Many of the World Customs Organization (WCO) Member Countries have asked the WCO to play the role of a technology developer and develop a risk management solution that can provide these countries with capabilities for a targeting and selectivity system that you might find in developed nations. Having worked for both Canada Border Services Agency and US Customs and Border Protection, I can tell you that a good targeting system is core to how these administrations manage their borders to identify high risk shipments for closer scrutiny or inspection. It’s also in my view the one single tool that can enable a developing customs administration to effectively operate using the principles of risk management for border management. I’d suggest it is the largest step forward any developing customs administration can make, and it can be measured using many key performance indicators including:
- · Reduced release times
- · Increased enforcement/penalties/seizures
- · Increased revenue is collected
- · Increased evaded revenue is recouped
- · Improved voluntary compliance from traders
- · Customs employees transition to become more skilled as analysts
- · Border decisions become intelligence driven
- · Improved integrity and reduced opportunities for corruption
The problem is, the WCO is blocking the technology providers from those countries who require and seek a robust risk management solution, by suggesting their Cargo Targeting System (CTS) as the only viable solution available. No market awareness or survey is provided. Sure -the WCO will point members to the TEN network or WCO IT Conference, but it’s clear to us that members are shown all roads lead to the CTS…. especially when they are told it makes them compliant with WCO SAFE (more on that in a moment).
In our view the system is rudimentary, and the delivery approach is flawed, with many existing redundancies on data integration. We’ll discuss that in an upcoming blog (The WCO CTS Myth - Part 2) in more detail. Instead we wanted to preface the Part 1 discussion to talk more about how the WCO uses the UNCTAD model of securing their system in a member country. There is a barrier to market entry being created here. It’s unfair, non-transparent, and we all need to express this to the WCO. It’s just started and the seeds are being laid for the WCO’s version of ASYCUDA. We love the WCO. We want to see them lead by example. We are discouraged to see a path of shadowy arrangements.
Many of the WCO members, are only familiar with the “UNCTAD” paradigm. As many are aware, UNCTAD builds and deploys a rudimentary declaration processing system called the Automated System for Customs Data or “ASYCUDA”. UNCTAD aggressively seeks out willing nations to deploy ASYCUDA, and now (to the detriment of technology providers) the WCO has followed the same steps in how these deployments are realized. Should they be building and deploying technology? Is it within their mandate? Are they capable of functioning as an IT shop? Of course not. Here’s a blog that discusses these points. It doesn’t matter whether the CTS is rudimentary, lacks maintenance and upgrades, fosters redundancies, or fails in any way. As long as the member nation feels like they are in compliance with the wishes of the WCO, then they will not be seeking out alternative solutions that arguably offer more return on investment (ROI). Like UNCTAD, the WCO is following suit to create a barrier to market entry and channel any opportunities straight back to their portfolio. Here are 3 observations:
Observation #1: The WCO (as a secretariat or council) enjoys the relationship leverage it has over its members. Ultimately a secretariat acts as a council to coordinate the cooperation, goals, and objectives of the members as a collective. A secretariat should provide expert advice and guide its members. We believe a conflict of interest exists when the WCO announces that the in-house technology it has recently developed -is also conveniently compliant with key international policies and frameworks developed by the WCO and endorsed by many members. (It’s a channeling tactic for willing members and a blocking tactic against competitive products.) How convenient.
· Sarcastic Side Note: This is like a city council announcing they have developed several policies and laws to ensure the safety of our roads and drivers. Then the city decides it wants to allocate funds and build a car, and tells its citizens that the best way they can be in compliance with the city’s “Safe Roads Framework” is if they use “the city’s car”. The city then gives their car to any citizen who wants it without an open tender. Other car manufacturers like Mercedes and Jaguar look at what the city has built and see it’s actually a go-kart with a lawn mower engine. When other car manufacturers including Mercedes and Jaguar complain, (suggesting a barrier has been created that prevents their vehicles from being considered), the city responds, “don’t worry, we hold an annual car show where you can showcase your latest vehicles”. The city further tells Mercedes and Jaguar there is no competitive behavior to their decisions and it is in fact the citizens who are asking for the city to provide the car. Ironically, the city also believes the car show re-sets the balance by providing the car manufacturers with 3 days a year to meet and market their products to the citizens. The citizens all line up to get their go-kart. The city tells them it also has air conditioning, leather seats, disc brakes, and bluetooth hands free….just like what Mercedes and Jaguar offer. They announce the lawn mower engine is all the citizen will need to ensure compliance with the Safe Roads Framework, and further suggest it will perform as well as any engine from Mercedes and Jaguar. Give me a break...
Observation #2: The WCO promotes and uses a no-bid sole source arrangement for the CTS with members. Like UNCTAD, the WCO will refuse to openly tender as an Intergovernmental Organization (IGO). That’s strange because it defeats and negates the UNCITRAL model law on the rules of procurement. UNCITRAL is another UN based organization, standing for The United Nations Commission on International Trade Law. The WCO is regularly engaged with UNCITRAL on many fronts, yet does anyone see the irony of discouraging an open tender to lock in a no-bid sole source arrangement for themselves? How convenient. There are many firms who can provide the same/similar/more advanced technology functions, so why is only one internal solution promoted by the WCO?
Observation #3: The WCO over-markets the CTS functions with vague misconceptions and bold statements. This is a vaporware tactic. It’s misleading and wrong to do this to any client (especially when you are the council representing the clients). Here is an example of how the WCO markets with vague misconception and bold statements. This was recently posted by the WCO:
“The WCO CTS is a cargo manifest risk assessment and targeting IT application developed by the WCO for Customs administrations across the globe. It allows those adopting the solution to implement international best practice cargo risk assessment including key pillars of the WCO’s SAFE Framework of Standards to Secure and Facilitate Global Trade.”
I’ve been designing and building targeting and selectivity systems with my colleagues and clients for the last 15 years. I can tell you that the WCO CTS is not an international best practice, nor positions those who use it to implement best practice. I don’t see how it could possibly make a country compliant with WCO SAFE. An Intergovernmental Organization should not be creating international signatory frameworks like SAFE and then announce to the same member community that they can be compliant with this framework “if” they deploy their rudimentary targeting system. Does anyone else see the irony?
It’s truly bizarre to watch this unfold. I’ll discuss more of this and support the argument in Part 2 of the WCO CTS Myth. For now, if you would like to see a list of functions that could arguably be viewed as international best practice, then look here. It’s not all inclusive, but certainly suggests the functions that may be considered a best practice. I’m also open to being challenged here.
Many of us in the technology sector don’t like how the WCO is following in the footsteps of the UNCTAD style behavior to create a barrier to market entry for the rest of us. We would never endorse this type of approach because it’s non-transparent, unprofessional, unfair, creates a barrier to market entry, and introduces opportunities for corruption. Why would anyone who is a legitimate stakeholder in this business support a shadowy layering of technology development and deployment? We certainly wouldn’t.
In summary, we are calling for the WCO to reform how they build, market, deliver, deploy, and support technologies like the WCO Cargo Targeting System (CTS). We call for the WCO to establish an advisory board made up of the customs technology providers to help guide the development and delivery of the CTS in a collaborative vs competitive manner. We further call for the WCO to use an open source licensing framework vs the closed licensing framework used today.
It’s time to be brave friends and call out the errors in where our industry is headed. I realize this is not going to make former friends and colleagues happy at the WCO, but the truth needs to be discussed and better decisions need to be made in the interests of all stakeholders. The WCO needs to understand they are not playing nice and these actions are disrespectful to a community of customs technology vendors they simultaneously court at various times of the year for events like the WCO IT or WCO R&D conferences. Come on guys, there’s a way to get this right. The current path is causing us pain. It’s time for some pain relief. If we are ignored, it puts us in a position where we will be required to disrupt the market. I don’t want to just be a problem identifier. Here’s a suggestion for collaboration:
The solution should promote a collaborative System Development Lifecycle (SDLC). The following diagram attempts to illustrate the current paradigm. It’s competitive, broken, and fractured at every stage.
The next diagram illustrates where we need to go, and how the roles can be collaborative. The WCO and other IGOs like UNCTAD can easily develop a baseline of functional requirements for a customs system and post these on their site as “best practice”. This could be done for key commercial border processing functions including declaration processing, warehousing, manifesting, accounting and payment, risk management, and electronic single window. One must ask why they haven’t done this already?
In summary, the technology vendors are not policy makers. It’s not their mandate and they offer no value as policy makers. The IGOs (especially WCO and UNCTAD) are not technology builders. It’s not their mandate. They aren’t good at it, and they offer no real value because they have no expertise in information technology. If they say they do, let’s compare resumes. We (the community of technology vendors) aren’t pretending to be policy experts and the IGOs shouldn’t be pretending to be technology experts.
We need to all work together to convince the WCO how to collaborate in this area. Until that happens, we need to continue the discussion and expose the WCO CTS Myth for the benefit of the member community. Transparency is key.
Please stay tuned for upcoming blogs that will continue the discussion along these segments:
- The WCO CTS Myth – Part 2: Does the CTS Have the Core Functions Needed to Declare itself as a Targeting System? A Closer Look at the Pros and Cons….
- The ASYCUDA Myth – Part 1: Is ASYCUDA World only a Declaration Processing System, or More?
- The ASYCUDA Myth – Part 2: Is ASYCUDA World an Electronic Single Window?
- The ASYCUDA Myth – Part 3: Is ASYCUDA World a Risk Management System? A Closer Look at the Pros and Cons of the ASYCUDA Risk Management Module.
- The ASYCUDA and CTS Myth – SOLVED: The path forward to open source, advisory boards, and suggested future collaborative arrangements between the technology sector, the WCO, the WTO, and UNCTAD.
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