Supply chain security arrangements sealed with Canada and Korea

Singapore Customs has inked its first two Mutual Recognition Arrangements (MRA) for supply chain security with the customs authorities of Canada and Korea. The MRAs were signed with the Canada Border Services Agency and the Korea Customs Service at the World Customs Organisation (WCO) Council Sessions in Brussels, Belgium, on 25 June 2010.

Singapore Customs Director-General Mr Fong Yong Kian (left) signed the Mutual Recognition Arrangements with Canada Border Services Agency President Mr Stephen Rigby (top) and Korea Customs Service Commissioner Mr Young sun Yoon (bottom) respectively.
The inking of the two MRAs signify mutual recognition of supply chain security programmes, namely: Singapore’s Secure Trade Partnership (STP) with Canada’s Partners in Protection (PIP) programme and Korea’s Authorised Economic Operator (AEO). The Arrangements will foster closer cooperation between Singapore Customs and its Canadian and Korean counterparts respectively to facilitate the smooth and efficient flow of bilateral trade with the two countries while keeping the supply chains safe and secure.

Director-General of Singapore Customs, Mr Fong Yong Kian said, “The establishment of MRAs with the customs authorities of Canada and Korea would strengthen Singapore’s position as a major international trade hub. This should help to give a boost to Singapore's exporters who have been certified as secured trade partners, as their exports will be less liable to customs inspection at the export markets, namely Canada and Korea.”

In 2009, Korea was Singapore’s sixth largest trading partner in Asia with trade volume exceeding S$38.5 billion, while Canada’s trade with Singapore stood at about S$5 billion.

Protecting global trade through MRAs
The concept of the authorised economic operator was developed by the WCO under the Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework) in 2005. The Framework highlights the need for all stakeholders to take measures to ensure the security of the supply chain, and the establishment of authorised economic operators, which are companies certified by a national customs authority as having robust security practices.

Increasingly, customs authorities are engaging in mutual recognition of authorised economic operators to enhance global supply chains. Countries recognise that with MRAs in place, benefits are reaped not only by traders at points of import and export, but are also carried down the supply chain, ultimately benefiting and providing security to other stakeholders in the supply chain. This would facilitate cross-border movements of goods both in times of peace and heightened security.

Singapore now joins the ranks of customs authorities such as Canada, the European Union, Japan, Korea, New Zealand and the United States, which have signed mutual recognition instruments. Singapore Customs is also currently engaged in mutual recognition discussions with the customs administrations of China, Japan, New Zealand and the United States, with a view to establishing MRAs with these countries.

Benefits for Singapore businesses
The MRAs mean that local companies certified under the STP programme administered by Singapore Customs would be recognised by Canada and Korea to be of a lower risk, leading to quicker release of goods at importation. Hence these companies can better predict the movement of their goods, particularly for time-sensitive exports, and save costs which would otherwise be incurred due to delays at the port. Companies that are not currently STP-certified will also be able to enjoy these benefits once they have successfully been certified by Singapore Customs. The MRAs could also facilitate continuous trade flows in situations of high alert or when international trade is disrupted.

Infineon Technologies Asia Pacific Pte Ltd, a pioneer secure trade partner of Singapore Customs since 2007, clearly sees the benefits of being a certified company. Mr Hans-Martin Stech, the company’s Chief Financial Officer said, “The certification recognises Infineon for our high standard of supply chain security management. It also helps us to build a robust chain of logistic partners that ultimately offers assurances to our customers. When the MRAs with key trading countries are in place, Infineon's customers, for example in Korea, will benefit from faster as well as more reliable deliveries."

Another company that welcomes the MRAs is IBM. "The MRAs that Singapore Customs has established with Canada and Korea represent a significant step towards enhanced supply chain security and increased facilitation of trade for companies. Some of the key benefits we believe may be derived from these MRAs include faster shipment processing and streamlined security criteria and requirements, making it easier for companies to move goods and recover more quickly from major crises," said Mr Theo Fletcher, IBM's Vice President, Import Compliance & Supply Chain Security. "IBM looks forward to its continued relationship with Singapore Customs in the Secure Trade Partnership programme to help further enhance the global supply chain."

About the Secure Trade Partnership (STP) programme
The STP Programme administered by Singapore Customs was launched in May 2007. It is a voluntary certification programme to encourage companies to adopt robust security measures in their trading operations, thereby contributing to a more secure global supply chain and minimising disruptions to the smooth flow of goods. Certified companies would be recognised as low-risk and thus be facilitated.

The STP programme is open to all supply chain stakeholders, including importers, exporters, warehouse operators, transporters and terminal operators. Participating companies will be given structured guidance on developing, implementing, monitoring and reviewing their internal supply chain security measures and practices.

STP certification
The STP programme comprises two tiers of certification, namely the STP and STP-Plus.

To attain the STP certification, companies will have to meet the requirements under the STP Guidelines, which spell out measures that companies should adopt to enhance the security of their operations and supply chains.

STP-Plus is for companies who wish to obtain a higher level of certification. To attain the STP-Plus certification, companies will have to meet the requirements under the STP Criteria. This is an enhanced version of the STP Guidelines and entails a set of minimum criteria which is mandatory for STP-Plus certification. This higher tier is also the basis for MRAs with other customs administrations that entail minimum criteria.

More information on the STP programme is available here.


Copyright © 2010 Singapore Customs. All Rights Reserved.
Singapoore Customs logo