The Hindu Business Line : New UK cargo security regime may slow world trade

The UK, if the report doing the round in shipping and transport circles is any indication, is set to introduce a new cargo security regime, similar to the US'24-hour advance manifest rule. The proposed British action has caused jitters among shippers who fear that it will slow the free movement of goods and hit global supply chain.

The UK Home Office's Counter-Terrorism andIntelligence Directorate, it is learnt, has been working closely with the country's Customs and Revenue Service on a scheme that would require consignment and transport data to be submitted to authorities before the arrival of the cargo in the UK.

The measures, modelled on the US requirement for all container carriers to provide cargo manifest data to the US Customs 24 hours before loading of US-bound cargo at a foreign port, are proposed for implementation by April 2007 and aimed at guarding against terrorism and better detect cases of crime and fraud, improve security and drugs enforcement. Data would be collected by carriers and passed to the police.

Concern over UK law

Understandably, the shippers have expressed concern over the proposed UK Act, to be framed under the Immigration, Asylum and Nationality Act. The export-import trade, they fear, will be impacted. Reacting sharply, the European Shippers Council (ESC) has stated that the new security plan by the British Government, which would require details regarding every consignment entering and leaving the UK to be supplied to police, will result in chaos at the port. The law, it is pointed out, will also put the UK out of line with all its trading partners, increasing costs and making the economy less competitive.

Several issues raised

The ESC has raised several issues, the most important being whether the UK's actions would not constitute a breach of principles of Single European Market. In a letter to European Community Commissioner for Internal Market, Mr Charlie McCreevy, the ESC Secretary-General, Ms Nicolette van der Jagt, has expressed concern that such security measures represent a "serious barrier" to intra-community trade. The measures, it has been pointed out, would disrupt free movement of goods at internal border within the European Union.

While it is arguable that national security is the responsibility of individual member states, the ESC also questions whether this proposal does not also have a Customs purpose and should, therefore, be dealt within the normal EU framework for changes to Customs procedures and requirements.

A Consultation Paper was issued in early September to all sectors in the transport industry. The UK-based Freight Transport Association (FTA), it is learnt, has already submitted its comments. The FTA Deputy Chief Executive wanted to be assured that the free flow of goods will not be disrupted by the new administrative burden. Shippers in India too have expressed concern over the proposed UK actions which, according to Western India Shippers Association (WISA), could result in "severe disruptions" to supply chain management, particularly for time-sensitive cargo.

Safe-guarding exporters-importers

WISA has requested the Union Shipping Secretary to ascertain the precise measures contemplated and measures required to safeguard the interests of India's export-import trade.

This is because the Act also empowers the police to demand passenger and crew information and allows the police and Customs to share data.

WISA has also urged the Union Commerce Ministry to review the proposed measures, in view of the growing volume of India-UK trade which therefore is of great interest to Indian shippers. In 2005, the trade between the two countries amounted to £5.56 billion and UK exports of goods to India grew by more than 25 per cent and UK imports of goods from India by 21 per cent.

India-UK trade'

Mr Tim Reardon, Manager, Shipping Policy at the UK Chamber of Shipping, was recently quoted in Sea Sentinel (a Fairplay Group publication) as saying that the Act may not make a difference to trade between the UK and India.

The trade, he said, would be covered by the EU's "24-hour rule" equivalent, currently in development, requiring data on Indian shipments to be provided to Customs and it was expected that the police would use the data sharing powers in the UK Act to access this data from Customs and not to require anyone to submit it again.

WISA fears that if EU Regulations do not materialise by April 2007, the India-UK trade will be automatically governed by the UK Act.

There is another point. The provisions of the UK Act are part of a strategy to empower border agencies against perceived threats from overseas but the problem is that the authorities are empowered to demand information on cargo from third parties such as shipowners, masters and agents who will not normally have it, and not from the shippers or cargo owners, who would.

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