Photo Credit: James Tourtellotte

A session of the World Customs Organization held in Brussels, Belgium.

What is the WCO?
The World Customs Organization (WCO), established in 1952 as the Customs Cooperation Council, is an independent intergovernmental organization headquartered in Brussels, Belgium. In the customs and trade arena, the WCO is at the forefront of the global trade community. The WCO’s goal is to enhance the effectiveness and efficiency of Customs administrations by providing advice and assistance to its 164 member Customs administrations worldwide.

One of the prime initiatives of the WCO is the development of uniform procedures governing the movement of commodities, people and conveyances across Customs frontiers. The trade community supports standardization because it facilitates trade but also increases security.

Standardization as a technique that simplifies and facilitates the movement of goods across borders has already proven itself. The WCO developed and introduced the Harmonized Commodity Description and Coding System. Generally referred to as the “Harmonized System” or HS. It is an international nomenclature system used to classify goods for tariff purposes. Currently, more than 177 countries use the HS as a basis for their customs tariffs and for the collection of international trade statistics. More than 98 percent of the merchandise in international trade is classified in terms of the HS.

Photo Credit: James Tourtellotte

Michael T. Schmitz, Assistant Commissioner, Office of Regulations and Rulings

An experienced and astute nominee for the WCO
Michael T. Schmitz, Assistant Commissioner, Office of Regulations and Rulings (ORR) has been nominated as a candidate for Director of Compliance and Facilitation for the WCO. This position is strategic to advancing global trade security measures while simultaneously facilitating trade. In preparation for the June election, Assistant Commissioner Schmitz has been circling the globe meeting with WCO representatives to garner support for his candidacy. Each country represented in the WCO gets one vote for the position. If elected, Mr. Schmitz would serve a five-year term beginning in January of 2006.

Schmitz’s varied background makes him an especially well-suited candidate for the position. As Assistant Commissioner for ORR , Schmitz is responsible for issuing regulations and rulings that affect the border security and trade facilitation missions of CBP. Schmitz is no stranger to the international forum, having held the position of Acting Assistant Commissioner for International Affairs where he was responsible for cooperative foreign initiatives and programs in areas as diverse as border security, antiterrorism, export controls, and non-proliferation of nuclear weapons.

He also has first hand knowledge of the work of the WCO having served as Chef de Cabinet to the Secretary General of the WCO for five years. As Chef de Cabinet he oversaw the day-to-day operations of the WCO and participated in key initiatives such as establishment of the non-preferential Rules of Origin, the Customs Enforcement Network, and implementation of the Intellectual Property Rights program.

Revised Kyoto Convention
Schmitz was a principal in the negotiation and completion of the Revised Kyoto Convention, which laid the groundwork for the modernization of customs administrations. The principal tenets of the Convention are that modern customs administrations should implement standard, simplified procedures, improve customs control techniques, maximize the use of information technology, and foster partnerships between customs and trade.

The convention promotes the use of automated systems to analyze pre-arrival information and the use of risk-management procedures. “The Revised Kyoto Convention has been ratified by 37 countries but must have 40 before it can be adopted. Though not formally in effect, the adoption of the principals delineated in the convention by global trade leaders has resulted in de facto implementation of the standards,” says Michael Schmitz. “If elected as the Director of Compliance and Facilitation, I would work to get the necessary ratifications and have the Convention come into force.”

WCO framework to secure and facilitate global trade
At the CBP 2004 Trade Symposium held this January, the role of the WCO was the topic of intense discussion. The High Level Strategic Group of the WCO has developed a Framework of Standards to Secure and Facilitate Global Trade, generally referred to as the “the Framework” or the “WCO Framework.” The Framework will be presented to the WCO Council on April 25 and 26, 2005, and will be voted on in June of this year. The framework builds upon the Revised Kyoto Convention document and on post -9/11 trade security initiatives of the United States.

Core elements of the framework are: advance electronic manifest information requirements on inbound, outbound and transit shipments is harmonized; countries joining the framework agree to employ consistent risk management approaches to address terrorism and other security threats; a receiving nation may request a sending nation’s customs administration perform an outbound inspection of high-risk containers using non-intrusive inspection technology; and lastly, businesses that meet minimal supply chain security standards and best practices will receive benefits.

The buy in
The WCO is the logical proponent for global security initiatives since its membership represents 99 percent of global trade. Customs administrations control and administer the international movement of goods and are, therefore, in a unique position to provide increased security to the global supply chain. They have the authority to inspect cargo and goods shipped into, through, and out of a country—and they can refuse entry or exit and take measures to expedite entry.

Most European Union (EU) countries do not view themselves as prime targets for terrorism, but they do rely on customs revenue to support themselves. Similarly, lesser-developed countries do not view themselves at risk for a bomb in a box, but can accept that advanced manifest information can provide economic security by protecting their revenue.

“CBP is at the forefront of global trade security. Partnerships with the trade like Customs-Trade Partnership Against Terrorist (C-TPAT) and the international cooperation inherent in the Container Security Initiative (CSI) are models that can be adopted and expanded on by other countries,” said Schmitz. While the United States can and has taken unprecedented action to protect our borders, “global trade security must be international in scope.” As members of a global community we must recognize that our security is inextricably tied to that our neighbors.