (APSA) to the Simplified Trade System (STS) Taskforce that included twenty-eight (28) key recommendations.
 
Recognising the complexity of the Integrated Cargo System (ICS) and difficulties in adjusting this aging system used for reporting import and export transactions to the ABF, a simple and pragmatic recommendation was provided to the Taskforce to harden the use of identity to strengthen the supply chain.
 
The ICS currently allows an importer to make direct payment of import duty, GST, and cost recovery charges. Alternatively, a licensed customs brokerage can make these payments on the importer's behalf.
 
By limiting the ability of customs brokerages in making these EFT payments on behalf of client importers, the cargo owner would be forced to provide financial banking data direct to the ABF. This data in turn can be used for risk assessment and identity verification, significantly reducing the risk of "piggyback" illegal imports consignments.
 
We look forward to ongoing close engagement with the ABF and STS Taskforce to achieve both community protection and trade facilitation outcomes.

Please also refer to today's article from the LoadStar Australia cracks down on cocaine smuggling, with 100 companies in its sights; please share your views HERE

Paul Zalai - Director FTA | Secretariat APSA | Director GSF