Customs enforcement has developed drastically over the last decades to keep pace with the tremendous increase in international trade and transport, the growing awareness of trans-national organized crime and, more recently, the threat of terrorism. This has led to an increased awareness in Customs administrations that national and international co-operation is essential. This co-operation is based to a large degree on the sharing of information between Customs Services. More recently, the value of sharing information with the business sector and other law enforcement agencies has also been recognized as being of prime importance. All of this information is the basis for risk management, now generally regarded as the best approach to Customs controls in the current international trading environment.
Enhanced screening of pre-arrival information is the most effective means of promoting the flow of legitimate trade while identifying high-risk containers, cargo and passengers for examination. While 100% examination is impossible with present resources, it is feasible for Customs services to guarantee that virtually all data will be adequately screened for indications of risk. This allows the appropriate application of resources to focus on high-risk shipments for examination prior to goods arriving at a port of entry.
It is always important to remember that although it is possible to define common risk indicators and profiles; it is not possible to specify universal coefficients for the risk indicators because risks and threats change depending on several variables, just as laws, criminal organizations, importers and industries do. Furthermore, it is important to emphasize that the presence of one risk indicator does not necessarily indicate a high risk shipment or person rather; a combination of several indicators increases the probability of the presence of risk.
The WCO Framework of Standards to Secure and Facilitate Global Trade also has, as one of its core elements, a requirement that all Members implementing the initiative employ a consistent risk management approach to address threats to the trade supply chain.
Standardized Risk Assessments (SRAs) are an important part of the Customs intelligence function and contribute to the efficient and effective functioning of Customs services which in turn benefits international trade facilitation efforts.
Definition: The area of Risk within the Customs environment contains many specific definitions of equal importance which are listed below:
Risk: The potential for non-compliance with Customs laws.
Risk analysis: Systematic use of available information to determine how often defined risks may occur and the magnitude of their likely consequences.
Risk areas: Those Customs procedures and categories of international traffic which present a risk.
Risk assessment: The systematic determination of risk management priorities by evaluating and comparing the level of risk against predetermined standards, target risk levels or other criteria.
Risk indicators: Specific criteria which, when taken together, serve as a practical tool to select and target movements for their potential for non-compliance with Customs law.
Risk management: Logical and systematic method of identifying, analyzing and managing risks. Risk management can be associated with any activity, function or process within the organization and will enable the organization to take advantage of opportunities and minimize potential losses.
Risk profile: A predetermined, comprehensive and relevant combination of characteristics or risk indicators, based on information which has been gathered, analyzed and categorized.
Risk profiling: The means by which Customs put risk management into practice. It replaces random examination of documents and goods with planned and targeted working methods that use profiles as a basis.
Standardized Risk Assessments (SRAs): These Assessments produce risk indicator products for use by Customs officials for the purpose of targeting goods and conveyances in their daily work.
Source: Global Facilitation Partnership for Transportation and Trade – The United Nations Trade Facilitation Network