Air Cargo Security Newsletter—October 2016—Issue 12

In this Issue of Air Cargo Security news, you will find important updates on:

IMPORTANT AIR CARGO SECURITY CHANGES—YOUR BUSINESS WILL BE AFFECTED

In this issue of Air Cargo Security News we focus on major changes coming your way. If you are a Regulated Air Cargo Agent (RACA), an Accredited Air Cargo Agent (AACA), or an aircraft operator, these changes will affect you.

Importantly, if you export goods to the United States (US) by air, then you must take some action before 1 July 2017 to make sure you can continue to send your cargo by air.

New regulations for air cargo security

The Aviation Transport Security Amendment (Cargo) Regulation 2016 (the Regulations) are scheduled for commencement on 1 November 2016. The Regulations will allow Australian export and freight forwarding businesses to meet the US requirement for piece-level examination of 100 per cent of air cargo bound for the US from 1 July 2017. Importantly, these arrangements will increase security across the whole supply chain, and ensure that $6 billion worth of exports to the US continue uninterrupted.

The Regulations will:

  • establish the regulatory framework for the Known Consignor scheme, which will allow exporters to secure cargo at its source—this is accepted as being commensurate with piece-level examination;
  • streamline air cargo examination and clearance provisions by defining what clearance is, and how it is achieved, for US bound and non-US bound cargo—this includes changes to who can issue a Security Declaration;
  • reform the regulatory arrangements for RACAs by transitioning RACAs that don't examine cargo under a Secretary's notice to AACAs; and
  • reform the regulatory arrangements for high-risk cargo by aligning our regulations with international best practice and ensuring that industry has measures in place to identify, handle and treat high-risk cargo.

Specific articles on the effects of the Regulations on RACAs, AACAs, Security Declarations, Enhanced Air Cargo Examination (EACE), Known Consignors and high risk cargo follow.

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Transitioning Regulated Air Cargo Agents (RACAs) to Accredited Air Cargo Agents (AACAs)

If your business is currently a RACA or an AACA the Regulations will mean changes for your business.

On 1 November 2016, existing RACAs that don't examine under a notice—i.e. don't hold either an Air Cargo Examination (ACE) notice or an Enhanced Air Cargo Examination (EACE) notice, will transition to the AACA scheme. This will happen automatically—you will receive further information soon.

Existing RACAs that have been issued with either of the notices will remain in the RACA scheme, with some limited changes.

This will not reduce the level of security that must be maintained or security outcomes for the handling of cargo, however, it will reduce the regulatory burden on businesses.

  • For businesses that remain as RACAs, their existing Transport Security Program (TSP) will be replaced with a RACA Security Program. The Department will provide information and assistance to help RACAs remaining in the scheme with this process.
  • For businesses that will be transitioned from RACAs to AACAs, your existing

    TSP will be replaced with an AACA Security Program on 1 November 2016. This is to ensure that the transition process is streamlined. RACAs transitioning to AACAs will also receive guidance to help with the transition in the next several weeks.

  • Current AACAs won't be required to significantly change their business practice and will still be required to treat cargo securely. Current AACAs will be issued with a new AACA Security Program on 1 November 2016.

Additionally, security documentation accompanying international air cargo is being streamlined in the Regulations—this is discussed in more detail below. A Chain of Custody Statement (ChOCS) will no longer be required, although AACAs may continue to issue one if they so choose.

It is highly recommended that RACAs and AACAs talk to their customers who export to the US by air to assess what their needs are ahead of 1 July 2017. Can you offer piece-level examination by 1 July 2017, or is the Known Consignor scheme the answer for some of your customers?

Plan early—if you are not prepared, US bound cargo that has not been examined at piece-level under an EACE notice, or has not come from a Known Consignor, will not be uplifted on US bound flights after 1 July 2017.

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Changes to clearance and who can issue a Security Declaration

The Regulations strengthen the role that Security Declarations play in identifying whether cargo has been cleared. Under the Regulations, cargo may only be cleared and receive clearance under three circumstances:

  • if cargo was examined under a notice issued by the Secretary (ACE or EACE);
  • if cargo originated from a Known Consignor; or
  • if cargo does not require examination (is exempt) under a notice issued under paragraph 44B(2)(b)(i) of the Act.

From 1 July 2017, US bound cargo must be cleared under an EACE notice or come from a Known Consignor. Cargo bound for destinations other than the US can also be cleared under an ACE notice (that is, examined as presented including consolidated cargo).

Clearance, and the issuing of a Security Declaration, under Regular Customer arrangements will not be acceptable.

This means that from 1 November 2016 Security Declarations can only be issued for cargo that has undergone examination by a RACA (examined under a notice issued by the Secretary), has originated from a Known Consignor, or is exempt.

Issuing a Security Declaration in any other circumstance is a strict liability offence.

An AACA cannot issue a Security Declaration. It is expected that all AACAs will comply with new Security Declaration regulations. However, the Department of Infrastructure and Regional Development (the Department) will allow businesses a little time to adapt to new requirements and will employ escalating compliance responses.

Apart from clearing cargo and issuing Security Declarations, freight forwarders transitioning into the AACA scheme can follow their existing Transport Security Programs until they have been formally issued with a replacement program after 1 November.

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Enhanced Air Cargo Examination (EACE) Notice

As noted above, from 1 November 2016 only businesses that examine under a notice can be RACAs. For those off-airport this means obtaining an EACE notice. To support the long term approach of piece-level examination (and to meet US requirements), ACE notices will not be approved off-airport.

The EACE notice sets out approved examination methods, combined with detailed examination techniques that are applied at a piece-level, using approved examination equipment. Approved examination methods are separated into primary and secondary methods. A primary method is the first method that must be applied (unless a piece of cargo is unsuitable for that method) and secondary method can be used to resolve unsatisfactory examination outcomes achieved by primary examination. The approved examination methods for use under the EACE notice are:

Primary Examination Methods:

  • X-ray examination;
  • Electronic Metal Detection (for perishable air cargo only);

Secondary Examination Methods:

  • Explosive Trace Detection (ETD) examination;
  • Physical examination (internal);
  • X-ray examination; and
  • Electronic Metal Detection (for perishable air cargo only).

To obtain an EACE notice a business must apply to the Department and undergo a validation site inspection. For more information about EACE, please contact eace@infrastructure.gov.au.

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The Known Consignor scheme is here

The Known Consignor scheme is a new initiative that offers export businesses an alternative way to meet US air cargo requirements. Instead of having their US bound air cargo examined at piece-level by another regulated business, Known Consignors implement security measures at their facilities to ensure their cargo is safe to load on an aircraft.

If your business originates international air cargo, you may be eligible to join the scheme. The Department is now accepting Expressions of Interest (EOI) from businesses that would like to join the Known Consignor scheme when it opens on 1 November 2016. The EOI can be found on the EOI webpage.

Talk to your freight forwarder about whether they are planning to offer examination, or if the Known Consignor scheme is more appropriate for you. Don't wait until the requirements for US bound cargo come into force on 1 July 2017 to start the process, as there may be a delay in assessing and validating applications and you may be unable to send your cargo to the US by air for some time.

Further information on the Known Consignor scheme can be found on the Department's website.

Over the past 6 months, the Department has worked with industry to develop and improve the Known Consignor scheme. The Department partnered with 21 businesses to test processes for assessing and validating Known Consignor applications, including an outcomes-focussed approach to meeting security requirements. A wide range of businesses successfully took part in the trial, including pharmaceutical companies, meat and fish exporters, flower growers and heavy machinery manufacturers. The scheme's flexibility allows a variety of different types of companies to participate so if you originate cargo and would like to know more, please visit the Department's website.

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High risk cargo

The Regulations replace existing references to suspect cargo with the term high risk cargo. This change will increase security outcomes by removing any uncertainty for aviation industry participants about how high risk cargo should be identified, handled and treated.

This will make sure that Australia's air cargo security regulatory framework continues to align with international standards and obligations under Annex 17 to the Convention on International Civil Aviation (the Chicago Convention).

Aircraft operators will be required to update their TSP to incorporate measures to handle and treat high risk cargo. A transition period has been included in the Regulations meaning that high risk cargo measures need only be included when an aircraft operator's TSP is next revised or it expires after 1 November 2016. The RACA Security Program and AACA Security Program will outline minimum requirements for identifying, handling and treating high risk cargo.

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Updated eLearning modules for regulated businesses

RACAs, AACAs and Known Consignors must provide security awareness training to their workers. In order to help regulated businesses achieve this requirement, the Department is redeveloping the online security awareness training package to update the existing RACA and AACA modules. This will ensure businesses meet new requirements made by the Regulations. A training module on Known Consignors is also being developed ahead of the scheme's rollout. It is intended that the training package will be released on 1 November 2016, when the Regulations come into effect and it will be available to all workers in regulated businesses.

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Industry sessions—thank you to all participants

Throughout August and September, representatives from the Department met with freight forwarders and exporters to discuss upcoming changes to the Regulations.

At information sessions in Brisbane, Adelaide, Sydney, Melbourne and Perth, Departmental representatives explained the content of the Regulations and stressed how important it is that exporters and freight forwarders discuss the changes to be prepared for the new US bound requirements and to determine the right path for their businesses.

The feedback received at these information sessions has been considered in the drafting of the Regulations and will be considered during the implementation of the new air cargo security arrangements. The Department will continue to communicate with industry and provide guidance to assist industry in transitioning to the new regulatory arrangements.

The Department would like to thank all those who took the time to attend the information sessions for their participation and feedback.

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