Meeting Summary. Trusted Trader Industry Advisory Group 1:00pm 4:00pm Thursday, 29 January 2015 Melbourne

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1 Meeting Summary Trusted Trader Industry Advisory Group 1:00pm 4:00pm Thursday, 29 January 2015 Melbourne Purpose: The purpose of this document is to provide a summary of the Industry Advisory Group (IAG) meeting held on 29 January 2015 in Melbourne. Attendees: Participants at the meeting were from relevant industry advocacy groups, companies and government agencies that have an interest in the Trusted Trader Programme (TTP). Opening Remarks 1. The Chair of the meeting, Teresa Conolan, Assistant Secretary of the Trusted Trader Branch, provided an update on the restructures underway in Department of Immigration and Border Protection. One of the components within the restructure is a redesign of the current Compliance Division which will see the TTP become a part of the revised compliance function. 2. Further updates on the restructure will be provided at future IAGs as they become available. 3. The Chair provided an update on future Asia-Pacific Economic Cooperation (APEC) studies and pilots that the TTP will participate in. One initiative is the China-Australia feasibility study which will involve data and technology testing for recognising and sharing information about trusted traders from China and Australia. 4. The Chair mentioned that the Trusted Trader Branch has engaged KGH Border Solutions to provide consultancy services to assist with the design and implementation work required for the Pilot launch in July 2015 as well as future program design. The KGH team visited Canberra in December for a series of policy design workshops with the Trusted Trader Branch and these workshops will continue throughout this year. 5. Trusted Trader Branch also has two officers visiting from the United States Customs Trade Partnership against Terrorism (US C-TPAT), which is the US version of the TTP. The aim of their two week visit is to provide the Trusted Trader Branch with information about lessons learned over the years since the US C-TPAT program was established and any issues experienced during the operationalisation of their program.

2 Agenda Item 1: Introduction and previous action items 6. The Chair of the meeting presented the proposed positions from the November meeting. In relation to the proposed tiered model and the validation process it was stated that further work will need to be done with KGH before a final position is presented on these two issues. 7. A question was raised about the difference between implementing best practice standards as opposed to exceeding minimum standards. It was noted that practical examples of what constitutes best practice as opposed to exceeding minimum standards will be assessed on a case by case basis, taking into account the industry sector, company size and operations. 8. A question was raised about the status of the legislation for the TTP. It was noted that Government policy approval is required before further work on the legislation can be progressed. Policy approval from Government may come in late February. It is intended that an exposure draft of the legislation will be made available. 9. David Widdowson, from the University of Canberra Centre for Customs and Excise Studies is also part of the KGH team that will be providing consultancy services to the Trusted Trader Branch. David Widdowson provided an update on the environmental scan that he is undertaking that will identify other programmes that the TTP could leverage off. 10. An update was provided on the previous action items. 11. It was noted that the compliance principles paper will be presented at the next round of IAG meetings. The Chair noted that fundamentally. the TTP will be an ongoing relationship between the Trusted Trader and ACBPS, this will involve ongoing reporting and information sharing as opposed to penalising the Trusted Trader on the first basis. 12. Questions were asked about how many negative compliance responses during audits were permissible for a company that was applying to be a Trusted Trader. 13. A question was raised about how the increase in compliance action within the Infringement Notice Scheme will align with the TTP. A general question was presented about how the TTP will work together with the stringent compliance management policy that is currently operating. The Chair of the meeting advised that these issues will be covered in the compliance principles paper. Additionally the Chair asked IAG members to the trustedtrader@customs.gov.au mailbox with any questions or issues that they would like covered within the compliance principles paper. 14. A question was raised about what was meant by streamlined reporting. It was noted that a discussion paper will be presented at a future IAG outlining the proposed principles of streamlined reporting in relation to the reporting, movement and declaration of goods. Agenda Item 2: Eligibility requirements for Trusted Traders 15. A presentation was given on the basic eligibility requirements that companies would have to meet before they are able to apply for the TTP. Views offered by participants included: 2

3 16. Questions were raised about how an Australian importer can demonstrate control over their overseas supply chains. It was noted that control does not mean having majority shares or ownership in the overseas company. In this context it would simply mean that the Australian importer imposes some sort of contractual obligation on their overseas suppliers to enforce SAFE Framework security standards in their practices for exporting to Australia. Once Australia signs mutual recognition agreements with countries it will be able to use those countries lists of Trusted Traders as verification of the overseas supply chain. 17. A question was asked about the trade compliance criteria and how far compliance will extend among the various legislation listed in the discussion paper. It was noted that the trade compliance will only be assessed in relation to the company s importation and exportation of goods. When assessing the trade compliance criteria ACBPS will liaise with its partner border agencies. 18. A question was raised about whether the Australian Taxation Office (ATO) will be consulted when assessing a company s trade compliance and whether any outstanding debts from the ATO will impact negatively on a company s eligibility for the TTP. It is expected that the ATO will be consulted when assessing a company s eligibility for the TTP, especially in relation to benefits such as duty deferral. 19. A question was raised about compliance in relation to a company s personnel and to what extent employees and directors within a company will be screened when the company is applying to the TTP. It was noted that the screening of personnel will be limited to those within the company that have decision making authority relating to the international supply chain. It was noted that a guide for vetting standards will be presented at a future meeting. Action Item: ACBPS to present a guide to vetting standards for company s personnel. 20. A sufficient history of operation in the international trade environment was generally accepted, however it was agreed among IAG members that 12 months operating in international trade was an insufficient period. It was proposed that operation in the international trade environment should be at least three years and should take into account the volume of transactions that a company completes. 21. A question was raised about how ACBPS will monitor trade compliance of a company after assessing the initial eligibility criteria. It was explained that ACBPS will establish a control management framework and ongoing assessment process for each Trusted Trader. It will also take into account any voluntary disclosure that the company provides ACBPS. 22. A question was raised about the information technology (IT) security requirements that a company must meet. It was noted that these security requirements will be outcome based and will take into account the individual circumstances of the company. The base level of IT security requirements will focus on who has access to IT systems and the type of access that are available, and general firewall and anti-virus protection. 23. A question was raised about the different types of financial solvency and how it will affect entry into the TTP. It was noted that voluntary administration within a company may not preclude membership in the TTP. 3

4 Agenda Item 3: How the tiered structure will operate 24. A presentation was given on how the tiered structure will operate, including how tiers and subsequent benefits will be assigned to companies. It was proposed that a company would be accredited as a single entity and would be assigned a single tier for all their trade related activities. 25. One IAG member raised that their company has one Australian Business Number (ABN) which encompasses a very broad range of international trade related activities. They also mentioned that there may be varying levels of compliance and security standards within the different activities. They asked if it would be possible to limit the application to only one stream of their international trade related activities. It was suggested that it may be too difficult to split one company into all their various trade related activities if they use only one ABN. It was also suggested that application into the TTP may lead the non-compliant parts of the company to improve their processes to become compliant. 26. It was noted that the tier rating will be based on a holistic risk assessment of the company. If it was proven that one part of the company was less compliant than others, then the company would have to show that they are taking steps to mitigate the risk. Additionally ACBPS could continue to monitor the particular activity with a higher risk rating. 27. A possibility was raised for companies to establish multiple ABNs if they wish to apply for Trusted Trader status for only certain parts of their international trade related activities. ACBPS agreed to present further options for large corporations wishing to apply for the TTP. Action Item: ACBPS to present options on how large corporations with multiple international trade related activities could apply for the TTP. 28. The Chair asked IAG members to the trustedtrader@customs.gov.au mailbox with examples of how their supply chains operate. This will be particularly relevant to large corporations that undertake various international trade related activities. Agenda Item 4: Principles for Australia s Pilot Programme 29. A member of the Trusted Trader Team presented on the proposed principles for Australia s Pilot Programme. 30. A question was raised whether feedback and outcomes from the Pilot will be circulated among other companies. It was noted that company feedback received during the Pilot would be published, providing that no confidential commercial information is in the feedback. 31. A question was raised about the timeframe for the accreditation process. The US C-TPAT officers provided that in the US the accreditation timeframe is 60 days. The timeframe for Australian validations is yet to be determined. 32. The Chair asked for any further questions on the Pilot Programme to be ed to the trustedtrader@customs.gov.au mailbox. Agenda Item 5 Triggers or conditions for revalidation 33. A presentation was given on the different types of revalidations and the length of time between validations. 4

5 34. There was a general view that the TTP should be focused on auditing and monitoring rather than revalidations and interventions. It was also agreed that those supply chains that pose a higher risk will be subject to revalidations more frequently. 35. An officer from the Department of Agriculture noted that Agriculture compliance agreements could be examined when assessing a company s risk rating and revalidation timeframe. 36. As the meeting had gone overtime the Chair asked members of the IAG to the trustedtrader@customs.gov.au mailbox if they had any comments on the preferred option for revalidations. Agenda Item 6 Other business 37. The next meeting was scheduled for early April, exact dates will be circulated with the Minutes and proposed position paper. Action items 38. ACBPS to present a guide to vetting standards for company s personnel. 39. ACBPS to present options on how large corporations with multiple international trade related activities could apply for the TTP. 5