US arrangement benefits NZ exporters

A comprehensive security arrangement between New Zealand and United States Customs authorities has been announced today by the Prime Minister Helen Clark and the Customs Minister Rick Barker.

This will see security issues reconciled prior to loading, so New Zealand exporters can be confident they are on the front foot when it comes to clearance at overseas borders.

"The New Zealand Customs Service and the US Customs and Border Protection Agency have agreed on a series of measures that will see high-risk containers identified and intercepted as early in the supply chain as possible," said Helen Clark.

"From 1 December the two agencies will work closely together using joint intelligence information to screen all trader and shipper declarations. Consignments identified for more detailed scrutiny will be inspected, using non-invasive technology or physical examination, prior to loading for export from New Zealand."

The US is New Zealand's second-largest individual export market, taking almost 15% of exports.

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"This arrangement is possible because of co-operation between the government and industry, including air and sea ports, in enhancing the security of New Zealand's supply chain. The government's commitment includes spending an extra $22 million this year on new non-invasive technology," said Helen Clark.

Rick Barker says the implementation of the Supply Chain Security arrangement means greater confidence over the low risk nature of New Zealand goods, providing greater facilitation and certainty for our shipments.

"When I met the US Customs and Border Protection Commissioner Robert Bonner last year, he told me of his trust and confidence in the New Zealand Customs Service. Commissioner Bonner has described New Zealand's initiatives in this area as some of the world’s best practice.

"New X-ray technology to scrutinise exports to meet trading partner expectations is part of a comprehensive push to put New Zealand ahead of our competitors, and to be sure we are doing everything we can to move our goods expeditiously across borders.

"At the same time, we are improving our assurance over the security of goods arriving in New Zealand and being trans-shipped through our ports and airports. This helps ensure New Zealand is kept secure.

"The Customs Service is also in discussion with other trading partners, and is working through the World Customs Organisation to develop international standards," said Mr Barker.

Questions and Answers

1. What is the arrangement with the United States?

The New Zealand Customs Service and the US Customs and Border Protection Agency have agreed to implement comprehensive supply chain security measures for shipments between the US and New Zealand.

This will mean enhanced security, greater facilitation and certainty for New Zealand shipments to the US.

New Zealand and US have adopted closely aligned security mechanisms and partnerships with trade to ensure supply chain best practice. Both countries are working together in multi-lateral fora, such as the World Customs Organisation, to internationalise those practices.

2. What security mechanisms has New Zealand adopted?

The New Zealand Customs Service in consultation with business has developed and implemented a Supply Chain Security Strategy to provide greater security assurance over exports, imports and transshippped goods.

The strategy has four elements:

Accurate advance electronic reporting of information about shipments; intelligence-based risk assessment; examining cargo identified as high risk to New Zealand or trading partners, using both non-invasive technology and physical inspection as required; and voluntary agreements to reduce risk.

3. What will the two agencies do as a result of this arrangement?

Beginning 1 December, an understanding has been reached that will see NZ Customs work closely with the US Customs and Border Protection National Targeting Centre to identify and intercept high-risk containers as early in the supply chain as possible. Joint intelligence information will be used to screen all trader and shipper declarations. Consignments identified for more detailed security scrutiny will be inspected using non-invasive x-ray or physical examination prior to loading for export from New Zealand.

4. What will this mean to NZ exporters to the US?

Through these initiatives and enhanced security practices, New Zealand traders can have confidence of the low risk nature of goods routed from New Zealand to the US and around the world providing enhanced security, greater facilitation and certainty for our shipments. This will put New Zealand exporters on the front foot at US border crossings.

5. Why is this necessary?

Internationally, our trading partners are progressively introducing extra measures to ensure that they do not import smuggled goods that may cause harm. These include the APEC STAR Initiative and the US Container Security Initiative (CSI).

We have to take responsibility for ensuring we are not exporting risk, and we have to demonstrate that security assurance to our trading partners, to avoid our trade being caught up by security requirements.

To give this assurance, Customs must be confident about the security of all goods leaving New Zealand, including those being transhipped through our ports and airports.

6. What has US Customs and Border Protection said about the proposed strategy?

The US Customs and Border Protection Commissioner (CBP) Robert C. Bonner said in November 2003 that: "New Zealand has developed and is implementing some of the world’s best practices to partner with the trade and take a leading role in ensuring the integrity of their export system. These types of initiatives, when fully implemented, will help ensure the low risk nature of goods coming from New Zealand to the U.S. – and keep New Zealand goods flowing in international commerce in times of heightened security.”

These initiatives will be fully implemented from 1 December 2004.

7. Why doesn't New Zealand simply join the US Container Security Initiative (CSI) as other ports around the world have done?

Under the CSI program, a small number of US Customs and Border Protection (CBP) officers are deployed to work with host nation counterparts to target high-risk cargo containers. Its purpose is to protect containerised shipping from exploitation by terrorists.

The US is negotiating CSI arrangements with the world's largest ports shipping direct to the US, on a port-by-port basis. It acknowledges it would take some time to get down to ports the size of New Zealand and there are no arrangements covering New Zealand goods in the interim. In addition, the New Zealand Government is not prepared to accept the distortionary regional economic impact of all goods to the US having to be shipped through one port. 8. What about exports to other countries?

The arrangement between the US and New Zealand only covers trade to and from that country. However other Customs administrations including APEC members and European countries are also working on trade security measures, including potential international standards for trade security. Common elements in all proposals currently being discussed are advance electronic supply of information, capability for non-invasive (x-ray) examination of cargo and partnerships with industry. New Zealand's Supply Chain security Strategy includes all these elements.

9. Is this arrangement the reason the Government is introducing a new charge on business?

Enhancing New Zealand's supply chain security means extra costs. Supply chain security enhancement is necessary not just to trade with the US, but also to prepare New Zealand to meet other international expectations.

The Government has increased its funding of the New Zealand Customs Service but is also consulting with industry over making a contribution through a goods clearance fee. The Government's contribution includes $22 million in capital costs for new non-invasive inspection (x-ray) equipment.

The Government believes there is a direct benefit to traders in facilitating trade at overseas borders and reducing the risk of delay. Importers and exporters know there is a cost associated with goods being delayed for examination, and an even bigger cost if they are refused entry. Therefore the Government considers it appropriate for industry to contribute to the cost.

10. How much will the new fee be?

Announcements on the detail of the new fee will be made later this month (October) however industry representatives have been consulted and are aware of the likely impact.

11. What is the Secure Export Partnership Scheme?

One part of the Supply Chain Security Strategy is to reduce risk through voluntary agreements with industry. The Secure Export Partnership Scheme is a voluntary agreement to ensure that goods exported under the scheme are packed securely and with no other goods. Then they have to be conveyed securely and without interference to the place of shipment and then shipped. This requires the business to have adequate security measures in place to ensure export goods cannot be tampered with or used to smuggle contraband. The consignment of goods is then sealed with a Customs-approved seal which signals that it is under Customs control and can be considered secure by overseas administrations. It is a voluntary scheme but Customs control over the sealed consignments is legislated for in the Border Security Bill. For more information on Secure Export Partnerships: www.customs.govt.nz/about/news/partnership+scheme+191203.asp

12. Has Customs had any interest from business in entering Secure Export Partnerships?

As of this month, Customs has over 100 applications from export businesses wanting to be considered for the Secure Export Partnership scheme.

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