EC Issues Proposed Regulation On Supply Chain Security For European Freight Transport

Highlights of the Proposed EU Enhancement on Supply Chain Security

According to the EC, recent improvements have been made to transport security in Europe, including: an EC regulation that has given framework to European aviation and airport security, an EC regulation that strengthens maritime and port terminal security, and an EC directive on security measures for seaports that is expected to improve security within entire port areas.

The EC notes that the proposed regulations complement these recent regulations and other transport security measures already in place; however, there are currently no rules in place for the European land transport supply chain in its entirety. (For these regulations, the EC defines the supply chain as comprising all the transport and transport-related operations and processes beginning at the production site and ending at the cargo's point of destination.)

As a result, the EC states that the proposed regulations would potentially implement the following measures:

Establish a mandatory system requiring European Union (EU) member states to create a security ("secure operator") quality label, which can be awarded to operators in the supply chain meeting European minimum security levels; thus, allowing mutual recognition of the label on the internal market;

Introduce within the mandatory provisions for the EU member states, a voluntaryscheme under which operators in the supply chain increase their security performance in exchange for incentives;

Make operators in the supply chain responsible for their security performance in European freight transport;

Allow "secure operators" to benefit from facilitations (e.g. "fast track treatment" security facilitations and simplification of customs controls) where security controls are carried out and to distinguish themselves positively from other competitors in the area of security, giving them a commercial and competitive advantage;

Allow regular updating and upgrading of security requirements, including recognized international requirements and standards, through the committee procedure; and

Allow "secure operator" status awarded by authorities in one EU member state to be recognized by authorities in other EU member states.

The EC states that to obtain "secure operator" status, an operator will have to implement and document a security management system, ensure resources are made available to counter security risks, and meet a number of specific requirements which the annexes to the proposed regulations set out in detail. These requirements relate to issues such as physical protection of buildings, access control, personnel and security procedures. In addition, the EC notes that secure operator status can be withdrawn in case of serious or repeated breach of security requirements, in which case the operator may re-apply after two years.

Implementation of Proposal Within 18 Months from Adoption of Regulation

The EC states that the proposal is in the form of a regulation which needs approval of the European Parliament and Council of Ministers. In addition, the implementation of the system to determine "secure operator status" should be in place within 18 months of the adoption of the proposal.

(See ITT's Online Archives or 06/27/05 news, 05062705, for BP summary of the World Customs Organization (WCO) adoption of the "Framework of Standards" to secure and facilitate global trade.

See ITT's Online Archives or 07/19/05, 07/20/05, and 07/22/05 news, 05071910, 05072010, and 05072210, for Parts I-III of BP series of summaries on the WCO "Framework of Standards," including information onAuthorized Economic Operators (AEOs).)

EC Press Release (IP/06/242, dated 02/28/06) available at http://europa.eu.int/rapid/pressReleasesAction.do?reference=IP/06/242&format=HTML&aged=0&language=EN&guiLanguage=en

EC Proposed Regulations COM(2006), 79 (dated 02/27/06) available at http://europa.eu.int/comm/dgs/energy_transport/security/intermodal/doc/com_2006_0079_en.pdf